This meeting of the House Labor and Commerce Committee will come to order. The time is 3.18 PM on February 2nd. Members present are Representative Karak, Representative Colomb, Representative Freer, Representative Sadler, representative Nelson, my co-chair, Representative Fields and myself, co chair Hall. We have a quorum. Please silence your cell phones. We're asking that staff and members of the audience not approach the table. If you need to pass a note to community members, please get the attention of my Committee A, Joan Wilkerson, and she will take care of it. I'd like to thank Andrew Magnussen from the Labor and Commerce Committee secretary and Susan Quigley from the Juneau LAO for Tech and Teleconferencing support. There will be a slight adjustment to our schedule today. We will first hear HB 243 followed by HB 210. The first bill we will hear is HB 243, barbers, hairdressers, and aesthetics licensing. Representative Carrick and aid cadence Conner, please take a seat at the front of the room and introduce yourselves for the record. And please maybe remind us what HB243 is about and any other comments you'd like to share. We also have Kevin McKinley from Fairbanks, he's at Fairbank's LIO. He's online to help us answer any committee questions. Representative carrick. Thank you, co-chair Holland, members of the House Labor and Commerce Committee for the record Ashley Kerrick representative for House District 35 in West Fairbanks. And House Bill 243, just for a reintroduction, simply provides the statutory clarity that the Board of Barbers and Hairdressers may delegate licensing authority to the Division of Corporations, Businesses and Professional Licensure. And it comes at the request of barbers in hairdressers, board chair Kevin McKinley in is online. If there are any questions. Great. Thank you. Are there any questions from the committee? Seeing none. We will now open public testimony on this bill. Is there anybody in the room who'd like to testify on HB 243. Seeing Are there any final questions for the bill's sponsor or for Mr. McKinley? Not seeing any, thank you, Representative Carrick. My office had set an amendment deadline for Friday, January 30th, and we received no amendments. If it is the will of the committee, Mr Co-chair, may I have a motion? I move to report House Bill 243, Work Order 34-LS 1197 backslash A out of committee with individual recommendations and accompanying fiscal notes. All right. Hearing no objection, HB 243, work order 34-LS1197 backslash A is reported out of committee with individual recommendations and accompanying fiscal notes. We'll take a brief addees to sign the committee work, committee paperwork. Okay, we are back on record for the House Labor and Commerce Committee. We're now going to move into our first hearing for HB 210, Peace Officers and Firefighters Disability by the Bill Sponsor, Representative Cop and his aide Julia O'Connor. Representative cop and staff please take a seat in the front of the room, introduce yourself for your record and begin your presentation. Thank you for being here. Thank you, co-chair Hall and fields and members of the committee Greatly appreciate the opportunity to present this legislation for the record. My name is Chuck cop house representative for district 10 and I am accompanied by my team member miss Julia O'Connor If it's okay with the other co chair, I'll just give a opening statement about the purpose of this bill Why it matters and then turn it over to miss O Connor to talk about The Mechanics of The Bill please proceed. Okay. Before serving in the legislature, I spent my career in Alaska as a police officer and police chief working shoulder to shoulder with firefighters and EMTs. During that time I worked alongside a lot of fire crews commanded incidents, buried friends, and sat with families whose lives were injury. And this really gets into why this bill matters, because line of duty injuries are not hypothetical. They really happen. They happen on traffic stops during domestic violence calls, structure fires, vehicle extrications, wildland responses, rescues, training, all these things can result in these types of injuries. Police and firefighters, know that risk is part of the job. In fact, risk really is the job, that's what you signed up for. But one thing the bill recognizes is that they should not accept financial ruin as part that risks. And that what we're looking at here. Under current Alaska law, a permanently disabled police officer or firefighter drops to 40% of gross pay. So when you think often with no ability to work elsewhere. And for families already navigating our high cost of living here, that's pretty devastating. What our current law gets wrong is that occupational disability is supposed to be a safety net and not so much of a trap door, which it really is now 40% of income is really not income replacement. It doesn't cover your mortgage, it doesn t cover medical travel or housing or family obligations, but it does send a message, whether it s intended or not, that once you re hurt, you are on your own. That s not a message, I believe we should send to the men and women who run toward danger. So what does House Bill 210 do? It fixes a one-time, well-defined problem after the first 12 months of occupational disability, the benefits increase from 40% to 75% of gross pay for police officers and firefighters. You do have to re-qualify every year to show that you are, in fact, disabled and not have to return to work, and unable to returned to It does not