Legislature(2019 - 2020)ADAMS ROOM 519
03/26/2019 09:00 AM FINANCE
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HOUSE BILL NO. 48 "An Act removing from the exempt service of the state persons who are employed in a professional capacity to make a temporary or special inquiry, study, or examination as authorized by the governor and including those persons in the partially exempt service of the state." 9:17:55 AM LYNN GATTIS, STAFF, REPRESENTATIVE TAMMIE WILSON, introduced the bill by reading the bill title: An Act removing from the exempt service of the state persons who are employed in a professional capacity to make a temporary or special inquiry, study, or examination as authorized by the governor and including those persons in the partially exempt service of the state. Ms. Gattis reviewed the sponsor statement (copy on file): AS 39.25.110(9) was supposed to allow the governor to appoint someone for some "temporary and special inquiry". Because they are temporary, exempts do not get PERS or regular State leave, health insurance or other State benefits. However, the statute has not been used in that manner. It has instead been used to establish positions without the intent of the positions being temporary, which would then entitle employees to PERS and all other benefits. The purpose of HB 48 is to discontinue the historical practice by the Executive Branch of using AS 39.25.110(9) to unilaterally establish highly paid executive level temporary exempt positions that have no salary limits. There are positions established many years ago using this statute that still exist today. Some are unbudgeted and do not appear in agency position counts. Several attempts have been made to obtain a complete list of these positions and current salary levels, but these attempts have been unsuccessful. HB 48 is intended to eliminate the establishment of "temporary exempt" positions and instead place these positions in the partially exempt service. Persons may be "appointed" to partially exempt positions, however, they will be subject to salary limits like all other state employees. HB 48 will force the administration to be more transparent and allow all employees to be treated fairly. 9:20:40 AM Vice-Chair Johnston asked if the statute associated with the bill [AS 39.25.110(9)] was limited to the executive branch or could be used in state enterprise units like Alaska Industrial Development and Export Authority (AIDEA), Alaska Housing Finance Corporation (AHFC), or Alaska Permanent Fund Corporation (APFC). REMOND HENDERSON, STAFF, REPRESENTATIVE TAMMIE WILSON, answered the statute allowed and defined those individuals covered by partially exempt, exempt, and classified service. Partially exempt service positions included deputy and assistant commissioners, directors of major divisions, attorneys in the Department of Law, the Public Defender's Office, one executive secretary for each department, principal executive officers of councils and commissions (e.g. the Alaska Public Broadcasting Commission and the Parole Board). The positions Vice-Chair Johnston was referencing were covered under exempt service (e.g. AIDEA). Vice-Chair Johnston asked for verification that some of the state's enterprise units would not be using the loophole in statute. She surmised it was more of an administration function. Mr. Henderson believed anyone could use the statute because it allowed something to be approved by the governor's office. There was also recent policy instituted by the governor's office requiring the governor's approval for not only those positions established under the statute, but for positions above a [pay] Range 18 or salary of $150,000 or more. 9:23:14 AM Representative Sullivan-Leonard asked for the number of positions identified under the previous administration that fell under the purview of the bill. She asked if they were looking at salary ranges of $300,000 or more. Mr. Henderson replied they had not been successful in identifying the number of positions that existed. The positions were buried in a large list of hundreds of positions. He explained the process involved trying to identify a position control number (PCN) by looking for the word "temporary." It was very difficult to ascertain the number of positions created in that manner. He elaborated that the best source of information was the individual departments. He reported that when they attempted to get the information from the departments, the response had varied. At one point they had been told the information would be complied by the Department of Law, then they had been told it would be compiled by the Department of Administration, and it had ultimately come from the Office of Management and Budget. He noted they had never received a complete list of the positions. Representative Sullivan-Leonard surmised the legislation would bring the issue to the forefront to identify the number of positions and the salary ranges. She construed the bill would fix an existing problem. Mr. Henderson replied in the affirmative. Representative Sullivan-Leonard asked if the bill also pertained to positions identified in the legislative branch. Mr. Henderson replied in the negative. The sponsor's office had not identified any positions in the legislative branch that had been created under the statute. 