Legislature(2015 - 2016)BILL RAY CENTER 208

06/14/2016 03:00 PM FINANCE


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Audio Topic
04:13:36 PM Start
04:14:16 PM HB4002
04:55:34 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed to a Call of the Chair --
+ HB4002 INS. FOR DEPENDS. OF DECEASED FIRE/POLICE TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 246 AIDEA: FUNDS; LOANS; PROGRAMS; DIVIDEND TELECONFERENCED
<Bill Hearing Canceled>
                  HOUSE FINANCE COMMITTEE                                                                                       
                  FOURTH SPECIAL SESSION                                                                                        
                       June 14, 2016                                                                                            
                         4:13 p.m.                                                                                              
                                                                                                                                
                                                                                                                                
4:13:36 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Thompson called the House Finance Committee                                                                            
meeting to order at 4:13 p.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Mark Neuman, Co-Chair                                                                                            
Representative Steve Thompson, Co-Chair                                                                                         
Representative Dan Saddler, Vice-Chair                                                                                          
Representative Bryce Edgmon                                                                                                     
Representative Les Gara                                                                                                         
Representative Lynn Gattis                                                                                                      
Representative David Guttenberg                                                                                                 
Representative Scott Kawasaki                                                                                                   
Representative Cathy Munoz                                                                                                      
Representative Lance Pruitt                                                                                                     
Representative Tammie Wilson                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
John   Boucher,    Deputy   Commissioner,    Department   of                                                                    
Administration;  Michele  Michaud,   Chief  Health  Officer,                                                                    
Department  of  Administration;   Representative  Sam  Kito;                                                                    
Representative Liz Vasquez.                                                                                                     
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 4002   INS. FOR DEPENDS. OF DECEASED FIRE/POLICE                                                                             
                                                                                                                                
          HB 4002 was HEARD and HELD in committee for                                                                           
          further consideration.                                                                                                
                                                                                                                                
HOUSE BILL NO. 4002                                                                                                           
                                                                                                                                
     "An Act  relating to  major medical  insurance coverage                                                                    
     under  the  Public   Employees'  Retirement  System  of                                                                    
     Alaska  for  certain  surviving spouses  and  dependent                                                                    
     children  of  peace   officers  and  firefighters;  and                                                                    
     providing for an effective date."                                                                                          
                                                                                                                                
4:14:16 PM                                                                                                                    
                                                                                                                                
Co-Chair Thompson discussed the meeting agenda.                                                                                 
                                                                                                                                
JOHN   BOUCHER,    DEPUTY   COMMISSIONER,    DEPARTMENT   OF                                                                    
ADMINISTRATION,  provided a  PowerPoint presentation  titled                                                                    
"Alaska  Department of  Administration Department  Overview"                                                                    
dated June  14, 2016 (copy on  file). He turned to  slide 2:                                                                    
"HB4002: What the Bill Does":                                                                                                   
                                                                                                                                
   Goal: Provide premium-free medical coverage to families                                                                      
   of peace officers and firefighters killed in the line of                                                                     
   duty                                                                                                                         
                                                                                                                                
   · Issue 1: Surviving spouses/dependents are not eligible                                                                     
     to receive premium-free  health benefits until survivor                                                                    
     becomes eligible for those benefits at retirement age.                                                                     
   · Solution 1: Bill allows surviving spouses/dependents                                                                       
     to   start    premium-free   medical    coverage   upon                                                                    
     occupational death of peace officer /firefighter.                                                                          
   · Issue 2: Defined Contribution Plan (Tier IV) does not                                                                      
     allow  access  to health  coverage  until  the time  at                                                                    
     which the  deceased member would have  reached 25 years                                                                    
     of  service. At  that  time, coverage  may be  accessed                                                                    
     with  100% cost  to surviving  spouses/dependents until                                                                    
     the time at which the survivor reaches Medicare age.                                                                       
   · Solution 2: Bill allows 100% premium subsidy for                                                                           
     surviving  spouses/dependents  of  peace  officers/fire                                                                    
     fighters    upon    occupational   death    of    peace                                                                    
     officer/firefighter  until  survivor  reaches  Medicare                                                                    
     age.  At Medicare  age, premium  subsidy and  access to                                                                    
     health reimbursement arrangement begin.                                                                                    
                                                                                                                                