create a windfall and it doesn't expand these benefits beyond public safety. It doesn' t add health care benefits. It simply restores dignity and a livable income after a career ending injury. On the recruitment and retention issue, something I know we are all focused on, I can speak that as a police chief, as an supervisor, I was responsible for recruiting and retaining officers for a long time. And I hear the same concerns echoed by fire chiefs. Our younger people coming into the profession today ask real, reasonable, tough questions, which is what happens if I get hurt? What happens to my family? Why does Alaska offer less protection than other states? Firefighters and police officers can work almost anywhere in the country. They're in high demand, and many states provide upwards of 75% or more Alaska is competing nationally, and we're losing experience people to better systems. So this bill just sends a clear signal. We value your service and will stand behind you if you're hurt. It is, I look at it as a moral obligation to those that serve in these jobs, because public safety is not better. It's just different, it's not just better than another profession, but it is very different. Officers and firefighters cannot refuse dangerous calls. That's what the job is. They don't choose the conditions, the fire behavior or the violence level. So the risk is inherent. When someone is permanently disabled in the line of duty, they have already paid the price. House Bill 210 doesn't elevate them, it just makes sure they're not abandoned. We believe it's fiscally responsible. The Occupational Disability Trust Funds are strongly overfunded. It's a measured predictable adjustment, not an open-ended liability. And from an operational standpoint, the cost of vacancies over time, burnout and turnover is far greater than the costs of doing this right. So just wrapping it up and turning it over to Ms. O'Connor here. I would say that more than anything, this bill is about trust. and the officers and firefighters who protect our communities, trust that if you're doing exactly what Alaska asked you to do, your family will not be pushed into financial crisis. The bill doesn't ask for special treatment, just for fair treatment. It sends a clear message to today's first responders in tomorrow's recruits. You protect Alaska and Alaska will protect you. Thank you, co-chair Hall and Anne Fields, and I will now turn it over to Ms. O'Connor. Thank You. Thank you chair Hall chair fields and the members of the committee for the record. My name is Julia O'Connor staff to representative cop like my boss said HB 210 updates Alaska Occupational disability benefit for peace officers and firefighters who are permanently injured in the line of duty The bill ensures injured public safety servants are not pushed into property and do not lose the retirement security Under the current system for PERS, public employee retirement system and TERS teacher retirement system, disability coverage varies by tier. Defying contribution members PERS tier 4 and tier 3 are eligible only for occupational disability benefits and do not receive non-occupational disability or health care coverage during their disability period. HB 210 works within this existing framework by improving the benefit level for the limited group the system already serves. An occupationally disabled peace officer, a firefighter, receives just 40% of their gross salary at the time of separation, 60% pay cut. For families already dealing with medical and recovery costs, this income reduction creates real financial pressure and does not reflect the higher risk nature of the job. All public safety servants and all peers tears from 40 to 75% of salary after the first 12 months of disability. Together, this change provides stability, dignity, and a realistic chance for injured workers to maintain a basic standard of living. The proposed increase results in about $25,000 in additional annual support after the first year. That amount can help make meaningful differences in maintaining basic household stability. HB 210 is a targeted, responsible improvement that addresses the most urgent gap affecting public safety workers. HB 2010 does not solve every problem in Alaska's retirement system, but it does address a clear inequity using resources that already exist. This is Fairness Safety and a Workforce Stability Bill. Thank you. Thank You, Co-Chair Hall, and we'll available for any questions. Great. I think first we'll turn to invited testimony before turning to committee member questions. I am not seeing Chief Schraghi in the room, so we will turn to Sergeant Darryl Evans, president of the Anchorage Police Department Employees Association. He is online. Sergeant Evans will you please introduce yourself for the record and begin your testimony. members of the House Labor and Commerce Committee. Thank you for allowing me this time to speak. My name is Darrell Evans. I am the president of the Anchorage Police Department Employees Association, or APDEA, representing the nearly 400 police officers of the Encourage Police department. I'm speaking on behalf of the APEDE today and strong support of House Bill 210. I am also a police sergeant with over 31 years of law enforcement experience in the state of Alaska. Alaska presents uniquely dangerous and adverse working conditions to include dangerously cold temperatures, hazardous driving conditions, unpredictable and dangerous large animals, and unforgiving terrain and waterways. All of this, in addition to the