Legislature(2019 - 2020)BUTROVICH 205

04/25/2019 03:30 PM STATE AFFAIRS

Note: the audio and video recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.

Download Mp3. <- Right click and save file as
Download Video part 1. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Bills Previously Heard/Scheduled: TELECONFERENCED
+= SB 73 SUCCESSOR OF LIEUTENANT GOVERNOR TELECONFERENCED
<Bill Hearing Canceled>
+= SB 75 COMMERCIAL VEHICLE LICENSING REQ'S TELECONFERENCED
Moved SB 75 Out of Committee
-- Public Testimony <Time Limit May Be Set> --
+= HB 48 TEMP STATE EMPLOYEES IN PART EXEMPT SVCE TELECONFERENCED
Moved CSHB 48(FIN) AM Out of Committee
-- Public Testimony <Time Limit May Be Set> --
        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                                                               
senate.state.affairs@akleg.gov                                                                                                  
                                                                                                                                
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.                                                                      

Document Name Date/Time Subjects
SSTA OFFICIAL AGENDA MEMO.pdf SSTA 4/25/2019 3:30:00 PM
agenda
CSHB048(FIN) am ver U.A Sponsor Statement.pdf SSTA 4/25/2019 3:30:00 PM
HB 48
CSHB0048(FIN) am ver U.A.pdf SSTA 4/25/2019 3:30:00 PM
HB 48
CSHB048(FIN) am ver U.A Explanation of Changes.pdf SSTA 4/25/2019 3:30:00 PM
HB 48
CSHB 48 - Fiscal Note - DOA.pdf SSTA 4/25/2019 3:30:00 PM
HB 48
HB 48 - EX Branch Select LTEXE and Temp Positions - DOA Response.pdf SSTA 4/25/2019 3:30:00 PM
HB 48
SB 75 Sponsor Statement.pdf SSTA 4/25/2019 3:30:00 PM
SB 75
SB 75 Bill Text Version A.PDF SSTA 4/25/2019 3:30:00 PM
SB 75
SB 75 Fiscal Note_DMV.pdf SSTA 4/25/2019 3:30:00 PM
SB 75
SB 75 Letter of Support_NIT.pdf SSTA 4/25/2019 3:30:00 PM
SB 75
SB 75 Letter of Support_Carlile.pdf SSTA 4/25/2019 3:30:00 PM
SB 75
SB 75 Letter of Support_AFLCIO.pdf SSTA 4/25/2019 3:30:00 PM
SB 75
SB 75 Letter of Support_Local 302.pdf SSTA 4/25/2019 3:30:00 PM
SB 75
SB 75 Letter of Support_Local 959.pdf SSTA 4/25/2019 3:30:00 PM
SB 75