Legislature(2005 - 2006)HOUSE FINANCE 519

04/13/2005 01:30 PM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 182 WAGE & HOUR ACT: EXEC/PROF/ADMIN/SALES TELECONFERENCED
Moved CSHB 182(FIN) Out of Committee
+ HB 169 REAL ESTATE LICENSEE EDUC TELECONFERENCED
Heard & Held
+ HB 98 NONUNION PUBLIC EMPLOYEE SALARY & BENEFIT TELECONFERENCED
Moved CSHB 98(STA) Out of Committee
+ HB 27 MUNI PROP TAX EXEMPTION FOR POLICE HOMES TELECONFERENCED
Scheduled But Not Heard
Bills Previously Heard/Scheduled
= HB 32 APPROP: GRANT TO ARCTIC POWER FOR ANWR
Moved CSHB 32(FIN) Out of Committee
+ HB 54 BAIL REVIEW TELECONFERENCED
Moved CSHB 54(FIN) Out of Committee
                  HOUSE FINANCE COMMITTEE                                                                                       
                       April 13, 2005                                                                                           
                         1:42 p.m.                                                                                              
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Chenault called the House  Finance Committee meeting                                                                   
to order at 1:42:34 PM.                                                                                                       
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Mike Chenault, Co-Chair                                                                                          
Representative Kevin Meyer, Co-Chair                                                                                            
Representative Bill Stoltze, Vice-Chair                                                                                         
Representative Eric Croft                                                                                                       
Representative Richard Foster                                                                                                   
Representative Mike Hawker                                                                                                      
Representative Jim Holm                                                                                                         
Representative Mike Kelly                                                                                                       
Representative Carl Moses                                                                                                       
Representative Bruce Weyhrauch                                                                                                  
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Reggie Joule                                                                                                     
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative  Vic  Kohring; Representative  Ralph  Samuels;                                                                   
Dean  Guaneli,  Assistant Attorney  General,  Legal  Services                                                                   
Section-Juneau,   Criminal  Division,   Department  of   Law;                                                                   
Representative   Norm  Rokeberg;   Heather  Nobrega,   Staff,                                                                   
Representative Norm  Rokeberg; Peggy Ann  McConnochie, Alaska                                                                   
Association of  Realtors; Mike Tibbles, Deputy  Commissioner,                                                                   
Office  of the  Commissioner,  Department of  Administration;                                                                   
Chris  Christensen,  Deputy  Administrator,   Office  of  the                                                                   
Administrative  Director,  Alaska  Court  System;  Al  Adams,                                                                   
Chairman of the  Board, Arctic Power; Barbara  Huff Tuckness,                                                                   
Lobbyist,  Teamsters  Local  959;  Grey  Mitchell,  Director,                                                                   
Division of Labor  Standards & Safety, Department  of Labor &                                                                   
Workforce Development;  Mila Cosgrove, Director,  Division of                                                                   
Personnel,   Department   of   Administration;   Pam   Varni,                                                                   
Executive Director,  Legislative Affairs Agency;  Art Chance,                                                                   
Direct, Labor Relations, Department of Administration                                                                           
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Tamara de Lucia,  Office of Victims Rights,  Anchorage; Linda                                                                   
Wilson, Deputy Director, Public  Defender Agency, John Sedor,                                                                   
Anchorage;   Karin  Rogina,   Alaska  Hospitality   Alliance,                                                                   
Anchorage; Jack Amon, Alaska Hospitality  Aliance, Anchorage;                                                                   
Barbara  Ramsey,   Chair,  Alaska  Real   Estate  Commission,                                                                   
Anchorage                                                                                                                       
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 32     "An Act making a special appropriation for a grant                                                                    
          to  Arctic  Power to  promote  the  opening of  the                                                                   
          Arctic  National Wildlife  Refuge for  oil and  gas                                                                   
          exploration  and development; and providing  for an                                                                   
          effective date."                                                                                                      
                                                                                                                                
          CSHB 83 (FIN) was REPORTED  out of Committee with a                                                                   
          "do pass" recommendation.                                                                                             
                                                                                                                                
HB 54     "An Act relating to bail review."                                                                                     
                                                                                                                                
          CSHB 54 (FIN) was REPORTED  out of Committee with a                                                                   
          "do  pass"  recommendation   and  with  three  zero                                                                   
          fiscal impact notes: #1 COR, #2 CRT, #3 LAW.                                                                          
                                                                                                                                
HB 182    "An Act  amending the Alaska  Wage and Hour  Act as                                                                   
          it relates to the employment  of a person acting in                                                                   
          a supervisory  capacity; providing  definitions for                                                                   
          persons employed in  administrative, executive, and                                                                   
          professional  capacities,  for persons  working  in                                                                   
          the  capacity  of  an  outside  salesman,  and  for                                                                   
          persons  working  in  the capacity  of  a  salesman                                                                   
         employed on a straight commission basis."                                                                              
                                                                                                                                
          CSHB 182 (FIN) was REPORTED out of Committee with                                                                     
          a  "no recommendation"  recommendation  and with  a                                                                   
          zero fiscal impact note  by the Department of Labor                                                                   
          and Workforce Development.                                                                                            
                                                                                                                                
HB 169    "An  Act relating to  the educational  requirements                                                                   
          for   certain   real  estate   brokers,   associate                                                                   
          brokers,  and salespersons  with  new or  suspended                                                                   
          licenses; and allowing  real estate brokers to hire                                                                   
          certain    experts    to   review    real    estate                                                                   
          transactions;   and  providing  for   an  effective                                                                   
          date."                                                                                                                
                                                                                                                                
          CSHB 169 (L&C) was heard and HELD in Committee for                                                                    
          further consideration.                                                                                                
                                                                                                                                
HB 98     "An Act relating to the compensation of certain                                                                       
          public  officials,   officers,  and  employees  not                                                                   
          covered  by collective  bargaining agreements;  and                                                                   
          providing for an effective date."                                                                                     
                                                                                                                                
          CSHB 98 (STA) was REPORTED out of Committee with a                                                                    
          "do  pass"  recommendation  and with  three  fiscal                                                                   
          impact notes: #1 GOV, #2 LEG, and new CRT.                                                                            
                                                                                                                                
HB 27     "An Act relating to an optional exemption from                                                                        
          municipal  property taxes on certain  residences of                                                                   
          law enforcement officers."                                                                                            
                                                                                                                                
          HB 27 was scheduled but not heard.                                                                                    
                                                                                                                                
1:42:50 PM                                                                                                                    
                                                                                                                                
HOUSE BILL NO. 32                                                                                                             
                                                                                                                                
     "An Act  making a special  appropriation for a  grant to                                                                   
     Arctic  Power  to  promote  the opening  of  the  Arctic                                                                   
     National  Wildlife Refuge  for oil  and gas  exploration                                                                   
     and development; and providing for an effective date."                                                                     
                                                                                                                                
Representative Foster MOVED to  ADOPT the work draft to HB 32                                                                   
labeled 24-LS0230LS\F,  Utermohle, 4/12/05.   There  being NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
1:43:49 PM                                                                                                                    
                                                                                                                                
Co-Chair Chenault  explained two changes in the new  CS.  The                                                                   
dollar amount  was changed to  $50,000 for the  participation                                                                   
of the  Native Village  of Kaktovik  and to  $50,000 for  the                                                                   
participation  of the  City  of Kaktovik  in  support of  the                                                                   
education efforts undertaken by Arctic Power.                                                                                   
                                                                                                                                
Representative  Weyhrauch stated  support for  the bill  with                                                                   
the addition of the new amendment.   He requested information                                                                   
about Jerry Hood's role in this grant.                                                                                          
                                                                                                                                
