Legislature(1999 - 2000)
03/27/2000 01:55 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
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+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
March 27, 2000
1:55 P.M.
TAPE HFC 00 - 83, Side 1
TAPE HFC 00 - 83, Side 2
RECONVENED
Co-Chair Therriault called the House Finance Committee
meeting to order at 1:55 p.m.
PRESENT
Co-Chair Mulder
Co-Chair Therriault
Representative J. Davies
Representative Grussendorf Representative Moses
Representative G. Davis Representative Williams
Vice Chair Bunde and Representatives Foster, Austerman and
Phillips were absent from the meeting.
ALSO PRESENT
Senator Drue Pearce; Representative Jeannette James; Don
Etheridge, AFL-CIO; Wendy Redman, Vice President, Statewide
Programs, University of Alaska; Robert Wells, Department of
Natural Resources; Mike Tibbles, Staff, Representative
Therriault.
TESTIFIED VIA TELECONFERENCE
Elizabeth Hickerson, Assistant Attorney General, Department
of Law; Mike Hotina, Director, Labor Relations, University
of Alaska; Scott Miller, President, Delta Farm Bureau, Delta
Junction; Art Griswold, Delta Junction.
SUMMARY
HB 116 "An Act relating to the Board of Agriculture and
Conservation, to the agricultural revolving loan
fund, to the disposal of state agricultural land,
and to the Alaska Natural Resource Conservation
and Development Board; and providing for an
effective date."
CSHB 116 (FIN) was REPORTED out of Committee with
a "do pass" recommendation and with a fiscal
impact note by the Department of Natural
Resources, published date 2/11/00.
CSHB 304 (FIN)
"An Act relating to issuance and sale of revenue
bonds to fund drinking water projects, to creation
of an Alaska clean water administrative fund and
an Alaska drinking water administrative fund, to
fees to be charged in connection with loans made
from the Alaska clean water fund and the Alaska
drinking water fund, and to clarification of the
character and permissible uses of the Alaska
drinking water fund; amending Rule 3, Alaska Rules
of Civil Procedure; and providing for an effective
date."
CSHB 304 (FIN) was REPORTED out of Committee on
March 17, 2000. Discussion occurred regarding
proposed amendments to CSHB 304 (FIN). NO
committee action was taken.
CSSB 269(RLS) am
"An Act relating to legislative powers and
responsibility with respect to collective
bargaining agreements between the state and a
labor or employee organization representing state
employees; and providing for an effective date."
CSSB 269(RLS) am was heard and HELD in Committee
for further consideration.
CS FOR SENATE BILL NO. 269(RLS) am
"An Act relating to legislative powers and
responsibility with respect to collective bargaining
agreements between the state and a labor or employee
organization representing state employees; and
providing for an effective date."
SENATOR DRUE PEARCE, SPONSOR testified in support of HB 269.
She observed that Senate Bill 269 began as a fairly short
and easy bill that would require that the monetary terms of
any collective bargaining agreements negotiated with state
employee unions be submitted to the legislature by the 45th
day of session. She observed that it is currently the 78th
day of the legislative session. The Administration has
negotiated at least 12 contracts with state employee unions
and the university has negotiated one or two contracts.
According to Senator Parnell, the final terms of each of the
contracts has not been provided to the legislature. She
stressed the difficulty of making an informed decision
without access to the contract terms.
Senator Pearce observed that a section was added to conform
with the Alaska Supreme Court's decision in University of
Supreme Court No. 5-8366 (Sept. 24,1999). The Supreme Court
decision stated that the legislature has to specifically
appropriate the monetary terms of a collective bargaining
agreement or the monetary terms of the agreement would not
take effect. An amendment was made on the Senate floor,
which provides that if the legislature does not fund the
monetary terms of a collective bargaining agreement then
none of the agreement's provisions would take effect.
