Legislature(2001 - 2002)
04/30/2002 08:05 AM House STA
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* first hearing in first committee of referral
+ teleconferenced
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+ teleconferenced
= bill was previously heard/scheduled
HB 327 - STATE EMPLOYEES CALLED TO MILITARY DUTY Number 1440 CHAIR COGHILL announced that the final order of business would be HOUSE BILL NO. 327, "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." Number 1439 REPRESENTATIVE FATE commented that the issue is whether or not university employees are state employees. In the past there have been times when the university has been accepted by the executive branch of government as an agency of the state. Actually it is not; it is a constitutionally authorized corporate body, and it is run by a board of regents, also authorized by the constitution. It is separate. Number 1505 WENDY REDMAN, Vice President, University Relations, University of Alaska, testified in support of HB 327. She explained that the university is in an ambiguous situation relative to being state employees. It is clearly an entity of the state; it is part of the executive branch, but university employees are not considered state employees. They are not covered by the state Personnel Act. Whenever a statute refers to state employees, unless it specifically delineates that it includes the university or not, it gets into a situation. She told the committee that the intention of the governor's office is that it not cover the university because it talks about the issuance of administrative orders from the governor. The governor doesn't normally issue administrative orders to the university; the board of regents sets policy and is defined in law and in the constitution as the body that sets policy. MS. REDMAN indicated that the pending amendment is sufficient to clarify that the governor will issue the administrative orders to state employees of the executive branch offices and departments. That clearly delineates what is intended and does not include the university, the railroad, and the judicial branch. Number 1630 REPRESENTATIVE STEVENS noted that this is not a bill about who is a state employee, this is a bill about allowing some benefits to people in the reserves. His question is how the university is covered, not whether it should be. He asked if university employees are treated in a similar fashion as state employees in this bill. Number 1673 MS. REDMAN said she isn't sure what the present policy is when the National Guard is called up. University employees are generally treated similarly to the state employees. They do fall under PERS [Public Employees' Retirement System] and TRS [Teachers' Retirement System], although the university also has its own defined benefit program. If this law passes and it was the position of the State of Alaska that it would pay all salary and benefits for people who are called into active duty, it is highly likely that the board of regents would take the same action. At the present time, paid leave is provided for people who are doing their guard duty. REPRESENTATIVE STEVENS asked what would happen if someone was in a command that was called up, became a regular member of the U.S. Army, and was sent off somewhere. He wondered how the university would treat its employees in that case. MS. REDMAN answered that she didn't know. She wasn't sure if the university has dealt with that issue yet. She said she assumes that the university would take precisely the action in this legislation to do everything it could to cover all expenses and benefits for those individuals. MS. REDMAN told the committee that should this bill pass, she will take it to the June meeting of the board of regents and ask that it develop a policy that would be similar to what the state has done. Number 1910 REPRESENTATIVE FATE made a motion to adopt Amendment 1, which read: Page 1, line 10: Delete "state" Page 1, line 10, after the word "employees": Insert "of executive branch offices and departments" Page 2, line 14: Insert "(d) in this section, executive branch offices and departments are those listed in AS 44.17.005" REPRESENTATIVE FATE noted that the intent of Amendment 1 is to exempt employees of the University of Alaska, The Alaska Railroad Corporation, the Judicial Branch, and the Legislature from HB 327. Number 1915 REPRESENTATIVE WILSON objected. She said she understands the intent of the amendment is to exempt the employees mentioned, but wondered why. REPRESENTATIVE FATE answered that it clarified the status of university employees compared to the executive branch. Number 1946 CHAIR COGHILL explained that the university has been given constitutional authority for the board of regents to run the policy. The Alaska Railroad Corporation operates independently of the State of Alaska, and the Judiciary Branch has its own policy. Number 1973 MS. REDMAN added that because of the constitutional establishment of the university and the railroad, the state and therefore the legislature, does not have any participation in establishment of salary or benefits for university employees. State employees are actually in statute; that's not the case for employees of the university and railroad. MS. REDMAN explained that the university is also a separate corporate body that is set up in the constitution of the state for the governance of the university system. This legislation establishes a compensation benefit for state employees specifically by the governor's administrative order. It's the board of regents' prerogative by law to establish and direct the pay and compensation for university employees. In that case, she said she thinks it is inappropriate and maybe not even legal for the governor to direct through administrative action what would be a significant benefit; that really is by law assigned to the board of regents. Number 2122 REPRESENTATIVE JAMES explained to Representative Wilson that the amendment doesn't necessarily exclude the University of Alaska, the railroad, judicial branch, or legislature, it just doesn't cover them. That is the intent of the legislation. Number 2168 REPRESENTATIVE STEVENS said he would like to know what the policies are of these exempt agencies. Number 2228 CAROL CARROLL, Director, Central Office, Administrative Services Division, Department of Military & Veterans Affairs (DMV), testified that from the DMV's perspective, treating people of the same class differently, if that were to occur, would not be something that the committee would like either. It wouldn't be a good idea to have members of the National Guard treated differently if they worked in the executive branch or if they worked for the university or legislature. She agreed that it would be good to know the policies of the other entities. REPRESENTATIVE JAMES said currently the legislature does give the university