1:45:15 PM                                                                                                                    
                                                                                                                                
AL ADAMS, CHAIRMAN  OF THE BOARD, ARCTIC POWER,  replied that                                                                   
Mr.  Hood   is  heading  up   the  Washington   D.C.  office.                                                                   
Representative  Weyhrauch  asked if  most  of Arctic  Power's                                                                   
efforts are aimed  at getting support from the  House side of                                                                   
Congress.  Mr. Adams responded  that is correct.  Efforts are                                                                   
being  targeted  toward the  435  House  members as  well  as                                                                   
toward several  states.  Mr. Adams noted  that Representative                                                                   
Joule   and  Representative   Berkowitz   are  currently   in                                                                   
Washington D.C. pushing this effort on the House side.                                                                          
                                                                                                                                
Representative  Weyhrauch asked  about  various Arctic  Power                                                                   
team members' roles and salaries.                                                                                               
                                                                                                                                
1:47:41 PM                                                                                                                    
                                                                                                                                
Representative  Hawker said it  is a  pleasure to be  working                                                                   
with Mr. Adams.  He stated support for the funding.                                                                             
                                                                                                                                
Representative Foster  moved to report  CSHB 32 (FIN)  out of                                                                   
Committee with  individual recommendations.   There  being NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
CSHB 83 (FIN) was REPORTED out  of Committee with a "do pass"                                                                   
recommendation.                                                                                                                 
                                                                                                                                
1:49:26 PM                                                                                                                    
                                                                                                                                
HOUSE BILL NO. 54                                                                                                             
                                                                                                                                
     "An Act relating to bail review."                                                                                          
                                                                                                                                
REPRESENTATIVE  RALPH SAMUELS,  sponsor,  explained that  the                                                                   
bill  does several  things.   Currently  a  defendant may  be                                                                   
granted a bail  hearing every 24 hours.  This  has been taken                                                                   
advantage of for a number of reasons.   To help limit some of                                                                   
the abuses, HB  54 proposes that the accused  must submit, in                                                                   
writing, that  there exists new  information for  the court's                                                                   
consideration  that was  not  considered  at prior  hearings.                                                                   
Second, the  district attorney  is given  48 hours  notice in                                                                   
which to  notify the victim of  the hearing.   Finally, there                                                                   
will be  a 48-hour period  between calendared  bail hearings.                                                                   
Without HB 54 the  first bail is set high, then  in court the                                                                   
bail is reset at  a reasonable level for the  offense.  Every                                                                   
day the  defendant could  request a  bail hearing,  which the                                                                   
victim has the right to attend.                                                                                                 
                                                                                                                                
Representative  Samuels explained that  the bill  was amended                                                                   
in Judiciary  to add  that a  victim may  be introduced  to a                                                                   
jury during  the opening statement  at a trial or  during the                                                                   
jury selection  process.  It  also changed a  minor defendant                                                                   
law to  allow introduction  of the  victim to  the jury.   He                                                                   
opined that  it is only fair to  put a face on the  victim of                                                                   
the crime.                                                                                                                      
                                                                                                                                
Co-Chair Chenault set aside HB 54.                                                                                              
                                                                                                                                
1:53:09 PM                                                                                                                    
                                                                                                                                
HOUSE BILL NO. 182                                                                                                            
                                                                                                                                
     "An  Act amending  the Alaska  Wage and  Hour Act  as it                                                                   
     relates  to  the employment  of  a  person acting  in  a                                                                   
     supervisory capacity; providing  definitions for persons                                                                   
     employed in administrative,  executive, and professional                                                                   
     capacities,  for persons working  in the capacity  of an                                                                   
     outside  salesman,  and   for  persons  working  in  the                                                                   
     capacity   of  a   salesman  employed   on  a   straight                                                                   
     commission basis."                                                                                                         
                                                                                                                                
Representative Foster  moved to adopt  the new CS for  HB 182                                                                   
labeled  24-LS0507\P,   Carver,  4/6/05.    There   being  NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
1:53:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  NORM ROKEBERG,  sponsor,  explained that  the                                                                   
bill  adopts  federal  rules   for  the  Federal  Fair  Labor                                                                   
Standards  Act by  amending  the Alaska  Wage  and Hour  Act.                                                                   
This bill  will significantly  help small businesses  because                                                                   
it clarifies provisions of the Alaska Wage and Hour Act.                                                                        
                                                                                                                                
Representative  Rokeberg  explained  that the  new  amendment                                                                   
would provide a  "bright line" to the effective  date of this                                                                   
law, July 1, 2005.                                                                                                              
                                                                                                                                
1:56:38 PM                                                                                                                    
                                                                                                                                
JOHN SEDOR,  ANCHORAGE SOCIETY FOR RESOURCE  MANAGEMENT, (via                                                                   
teleconference)  spoke in support  of HB  182.  He  explained                                                                   
that  the  bill  would  eliminate   confusion  about  how  to                                                                   
determine overtime exemptions.                                                                                                  
                                                                                                                                
1:59:47 PM                                                                                                                    
                                                                                                                                
Representative  Weyhrauch  pointed   out  that  in  order  to                                                                   
understand  the various  occupations  in  this bill,  Federal                                                                   
Fair Labor Standards  Act regulations have to  be understood.                                                                   
He questioned the relevance of  certain classifications.  Mr.                                                                   
Sedor responded  that one  of the  benefits of moving  toward                                                                   
the  federal  system is  that  some  people in  the  computer                                                                   
industry qualify  due to the complexity  of their jobs.   The                                                                   
state  has  not  moved  forward to  clarify  which  jobs  are                                                                   
exempt.                                                                                                                         
                                                                                                                                
Representative  Rokeberg asked  Mr. Sedor  to comment  on the                                                                   
proposed amendment.   Mr. Sedor  related that the  bill would                                                                   
delete the  80/20 test and  sets forth definitions  which are                                                                   
much more understandable.   He gave an example.   The primary                                                                   
duties test is the only test now  in the federal system.  The                                                                   
amendment  states that  claims  brought after  July 1,  2005,                                                                   
would  be subject  to  statutory provisions  of  HB 182,  and                                                                   
claims  brought   before  that  date  would   be  subject  to                                                                   
conditions prior to HB 182.                                                                                                     
                                                                                                                                
2:07:46 PM                                                                                                                    
                                                                                                                                
Representative Croft asked if  primary duty is defined in the                                                                   
P  version.   Mr. Sedor  replied  it is  not  defined in  any                                                                   
version, only in  federal regulation.  He gave  an example of                                                                   
a position that  is exempt due to the importance  of the job.                                                                   
Representative  Croft rephrased  his  question to  ask if  an                                                                   
employer has to conform to both  state and federal laws.  Mr.                                                                   
Sedor  replied that  those  in  the private  sector  do.   He                                                                   
pointed  out  that  the  P  version   only  has  one  system.                                                                   
Representative Croft inquired  why the definitions differ and                                                                   
why  it is  not stated  that they  shall  be the  same as  in                                                                   
federal  law.   Mr. Sedor  replied that  "primary duties"  is                                                                   
only one  of several tests.   He indicated that  the statutes                                                                   
would be extremely large if all duties were spelled out.                                                                        
                                                                                                                                
2:13:41 PM                                                                                                                    
                                                                                                                                
Representative  Croft asked  if primary  duty is  one of  the                                                                   
tests   below    executive,   administrative,    professional                                                                   
capacity, and  all other definitions  are incorporated.   Mr.                                                                   
Sedor  replied correct.    Representative  Croft referred  to                                                                   
page 4,  (C) (1),  which allows  for state private  employers                                                                   
having to follow only one system.   Mr. Sedor replied that is                                                                   
exactly right,  and 41 other jurisdictions have  adopted that                                                                   
as well.                                                                                                                        
                                                                                                                                
