Legislature(2005 - 2006)HOUSE FINANCE 519
03/07/2006 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB218 | |
| HB408 | |
| HB485 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 324 | TELECONFERENCED | |
| += | HB 408 | TELECONFERENCED | |
| += | SB 218 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 485 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
March 7, 2006
1:46 P.M.
CALL TO ORDER
Co-Chair Meyer called the House Finance Committee meeting to
order at 1:46:39 PM.
MEMBERS PRESENT
Representative Mike Chenault, Co-Chair
Representative Kevin Meyer, Co-Chair
Representative Bill Stoltze, Vice-Chair
Representative Mike Hawker
Representative Jim Holm
Representative Reggie Joule
Representative Mike Kelly
Representative Beth Kerttula
Representative Carl Moses
MEMBERS ABSENT
Representative Richard Foster
Representative Bruce Weyhrauch
ALSO PRESENT
Representative Mark Neuman; Senator Con Bunde; Senator
Gretchen Guess; Portia Parker, Deputy Director, Department
of Corrections; Susan Parks, Deputy Attorney General,
Criminal Division, Department of Law; Rynnieva Moss, Staff
to Rep. Coghill; Tammy Sandoval, Acting Director Offices of
Children's Services; Janet Clarke, Assistant Commissioner,
Division of Finance and Management Services, Department of
Health and Social Services; Virginia Smiley, Director,
Division of Pioneer Homes, Department of Health and Social
Services; Sharleen Griffin, Acting Director, Division of
Administrative Services, Department of Corrections; Robynn
Wilson, Director, Division of Tax, Department of Revenue;
Jerry Burnett, Legislative Liaison, Department of Revenue;
Mila Cosgrove, Director, Division of Personnel, Department
of Administration.
PRESENT VIA TELECONFERENCE
Quinlan Steiner, Director, Office of Public Defender; Jan
Rutherdale, Assistant Attorney General, Department of Law.
SUMMARY
CS SB 218(FIN)
An Act relating to sex offenders and child
kidnappers; relating to reporting of sex offenders
and child kidnappers; relating to periodic
polygraph examinations for sex offenders released
on probation or parole; relating to sexual abuse
of a minor; relating to the definitions of
'aggravated sex offense' and 'child kidnapping';
relating to penalties for failure to report child
abuse or neglect; relating to sentencing for sex
offenders and habitual criminals; and providing
for an effective date.
CS SB 218 (FIN) was HEARD and HELD in Committee
for further consideration.
HB 408 An Act relating to the definition of 'child abuse
and neglect' for child protection purposes; and
providing for an effective date.
CS HB408 (FIN) was REPORTED OUT of Committee with
individual recommendations and 2 zero fiscal
notes (#1, DHSS; New, HFC).
HB 485 An Act amending the State Personnel Act to place
in the exempt service pharmacists and physicians
employed in the Department of Health and Social
Services or in the Department of Corrections and
corporate income tax forensic auditors employed by
the division of the Department of Revenue
principally responsible for the collection and
enforcement of state taxes who specialize in
apportionment analysis and tax shelters of
multistate corporate taxpayers; and providing for
an effective date.
HB 485 was HEARD and HELD in Committee for further
consideration.
CS FOR SENATE BILL NO. 218(FIN)
"An Act relating to sex offenders and child kidnappers;
relating to reporting of sex offenders and child
kidnappers; relating to periodic polygraph examinations
for sex offenders released on probation or parole;
relating to sexual abuse of a minor; relating to the
definitions of 'aggravated sex offense' and 'child
kidnapping'; relating to penalties for failure to
report child abuse or neglect; relating to sentencing
for sex offenders and habitual criminals; and providing
for an effective date."
SENATOR CON BUNDE, SPONSOR, thanked the Committee and
pointed out examples from weekend news articles from
Anchorage recounting various sexual crimes, especially
noting an incident when an perpetrator committed an assault
hours after being release from prison. Her concluded that
this was an indication of the need for longer prison
sentences.
1:48:17 PM
Co-Chair Chenault MOVED to ADOPT Work Draft #24-LS1307\U,
Luckhaupt, 3/6/06, as the version of the bill before the
Committee. There being NO OBJECTION, the motion was ADOPTED.
Senator Bunde referred to SUSAN PARKS, DEPUTY ATTORNEY
GENERAL, CRIMINAL DIVISION, DEPARTMENT OF LAW to address the
bill. Ms. Parks highlighted changes in the Committee
Substitute. She noted changes in Section 1 and 2, referred
to as the "peer group amendment". She stated that there was
a concern about whether conduct between teenage peers hould
be considered criminal. She explained that the changes
specified the need for one of the teenagers to be 17 years
of age or older, and for there to be four years' difference
in ages to constitute a criminal act.