money. If this were to go into effect, it'd be obligated to give the university a line item for pay; the railroad doesn't get any money from the legislature, and it doesn't want to start doing that now. She said she thought if the legislature was going to tell the railroad to provide this benefit to its employees, then it should probably pay the railroad in the budget too. Number 2272 MS. CARROLL indicated that the executive branch is leading on this concept of making sure that the state employees are held harmless when they are called to active duty. It is the department's opinion that it would be a good policy for others, but it isn't under the purview of this bill to force that policy on those different branches of government. REPRESENTATIVE JAMES commented that since this bill provides for people to get paid and get their benefits while they're gone, it could be a very expensive piece of legislation. She said that she would rather not go for such a deep step at the beginning. She would simply hold the position for them, but she acknowledged that would be difficult to do when many of the employees are politically appointed. If they were to come back, they might not be able to return to the same position because there may be another administration. People don't know how long they would be gone. She said she sees some problems with this legislation because right now those people would be able to continue to receive the pay and benefits until whatever time, and she wondered if this bill should be that broad. CHAIR COGHILL asked Mr. Stewart if he considered how this amendment might affect things. Number 2542 DAVE STEWART, Personnel Manager, Central Office, Division of Personnel, Department of Administration, told the committee that the fiscal note was prepared based on the members of the executive branch staff whose salary would have been supplemented. If the legislation goes into effect the way it's written, it is retroactive to September 11. Assuming that the governor issued an administrative order covering pay and health insurance for the 41 employees called to active duty, the fiscal note for 2002 shows $44,000 for that. CHAIR COGHILL asked if any employees of the university, railroad, judicial branch, or legislature had been called to active duty. MR. STEWART replied that he didn't know. REPRESENTATIVE WILSON removed her objection. There being no further objection, Amendment 1 was adopted. REPRESENTATIVE HAYES said he didn't think the committee needed to hold the bill to get further information. He said that information could be gotten before it was voted on later in the process. CHAIR COGHILL agreed to have his staff write some letters and get an official position for the committee members. Number 2661 REPRESENTATIVE WILSON said this is a policy under the purview of this committee, and some more facts are needed. Number 2671 REPRESENTATIVE JAMES commented that the more she thinks about it, she isn't as comfortable with this bill. She is concerned that it is pretty broad. Number 2750 REPRESENTATIVE STEVENS agreed that there are a lot of issues that need to be looked at carefully. The idea of holding people harmless when they are called to serve in the military is a good idea. Currently, people in the military can buy their time back at the university. He suggested maybe having people buy into the system instead of just granting it to them. Number 2801 REPRESENTATIVE CRAWFORD indicated that this is a fairness issue for him. He said he's not sure if it's the right policy call to give this benefit to state employees when National Guard people in the private sector don't get these benefits. He said he wished all of them could get it, but he can't see making small business owners responsible for it. He said he was torn on this bill. CHAIR COGHILL agreed. He said he thought this bill would get Finance Committee referral. MR. STEWART responded to a question by Chair Coghill on the executive order and explained that the intent of the legislation was to allow the drafting of an administrative order that would specify a group or groups of employees either by status, department membership, or position, and the nature of the supplementation: whether they would receive just the difference in their state and military wage, - this is only for individuals whose military wage is less than their state salary - and it would specify whether there would be health insurance or retirement contributions paid, and it would specify a duration. REPRESENTATIVE WILSON said she doesn't have a problem with what this bill does. The principal of going out and doing something for the country shouldn't set someone back financially, but no one knows know what is coming down the pike. She commented that this isn't wise just for the simple reason that there isn't a fiscal policy in place and the fact that this is so open ended. TAPE 02-50, SIDE B Number 2967 REPRESENTATIVE STEVENS asked for an explanation on hold harmless. Number 2922 MR. STEWART said that the legislation was intended to lead not to direct the other entities discussed earlier. The number of individuals called to active duty since September 11 was 41 state employees. Only 8 of those had military salaries less than their state salaries. There were 34 people who had a higher military rate of pay, so the rate of supplementation would have been zero on the fiscal note for those employees in 2002. That cost only includes the employer contribution of health insurance. In deciding whether the out-year fiscal impact could be determined, a list of all state employees who are members of the National Guard was looked at, and roughly 10 percent of those had lower state salaries than military salaries. He indicated that the supplementation equals out with the other costs. Number 2854 REPRESENTATIVE STEVENS asked about the other benefits in compensating someone. MR. STEWART replied that the cost of health insurance is a fixed cost. It is established either by union contract or law as far as the employer contribution. The retirement contribution is a percent of salary, and there would be a definition in the administrative order about whether the employer would pay the employer's contribution or both the employer and employee contribution. There is some protection afforded for retirement credit. If an individual, state employee or otherwise, is called by presidential order to active service, there is a distinction in the Uniformed Services Employment and Reemployment Rights Act that requires the state to provide the service credit based on time served or absence from work and not the financial benefit. The committee took an at-ease from 8:57 a.m. to 9:01 a.m. Number 2718 REPRESENTATIVE FATE asked Mr. Stewart for a copy of the list of employees who are in the National Guard. CHAIR COGHILL announced that HB 327 would be held over.
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