inherent risks and dangers already associated with law enforcement. The dangers involved in dealing with the most dangerous, and violent offenders in society and the unpredictability of human behavior. In my 30 plus years as a police officer, I have suffered several injuries that luckily were not severe enough to threaten my career, but I had faced armed suspects, been involved in serious car crashes, and assisted with rescue operations and dangerous conditions. I've worked with several colleagues throughout the years who are not as lucky as I been. And a few have even been shot and wounded to the point that they have been unable to return to duty. For those peace officers and firefighters that are forced to leave their chosen professions sooner than they or their families that ever planned, I thank representative cop for sponsor HB 210. And I think you members of this committee for having the conversation and considering this bill that honors the sacrifices made by our peace, officers, and fire fighters will serve in the state of Alaska. HB 210 provides an improved benefit structure that shows the state of Alaska will stand behind these honorable men and women when they meet at the most. Thank you again for your time today. Thank You Sergeant Evans. Do committee members have any questions for Sergeant Evan's representative, Carrick? No? Okay. Okay, thank you, Sergeant. Yes, excuse me if we're going to be hearing all the presentations, I might like to have the Invited testifiers available for questions later once we hear a little things if We're gonna listen all of it. Yeah, we'll come back to questions. Let's do that Yes point well taken representative Sadler Sergeant Evans do you have time to stay on the line and answer additional questions that may come up? I do. Yes. Wonderful. Thank you very much Next, we will turn to Chief Sean Case with the Anchorage Police Department, Chief Case. Would you please introduce yourself for the record and begin your testimony. Ms. Hamm, thank you, co-chairs, fields and halls and members of the committee. Thank you for your opportunity to testify today's form of House Bill 210 and act related to occupational disability benefits for police officers and firefighters. My name is Sean Cage and I serve as a Chief of Police for the Anchorage Police Department, and i'm here to express my strong support for this legislation, which recognizes the unique risks and sacrifices made by Alaska's first responders. Every day, Alaska peace officers and firefighters face physical dangers, psychological stress, and unpredictable hazards in service to our communities. When one of our officers or firefighters their ability to provide for their families should not be compromised. Under the current law, the 40% disability benefit often falls short of meeting basic living expenses. This gap can force disabled first responders and their family into financial hardship at a time when they're already coping with life-changing injuries or trauma. House Bill 210 corrects this inequity, providing a fair and substantial, sustainable level of support. that reflects the true cost of living and value to the service rendered. This legislation will also strengthen recruitment and retention within Alaska's public safety workforce. Many women considering a career in law enforcement or firefighting weigh the risk they face against the security provided to them and their families. HB 210 sends a clear message to state of Alaska spans behind those who serve and will not abandon them if they are injured protecting others. In closing, House Bill 210 is not just about numbers, it's about values. It's honoring the commitment of those who run towards danger when others run away. It is about ensuring that if tragedy strikes, our first responders and their families are not left behind. I urge the committee to advance House bill 210 and to continue supporting Alaska's peace officers and firefighters who dedicate their lives to keeping our communities safe. Thank you for your time and consideration. I'm happy to answer questions. Thank you, Chief Case. Do any committee members have questions for the Chief? Representative Co-Chair Fields. Thanks to the Chair, just checking in on current vacancies at APD and thank you for being here today. It's current vacancy that the Anchorage Police Department is 36 and we have an additional 48 officers that are in training either field training or in the academy in June or upcoming academy. We will nearly be have over positions that we had funded. So. Great. Thank you. Do any committee members have questions for Representative Carrack, Representative Sadler, Representative Colone? Thank you through the co-chair. Thank for bringing this bill, representative cop, and to the invited testifiers also, thank you for sharing. Curious one, is this bill retroactive to folks who have already been injured on the job? Could they potentially apply in some way for the increase in benefits based on when they were injured? And also because there's an indeterminate fiscal note, do we have any kind of sense of how many people this might apply to year to year, for example? structure it that way. As it is now, the effective date would be people coming into the disability status as of that date. You know, I mean, it could be structured differently to be retroactive. As far as your question, how many would it apply to? Talking with the DPS, Department of Public Safety and various public safety leaders around the state, we're talking about like less than 10 that