Legislature(2003 - 2004)
04/16/2004 03:40 PM House L&C
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
April 16, 2004
3:40 p.m.
MEMBERS PRESENT
Representative Tom Anderson, Chair
Representative Carl Gatto, Vice Chair
Representative Nancy Dahlstrom
Representative Bob Lynn
Representative Norman Rokeberg
Representative Harry Crawford
Representative David Guttenberg
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
^CONFIRMATION HEARING(S)
^Occupational Safety and Health Review Board
Thor R. Christianson - Sitka, Alaska
- CONFIRMATION(S) ADVANCED
^Personnel Board
Laura Plenart - Ketchikan
- CONFIRMATION(S) ADVANCED
^State Board of Registration for Architects, Engineers, and Land
Surveyors
Clifford E. Baker - Kenai
Boyd J. Brownfield - Anchorage
Richard A. Hughes - Fairbanks
Kenneth D. Maynard - Anchorage
- CONFIRMATION(S) ADVANCED
^Alaska Labor Relations Agency
Gary P. Bader - Anchorage
- CONFIRMATION(S) HELD
Dennis S. Niedermeyer - Eagle River
- CONFIRMATION(S) ADVANCED
James S. Spalding - Anchorage
- CONFIRMATION(S) HELD
HOUSE BILL NO. 539
"An Act exempting a person who allows a student of the
University of Alaska to gain practical work experience with the
person while participating in a practicum from vicarious
liability as an employer, and exempting the student
participating in a practicum from the Alaska Wage and Hour Act
and workers' compensation coverage."
- MOVED CSHB 539(L&C) OUT OF COMMITTEE
HOUSE BILL NO. 545
"An Act relating to the extension under the State Procurement
Code of terms for leases for real estate and certain terms for
certain state contracts for goods and services; and providing
for an effective date."
- MOVED CSHB 545(L&C) OUT OF COMMITTEE
HOUSE BILL NO. 540
"An Act relating to workers' compensation insurance rates; and
providing for an effective date."
- SCHEDULED BUT NOT HEARD
HOUSE BILL NO. 148
"An Act instructing the State Board of Registration for
Architects, Engineers, and Land Surveyors to adopt minimum
technical standards relating to the practice of surveying."
- SCHEDULED BUT NOT HEARD
PREVIOUS COMMITTEE ACTION
BILL: HB 539
SHORT TITLE: UNIV. STUDENT PRACTICUM LIABILITY/WAGES
SPONSOR(S): JUDICIARY
03/18/04 (H) READ THE FIRST TIME - REFERRALS
03/18/04 (H) L&C, JUD
04/16/04 (H) L&C AT 3:15 PM CAPITOL 17
BILL: HB 545
SHORT TITLE: STATE REAL PROPERTY LEASE EXTENSIONS
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
03/25/04 (H) READ THE FIRST TIME - REFERRALS
03/25/04 (H) L&C, JUD
04/07/04 (H) L&C AT 3:15 PM CAPITOL 17
04/07/04 (H) <Bill Hearing Postponed to 4/14>
04/14/04 (H) L&C AT 3:15 PM CAPITOL 17
04/14/04 (H) Heard & Held
04/14/04 (H) MINUTE(L&C)
04/16/04 (H) L&C AT 3:15 PM CAPITOL 17
WITNESS REGISTER
LARAINE DERR, Boards & Commissions Director
Office of the Governor
Juneau, Alaska
POSITION STATEMENT: Explained the process of appointment to
boards and commissions.
JAMES S. SPALDING, Appointee
to the Alaska Labor Relations Agency
Anchorage, Alaska
POSITION STATEMENT: Testified as an appointee to the Alaska
Labor Relation Agency.
DENNIS NIEDERMEYER, Appointee
to the Alaska Labor Relations Agency
Eagle River, Alaska
POSITION STATEMENT: Testified as an appointee to the Alaska
Labor Relation Agency.
LAURA PLENART, Appointee
to the Personnel Board
Ketchikan, Alaska
POSITION STATEMENT: Testified as an appointee to the Personnel
Board.
JOHN GIUCHICI
International Brotherhood of Electrical Workers (IBEW);
Fairbanks Central Labor Council
Fairbanks, Alaska
POSITION STATEMENT: Testified in opposition to the confirmation
of Mr. Spalding to the Alaska Labor Relations Agency.
