02/11/2014 01:00 PM House MILITARY & VETERANS' AFFAIRS

        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.