Legislature(2025 - 2026)ADAMS 519
03/19/2025 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Adjourn | |
| Start | |
| HB48 | |
| HB17 |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 17 | TELECONFERENCED | |
| + | HB 48 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 17
"An Act relating to retirement benefits and military
service."
2:39:36 PM
REPRESENTATIVE GEORGE RAUSCHER, SPONSOR, explained that the
bill was a reintroduction of the previous year's HB 232. He
recounted that HB 232 had successfully advanced through the
House Military and Veterans Affairs Committee, and the
House Finance Committee before reaching the House Rules
Committee on May 8, 2024, too late for passage. He thanked
the committee for its unanimous support in the prior year.
He noted that there had been nine "do pass" designations on
the bill.
Representative Rauscher relayed that HB 17 ensured that
veterans that were totally and permanently disabled could
access accrued Public Employees' Retirement System (PERS)
benefits a few years earlier without penalty. The bill also
clarified that the military service purchased under PERS
rules counted as credited service requirements for normal
retirement. He noted the veterans with total and permanent
disabilities often encountered significant barriers to
employment, financial stability due to their service-
connected conditions. He contended that by passing HB 17,
the legislature could ensure the veterans received the
benefits they had already earned at a time when they needed
them the most. The bill did not expand benefits but simply
removed unnecessary hurdles for disabled veterans that had
already served the country and the public. He contended
that with the support of the committee and the legislature,
the state could take a meaningful step towards providing
stability and certainty for those that sacrificed and gave
so much of their lives and bodies for our nation.
2:42:04 PM
CRAIG VALDEZ, STAFF, REPRESENTATIVE GEORGE RAUSCHER, went
through the sectional analysis (copy on file).
Section 1: AS 39.35.370(a) This section amends AS
39.35.370(a) to add additional language related to
eligibility requirements when a terminated employee is
eligible for a normal retirement benefit. Specifically
adding new subsections, A and B to section 1, lines 7
through 10.
Section 2: Repeals three statutes.
Representative Stapp commented that he supported the bill.
He asked about the discount rate given and understood that
the veterans would be able to use military service to buy
into retirement. He asked what the discount rate would be.
2:43:50 PM
BRANDON ROOMSBURG, RETIREMENT AND BENEFITS MANAGER,
DIVISION OF RETIREMENT AND BENEFITS, DEPARTMENT OF
ADMINISTRATION (via teleconference), assumed that
Representative Stapp was asking about being able to retire
sooner than being vested or meeting normal early-eligible
requirements.
Representative Stapp answered in the affirmative. He
thought typically people could buy into it with money to
make sure the actuarial realized value was the same.
Mr. Roomsburg answered affirmatively. He asked if
Representative Stapp was speaking to the ability to accept
an actuarial reduction to the benefit and not having to pay
for the claim itself.
Representative Stapp asked if the bill proposed to make the
veterans buy the time, or if the veterans were just
receiving the time.
Mr. Roomsburg would follow up at a later time.
Co-Chair Josephson thought the sponsor had indicated that
the bill did not propose to expand benefits. He pondered a
person with 5 years in credited service, for defined
benefit (DB) or defined contribution (DC) plans. He assumed
that if a person could get into retirement sooner, there
benefits were expanded in terms of timeline if not in
quantity or quality of the benefit.
Mr. Valdez responded that it was only for DB plans and only
covered Tier 1 employees. He understood Co-Chair
Josephson's reasoning.
2:46:37 PM
Representative Hannan asked if the number of people
potentially affected was known. She recalled that two
people were affected. She thought the people both needed to
already have 5 years credited service in the DB system and
be permanently and totally disabled service-connected. She
thought the scope was narrow.
Mr. Valdez relayed that the state did not have precise
numbers but had narrowed it down to potentially two Tier 2
individuals. The fiscal note mentioned there were
potentially up to 48 people that could meet the
qualifications. He suggested addressing the question to the
authors of the fiscal note.
Representative Hannan wanted to hear from DRB as to whether
it had come up with a broader number.
Mr. Roomsburg did not hear the question.
Representative Hannan asked how many people would be
captured under the law if the bill was implemented.
Mr. Roomsburg replied that it would be approximately 48
members.
Representative Hannan asked about the 48 people who
potentially could qualify because of having five years of
service. She asked if it was not known if they were all
living and currently receiving disability.