JAY QUAKENBUSH, President
Fairbanks Building Trades
Fairbanks, Alaska
POSITION STATEMENT: Indicated concern with the confirmation of
Mr. Spalding to the Alaska Labor Relations Agency.
TIM SHARP
Laborers Local 942
Fairbanks, Alaska
POSITION STATEMENT: Testified in opposition to the confirmation
of Mr. Spalding to the Alaska Labor Relations Agency.
RAY SMITH
Anchorage, Alaska
POSITION STATEMENT: As a former member of the Alaska Labor
relations Agency, offered to answer questions.
ROBERTA DEMOSKI
International Brotherhood of Electrical Workers (IBEW)
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to the confirmation
of Mr. Spalding to the Alaska Labor Relations Agency.
DON VALESKO, President
Anchorage Central Labor Council;
Business Manager, Alaska District Council of Laborers;
Business Manager, Public Employees Local 71
Anchorage, Alaska
POSITION STATEMENT: Expressed concern with the nomination of
Mr. Spalding to the Alaska Labor Relations Agency.
HEATH HILYARD, Staff
to Representative Lesil McGuire
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented CSHB 539, Version D, on behalf of
Representative McGuire, Chair of the House Judiciary Standing
Committee.
DON ETHERIDGE, Lobbyist
for the Alaska State American Federation of Labor and Congress
of Industrial Organizations (AFL-CIO)
Juneau, Alaska
POSITION STATEMENT: Expressed concerns with workers'
compensation under CSHB 539, Version D.
JAKE POOLE, Director
Tanana Valley Campus
University of Alaska - Fairbanks
Fairbanks, Alaska
POSITION STATEMENT: Testified on HB 539.
JAN GEHLER
University of Alaska - Anchorage
Anchorage, Alaska
POSITION STATEMENT: Testified on HB 539.
JAMO PARRISH
University of Alaska
(No address provided)
POSITION STATEMENT: During discussion of CSHB 539, Version D,
answered questions.
PETE KELLY
University of Alaska
(No address provided)
POSITION STATEMENT: During discussion of CSHB 539, Version D,
answered questions.
VERN JONES, Chief Procurement Officer
Division of General Services
Department of Administration
Juneau, Alaska
POSITION STATEMENT: Presented CSHB 545, Version D, on behalf of
the governor.
ACTION NARRATIVE
TAPE 04-43, SIDE A
Number 0001
CHAIR TOM ANDERSON called the House Labor and Commerce Standing
Committee meeting to order at 3:40 p.m. Representatives
Anderson, Dahlstrom, Lynn, Rokeberg, Crawford, and Guttenberg
were present at the call to order. Representatives Gatto
arrived as the meeting was in progress.
CONFIRMATION HEARING(S)
CHAIR ANDERSON announced that the first order of business would
be the confirmation hearings for the following boards:
Occupational Safety and Health Review Board; Personnel Board;
State Board of Registration for Architects, Engineers, and Land
Surveyors; and Alaska Labor Relations Agency. Chair Anderson
said that he would first take public testimony on the
appointees.
Number 0173
LARAINE DERR, Boards & Commissions Director, Office of the
Governor, explained that ordinarily a vacancy list is published
on the Internet. Therefore, someone interested in serving would
start there and submit an application. The application is filed
in the appropriate board or commission. When a vacancy arises,
the applications are reviewed in order to ensure that the
applicants are qualified, then a recommendation is made to the
governor. The governor then makes the appointment.
REPRESENTATIVE LYNN inquired as to the number of applications
for the positions being considered today.
MR. DERR answered that there were seven applicants for the
Alaska Labor Relations Agency and only one or two for the
Personnel Board. Mr. Derr confirmed that the seven applicants
for the Alaska Labor Relations Agency were reviewed and the
governor made a decision among the seven.
Number 0360
REPRESENTATIVE ROKEBERG recalled that the Alaska Labor Relations
Agency has seats designated for specific [groups in the field].
He pointed out that e-mails in the committee packet indicate
that the seat to which Mr. James S. Spalding is being appointed
is a "labor seat". Representative Rokeberg asked if the statute
requires that the individuals on this agency be from a mix of
backgrounds.
