Legislature(2009 - 2010)CAPITOL 106

03/17/2009 08:00 AM STATE AFFAIRS


Download Mp3. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 157 REEMPLOYMENT OF RETIREES; EXEMPT SERVICE TELECONFERENCED
Heard & Held
*+ HCR 11 SEXUAL ASSAULT AWARENESS MONTH TELECONFERENCED
Moved Out of Committee
*+ HB 115 PERMANENT ABSENTEE VOTING TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HJR 3 CONST.AM:NO GAMING WITHOUT VOTER APPROVAL TELECONFERENCED
Moved Out of Committee
HB 157-REEMPLOYMENT OF RETIREES; EXEMPT SERVICE                                                                               
                                                                                                                                
8:06:52 AM                                                                                                                    
                                                                                                                                
CHAIR LYNN  announced that the first  order of business  was HOUSE                                                              
BILL NO.  157, "An Act amending  the State Personnel Act  to place                                                              
in the  exempt service the  chief economist and  state comptroller                                                              
in the  Department of Revenue  and certain professional  positions                                                              
concerning  oil   and  gas  within   the  Department   of  Natural                                                              
Resources;  relating to  reemployment of  and benefits  for or  on                                                              
behalf  of reemployed  retired teachers  and  public employees  by                                                              
providing  for   an  effective   date  by  amending   the  delayed                                                              
effective date  for secs. 3,  5, 9, and 12,  ch. 57, SLA  2001 and                                                              
sec. 19, ch. 50, SLA 2005; and providing for an effective date."                                                                
                                                                                                                                
8:07:08 AM                                                                                                                    
                                                                                                                                
GINGER  BLAISDELL,  Director,  Administrative  Services  Division,                                                              
Department  of  Revenue  (DOR),  on  behalf  of  the  House  Rules                                                              
Standing   Committee,  sponsor   by  request   of  the   governor,                                                              
paraphrased  the  sponsor statement  for  HB  157, which  read  as                                                              
follows [original punctuation provided]:                                                                                        
                                                                                                                                
     HB  157   Reemployment  of   Retirees;  Exempt   Service                                                                   
     contains   three   personnel  topics   regarding   state                                                                   
     employment.  First, extending  the  sunset provision  of                                                                   
     the  "retire/rehire"  employment provision  would  allow                                                                   
     state entities  to hire retired employees  into existing                                                                   
     positions.   Second,  the   Department  of  Revenue   is                                                                   
     requesting  that  two  professional  positions  be  made                                                                   
     "exempt"  for the  purposes of  allowing flexibility  in                                                                   
     recruitment  and  paying market  value.  Third,  certain                                                                   
     professional  positions concerning  oil  and gas  within                                                                   
     the  Department of  Natural Resources  are requested  to                                                                   
     be  made "exempt"  for  flexibility  in recruitment  and                                                                   
     paying market value.                                                                                                       
                                                                                                                                
     Each  of  the portions  of  the  bill are  presented  in                                                                   
     order of the bill:                                                                                                         
                                                                                                                                
     Department of Revenue - Exempt Positions                                                                                 
     Two  positions in the  Department of  Revenue have  been                                                                   
     difficult  to fill  and  retain because  the  department                                                                   
     cannot   offer  market   pay.   The  state   comptroller                                                                   
     oversees  billions   of  dollars  and   coordinates  the                                                                   
     state's  accounts with national  banking agencies.  This                                                                   
     position  is currently  partially-exempt,  meaning  that                                                                   
     it is  not governed  by collective  bargaining but  that                                                                   
     it  must  be paid  within  a  state salary  scale.  This                                                                   
     position has  turned over every  year for the  past four                                                                   
     years  due  to  more  appealing   private-sector  offers                                                                   
     accepted   by  the  incumbents.   The  chief   economist                                                                   
     position  is a  classified  position and  has been  open                                                                   
     for  recruitment for  approximately  one year.  Although                                                                   
     one of  the division's lead  economists is filling  this                                                                   
     position  in acting  status, the  department is  seeking                                                                   
     an  economist   who  can   speak  with  experience   and                                                                   
     authority on Alaska's global petroleum economics.                                                                          
                                                                                                                              
     Department of Natural Resources - Exempt Positions                                                                       
     The  division  of  oil  and  gas  and  the  division  of                                                                   
     geological and  geophysical survey of the  Department of                                                                   
     Natural  Resources (DNR) are  responsible for  assessing                                                                   
     the   state's   mineral   resources,    overseeing   the                                                                   
     assessment  and collection  of  a large  portion of  the                                                                   
     state's  revenues related  to oil  and gas  development,                                                                   
     as  well  as  management  of the  state's  oil  and  gas                                                                   
     resources. DNR,  through these divisions,  must maintain                                                                   
     an  experienced  and  professional   staff  as  well  as                                                                   
     recruit  new  staff.  Without exempt  status  the  State                                                                   
     cannot be competitive  with industry in hiring  the best                                                                   
     and  most  experienced  employees in  areas  where  that                                                                   
     experience  can mean millions  of dollars in  revenue to                                                                   
     the employer.                                                                                                              
                                                                                                                                
     Retire/Rehire Sunset Extension                                                                                           
     Legislation  was  passed in  2005  that allows  for  the                                                                   
     rehire  of certain PERS  and TRS  employees who  retired                                                                   
     with  a normal  retirement. These  rehires can  continue                                                                   
     to  receive   normal  retirement  benefits   by  waiving                                                                   
     further  participation in the  retirement systems.  This                                                                   
     legislation is scheduled to sunset on July 1, 2009.                                                                        
                                                                                                                                
     In a report  provided to the legislature on  February 6,                                                                   
     2009,  the  number  of  waivers   in  the  retire/rehire                                                                   
     program in  2008 were 62  PERS and 85 TRS  participants.                                                                   
     While  the number  of  participants  are seemingly  low,                                                                   
     these individuals  play a vital role in  the communities                                                                   
     where  they are employed.   Many  rural communities  and                                                                   
     school districts have benefited from the retire/rehire                                                                     
      program to retain retirement eligible individuals in                                                                      
     these hard-to-fill positions.                                                                                              
                                                                                                                                
8:11:44 AM                                                                                                                    
                                                                                                                                
KEVIN BANKS,  Acting Director, Central  Office, Division of  Oil &                                                              
Gas,  Department of  Natural  Resources (DNR),  said  he would  be                                                              
speaking in  regard to the  Division of Oil  & Gas (DOG),  as well                                                              
as  the Division  of  Geological  and Geophysical  Survey  (DGGS),                                                              
which  is headed  by Bob Swenson.   Mr.  Banks said  HB 157  would                                                              
amend  [paragraph]   14  of  AS  39.25.110,  by   "adding  several                                                              
positions  that  are now  hired  under  a  provision in  110  that                                                              
refers to  people who are  conducting special inquiries,  studies,                                                              
and examinations.   He added, "That  would be then  transferred to                                                              
position   titles,   like   petroleum   geophysicist,   commercial                                                              
analysts, and, in the case of DGGS, the state geologist."                                                                       
                                                                                                                                
MR.  BANKS reviewed  that  DOG is  responsible  for assessing  and                                                              
managing the state's  mineral resources.  Staff  members "in these                                                              
positions"  have  been  hired  "out   of  industry,"  because  the                                                              
division can  offer under exempt  status a salary that  includes a                                                              
measure of stability.                                                                                                           
                                                                                                                                