Mr. Roomsburg responded that it could be a combination of
active, inactive, or retired members. He offered to split
up the demographics for her review.
2:49:10 PM
Representative Bynum thought that under the bill the
individuals would still have to meet the five years of
service requirement. He asked about the term "terminated"
being used twice. He asked about the current definition for
"permanently and totally disabled for service-connected
conditions."
Mr. Roomsburg responded that when he read the language, he
did not see the portion about five years of service as part
of the bill. He would have the same question for the bill
sponsor.
Co-Chair Josephson asked Mr. Roomsburg to repeat his
answer.
Mr. Roomsburg replied that he would have the same question
as Representative Bynum had regarding the "at least 5
years" of service.
Mr. Valdez relayed that he would look into the language.
Mr. Roomsburg responded that Section 1 stated "with at
least five years of credited service."
Co-Chair Foster suggested that the sponsor do some research
on the credit service.
Representative Rauscher responded that the phrase "at age
60" was removed. He was not sure he was following the
question, but he would return to the committee with more
information.
2:52:53 PM
Representative Bynum acknowledged that the bill stated "at
least five years," but wanted to ensure that it was a
requirement with the way the bill was written. He thought
it would be a question for the Division of Legal and
Research Services. He asked about the specific terminology
relating to a terminated employee. He discussed terminology
regarding veterans that were permanently disabled, and
whether it was specifically defined in the federal code. He
discussed classifications of disability.
Mr. Valdez responded that he would follow up with
legislative legal services to determine why certain
terminology was used. He relayed that the bill used the
Veteran's Administration (VA) definition of permanent
disability.
Co-Chair Josephson asked when Tier 2 had ended.
Mr. Roomsburg responded that Tier 2 closed on June 30,
1996.
2:54:58 PM
MARK WHISENHUNT, SELF, PALMER (via teleconference),
advocated on behalf of disabled veterans and supported the
bill. He wanted to address some of the questions members
had asked. He explained that disabled veterans often faced
challenges like limited employment opportunities,
difficulty accessing quality healthcare, and higher rates
of mental health issues such as Post-Traumatic Stress
Disorder (PTSD). He discussed the transition to civilian
life, which could be challenging. He thought veterans often
downplayed the impact of service. He discussed the category
of veterans with permanent disabilities, who could face
even greater challenges with employment and often struggled
with income stability. He had personally experienced the
challenges and had seen the same in others.
Mr. Whisenhunt contended that the bill could serve a unique
role in supporting disabled veterans. He suggested that
support of the bill would show commitment to veterans. The
bill allowed totally permanently disabled veterans to
access retirement benefits they had earned. He thought the
legislation was a lifeline and cited that the VA had deemed
less than 4 percent of veterans were totally permanently
disabled. He cited a study that indicated that the small
group of veterans had diminished life expectancy when
compared to the civilian population. Disabled veterans were
dying on average 15 years earlier than their civilian
counterparts. He estimated that there were approximately 48
totally permanently disabled veterans that had a PERS
account. He believed that allowing approximately 48 totally
disabled veterans with a significantly lowered life
expectancy to access their hard-earned retirement funds
would in now way cause an undue hardship to the PERS
system.
Mr. Whisenhunt addressed earlier questions relating to how
one would buy military time back. He noted that the
circumstance applied to Tiers 1, 2, and 3. In order to get
any type of benefits, a person would have to be vested by
at least 5 years of service. To purchase military time, it
could only be up to 5 years, and it was done at a rate of
8.5 percent of your annual wage on a vesting year. At year
5, if a person made $50,000 per year, they would have to
pay 8.5 percent of the annual wage, which for the maximum
service credit of five years the person would pay about
$21,000. He noted that the phrases "temporary" and
"permanent" were defined in federal law. The only way to
obtain the specific rating was to be 100 percent disabled
and the VA had to determine the condition would not
improve.
3:01:18 PM
Representative Allard asked about Mr. Whisenhunt's sources
and if he was an expert. She relayed that she had heard
from some veterans that had indicated that the bill would
have a negative impact.
Mr. Whisenhunt replied that he was not an expert but had
done a lot of research. He noted that the data he
referenced was directly from the VA.
Representative Allard was in disagreement with some of what
Mr. Whisenhunt had stated.
