Legislature(2019 - 2020)BUTROVICH 205
04/25/2019 03:30 PM STATE AFFAIRS
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HB 48- TEMP STATE EMPLOYEES IN PART EXEMPT SVCE 3:38:18 PM VICE CHAIR COGHILL announced the consideration of CS FOR HOUSE BILL NO. 48(FIN) am, "An Act removing from the exempt service of the state persons who are employed in a professional capacity to make a temporary or special inquiry, study, or examination as authorized by the governor and including those persons in the partially exempt service of the state; repealing the authority of the governor or a designee of the governor to authorize higher pay than is otherwise allowable for certain partially exempt employees in the executive branch; requiring the commissioner of administration to submit a report to the legislature; and providing for an effective date." He asked the sponsor to respond to the questions that were raised during the previous hearing. 3:39:19 PM REPRESENTATIVE TAMMIE WILSON, Alaska State Legislature, Juneau, sponsor of HB 48, said she'd like Mr. Henderson to respond to Senator Micciche's question about whether the bill would affect the governor's ability to hire somebody who commands a higher salary to work on a specialized project. 3:39:43 PM REMOND HENDERSON, Staff, Senator Tammie Wilson, Alaska State Legislature, Juneau, explained that the governor would still have the authority to hire somebody under AS 39.25.110, which exempts the Office of the Governor from the Personnel Act. VICE CHAIR COGHILL offered his understanding that this would be under the governor's broad authority to hire and the position may or may not be temporary. MR. HENDERSON said that's correct. REPRESENTATIVE T. WILSON referenced the list of exempt service PCNs the Department of Administration provided and explained that it focuses on when these supposedly temporary positions were established. The earliest is 1989 and several others were established in 2003 and 2010, none of which are temporary. She also pointed out that some of these positions have been filled more than once, which doesn't seem very temporary. If the position isn't temporary it should be classified differently, she said. She described the bill as being about transparency and ensuring that fulltime employees are treated equitably. 3:42:03 PM SENATOR MICCICHE commented that the list the department provided does not include those highly specialized and highly compensated positions he talked about during the last hearing. He said the people on this list probably should not have been hired as exempts so there is abuse of the system, but the salaries aren't out of line. He assured the public that if they were out of line, the committee would jump on that immediately. He agreed with the sponsor that this brings the issue out into the open and lets this and future administrations know the expectation is that hiring will be done correctly, employees will all be treated fairly, and the process will be transparent. 3:44:11 PM REPRESENTATIVE T. WILSON remarked that this is just one of the issues that needs to be addressed. She's identified others that she'll also look into. VICE CHAIR COGHILL commented on the lengthy list of exempt positions in the statute. SENATOR REINBOLD asked if the department's list reflects bimonthly pay. MR. HENDERSON answered yes; the compensation that's listed is paid twice a month. He also clarified that salaries for some of the positions on the list are up to $120,000 per year and that some exempt positions that clearly are temporary and not highly compensated, such as elections workers, are not on the list. SENATOR MICCICHE asked if all the larger numbers on the list reflect the bimonthly base rate. REPRESENTATIVE WILSON deferred the question to Ms. Sheehan. 3:46:29 PM KATE SHEEHAN, Director, Division of Personnel and Labor Relations, Department of Administration, Juneau, confirmed that most of the numbers are semimonthly base rates and some are hourly rates. VICE CHAIR COGHILL asked if this exemption provides a special and helpful tool. MS. SHEEHAN replied it depends on the position. She noted that when the statute was changed in 1982 to "temporary or special inquiry" instead of "and," it started being used for more permanent projects like the gas pipeline. Other options are available such that an exempt agency or the governor's office could employ an exempt employee. She said it would be limiting in the partially exempt services where there are classified nonpermanent employees. She said she doesn't know why things are set up a certain way but she is aware that it has helped DOA set up new divisions fairly quickly. VICE CHAIR COGHILL offered his understanding that those people could be hired fairly quickly under the governor's authority. MS. SHEEHAN confirmed that a position for a high-level project that is set up by the governor's office would be exempt right away. VICE CHAIR COGHILL asked what caused hiring under this section of the statute to be less