8:14:35 AM                                                                                                                    
                                                                                                                                
MR.  BANKS   stated  that   significant  industry  experience   is                                                              
critical  to  being  able  to  interpret  the  data  and  type  of                                                              
information  generated  by  the  industry.    He  said  [DOG]  has                                                              
geologists, engineers,  and commercial  "folks" who  have received                                                              
national  recognition.  Similarly,  DGGS  brings expertise  to the                                                              
table in  promoting the  state's mineral, oil,  and gas  wealth to                                                              
the  industry by  developing studies  and marketing  the state  to                                                              
other professionals.                                                                                                            
                                                                                                                                
CHAIR  LYNN asked how  much more  the occupations  proposed  to be                                                              
added to [paragraph 14] would be paid.                                                                                          
                                                                                                                                
MR. BANKS  responded that the top  exempt salaries range  at about                                                              
$150,000;  a petroleum  engineer in  the private  sector could  be                                                              
making up to $200,000.  He continued as follows:                                                                                
                                                                                                                                
                                                                                                                                
     The  positions  that  are listed  here  are  now  filled                                                                   
     under  an exempt status,  and we  would not be  changing                                                                   
     the amount  of money that  we're paying folks  from now.                                                                   
     What  it  does,  though, is  change  from  this  special                                                                   
     inquiry or studies  or examination, which is a  bit of a                                                                   
     loose  reference.    For  example,  we  have  commercial                                                                   
     analysts  that work  for us under  special inquiry,  and                                                                   
     I've  had difficulty  at times  persuading folks  coming                                                                   
     to  work  for  us  that  that  doesn't  mean  that  this                                                                   
     special  inquiry will be  over in  six or eight  months,                                                                   
     and thank  you very much for  your service.   What we'll                                                                   
     do is  convert those ...  two positions that  are listed                                                                   
     here  and be  able to  offer, I  think, ...  a sense  of                                                                   
     permanence for  those folks, recognizing that  they have                                                                   
     technical  skills  that we  need  and will  continue  to                                                                   
     need  as their  job evolves  over time.   So, we're  not                                                                   
     talking  about  changing  a classified  position  to  an                                                                   
     exempt position under this bill.                                                                                           
                                                                                                                                
8:17:41 AM                                                                                                                    
                                                                                                                                
MR. BANKS,  in response  to Representative  Wilson, remarked  that                                                              
the term  "special inquiry" has  been interpreted  fairly broadly.                                                              
He relayed  that when he worked  as a petroleum market  analyst in                                                              
the division,  his responsibilities  included managing  royalty in                                                              
kind and  royalty in  value contracts.   That,  he explained,  was                                                              
the  definition  of  his  special   inquiry  as  applied  to  that                                                              
position.   It involved  a certain skill  set and certain  ongoing                                                              
work.  In response  to a follow-up question, Mr.  Banks stated his                                                              
belief that the  meaning of special inquiry has to  do not so much                                                              
with a  skill set,  but with the  nature of the  work and  what it                                                              
contributes.                                                                                                                    
                                                                                                                                
8:19:52 AM                                                                                                                    
                                                                                                                                
MR. BANKS,  in response  to Representative  Gruenberg, said  DNR's                                                              
concern is solely with Section 1 of the proposed legislation.                                                                   
                                                                                                                                
REPRESENTATIVE  GRUENBERG asked  if this issue  will need  to come                                                              
before the legislature  every few years because the  titles in job                                                              
positions change.                                                                                                               
                                                                                                                                
MR. BANKS  replied that he does  not think that will  be necessary                                                              
because "these  positions are the  names of the positions  that do                                                              
exist now  under the special  inquiry part  of the statute."   The                                                              
definition of  the positions is  broad and common to  the industry                                                              
nomenclature, he  said.  In response to Representative  Gruenberg,                                                              
he  said the  term "special  inquiry"  is found  in AS  39.25.110,                                                              
paragraph (9).                                                                                                                  
                                                                                                                                
8:21:33 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GRUENBERG cited the  introductory paragraph  of AS                                                              
39.25.110, which read:                                                                                                          
                                                                                                                                
     Sec. 39.25.110.  Exempt service.                                                                                           
     Unless   otherwise  provided   by  law,  the   following                                                                   
     positions  in the  state service  constitute the  exempt                                                                   
     service  and  are exempt  from  the provisions  of  this                                                                   
     chapter and the rules adopted under it:                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG  noted that paragraph (14) is  set out in                                                              
Section 1 of  the bill and paragraph  (42) is in Section  2 of the                                                              
bill.  He  cited Section (9),  to which Mr. Banks  referred, which                                                              
read as follows:                                                                                                                
                                                                                                                                
        (9) persons employed in a professional capacity                                                                         
        to make a temporary or special inquiry, study or                                                                        
     examination as authorized by the governor;                                                                                 
                                                                                                                                
8:22:39 AM                                                                                                                    
                                                                                                                                
MR. BANKS  continued his testimony.   He  said it is  important to                                                              
realize, "It's  not only a matter  of hiring people; it  is also a                                                              
matter  of retaining  people."    He stated  his  belief that  the                                                              
changes proposed  in HB  157 represent  the state's commitment  to                                                              
its current employees  - that temporary or special  inquiry is not                                                              
the  reason they  are  working for  [the  department], but  rather                                                              
that their  skills and the work  they are doing are  essential for                                                              
the performance  and conduct  of DOG and  DGGS.  These  people, he                                                              
said,  offer  many  benefits to  the  state,  including  providing                                                              
mentorship  to   the  classified  state  employees.     Mr.  Banks                                                              
reemphasized  the  importance  of  retaining "these  folks."    He                                                              
shared that  some have come to him  to let him know  that although                                                              
they have  received offers  from the  private sector,  they prefer                                                              
to  stay.   He  surmised  the reasons  include  a  sense of  civic                                                              
responsibility,  the  realization  of job  security,  and  because                                                              
they may  have a role  that exceeds  the responsibility  that they                                                              
had in a much larger organization.                                                                                              
                                                                                                                                
8:24:17 AM                                                                                                                    
                                                                                                                                
MR. BANKS,  in response  to Representative  Gatto, explained  that                                                              
the term  "petroleum physicist"  is a  field of  study in  oil and                                                              
gas  or   schools  of  mining.     Many  geophysicists   have  had                                                              
undergraduate training  in physics,  followed by a  narrowed focus                                                              
into  the acoustic  properties  of  geophysical  type  survey.   A                                                              
geophysicist  does   not  have   certification  like  that   of  a                                                              
petroleum  engineer,  he  said.   In  response  to  Representative                                                              
Gatto, he  indicated that the  bill is a  way in which  to sweeten                                                              
the deal for  those who want to  remain in Alaska to  work, and to                                                              
demonstrate commitment  to those who  already work for  the state;                                                              
however, anyone  working for the  state "in this  capacity," under                                                              
exempt or classified service, can move on to greener pastures.                                                                  
                                                                                                                                
8:27:28 AM                                                                                                                    
                                                                                                                                
MR. BANKS, in response to Representative Seaton, stated:                                                                        
                                                                                                                                
     Several  positions  were created  under  110  (9) -  the                                                                   
     special  inquiry.    They  included  several  commercial                                                                   
     analyst  positions   and  some  of  the   [geotechnical]                                                                   
     positions,  like the  geophysicists.    And people  were                                                                   
     brought in on  staff.  So, we went from  about 20 people                                                                   
     on  our  staff that  are  exempt  to  30 people.    That                                                                   
     occurred  about five  years  ago.   It  also included  a                                                                   
     substantial  increase in  salaries at  that time to  try                                                                   
     to achieve  some parity with  the industry,  and frankly                                                                   
     that  was quite  successful.   We were  able to  attract                                                                   
     over  the last  several  years  several new  people  and                                                                   
     replace those who were retiring.                                                                                           
                                                                                                                                