Co-Chair Josephson was also confused. He asked if a person
were born in 1988 and at age 18, they could have just
become a Tier 3 employee when the program ended and had
state or municipal service. He discussed the hypothetical
situation of the individual having five years state service
before entering the miliary and becoming totally and
permanently disabled. He pondered that the individual would
currently be 37 years old and would be able to qualify for
retirement decades before others. He pondered that maybe it
was a perfectly good policy call because it was affordable
(because of the low number of people) and the person
defended our country. He asked if under the bill such a
person could get retirement.
Mr. Whisenhunt responded that the person would not regard a
full retirement but would be eligible for the years that
they worked. If the person worked for five years, they
would be eligible for ten percent of their retirement,
which would be a few hundred dollars a month but could be a
significant difference in a person's life.
3:04:49 PM
Co-Chair Josephson asked about Mr. Whisenhunt's comment
about being eligible for ten percent of retirement. He
thought the person would be eligible for all of the
retirement, but it would be fairly small after only working
five years.
Mr. Whisenhunt responded that Tier 2 and 3 retirement was
based off years worked, and ultimately the percentage of
income. If the person made $50,000 per year they would be
eligible for 10 percent of that per month.
Co-Chair Josephson asked why there was no cost to the state
or the Department of Administration [ref: FN 1 from DOA,
OMB Component 64].
Mr. Whisenhunt understood that the fiscal note was
indeterminate because the division did not collect data on
veterans' status.
3:06:43 PM
Representative Hannan thought that Mr. Whisenhunt had
raised a couple of issues that were not in the bill. She
thought he had stated that a person could only bring in
five years of service. She thought line 7 said the person
had to be 60 years of age before drawing the benefit. She
asked if she was reading the bill differently.
Mr. Whisenhunt responded that the five years was defined
within AS 35, which stipulated it was the maximum amount of
time a person could purchases from military service. If a
person had served three years, they could purchase a
maximum of three years of service. He noted that there was
an "or" between a and b; meaning that one had to reach age
60 or be deemed permanently and totally disabled. Vesting
was required for both circumstances. If a person was
permanently and totally disabled at age 44, a person could
retire at that time with the service they had in the
system.
Mr. Valdez reiterated that there were two circumstances in
(a) and (b) to qualify.
Representative Allard asked if anyone had reached out to
the sponsor to indicate it was negatively impacting them.
Representative Rauscher responded in the negative.
Representative Allard shared that she had people reach out
who indicated the bill would negatively impact them. She
referenced Mr. Whisenhunt's testimony about veterans'
shorter life span and challenges with employment. As a
veteran she took offense with many of Mr. Whisenhunt's
statements. She stressed that veterans were not inept but
were capable. She thought it was demoralizing to say that
veterans would need handouts. She thought there needed to
be more information, and questioned the quality of Mr.
Whisenhunt's testimony. She relayed that she would proceed
with caution and gather more information on how the bill
could affect veterans that had retired and had paid into
the system.
Co-Chair Foster asked if Mr. Whisenhunt had an affiliation.
Mr. Whisenhunt responded that he was representing himself.
He noted he had put many hours of research into the topic.
He appreciated Representative Allard's position. He
clarified that as a disabled veteran he would never say
that veterans were not good or needed a handout. He
commented that veterans are resilient. He relayed that his
goal was to point to VA statistics on the struggles of some
veterans. He thought the bill would only help veterans and
in no way hurt veterans, whether retired or not.
3:11:47 PM
Representative Rauscher referenced Representative Allard's
comments and did not think there were any handouts or pity.
He pondered that if a person was 100 percent disabled,
their body would deteriorate faster than others. He
explained that the bill related to awards for the service
and a thank you in understanding what disabled veterans
gave up for our country.
Representative Johnson referenced the first paragraph in
the language section of the fiscal note, which indicated
the bill would create an additional unfunded liability to
the PERS plan. The final paragraph referenced roughly 48
members and referenced repeal of statutes. She read from
the fiscal note:
Additionally, the repeal of the 3 statutes listed in
the bill open up the PERS to additional members who
can use prior military service. This information is
not tracked currently, and the Division is unable to
determine how many members this could impact nor the
impact on pension benefit costs to the PERS. As such,
the Division provides an indeterminate fiscal note
based on this analysis and conclusion.