1:50:58 PM
Ms. Parks also noted another major change to the bill
contained in Section 8, page 7. She explained that the
original bill mandated that there be probation for sex
offenses. She pointed out that probation only carried
weight if it pertained to suspended time, which enabled
violators of probation to be punished. She stated that
Section 8 required a certain amount of suspended time so
that mandatory probation carried significance. She pointed
out that there were amendments to the ranges that had been
increased by 5 years to allow for required suspended time.
1:52:00 PM
Ms. Parks also pointed out that on Page 6, line 11, the
range of sentence was changed from "one to twelve years" to
"two to twelve years".
Representative Stoltze referred to a sentencing proceeding
that reminded him of the truth in sentencing provisions, and
asked about the actual provisions.
1:53:11 PM
Ms. Parks emphasized that a prior sexual offense would
guarantee a severe sentence for a subsequent offense,
whereas a first time offender might receive a lighter
sentence, such as four years, with the possibility of
discretionary parole.
Representative Stoltze noted that the offender to which he
referenced in Wasilla had received a sentence of 99 years,
being eligible for parole in 23 years.
1:54:20 PM
Co-Chair Meyer MOVED to ADOPT Amendment #1.
Page 3, lines 18-21
Delete subsection (b)
Insert:
(b) This statute does not apply if any of the
circumstances or conduct establishing the offense
relate to an attorney-client relationship with the sex
offender or child kidnapper.
The defendant may file notice pre-trial that subsection
(b) applies. The notice merely requires that a good
faith basis for its filing exist. The defendant may
request a pre-trial ruling by the Judge, or may request
a jury determination, or both. The State has the
burden to prove beyond a reasonable doubt that sub-
section (b) does not apply.
Representative Stoltze OBJECTED.
Co-Chair Meyer referred to Ms. Parks for discussion of the
amendment. Ms. Parks explained that the amendment pertained
to the "failure to report" provisions contained in Section 3
of the bill. She explained that the Public Defender's
office raised concerns that the bill created an ethical
dilemma for a defense attorney representing a client who
should have been registered and was not registered. She
stated that the language had been developed in cooperation
with the Public Defender's office in order to mitigate the
ethical issue.
QUINLAN STEINER, DIRECTOR, OFFICE OF PUBLIC DEFENDER
testified online, stating that he had worked with Ms. Parks
on the language to remedy the ethical dilemma.
Representative Stolze WITHDREW his OBJECTION.
There being no further objection, the Amendment was ADOPTED.
Representative Kerttula MOVED to WITHDRAW Amendments #2 and
#3.
Representative Kerttula then MOVED to ADOPT Amendment #4,
24-LS1307\U.2, Luckhaupt, 3/7/06.
1:57:38 PM
Representative Hawker OBJECTED.
Representative Kerttula explained that her amendments did
not indicate a lack of support or respect for the sponsors,
but rather pertained to the complicated nature of the
legislation. She thanked the sponsors for changing the
crime of omission and for extending statutory rape.
Representative Kerttula specified that Amendment #4
pertained to sentencing for Class A and Class B felonies.
She conceded that these were serious crimes that should
carry serious penalties, however pointed out that if the
sentences were increased to this degree it would generate
commensurate costs. She proposed bringing the sentences
within a range that allowed for a more gradual impact.
Senator Bunde agreed that the bill would generate a cost.
He discussed the merits of the costs as compared to the
quality of safety in society. He also pointed out that
large sentences, as well as incarcerating offenders for a
long and costly period, also served as a deterrent. He
concluded that the societal cost therefore balanced the
financial costs.
2:01:19 PM
REPRESENTATIVE NEUMAN (Co-Sponsor) emphasized that,
particularly for victims age 13 or younger, the cost of
rehabilitation lasted a lifetime. He referred to
discussions on the cost of such rehabilitation, and
estimated it at $45,000 per victim. He also noted that
there were 518 reported victims, resenting only 16 percent
of sexual crimes committed that were actually reported. He
also reminded the Committee about the rate of recidivism due
to the inability to rehabilitate offenders. He also
recalled discussions with Commissioner Tandeske, confirming
that these offenders also committed other types of crimes.
He concluded that all of these costs should be considered in
the entire picture.
2:03:47 PM
SENATOR GUESS (CO-SPONSOR) spoke in opposition to the
amendment, but welcomed the discussion of the issues. She
referred to previously passed bills (Sen. French), and
testimony by administration stating that the bill did not
pertain as much to sentences as to compliance with a court
case. She emphasized that the bill sponsors did not
contemplate appropriate sentence ranges. She noted that the
Legislature discussed such policy issues at length. She
pointed out that Senator French's bill did not address first
time offenders or the sentencing structure.
2:05:34 PM
Senator Guess also referred to the third section of the
amendment that reduced probation requirements. She pointed
out that probation stipulations allowed for the best use of
the polygraph in helping prevent offenders from recurrence.
She stated her opinion that it was wrong to reduce sentences
and probation on a policy basis. She agreed with
Representative Neuman that the societal cost of sexual
crimes was significant, if somewhat unknown, and concluded
that it outweighed any other costs.