4:17:52 PM                                                                                                                    
                                                                                                                                
Representative Gattis asked what age dependents "age out."                                                                      
Mr. Boucher answered that it was 23 if a person was in                                                                          
college; it was 19 otherwise.                                                                                                   
                                                                                                                                
Representative  Guttenberg  pointed  to  the  last  line  of                                                                    
solution 2 on slide 2. He  inquired about access to a health                                                                    
reimbursement arrangement  (HRA). Mr. Boucher  answered that                                                                    
as part of  each Tier IV employee's  employer contribution a                                                                    
monthly payment to an account  was set up with the intention                                                                    
that later  they could access  the account to use  the money                                                                    
to  offset  the  premium  share or  other  eligible  medical                                                                    
costs.                                                                                                                          
                                                                                                                                
Vice-Chair  Saddler  asked  about the  health  reimbursement                                                                    
arrangement, as he did not  understand Mr. Boucher's answer.                                                                    
Mr. Boucher  replied that  for each  employee in  the Public                                                                    
Employees' Retirement  System (PERS) Tier IV  a contribution                                                                    
was made by the employer  to an individual account earmarked                                                                    
for use  by the individual.  The state held the  account for                                                                    
the individual  until they were  eligible to use  the funds.                                                                    
For example,  a retired person  used a portion of  their HRA                                                                    
to offset  the monthly  premium they would  have to  pay. It                                                                    
was  a way  of  defraying future  healthcare  costs for  the                                                                    
retired individual.                                                                                                             
                                                                                                                                
Co-Chair  Thompson surmised  that  if someone  was 25  years                                                                    
old,  became  a  police  officer,   served  25  years,  then                                                                    
retired, they would  be 50 at the time  of their retirement.                                                                    
He suggested that from 50 to  65 years of age the individual                                                                    
would  be  able  to  access  the  account  to  offset  their                                                                    
premiums. He asked  if he was correct.  Mr. Boucher deferred                                                                    
to Ms. Michaud.                                                                                                                 
                                                                                                                                
MICHELE  MICHAUD,   CHIEF  HEALTH  OFFICER,   DEPARTMENT  OF                                                                    
ADMINISTRATION,  agreed with  the scenario  provided by  Co-                                                                    
Chair  Thompson.  She elaborated  that  a  peace officer  or                                                                    
firefighter with 25 years of  service was eligible to retire                                                                    
from  the plan  but was  not  eligible to  access a  premium                                                                    
subsidy  until   turning  65  Medicare  age   eligible.  The                                                                    
healthcare reimbursement  arrangement could  be used  to pay                                                                    
the full  premium in the interim  period. Similarly, someone                                                                    
with 10 years  of service that retired at age  65 had to pay                                                                    
a  portion of  their premium.  The healthcare  reimbursement                                                                    
arrangement could  be used  for that  individual to  pay for                                                                    
their portion of the premium.                                                                                                   
                                                                                                                                
Vice-Chair Saddler asked  if there was money put  away in an                                                                    
account  every  pay  period  for someone  as  soon  as  they                                                                    
started  working  which could  be  accessed  later in  their                                                                    
career  or upon  retirement.  Mr. Boucher  responded in  the                                                                    
affirmative.                                                                                                                    
                                                                                                                                
4:22:10 PM                                                                                                                    
                                                                                                                                
Mr. Boucher  continued to slide  3: ""HB4002: What  the Bill                                                                    
Does":                                                                                                                          
                                                                                                                                
   · Issue 3: Current law requires DCR retirement plan                                                                          
     members to retire directly from PERS plan in order to                                                                      
     be eligible for medical benefits.                                                                                          
   · Solution 3: HB 4002 removes this requirement, but only                                                                     
     for survivors of peace officers/fire fighters that                                                                         
     experience occupational death.                                                                                             
   · Issue 4: Benefits not available to dependent children                                                                      
     of PERS plan members if member dies and there is no                                                                        
     surviving spouse.                                                                                                          
   · Solution 4: HB 4002 extends eligible medical care                                                                          
     expenses to include deceased peace officer/firefighter                                                                     
     member's dependents.                                                                                                       
                                                                                                                                