Representative Johnson pondered that the fiscal note did
not go into the cost in-depth. She thought the bill could
create an unfunded liability to PERS.
3:14:15 PM
Co-Chair Foster OPENED public testimony.
3:14:30 PM
AUSTIN FLAVIN, SELF, PALMER (via teleconference), testified
in support of the bill. He was a member of a veteran's
association. He had followed the previous version of the
bill. He grew up in Dillingham and had enlisted in the navy
for six years. He recounted that around 2001, he had some
PERS service prior to enlisting and kept his Tier 3 status.
He discussed four deployments, including a 7-month
deployment to Iraq where he dealt with burn pit activity.
He described the cutting and welding of improper metals and
up-armoring of military vehicles, which involved ingesting
toxins. He had a rating with the VA and he had bought his
time back. He addressed comments related to the bill being
a kind of hand-out. He cited that he had paid over $30,000
to buy his military time back. He interpreted the bill as a
benefit he had already paid for. He addressed Section 3,
line 13, which he thought would affect himself or others
with at least 30 years of credited service. He discussed a
similar provision for police and fire personnel.
Mr. Flavin shared that he supported the bill because he had
a rating with the VA, which he could not disclose. He
relayed that he had Chronic Obstructive Pulmonary Disease
(COPD) directly associated with burn pits in Iraq. He
shared that he was 43 years old and endeavored to be
healthy. He would gladly take the opportunity to retire
sooner and live a better quality of life. He knew there
were individuals that had worse experiences that would also
be eligible. He saw the bill only as helping people that
had served their country, with a high likelihood of serving
in Iraq, Kosovo, and other areas. He mentioned the lower
life expectancy of veterans.
3:22:07 PM
Representative Tomaszewski thanked Mr. Flavin for his
service.
Co-Chair Josephson thanked Mr. Flavin for his service. He
knew that the previous Congress had fought hard for
benefits for people that were exposed to burn pits and
hoped he got what he was entitled to.
3:23:06 PM
Co-Chair Foster CLOSED public testimony.
Representative Hannan asked if the bill would impact anyone
who was already a retiree.
Mr. Roomsburg relayed that he would need to follow up.
Representative Hannan was confused. She understood that the
numbers could not be predicted and that the fiscal note
referenced potential unfunded liability but thought that
the bill would not affect the people who were already
retired or their benefits.
Mr. Roomsburg agreed.
Representative Bynum asked about questions for Legislative
Legal Services.
DAN WAYNE, ATTORNEY, LEGISLATIVE LEGAL SERVICES, JUNEAU
(via teleconference), was available for questions.
Representative Bynum asked about persons being aged 60 or
any age if the terminated employee was a veteran. He
thought the VA's definition would apply. He wondered if
there was a legal reason for saying "terminated" twice.
Mr. Wayne thought the language was for drafting purposes,
and instead of saying "person" the bill said "terminated
employee."
3:27:08 PM
Representative Bynum asked that the reference to terminated
employee in the language of the statute described a person
that was no longer working with the state or under the
retirement program.
Mr. Wayne responded in the affirmative.
Representative Bynum thought the language of the bill
stated that a 100 percent disabled veteran (under the VA
definition) would be able to qualify for early retirement.
If a person had worked under Tier 2 or Tier 3 for five
years then met the classification, the person would be able
to file for retirement. He asked if there had been
consideration of putting the new category under the section
where there would be an actuarial adjustment.
Mr. Valdez responded that he was not involved in the
drafting, but he could follow up.
Representative Bynum was just curious if it was taken into
consideration. He thought the fiscal note indicated there
was a small scope of individuals affected. He supported the
bill.
Co-Chair Foster asked to review the fiscal note.
Mr. Roomsburg reviewed a zero-cost fiscal note from DOA
with OMB component 64 and control code IUnPL. There were no
requested operating expenditures, fund sources, or
additional positions requested for the bill. The department
already had sections for processing the work. The
department anticipated regulations to be developed at a
later time if the bill was passed.
Co-Chair Foster set an amendment deadline of March 27 at 5
o'clock p.m.
Representative Rauscher expressed his appreciation for the
committee hearing the bill. He noted that the bill only
affected a small number of veterans with total disability.
Co-Chair Foster reviewed the agenda for the following
meeting.
HB 48 was HEARD and HELD in committee for further
consideration.