Legislature(2009 - 2010)BELTZ 211

02/12/2009 09:00 AM STATE AFFAIRS

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09:03:49 AM Start
09:04:45 AM Confirmation, Joseph Masters, Commissioner Designee, Department of Public Safety
09:19:01 AM Confirmation, Kathleen Ballenger, Nominee, Alaska Public Offices Commission
09:29:51 AM SB79
09:59:57 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Confirmation of Governor's Appointments TELECONFERENCED
Commissioner Joseph A. Masters,
Dept of Public Safety
Commissioner Kathleen Ballenger, APOC
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
         SB  79-MED BENEFITS OF DISABLED PEACE OFFICERS                                                                     
9:29:51 AM                                                                                                                    
CHAIR MENARD announced the consideration of SB 79.                                                                              
SENATOR LESIL  MCGUIRE, Alaska  State Legislature,  sponsor, said                                                               
SB 79 addresses  an odd situation that has been  in statute since                                                               
1986  and  was  recently  identified.   People  in  the  Tier  II                                                               
retirement system have  just begun the retirement  process and an                                                               
irregularity was  found. If public safety  employees are disabled                                                               
during  their  first 20  years  of  service, they  receive  major                                                               
medical  coverage  for the  disability.  The  state will  provide                                                               
permanent  disability  for  life  to a  person  who  is  severely                                                               
injured fighting a  fire or serving the community in  the area of                                                               
public safety. Persons who are  injured after 25 years of service                                                               
go  immediately  into  the retirement  system  and  have  medical                                                               
coverage. SB  79 is for  those who become disabled  between their                                                               
21st  year and  25th  year. It  is a  small,  inadvertent gap  in                                                               
benefits. She has found no  record or any public policy statement                                                               
that  was  intended  to  exclude  this  group  of  public  safety                                                               
employees who  become permanently disabled  in the line  of duty.                                                               
The bill  restores what  she believes is  the original  intent of                                                               
lawmakers  in  1986.  "If  you  are out  there  serving  us,  our                                                               
communities,  in  the  area  of  public  safety  and  you  become                                                               
disabled, ... certainly  it would be our intent  that you receive                                                               
permanent disability  coverage for  your life." Fiscally,  it may                                                               
be $570,000, but  there is no way to know.  It corrects a serious                                                               
problem in the statute.                                                                                                         
9:32:59 AM                                                                                                                    
SENATOR PASKVAN  asked if anyone  has been denied  those benefits                                                               
and if the  bill needs to be retroactive. Are  we dealing with an                                                               
unfortunate person who was disabled in the 21st year of service?                                                                
SENATOR MEYER said this is just an oversight.                                                                                   
SENATOR MCGUIRE said  there are other bills  [in the legislature]                                                               
that  are   more  comprehensive  and  will   change  the  defined                                                               
contribution plan  to a  defined benefit plan,  but this  bill is                                                               
just correcting an oversight.                                                                                                   
9:34:21 AM                                                                                                                    
SENATOR  KOOKESH  asked if  there  are  other overlooked  issues,                                                               
because it is a lot of money.                                                                                                   
SENATOR MCGUIRE  said other issues  may have been created  as the                                                               
tiers changed over  the years in an effort to  reduce the state's                                                               
liability, including the wholesale  change from a defined benefit                                                               
program to  a defined contribution  program. "But at this  time I                                                               
haven't identified any."                                                                                                        
9:35:32 AM                                                                                                                    
JEFF   BRIGGS,   Legislative    Director,   Alaska   Professional                                                               
Firefighters   Association,   Anchorage,   said  there   are   no                                                               
firefighters  that have  been injured  and  denied benefits,  but                                                               
there is a  corrections officer in Fairbanks.  Senator Olson said                                                               
he met someone while campaigning.                                                                                               
SENATOR PASKVAN said  that an employee who was  disabled after 17                                                               
years of work  would qualify for medical coverage.  It would seem                                                               
that a  person disabled in the  21st year has given  more to this                                                               
state. If there  is someone out there that was  disabled in those                                                               
gap  years,  the  bill  should   be  made  retroactive  "so  this                                                               
oversight doesn't land on just a few people."                                                                                   
MR. BRIGGS  said he agrees.  His group  just found out  about the                                                               
problem last  winter, and it  tried going through  the Department                                                               
of Administration  and found out  that the statute would  need to                                                               
change.  It only  affects  Tier  II and  Tier  III public  safety                                                               
employees, and since Tier II was  created in 1986, it is just now                                                               
impacting employees that are reaching  that gap. His hope is that                                                               