Representative Hawker MAINTINED his OBJECTION.
Representative Kerttula concurred with the Sponsors'
addition of probation to the Committee Substitute, and
explained that her amendment was an effort to bring the
sentencing down into a somewhat reduced range with
commensurate probation periods. She stated that this was
the most difficult of her proposed amendments.
Responding to a question by Co-Chair Chenault, Senator Guess
clarified an earlier observation that sexual offenders
responded well to the structured environment of
incarceration. She referred to Senator French's bill, and a
supporting document confirming that sexual offenders often
received "good time", which under the current amendment
would be eight years.
Representative Bunde noted that sex offenders often sought
vulnerable victims.
2:09:19 PM
A roll call vote was taken on the motion.
IN FAVOR: Moses, Kertulla
OPPOSED: Stoltze, Hawker, Holm, Joule, Kelly, Meyer,
Chenault
The Amendment FAILED on a vote of 7 to 2.
Representative Kerttula MOVED to ADOPT Amendment #5, 24-
LS1307\U.1, Luckhaupt, 3/7/06.
Representative Stoltze OBJECTED.
Representative Kerttula explained that the amendment
pertained to Class C Felonies. While she conceded that
these offenses could indicate serious behavior, she noted
that it could also include less serious behavior such as
touching. She stated her belief that the maximum sentences
were often disproportionate to the less serious crimes. She
also noted that the Amendment contained a commensurate
reduction of probationary periods.
2:11:02 PM
Representative Stoltze referred to comments made in the
Senate Judiciary Committee regarding the issue of incidental
touch, and asked how often instances of this nature were
prosecuted.
SUSAN PARKS, DEPUTY ATTORNEY GENERAL, CRIMINAL DIVISION,
DEPARTMENT OF LAW referred to case examples and stated that
in 2004, of over 100 case that were charged with touching
offenses, only 40 times did they receive the most serious
offense, and usually when accompanied by a more serious
charge. She noted a case in Anchorage when a young girl had
received touches over an eight year period, that eventually
developed into more serious conduct, and concluded that this
was often the case. She also noted that touching offenses
were often prosecuted when offenders had been interrupted or
fought off. She noted several cases of touching offenses in
various serious circumstances and concluded that these could
be potentially serious offenses.
2:15:16 PM
Representative Stoltze concluded that the touching
offenses in a situation of an accidental or "barroom grope"
were rarely prosecuted. Ms. Parks responded that those
types of cases were not usually charged.
Representative Neuman referred to the first section of the
amendment, deleting the numbers "99" and "20", and pointed
out that the bill language actually stated "not more than
99/20". He also referred to lines 22 to 23 of the amendment
proposing to delete "99" and insert "9 to 20", and pointed
out that these sentences pertained to a third felony
conviction.
2:17:10 PM
Responding to a comment by Co-Chair Meyer, Senator Guess
stated that the Sponsors were opposed to the amendment.
Senator Guess noted that at the third degree level, a wide
variety of conducts were included. She noted a recent study
about the problem of rape in prisons, as well as about
incest. She concluded that there were serious crimes
included in this range. She explained that a wider range of
sentences at this level of offense was to give courts
flexibility.
2:18:44 PM
Representative Kerttula expressed that while she
appreciated the benefit of flexibility, she maintained
concern over the large range of offenses in the bill. She
proposed breaking the bill apart, and separating the lesser
offenses from much more serious behaviors. She also
commented that, along with flexibility, an amount of
discretion remained to the courts. She noted that low level
thefts were also included within the same level and
therefore subject to the same sentencing structure.
A roll call vote was taken on the motion.
IN FAVOR: Moses, Kertulla
OPPOSED: Stoltze, Hawker, Holm, Joule, Kelly, Chenault,
Meyer
The motion FAILED on a vote of 2 to 7.
Representative Kerttula MOVED to ADOPT Amendment #6.
Representative Hawker OBJECTED.
Representative Kerttula commented that in her experience as
a defense attorney she had dealt with offenders who were
well aware of sentencing ranges. She stated her concern that
such knowledge of sentences might induce an offender to
murder a victim of a sexual assault in an attempt to obtain
a lighter sentence.
Representative Hawker strongly maintained his objection,
expressing his concern for victims of sexual assaults who
serve a "life sentence" of suffering.
2:23:51 PM
Representative Neuman stressed that the majority of crimes
referred to by the amendments were committed against persons
under the age of thirteen. He also noted that the
perpetrators often carried firearms, thereby justifying the
higher sentences.
Representative Bunde pointed out that in any of the
sentences, a single mitigating circumstance could reduce the
sentence by as much as half. He noted that courts and
juries could exercise a certain amount of discretion in
these circumstances. He mentioned that other states had
substantially increased penalties for sexual predators. He
also pointed out that offenders often moved from state to
state, and was concerned that Alaska could become a prime
destination for sexual predators if our sentences were
lower.