transparent. MS. SHEEHAN said she didn't know. SENATOR REINBOLD asked what the Position Time Class "ltexe" refers to. MS. SHEEHAN replied that is long term exempt. SENATOR MICCICHE asked if some of the people on the list are employed under AS 39.25.110(9) and AS 39.27.011(k), which Section 2 repeals. He also recalled that petroleum employees generally work under a different statute. MS. SHEEHAN replied the list has only the temporary exempt positions under paragraph (9). It does not capture every state employee who is paid at a higher rate under the subsection (k) exception. She noted that some of the petroleum positions that are listed as temporary exempt are actually exempt under statute but they were never updated in the system. She reiterated that the list SENATOR MICCICHE asked why the list includes some petroleum professionals, the highest of which is paid $168,000, when AS 39.25.110(14) provides the following specific exemption: (14) petroleum engineers and petroleum geologists employed in a professional capacity by the Department of Natural Resources and by the Alaska Oil and Gas Conservation Commission; 3:52:53 PM MS. SHEEHAN explained that the positions were established years ago and subsequent legislation placed them in exempt service. For some reason they were never updated in the system so they come up as temporary exempt when a report is run. She said her office did send the report to all agency HR managers asking what the duties are for these positions and hopefully that will help get the positions appropriately categorized as exempt if they are exempt under current statute. SENATOR MICCICHE asked if the professionals in those necessary, high-cost positions could be hired under AS 39.25.110(14). MS. SHEEHAN said yes. VICE CHAIR COGHILL asked if repealing AS 39.27.011(k) will result in those positions being hired under AS 29.25.110. MS. SHEEHAN explained that the subsection (k) exception was put in statute in 2013 and it applies to partially exempt employees. The testimony at the time was that it would be a tool to hire partially exempt people at a pay increment that is higher than the highest merit step F. Those positions are separate from the truly exempt positions that are not confined by the state pay plan in the Personnel Act. VICE CHAIR COGHILL offered his understanding that repealing subsection (k) narrows the ability to pay beyond a certain step. MS. SHEEHAN said yes, step F would be the highest without setting up an exempt position. SENATOR MICCICHE said he believes that a number of the positions that will disappear are needed. He asked if it would be possible to fill those needed positions with highly skilled people that come at a certain cost. MS. SHEEHAN said it would depend on the position. 3:57:51 PM SENATOR REINBOLD said she likes the bill and is ready to vote. VICE CHAIR COGHILL observed that the administration will still be able to hire the talent it needs, although repealing subsection (k) may change how a director is hired. SENATOR MICCICHE asked if step F is bimonthly. MS. SHEEHAN answered yes; partially exempt employees and most exempt employees are paid semimonthly. SENATOR MICCICHE asked if the monthly salary for step F is double what's shown on the list. MS. SHEEHAN answered yes. VICE CHAIR COGHILL offered his understanding that the difference between the exemption under AS 39.27.011(k) and the exemption under AS 39.25.110(9) is that one requires justification and the other does not. MS. SHEEHAN confirmed that there must be written justification by the governor or their designee under the subsection (k) exception. SENATOR MICCICHE responded, "Mr. Chairman, right where you are right there. If that's the case that completely eliminates my concern on the bill." 3:59:36 PM VICE CHAIR COGHILL opened public testimony on HB 48. 4:00:23 PM CHARLES MCKEE, representing self, Anchorage, testified that his account was subjugated and the state corporation defrauded him in 1983 because the Anchorage Times lied about him. He's never recovered. VICE CHAIR COGHILL advised that testimony must be germane to HB 48. MR. MCKEE said he sent information to his representative's staff member. VICE CHAIR COGHILL asked if he had testimony on HB 48. MR. MCKEE said his testimony does pertain to HB 48 because he sent the information to a temporary employee. VICE CHAIR COGHILL suggested he submit written testimony to email@example.com 4:03:31 PM VICE CHAIR COGHILL found no further testifiers and closed public testimony on HB 48. SENATOR REINBOLD stated particular support for Section 5. SENATOR MICCICHE recapped that this bill takes care of a problem but allows the same businesses to continue in a different way and with more transparency. 4:04:49 PM SENATOR MICCICHE moved to report HB 48, work order 31- LS0346\U.A, from committee [with individual recommendations] and attached fiscal note(s). 4:05:25 PM VICE CHAIR COGHILL found no objection and CSHB 48(FIN)am was reported from the Senate State Affairs Standing Committee.