2:14:52 PM                                                                                                                    
                                                                                                                                
Representative  Rokeberg drew  attention to  Section 5  where                                                                   
definitions  in federal  law are  mentioned.   Representative                                                                   
Croft  pointed  out  that  in other  areas  outside  of  that                                                                   
capacity   definition,   the   bill  allows   for   different                                                                   
definitions by the wording, "if not defined in this title".                                                                     
                                                                                                                                
Representative Croft asked Mr.  Sedor if the amendment states                                                                   
that claims filed previous to  the effective date of the bill                                                                   
are cut off.   Mr. Sedor responded that claims  brought after                                                                   
the date  are subject to  one statutory requirement,  HB 182.                                                                   
A two-year look-back applies to both time situations.                                                                           
                                                                                                                                
2:18:29 PM                                                                                                                    
                                                                                                                                
KARIN ROGINA,  ALASKA HOSPITALITY  ALLIANCE, ANCHORAGE,  (via                                                                   
teleconference) conveyed  full support for HB  182 because it                                                                   
provides  for  clear  exempt status  language.    It  defines                                                                   
exempt   status,  makes   it  workable,   and  will   prevent                                                                   
litigation.   She gave an example  of a hotel worker  with an                                                                   
exempt salary status issue.                                                                                                     
                                                                                                                                
2:23:27 PM                                                                                                                    
                                                                                                                                
JACK  AMON,  ALASKA  HOSPITALITY  ALLIANCE,  ANCHORAGE,  (via                                                                   
teleconference) testified  in support of HB 182.   He related                                                                   
the difficulties of operation under the older system.                                                                           
                                                                                                                                
Representative  Weyhrauch  quoted  the bill,  "an  individual                                                                   
employed  in an  executive, administrative,  or  professional                                                                   
capacity is  compensated on a salary  or fee basis at  a rate                                                                   
of not  less than two  times the state  minimum wage  for the                                                                   
first 40  hours of employment  each week, exclusive  of board                                                                   
or lodging".   He opined that  most people work more  than 40                                                                   
hours.   He asked about  the pay after  that period  of time.                                                                   
Representative Rokeberg  replied that exempt  employees would                                                                   
not receive extra compensation; they would be on salary.                                                                        
                                                                                                                                
HEATHER  NOBREGA, STAFF,  REPRESENTATIVE ROKEBERG,  clarified                                                                   
that their  salary would  be based on  a normal 40-hour  work                                                                   
week.  Representative  Weyhrauch asked if the  value of board                                                                   
and lodging  is not  included.  Ms.  Nobrega replied  that is                                                                   
correct.   Representative Rokeberg  added that because  there                                                                   
is  a unique  test in  Alaska, it  is two  times the  minimum                                                                   
wage, which is based on the 40-hour week.                                                                                       
                                                                                                                                
2:27:53 PM                                                                                                                    
                                                                                                                                
BARBARA  HUFF   TUCKNESS,  LOBBYIST,  TEAMSTERS   UNION  959,                                                                   
concurred  with  the  sponsor's  earlier  comments  regarding                                                                   
concerns and definitions.  She  responded to the comment that                                                                   
this  bill  impacts  the  highest   paid  workers.    In  the                                                                   
supervisory   and   administrative  categories,   there   are                                                                   
managers at  McDonald's that  flip hamburgers  and are  in an                                                                   
hourly, paid-with-overtime  compensation  or are exempt  from                                                                   
overtime  and have  to  be paid  at  least  double time.  She                                                                   
recalled  a bill from  last session  regarding minimum  wage.                                                                   
She  provided   a  history  of  definition   discussions  and                                                                   
maintained  that they  should be introduced  into state  law.                                                                   
The statute  serves to provide  information to  employers and                                                                   
employees.  She suggested that  it should all be incorporated                                                                   
into  statute.   She  voiced concern  about  the adoption  of                                                                   
regulations  and  made suggestions  about  how  to deal  with                                                                   
them.   She spoke of increasing  from double minimum  wage to                                                                   
2.2 percent and reasonable salary compensation.                                                                                 
                                                                                                                                
2:32:43 PM                                                                                                                    
                                                                                                                                
Vice-Chair Stoltze  asked if the  employee has the  option of                                                                   
exempting  himself or  herself from overtime.   Ms.  Tuckness                                                                   
said that is determined by law.                                                                                                 
                                                                                                                                
2:34:27 PM                                                                                                                    
                                                                                                                                
Co-Chair Chenault closed public testimony.                                                                                      
                                                                                                                                
Representative Foster MOVED to ADOPT Amendment 1:                                                                               
                                                                                                                                
     Page 1, line 6, following "occupations;":                                                                                
     Insert  "directing  retrospective   application  of  the                                                                 
     provisions  of this  Act  to work  performed before  the                                                                 
     effective date of this Act  for purposes of claims filed                                                                 
     on  or  after  the  effective  date  of  this  Act,  and                                                                 
     disallowing  retrospective application  for purposes  of                                                                 
     claims  for   that  work  that  are  filed   before  the                                                                 
     effective date of this Act;"                                                                                           
                                                                                                                                
     Page 5, following line 30:                                                                                                 
     Insert a new bill section to read:                                                                                         
     "* Sec.  6.  The uncodified  law of the State  of Alaska                                                                 
     is amended by adding a new section to read:                                                                                
     APPLICATION  AS TO WORK  PERFORMED BEFORE THE  EFFECTIVE                                                                   
     DATE   OF   THIS  ACT.      (a)     This   Act   applies                                                                   
     retrospectively  to work performed before  the effective                                                                   
     date  of  this   Act  for  purposes  of   any  claim  or                                                                   
     proceeding  based on  AS 23.10.050  - 23.10.150  (Alaska                                                                   
     Wage  and  Hour Act)  that  is  filed  on or  after  the                                                                   
     effective date of this Act.                                                                                                
     (b)   This Act does not  apply to work  performed before                                                                   
     the  effective date  of  this Act  for  purposes of  any                                                                   
     claim or  proceeding based  on AS 23.10.050  - 23.10.150                                                                   
     that is filed before the effective date of this Act."                                                                      
                                                                                                                                
     Renumber the following bill section accordingly.                                                                           
                                                                                                                                
Co-Chair Chenault OBJECTED for discussion purposes.                                                                             
                                                                                                                                
Representative Rokeberg explained  that the amendment creates                                                                   
a bright  line of flexibility.   There  would be two  sets of                                                                   
rules, before and after the effective date of the bill.                                                                         
                                                                                                                                
2:36:39 PM                                                                                                                    
                                                                                                                                
Vice-Chair Stoltze asked if this  legislation was found in HB                                                                   
255 last year.   Representative Rokeberg replied  that it was                                                                   
somewhat  similar.    Vice-Chair Stoltze  wondered  what  the                                                                   
Department of Labor's position is.                                                                                              
                                                                                                                                
2:38:59 PM                                                                                                                    
                                                                                                                                
GREY  MITCHELL,  DIRECTOR,  DIVISION  OF  LABOR  STANDARDS  &                                                                   
SAFETY,  DEPARTMENT  OF  LABOR   AND  WORKFORCE  DEVELOPMENT,                                                                   
related that the department has  had input on this bill.  The                                                                   
department remains neutral on the bill.                                                                                         
                                                                                                                                
