02/01/2012 09:00 AM Senate FINANCE

SENATE BILL NO. 38                                                                                                            
                                                                                                                                
     "An Act establishing a one-time occupational death                                                                         
     benefit for peace officers and firefighters."                                                                              
                                                                                                                                
9:33:16 AM                                                                                                                    
                                                                                                                                
Senator Meyer  stated that  SB 38  would provide  a one-time                                                                    
payment of  $100,000 occupational death  benefit established                                                                    
in Section  2 of the draft  bill. It would provide  that the                                                                    
payment may not be made to  anyone but a surviving spouse of                                                                    
a dependent child  of a peace officer. He  stressed that the                                                                    
death  of a  peace officer  was  fairly rare  in Alaska.  He                                                                    
noted several letters of support.  He noted that the average                                                                    
age of a peace officer who dies  in the line of duty was 38-                                                                    
years-old.  He   stressed  that  the  bill   was  especially                                                                    
important, because the officer  may have small children that                                                                    
needed financial support.                                                                                                       
                                                                                                                                
Co-Chair Hoffman  wondered what  other states  programs were                                                                    
in comparison to  this bill. Senator Meyer  stated that each                                                                    
state  had different  programs. CHRISTINE  MARASIGAN, STAFF,                                                                    
SENATOR KEVIN  MEYER, stated that  39 other  states provided                                                                    
similar benefit.  She said the  benefit ranged  from $25,000                                                                    
to $400,000.                                                                                                                    
                                                                                                                                
Senator Egan  requested an explanation of  the fiscal note's                                                                    
continual  increase  over  time. Ms.  Marasigan  noted  that                                                                    
there was  some information  required related  to liability.                                                                    
She stressed that there was  some actuary liability studies.                                                                    
Senator  Meyer  added that  there  was  anticipation of  one                                                                    
death per year.                                                                                                                 
                                                                                                                                
9:38:49 AM                                                                                                                    
                                                                                                                                
Senator Olson  looked at the  pension fund, and  wondered if                                                                    
the  peace   officers  would  be  required   to  pay  higher                                                                    
insurance because  of the potential of  more deaths. Senator                                                                    
Meyer  believed  that  the  money would  be  used  from  the                                                                    
unfunded  liability,  meaning  that the  money  was  already                                                                    
available.                                                                                                                      
                                                                                                                                
Senator Olson  wondered if there  were other  death benefits                                                                    
for officers  that die  in the line  of duty.  Senator Meyer                                                                    
replied that there were some life insurance benefits.                                                                           
                                                                                                                                
JIM PUCKETT, DIRECTOR, DIVISION  OF RETIREMENT AND BENEFITS,                                                                    
introduced himself.                                                                                                             
                                                                                                                                
Co-Chair  Stedman  wondered  what   the  tier  4  employees'                                                                    
benefits  would  be. Mr.  Puckett  replied  that they  would                                                                    
receive the DCR balance.                                                                                                        
                                                                                                                                
Co-Chair Stedman  surmised that  the benefit would  be zero.                                                                    
Mr.  Puckett agreed  to provide  more information  regarding                                                                    
tier 4 employee benefits.                                                                                                       
                                                                                                                                
Co-Chair   Stedman  requested   information  regarding   the                                                                    
structure of the  tier 4 benefits, because he  would like to                                                                    
look at  the comparative differences between  a new employee                                                                    
and one  that had  been employed for  20 years.  Mr. Puckett                                                                    
explained that if  there was a loss of life  due to accident                                                                    
on  the job,  there would  be  a life  insurance benefit  of                                                                    
$100,000  and  the  Supplemental Benefit  System  (SBS).  He                                                                    
stated that  he would provide further  information regarding                                                                    
new employees.                                                                                                                  
                                                                                                                                
Senator  Olson  wondered  when   the  benefits  would  begin                                                                    
following  the death.  Mr. Puckett  replied that  basic life                                                                    
insurance would  occur immediately,  and the check  would be                                                                    
disclosed within a week following the incident.                                                                                 
                                                                                                                                
9:44:21 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman requested  written information in grid-form                                                                    
regarding  the  tier  system benefits  and  structures.  Mr.                                                                    
Puckett agreed to provide that information.                                                                                     
                                                                                                                                
Senator Egan wondered  if it there was an  assumption of one                                                                    
death  per  year,  when  the  calculations  were  made.  Mr.                                                                    
Puckett replied  that the one  death per year was  the basis                                                                    
of the calculation.                                                                                                             
                                                                                                                                
Senator Egan  wondered how the unfunded  liability increased                                                                    
$650,000.   Mr.   Puckett  requested   further   information                                                                    
regarding  Senator Egan's  reference  of $650,000.  Co-Chair                                                                    
Stedman  stated that  it was  in the  Buck Analysis,  second                                                                    
paragraph last  sentence. He felt  that the  accumulation of                                                                    
expenditures was added  to the negative side  of the balance                                                                    
sheet.                                                                                                                          
                                                                                                                                