Representative Kerttula clarified that her amendments did
not address repeat offenses, and only pertained to the lower
end of the offenses. She proposed that the lower end of the
sentence should be lower than that for murder in the second
degree.
Representative Bunde stated that research showed that by the
time a perpetrator was arrested and tried they often had
committed a number of unreported offenses.
A roll call vote was taken on the motion.
IN FAVOR: Kertulla
OPPOSED: Hawker, Holm, Joule, Kelly, Moses, Stoltze, Meyer,
Chenault
The motion FAILED on a vote of 1 to 8.
2:27:26 PM
Representative Bunde departed the meeting and stated that he
was opposed to any amendments.
Representative Kerttula MOVED to ADOPT Amendment #7 (24-
LS1307\U.4, Luckhaupt, 3/7/06).
Representative Hawker OBJECTED.
Representative Kerttula explained that the amendment dealt
with the failure to report sexual offenders or child
kidnappers. She noted that this section of the bill had
been amended to address ethical considerations for defense
attorneys.
2:29:08 PM
Representative Kerttula suggested that the standard should
be one of "knowingly" disregarding requirements rather than
"recklessly". She noted that in an earlier discussion Ms.
Parks had referred to other legislation that employs such
duel standards. Representative Kerttula proposed that the
current standards in the bill would make it confusing and
more difficult to prosecute.
Senator Guess stated that she was opposed to the amendment,
and confirmed their belief that the duel standards would not
cause confusion.
2:30:25 PM
Ms. Parks stated her belief that changing the mental state
to "recklessly" would make it more difficult to prosecute
the cases. She noted that certain offenses contain both a
"reckless" and "knowing" terminology. She pointed out that
"recklessly" was a difficult standard to meet, since it
requires that the offender is aware of and consciously
disregards a substantial risk, constituting a gross
deviation from a reasonable standard of conduct. She
expressed concern that those who wish to remain ignorant of
circumstantial evidence can simply claim to "not know",
whereas it can be proven that a person acted in reckless
disregard of the evidence.
2:32:15 PM
Representative Stoltze asked how it would affect a family
situation. Ms. Parks confirmed that the concern would be
that individuals would choose not to confirm suspicions.
2:32:45 PM
Representative Hawker observed that use of the "reckless"
standard had been adequately defended. He questioned,
however, the double standard "and knowlingly".
Representative Hawker asked whether, if an individual was
unaware of location of a perpetrator, their knowing could be
proven.
2:34:02 PM
Representative Neuman stated his opinion that the standards
were a policy decision. He questioned whether if an
individual knew of incest in a family, or a sexual molester,
and purposefully did not bring these facts forward, or even
witnessed an act while under the influence of a substance,
they would bear some measure of guilt. He observed that
the victims should be given first consideration, along with
our responsibility to society. He suggested that there
should be a greater aptitude toward societal responsibility.
Representative Hawker commented that in the construction of
statute, they were obligated to protect the innocent, as
well as provide a vehicle to prosecute the guilty. He
expressed concern that with the current bill, the statute
might prosecute the innocent.
2:36:50 PM
Senator Guess acknowledged Representative Hawker's
observation as valid, and conceded that language might be
changed to protect an individual who failed to report the
location of a sex offender due to their lack of knowledge.
2:37:58 PM
Representative Hawker asked if it was the chairman's
intention to report the bill out of Committee, and suggested
that the language could be remedied during discussion of
other amendments.
Co-Chair Meyer recommended that the amendment be withdrawn.
Representative Kerttula WITHDREW Amendment #7.
Co-Chair Meyer stated that the bill would be HELD. He
requested that updated fiscal notes be prepared for the next
hearing to take into account any bill changes.
2:39:08 PM
Representative Kerttula requested that the remainder of her
amendments (#8-10) be withdrawn in order for further
consideration before the next hearing.
2:39:38 PM
CS SB 218 (FIN) was HELD in Committee for further
consideration.
2:40:18 PM
HOUSE BILL NO. 408
"An Act relating to the definition of 'child abuse and
neglect' for child protection purposes; and providing
for an effective date."
2:42:27 PM
Co-Chair Chenault MOVED to ADOPT work draft #24-BH202\Y.
There being no objection, the DRAFT was ADOPTED.
Rynnvieva Moss noted that the bill was sponsored by the
Governor, and explained the influence of last year's House
Bill 53, combined with efforts of the Administration and
various legislators into one vehicle, called the Family
Rights Act of 2006. She acknowledged the inclusion of
legislation by Representative Chenault, Representative
Coghill, and changes added by the Office of Children's
Services (OCS).
Ms. Moss addressed Representative Coghill's concern with
section 5 of the Committee Substitute. She explained that
last year, under the previous law as written in HB 53, OCS
could only discuss the report of harm that involved the
disclosing information in the case of a resulting death. At
that time, the Attorney General's office stipulated that the
agency could only discuss the most recent report of harm
that actually resulted in the death. She clarified that the
revised bill now allows them to discuss any report of harm
once requirements had been met, regarding any child in this
situation.
