ATRS Legislative Update: Week 5 (Feb. 10-14)

This week saw some movement in bills related to ATRS and the other retirement systems. The ATRS appropriation bill, SB66, passed both the Senate and House with no opposing votes. It is now on the Governor's desk awaiting her signature. On Tuesday, the Joint Public Retirement Committee heard several bills from two of the state's other retirement systems and gave a "do pass" recommendation to all but one of them. On Wednesday, HB1365 failed to pass the House State Agencies & Governmental Affairs Committee. This is the bill that would remove the requirements for minority representation on the ATRS Board and other state boards and commissions. It is still possible that bill could be brought back up at a future committee meeting for consideration.

Next Tuesday the 18th, the Committee is scheduled to hear the seven bills in the ATRS Legislative Package. The Legislature's actuary is finalizing his review of the bills, and his reports should be posted to the Legislature's website by Monday. Our own actuaries have already reviewed the bills and determined that none of the bills will result in any material cost to ATRS. You can review a summary of the seven bills on the ATRS website here.

As a reminder, all of the Committee's meetings are live-streamed. You can watch Tuesday's meeting by going to the Legislature's website, scrolling down to the entry for Joint Public Retirement Committee under Tuesday, February 18, and click on the "Video" button on the right. The meeting isn't listed on the website at the time of my writing this email, but it should be listed there by Monday. The meeting will begin after the House and Senate adjourn for the day on Tuesday. That could be anytime after 2pm that day.

In last week's email, I discussed our possible concerns with HB1352 and its restrictions on investments in China. We are still having ongoing discussions with the Governor's Office, the sponsors, and the other retirement systems. I am still cautiously optimistic that the bill will be amended to address our concerns. If that changes, I will let you know at once.

If you have questions about how a bill may impact ATRS, or if you are concerned about something ATRS is proposing, please reach out to me at the email address or phone number below.

Also, if you are receiving this email as a forward and would like to be added to the distribution list, you can subscribe to these legislative updates here.

Mark White
ATRS Executive Director
MarkW@artrs.gov
Office: (501) 621-8853
Cell: (501) 541-2057

ATRS Legislative Update: Week 4 (Feb. 3-7)

Last week after our update email was written, four bills affecting ATRS and its members were filed. The good news is that three of them do not appear to threaten our independence or benefits. The fourth bill, if amended, should not cause us harm. The bills that we are tracking include:

• HB1317 - Increases the criminal penalties for making a "material false statement or representation" to ATRS or any other state retirement system for the purpose of obtaining or modifying a benefit. One of the other state retirement systems has asked for this change, and we do not see it causing any harm to our members or benefits. ATRS is currently neutral on this bill.
• HB1365 - Repeals requirements that certain state boards and commissions have minority board members, including the ATRS Board of Trustees. Under current law, ATRS Board Position #8 is reserved for minority ATRS members. If this bill passes, any active or retired ATRS member would be eligible to run for position #8 when it comes open in 2027. This bill would not affect the term of our current Board member in position #8, Anita Bell. Because the position would still be elected and the ATRS Board would remain independent, ATRS is currently neutral on this bill. 
• SB151 - Forfeits the retirement benefits of any elected public official who is convicted of a crime that would make them ineligible to hold office. The bill would apply only to members who join ATRS after the bill's effective date. ATRS is currently neutral on this bill.

The fourth bill is HB1352 which would restrict our ability to invest in China. For the last year or two, our investment managers have been hesitant to invest in China because of increased risk. China's business environment is not the same as it was 5-10 years ago, and the political and legal instability there makes it much harder to do business. Our investment managers do not think that a restriction on future investments would have any harm on our investment returns.

What is a concern, though, is the requirement in Section 3 of HB1352 that we divest some of our existing investments. If implemented in the wrong way, a divestment could cause us investment losses. I have been talking with the sponsors, and I am cautiously optimistic that the bill will be amended to address our concerns. For that reason, ATRS is neutral for the time being. If that changes and amendments are not made, I will alert you at once.

On Thursday, the Joint Budget Committee unanimously approved SB66 which is the appropriation act for ATRS. It should be heard on the Senate floor next week. On Tuesday the 11th, the Joint Public Retirement Committee will have its next meeting. At this point, I am not expecting that any ATRS bills will be considered that day.

If you have questions about how a bill may impact ATRS, or if you are concerned about something ATRS is proposing, please reach out to me at the email address or phone number below.

Also, if you are receiving this email as a forward and would like to be added to the distribution list, you can subscribe to these legislative updates here.

Mark White
ATRS Executive Director
MarkW@artrs.gov
Office: (501) 621-8853
Cell: (501) 541-2057