Legislature(2003 - 2004)
05/13/2003 08:09 AM STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 228-STATE EMPLOYEES CALLED TO MILITARY DUTY CHAIR WEYHRAUCH announced that the next order of business would be HOUSE BILL NO. 228, "An Act relating to state employees who are called to active duty as reserve or auxiliary members of the armed forces of the United States; and providing for an effective date." [Before the committee is CSHB 228(MLV).] Number 2578 JULI LUCKY, Staff to Representative Beth Kerttula, Alaska State Legislature, testified on behalf of the sponsor. Ms. Lucky explained that HB 228 will give the governor the authority to extend benefits and pay to state employees that are called to active duty or on orders. The state employees would receive less pay while working for the military service. She offered to answer any questions. REPRESENTATIVE SEATON pointed out that the legislation includes a retroactive provision back to September 2001. However, the fiscal note seems to indicate that no one was called to active duty. MS. LUCKY related her understanding that eight [state employees] could be eligible. She explained that the legislation gives the governor the authority to issue the administrative order, which has tremendous latitude. The fiscal note is indeterminate. REPRESENTATIVE SEATON surmised then that the authorization would be the difference between the [state employee's] regular pay and his/her military pay, which is a known quantity as are the benefits. However, there is no knowledge with regard to the maximum authorization amount. He asked if the aforementioned merely hasn't been calculated. MS. LUCKY pointed out that the Department of Military & Veterans' Affairs prepared the fiscal note. Ms. Lucky related that the sponsor feels that when people are hired and a budget is created, the departments have already incurred those costs. Therefore, the only time that additional costs would be incurred if someone had to fill the position of an employee called to active duty. REPRESENTATIVE SEATON asked if people have been pulled in to fill the employees' positions over the several year period specified in the legislation. MS. LUCKY said she understood that when people were called to duty during the retroactive period the employees were, on average, only gone for around three months. Ms. Lucky acknowledged that the retroactive provision has been an issue for the administration. She explained that those covered under the retroactive provision are looking for the known net loss in their retirement benefits and accrual of time. Obviously, the [state] wouldn't extend the pay and health benefits to these people at this time. These individuals are looking for the time that they were called to duty to count toward their retirement and retirement benefit credit. Number 2360 REPRESENTATIVE DAHLSTROM asked if this legislation would basically bring the state into compliance with what other businesses are required to do when employees are called to active duty. MS. LUCKY answered that the state meets the requirements now. However, since [the terrorist attacks of September 11, 2001] businesses and employers have tried to provide their employees with no net loss. The thought is that if one is willing to fight for the country, that individual's family shouldn't lose health benefits and the individual shouldn't lose retirement benefits or pay while on active duty. She informed the committee that the states that have some sort of pay differential or medical coverage to make up the difference [between the individuals regular pay and benefits and those received from the military] are as follows: Tennessee, New York, Florida, Virginia, California, Delaware, Kansas, New Jersey, Ohio, Okalahoma, West Virginia, Washington, and Wyoming. She noted that some of the private companies that are doing this are as follows: American Express, Boeing, Co., Coca Cola, Ford Motor Co., Hewlett Packard, Sara Lee, UPS, and Xerox. Ms. Lucky specified that the benefits would only go to those individuals who would make less while on active duty than if at home. The past testimony has related that the average deployment is three months and dependents don't receive benefits until the deployed individual has been gone for about 180 days. The sponsor's intent is to allow the governor to say that those fighting for the country shouldn't have to suffer additional financial hardships while serving. REPRESENTATIVE DAHLSTROM related her understanding that when men and women are called to active duty there is no choice. MS. LUCKY said that she believes HB 228 would cover both voluntary and involuntary service. Number 2210 REPRESENTATIVE HOLM remarked that he has no problem with the idea behind this legislation. However, he noted his discomfort with a fiscal note that doesn't have limits. Representative Holm questioned whether it's good policy to pass legislation when there is no way to know if it can be funded or not. REPRESENTATIVE GRUENBERG characterized HB 228 as a type of unfunded mandate. Representative Gruenberg said he believes it's time for the federal government to review the cost of serving and who should bear that cost and whether this is an unfunded mandate. Perhaps the state should ask Congress to consider this part of the cost of waging war and perhaps Alaska should be the first state to speak up for those who sacrifice not only their lives but also their entire family savings. Representative Gruenberg said he would like to know whether it's appropriate to insert such language in this legislation. REPRESENTATIVE LYNN agreed with Representative Gruenberg regarding this legislation being an unfunded mandate. The families of those serving are often the ones who bear a large part of the burden. Representative Lynn suggested that a resolution on this matter would probably be appropriate. He offered to work with Representative Gruenberg on such a resolution. Number 1913 CHAIR WEYHRAUCH inquired as to how many individuals would be impacted by this legislation now. MS. LUCKY said that last year eight state employees would've qualified. CHAIR WEYHRAUCH inquired as to the policy justification to have this retroactive and he asked if the legislation would be harmed if the retroactive provision wasn't included. MS. LUCKY reiterated that the retroactive provision was included to help those called to duty during [the terrorist attacks of September 11, 2001] and the subsequent events. The sponsor intended for those individuals to recoup