04-R 379

2004 -- H 8600

Enacted 06/24/04

J O I N T R E S O L U T I O N

CREATING A SPECIAL LEGISLATIVE COMMISSION TO STUDY THE IMPACT OF THE

GOVERNMENT ACCOUNTING STANDARDS BOARD'S RULES AND REGULATIONS

REGARDING OTHER POST EMPLOYMENT BENEFITS

Introduced By: Representative Peter F. Kilmartin

Date Introduced: June 03, 2004

     RESOLVED, That a special legislative commission be and the same is hereby created

consisting of thirteen (13) members; five (5) of whom shall be from the house of representatives,

not more than four (4) from the same political party, to be appointed by the speaker; five (5) of

whom shall be from the senate, not more than four (4) from the same political party, to be

appointed by the senate president; one of whom shall be the auditor general, or designee; one of

whom shall be the governor, or designee; and one of whom shall be the general treasurer; or

designee.

     In lieu of any appointment of a member of the legislature to a permanent advisory

commission, a legislative study commission, or any commission created by a general assembly

resolution, the appointing authority may appoint a member of the general public to serve in lieu

of a legislator, provided that that the majority leader or the minority leader of the political party

which is entitled to the appointment consents to the appointment of the member of the general

public.

     The purpose of said commission shall be to study the impact of rules and regulations

promulgated by the Government Accounting Standards Board regarding Other Post Employment

Benefits (OPEB). These standards which local and state governments must adopt, beginning in

2005, would require school districts, cities and towns and the state of Rhode Island to begin

accounting for the cost of Other Post Employment Benefits on an accrual basis. OPEB are

benefits other than pensions that governments offer to retirees, such as health care and life

insurance. Based on an accrued form of accounting, if the costs of these benefits are unfunded,

they will be classified as a financial liability for the government entity providing them. Large

unfunded liabilities have a negative impact on the credit worthiness of local and state government

and result in lower credit ratings. Lower credit ratings result in the state and local governments

paying substantially higher interest rates on bonded debt.

     Forthwith upon passage of this resolution, the members of the commission shall meet at

the call of the speaker of the house of representatives and organize and shall select, from among

the legislators, a chairperson. Vacancies in said commission shall be filled in like manner as the

original appointment.

     The membership of said commission shall receive no compensation for their services. All

municipalities, school districts, departments and agencies of the state shall furnish such advice

and information, documentary and otherwise, to said commission and its agents as is deemed

necessary or desirable by the commission to facilitate the purposes of this resolution. The Joint

Committee on Legislative Services is hereby authorized and directed to provide suitable quarters

for said commission; and be it further

     RESOLVED, That the commission shall report its findings and recommendations to the

general assembly on or before January 31, 2005, and said commission shall expire on December

31, 2005.

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LC03572

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