Mr.  Boucher  elaborated  that  in  the  instance  where  an                                                                    
individual was  killed in  the line  of duty  they obviously                                                                    
did not  have the opportunity  go through what  he described                                                                    
as the "retirement gate" to  become eligible. The department                                                                    
had to  address the issue  within the legislation.  He noted                                                                    
that there  was a special  exception written to  resolve the                                                                    
issue for those  individuals that would be  eligible for the                                                                    
healthcare.                                                                                                                     
                                                                                                                                
Co-Chair Thompson noted issue 4  and asked if children would                                                                    
only be eligible  until the age of 23.  Mr. Boucher answered                                                                    
that 23 years of age was  the maximum. They would age out at                                                                    
19   if  they   were  not   meeting  the   requirements  for                                                                    
eligibility.                                                                                                                    
                                                                                                                                
Co-Chair  Thompson suggested  that  going to  college was  a                                                                    
requirement.                                                                                                                    
                                                                                                                                
Mr. Boucher addressed who was  covered by the legislation on                                                                    
slide 4: "HB 4002 - Who is Covered":                                                                                            
                                                                                                                                
   · 3,639       members      designated       as      peace                                                                    
     officers/firefighters in PERS system                                                                                       
   · 1,916 are state employees                                                                                                  
   · 1,723 are employed by 43 political subdivisions                                                                            
   · Statutory-defined "peace officer" and "firefighter"                                                                        
     includes: police, chief of police, regional public                                                                         
     safety officer, correctional officers, correctional                                                                        
     superintendents, firefighter, fire chief                                                                                   
   · Does NOT include VPSOs or any contracted police or                                                                         
     firefighter positions                                                                                                      
                                                                                                                                
Co-Chair Thompson asked for a  breakdown of firefighters. He                                                                    
asked if  the number of  employees included the  Division of                                                                    
Forestry. Mr. Boucher would follow  up with an answer to Co-                                                                    
Chair Thompson's question.                                                                                                      
                                                                                                                                
Co-Chair Thompson requested that  the answers be provided to                                                                    
his staff.                                                                                                                      
                                                                                                                                
Representative  Guttenberg  asked   how  a  regional  public                                                                    
safety  officer  differed  from   a  Village  Public  Safety                                                                    
Officer (VPSO). Mr.  Boucher would have to find  out and get                                                                    
back to the committee.                                                                                                          
                                                                                                                                
4:25:39 PM                                                                                                                    
                                                                                                                                
Representative Wilson  wondered if the employees  on slide 4                                                                    
included state,  borough, and other  municipality employees.                                                                    
She  wondered if  the boroughs  and municipalities  would be                                                                    
paying for  their employees or  if the state was  picking up                                                                    
the tab  for all  3,639 members.  Mr. Boucher  answered that                                                                    
currently due to the PERS  contribution rate being capped, a                                                                    
change  in the  contributions for  the individual  employers                                                                    
would  mean an  increase  in the  overall  liability to  the                                                                    
system. Since the employers were  currently held harmless at                                                                    
22  percent and  the  rate  was over  22  percent, it  would                                                                    
result  in  an  increase  in  the  annual  state  assistance                                                                    
payment.  However, should  the rate  fall below  22 percent,                                                                    
the  individual  employers  with peace  and  fire  employees                                                                    
would potentially  bear the  cost of  increased contribution                                                                    
rates. It  would only be  those employers who had  peace and                                                                    
fire    employees    that   could    experience    increased                                                                    
contributions.                                                                                                                  
                                                                                                                                
Representative  Wilson provided  a scenario.  She asked  for                                                                    
verification  that  the percentage  would  have  more of  an                                                                    
impact on  the municipalities  rather than the  bill itself.                                                                    
Mr.  Boucher   responded  that   there  would   be  employer                                                                    
contribution  increases  associated  with  the  benefit.  He                                                                    
continued to address slide 4.  He noted that the legislation                                                                    
did not apply to any VPSOs  or any contracted police or fire                                                                    
positions  because   they  were   contractual  relationships                                                                    
lacking a participation agreement in PERS.                                                                                      
                                                                                                                                