The Court's ruling highlights a significant problem for the
Legislature. Contract negotiations between the state and
state employee unions are confidential. Often the
Legislature does not receive the monetary terms of these
negotiated collective bargaining agreements until the final
days of session. As a result, the Legislature faces the
challenge of making reasoned decisions involving complex
contractual terms in a short period of time. Senate Bill 269
would alleviate this problem by requiring all monetary terms
of collective bargaining agreements to be submitted by the
45th day of the Legislative session. The state could begin
the negotiation process at an earlier date and still provide
a significant amount of time within the calendar year for
legislative review.
Senate Bill 269 also gives the legislature the discretion to
review changes to a timely filed but previously rejected
collective bargaining agreement for consideration in the
calendar year under which that agreement was negotiated.
Senator Pearce observed that if a situation occurred similar
to the PSEA contract of a few years ago: if by the 45th day
the legislature had received the terms of the contract and
the legislature chose not to appropriate the funds for the
contract, then the union could go back to the table for
renegotiations.
Co-Chair Therriault questioned if the Administration came to
terms after the 45th day if they could request that the
legislature approve the contract. Senator Pearce anticipated
that an authorization by the legislature could be a
resolution passed by both bodies, approving the terms. She
did not think that introduction of legislation would be
sufficient without action.
Senator Pearce pointed out that there has always been
language in the statute directing the legislature to approve
or disapprove the contracts by concurrent resolution. Last
year the legislature passed a resolution disapproving the
contracts, but specific language was not added to the budget
concerning the contracts. The Court ruled that there has to
be a specific appropriation or the contracts do not take
affect. The primary thrust of the bill would comply with the
court decision and take the concurrent resolution out of the
picture. It becomes a straight appropriation issue.
Representative J. Davies hypothesized that funding by the
legislature would constitute authorization by the
legislature. Co-Chair Therriault pointed out that his
questioned is what it would take if the legislature did not
authorize the appropriation. Senator Pearce noted that the
question is what would happen if the contracts were turned
down and renegotiations happens quickly and are brought back
before the end of that session or in a special session. The
legislation was amended on the Senate floor to allow
renegotiated contracts to be brought back to the
legislature.
Senator Pearce recalled that some legislators were not aware
that the contract that they approved contained a 37.5-hour
workweek provision. She emphasized the need to have all of
the terms of a contract for deliberation, not just the
monetary terms. The point is to have all the information on
the table so that an informed decision can be made.
Representative J. Davies questioned if the entire agreement
would be void if the legislature did not fund the monetary
terms of the agreement. Senator Pearce agreed that if the
legislature did not fund the monetary agreements that none
of the terms would take effect. She reviewed terms proposed
under contracts in negotiation. She referred to the GGU
contract that is being negotiated. One of the provisions
that the Administration considers to be a non-monetary
provision is to allow the 7,000 employees in the GGU to
convert their sick leave to personal leave and then cash in
up to half of the leave converted. If all of the employees
availed themselves of this option it could cost the state of
Alaska $24 million dollars, which could happen in a short
term. When other unions have had the same option, the number
of employees that have availed themselves of the opportunity
was been high: over half of those eligible availed
themselves of the opportunity. The reserve fund has a $10
million dollar balance. The reserve fund could be depleted
and extra money required "in one fell swoop". Even though
this is considered a non-monetary term by the union and
Administration the legislature would consider it to be one
of the provisions that would not go into effect if monetary
terms were not approved.
Senator Pearce pointed out that there would be times when it
would be to the employee's advantage not to allow non-
monetary terms to take effect without approval of monetary
terms. For example: If employees agreed to return to a 40-
hour workweek in return for salary increases.
Senator Pearce noted that in a multi-year agreement, that if
the monetary terms were approved in the first year then the
non-monetary terms would remain in effect, even if the money
was not appropriated in the second year.
Representative J. Davies expressed concern that it is
possible that there would be provisions that are non-
monetary that both the Administration and union would agree
to, absent the monetary provisions. He questioned why the
sponsor would want to sweep all of the provisions under the
termination. Senator Pearce responded that it would be
difficult to approve only specific portions of the contract.
Representative J. Davies observed that contracts could have
provisions contingent on monetary terms and others that were
not. Senator Pearce maintained that non-monetary terms
should not apply if the monetary terms are not approved.