Ms. Moss also noted that another concern by Representative
Coghill was addressed by Section 7 of the Committee
Substitute. Ms. Moss explained that this amendment resulted
from a situation occurring in Representative Coghill's
district where two teenage children had been placed in a
foster home and foster parents had collected the children's
previous pfd's. In this case, the foster placement did not
work out, but the children's dividends were lost. The bill
stipulates that once a child has been placed in the custody
of OCS, their dividends will accrue until they reach the age
of 18, at which time they will have one year to collect the
dividends.
2:46:09 PM
Ms. Moss pointed out that Section 4 incorporated House Bill
327, by Representative Chenault, requiring that when a
public official requested information, the Department be
given five working days to collect information. She
expressed that the Sponsor was very pleased with the
Committee Substitute, and thought that the language was
excellent.
2:47:16 PM
TAMMY SANDOVAL, DEPUTY COMMISSION FOR THE DEPARTMENT OF
HEALTH AND SOCIAL SERVICES OFFICES OF CHILDREN'S SERVICES
testified regarding the bill. She stated that the original
intent of HB 408 was to comply with federal law. The
"Keeping Children and Families Safe Act" of 2003, amended
the Child Abuse Prevention and Treatment Act (CAPTA), and
enacted new federal requirements for those states receiving
CAPTA funds. She then explained that the bill had been
amended to include a reporting requirement at delivery by a
health care provider determining that a child has been
"adversely affected by or is withdrawing from expose to, a
controlled substance or alcohol". She explained that
Sections 1, 2 & 3 related to reasonable efforts and
involuntary termination of parental rights. She stated that
these sections had been amended to require the court to find
clear and convincing evidence, rather than a preponderance
of evidence, prior to terminating parental rights.
Ms. Sandoval referred to Jan Rutherdale, Assistant Attorney
General, Department of Law, who was online to answer any
questions.
Ms. Sandoval also referred to Section 4, related to
Department of Health and Social Services and the
Administration's disclosure to public officials. Sections 5
and 6 related to disclosure of agency records, amended to
comply with the intent of HB 53, as it relates to disclosing
information about high profile child protection case. She
noted that they had experienced the function of HB 53, and
suggested the new language to provide more transparency and
accountability. She concluded that Section 7 changes
conditions under which OCS could release a child's PFD
account trust monies.
2:49:46 PM
Representative Kerttula asked regarding changing the
evidence standard to clear and convincing, and expressed
concern that currently if the court found by preponderance
of evidence, which was a lower standard, children could be
pulled out for a number of serious circumstances. She asked
how the department of law felt about raising the standard.
2:50:58 PM
JAN RUTHERDALE, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF
LAW noted that the amendments involve the termination
statutes only, and not the initial removal, which is under
temporary custody and adjudication. She stated that the
department of law actually pointed out the current problem,
due to the constitutional argument that the standard of
evidence was too low.
2:51:59 PM
Co-Chair Chenault referred to the indeterminate fiscal note,
and asked if OCS would be affected by the requirement to
track permanent fund monies for children until the age of
18. Rep Chenault asked how many children were currently
tracked in this way.
Ms. Sandoval noted that the indeterminate note had been
prepared earlier, but that after clarification about the
intent of the provision with the sponsor, the fiscal note
was changed to zero. She responded that only 17 children in
this year had been placed in guardianship.
2:53:12 PM
Representative Kerttula asked about the section that added
alcohol into the definition of child abuse and neglect. She
noted a concern with section 8 regarding the level of effect
from alcohol that would constitute the definition. She gave
the example that an individual might have consumed alcohol
before knowing they were pregnant, and expressed that she
did not believe this should fall under the definition.
2:54:58 PM
Ms. Rutherdale responded from a legal standpoint that this
section applied only with children born with very obvious
fetal alcohol syndrome, but not when a person had consumed a
minor amount of alcohol prior to knowing they were pregnant.
She stated that other affects of alcohol were not apparent
until a child had entered school age, presenting in a
child's ability to focus, poor judgment ability, etc..
2:56:31 PM
Co-Chair Meyer opened the floor to public testimony. There
was no one available for testimony, and testimony was
closed.
Co-Chair Meyer asked about the indeterminate fiscal note,
and Ms. Rutherdale reiterated that once a confusion had been
clarified, the fiscal note had been reflected as zero.
2:57:50 PM
Ms. Moss explained the concern that, in the way the bill had
been written, OCS would be required to apply for dividends
for children that were no longer in their custody but with a
legal guardian. She explained that dividends were applied
for only when the child was in the custody of OCS; otherwise
their legal guardian would apply.
2:58:35 PM
Co-Chair Chenault MOVED to create a Zero Fiscal Note for
Health and Social Services, Children's Services, Children's
Services Management, Component #2666 (3/07/06). There being
NO OBJECTION, it was so ordered.