Mr. Boucher turned to slide 5: "HB 4002 - Bill History":                                                                        
                                                                                                                                
   · Governor Parnell worked with legislators on HB 66 and                                                                      
     SB 202,  which included  all PERS  & TRS  employees and                                                                    
     removed  the DCR  requirement to  retire directly  from                                                                    
     the plan, resulting in large fiscal note.                                                                                  
   · Leg Legal revised HB 66 (version P) to expand health                                                                       
     insurance  under AS  39.30.090  (Group Insurance),  but                                                                    
     this statute  does not apply  to Troopers  because they                                                                    
     have their own health trust  and thus were not included                                                                    
     in this version of the bill.                                                                                               
   · Law and Leg Legal drafted a new version of HB 66                                                                           
     (version  S), but  no hearings  were held.  Rep. Millet                                                                    
     pulled the bill and rolled it into SB 91.                                                                                  
   · House removed HB 66 from SB 91.                                                                                            
                                                                                                                                
4:30:07 PM                                                                                                                    
                                                                                                                                
Mr. Boucher  continued on slide 6:  "HB 4002 - Where  we are                                                                    
Now":                                                                                                                           
                                                                                                                                
   · Governor Walker introduced HB 4002, modeled on HB 66                                                                       
     (version S)                                                                                                                
        · HB 4002 returns to the PERS system Occupational                                                                       
          Death benefit as the vehicle                                                                                          
        · Limits   application   to   peace   officers   and                                                                    
          firefighters, resulting in a smaller group and a                                                                      
          lower cost                                                                                                            
                                                                                                                                
Co-Chair Thompson assumed  that volunteer firefighters would                                                                    
not be  included under the legislation.  Mr. Boucher agreed.                                                                    
He detailed  that if there were  no ties to PERS  they would                                                                    
have no vehicle to gain access to the benefits.                                                                                 
                                                                                                                                
Co-Chair  Thompson assumed  volunteer firefighters  were not                                                                    
employees.  Mr.  Boucher  answered,  "Correct."  It  was  an                                                                    
important distinction and narrowed the  scope of the bill to                                                                    
those who were covered by existing PERS relationships.                                                                          
                                                                                                                                
Mr. Boucher addressed slide 7: "HB 4002 - Costs":                                                                               
                                                                                                                                
     Why is this a state cost versus an employer cost?                                                                          
                                                                                                                                
     Since the  PERS employer contribution rates  are capped                                                                    
     at 22  percent and the  effective rate is  projected to                                                                    
     be above  22 percent,  any increase in  total liability                                                                    
     or contributions  by employers  results in  an increase                                                                    
     in the  annual State Assistance payment,  currently the                                                                    
     statutory responsibility of the state.                                                                                     
                                                                                                                                
     What if the PERS total contribution rate falls below                                                                       
     the 22 percent cap?                                                                                                        
                                                                                                                                
     The increased contribution rate for PERS P/F employers                                                                     
     associated with this benefit would be a cost borne by                                                                      
     employers that have P/F employees.                                                                                         
                                                                                                                                
Mr. Boucher  reported that  the total  costs related  to the                                                                    
bill started out  at about $174 thousand  annually and would                                                                    
increase to $226 thousand. A  fiscal note was put forth with                                                                    
the legislation because of the  current situation with PERS.                                                                    
If  additional  benefits  were needed  in  the  contribution                                                                    
rates  it  essentially,  in the  state's  current  paradigm,                                                                    
resulted  in an  increase in  the state  assistance payment.                                                                    
However, if the paradigm changed  at any point in the future                                                                    
the participating employers contributing  on a regular basis                                                                    
to police  and fire retirement would  experience an increase                                                                    
in their contribution.                                                                                                          
                                                                                                                                
4:34:02 PM                                                                                                                    
                                                                                                                                
Representative  Gattis  asked what  the  state  had done  in                                                                    
reference to  the families since the  prior administration's                                                                    
initiation of  the bill. Mr.  Boucher answered that  some of                                                                    
the  state   troopers  and  the   families  affected   by  a                                                                    
particular  incident  that  occurred in  2013  had  received                                                                    
medical  care coverage  by the  Department of  Public Safety                                                                    
(DPS) out of its budget.                                                                                                        
                                                                                                                                