Representative J. Davies felt that any provision with a
fiscal impact should be a monetary term. He reiterated that
he would like to have non-monetary terms available for
agreement.
Co-Chair Therriault emphasized the difficulty of crafting
language to address Representative J. Davies' concerns.
Senator Pearce stated that there may be a way to do a
consent agreement, but emphasized that the legislature would
still want to know what the (non-monetary) terms are.
Representative Grussendorf observed that there are 12
contracts and questioned if they could be approved
individually. Senator Pearce clarified that they could be
approved separately. Each one would have to be approved.
Representative Grussendorf pointed out that the 37.5-hour
workweek was negotiated in lieu of a salary increase.
Representative Grussendorf questioned why a 45-day cut off
was selected. Senator Pearce observed that the original
legislation contained a 60-day cutoff. She reiterated that
the legislature is currently on the 78th day and that the
information has not been provided. Representative
Grussendorf stated that he would be more comfortable with of
a 60-day period. Senator Pearce noted that April 1 was the
original date.
In response to a question by Representative Grussendorf,
Senator Pearce explained that if they chose not to go back
to negotiation some unions have the right to strike, some
have negotiated away their right to strike. In the new DGU
contract the employees of DGU are given the right to strike
if the legislature fails to fund the contract in any year.
This is a major contract change. Troopers do not have the
right to strike.
DON ETHERIDGE, AFL-CIO testified in opposition to the
legislation. He observed that the legislation was amended in
the Senate Rules Committee. He maintained that under the
amendment that that union members would not have the right
to strike or any way to change a contract, if monetary terms
are turned down on the second or third year of a multi year
agreement. He maintained that the state of Alaska would have
an unfair advantage under the legislation. He maintained
that employees should have the right to go back to the table
or strike if the monetary terms are not approved. He
referred to previous negotiations and observed that local 71
attempted to go back to a 40-hour workweek, but that it was
rejected by the legislature. He acknowledged that the
legislature has the option to turn contracts down. He stated
that it would not be fair to retain non-monetary terms if
the monetary terms were rejected.
Representative Grussendorf pointed out that there is an
understanding that the university is not in the position to
fund contracts if they are not approved by the legislature.
In response to a question by Representative Williams, Mr.
Etheridge stated that the union could live with the 45-day
deadline, but that they support a longer period. He
anticipated that contracts would be negotiated annually.
Co-Chair Therriault observed that language was written into
the contract preserving the employee's right to strike every
year and concluded that the provision would create a virtual
one-year contract. Mr. Etheridge responded that "that is the
only portion of the contract that is open and it doesn't
take a long period of time to go in and work on that point."
Most contracts have a no strike/no lockout clause. He
estimated that there would be court battles.
Representative Grussendorf referred language added on page
2, by the Senate Rules Committee: Unless otherwise
authorized by the legislature, the final agreement shall be
submitted to the legislature no later than the 45th day of
the legislative session to receive legislative consideration
during that calendar year." He questioned if the
Administration or the unions could petition the legislature
to extend the time. Mr. Etheridge responded that if a
contract was negotiated after the 45 day period that they
could request that it be looked at, or that if a contract
was going to be late that an extension could be requested.
He added that if the legislature or the membership rejected
a contract that there would be time to fix it before the
legislature adjourned. Representative Grussendorf questioned
if rejection would be through a concurrent resolution.
Representative G. Davis questioned the definition of
"monetary terms". Mr. Etheridge responded that the
definition as provided to them by the Administration would
be "something that requires appropriation". He stressed that
a legal definition is needed.
WENDY REDMAN, VICE PRESIDENT, STATEWIDE PROGRAMS, UNIVERSITY
OF ALASKA expressed concern with section 1, which provides
that none of the provisions of an agreement take effect if
the monetary terms are not approved. She observed that the
University has taken the position that if the legislature
does not fund the monetary terms that they do not go into
effect. She pointed out that the university proceeded with
the balance of negotiated contracts that were not funded by
the legislature. There are some elements of any contract
that may be triggered off of monetary provisions. She
stressed that there are a lot of things in collective
bargaining process that are important to university
employees such as: grievances, teaching loads, and committee
work on tenure review. She emphasized that the contracts are
presented to the legislature and that many legislators
review them. She suggested that section 1 be deleted. She
questioned if workload would be a monetary term and what
would happen if the monetary terms are denied and all other
terms were rejected. She questioned if they would be at
impasse and if members would have a right to strike. She
stressed that further direction is needed.