are currently in a career ending injury status. Traumatic brain injury is two or three of those. You've heard, you know, their spinal injuries, neck injuries. And remember that disability can also, particularly in the firefighting profession, can be a job-related disability directly to chemical exposure. It more commonly happens to firefighters than it does to police officers, so it can be for a variety of reasons where you are moving to a disability status. But it's a handful. I think that DRB could probably tell because they would know how many people are in a disability's status, but it it is not a large number. Just real quick, I just want to make a note for the committee that we have Brandon Rumsberg online. He's the retirement manager, the division of retirement and benefits representative Carrick. Thank you through the coach. I've just had one other question too and thank you for that answer. Does the bill also include correctional officers under peace officers? I don't believe it does. But I will get back to the committee on that one That's a good question represented character. Thank you Thank You representative cop next we'll turn to representative Sadler Thank a miniature. I appreciate the sponsor bringing the bill forward And hearing from the chief police and the fire firefighters about this There's a lot of intricacies about the disability and retirement benefits in public safety folks, different tranches, different tiers, and different circumstances, so it's going to take some time to understand how this would actually play through. I'm going start with a general question or two. Is this about firefighters or police officers who are permanently in their career because of a Yeah, so through the chair representative Sadler, the determination is made on an annual review, so you never get like an evaluation that says you're permanently disabled. If you are on disability, you have to have a medical panel go through a review process every year to basically re-qualify you for disability benefits. So it would apply as long as someone meets that disability benefit standard. set by a medical evaluation team. Okay, and through the chair, that's kind of where I begin to see the intricacies here. I would probably need to look for the division of Oak Rehab, what percentage of people who go on year by year, disability, what's called termination, come off of that, and how much this tenant would call temporary. So that is one. I guess I had to ask them questions and do some math about what this is going to mean to individuals. I certainly want to, we do have many laws and programs that benefit our public safety officers retirement and health insurance coverage and so forth. But I just have to have questions about, well again, I get how many people, what percentage of the workforce and law enforcement firefighters are disabled and what their benefits are. There's some of background supporting testimony indicates people would like to disability coverage for non-work related injuries. Is that your intent as a rather simple bill right now? But the case is made strongly in the ample testimony here that that is something people in law enforcement and firefighters businesses would like to have. Is it your intend to go there? Code through the co-chair hall, Representative Sadler. So the point is well taken when we went from the legacy retirement tiers to the defined contribution, we dropped all the non-occupational disability and health care. That's unfortunate because 85% of career-ending injuries happen off-duty. 85%, so 85 percent already of disabilities, this bill does not touch. It does no go there. It stays with the structure of the plan we have talking about work-related injuries only. There are plenty of people that would love to not be worried about falling in their driveway off duty, you know. But no, this bill doesn't address that. We, in fact, referred to the committee notes way back in 2005 and found legislative testimony that they intended to address this. They were aware that there were doing away with a non-occupational disability and decided they would address it later. It was never addressed. I'm sure you probably did get correspondence on that. But this bill, again, only deals with the structure that we have now, which is duty-related disability benefits. So as to whether we're likely to see that come up with a bill or an amendment to do that, I am not quite sure if I know. I think you're hearing, I hear what you saying your inclination would be to do so, is that correct? My inclination is to stay with the structures of this Bill. Good. So you don't intend to bring that forward. Good, glad of you here. Um, another question to the chair and looking at some of the details, as I say, some other details of, of the program of somebody who is, uh, on disability year to year, uh under the current 40% calculation, their families, their dependents, update 23 if the kids are in school, still receive full free medical coverage, even at the 40 percent rate, when they're, is that correct? Oh, through the Chair, no, not under disability benefits. You don't. What you are talking about is line of duty deaths. in line of duty deaths by executive order. Governor Walker did this and I believe that also Governor Parnell extended the benefit of the state to cover uninsured families and possibly education benefits for children. Now federally there is a federal program for firefighters and police officers who die in the line-of-duty that is more life insurance related but the