9:25:36 AM Co-Chair Wilson added that her office had also found the issue was not limited to listed PCNs. She explained that if a department had money from other resources, it was able to use those funds to pay for the individuals. She agreed that as the budget was developed, the legislature would see the positions, job descriptions, and how the salary had been handled. Vice-Chair Ortiz appreciated the intent of the bill and was supportive. He asked for further detail on the language in the sponsor statement stating that the bill would force the administration to be more transparent and allow all employees to be treated fairly. He asked for detail on how employees had not been treated fairly. He wondered if there was any downside to adopting the bill. Co-Chair Wilson answered that temporary positions did not go through the same process as all other state employees. The deletion of the statute would mean all employees would go through the same process - the state would have to consider the job description and how much an individual was paid and would not be able to randomly determine the person's salary. She stated the issue was about employees who went through the [general hiring] process versus employees who were currently hired via the loophole. 9:27:38 AM Vice-Chair Ortiz asked for verification that the individuals would be treated more fairly because they would go through the same hiring process. Co-Chair Wilson replied in the affirmative. Vice-Chair Ortiz asked if there were any opportunity costs associated with the bill. Mr. Henderson replied there were no additional costs to the bill. He reported that the department had prepared a zero fiscal note for the bill. Vice-Chair Ortiz clarified he was not talking about financial cost but opportunity costs. For example, perhaps past administrations had used the statute to attract more highly qualified people for a position. Mr. Henderson answered that he saw the bill as a cost savings measure. Vice-Chair Ortiz understood. He clarified he was wondering if the statute had been used in the past to attract highly qualified people or talented individuals, which would no longer be possible if the bill was adopted. Mr. Henderson replied that the bill would not prevent the administration from maintaining that practice. The state would still be allowed to seek those individuals for hire but would have to provide written justification to pay individuals above a certain range. He explained that written justification was not currently required. 9:29:41 AM Representative Josephson asked how the positions would be more transparent to the finance committee, legislature, and public. Mr. Henderson answered that as the statute was currently used, individuals could be appointed to the positions without salary limitations. He explained that the positions were not subject to a classification pay plan. The bill would require the individuals to be placed in partially exempt service where there was a statutory provision that identified the positions covered under partially exempt service and the associated salary scales. Representative Josephson asked if the positions moved to partially exempt service that it meant the employees may not receive healthcare or retirement benefits. Alternatively, he wondered if the individuals would still be eligible for the benefits. Mr. Henderson replied that the individuals would be entitled to healthcare and benefits provided to other employees. Representative Carpenter understood the concept of increased transparency. He asked what would happen if there was a need for a temporary employee in a timely manner. He noted the bill's provision that would require hiring a person through the normal process. He asked if the bill eliminated the executive branch's ability to bring in a person with subject matter expertise. Mr. Henderson replied in the negative. The bill would not prohibit the administration from hiring someone immediately that they found qualified for a temporary position. 9:32:21 AM RUSSEL SAMPSON, SELF, WASILLA (via teleconference), supported the bill. She thanked Co-Chair Wilson for sponsoring the bill. Co-Chair Wilson CLOSED public testimony. Co-Chair Wilson reported amendments were due the following day by 5:00 p.m. HB 48 was HEARD and HELD in committee for further consideration. Co-Chair Wilson discussed the schedule for a meeting the following day. She reported the next meeting was that afternoon.
|HB077 Sectional Analysis ver A 3-19-19.pdf||
HFIN 3/26/2019 9:00:00 AM
|HB077 - sponsor statement 3-19-19.pdf||
HFIN 3/26/2019 9:00:00 AM
|HB048 ver M Sponsor Statement 3.21.19.pdf||
HFIN 3/26/2019 9:00:00 AM