Co-Chair Therriault asked if some of the non-monetary terms
were linked directly to monetary terms.
MIKE HOTINA, DIRECTOR, LABOR RELATIONS, UNIVERSITY OF ALASKA
testified via teleconference. He stated that they did not
have any non-monetary terms linked directly to monetary
terms. He stressed that the legislation creates a
disincentive. He stressed that they can address the problem
of getting the contracts to the legislature. If the
legislature does not appropriate the monetary terms under
the current law they do not go into effect. Once a contract
is disapproved it would go back to the table. The right of
management to set standards and demand accountability
becomes the only bone of contention and could lead to
erosion of productivity and accountability. He maintained
that both sides are aware that the legislature has the right
to not approve the monetary terms.
In response to a question by Representative Grussendorf, Mr.
Hotina reiterated that there was no specific provision that
indicated that if the monetary terms were not approved that
a non-monetary term would not go into effect. Representative
Grussendorf pointed out that there are many non-monetary
terms of importance. He felt that the terms would be linked.
Mr. Hotina stated that there is no legal barrier that would
preclude a link between monetary and non-monetary terms.
SB 269 was heard and HELD in Committee for further
consideration.
(TAPE CHANGE, HFC 00 - 83, SIDE 2)
HOUSE BILL NO. 116
"An Act relating to the Board of Agriculture and
Conservation, to the agricultural revolving loan fund,
to the disposal of state agricultural land, and to the
Alaska Natural Resource Conservation and Development
Board; and providing for an effective date."
Co-Chair Therriault provided members with a proposed
committee substitute, work draft #1-LS0407\Q, Cook, 3/23/00
(copy on file).
Co-Chair Mulder MOVED to ADOPT work draft #1-LS0407\Q, Cook,
3/23/00. There being NO OBJECTION, it was so ordered.
JOE BALASH, STAFF, REPRESENTATIVE THERRIAULT explained that
a number of areas needed technical changes, which were made
in the committee substitute. Changes were made to address
the concerns of the Department of Law and the Department of
Natural Resources.
In section 1, page 2, line 9 the following language was
added: "An appointed member may be removed from office by
the governor if the governor first provides a written
statement of the reasons for removal to the member and makes
the statement available to the public." In the previous
version a member could only be removed for cause.
Mr. Balash observed that the language in subsection (d) was
tightened to address concerns regarding ethics. It prohibits
a member from having an existing loan or contract
restructured.
On line 29 "immediate family member" and "official action"
have the meanings given in AS 39.52.960.
In subsection (e) the appointment of the board director is
made by the commissioner from a list submitted by the board.
The list must have at least two persons.
Sections 2 - 4 were not changed.
Section 5 removes existing language regarding when a loan is
delinquent. It was reduced to receipt of payment by the
board or the director. This was the recommendation of an
audit report. The delinquency penalty is not needed in
statute.
Representative Williams referred to page 5, line 28. He
asked for clarification. Mr. Balash observed that there was
some question if the Board would have to meet in order to
receive payment. The director of the board can receive the
payment.
Section 9 removes language exempting restructuring from the
length of time that there was a limitation on existing
loans.
Section 11 applies to all loans under the statute.
Co-Chair Therriault observed that Representative Harris
sponsored a bill dealing with interest rates on loans. Some
of the language in HB 116 duplicates and conforms to
Representative Harris' bill.
REPRESENTATIVE JEANNETTE JAMES spoke in support of the
legislation. She maintained that the legislation
accomplishes its goals. She stressed that changes of the
director of the Division of Agriculture have been a problem.
She observed that there is a problem keeping good directors.