Representative Kelly commended  the sponsor for bringing this                                                                   
bill forward.   He asked Mr. Mitchell if this  bill would cut                                                                   
down on  the cost  of administering  the hourly vs.  salaried                                                                   
worker  situation.    Mr.  Mitchell  agreed  that  it  would.                                                                   
Representative Kelly opined that  it would cut down on fraud.                                                                   
                                                                                                                                
Co-Chair Chenault  REMOVED his  OBJECTION to adopt  Amendment                                                                   
1.  There being NO OBJECTION, Amendment 1 was adopted.                                                                          
                                                                                                                                
2:42:46 PM                                                                                                                    
                                                                                                                                
Co-Chair Chenault announced that  HB 27 would not be taken up                                                                   
today.                                                                                                                          
                                                                                                                                
Representative Hawker summarized  the discussion.  He related                                                                   
that there is a valid parallel  to state corporate income tax                                                                   
regulations in this bill.                                                                                                       
                                                                                                                                
Representative Foster  MOVED to report CSHB 182  (FIN) out of                                                                   
Committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal  note.  There being NO  OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CSHB  182 (FIN)  was REPORTED  out  of Committee  with a  "no                                                                   
recommendation" recommendation  and with a zero fiscal impact                                                                   
note by the Department of Labor and Workforce Development.                                                                      
                                                                                                                                
2:46:15 PM                                                                                                                    
                                                                                                                                
HOUSE BILL NO. 169                                                                                                            
                                                                                                                                
     "An  Act relating  to the  educational requirements  for                                                                   
     certain  real  estate brokers,  associate  brokers,  and                                                                   
     salespersons  with   new  or  suspended   licenses;  and                                                                   
     allowing real estate brokers  to hire certain experts to                                                                   
     review real  estate transactions;  and providing  for an                                                                   
     effective date."                                                                                                           
                                                                                                                                
Representative Rokeberg  related that HB 169  provides for 20                                                                   
hours  of post-licensing  education  for realtors.   It  also                                                                   
provides that  lawyers may assist brokers in  supervising all                                                                   
transactions.                                                                                                                   
                                                                                                                                
2:47:20 PM                                                                                                                    
                                                                                                                                
PEGGY  ANN  MCCONNOCHIE,  ALASKA   ASSOCIATION  OF  REALTORS,                                                                   
explained  that 18  states currently  require  post-licensing                                                                   
education.   This bill would reduce  the number of  claims to                                                                   
the  real estate  commission.    She explained  that  realtor                                                                   
associations  are in  favor of  this bill.   It will  provide                                                                   
additional   consumer  protection   by  having   well-trained                                                                   
realtors.  The effective date is timely.                                                                                        
                                                                                                                                
Ms. McConnochie explained that  the supervision aspect of the                                                                   
bill  is  aimed  at  the larger  brokers  in  the  state  who                                                                   
supervise many transactions per  month.  They need to be away                                                                   
to  make sure  that  documents are  properly  filed prior  to                                                                   
closing.   This  provision allows  a  broker to  hire a  real                                                                   
estate  attorney  to review  transactions  and  will help  to                                                                   
better serve  the public.  She  reported that this  aspect is                                                                   
missing from HB 29.                                                                                                             
                                                                                                                                
Representative Croft commented  that the continuing education                                                                   
portion  of the  bill  is fine.    He voiced  concerns  about                                                                   
Section  14, the  review of  transactions.   Ms.  McConnochie                                                                   
replied that this section makes  it clear that a large broker                                                                   
can  employ an  attorney  and have  no  conflict in  statute.                                                                   
Representative Croft asked who  the attorney represents.  Ms.                                                                   
McConnochie   replied   the   broker,   who   is   ultimately                                                                   
responsible for all decisions.   Representative Croft worried                                                                   
that there  is a sense that  the attorney is looking  out for                                                                   
the buyer's interests when he  or she is only looking out for                                                                   
the broker's interests.   Ms. McConnochie replied  that there                                                                   
would not  be the opportunity  to have that false  perception                                                                   
because   the  attorneys   would  never   meet  the   buyers.                                                                   
Representative  Croft maintained that  the broker  always has                                                                   
an ability to hire an attorney  to look at the documents.  He                                                                   
opined that the  attorney is only looking after  the broker's                                                                   
interests.   Ms.  McConnochie  restated  the  purpose of  the                                                                   
review.  There  is no implication that the  lawyer is partial                                                                   
to the buyer, seller, landlord, or tenant.                                                                                      
                                                                                                                                
2:53:13 PM                                                                                                                    
                                                                                                                                
Representative   Foster   inquired  if   the   post-licensing                                                                   
education would require a realtor  in Nome to buy an airplane                                                                   
ticket  to the  class.   Ms.  McConnochie  replied that  that                                                                   
person could take the class by correspondence.                                                                                  
                                                                                                                                
2:54:11 PM                                                                                                                    
                                                                                                                                
BRAD FLEUTSCH, ALASKA REAL ESTATE  COMMISSION, stated support                                                                   
for the continuing education elements  of the bill.  He noted                                                                   
that  there is  a  problem  with Section  14.    There is  no                                                                   
requirement  in the  bill that  the attorney  be licensed  in                                                                   
Alaska  or have knowledge  of  real estate  law.  The  Alaska                                                                   
Real Estate  Commission has  no ability  to supervise  such a                                                                   
position.   He explained that  the completed file has  all of                                                                   
the  forms  and  legal  requirements,  and  it  is  the  last                                                                   
responsibility the  broker has to  the client.   He requested                                                                   
to have Section 14 dropped or fixed.                                                                                            
                                                                                                                                
2:57:08 PM                                                                                                                    
                                                                                                                                
Representative  Hawker recalled  that he  has often  sought a                                                                   
non-Alaskan lawyer with good results.   Mr. Fleutsch stressed                                                                   
that it  is Alaska  real estate law  that is being  reviewed.                                                                   
Representative  Hawker  asked if  an attorney  practicing  in                                                                   
Alaska has to be  licensed to practice real estate  law.  Mr.                                                                   
Fleutsch  suggested  amending  Section  14 to  say  "licensed                                                                   
Alaska  attorney".    Representative   Hawker  said  that  is                                                                   
inherent in  statute.   Mr. Fleutsch  offered that  it should                                                                   
not be  limited to attorneys,  but accountants could  also be                                                                   
included.   The purpose of this  aspect of HB 169 is  just to                                                                   
review the  file, which the  Real Estate Commission  feels is                                                                   
very important.                                                                                                                 
                                                                                                                                
Representative  Kelly  asked if  the attorney  does  anything                                                                   
that a  broker does  not do.   Mr. Fleutsch  replied  that he                                                                   
does not know.  Representative  Kelly suggested language that                                                                   
would include  an associate broker  or an attorney  acting as                                                                   
an  associate   broker.    He  shared  concerns   similar  to                                                                   
Representative Croft's.                                                                                                         
                                                                                                                                
Representative Croft suggested  that the broker could hire an                                                                   
accountant or  other professionals.   He questioned  the need                                                                   
for  this part  of the  bill.   He  said that  Section 14  is                                                                   
either unnecessary or unclear.                                                                                                  
                                                                                                                                
3:02:11 PM                                                                                                                    
                                                                                                                                
Representative Hawker  read from Section 14,  "The broker may                                                                   
pay  the   attorney  or   associated   broker  from   a  fee,                                                                   
commission, or  other compensation received by  the broker in                                                                   
a real  estate transaction  payment."   He  asked if that  is                                                                   
prohibited in statute, as covered in Section 15.                                                                                
                                                                                                                                