Co-Chair Stedman  wondered who picked  up the tab:  the city                                                                    
or the state. He explained  that the state would be required                                                                    
to provide the  funds, because the cities were  capped at 22                                                                    
percent. He  felt that there  would be a  broader discussion                                                                    
related to that topic.                                                                                                          
                                                                                                                                
AARON   DANIELSON,  PUBLIC   SAFETY  EMPLOYEE   ASSOCIATION,                                                                    
testified  in  support of  SB  38.  He  felt that  the  bill                                                                    
addressed the  families of the officer  greatest concern. He                                                                    
pointed out that the bill would provide peace of mind.                                                                          
                                                                                                                                
9:49:34 AM                                                                                                                    
                                                                                                                                
CHRIS  GIFFORD, MUNICIPAL  CHAPTER PRESIDENT,  PUBLIC SAFETY                                                                    
EMPLOYEE  ASSOCIATION,  spoke  in   support  of  SB  38.  He                                                                    
stressed the  importance of the  benefit of the  families of                                                                    
the officers.                                                                                                                   
                                                                                                                                
DEREK   HSIEL,   ANCHORAGE    POLICE   DEPARTMENT   EMPLOYEE                                                                    
ASSOCIATION, testified  in support of  SB 38. He  focused on                                                                    
the reality  of death in  the line  of duty. He  pointed out                                                                    
that  training  for  death  was   a  requirement  for  peace                                                                    
officers.   The  training   was   used   to  inoculate   the                                                                    
understanding of  death. He pointed  out that  when officers                                                                    
were  killed in  the  line of  duty, the  work  for the  day                                                                    
continued.  He  stressed  that   death  was  expensive,  and                                                                    
sometimes there were extra costs  incurred by the family. He                                                                    
stressed  that  sometimes   business  contributions  off-set                                                                    
costs, but smaller communities might not have that benefit.                                                                     
                                                                                                                                
9:54:10 AM                                                                                                                    
                                                                                                                                
Senator  McGuire   noted  that  $100,000  might   not  be  a                                                                    
substantial amount of money. She  wondered if there were any                                                                    
scholarship  opportunities for  dependents. She  hoped there                                                                    
may be a  possibility for a four-year scholarship  for an in                                                                    
state  college  for children.  Mr.  Hsiel  pointed out  some                                                                    
benefits in  the military. He  felt that the  added benefits                                                                    
would be left to the legislature's discretion.                                                                                  
                                                                                                                                
Senator   McGuire  requested   more  information   regarding                                                                    
scholarships, and  noted a  summary of  the record  of peace                                                                    
officer  deaths in  Alaska. She  also  would like  to see  a                                                                    
scholarship  benefit  possibility.  Co-Chair  Stedman  noted                                                                    
that those requests  should be directed at  the bill sponsor                                                                    
and the Department of Public Safety.                                                                                            
                                                                                                                                
9:59:14 AM                                                                                                                    
                                                                                                                                
ERIC TUOTT, ANCHORAGE FIREFIGHTERS,  testified in support of                                                                    
SB 38. He  stated that he was married  with a three-year-old                                                                    
daughter, so his family would  be greatly affected if he was                                                                    
killed in the line of duty.  He stressed that deaths did not                                                                    
happen frequently, but did occur occasionally.                                                                                  
                                                                                                                                
LARRY  SEMMENS,   CITY  MANAGER,   CITY  OF   SOLDOTNA  (via                                                                    
teleconference), testified  against SB 38. He  stressed that                                                                    
the  employees were  already covered  by occupational  death                                                                    
benefits. If SB 38 passed, He  thought it was a poor time to                                                                    
add benefits that would increase  the unfunded liability. He                                                                    
indicated  we  should  be working  to  reduce  the  unfunded                                                                    
liability, and not add benefits.                                                                                                
                                                                                                                                
Co-Chair  Stedman pointed  out  the new  fiscal impact  note                                                                    
from the  Department of Administration,  for a  zero-cost in                                                                    
FY  2013. However,  the there  was  an anticipated  $175,000                                                                    
general fund  increase in  the annual  employer contribution                                                                    
amount beginning  in FY 2014, with  incremental increases in                                                                    
the following years. He stressed that there would be an                                                                         
impact on the unfunded liability.                                                                                               
                                                                                                                                
10:07:23 AM                                                                                                                   
                                                                                                                                
Senator Olson wondered what community contribution would                                                                        
be. Senator Meyer replied that the local contribution was                                                                       
currently 22 percent.                                                                                                           
                                                                                                                                
Senator McGuire referenced Title 14.43.085.                                                                                     
                                                                                                                                
Senator Meyer thanked the committee.                                                                                            
                                                                                                                                
SB 38 was HEARD and HELD in committee for further                                                                               
consideration.                                                                                                                  
                                                                                                                                
10:09:33 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:13:39 AM                                                                                                                   
RECONVENED