the legislation  would take effect  from that 20-year  point. "We                                                               
are  the only  workgroup that  this happens  to." All  other work                                                               
groups  are covered  for occupational  injuries. The  plan allows                                                               
vesting at  10 years,  so a  person with  10 years  and a  day of                                                               
service has more benefits than a person with 20 to 25 years.                                                                    
9:39:06 AM                                                                                                                    
SENATOR FRENCH asked that legislative  legal staff answer Senator                                                               
Paskvan's question about the bill being retroactive.                                                                            
DAN WAYNE, Attorney, Legislative  Legal Services, Juneau, said if                                                               
there is a  peace officer that was denied benefits,  it won't fix                                                               
that.  "It  would  fix  it  prospectively."  He  doesn't  believe                                                               
correctional officers will  be affected by this  bill. "Under the                                                               
definitions  of peace  officers  that we  have  in statute,  they                                                               
don't appear in  any of those definitions." He said  the staff in                                                               
retirements and benefits  should know if someone  has been denied                                                               
SENATOR  FRENCH asked  for  that  definition of  who  is a  peace                                                               
officer under state law.                                                                                                        
MR.  WAYNE said  that  in AS  01.10.060 a  peace  officer is  "an                                                               
officer of the state troopers; a  member of the police force of a                                                               
municipality; a village public safety  officer; a regional public                                                               
safety officer; a United States  marshal or deputy marshal; or an                                                               
officer  whose duty  it is  to  enforce and  preserve the  public                                                               
peace." That's  the general definition. Under  criminal statutes,                                                               
peace officer means a public servant  vested by law with the duty                                                               
to  maintain public  order or  make arrests.  He doesn't  think a                                                               
correctional officer is a peace officer.                                                                                        
SENATOR  FRENCH  asked if  the  bill  will  fix the  problem  for                                                               
9:42:20 AM                                                                                                                    
MR. WAYNE said it will certainly fix it prospectively.                                                                          
SENATOR FRENCH said, "For firefighters?"                                                                                        
The committee took an at-ease.                                                                                                  
9:44:11 AM                                                                                                                    
SENATOR  MCGUIRE  said  lines  15-18   on  page  2  of  the  bill                                                               
references 20 years of credited  service as a peace officer under                                                               
AS  39.35.360  and 39.35.370.  That  statute  refers to  a  peace                                                               
officer or a  firefighter, "so that's where  the definition comes                                                               
from  and that's  where the  firefighters  come in."  She has  no                                                               
objection  to  including  correctional   officers.  There  is  no                                                               
retroactivity clause, but  the bill clarifies a law  that was put                                                               
in place  in 1986. It  is her intent  that the new  statute would                                                               
work  from that  moment. "This  would  have been  the rule.  This                                                               
would've been  what was intended."  If a retroactivity  clause is                                                               
needed to make it clear, she welcomes that from the committee.                                                                  
SENATOR FRENCH  said it  may save  some poor  guy a  lawsuit. "An                                                               
injured worker  will face  a lawsuit and  there'll be  some good-                                                               
natured  Department of  Law attorney  saying the  statute doesn't                                                               
cover you, and the legislature had their opportunity to do it."                                                                 
SENATOR  PASKVAN asked  if [this  conversation] of  the committee                                                               
will influence it.                                                                                                              
SENATOR FRENCH said, a little, but it is better to be explicit.                                                                 
9:46:29 AM                                                                                                                    
MR. WAYNE said it is better to be explicit.                                                                                     
SENATOR FRENCH  said in 2006 the  first Tier II employees  got 20                                                               
years of  service and  could get injured  and not  have coverage,                                                               
unlike if  it had happened the  year before. The gap  to be fixed                                                               
starts  there. It  is now  2009, so  the gap  has been  there for                                                               
three years,  so there may be  people that have been  injured and                                                               
are  fighting for  major medical  disability payments.  This bill                                                               
could  cure their  problem if  the bill  is explicit  in covering                                                               
everyone  who  has  20  years  of service  in  Tier  II.  So  the                                                               
committee should  make it retroactive  to 2006 or "just  say that                                                               
we mean to make it cover all those employees."                                                                                  
MR. WAYNE said he agrees.                                                                                                       
SENATOR  FRENCH said  he thinks  a CS  [committee substitute]  is                                                               
SENATOR MCGUIRE  said a  conceptual amendment  on making  the law                                                               
retroactive would be acceptable, and  then Mr. Wayne could tackle                                                               