8:28:45 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GRUENBERG  asked  if  the  terms  "temporary"  and                                                              
"special inquiry"  - in  Section 9  of the bill  - are  defined in                                                              
regulation.                                                                                                                     
                                                                                                                                
8:29:16 AM                                                                                                                    
                                                                                                                                
MR. BANKS  offered his  understanding that  the Department  of Law                                                              
issued an opinion  at the beginning of the  current administration                                                              
which narrowed  the definition of  "special inquiry"  and required                                                              
that people hired  under that provision go through  more scrutiny.                                                              
He said he  is not aware of  any specific definition.   The hiring                                                              
of an  exempt employee  in DOG  requires the  vetting through  the                                                              
Office  of the  Governor.   The hiring  of someone  in the  exempt                                                              
status is not done willy-nilly, he said.                                                                                        
                                                                                                                                
REPRESENTATIVE GRUENBERG  asked if there  is a uniformity  of that                                                              
phrase throughout  the department,  questioned the reason  for the                                                              
legal  opinion, and  said he  would like  to have  a copy of  that                                                              
legal  opinion  given to  committee  members.   He  suggested  the                                                              
committee  may want  to consider  whether or  not to address  that                                                              
classification phrase.                                                                                                          
                                                                                                                                
8:32:56 AM                                                                                                                    
                                                                                                                                
MR. BANKS  remarked  that the original  provision  in 110  (9) has                                                              
existed  for  many  years.   He  said  Representative  Seaton  was                                                              
referring  to a  budget item  that  came through  five years  ago,                                                              
which  allowed "us"  to pay people  in exempt  positions a  salary                                                              
more  commensurate  with  the  industry;   it  had  no  effect  on                                                              
changing  the   content  of  this   bill.    He   speculated  that                                                              
[Representative  Gruenberg]  may  be  correct  that  temporary  or                                                              
special inquiry  might have been viewed  as a loophole  by some in                                                              
the  past;  however,  he  said  his  understanding  of  the  legal                                                              
opinion is  that it  basically closed that  loophole.   The exempt                                                              
job has to require  someone with the kinds of skills  that are not                                                              
found in someone who is a member of the classified service.                                                                     
                                                                                                                                
8:34:27 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON  clarified  that  HB  157  would  take  the                                                              
positions in  question out  of paragraph (9)  and add them  to the                                                              
list of exempt employees listed in paragraph (14).                                                                              
                                                                                                                                
8:36:14 AM                                                                                                                    
                                                                                                                                
JERRY   BURNETT,    Deputy   Commissioner,    Treasury   Division,                                                              
Department of  Revenue, testified regarding  Section 2 of  HB 157.                                                              
He  said Section  2 addresses  two positions  in DNR  - the  chief                                                              
economist  and the  state comptroller  -  that would  be moved  to                                                              
exempt  service.  Currently,  he  said, the chief  economist  is a                                                              
classified  job, at  range  26.   The  chief  economist heads  the                                                              
economic analysis  group in  the tax  division and is  responsible                                                              
for the state's  revenue sources and forecasts.  The  job was held                                                              
by one  person for more  than 20 years  prior to 2004,  by another                                                              
from 2004 to  2008, and attempts  to fill it since that  time have                                                              
been unsuccessful.   There  needs to  be a  capable person  in the                                                              
position,  because  consequences  are  high  in  it.    Given  the                                                              
current market,  Mr. Burnett  said, the  best way to  successfully                                                              
recruit   someone    with   international   petroleum    economics                                                              
experience is by moving the job into the exempt service.                                                                        
                                                                                                                                
8:38:19 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GATTO  commented on  the  fact that  although  the                                                              
state has  paid someone  a range  26 to  forecast oil  prices, the                                                              
legislature has  had no accurate  help from anyone in  its efforts                                                              
to forecast prices.                                                                                                             
                                                                                                                                
MR. BURNETT  responded that that  has been a classified  position.                                                              
Furthermore, the  state contracts  with "external people"  and has                                                              
other resources it  uses to figure out oil prices.   He stated, "I                                                              
don't think anyone  has been successful forecasting  oil prices or                                                              
stock  prices, or  any real  asset  or commodity  prices over  the                                                              
last  year  or  two.    He  offered  his  understanding  that  the                                                              
volatility in  the market is  greater than  it has been  since the                                                              
1860s.   He concurred  with Chair  Lynn that no  one is  to blame,                                                              
and he  said "we" want  the most qualified  person in the  job and                                                              
to be able to access the markets.                                                                                               
                                                                                                                                
REPRESENTATIVE GATTO  questioned the  philosophy of looking  for a                                                              
better person for a job that cannot be done.                                                                                    
                                                                                                                                
MR.  BURNETT said  the person  in this  position does  a lot  more                                                              
than forecast;  he/she also  looks at  the competitiveness  of the                                                              
state's fiscal system  on a worldwide basis and has  to be able to                                                              
understand  how petroleum  economics work.   The  right person  in                                                              
the  job makes  a  better advisor,  and  the  department does  not                                                              
believe it  can get the  person with the  right skills in  the job                                                              
without offering the position as exempt.                                                                                        
                                                                                                                                
REPRESENTATIVE GATTO  said that answer  does not satisfy him.   He                                                              
further  commented   on  the   unpredictability  of   forecasting,                                                              
suggesting that The  Old Farmer's Almanac may do just  as a good a                                                            
job forecasting.                                                                                                                
                                                                                                                                
MR.  BURNETT  said  if  it was  purely  a  matter  of  forecasting                                                              
prices, a  number of external  tools may  work as well.   However,                                                              
understanding  how price  movement will  impact Alaska's  revenues                                                              
within its current fiscal system is much more complex than that.                                                                
                                                                                                                                
REPRESENTATIVE GATTO said, "I'll agree."                                                                                        
                                                                                                                                
8:42:51 AM                                                                                                                    
                                                                                                                                
MR.  BURNETT, in  response  to Representative  Johnson,  confirmed                                                              
that the  person in this position  also contracts  with companies,                                                              
such as  Black & Veach,  to look at  Alaska's fiscal  systems, and                                                              
it is important  to have a person  in the position who  can "speak                                                              
the same language."                                                                                                             
                                                                                                                                
8:43:32 AM                                                                                                                    
                                                                                                                                
MR.  BURNETT addressed  the  second DNR  position  proposed to  be                                                              
moved to  exempt status:   the state  comptroller.   That position                                                              
needs to  be filled by  a CPA who is  in charge of  the accounting                                                              
function of  the Treasury Division.   In the last five  years, the                                                              
department  has had four  comptrollers.   The department  is happy                                                              
with  the person  currently in  the  position and  would like  the                                                              
ability  to  negotiate  a  salary  comparable  with  those  exempt                                                              
positions that  are paid market-based  salaries, in order  to keep                                                              
the  employee.   The position  is responsible  for generating  the                                                              
financial statements  for the pension  funds and all of  the state                                                              
treasury functions.   Mr.  Burnett stated, "Most  of the  staff in                                                              
the  Treasury  Division  are  exempt   ...,  so  working  in  that                                                              
environment, it  seems appropriate to  have this position  also as                                                              
an exempt  position."  He noted  that the comptroller  position is                                                              
currently partially exempt, paid at a "state-paid schedule."                                                                    
                                                                                                                                