2:59:11 PM
Co-Chair Chenault thanked Ms. Sandoval for her good work
resolving cases. He then MOVED to REPORT CS HB408 (FIN) out
of Committee with individual recommendations and 2 zero
fiscal notes (#1, DHSS; New, HFC).
There being NO OBJECTIONS, the bill was passed by UNANIMOUS
CONSENT.
HOUSE BILL NO. 485
"An Act amending the State Personnel Act to place in
the exempt service pharmacists and physicians employed
in the Department of Health and Social Services or in
the Department of Corrections and corporate income tax
forensic auditors employed by the division of the
Department of Revenue principally responsible for the
collection and enforcement of state taxes who
specialize in apportionment analysis and tax shelters
of multistate corporate taxpayers; and providing for an
effective date."
3:00:53 PM
JANET CLARKE, ASSISTANT COMMISSIONER, DIVISION OF FINANCE
AND MANAGEMENT SERVICES, DEPARTMENT OF HEALTH AND SOCIAL
SERVICES, referred to Virginia Smiley to speak to a
situation which generated the bill.
3:01:55 PM
VIRGINIA SMILEY, DIRECTOR, DIVISION OF PIONEER HOMES gave an
overview of the pharmacist duties in the Pioneer's Home.
She gave the following overview of the pharmacy and
pharmacist duties as follows:
"The six Pioneer Homes located in Ketchikan, Sitka,
Juneau, Anchorage, Palmer and Fairbanks all rely on
receiving medications for their residents from the
Division's central pharmacy located in APH.
Per state and federal law the pharmacy must be under
the oversight of licensed pharmacists. We can and do
use school of pharmacy interns and pharmacy assistants,
but three pharmacists are necessary to supervise staff,
dispense medications, comply with Medicare Part D and
Medicaid documentation, and provide clinical
consultation to physicians, residents, families, and
staff.
In the quarter ending Dec 31, 2005, the pharmacy
packaged and dispensed 353,821 individual doses of
medications. Dispensing that volume of medications
requires a full staff present and working.
We have almost a full year's history in first losing
our pharmacists to jobs that pay much higher wages and
then not being able to attract new pharmacists to apply
for the vacant positions.
The federal government is paying wages that are
competitive with the private sector, and offering
signing bonuses and forgiveness of student loans.
Nationally, the same is true in the private sector, as
shown by lucrative offers being made to pharmacists in
recruitment letters and advertising in national
publications.
For eight months of last year we had a single
pharmacist on our payroll. It was necessary for us to
sign contracts with two temp agencies, and we were able
to fill many, but not all, of the vacant shifts. We
paid the contract agencies $70 hr for their
pharmacists.
At this critical point we finally placed the pharmacist
PCN into a temporary higher paying category in order to
recruit and hire more competitively. However, the
Division of Personnel advised us we would have to seek
a more permanent solution. That is why we are here
today.
The problem is that under the present wage scale for
permanent pharmacist positions in the state system, we
are not competitive with other employers.
We are asking to have pharmacists moved into the exempt
service with other professional classifications as it
will provide the needed flexibility to be competitive
in the marketplace.
She noted that pharmacists dispensed an extremely high
number of doses of medication, but that they were not
able to attract or retain qualified pharmacists as
compared with other states. She notes that during the
following year, only one pharmacist was on contract,
requiring them to hire temporary pharmacists at over
double the salary paid to the contract employee."
3:04:19 PM
Ms. Clarke noted that eight pharmacy positions existed in
the Department of Health and Social Services: three at the
Pioneer Home, two at API, two in Medicaid, and one in
epidemiology and public health. She stated that those in
these positions were required to provide high-level
consultation services, meaning that risks were great if
these positions were not filled. She noted that in the
private sector, pharmacists were paid $55 to $65 per hour,
or up to $70 per hour for temporary employees. She proposed
that pharmacists belonged in the same exempt category as
psychiatrists, medical examiners, etc.
3:06:36 PM
LAURA LINK, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT
OF CORRECTIONS expressed that her department experienced
similar problems in recruiting and retaining qualified
pharmacists.
Responding to a question by Co-Chair Meyer, she stated that
pharmacists maintained similar educational requirements as
doctors.
3:08:26 PM
JERRY BURNETT, DIRECTOR OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF REVENUE spoke to the second part of the bill,
regarding corporate tax forensic auditors, moving them into
the exempt category.
ROBYNN WILSON, DIRECTOR OF TAX DIVISION, DEPARTMENT OF
REVENUE explained the function of auditors for the State of
Alaska. She discussed the method for determining the
taxable income of large groups of companies. She noted the
complexities involved in dealing with multi-state and
worldwide companies that did business in Alaska, as well as
the wide variety of taxpayers. She explained the goal of
determining value of property, sales, vessels, etc.
3:11:03 PM
Ms. Wilson noted her experience as an auditor hired by the
State of Alaska 11 years ago. She explained that at that
time, a number of their more experienced auditors came from
the internal revenue service. She noted that public
auditors made money by working long hours, as employees
gained experience. She pointed out that at that time the
state paid a wage competitive with the federal government.