Representative  Rokeberg replied  that  is true.   He  opined                                                                   
that this provision  is needed in statute  for clarification.                                                                   
Currently under Chapter 8, lawyers  can sell real estate.  He                                                                   
pointed out that  the Real Estate Commission has  no power to                                                                   
discipline  attorneys,  and  emphasized  that the  broker  is                                                                   
still  responsible  for  all  transactions.    There  are  no                                                                   
restrictions on a large brokerage  house or a commercial real                                                                   
estate brokerage  house to not  use an attorney  to supervise                                                                   
the actual  documents  of a transaction.    That needs  to be                                                                   
clear.  He emphasized  that the bill should be  passed in its                                                                   
current state.                                                                                                                  
                                                                                                                                
3:06:44 PM                                                                                                                    
                                                                                                                                
BARBARA  RAMSEY,   CHAIR,  ALASKA  REAL   ESTATE  COMMISSION,                                                                   
ANCHORAGE, (via  teleconference) testified in support  of the                                                                   
legislation, but expressed concern  with page 8, lines 19-24.                                                                   
She recommended  the deletion  of Section  14.  She  stressed                                                                   
that the Commission does not want to regulate attorneys.                                                                        
                                                                                                                                
3:10:01 PM                                                                                                                    
                                                                                                                                
Representative Kelly  asked if Ms. Ramsey is  saying that the                                                                   
current statute  provides that a broker could  hire assistant                                                                   
brokers and retain attorneys to  help review these files, and                                                                   
those  costs are permitted  to  be taken by  the broker  from                                                                   
transaction fees.                                                                                                               
                                                                                                                                
Ms.  Ramsey clarified  that an  associate  broker is  already                                                                   
allowed  in  regulations  -  12AAC.64.125,   Section  B.  She                                                                   
pointed  out that the  provision regarding  attorneys  is not                                                                   
currently allowed.  She opined  that they should be paid as a                                                                   
business expense, as an employee.                                                                                               
                                                                                                                                
3:11:59 PM                                                                                                                    
                                                                                                                                
Representative  Rokeberg   spoke  in  support   of  retaining                                                                   
Section 14.                                                                                                                     
                                                                                                                                
3:13:38 PM                                                                                                                    
                                                                                                                                
Representative  Croft  noted  concerns  by  the  Real  Estate                                                                   
Commission.  He argued that any  profession could be hired to                                                                   
look up documents, but its different  when they get a portion                                                                   
of  the  fee  because  then they  have  an  interest  in  the                                                                   
transaction.   That  is why real  estate law  is so  specific                                                                   
about who gets the fee.                                                                                                         
                                                                                                                                
3:14:44 PM                                                                                                                    
                                                                                                                                
Representative  Rokeberg maintained  that  Amendment 1  would                                                                   
conform  the legislation.   There  is no intent  for a  "kick                                                                   
back".                                                                                                                          
                                                                                                                                
Co-Chair Meyer MOVED to ADOPT Amendment 1:                                                                                      
                                                                                                                                
     Page 9, line 26, following "date":                                                                                         
     Insert "of secs. 1-11 and 16"                                                                                              
                                                                                                                                
     Page 9, line 29, following "date":                                                                                         
     Insert "of secs. 1-11 and 16"                                                                                              
                                                                                                                                
     Page 10, line 1, following "date":                                                                                         
     Insert "of secs. 1-11 and 16"                                                                                              
                                                                                                                                
Co-Chair  Chenault OBJECTED  for the  purpose of  discussion.                                                                   
Ms. Nobrega  explained that the  amendment would  conform the                                                                   
effective dates to the appropriate sections.                                                                                    
                                                                                                                                
Co-Chair Chenault  REMOVED his  OBJECTION to adopt  Amendment                                                                   
1.  There being NO OBJECTION, Amendment 1 was adopted.                                                                          
                                                                                                                                
3:17:54 PM                                                                                                                    
                                                                                                                                
Representative Croft MOVED to ADOPT Conceptual Amendment 2:                                                                     
                                                                                                                                
     Delete section 14, page 8, lines 14 - 25.                                                                                  
                                                                                                                                
Representative  Rokeberg  noted  that  some  members  of  the                                                                   
Commission  disagree with  the concern  over section  14. The                                                                   
issue is  whether the Commission  can properly  supervise the                                                                   
lawyers.    He  did  not  agree  with  these  concerns.    He                                                                   
maintained  that   there  is   no  formal  position   of  the                                                                   
Commission.                                                                                                                     
                                                                                                                                
3:18:32 PM                                                                                                                    
                                                                                                                                
Representative   Hawker   OBJECTED   for   the   purpose   of                                                                   
discussion.  He referred to Ms.  Ramsey's letter and disputed                                                                   
her  concerns.    He  concluded   that  her  objections  were                                                                   
irrelevant to the issue at hand.                                                                                                
                                                                                                                                
Representative  Kelly  questioned  if  the  broker  alone  is                                                                   
punished for infractions.                                                                                                       
                                                                                                                                
3:22:45 PM                                                                                                                    
                                                                                                                                
Representative Rokeberg replied  that is correct.  The broker                                                                   
is ultimately responsible.                                                                                                      
                                                                                                                                
Representative  Croft responded that  there ought to  be some                                                                   
power over  the person that receives  the fee.   He concluded                                                                   
that the Commission  should have control over  the lawyers or                                                                   
the fee should  be removed.  He argued that  the compensation                                                                   
should not be based on "their saying yes".                                                                                      
                                                                                                                                
3:25:36 PM                                                                                                                    
                                                                                                                                
Representative  Rokeberg directed  the committee  to page  8,                                                                   
line 23,  "received by  the broker".   He explained  that the                                                                   
broker  receives  the money  and  then  allocates it  to  the                                                                   
attorney  or  associate  broker.   Direct  compensation  from                                                                   
commissions is not being given to the lawyer.                                                                                   
                                                                                                                                
3:26:47 PM                                                                                                                    
                                                                                                                                
Representative Weyhrauch  questioned why Section  14 would be                                                                   
necessary.  The real estate broker  may contract with and pay                                                                   
an   attorney   to  assist   the   broker  in   real   estate                                                                   
transactions.  He observed applications of malpractice.                                                                         
                                                                                                                                
3:28:51 PM                                                                                                                    
                                                                                                                                
Representative  Croft  pointed out  that  the attorney's  pay                                                                   
would be dependent on receiving  a percentage of the broker's                                                                   
commission.  He reiterated his concerns.                                                                                        
                                                                                                                                
Representative Weyhrauch maintained  that attorneys would not                                                                   
base  their pay  on a  commission.   Ms.  Nobrega noted  that                                                                   
associate brokers  and brokers are also dependent  on receipt                                                                   
of the commission.                                                                                                              
                                                                                                                                
Representative  Weyhrauch  stressed  the  importance  of  the                                                                   
public's trust of attorneys.                                                                                                    
                                                                                                                                
3:31:12 PM                                                                                                                    
                                                                                                                                
Ms. Ramsey agreed with remarks  by Representative Croft.  She                                                                   
noted that  the Real Estate  Commission approved  the pursuit                                                                   
                                                                                                                                
of  legislation for  post-licensing  in  March 4,2004.     On                                                                   
February 8,  2005, she  received the first  draft of  HB 169.                                                                   
She  observed that  the issue  was first  discussed on  March                                                                   
  thth                                                                                                                          
15.    On  the 24   of  March she  sent  a letter  addressing                                                                   
concerns to Representative   Rokeberg. On April  4, she spoke                                                                   
with Representative  Rokeberg about her concerns.   The state                                                                   
association did  not discuss the  issue with the  Commission,                                                                   
the entity that must enforce the provision.                                                                                     
                                                                                                                                