8:45:24 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GATTO   asked  what  changes,  from   the  state's                                                              
perspective, once someone's position has been made exempt.                                                                      
                                                                                                                                
MR. BURNETT,  using the  example of  the position of  comptroller,                                                              
which  is currently  filled, said  the state  would be looking  at                                                              
using  a market  survey to  set future  wages.   However, he  said                                                              
nothing  would really  change; the  person would  still be  an at-                                                              
will employee subject  to the same work environment.   In response                                                              
to  Representative  Gatto,  he  stated  that the  whole  point  of                                                              
changing  the position  to  exempt  status would  be  to have  the                                                              
ability  to offer an  employee more,  based on  market survey,  to                                                              
entice  him  or  her to  take  the  position  or  to stay  in  the                                                              
position.  He emphasized  that that is the whole  point of Section                                                              
2.                                                                                                                              
                                                                                                                                
8:47:13 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GRUENBERG directed  attention to AS  39.25.110(26)                                                              
and  asked Mr.  Burnett why  the economist  and comptroller  could                                                              
not be listed here, rather than in (42).                                                                                        
                                                                                                                                
8:47:59 AM                                                                                                                    
                                                                                                                                
MR. BURNETT  said he believes the  decision of where to  put those                                                              
positions is merely a drafting style.                                                                                           
                                                                                                                                
8:48:28 AM                                                                                                                    
                                                                                                                                
PAT SHIER,  Director, Division  Retirement & Benefits,  Department                                                              
of Administration,  testified regarding Section  3 of HB 157.   He                                                              
said   the  division   has  heard   from   school  districts,   in                                                              
particular, as well  as from certain public  employers, expressing                                                              
concern  that "this  portion  of the  law  was set  to  end."   He                                                              
continued:                                                                                                                      
                                                                                                                                
     It's  a tool  in  the toolbox  that  helps those  public                                                                   
     employers  and  those  school  districts  where  they're                                                                   
     experiencing a  real shortage in individuals  to come to                                                                   
     the table  and do the  work that needs  to be done.   It                                                                   
     simply extends  the sunset out to 2013; it  doesn't make                                                                   
     it permanent.   And we see it as a rational  response to                                                                   
     current labor situations.                                                                                                  
                                                                                                                                
8:49:39 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTO  questioned the  hardship in hiring  during a                                                              
time when there is an increase in unemployment.                                                                                 
                                                                                                                                
MR. SHIER responded  that employers are reporting  a difficulty in                                                              
recruiting qualified  applicants.  He noted that  public employers                                                              
must  prove they  have had  a difficulty  in recruiting  qualified                                                              
individuals  by showing  that  they had  five  or fewer  qualified                                                              
applicants.   In  response  to Chair  Lynn,  he acknowledged  that                                                              
things may be  changing; the state may find individuals  coming to                                                              
Alaska looking  for work.   In that  case, public employers  would                                                              
have more  than five  qualified applicants and  would not  be able                                                              
to "access the future to this bill."                                                                                            
                                                                                                                                
8:50:40 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  WILSON  said she  has  heard  that there  are  two                                                              
areas  in   which  there   currently  is   an  exception   to  the                                                              
unemployment  problem:    health  and  education.    However,  the                                                              
number of  Baby Boomers retiring  will be increasing.   She warned                                                              
that  the state  will  have a  terrible  time replacing  teachers,                                                              
because there  are not enough of  them in the United States.   She                                                              
reported that the  schools within her constituency  have asked her                                                              
to extend this legislation.                                                                                                     
                                                                                                                                
8:51:38 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  said the legislature dealt  with this issue                                                              
before when it scheduled the 2009 sunset.  He continued:                                                                        
                                                                                                                                
     As I  recall, part  of the problem  was when the  policy                                                                   
     was put  in, we  had supervisors ...  - people  who were                                                                   
     still not exempt,  but they would leave  their materials                                                                   
     in the  desk, would  go on vacation  for 30 days,  would                                                                   
     continue.   We  wouldn't have  applications from  people                                                                   
     under  them in the  department, because  who's going  to                                                                   
     put in an  application when you know your  boss is going                                                                   
     to get the  job because somebody ... liked  him, and who                                                                   
     can  be  more  qualified,   probably,  than  the  person                                                                   
     that's existing in the job?                                                                                                
                                                                                                                                
     So, one of  the ... problems, and why there's  a sunset,                                                                   
     was  because   this  was  seen  as  a  detriment   or  a                                                                   
     deterrent  for  people  to stay  within  the  department                                                                   
     because  they  knew the  guys  at  the top  would  never                                                                   
     leave   -  they   could   be  rehired,   retire,   start                                                                   
     collecting their  retirement, and stay in the  same job,                                                                   
     and there was a real problem of upward mobility.                                                                           
                                                                                                                                
     How have you  solved that within this situation,  and do                                                                   
     we  have  that  same  problem  with  morale  within  the                                                                   
     department for  upward movement of personnel,  and if we                                                                   
     extend  this,   won't  we  be  ...  keeping   that  same                                                                   
     problem?                                                                                                                   
                                                                                                                                
MR. SHIER responded  that the division is committed  to developing                                                              
talent "to come up  and take the jobs of the future."   He said it                                                              
is clear  from his  conversations with  the commissioner  that she                                                              
highly  values the  importance of  taking steps  toward having  an                                                              
adequate  training program  -  a succession  program  - in  place.                                                              
The  division  is  currently  developing   the  internal  training                                                              
programs  and knowledge  transfer  programs  that  will allow  the                                                              
state  to do business  as well  or better  "when  some of us  were                                                              
here or  gone."   Notwithstanding that,  he said  he has  heard of                                                              
one  case  where  a situation  exactly  as  Representative  Seaton                                                              
described occurred,  and he said  that is demoralizing.   In terms                                                              
of  how the  law  is structured,  if  extended,  the two  features                                                              
designed  to help minimize  this occurrence  were the  requirement                                                              
that there  be proof  of five  or fewer  qualified candidates  and                                                              
the development of a knowledge transfer plan, he reviewed.                                                                      
                                                                                                                                
MR.  SHIER   referred  to   the  aforementioned   report   to  the                                                              
legislature and  said it  shows that "better  than" 80  percent of                                                              
the  Public  Employees'  Retirement System  (PERS)  employers  and                                                              
almost  80  percent  of  the  Teachers'  Retirement  System  (TRS)                                                              
employers  have  in place  and  on  file  with the  division  that                                                              
knowledge  transfer  plan.   He  said  the division  would  expect                                                              
that, and  the five or fewer  requirement, to continue  to be part                                                              
of the process of certification.                                                                                                
                                                                                                                                
8:55:36 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON  indicated  that some  employers  have  not                                                              
completed  their  transfer  plan,  even  though  it  is  required.                                                              
Furthermore, there  is no mention of the plan  in the department's                                                              
web  site.   He asked  if there  is an  annual certification  that                                                              
would  show  that  every employer  is  exercising  that  knowledge                                                              
transfer plan.                                                                                                                  
                                                                                                                                
MR.  SHIER responded  that  the division  would  like 100  percent                                                              
compliance  and  currently  reminds employers  to  complete  their                                                              
plan.   He  said some  employers  have reported  feeling  panicked                                                              
because  they are  having difficulty  filling  all the  vacancies.                                                              
The  department  tries to  help  those employers  accomplish  this                                                              
part of the requirement.                                                                                                        
                                                                                                                                
REPRESENTATIVE  SEATON asked if  the Department of  Administration                                                              
is ensuring  that the  knowledge transfer  plan is actually  being                                                              
implemented or [if the requirement] is "just on paper."                                                                         
                                                                                                                                