educational benefit decision to cover families and the last point representative settler if you could just pause for a moment we're going to turn to representative cologne her question we'll come back to you thank you chair through the chair thank you represent cop for bringing this forward so i'm just trying to figure out the mechanics of this so if this were to increase to seventy five percent this is so we know the employer contributions capped 22 percent this That's why you brought up the overfunding. Yeah, so it's actually the disability trust. It's a separate fund that is responsible to pay these disability payments. And that trust is significantly overfunded right now, which is why we believe this is just not going to reason. And there's such a small handful of career ending injuries that are out there right now. But you're right in that. It's under the umbrella of the retirement system that the benefit is paid, but they have a separate trust just dedicated for this, which is significantly overfunded. And a follow up follow-up. So how's the trust funded? Where's money for that come from? It comes from the payments every month that come out of employer employee contributions. There's a disability payment that DRB could could say what that is. But yeah, it's funded monthly. and the follow-up follow up so on the slide when you said purrs and turs were way overfunded was that referring to the the trust or just because my understanding it was I know it's over funded but I think it is just a health portion that was over-funded on you yeah the disability student chair the disability Trust Representative Colom has also over fund it okay and follow up, follow-up, and we don't know how much, or you need to find out how many. Oh, actually, O'Connor, for peers here for the disability press phone is 399% funded, and for TERS is 5,172% funded. Okay, so I'm just wondering, because it's so kind of like the unemployment insurance, when you have a fund that's overfunded, You know, that's good. I think it's a it is a great idea to use it for this. I just didn't know how how overfunded and when is it start to reverse the other way and now we're getting too many funds to go out? But it sounds like there's not that many People that right now would be under your bill Through the chair representative column. Yes. Thank god, right? Yeah, but yeah, it s a small number and we You know, obviously DRB should speak to this for some of the disability trust, but we do not see it impacting the fund negatively Yeah, and could I have one more question do you real quick? Do you want to bring on mr. Rumsberg with the drb? Yeah Mr. rumsburg do have any clarity that you can provide on this conversation, please put yourself on the record Oh, good afternoon through the share. This is Brandon room bird. We're going to measure with the table Alaska. I would have to get with Christopher Nobel or chief financial officer to speak to the health of the disability trust. So I wouldn't be able to follow up with you shortly after this meeting if that's possible. That would be great. Thank you very much, Mr. Rumsberg. Okay, I'll just do one more comment. One more second. Thank you, Chair. My other question is, so we always hear that we lose firefighters and police officers to Washington State. And what is the 40% that provide really low? Do other states, is 75% kind of the standard and we're just low or do you have any context of what other States are doing? So yeah, to answer your question, this bill isn't really about the retirement system and how competitive we are, it's just about disability benefits and so narrowly addressing disability benefits because our retirement is what it is, 401k and no social security. thing that we can do to show an investment in people who are in a high-risk location. And as far as how do other states fund disability, yes, it's in the committee packet, I believe it is titled Other States Occupational Benefits. And it just gives a rundown of what other States are doing. So we're definitely at the bottom, at very lowest, that to 75 and of course our cost of living is higher pretty much than all those states, so yeah. Right, okay, awesome, thank you. Thank you, representative Fields. Thank You through the chair. Yeah, I had a very similar question, namely who would be an actuary who monitors the occupational disability fund who could speak to why this is sustainable just so we have that on the record. And maybe that is, I guess it's not Mr. Rumsberg, but just be nice to hear that. So when people ask, we can say yes. In fact, We did hear. Thank you. I agree. Thank You Representative Fields. Representative Sadler. Thank thank you very much. Actually, through the chair to your staff for Representative Kopp, I've heard the percentages. We are 99% overfunded 5127% over funded. I would love to here the raw numbers on those if I may, please. Julia O'Connor for this is for the Defying Contribution Retirement Disability Trust and by raw numbers for PERS tier 4 399% and TERS Tier 3 5172 percent and In the packet if I may I did per or we provided a recent armboard resolution that has great information about the current occupational and non-occupational disability background, which is pretty fascinating, it goes quite in depth. Follow up. Thank you. Follow. Yeah, I did catch the percentages, but you have the raw numbers. If the PERS 4DC retirement disability trust is 399% overfunded, what is the balance that 399%, percent represents how much money? Julia O'Connor, I do not know, but I'm