HB 116-PERS CREDIT FOR MILITARY SERVICE  3:52:59 PM CHAIR OLSON announced that the next order of business would be HOUSE BILL NO. 116, "An Act relating to the use of credited military service by retired peace officers and firefighters to meet certain requirements for major medical insurance coverage; and providing for an effective date." 3:53:55 PM VASILIOS GIALOPSOS, Staff to Representative Charisse Millett, stated that HB 116 would be an option under PERS Tier II and III for peace officers and firefighters who are veterans of the armed forces to opt to purchase time up to five years towards medical retirement benefits. He said this would create a separate indebtedness in comparison to the existing PERS buy- back provisions for PERS retirement. He stated that one change in Version U of HB 116 [not yet before the committee] can be found on page 2, [lines 28-30], of proposed Section 3, which adds subsection (b). This amendment was suggested by the Division of Retirement & Benefits in order for the intent of the bill to take effect. He deferred to the division to explain the effect. 3:55:13 PM REPRESENTATIVE REINBOLD moved to adopt the proposed committee substitute (CS) for HB 116, labeled 28-LS0398\U, Wayne, 2/25/14 as the working document. CHAIR OLSON objected for the purpose of discussion. 3:55:30 PM MR. GIALOPSOS referred to page 2, lines 28-30, of proposed Section 3, which adds subsection (b). He deferred to the Division of Retirement & Benefits to explain the effect. 3:55:44 PM KATHY LEA, Chief Pension Officer, Division of Retirement and Benefits, Department of Administration, stated the new subsection [in Version U] clarifies that the costs calculated for [AS 39.35.340] (j) are not in addition to any costs outlined in subsection (b). Thus, there are not two costs to claim military service for health eligibility, so only one cost will be charged. 3:56:42 PM REPRESENTATIVE CHENAULT asked for clarification on the fiscal note explanation. MS. LEA answered that HB 116 has a zero fiscal note. The cost to using up to five years to count towards health eligible is borne entirely by the member. It is an actuarial cost at time of his/her retirement. Since there isn't any impact on the system, the division submitted a zero fiscal note. 3:57:26 PM CHAIR OLSON asked if it would be similar to the military buy in. MS. LEA answered yes. 3:57:36 PM REPRESENTATIVE CHENAULT referred to page 2, [Section 3], of HB 116. He asked what this language means and how it will affect a peace officer who is retiring, and to further explain how that would affect their retirement payments of benefits. MS. LEA explained a provision in PERS states that any claim for service which will reduce a member's payment below what it would be absent claiming the service cannot use the service. This paragraph refers to that provision. The division would want to be able to use the service whether or not it had an effect on the benefit. 3:58:42 PM REPRESENTATIVE CHENAULT asked whether that was the reason for the language change in Version U. MS. LEA, after first mulling it over, answered yes. 3:59:34 PM REPRESENTATIVE MILLETT pointed out that the profession of police officer is a "young man's job," which is a reason for this bill. She anticipated this bill is a cost savings measure. It will allow police officers and firefighters to buy up to five years of military medical service as a "buy back." In turn, this allows municipalities to hire lower cost employees. She said that she did not wish to disrespect any older officers. 4:01:16 PM CHAIR OLSON, after first determining no one else wished to testify, closed public testimony on HB 116. CHAIR OLSON removed his objection. REPRESENTATIVE JOSEPHSON said he was glad to see the bill again in committee. He characterized the bill as a "win-win" that gives great discretion to the firefighters and police officers to choose whether to use the program. 4:02:18 PM REPRESENTATIVE REINBOLD moved to report the proposed committee substitute (CS) for HB 116, labeled 28-LS0398\U, Wayne, 2/25/14 out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHB 116(L&C) was reported from the House Labor and Commerce Standing Committee.