MR. SHIER  said he does  not want to  answer off the  cuff without                                                              
speaking with  the person responsible  for doing the  follow-up on                                                              
this.                                                                                                                           
                                                                                                                                
REPRESENTATIVE  SEATON asked  Mr.  Shier to  do that  and let  the                                                              
committee know  what the Department of Administration's  procedure                                                              
is for  following up on the  knowledge transfer plans  within each                                                              
agency  which   uses  a  "retire/rehire."     He   emphasized  the                                                              
importance of morale within departments.                                                                                        
                                                                                                                                
8:59:01 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   SEATON,    regarding   the   "five    or   fewer"                                                              
requirement,  asked  if  the  rehire would  last  through  2013  -                                                              
throughout the time until the bill would sunset.                                                                                
                                                                                                                                
MR. SHIER stated  his understanding that there is  no provision in                                                              
this  part  of the  law  due  to  sunset that  would  require  the                                                              
division or employer  to report a change in the  labor market that                                                              
would lead  the division  or the employer  to release  the retiree                                                              
automatically.                                                                                                                  
                                                                                                                                
REPRESENTATIVE   SEATON  offered   his   understanding  that   the                                                              
situation is  that if there  is a job  opening and there  are five                                                              
or  fewer  applications,  the  employer  can  rehire  "the  person                                                              
that's  in there"  and [that  person] can  maintain that  position                                                              
until  2013  "without  any  reoffering  of  the  job  if  anything                                                              
changes."   He  asked  Mr.  Shier to  get  back to  him  regarding                                                              
whether that understanding is correct.                                                                                          
                                                                                                                                
MR. SHIER said he will.                                                                                                         
                                                                                                                                
9:00:45 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   WILSON   mentioned   a  memorandum   from   Scott                                                              
Nordstrand,   [former   commissioner    of   the   Department   of                                                              
Administration],  dated  9/11/06,  which  addresses the  issue  of                                                              
rehiring retirees.   She recollected  that the legislature  had at                                                              
one time  considered a  requirement that [the  retiree] had  to be                                                              
"out  at least  six  months"; however,  she  observed that  former                                                              
Commissioner Nordstrand's  memorandum notes that the  time is only                                                              
30 days.   She cited  a portion of  the memorandum, which  read as                                                              
follows  [original  punctuation  provided,  with  some  formatting                                                              
changes]:                                                                                                                       
                                                                                                                                
     A  retiree who  intends to  seek  a PERS  waiver may  be                                                                   
     appointed to a position in the classified service if:                                                                      
                                                                                                                                
          an open competitive recruitment process is                                                                            
     conducted  for  at  least  30 days  and  results  in  an                                                                   
     applicant pool  of fewer than five qualified,  eligible,                                                                   
     and available applicants;                                                                                                  
          all qualified, eligible and available applicants                                                                      
     are considered;                                                                                                            
          the hiring authority demonstrates why no other                                                                        
     applicant  will have the  knowledge, skills, or  ability                                                                   
     to  perform the  duties of  the  position after  serving                                                                   
     the full probationary period;                                                                                              
          and                                                                                                                   
          the retiree has served a thirty-day separation                                                                        
     with the  PERS.   If the employee  currently is  covered                                                                   
     under [House  Bill 242], a second thirty-day  separation                                                                   
     will  not   be  required  if   the  employee   is  later                                                                   
     appointed  under  [House Bill  161].   However,  if  the                                                                   
     employee  has not been  rehired under  [House Bill  242]                                                                   
     and has  not served  the initial thirty-day  separation,                                                                   
     a thirty-day separation will be required.                                                                                  
                                                                                                                                
REPRESENTATIVE  WILSON asked,  "Are  these regulations  or ...  is                                                              
this ... in statute?"                                                                                                           
                                                                                                                                
MR. SHIER  responded, "This is  the administrative  execution plan                                                              
that  the  division   is  currently  using;  we   haven't  changed                                                              
anything since that  memo."  In response to a  follow-up question,                                                              
he  said  it is  difficult  to  make  a blanket  statement  as  to                                                              
whether a 30-day  separation requirement is fair.   He said "this"                                                              
is designed to be  addressed on a case-by-case basis.   He stated,                                                              
"This  has   been  a  method  for   us  to  try  and   bring  some                                                              
accountability  to the process,  and I  can imagine going  further                                                              
than  this might  create undue  administrative  hardships on  both                                                              
the employers  and on the division.   So, I would call  this - for                                                              
the time being - adequate."                                                                                                     
                                                                                                                                
REPRESENTATIVE WILSON  asked if Mr. Shier has  received complaints                                                              
from other employees "because you're doing this."                                                                               
                                                                                                                                
MR.  SHIER   noted  that  last   year  the  division   received  a                                                              
complaint;  however, it  was not  from  a candidate.   He  related                                                              
that  the complaint  was from  an employee  who is  governed by  a                                                              
board, and  there was some disagreement  on the board.   Mr. Shier                                                              
said  that is  the only  complaint  he can  recollect having  been                                                              
received in the last year and a half.                                                                                           
                                                                                                                                
9:05:18 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  directed attention to page 4  of the Alaska                                                              
Legislative  Report handout,  which shows  a list  of job  classes                                                              
rehired under PERS  as a result of House Bill 161.   He noted that                                                              
one  of  the  jobs  listed is  Administrative  Assistant  I.    He                                                              
questioned  why that would  be a  position for  which it  would be                                                              
necessary to hire  a retiree.  He asked if that  is an entry-level                                                              
position.                                                                                                                       
                                                                                                                                
MR.  SHIER replied  that  without  further information,  he  would                                                              
surmise  that the  reason  has  to do  with  the two  most  common                                                              
factors:    the  location  and  the labor  pool  at  the  time  of                                                              
recruitment.                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  expressed concern that the  legislature not                                                              
support a  bill that "could lead  to the cronyism kind  of hiring"                                                              
that that  body attempted to  get rid of  with the sunset  date of                                                              
2009.  He asked  Mr. Shier to get back to the  committee with more                                                              
details related to the issue.                                                                                                   
                                                                                                                                
MR. SHIER  said he  would try.   However,  he told  Representative                                                              
Seaton that it may  be that some of the data  concerning the labor                                                              
market at the  time will be difficult to substantiate.   Regarding                                                              
some  of the  clerical positions  listed,  he said,  "We may  find                                                              
that those individuals  simply found it difficult  to have anybody                                                              
apply for  that kind of  work ... - the  labor pool being  what it                                                              
was at that time."                                                                                                              
                                                                                                                                
REPRESENTATIVE  SEATON  responded that  if  the proposed  bill  is                                                              
passed, what  the labor pool  is at the  time, and which  jobs are                                                              
on the  list, will  be locked in  through 2013.   He relayed  that                                                              
someone retired and  rehired may occupy that job for  a long time,                                                              
while there may be  a new labor pool that is  willing and eager to                                                              
have the job.                                                                                                                   
                                                                                                                                
9:10:06 AM                                                                                                                    
                                                                                                                                
NIKKI NEAL,  Director, Division  of Personnel  & Labor  Relations,                                                              
Department  of Administration,  in  response  to  a question  from                                                              
Representative  Wilson,   said  there  are   approximately  15,000                                                              
employees in the executive branch.                                                                                              
                                                                                                                                