3:12:18 PM
Ms. Wilson then explained how circumstances had changed in
several ways: 1) large public accounting firms had
condensed, decreasing supply of employees; 2) the manner of
business had changed, with a new focus on selling tax
structures; 3) accounting rules had developed out of recent
corporate upsets, increasing the wages for auditors in the
private sector. She pointed out that the state of Alaska
had maintained an even wage, while wages in the public and
federal sectors had increased. She stated that in recent
years, the number of state auditors decreased from ten to
two, a number too small to complete the workload.
3:14:00 PM
She noted that the department had tried several recruitment
methods for auditors. She discussed methods seeking
auditors from the University of Alaska that had as yet been
unsuccessful, and noted that even if it had succeeded; they
did not have the ability to train new auditors. She
concluded that salary was the problem in recruitment, and
proposed that the bill would help to attract experienced
auditors by establishing three exempt positions that could
compete with the private market.
3:15:43 PM
Responding to a question by Co-Chair Meyer, Ms. Wilson
noted the curiosity over whether new auditors might be
needed in developing the new PPD tax.
Responding to a further question, she noted that the
educational requirements for auditors would include a
Masters Degree or Certified Public Accountant certificate.
Representative Joule asked for clarification on the exempt
status. Mr. Burnett explained that an exempt position was
not covered by the personnel rules adopted by the Personnel
Board and not subject to the salary schedule of other
employees, enabling salaries to be paid by a different
method.
Representative Joule asked whether exempt positions were
only appointed, such as government officials. Mr. Burnett
explained that certain positions in Department of Revenue
were exempt, not due to political appointment, but rather to
skills sets.
3:18:41 PM
Representative Stoltze asked what aspect of the
classification status solved the salary problems.
Mr. Burnett clarified that the issue at hand was one of
salary, and not classification. He noted that they were
currently unable to pay beyond the classification limit of
range. He stated that the department was not able to pay
the level of salary expected by an experienced CPA, which
could exceed $100 thousand.
Responding to another question by Representative Stoltze,
Ms. Wilson noted that a salary survey focused on the Level
3, revealed a large salary disparity at the higher level,
higher than the disparity on levels 1 and 2. She explained
that even moving an auditor up by one or two ranges could
not provide a competitive salary within the market. She
concluded that this was the reason for the need for a
category.
3:21:30 PM
Representative Kerttula commented that exempt employees
were easier to terminate. She wondered if this would
present a problem with the coming oil taxes. She asked
whether it was possible to simply negotiate higher salaries
in the collective bargaining process.
Mr. Burnett conceded there might be some possibility of
negotiating a higher salary within classified service. He
pointed out that the terms of the negotiation would need to
be approved by the legislature, which he proposed would be
an inefficient method of hiring.
Representative Kertulla commented that it might be worth
that method considering the importance of the upcoming jobs.
Representative Kelly asked if it was standard for these
types of positions to be exempt in the private sector. Mr.
Burnet clarified that the types of jobs in the private
sector were structured differently. He surmised that
auditors might not be terminated for political reasons.
Representative Hawker noted his own experience during his
tenure at the Legislature of auditors being terminated for
political reasons.
3:24:26 PM
JIM DUNCAN, BUSINESS MANAGER, ALASKA STATE EMPLOYEES
ASSOCIATION testified. He concurred that both pharmacists
and auditors were difficult to recruit and required a higher
salary, but disagreed with creating an exempt position to
solve the problem, pointing out that other types of
positions were difficult to fill. He reminded the Committee
that the merit system of employment was established by the
Alaska State Constitution, with those elected or appointed
being exempt from the system. He expressed concern over
changing the system through this bill, and observed that the
issue at hand was salary rates and not policy.
3:27:43 PM
Mr. Duncan proposed that in exempt service there would be
political pressure. He gave the example of an auditor being
placed under pressure by a large corporation to slow an
audit by means of the exempt system. He further pointed out
that as the State considered changing its corporate tax
structure, it might not be wise timing to move those in
charge of collecting tax and auditing corporations into
exempt status where they might be subjected to political
pressure. He referred to recent occurrences in Department
of Natural Resources.
3:28:51 PM
Mr. Duncan commented that the classified system was not at
issue, but rather the pay structure within the system. He
reminded the Committee that the pay plan was mandatory,
subject to bargaining, enabling the Administration to change
the pay plan due to an inability to attract employees. He
stated that he was currently composing a letter to the
Administration proposing that ranges 28, 29 and 30 be added
to the pay scale in order to solve the problem. He
suggested that the classified service ought to afford the
same salary as in exempt service. He encouraged the
Administration to examine the ability for movement to other
pay scales through internal/external comparisons and market
based studies.
3:30:34 PM
He suggested that currently they were comparing
inappropriate job classes, and that other comparisons should
be made to perhaps create a new job class family for these
forensic auditors.