Co-Chair  Thompson clarified  that in  the operating  budget                                                                    
there was  a $174 thousand  line item that  covered families                                                                    
of deceased police  officers. The bill aimed  at getting the                                                                    
insurance in statute.                                                                                                           
                                                                                                                                
Representative Gattis  noted that  there were  peace officer                                                                    
deaths going  back to  the 80's. She  wondered if  the state                                                                    
had always included compensation for  the families in a line                                                                    
item  since that  time.  Mr. Boucher  answered  that he  was                                                                    
unaware of individuals being covered until recently.                                                                            
                                                                                                                                
Representative  Gattis reiterated  her understanding  of Mr.                                                                    
Boucher's statement. Mr. Boucher  agreed and elaborated that                                                                    
the bill would also  deal retroactively with the individuals                                                                    
affected by the 2013 incident.                                                                                                  
                                                                                                                                
Representative  Gattis asked  for additional  clarification.                                                                    
Mr. Boucher  responded that the  effective date of  the bill                                                                    
was January 1, 2013.                                                                                                            
                                                                                                                                
Representative  Gattis queried  about  the retroactive  date                                                                    
since the state was already  paying the bill since 2013. Ms.                                                                    
Michaud answered that the benefits  vested were based on the                                                                    
member  and not  their survivors.  A survivor  could not  be                                                                    
vested into a benefit.  The retroactivity date was necessary                                                                    
in  the bill  in order  for the  deceased individuals  to be                                                                    
vested.                                                                                                                         
                                                                                                                                
4:37:08 PM                                                                                                                    
                                                                                                                                
Mr.  Boucher  turned  to  slide  8:  "HB  4002  -  Potential                                                                    
Expansion of the Bill":                                                                                                         
                                                                                                                                
     Option: Expand scope of bill to include National                                                                           
     Guard, VPSOs and other contractors who do similar work                                                                     
     to peace officers/fire fighters                                                                                            
                                                                                                                                
     Problem: These groups are not part of PERS and do not                                                                      
     contribute to PERS retiree health plan                                                                                     
     · IRS prohibits non-participants from benefiting from                                                                      
        pre-tax health trust funds                                                                                              
     · Including these groups jeopardizes tax-exempt status                                                                     
        of PERS retiree plan                                                                                                    
                                                                                                                                
Representative   Guttenberg   understood  the   relationship                                                                    
between employees and PERS. He  wondered if individuals that                                                                    
were  in the  National  Guard  or who  were  VPSOs or  other                                                                    
contractors  had any  death benefits.  He wondered  what the                                                                    
National  Guard  did.  Mr. Boucher  was  not  familiar  with                                                                    
National Guard  benefits but offered  to follow up  with the                                                                    
information. He also  offered to look into  the benefits for                                                                    
VPSOs.                                                                                                                          
                                                                                                                                
Representative  Guttenberg thought  it would  be interesting                                                                    
to  have the  information. There  were a  variety of  places                                                                    
that  VPSOs  worked.  He  added   that  there  were  several                                                                    
volunteer  fire fighters.  He was  interested in  knowing if                                                                    
they bought insurance. Mr.  Boucher presumed the individuals                                                                    
would  be  part  of  state  workers'  compensation.  He  was                                                                    
uncertain beyond that.                                                                                                          
                                                                                                                                
Mr.  Boucher  turned  to  slide  9:  "HB  4002  -  Potential                                                                    
Narrowing of Bill":                                                                                                             
                                                                                                                                
     Request: Limit scope of bill to only state employees,                                                                      
     i.e. Troopers                                                                                                              
                                                                                                                                
     Problem: Definition of "peace officers/firefighters"                                                                       
     would have to be changed for this bill, creating two                                                                       
     groups:                                                                                                                    
        · State employees who qualify for benefits under                                                                        
          PERS                                                                                                                  
        · Non-state employees who qualify for benefits                                                                          
          under PERS                                                                                                            
        · Limiting benefit to state employees would provide                                                                     
          one group with enhanced benefit                                                                                       
        · Would require substantial, potentially costly                                                                         
          change to existing PERS system                                                                                        
                                                                                                                                