REPRESENTATIVE  WILSON remarked  that  there are  71  people on  a                                                              
list of those rehired  under House Bill 161, which,  out of 15,000                                                              
employees,  is not bad.   She  directed attention  to [page  8] of                                                              
the  Alaska  Legislative  Report,   entitled,  "Number  of  Months                                                              
Retired  Rehired under  [House Bill  161]  for participating  PERS                                                              
employers," and  offered her understanding  that of that  71, only                                                              
four were  retired one to  six months before  being rehired.   She                                                              
said  she is  not as  concerned about  that, because  most of  the                                                              
retirees  were   retired  much  longer  than  that   before  being                                                              
rehired.                                                                                                                        
                                                                                                                                
9:12:47 AM                                                                                                                    
                                                                                                                                
MS. NEAL, in  response to a question from  Representative Johnson,                                                              
said  regulations  and  collective   bargaining  agreements  allow                                                              
departments  to  recruit  departmentally  or for  state  employees                                                              
only.   Regarding HB  157, she  pointed out  that the Division  of                                                              
Personnel does  not allow  individuals to  be rehired  as retirees                                                              
through  only a  departmental or  statewide  recruitment; an  open                                                              
competitive recruitment must be conducted.                                                                                      
                                                                                                                                
9:14:14 AM                                                                                                                    
                                                                                                                                
MS. NEAL,  in response  to a question  from Representative  Seaton                                                              
regarding the  issue of  five or  more qualified applicants,  said                                                              
it is  not enough  just to  have fewer  than five applicants;  the                                                              
employer must illustrate  the reasons why the other  applicants do                                                              
not have the skills  necessary to perform the work.   She said she                                                              
is  the one  who  personally signs  off  on those  approvals,  and                                                              
"they're  very few  and far between."   The  majority of  retirees                                                              
working today were not recently appointed, she noted.                                                                           
                                                                                                                                
9:15:24 AM                                                                                                                    
                                                                                                                                
BARB  ANGAIAK, President,  National  Education  Association-Alaska                                                              
("NEA-Alaska"),  said she  would speak  to issues  in HB 157  that                                                              
are  related  to  employees of  the  Teachers'  Retirement  System                                                              
(TRS).  She stated  that the original intent of bill  - to address                                                              
the issue  of shortfalls in  filling hard-to-fill positions  - was                                                              
good.   Unfortunately,  she  said,  the bill  does  not provide  a                                                              
solution and  is, in fact, problematic.   The categories  of hard-                                                              
to-fill positions  were broadly  interpreted by school  districts.                                                              
For  example, the  term "hard-to-fill  teacher" was  [interpreted]                                                              
in such a  broad manner that in  some districts, any teacher  in a                                                              
teaching  position who  wished to  be rehired  after retiring  was                                                              
allowed  to be,  regardless of  whether  or not  the position  was                                                              
hard to fill,  because the district,  as a whole, could  show that                                                              
it was having trouble filling teaching positions.                                                                               
                                                                                                                                
MS.  ANGAIAK, in  another example,  said  in at  least one  school                                                              
district  the term  administrator  was  used in  a  broad term  to                                                              
include  the  superintendent;  therefore,  there  was  no  serious                                                              
attempt  made to  recruit for  a superintendent,  since there  had                                                              
been an  ongoing problem  of trying  to fill principal  positions,                                                              
and the two categories were considered administrators.                                                                          
                                                                                                                                
MS.  ANGAIAK said  one problem  in hiring  retirees into  teaching                                                              
positions  has to  do  with the  issue of  wanting  the "best  and                                                              
brightest."   Teachers who are just  starting out do not  have the                                                              
opportunity   to  develop   their  craft   and  become   excellent                                                              
educators  if the  system continues  to rehire  the same  teachers                                                              
repeatedly.  She continued as follows:                                                                                          
                                                                                                                                
      Some of the people who are rehired retirees are our                                                                       
      members; but I think they would agree that the long-                                                                      
     term  impact of  this really  affects  how effective  we                                                                   
     can  be  in   our  schools  in  working   with  Alaska's                                                                   
     children.   So, for  us, it's important  to take  a look                                                                   
     at whether this is really a solution.                                                                                      
                                                                                                                                
9:18:46 AM                                                                                                                    
                                                                                                                                
MS. ANGAIAK  related that a superintendent  told her not  long ago                                                              
that even  if the proposed  legislation passes  and the  sunset is                                                              
moved  further out,  he  probably would  recommend  to his  school                                                              
board that  it not  participate, because he  does not  think "that                                                              
it's  the fix  that  we  need," and  he  sees it  as  exacerbating                                                              
already existing recruitment and retention problems.                                                                            
                                                                                                                                
REPRESENTATIVE   GRUENBERG  opined  that   the  bill   presents  a                                                              
difficult policy issue.   He said there are a lot  of Baby Boomers                                                              
with a  wealth of experience and  a younger generation  that needs                                                              
to build  for the  future, and he  said he  thinks society  has to                                                              
protect  both.   He  asked everyone  to  consider  the issue  more                                                              
broadly.   He  asked for  Ms. Angaiak's  advice  regarding how  to                                                              
help both generations.                                                                                                          
                                                                                                                                
9:21:25 AM                                                                                                                    
                                                                                                                                
MS. ANGAIAK  responded that it  is problematic when  retirees draw                                                              
a  retirement  income  while  filling a  position  that  could  be                                                              
filled by  someone who would be  contributing to the system.   She                                                              
said she  has heard many concerns  expressed about the  funding of                                                              
the state's  retirement  system, and  "this only  causes it  to be                                                              
worse."                                                                                                                         
                                                                                                                                
9:22:18 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTO  questioned if there is a point  at which the                                                              
state would  be better  off paying  off all  the retiree  debt and                                                              
"not taking  on any  more," or whether  the state should  maintain                                                              
that the  system will go  on forever as  long as people  are hired                                                              
"at the front end" to help pay the people "at the back end."                                                                    
                                                                                                                                
MS.  ANGAIAK indicated  that  the  latter system  -  in which  new                                                              
hires come  into the system and  make a contribution,  while those                                                              
retiring are  able to collect retirement  - has worked.   She said                                                              
that system  is most beneficial  to the  children of Alaska.   She                                                              
emphasized  the importance of  bringing people  with the  best and                                                              
current  knowledge  into  the  system.   Regarding  her  own  peer                                                              
group, Ms.  Angaiak stated,  "It's a tough  battle to stay  ... up                                                              
on what  we need  to know  to really  offer the  very best."   She                                                              
concluded,  "The  funding of  the  retirement  system  is tied  to                                                              
this, certainly, but  the most important thing to  us is, 'How are                                                              
we going to educate our kids in the very best way we can?'"                                                                     
                                                                                                                                
REPRESENTATIVE  GATTO said  this is  a question  about money.   He                                                              
said  the situation  reminds him  of the  social security  system,                                                              
which must  acquire new people in  order to pay those  who retire,                                                              
but has  an enormous  unfunded liability.   He questioned  if that                                                              
is what is being created through TRS.                                                                                           
                                                                                                                                
MS. ANGAIAK expressed  her belief that the state  has system which                                                              
needs  work, but which  can support  a retirement  for its  public                                                              
employees in order to draw people to public service.                                                                            
                                                                                                                                
[CHAIR LYNN passed the gavel to Vice Chair Seaton.]                                                                             
                                                                                                                                