3:34:11 PM                                                                                                                    
                                                                                                                                
Representative Rokeberg took exception to the objections.                                                                       
                                                                                                                                
Representative  Kelly  suggested that  the  last sentence  be                                                                   
dropped.                                                                                                                        
                                                                                                                                
3:35:33 PM                                                                                                                    
                                                                                                                                
Representative Croft WITHDREW Conceptual Amendment 2.                                                                           
                                                                                                                                
HB 169 was HELD for further consideration.                                                                                      
                                                                                                                                
3:36:54 PM                                                                                                                    
                                                                                                                                
Representative  Ralph   Samuels  returned  to  HB   54.    He                                                                   
explained  that  the bill  would  clarify whether  the  judge                                                                   
could allow the victim to be introduced the to a jury.                                                                          
                                                                                                                                
TAMARA DE  LUCIA, OFFICE OF  VICTIMS RIGHTS, ANCHORAGE,  (via                                                                   
teleconference)  reviewed new  bail provisions  in the  bill,                                                                   
which would include participation by the victim.                                                                                
                                                                                                                                
3:41:15 PM                                                                                                                    
                                                                                                                                
Ms. De  Lucia continued  to explain  the provision  regarding                                                                   
the  introduction  of the  victim  to the  jury.   She  urged                                                                   
passage of HB 54.                                                                                                               
                                                                                                                                
3:42:29 PM                                                                                                                    
                                                                                                                                
LINDA  WILSON,  DEPUTY  DIRECTOR,   PUBLIC  DEFENDER  AGENCY,                                                                   
DEPARTMENT  OF  ADMINISTRATION,  (via  teleconference)  spoke                                                                   
about bail hearings.  It takes  a week to get a slot for bail                                                                   
hearings for petitions to revoke  probation.  It is primarily                                                                   
a problem with city cases.  She  wondered why a fix was being                                                                   
created  for such  a small number  of cases.   She  suggested                                                                   
requiring a 48-hour  notice.  The system seems  to be working                                                                   
well  right now.    She suggested  that  defense lawyers  get                                                                   
together to solve the problem.                                                                                                  
                                                                                                                                
3:47:06 PM                                                                                                                    
                                                                                                                                
Vice-Chair Stoltze MOVED to ADOPT Amendment 1:                                                                                  
                                                                                                                                
     Page 1, line 1, following "review;":                                                                                     
     Insert "relating to petitions for review by crime                                                                        
     victims where the defendant has received a mitigated                                                                     
     sentence;"                                                                                                               
                                                                                                                                
     Page 2, following line 13:                                                                                                 
     Insert a new bill section to read:                                                                                         
     "* Sec. 4.  AS 12.55.120 is amended by adding a new                                                                      
     subsection to read:                                                                                                        
          (e)  The victim of the crime for which a defendant                                                                    
     has been convicted and sentenced may file a petition                                                                       
     for review in an appellate court of a sentence that has                                                                    
     been mitigated under AS 12.55.155(d)."                                                                                     
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 2, line 25:                                                                                                           
     Delete "Section 4"                                                                                                         
     Insert "Section 5"                                                                                                         
                                                                                                                                
Co-Chair Meyer OBJECTED for discussion purposes.                                                                                
                                                                                                                                
3:47:58 PM                                                                                                                    
                                                                                                                                
Representative  Samuels  explained  the  he wanted  to  amend                                                                   
Amendment 1 by  eliminating the last word on  line 9, through                                                                   
line 10,  and replacing  that with  "is below the  sentencing                                                                   
range  for the  crime."   He  clarified  if  there are  three                                                                   
aggravating sentences  and one mitigating sentences,  or five                                                                   
aggravators and  one mitigator, a  review could not  be asked                                                                   
for at  the appellate  court level.   If  the sentence  for a                                                                   
particular crime is below the  range, the victim would have a                                                                   
right to  petition for a  review in  an appellate court.   If                                                                   
the sentence  is above the range,  then there must be  a jury                                                                   
trial.                                                                                                                          
                                                                                                                                
Vice-Chair Stoltze  MOVED to AMEND Amendment 1.   There being                                                                   
NO OBJECTION, it was so ordered.                                                                                                
                                                                                                                                
DEAN GUANELI,  CHIEF ASSISTANT  ATTORNEY GENERAL,  DEPARTMENT                                                                   
OF LAW,  explained that the  actual wording of  the amendment                                                                   
speaks about  a petition  for review  in an appellate  court.                                                                   
He  asked if  it is  the committee's  intent that  this is  a                                                                   
discretionary  petition  with the  court  of appeals,  rather                                                                   
than an absolute right to appeal  to the court and require it                                                                   
to issue an opinion.                                                                                                            
                                                                                                                                
3:52:45 PM                                                                                                                    
                                                                                                                                
Mr. Guaneli described  a particular case, which  was reviewed                                                                   
by  the court  of appeals.    He questioned  if  this is  the                                                                   
direction that the amendment should go.                                                                                         
                                                                                                                                
Representative Croft inquired  if it would be different if an                                                                   
appeal was  filed.   Mr. Guaneli said  it would be  different                                                                   
and he would be opposed to that  idea.  He wondered about the                                                                   
intent of  the amendment to  give victims the  absolute right                                                                   
to  appeal.   Representative Croft  asked if  anyone has  the                                                                   
right to file  a petition for review.  Mr.  Guaneli responded                                                                   
that  an  original  application  for relief  was  an  unusual                                                                   
procedure and a full briefing was ordered.                                                                                      
                                                                                                                                
3:54:50 PM                                                                                                                    
                                                                                                                                
Vice-Chair Stoltze asked if a precedent has been set.                                                                           
                                                                                                                                
3:55:47 PM                                                                                                                    
                                                                                                                                
Representative  Hawker asked  if the  intention is to  change                                                                   
the language  to "file  and appeal" to  give victims  a right                                                                   
that  they cannot  currently enjoy.   Representative  Samuels                                                                   
argued  the point  "that they  cannot currently  enjoy".   He                                                                   
emphasized  that he  does not  want the bill  to die  because                                                                   
appeals are  too broad.   He asked  for clarification  on the                                                                   
wording if a period is used after "sentencing".                                                                                 
                                                                                                                                
Mr. Guaneli agreed that change  may satisfy his concern about                                                                   
limiting what  already exists under  current court rule.   He                                                                   
noted that he would  like to look at the standards  and think                                                                   
about it.                                                                                                                       
                                                                                                                                
3:59:03 PM                                                                                                                    
                                                                                                                                
Representative  Croft  inquired how  much  victims should  be                                                                   
involved in  the criminal  justice process.   He opined  that                                                                   
they  ought   to  be   more  involved,   especially   in  the                                                                   
sentencing.  They  have a right to have an  appeal heard when                                                                   
it is below the range.  Representative Samuels concurred.                                                                       
                                                                                                                                
4:01:10 PM                                                                                                                    
                                                                                                                                
Representative  Weyhrauch referred  to Mr. Guaneli's  example                                                                   
and asked  if the victim  had file a  petition for  review in                                                                   
court of appeals.   Mr. Guaneli said yes and  related details                                                                   
of   the  case.     Representative   Weyhrauch  debated   the                                                                   
requirements  of   the  court.    Mr.  Guaneli   agreed  with                                                                   
Representative Weyhrauch'  assessment.  He  acknowledged that                                                                   
Representative Croft is right  in that if the state appeals a                                                                   
sentence,  the  sentence cannot  be  increased.   He  further                                                                   
explained the  procedure.  He  noted that victims'  interests                                                                   
may be different.                                                                                                               
                                                                                                                                
4:06:14 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Stoltze opined  that  this is  may not  be a  bad                                                                   
precedent.                                                                                                                      
                                                                                                                                