ELIZABETH HICKERSON, ASSISTANT ATTORNEY GENERAL, DEPARTMENT
OF LAW testified via teleconference. She noted that the
committee substitute addresses concerns by the Department of
Law. There are no legal issues remaining.
SCOTT MILLER, PRESIDENT, DELTA FARM BUREAU, DELTA JUNCTION
testified via teleconference in support of the legislation.
ROBERT WELLS, DEPARTMENT OF NATURAL RESOURCES stated that
the concerns of the Department of Natural Resources were
addressed. The Department of Natural Resources supports the
legislation. He noted that the fiscal note would remain
essentially the same. There would be a need for more
meetings of the board due to additional responsibilities:
$10 thousand dollars were added. He observed that the
interest rate is similar to HB 203. The interest rate could
be reduced, which could lead to increased loan activity.
Representative James observed that the Board has been paying
the cost of their application.
Co-Chair Mulder observed that the fiscal note moves from a
fixed to an adjustable rate. Mr. Wells stressed that it
would be hard to quantify the fiscal impact. Short-term loan
rates could be different. The Board is generally very
fiscally conservative.
ART GRISWOLD, DELTA JUNCTION testified via teleconference in
support of the legislation. The Alaska Highway Grange also
supports the bill.
Co-Chair Mulder MOVED to report CSHB 166 (FIN) out of
Committee with the accompanying fiscal note. There being NO
OBJECTION, it was so ordered.
CSHB 116 (FIN) was REPORTED out of Committee with a "do
pass" recommendation and with a fiscal impact note by the
Department of Natural Resources, published date 2/11/00.
CS for HOUSE BILL NO. 304
"An Act relating to issuance and sale of revenue bonds
to fund drinking water projects, to creation of an
Alaska clean water administrative fund and an Alaska
drinking water administrative fund, to fees to be
charged in connection with loans made from the Alaska
clean water fund and the Alaska drinking water fund,
and to clarification of the character and permissible
uses of the Alaska drinking water fund; amending Rule
3, Alaska Rules of Civil Procedure; and providing for
an effective date."
Co-Chair Therriault provided members with a technical
amendment to CSHB 304 (FIN), 1-GH2031 \H.1 Cook 3/24/00,
that he intended to offer on the House Floor.
MIKE TIBBLES, STAFF, REPRESENTATIVE THERRIAULT explained
that he consulted legal counsel regarding problems that
arose in the House Finance Committee substitute. One of the
problems was the result of a conceptual amendment the other
was language that was inadvertently dropped. He reviewed the
amendment. He observed that there were two restrictions
under AS 37.15.560(b). The amount that can be bonded in a
particular year is $15 million dollars. The limit on the
total unpaid principal is $150 million dollars. The amount
applies only to each particular program. Drinking Water and
wastewater programs are included. The amendment clarifies
that the amounts applies to each program.
Page 2, line 18, following "$150,000,000":
Insert "for each program".
Mr. Tibbles noted that the conceptual amendment offered by
Representative J. Davies resulted in the drinking water
language being placed in the wastewater section. Wastewater
was not specified. The amendment clarifies that it applies
to wastewater.
Page 7, line 26, following "provides":
Insert "waste"
Mr. Tibbles explained that subsections (a) and (b) were
setup to allow municipalities and private entities that are
economically regulated access to loans. The language was not
tied to the private portion. The amendment includes the
private sector.
Page 9, line 8, following "assistance"
Insert "for drinking water system projects, including
projects to plan, design, build, construct, or
rehabilitate a public drinking water collection,
storage, treatment, or distribution system,"
Page 9, lines 9- 11:
Delete all material and insert:
"(A) municipalities;"
Co-Chair Therriault explained that he planned to offer the
amendment on the House floor, as a technical amendment.
Representative J. Davies clarified that economic regulation
was not limited to wastewater.
CSHB 304 (FIN) was REPORTED out of Committee on March 17,
2000. Discussion occurred regarding proposed amendments to
CSHB 304 (FIN). NO committee action was taken.
ADJOURNMENT
The meeting was adjourned at 3:10 p.m.
House Finance Committee 11 3/27/00
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