Mr. Duncan stated that he did not believe the bill would
serve the State's problems well and would erode the merit
system. He addressed the issue of pharmacists, noting that
federally funded positions were required to be subject to a
merit based pay system, and asked how these requirements
would be satisfied or if federal funding would be lost.
3:33:23 PM
Mr. Duncan also noted that pharmacists' positions were
established, and pointed out that our constitution prevented
repairing a contract by passing a statute. He pointed out
that the pharmacists were covered by the current collective
bargaining agreement. He proposed that the statute would
violate the contract provision. He stated that although the
Union did not wish to enter into a debate, they would
certainly demand enforcement of their current contract.
3:35:35 PM
Mr. Duncan expressed his confusion over the description for
the position of forensic tax auditor. He noted the theory
that a description would be written after hiring the type of
individual needed for the job and proposed that the process
should work in a different manner. He stated his belief
that a forensic tax auditor was a Revenue Auditor 4 and read
from the description of that position: "work with multiple
and complex accounting methods and systems, generate
significant revenue from the collection of taxes, apply a
wide diverse body of authorities dealing with apportionment
issues, determine correct unitary group, apportionable
income, be aware of state statute and federal regulations".
He concluded that the new positions duplicated a position,
which occurred within the classified service. He suggested
that a new pay plan be discussed with the Union, and that a
job description be developed, prior to a hiring process. In
summary, he stated his belief that the proposed process was
flawed, ignoring the mandatory bargaining agreement of the
state and perhaps other representing unions. Mr. Duncan
also surmised that the proposed legislation would place
these revenue auditors at will and subject to pressures by
those corporations they audit. He observed that while a new
revenue system was being considered, they were also
considering placing those overseeing the taxes in an "at
will" position subject to political pressure. He urged care
in considering this legislation.
3:38:49 PM
Representative Hawker asked whether Mr. Duncan had
discussed these issues with the Administration. Mr. Duncan
stated that the Union had not been briefed in advance by the
Administration, but that they now intended to follow up with
discussion. In response to a follow up by Representative
Hawker, Mr. Duncan expressed his belief in the possibility
for productive discussion and the implementation of an
improved pay plan. He emphasized that his proposal would
not open the discussion of changing pay plans for other
positions.
3:40:24 PM
Representative Kelly asked if such a circumstance had
occurred before. Mr. Duncan referred to a list of positions
that had been added to the exempt service. He noted however
that these jobs were formerly in commissions, for example
the Mental Health Trust, when employees were actually laid
off and then rehired into exempt service. He urged caution,
since there were other jobs where pay scales were not
adequate.
Representative Kelly asked if the system proposed was
flexible enough to allow for downward changes. Mr. Duncan
responded that although the union would not advocate for
lower pay, there had been determinations for positions to be
classified downward in the past.
3:42:54 PM
Clarifying an issue for Representative Kelly, Mr. Duncan
commented that the pharmacist shortage had been solved on a
temporary basis. Representative Kelly asked whether this
would be a method to carry forward until the next round of
bargaining to solve the current problem. Mr. Duncan
conceded that this was possible. He pointed out, however,
that since the proposed legislation would not take effect
until July, and a new pay period could be in place by that
time.
3:43:59 PM
Co-Chair Meyer expressed the intention to HOLD the bill in
Committee, and a desire to view Mr. Duncan's letter to the
Administration. He suggested that there be a representative
from the Administrative present at the next hearing of the
bill.
MILA COSGROVE, DIRECTOR, DIVISION OF PERSONNEL, DEPARTMENT
OF ADMINISTRATION clarified that there were three types of
employees: 1) Classified, fully subject to the merit
system, including the classifications and pay plan; 2)
Partially Exempt, not subject to all rules, but subject to
classification and pay plan; and 3) Exempt, which were not
subject to classification or pay plan, but still possibly
subject to collective bargaining, such as employees of the
Marine Highway System.
3:46:25 PM
Ms. Cosgrove noted that while some exempt positions were "at
will", such as Commissioners and high level policy makers,
other exempt employees were held at a higher bar for
dismissal from state service. She pointed out that these
state employees were treated fairly and equitably with
management rights and not easily dismissed.
3:47:26 PM
Ms. Cosgrove also emphasized that wages for pharmacists and
other such professionals were very volatile at the current
time. She suggested that these wages were well beyond what
could be negotiated under the current classification plan,
which relies upon the concept of internal alignment. She
explained that all job classes must bear some relationship
to one another. She followed that revenue auditor positions
would have to increase to remain in relation to the
increased wages for top-level auditors. She also pointed out
that the state was considering a market based pay plan, but
stressed that internal alignment would still apply. She
concluded that the market based pay plan would not solve the
problem of pharmacists and auditors at the highest level.
She expressed a desire to reply in more detail at the next
meeting.
3:49:15 PM
Co-Chair Meyer stated that HB 485 would be HELD in Committee
for further consideration.
ADJOURNMENT
The meeting was adjourned at 3:49 P.M.
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