Mr. Guaneli related  his philosophy on the issue.   He opined                                                                   
that this amendment is not beneficial  for the administration                                                                   
of justice in Alaska.                                                                                                           
                                                                                                                                
Co-Chair Meyer  WITHDREW his OBJECTION to adopt  Amendment 1.                                                                   
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
4:09:55 PM                                                                                                                    
                                                                                                                                
Representative Croft MOVED to ADOPT Amendment 2:                                                                                
                                                                                                                                
     Page 1, line 1, following "review;":                                                                                     
     Insert  "relating  to  the   qualifications  of  certain                                                                 
     members of the Violent Crimes Compensation Board;"                                                                       
                                                                                                                                
     Page 2, following line 13:                                                                                                 
     Insert a new bill section to read:                                                                                         
    "* Sec. 4.   AS 18.67.020(a) is amended to read:                                                                        
          (a)  There is the Violent Crimes Compensation                                                                         
     Board in  the Department  of Administration  composed of                                                                   
     three members  to be appointed by the governor.   One of                                                                   
     the members  shall be designated as chair  [CHAIRMAN] by                                                               
     the governor.  At least one  member must be a medical or                                                                   
     osteopathic  physician  licensed  to  practice  in  this                                                                   
     state or holding a retired  status license in this state                                                               
     and one member must be an  attorney licensed to practice                                                                   
     in this state or retired from practice in this state."                                                                 
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 2, line 25:                                                                                                           
     Delete "Section 4"                                                                                                         
     Insert "Section 5"                                                                                                         
                                                                                                                                
     Page 2, line 31:                                                                                                           
     Delete "sec. 5"                                                                                                            
     Insert "sec. 6"                                                                                                            
                                                                                                                                
     Page 3, line 4:                                                                                                            
     Delete "sec. 4"                                                                                                            
     Insert "sec. 5"                                                                                                            
                                                                                                                                
     Page 3, line 5:                                                                                                            
     Delete "sec. 6"                                                                                                            
     Insert "sec. 7"                                                                                                            
                                                                                                                                
                                                                                                                                
Co-Chair Meyer OBJECTED for discussion purposes.                                                                                
                                                                                                                                
Representative Croft explained that the amendment allows a                                                                      
retired physician to be a member of the Violent Crimes                                                                          
Compensation Board.                                                                                                             
                                                                                                                                
Representative Samuels said it makes sense to add this to                                                                       
the bill.                                                                                                                       
                                                                                                                                
Co-Chair Meyer WITHDREW his OBJECTION to adopt Amendment 2.                                                                     
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
4:11:19 PM                                                                                                                    
                                                                                                                                
Representative  Croft MOVED to  REPORT CSHB  54 (FIN)  out of                                                                   
Committee  with  individual  recommendations   and  with  the                                                                   
accompanying fiscal notes.  There  being NO OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CSHB 54 (FIN) was REPORTED out  of Committee with a "do pass"                                                                   
recommendation  and with three  zero fiscal impact  notes: #1                                                                   
COR, #2 CRT, #3 LAW.                                                                                                            
                                                                                                                                
4:12:20 PM                                                                                                                    
                                                                                                                                
HOUSE BILL NO. 98                                                                                                             
                                                                                                                                
     "An Act relating  to the compensation of  certain public                                                                   
     officials,  officers,  and   employees  not  covered  by                                                                   
     collective bargaining  agreements; and providing  for an                                                                   
     effective date."                                                                                                           
                                                                                                                                
MIKE   TIBBLES,   DEPUTY   COMMISSIONER,    OFFICE   OF   THE                                                                   
COMMISSIONER,  DEPARTMENT OF  ADMINISTRATION, explained  that                                                                   
HB  98  matches  the statutory  schedule  for  the  partially                                                                   
exempt/exempt  employees  in the  legislative  executive  and                                                                   
judicial   branches,  to   the   salary  schedules   recently                                                                   
negotiated with the  supervisory unit.  He describe  the two-                                                                   
tier approach  that is  required to  update salary  schedules                                                                   
for  state  employees.     One  is  through   the  collective                                                                   
bargaining   process,   the   second   tier   for   partially                                                                   
exempt/exempt  employees.   Because there  are two  different                                                                   
approaches,   the  salary  schedules   have  drifted   apart.                                                                   
Currently  they are  5 percent  off, and will  increase  to 9                                                                   
percent at the end of the recently negotiated contracts.                                                                        
                                                                                                                                
Mr.  Tibbles  expressed  three  concerns.    The  pay  system                                                                   
requires payment  based on  "like pay  for like work",  which                                                                   
will not meet  statutory obligation.  He referred  to a chart                                                                   
on page  3 of the packet  "Comparison of Statutory,  Judicial                                                                   
and Supervisory Salary Schedules"  (copy on file.)  The other                                                                   
two   concerns   regard   upward   career   progression   and                                                                   
recruitment.  He recommended that  the legislature  adopt the                                                                   
statutory schedule.                                                                                                             
                                                                                                                                
4:16:16 PM                                                                                                                    
                                                                                                                                
In response  to a question  from Co-Chair Meyer,  Mr. Tibbles                                                                   
replied that it  is common practice to submit  legislation to                                                                   
track  the  two  salary  schedules.    They  are  not  always                                                                   
approved in  the same  year and so  there is sometimes  catch                                                                   
up, like there is this year.                                                                                                    
                                                                                                                                
In  response to  a  question  from Representative  Holm,  Mr.                                                                   
Tibbles  explained the  difference  between  steps A  through                                                                   
step F.                                                                                                                         
                                                                                                                                
In  response to  a question  from  Representative Kelly,  Mr.                                                                   
Tibbles reiterated the current  and projected salary schedule                                                                   
gap.                                                                                                                            
                                                                                                                                
4:17:51 PM                                                                                                                    
                                                                                                                                
Representative Croft  asked for the  total cost for  the next                                                                   
five years.   Mr. Tibbles describe  each of the  three fiscal                                                                   
notes.   Representative Croft  questioned the "free  ride" of                                                                   
organizations  that   have  not  negotiated.     Mr.  Tibbles                                                                   
responded  that the  salary schedule  applies to  individuals                                                                   
that  are exempt  from  collective  bargaining  and it  meets                                                                   
statutory obligation.   He pointed out problems  if parity is                                                                   
not followed.                                                                                                                   
                                                                                                                                
4:20:37 PM                                                                                                                    
                                                                                                                                
Representative  Hawker  observed  that  the  legislature  has                                                                   
imposed  upon itself  a 23.5  percent reduction  in per  diem                                                                   
pay.  He questioned what happened to cost reduction.                                                                            
                                                                                                                                
MILA    COSGROVE,    DIRECTOR,   DIVISION    OF    PERSONNEL,                                                                   
ADMINISTRATION  underscored  the parity  issue  of the  bill.                                                                   
She  addressed Representative  Croft's  concern about  equity                                                                   
and  negotiation  issues.   She  spoke  of an  obligation  to                                                                   
insure  "like  pay  for  like  work", and  a  duty  to  treat                                                                   
management level and "rank and file" fairly.                                                                                    
                                                                                                                                
Representative   Kelly  asked  which   comes  closest   to  a                                                                   
competitive scale.   Ms. Cosgrove reported that  the state of                                                                   
Alaska   does  not   have  a   market   driven  pay   system.                                                                   
Representative Kelly  noted that equal pay for  equal work is                                                                   
not relevant today.  He asked  how competitiveness is sensed.                                                                   
                                                                                                                                