9:26:43 AM                                                                                                                    
                                                                                                                                
DON  ETHERIDGE,  American  Federation  of Labor  and  Congress  of                                                              
Industrial Organizations  (AFL-CIO), related that during  his past                                                              
25 years sitting  at the negotiating table for  the labor, trades,                                                              
and crafts  group, the message  was hammered  in that "we  need to                                                              
lower the  wages to  middle ground."   He  stated, "I  think we're                                                              
there.   That's  why  we're having  problems  with recruiting  and                                                              
retention.   We've reached middle  ground, and we're right  in the                                                              
ball park  with everybody else,  so there's nothing extra  to show                                                              
the people who we  need to stay here."  He  said AFL-CIO's concern                                                              
is  that by  exempting positions  just  because they  are hard  to                                                              
fill,  the consequence  may be that  there will  be no  classified                                                              
positions left.                                                                                                                 
                                                                                                                                
MR. BENSON, regarding  the issue of retirement, said  the state is                                                              
using  PERS and  TRS  to fund  the  shortfall of  the  wages.   He                                                              
warned  that that  "will  hurt the  retirement  system even  worse                                                              
than it  already is  now."  He  said there  are people  who cannot                                                              
afford to  work because wages are  not enough, but if  they retire                                                              
and  collect retirement  and get  rehired to  collect wages,  then                                                              
they  can afford  "to stay  here."  Mr.  Benson said  he does  not                                                              
believe that is right.                                                                                                          
                                                                                                                                
9:28:55 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  PETERSEN asked Mr.  Benson if  he thinks  the fact                                                              
that the State of  Alaska does not offer a defined  benefit system                                                              
[to  any employee  hired  after  June 30,  2006,]  is hurting  the                                                              
recruitment effort.                                                                                                             
                                                                                                                                
MR. ETHERIDGE  answered yes.   He  said he knows  for a  fact that                                                              
has caused problems.   Many engineer positions  and administrative                                                              
office positions in  the harbor system have been  vacated for that                                                              
precise reason, he said.                                                                                                        
                                                                                                                                
9:29:51 AM                                                                                                                    
                                                                                                                                
MR. ETHERIDGE,  in response to  Representative Gatto, said  as yet                                                              
no study has  been done to show recruitment and  retention trends,                                                              
but he  said he has requested  that one be  conducted.  He  said a                                                              
study would  make it easier for  "us" to demonstrate  the problem.                                                              
He added, "And  to also look at  the cost to government  having to                                                              
retrain  every time  we have  a  problem with  that retention  and                                                              
recruitment  effort."   In response  to a  follow-up question,  he                                                              
affirmed  that "in  some  areas"  the state  ends  up hiring  less                                                              
qualified  people   because  of   the  existing  recruitment   and                                                              
retention problems.   He said the  study would have to  be done to                                                              
determine the percentage of jobs affected.                                                                                      
                                                                                                                                
9:31:25 AM                                                                                                                    
                                                                                                                                
VICE   CHAIR   SEATON   reminded   everyone   that   retire/rehire                                                              
legislation originally  passed when the  state was still  under [a                                                              
defined benefit  system]; therefore, "this wasn't  coincident with                                                              
the new retirement system when we worked on that."                                                                              
                                                                                                                                
9:31:37 AM                                                                                                                    
                                                                                                                                
HANNAH  RAMISKEY, Member,  Ketchikan  Charter  School Board,  told                                                              
the  committee  that  the  Ketchikan Charter  School  has  a  core                                                              
knowledge curriculum  and an  80 percent  or higher assessment  on                                                              
all its  students.   She mentioned  [a former] superintendent  who                                                              
was a  curriculum director  and reading  specialist, had  accepted                                                              
knowledge in the  curriculum, and was young.  She  stated, "He did                                                              
not retire  because he  wanted to double  dip; he retired  because                                                              
the  school board  chose to  let  him go  to hire  someone with  a                                                              
different  educational  philosophy."     Mr.  Martin  is  the  new                                                              
administrator whom  Ms. Ramiskey said 100 percent of  the staff in                                                              
the school support.   The man has the knowledge  and experience to                                                              
make the charter school successful, she opined.                                                                                 
                                                                                                                                
MS.  RAMISKEY  talked about  the  importance  of hiring  the  best                                                              
people  to educate  the students,  and she  expressed her  concern                                                              
regarding the  testimony she  has heard thus  far.   She continued                                                              
as follows:                                                                                                                     
                                                                                                                                
     First  of all, the  Ketchikan School  District does  pay                                                                   
     Mr. Martin's  retirement benefits to the state;  he just                                                                   
     doesn't  get them.   So, the money's  going in;  he does                                                                   
     not  get them.   He  is more  experienced  and yet  less                                                                   
     paid than  most principals,  because he  comes in  at an                                                                   
     entry level  elementary school principal's  position and                                                                   
     he does not collect retirement benefits.                                                                                   
                                                                                                                                
9:35:03 AM                                                                                                                    
                                                                                                                                
MS.  RAMISKEY  talked about  a  teacher  who retired  because  her                                                              
husband had  cancer, and who was  subsequently rehired to  run the                                                              
school's reading program after her husband died.  She continued:                                                                
                                                                                                                                
     There's no one  else in the City or island  of Ketchikan                                                                   
     who can  replace these  people or come  close.   They do                                                                   
     not  have  their  experience;  they do  not  have  their                                                                   
     training.                                                                                                                  
                                                                                                                                
     The  last few principals  hired in  Ketchikan have  come                                                                   
     from somewhere  else.  And  I don't know that  Ketchikan                                                                   
     has  that   [emphasis  on  "that"]  many   smart,  well-                                                                   
     educated  people that  we  can afford  to  say to  these                                                                   
     people, "We  don't want you  in our community as  a part                                                                   
     of  our base;  we can't  reuse your  education and  your                                                                   
     knowledge; we  are going to insist that we  hire someone                                                                   
     else  who may  not  be able  to fill  the  bill, but  at                                                                   
     least we're bringing in someone new."                                                                                      
                                                                                                                                
MS. RAMISKEY  asked the  legislature to  think about the  children                                                              
involved.   She mentioned  No Child  Left Behind,  and stated  her                                                              
concern that  if there are people  using the system in  a way that                                                              
does not  benefit the  state or school  children, then  that issue                                                              
needs to  be addressed.  She  said there are many  charter schools                                                              
in  Alaska  that   have  either  retired  principals   or  retired                                                              
superintendents  "at  their  core,"   and  whose  curriculums  are                                                              
sometimes different  from other curriculums in the  district.  She                                                              
said  some people  say they  would like  to work  for the  charter                                                              
school,  but they  do  not  have the  belief  in the  school,  and                                                              
without  that belief,  the school  would not  be successful.   She                                                              
asked the  committee to take  that into consideration  when making                                                              
decisions  about money  and numbers.   Ms.  Ramiskey restated  her                                                              
concern for the children.                                                                                                       
                                                                                                                                
VICE CHAIR SEATON noted:                                                                                                        
                                                                                                                                
     We're  only  talking  about  people that  wanted  to  be                                                                   
     rehired   that  want  to   continue  to  collect   their                                                                   
     retirement while  being reemployed.  They could  go back                                                                   
     into the  system and  earn further  years in the  system                                                                   
     as  a regular  employee.  So,  all options  are not  off                                                                   
     the table if ... this goes away.                                                                                           
                                                                                                                                