the language.                                                                                                                   
9:48:46 AM                                                                                                                    
SENATOR  PASKVAN   said  his  concern   is  that  there   may  be                                                               
individuals that  have already  been denied.  It is  important to                                                               
make it explicit through a CS.                                                                                                  
SENATOR MEYER said  it is the chair's prerogative to  get a CS or                                                               
use a conceptual amendment, but he  would like to hear from Kevin                                                               
Brooks because there may be other overlooked classifications.                                                                   
CHAIR MENARD  said it will  affect the  fiscal note if  there are                                                               
others, so she prefers a CS.                                                                                                    
9:50:44 AM                                                                                                                    
KEVIN BROOKS, Deputy  Commissioner, Department of Administration,                                                               
Juneau,  said  it  is  his  understanding  that  p-retirement  is                                                               
differentiated  from  police  officers  defined  in  statute.  P-                                                               
retirement   includes    peace   officers,    firefighters,   and                                                               
correctional officers, but he will confirm that later.                                                                          
SENATOR  FRENCH  said  Senator  Meyer's  issue  may  be  resolved                                                               
because it may  be only that narrow class of  employees that have                                                               
access to  a 20-year  retirement. So  other employees  won't fall                                                               
into this gap.                                                                                                                  
MR. BROOKS  said he  thinks that is  correct, and  those benefits                                                               
have been  changed from 20  to 25 [years] for  Tier IV. He  has a                                                               
handy  matrix  comparing the  tiers  that  he  will give  to  the                                                               
committee. He  believes there  are no  other oversights  that are                                                               
similar. He  knows of no  one who  has applied for  benefits that                                                               
may have  been denied [because  of this  gap], but he  will check                                                               
into that.  He said  his department attached  the fiscal  note of                                                               
about $570,000. There  is a lot of  proposed legislation relating                                                               
to pension benefits this year. This  bill is a very narrow piece,                                                               
but the  retirement management  board is  meeting today  and will                                                               
provide the status  of the funds. At the last  report there was a                                                               
$7.4 billion unfunded status with  PERS and TRS retirement funds.                                                               
That doesn't include the dramatic  recent losses. He expects that                                                               
the  unfunded liability  has  grown,  and it  may  be  in the  $9                                                               
billion range.  This bill  adds a $570,000  present value  to the                                                               
liability, and  he is  concerned about  adding anything.  But the                                                               
bill does  recognize a gap  in benefits.  He is trying  to figure                                                               
out the  intent of  the gap,  and he  hasn't gotten  a definitive                                                               
answer. "We had a small amount  in our operating budget, as well,                                                               
to do  some programming changes  -- $12,800 in the  current year;                                                               
$12,400  in  FY10,  but that's  just  some  computer  programming                                                               
changes that we would need to  make to accommodate the changes in                                                               
the plan if the bill becomes law."                                                                                              
9:55:50 AM                                                                                                                    
SENATOR MEYER said the confusion  was defining peace officers for                                                               
retirement  purposes which  is different  than the  definition in                                                               
statute. Does  the administration support this  bill? He believes                                                               
it was an oversight, but it will add to the unfunded liability.                                                                 
MR.  BROOKS said  he  has  no word  from  the  governor, but  the                                                               
department  is  neutral  because   of  the  additional  cost.  He                                                               
apologized for the "cop out."                                                                                                   
CHAIR MENARD  suggested that if it  is the right thing  to do, it                                                               
"trumps what  the department's going to  have to look at  and get                                                               
creative to  find this money, because  if we truly did  err, then                                                               
this is our opportunity to correct it."                                                                                         
9:57:50 AM                                                                                                                    
CHAIR MENARD  closed public testimony  and asked Mr. Wayne  if he                                                               
had further comments.                                                                                                           
MR. WAYNE  said it is a  good idea to name  correctional officers                                                               
and firefighters  explicitly, which means changing  the title. It                                                               
would  be changing  the  law  as it  is  now  because only  peace                                                               
officers are eligible  ... There are a couple  of paragraphs that                                                               
refer to peace  officers in the bill on page  2. If the committee                                                               
intends to  include correctional officers and  firefighters, they                                                               
should be added.                                                                                                                
CHAIR MENARD said that is a good suggestion and held SB 79 in                                                                   

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