some of the retirement benefits that were lost. The retroactive provision has been an item of discussion and is left to the committee's discretion. CHAIR WEYHRAUCH related his understanding that the retroactive provision would bestow health benefits on one of the eight. MS. LUCKY explained that the legislation is permissive, and therefore it would depend upon the language of the administrative order. CHAIR WEYHRAUCH inquired as to how health benefits would be given retroactively. MS. LUCKY said that in her opinion, the health benefits wouldn't be something that [an administrative order] would give. The intent is to allow the governor to put out an administrative order that would allow people who might not have been able to qualify or vest in their retirement to receive credited time for the time they were away. It wasn't [the sponsor's] intent to give these people back pay or health benefits. Number 1775 REPRESENTATIVE DAHLSTROM pointed out that if a family member had surgery during the time [when the individual was called to active duty], with the passage of this legislation the individual would be able to submit the costs for that and recover those costs. Representative Dahlstrom characterized the aforementioned as a good thing. CHAIR WEYHRAUCH asked if the military would have health benefits that the individual called to duty could obtain. MS. LUCKY related her understanding that the individual would be covered by those health benefits and after 180 days the health benefits would be available to the dependents. However, the problem is that the [dependents] would only receive the state benefits through the month the individual called to duty was working unless the individual had enough leave to cover the time he/she was gone. Therefore, the dependents wouldn't be covered under the individual called to duty. Number 1705 REPRESENTATIVE SEATON asked if the eight individuals this would address were volunteers to duty or were called to duty. MS. LUCKY said that she didn't have that information. Number 1660 JOHN CRAMER, Director, Administrative Services Division, Department of Military & Veterans' Affairs, responded to Representative Seaton's question by saying that he believes the eight individuals were called to duty. CHAIR WEYHRAUCH pointed out that in the PERS information handbook it addresses the call to active duty by specifying the following: "If you are called to active duty either voluntarily or involuntarily during your active PERS service and you return to the same PERS employer within 90 days of honorable discharge from active duty, your military service is considered membership service time. You will need to submit a written request along with a copy of your military discharge papers to have this service time credited. There is no cost for this service." He inquired as to how that worked with what is being accomplished in this legislation. MS. LUCKY said she could get an answer for the committee. MS. CRAMER said he couldn't comment and deferred to the Division of Retirement and Benefits. REPRESENTATIVE LYNN indicated that one of the basic issues is with regard to the dependents who experience a gap in coverage. The person recalled to active duty receives military pay, health, and benefits. This lapse in coverage for the dependents isn't helpful for morale. REPRESENTATIVE SEATON surmised from the excerpt from the PERS information handbook that the retirement benefits of [an individual called to active duty] is covered if they return to state service and apply [to receive] it. Therefore, it seems the retirement benefit is already addressed. He noted that he has problems with retroactive clause. Number 1486 REPRESENTATIVE DAHLSTROM said that she shared some of Representative Seaton's concerns regarding the fiscal impacts of this. However, she said that she has such great respect for those willing to put their lives on the line that perhaps there are some costs that [the state] does need to incur and thus she is comfortable with the legislation. REPRESENTATIVE SEATON commented that he doesn't have a problem with the legislation. However, every time there is a retroactive clause it seems to create a "sticky wicket." REPRESENTATIVE CRAWFORD turned to Representative Seaton's "sticky wicket" remark and said that [some of] the retroactive dates changed court orders or cases, which isn't the case with this legislation. It seems that legislation very similar to this was passed out of this committee; he inquired as to what happened with that legislation. MS. LUCKY confirmed that there was [similar] legislation last year in both the House and the Senate. The legislation [from last year] ended up permanently residing in the Senate State Affairs Standing Committee. Number 1221 REPRESENTATIVE SEATON asked if the health benefits of these [eight] individuals is restored [for that time of active duty], would it mean that [the state] would pay for the health insurance premiums that those folks may or may not have used. He expressed concern that this retroactivity allows the governor to give these individuals pay for the time gone from state service. Therefore, he moved that the committee adopt Conceptual Amendment 1 as follows: Page 2, line 20, after "2001" Insert "for health and accrual of retirement benefit qualifications only" REPRESENTATIVE GRUENBERG objected and expressed his desire to meet on this topic this afternoon when perhaps someone from the Division of Retirement and Benefits could be available. Therefore, he requested that Conceptual Amendment 1 be held on the table until that time. REPRESENTATIVE CRAWFORD noted his opposition to Conceptual Amendment 1 because he believes the intent is to make up the difference in people's pay if called to active duty. Those individuals shouldn't be made to suffer for doing their duty for the country. He remarked that the believes the intent of this legislation is the right intent. REPRESENTATIVE DAHLSTROM said that she would like to leave the legislation as it stands. REPRESENTATIVE LYNN echoed Representative Dahlstrom's sentiment. A roll call vote was taken. Representatives Holm, Seaton, and Weyhrauch voted in favor of Conceptual Amendment 1. Representatives Dahlstrom, Lynn, Crawford, and Gruenberg voted against it. Therefore, Conceptual Amendment 1 failed by a vote of 3-4. Number 0858 REPRESENTATIVE DAHLSTROM moved to report CSHB 228(MLV) out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHB 228(MLV) was reported from the House State Affairs Standing Committee.