9:38:41 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG  observed that  part of the  problem with                                                              
the  proposed legislation  is that  it  is an  amalgamation of  at                                                              
least two bills:   one dealing with exempt service,  and the other                                                              
dealing with  retired/rehired service.   Currently the  discussion                                                              
pertains to the  retired/rehired portion of the bill  - the second                                                              
part  of  HB 157  -  which  is  also an  amalgamation  because  it                                                              
includes people  working for  state and  people working  for local                                                              
governments.   Furthermore,  the  category of  people working  for                                                              
local governments  is an  amalgamation because  it includes  those                                                              
working  as  teachers  under  TRS   and  those  working  in  other                                                              
administrative  capacities under  PERS.   He pointed  out that  to                                                              
this point, Ms.  Ramiskey and Ms. Angaiak were the  only people to                                                              
have testified  about local  teacher issues.   Ms. Angaiak  talked                                                              
about  it from the  employees' and  union's point  of view,  while                                                              
Ms. Ramiskey  is discussing  the issue from  the point of  view of                                                              
the  parents.     Representative  Gruenberg  concluded,   "As  the                                                              
legislature  continues to  consider  this and  related issues,  it                                                              
may  be helpful  for  us to  break them  out  analytically in  the                                                              
manner I've  outlined, because some  of the policy  considerations                                                              
may be somewhat different."                                                                                                     
                                                                                                                                
9:40:37 AM                                                                                                                    
                                                                                                                                
HARRY MARTIN,  Principal, Ketchikan  Charter School,  testified as                                                              
follows:                                                                                                                        
                                                                                                                                
     The  state   statute  gives  the  charter   schools  the                                                                   
     opportunity  to come  up with their  own curriculum  and                                                                   
     then to  find people who  support that curriculum  to be                                                                   
     hired for that school.                                                                                                     
                                                                                                                                
     In this case  we have our own reading program.   We have                                                                   
     a trainer who  is trained in that program,  who did, and                                                                   
     still  continues to  do  in some  of  the schools  here,                                                                   
     training  for teachers  that  buy into  that  particular                                                                   
     philosophy  and that  particular method  of teaching  of                                                                   
     teaching reading.                                                                                                          
                                                                                                                                
     She is  back in  the charter school  doing that  for the                                                                   
     charter   school    curriculum,   because    they   have                                                                   
     completely bought  into that.  She is the  only one that                                                                   
     is  a certified  trainer  for this  particular  program.                                                                   
     She does a  tremendous job with the people  reading, and                                                                   
     as  Ms.  Ramiskey  pointed  out, she  comes  in  at  the                                                                   
     bottom  salary   schedule  according  to   our  district                                                                   
     arrangements  and stays on that  bottom level, so  it is                                                                   
     an  economic plus  for the  district.  And,  as part  of                                                                   
     the state TRS  agreement, the employer does  pay TRS for                                                                   
     the  employer,  however,  she  does  not  contribute  to                                                                   
     that.                                                                                                                      
                                                                                                                                
     So,  just keep  in  mind that  for  charter schools,  to                                                                   
     whom  you've  given  the opportunity  to  come  up  with                                                                   
     their  own  curriculum  and  hire the  people  best  for                                                                   
     that, that  this is certainly  one of the tools  that we                                                                   
     use in order  to do that and provide the  best education                                                                   
     for those kids that go to our charter school.                                                                              
                                                                                                                                
[VICE CHAIR SEATON returned the gavel to Chair Lynn.]                                                                           
                                                                                                                                
9:43:03 AM                                                                                                                    
                                                                                                                                
KEVIN BROOKS,  Deputy Commissioner,  Department of  Administration                                                              
(DOA), noted  that the  retire/rehire provisions  in statute  have                                                              
been in  place for some  years now.   The proposed  legislation is                                                              
the second  proposal for  extension, and  would extend  the sunset                                                              
date  by  four  years.    Mr.  Brooks   said  the  nature  of  the                                                              
retire/rehire  practice has changed  over the  years.  It  used to                                                              
occur that  a person  would retire  on Friday  and be  rehired and                                                              
back  at  work  on Monday,  which  caused  hard  feelings  because                                                              
people thought  that blocked promotional opportunities.   However,                                                              
from  the state's  perspective, Mr.  Brooks said,  "It has  really                                                              
become  much more  refined."   He offered  his understanding  that                                                              
there are  less than  30 employees  currently employed  under this                                                              
status.                                                                                                                         
                                                                                                                                
MR. BROOKS  said the requirement  to prove recruitment  difficulty                                                              
by showing  there were  five or  fewer candidates  after weeks  of                                                              
recruitment, along  with the carrying out of  a knowledge transfer                                                              
plan, has served the state well.                                                                                                
                                                                                                                                
9:45:36 AM                                                                                                                    
                                                                                                                                
MR.  BROOKS stated  that an  employer still  has to  pay the  past                                                              
service cost  on a retiree.   A person  coming in is  not accruing                                                              
additional  service,  is  not  "adding   normal  costs,"  and  the                                                              
employer is "paying  the delta between the normal cost  and the 22                                                              
percent  that  is  set  in  statute  to  pay  down  that  unfunded                                                              
liability."   Mr. Brooks said there  is a zero fiscal  note; there                                                              
would  be  no  financial  impact  as  a  result  of  the  proposed                                                              
legislation.   He  added, "In  fact,  you have  taken measures  in                                                              
previous  bills to  make  sure that  it's  not  having a  negative                                                              
impact on  the unfunded liability."   He said he wants  to clarify                                                              
for the committee  that that is  also a concern of  the department                                                              
and he thinks the concern has been adequately addressed.                                                                        
                                                                                                                                
9:47:00 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON  said  he  would  like  to  know  what  the                                                              
interaction is "with  this and the hiring freeze  that's currently                                                              
in place."                                                                                                                      
                                                                                                                                
9:47:30 AM                                                                                                                    
                                                                                                                                
MR.  BROOKS, in  response to  Representative Gruenberg,  clarified                                                              
that his previous  comment regarding there being no  impact to the                                                              
unfunded liability was made in regard to both PERS and TRS.                                                                     
                                                                                                                                
9:47:48 AM                                                                                                                    
                                                                                                                                
CHAIR LYNN announced that HB 157 was held over.                                                                                 
                                                                                                                                

Document Name Date/Time Subjects
01 HB 157 Version A.pdf HSTA 3/17/2009 8:00:00 AM
HB 157
01 HB0115A.pdf HSTA 3/17/2009 8:00:00 AM
HB 115
02 Sponsor Statement HB157 Exempt 13Mar09.doc HSTA 3/17/2009 8:00:00 AM
HB 157
03 HB 157 - legislative-report-on-retiree-return-program-2-6-09.pdf HSTA 3/17/2009 8:00:00 AM
HB 157
04 HB0157-1-1-022709-ADM-N.pdf HSTA 3/17/2009 8:00:00 AM
HB 157
05 HB0157-2-1-022709-DNR-N.pdf HSTA 3/17/2009 8:00:00 AM
HB 157
01 HCR011A.pdf HSTA 3/17/2009 8:00:00 AM
02 - updated HCR11Sponsor Statement - Electronic.doc HSTA 3/17/2009 8:00:00 AM
02 sponsor statement HB 115.doc HSTA 3/17/2009 8:00:00 AM
HB 115
03 Sectional Analysis HB 115-REV.doc HSTA 3/17/2009 8:00:00 AM
HB 115
04 HB 115 APWU letter of Support.PDF HSTA 3/17/2009 8:00:00 AM
HB 115
03 Fiscal Note HCR 11.xls HSTA 3/17/2009 8:00:00 AM
06 HB0157-3-1-022709-REV-N.pdf HSTA 3/17/2009 8:00:00 AM
HB 157
07 HB157-DOA-DRB-03-16-09.pdf HSTA 3/17/2009 8:00:00 AM
HB 157
New to Packet - HJR 3 legal memo.pdf HSTA 3/17/2009 8:00:00 AM