Mr.   Boucher  discussed   the   challenge  of   potentially                                                                    
redefining the definition  of "peace officers/firefighters."                                                                    
There was a  concern that it would set  a precedence similar                                                                    
to  that  of  California  which  had  trillions  of  benefit                                                                    
packages  to  administer.  He acknowledged  that  the  state                                                                    
already had enough programs in  place to have to administer.                                                                    
He was concerned about having  the ability to administer the                                                                    
program if it was taken to such an extreme.                                                                                     
                                                                                                                                
4:42:16 PM                                                                                                                    
                                                                                                                                
Mr.  Boucher  moved  to  slide 10:  "HB  4002  -  Compromise                                                                    
Solution":                                                                                                                      
                                                                                                                                
   · Applies to existing statutorily-defined group of peace                                                                     
     officers and firefighters                                                                                                  
   · Consistent with existing legal distinction of this                                                                         
     group from other state employees                                                                                           
   · Reduces fiscal impact compared to previous iterations                                                                      
     of legislation                                                                                                             
   · Provides solution to three Trooper families, after 2                                                                       
     years of working on issue                                                                                                  
                                                                                                                                
Mr.  Boucher  concluded  his remarks  and  offered  to  take                                                                    
questions.                                                                                                                      
                                                                                                                                
Vice-Chair Saddler  asked for the total  number of employees                                                                    
covered by  the Public Employees' Retirement  System (PERS).                                                                    
Mr.  Boucher  would follow  up  with  a precise  number.  He                                                                    
estimated the number to be in excess of 40,000.                                                                                 
                                                                                                                                
Vice-Chair  Saddler referenced  a  comment  Mr. Boucher  had                                                                    
made regarding  fiscal notes showing  the cost  of providing                                                                    
premium-free  health insurance  for all  PERS employees.  He                                                                    
asked  for  the  amount  of the  fiscal  note.  Mr.  Boucher                                                                    
believed it was in excess of  $2.5 million to $3 million per                                                                    
year and escalating.                                                                                                            
                                                                                                                                
Vice-Chair  Saddler asked  what DCR  stood for.  Mr. Boucher                                                                    
answered,  "Defined  contribution  retirees, as  opposed  to                                                                    
defined benefit."                                                                                                               
                                                                                                                                
Vice-Chair Saddler  asked if the  occupations of  police and                                                                    
fire  fighters experienced  the  highest occupational  death                                                                    
rate.  Mr.  Boucher replied  that  the  state did  not  have                                                                    
occupational   related  death   rates.  However,   when  the                                                                    
department looked at the experience  of the peace/fire group                                                                    
versus  the "all  other" group  the peace/fire  group had  a                                                                    
higher death  rate. He added  that the department  could see                                                                    
that there  could be  other high  hazard occupations  in the                                                                    
"all other' groups.  They might be in a  pool of occupations                                                                    
that had a wide variety or very low death risk.                                                                                 
                                                                                                                                
Vice-Chair   Saddler  queried   about   the  potential   for                                                                    
litigation  for   unequal  coverage.  He  wondered   if  the                                                                    
department had  considered the issue. Mr.  Boucher responded                                                                    
that  the department  believed  that  constructing the  bill                                                                    
along  the  lines  of  existing  groups  provided  the  best                                                                    
defense  going  forward. To  say  that  the state  would  be                                                                    
impervious to a  law suit would be  foolish. He acknowledged                                                                    
that department  recognized that there might  be high hazard                                                                    
occupations  outside  of  police  and  fire.  However,  when                                                                    
looked at as  a pool, the particular group had  a lower rate                                                                    
of death than the peace/fire group.                                                                                             
                                                                                                                                
Vice-Chair   Saddler   asked    for   any   information   on                                                                    
occupational  death  rates.  He provided  some  examples  of                                                                    
other  potentially   hazardous  professions   and  expressed                                                                    
concerns about  disparity in  providing death  benefits. Mr.                                                                    
Boucher would provide the information.                                                                                          
                                                                                                                                