4:24:11 PM                                                                                                                    
                                                                                                                                
Ms. Cosgrove replied  that the executive branch  is hemmed in                                                                   
by statute.   She explained that  the pay is  not competitive                                                                   
with the  private sector.  She  agreed that steps need  to be                                                                   
taken  to  adjust  pay  scales.     There  is  an  impact  on                                                                   
recruitment.     Representative  Kelly  suggested   that  the                                                                   
department should  be aware of the market condition  in order                                                                   
to get  to a  competitive measurement.   He stressed  another                                                                   
reason to stay competitive.                                                                                                     
                                                                                                                                
4:26:50 PM                                                                                                                    
                                                                                                                                
CHRIS  CHRISTENSEN,  DEPUTY  ADMINISTRATOR,   OFFICE  OF  THE                                                                   
ADMINISTRATIVE  DIRECTOR,  ALASKA  COURT SYSTEM,  shared  the                                                                   
background  of  the  court system.    He  related  statistics                                                                   
surrounding  court employees.    He discussed  high  turnover                                                                   
rates and  talked about cost-of-living adjustments  resulting                                                                   
in employees  joining  a union.   He related  the history  of                                                                   
judges'  salaries in  Alaska, including  a comparison  of the                                                                   
average annual  increases for judges nationally  and locally.                                                                   
Judges do  not get annual longevity  increases.  He  spoke of                                                                   
rural  judge  differentials.     HB  98  would  bring  salary                                                                   
adjustments  equal to  salaries approved  by the  legislature                                                                   
for APEA  members last  year.   The bill  sends a message  to                                                                   
employees  that the legislature  does value  them as  much as                                                                   
union employees.                                                                                                                
                                                                                                                                
4:33:03 PM                                                                                                                    
                                                                                                                                
He referred  to  Representative Croft's  question about  non-                                                                   
union employees stating that often  non-monetary compensation                                                                   
in union contracts is not matched.                                                                                              
                                                                                                                                
4:37:27 PM                                                                                                                    
                                                                                                                                
Vice-Chair Stoltze recalled that  there has been an effort to                                                                   
match  employees' salaries.   He  noted that  judges have  an                                                                   
honorary position.                                                                                                              
                                                                                                                                
Mr.  Christensen  responded  that  going from  number  49  to                                                                   
number  47 does  not seem  to  be much  of an  increase.   He                                                                   
contrasted private sector lawyers  with public sector lawyers                                                                   
and judicial pay raises.                                                                                                        
                                                                                                                                
4:38:05 PM                                                                                                                    
                                                                                                                                
PAM VARNI,  EXECUTIVE DIRECTOR,  LEGISLATIVE AFFAIRS  AGENCY,                                                                   
testified  in support  of HB  98,  for equity  reasons.   She                                                                   
recalled  the history  of the executive  and judicial  salary                                                                   
schedules.     She  described  the  difference   between  the                                                                   
partially exempt and CPIU salary  increases as 26.68 percent.                                                                   
She shared  statistics from  various states regarding  salary                                                                   
increases.  The per diem rate  has gone down for legislators,                                                                   
which is set by Department of Defense.                                                                                          
                                                                                                                                
4:40:44 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Stoltze  asked  on  who's  behalf  Ms.  Varni  is                                                                   
testifying.    She  replied  on  the  behalf  of  the  agency                                                                   
employees.  Legislative council would also support this.                                                                        
                                                                                                                                
4:41:48 PM                                                                                                                    
                                                                                                                                
Representative Hawker  observed that the  bill puts him  in a                                                                   
very  uncomfortable   position.     Dealing  with   costs  of                                                                   
retirement plans  is a big  issue.  Alaska's retirement  plan                                                                   
is very generous.   He suggested "do no harm  until we figure                                                                   
out how to solve  the problem."    He debated  the other side                                                                   
of the  argument.   He stated his  opposition to  the radical                                                                   
changes proposed  to the  PERS and TRS  plans.  He  suggested                                                                   
that granting  a wage increase  is hypocritical on  his part.                                                                   
He stated  that his concern is  not with equity  and fairness                                                                   
to employees.                                                                                                                   
                                                                                                                                
4:45:27 PM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer suggested  proposing  a  hiring freeze  until                                                                   
PERS  and  TRS  is  decided.    He  emphasized  that  current                                                                   
employees need  to be treated fairly.   He spoke in  favor of                                                                   
passing HB 98.                                                                                                                  
                                                                                                                                
Vice-Chair Stoltze agreed with Representative Hawker                                                                            
                                                                                                                                
Representative Holm  also agreed with Representative  Hawker.                                                                   
He quoted  the high  pay level  of 28 E.   He voiced  concern                                                                   
about  COLA,  vacation  pay, and  other  compensations.    He                                                                   
requested more information about those costs.                                                                                   
                                                                                                                                
4:47:50 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer pointed out that  union employees have already                                                                   
received  their  wages.    This  bill  will  bring  non-union                                                                   
employees up to the same level.                                                                                                 
                                                                                                                                
4:49:03 PM                                                                                                                    
                                                                                                                                
Ms. Cosgrove spoke of collective bargaining.                                                                                    
                                                                                                                                
ART   CHANCE,   DIRECT,  LABOR   RELATIONS,   DEPARTMENT   OF                                                                   
ADMINISTRATION,  shared   information  about   the  executive                                                                   
branch  related to  leave, pay,  geographical  differentials,                                                                   
and merit steps, all established in statute.                                                                                    
                                                                                                                                
4:51:56 PM                                                                                                                    
                                                                                                                                
Representative  Foster spoke in  support of the  legislation.                                                                   
He concluded that  denial of the legislation  would result in                                                                   
greater unionization.                                                                                                           
                                                                                                                                
Mr.  Chance stated  that the  only employees  that could  not                                                                   
collectively  bargain are  elected  and appointed  officials.                                                                   
He  noted that  he is  currently seeking  to eliminate  labor                                                                   
relations staff from the current bargaining unit.                                                                               
                                                                                                                                
4:54:20 PM                                                                                                                    
                                                                                                                                
Co-Chair  Chenault  referred   to  Section  6,  salaries  for                                                                   
University  of  Alaska, and  questioned  why  they are  being                                                                   
treated differently.                                                                                                            
                                                                                                                                
Ms.  Cosgrove  noted that  the  university pay  structure  is                                                                   
completely  different from  the other  branches.  Mr.  Chance                                                                   
added that  many of  their salaries  are established  through                                                                   
collective bargaining.                                                                                                          
                                                                                                                                
4:55:52 PM                                                                                                                    
                                                                                                                                
Representative  Kelly spoke  in support  of the  legislation.                                                                   
He  observed that  public pay  has  slipped, the  legislation                                                                   
                                thth                                                                                            
would only raise judges  from 49  to 47[place   in regards to                                                                   
pay nationally],  and there is  a threat of  underemployment.                                                                   
He stressed  that the  PERS and  TRS issue  is separate.   He                                                                   
concluded that employees  would be lost or organized  if this                                                                   
legislation is not adopted.                                                                                                     
                                                                                                                                
4:59:30 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer  pointed out that it  is not an union  or non-                                                                   
union issue, but one of fairness and equality.                                                                                  
                                                                                                                                
Representative Foster  MOVED to report  CSHB 98 (STA)  out of                                                                   
Committee with  the accompanying  fiscal notes.   There being                                                                   
NO OBJECTION, it was so ordered.                                                                                                
                                                                                                                                
CSHB 98 (STA) was REPORTED out  of Committee with a "do pass"                                                                   
recommendation  and with three  fiscal impact notes:  #1 GOV,                                                                   
#2 LEG, and a new CRT note.                                                                                                     
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 5:01 PM                                                                                            

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