happy to get that for you. Please for both of those as well. Thank you One moment, are there any other questions from the committee other than representative Sadler? I did have one other Representative Colomb welcome back to you representative sadler Thank You chair through the chair. I was wondering if the EMS workers are included in this Only if they're classified as a local government PERS public safety employee, so there are a lot of EMS people that are outside of that Context okay, if they were inside that then they would apply. Yes. Thank you. Yeah Representative Sadler. Thank you, manager. Okay. They're looking at the the blue sheet here from the Division of Retirement Benefits about Occupational Disability Benefits as one for the record There's a point that says that generally per is occupational disability bits are not considered taxable if your benefit is calculated at 40% of your gross monthly salary Would the additional from 40 to 75% delta be taxable? Do you know a representative cop? through the chair, Representative Sadler, I'm not sure what the IRS rule is. I am sure there's a special ruling on disability benefits and when it becomes taxable or not. As we saw in the previous slide here on the amount that's actually coming in, this would be based on a $6,000 a month. So this bill would go from 2,400 a Month to 4,500. a month, and that puts you in probably a 15% tax bracket, but if you're married file and jointly and you get your deduction, you are probably not paying much at that amount, you know. Follow-up? Thank you for that, I appreciate that. To the Chair, could the sponsor tell me, $6,000 a Month is $72,00 a year, roughly. Is that a starting site firefighter wage? Is it someone who's been at it for five years or 10 years? What do firefighters and police officers generally make? Is 72,000 an average or a median or? Yeah, so this is just an example we throw up just to get your head around a number. Firefighters and Police Officers in Alaska have a significant salary range as do teachers, depending on who the employer is and where they're at. But a starting officer salary can be in the 50s. To a starting salary that's close to a hundred Depending on what your department isn't where you're working, but This $6,000 a month is a good idea of an average at For public safety person in Alaska and just showing how the disability benefit would impact the monthly benefit Just using it as an effort. Yeah, so it is an outreach you see Representative Carrick Thank you through the co-chair the I really appreciate the list of other states and their percentages and I'm just wondering how this legislation came out at 75% as opposed to Anchorage Place and Fire is listed on here for two of their plans it's at 50% and then another is 66%. Sounds like we have plenty of Yeah, so just looking at the age of those plans and how long ago those rates were set and what's happened to inflation and energy and housing and transportation costs now. And looking what other states are doing comparatively to what our dollar will buy in Alaska compared to those states, it's kind of how we landed. where we thought we should be. In fact, even as long as we've been at 40%, if we just kept up with inflation, we'd be pretty close to this number now. And just a follow-up, follow up. Thank you through the co-chair. It would be really great to see Washington's number specifically since, as Representative Cologne mentioned, we do often get compared to Washington in terms of benefit competitiveness. So it'd really be great to get that number and. have that comparison. Yeah, thank you representative kerrick so we'll put together a committee memo as the follow-up and yeah and there's been several really good questions raised and we get back and do at least five to ten percent higher than what washington is doing right gotta be more competitive that's right all right additional questions from the committee Thank you and and through the chair. Again, I'll say that the systems are complicated and I look forward to digging into it but I am looking at this document here the occupational disability benefits. It does say you your spouse your dependent children are eligible for major medical coverage at no cost to you as long as you're receiving disability benefit. I just want to clarify that's that accurate because I thought I heard you say it was not the case. Yeah It does not apply if it's a non-occupational disability, and we're not getting into that, even though 85% of disabilities actually are not duty related. But again, anything else? And for the record, Julia O'Connor, defined benefit retirement systems, they do have health care provided. It is the defined contribution that do not have healthcare provided, and most of our employees through the chair are in the define contribution program. So there's No health care. Yeah. And as I said, there are nuances here that need to pick through to make sure I'm making the proper conclusions. Thank you. All right. Additional questions from the committee for representative copper his staff. Not seeing any thank you very much for all those who provided invited testimony today We certainly appreciate your perspectives. Thank you. Very much representative cop and miss O'Connor. Really appreciate you guys being here We're gonna hold this bill over and discuss it again at our next or earliest opportunity This will conclude our business for today the house labor and commerce committee will meet next on Wednesday, February 4th at 3 15 p.m at 4 p.m. Thank you.