4:47:16 PM                                                                                                                    
                                                                                                                                
Representative  Wilson referred  to slide  7. She  asked how                                                                    
the  benefit worked.  Mr. Boucher  provided  an example.  He                                                                    
suggested that if  an individual died prior to  the 25 years                                                                    
and  received  an  occupational death  benefit,  they  would                                                                    
continue  to accrue  service and  contributions  to the  HFA                                                                    
until the  time they would  have reached retirement  age. At                                                                    
that  time they  would change  to retirement  status in  the                                                                    
system.                                                                                                                         
                                                                                                                                
Representative  Wilson believed  the cost  seemed high.  She                                                                    
did not  have a problem with  the benefit part of  the bill.                                                                    
She noted how high the  health costs were and wondered about                                                                    
them.   Mr.   Boucher   responded  that   comparisons   were                                                                    
legitimate. However, money  was also being set  aside for an                                                                    
anticipated future occurrence of incidents.                                                                                     
                                                                                                                                
Representative  Wilson asked  for  a breakdown  of the  $174                                                                    
thousand. Mr. Boucher answered that  it would be part of the                                                                    
occupational  death  benefit, which  was  part  of a  larger                                                                    
pool. There  was also  some retroactivity  in the  bill. The                                                                    
state would potentially be liable for some retroactivity.                                                                       
                                                                                                                                
4:50:57 PM                                                                                                                    
                                                                                                                                
Representative Wilson  asked if  the state had  already been                                                                    
paying  $174 thousand  before the  bill was  introduced. Mr.                                                                    
Boucher answered in the negative.  His understanding was the                                                                    
$174  thousand was  being paid  from DPS'  budget. In  other                                                                    
words,  the   department  was  taking   a  portion   of  its                                                                    
allocation to cover the cost.                                                                                                   
                                                                                                                                
Co-Chair Thompson relayed that  the budget showed the number                                                                    
in anticipation of the passage of the bill.                                                                                     
                                                                                                                                
Representative Wilson was dividing  $174 thousand by 3 which                                                                    
equaled  $58,000  per family.  She  thought  the amount  was                                                                    
high. She  asked how much  the state would be  setting aside                                                                    
for 3 specific families and how  much was being saved in the                                                                    
event of tragedy  in the future. Mr.  Boucher responded that                                                                    
there  were other  eligible individuals  who fell  under the                                                                    
umbrella of the bill.                                                                                                           
                                                                                                                                
Co-Chair  Thompson  announced that  in  about  3 minutes  he                                                                    
would be recessing the meeting.                                                                                                 
                                                                                                                                
Representative Gattis  asked if Mr. Boucher  could breakdown                                                                    
the numbers  and provide  them to the  chairs. She  had more                                                                    
than 3  families on  a list.  She asked  him to  provide the                                                                    
related numbers.  She queried what  "SO" meant.  Mr. Boucher                                                                    
believed "SO" stood for significant other.                                                                                      
                                                                                                                                
Co-Chair  Thompson   asked  Mr.   Boucher  to   provide  the                                                                    
information to his staff.                                                                                                       
                                                                                                                                
Representative  Edgmon requested  that  Mr. Boucher  provide                                                                    
information regarding  any benefits  for VPSOs  through non-                                                                    
profits.                                                                                                                        
                                                                                                                                
Co-Chair Thompson  believed VPSOs  were under  contract. The                                                                    
state   provided   grants    to   communities   and   tribal                                                                    
organizations who then hired VPSOs.                                                                                             
                                                                                                                                
HB  4002  was  HEARD  and  HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
Co-Chair  Thompson recessed  the meeting  to a  call of  the                                                                    
chair  [Note: the  meeting never  reconvened]. He  discussed                                                                    
the schedule  for the following  meeting. He  mentioned that                                                                    
if there were amendments that  members wanted to put forward                                                                    
for HB 4002 they should be  submitted to his office no later                                                                    
than 5:00 p.m. the following day.                                                                                               
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
4:55:34 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 4:55 p.m.                                                                                          

Document Name Date/Time Subjects
H FIN_HB 4002 Presentation_6.14.16 Final.pdf HFIN 6/14/2016 3:00:00 PM
HB4002