HB 286-VETS' RETIREMENT/LOANS/HOUSING/EMPLOYMENT  1:50:00 PM CO-CHAIR LEDOUX announced that the final order of business would be HOUSE BILL NO. 286, "An Act relating to the Teachers' Retirement System, the Judicial Retirement System, and the Public Employees' Retirement System for qualified military service; relating to the definition of 'veteran' for purposes of housing, eligibility for veterans' loans, and preferences in state employment hiring; and providing for an effective date." 1:50:34 PM CURTIS THAYER, Commissioner, Department of Administration (DOA), introduced HB 286 on behalf of the House Rules Committee by request of the governor. Commissioner Thayer informed the committee that the governor's administration has recently found items in statute that are not current. For example, there are over 64,000 veterans living in Alaska and 25,000 military members and their families "call Alaska home." Under Alaska law, veterans are eligible for special loan, housing, and employment preferences; however, current statutory language limits preferences to veterans of foreign wars up to and including the Vietnam War. The state is currently unable to extend these preferences to veterans of recent conflicts. In recognition of our service men and women, the bill amends the preference eligibility statutes by updating the periods of service to include the veterans of the most recent wars and conflicts and extending eligibility for veterans' preferences to veterans of the 1991 Gulf War, and veterans who have served under Operation Iraqi Freedom and includes provisions should future conflicts arise. The bill also ensures military families receive full survivor benefits for fallen soldiers implemented under the Heroes Earning Assistance and Relief Tax Act (HEART Act) enacted by Congress in 2008. The HEART Act also addresses differential wage payments - compensation for service members that they would have received from the employer during the service member's period of active duty had the employee been called up to active duty. Commissioner Thayer further explained that when a state employee reservist is called to active duty and is killed in action, their employment with the state will revert back to the day before they died, thus they would receive the same death benefit as a current state employee, and vesting, if any, would be credited to them for their families. Also, there is a provision for the definition of veteran for the purposes of Alaska Housing Finance Corporation (AHFC). Attached to HB 286 is a zero fiscal note. Commissioner Thayer observed that the state has been very lucky that no reservists that have been called for active duty have been killed; however, the administration seeks to bring the state law up to date with federal law. 1:54:07 PM CO-CHAIR LEDOUX opened public testimony on HB 286. REPRESENTATIVE GRUENBERG surmised the bill extends private benefits, but not governmental benefits. COMMISSIONER THAYER responded that the bill extends state benefits, such as state death benefits. REPRESENTATIVE GRUENBERG asked why there is no fiscal note to reflect that. 1:55:11 PM KATHY LEA, Deputy Director, Central Office, Division of Retirement and Benefits, Department of Administration, responded that her division requested its plan actuary to value the effect of the bill on the Public Employees' Retirement System (PERS), the Teachers' Retirement System (TRS), and the Judicial Retirement System (JRS) [plan]. The actuary determined that since there have been no such deaths since [2009], the bill has a de minimis effect on the plan, thus there is a zero fiscal note. In further response to Representative Gruenberg, she said the state does not expect no one will be affected, but it does not expect to see large numbers affected, that would influence the liabilities of the plan. REPRESENTATIVE GRUENBERG stated that he and especially the House Special Committee on Military and Veteran's Affairs need to know an estimate on how many would be affected. COMMISSIONER THAYER pointed out, thankfully, in six years no one has been killed under these circumstances. In further response to Representative Gruenberg, he agreed that the bill is prophylactic because the federal law changed in 2008, and the state is currently out of compliance. He said, "This is for audit purposes ... we're expecting a 2015 audit." REPRESENTATIVE GRUENBERG inquired as to whether the state will face potential sanctions for being out of compliance. MS. LEA said at this point her division does not anticipate any sanctions from the federal government; if the bill passes as anticipated, the state will be "in good qualification status" in a timely manner. In further response to Representative Gruenberg, she deferred the question of potential sanctions to tax counsel, but added her understanding is that the division will not face sanctions if the bill is passed prior to qualification time. REPRESENTATIVE GRUENBERG restated his question: "Any idea, if we don't pass it, what we might face?" 2:00:03 PM MS. LEA acknowledged that if the bill is not passed, when the state seeks qualifications of PERS, TRS, and JRS, the most dire consequence would be the loss of tax qualification status and, at the least, the state could face fines. REPRESENTATIVE GRUENBERG requested that the division forward to him any further information on this matter. REPRESENTATIVE HUGHES asked for confirmation that the definition of "employer" referred to in the bill is the State of Alaska. COMMISSIONER THAYER said correct. The bill applies to State of Alaska employees, retirees, and political subdivisions. 2:02:10 PM CO-CHAIR LEDOUX, after ascertaining that no members of the public wished to testify, closed public testimony. 2:02:35 PM HB 286 was held over.