MR. DERR confirmed that the statute specifies that [the Alaska
Labor Relations Agency] should consist of representatives from
labor, two representatives of management, and two public seats.
Furthermore, the statute specifies that the individuals must
have a background in the specific area for which they are being
appointed. In further response to Representative Rokeberg, Mr.
Derr informed the committee that there was one opening in each
of the three areas of the agency: labor, management, and the
public seat. He further informed the committee that Mr. Gary P.
Bader is recommended for the public seat; Mr. Dennis S.
Niedermeyer is recommended for the management seat; and Mr.
Spalding is recommended for the labor seat.
REPRESENTATIVE ROKEBERG, turning to Mr. Spalding's background,
asked if a background in human resources qualifies an individual
to represent labor.
MR. DERR answered that human resources personnel deal with labor
issues quite a bit. Furthermore, Mr. Spalding was a labor
representative in the past.
Number 0529
REPRESENTATIVE CRAWFORD inquired as to the duties of those
appointed to the Personnel Board.
MR. DERR explained that the Personnel Board reviews problems
that are forwarded to it and essentially deal with management
and labor issues. In further response to Representative
Crawford, Mr. Derr related that for the Personnel Board
individuals with "a good head on their shoulders and someone
that ... has some experience dealing with people" are sought.
The Personnel Board has no designated seats.
Number 0628
CHAIR ANDERSON requested that the committee forward the names of
the following appointees to the following boards: Mr. Thor R.
Christianson to the Occupational Safety and Health Review Board;
and Mr. Clifford E. Baker, Mr. Boyd J. Brownfield, Mr. Richard
A. Hughes, and Mr. Kenneth D. Maynard to the State Board of
Registration for Architects, Engineers, and Land Surveyors.
REPRESENTATIVE ROKEBERG related that he is well acquainted with
Mr. Maynard, who he believes will be an excellent appointee.
CHAIR ANDERSON concurred, and noted that he and Mr. Maynard
served on the zoning board of examiners and appeals in the
Municipality of Anchorage. Upon hearing no objection, Chair
Anderson announced that the names of Mr. Christianson, Mr.
Baker, Mr. Brownfield, Mr. Hughes, and Mr. Maynard will be
forwarded to the full body for consideration.
Number 0696
JAMES S. SPALDING, Appointee to the Alaska Labor Relations
Agency, informed the committee that he has lived in Alaska since
1968 when he was stationed here. He related that during his
time in Alaska he has spent most of his time in the field of
human resources and labor relations, in both the public and
private sectors. He explained that although he has primarily
worked in management, he has some years of experience working
for a labor organization, Alaska Public Employees Association
(APEA). Mr. Spalding said that he believes he has a very good
understanding of labor dynamics and labor laws. Furthermore, he
opined that most people who have worked with him would agree
that he presents a fair and objective picture and treats people
in a fair and consistent manner. He recalled being before the
Alaska Labor Relations Agency when he worked as the human
resources manager for the City of Unalaska. Mr. Spalding
related that he is honored to be selected for this position and
felt it appropriate that he give something back to the state.
CHAIR ANDERSON informed the committee that Mr. Gary P. Bader,
Appointee to the Alaska Labor Relations Agency, is out of state
and has yet to submit his resume. Therefore, his name will be
held until all the information necessary is obtained.
Number 0805
REPRESENTATIVE DAHLSTROM inquired as to Mr. Spalding's current
position with Matanuska Electric Association (MEA).
MR. SPALDING answered that he is the director of human resources
and corporate affairs. He confirmed that in the aforementioned
position he represents management and does so when in
arbitration.
REPRESENTATIVE DAHLSTROM asked if it's necessary for Mr.
Spalding to take management's viewpoint in those arbitrations.
MR. SPALDING answered, "Well, generally speaking, yes." For
example, when interpreting contract language, it's his job to
defend the way in which [management] interprets the contract.
In further response to Representative Dahlstrom, Mr. Spalding
confirmed that he reports directly to management.
REPRESENTATIVE DAHLSTROM asked if in Mr. Spalding's position he
ever represents labor.
MR. SPALDING explained that there are times when he acts as an
advocate for individual employee issues. For instance, he might
help an individual in the case of a benefit problem. "Even
times when an employees might have issues that I think that
they're understanding of the contract may be correct and it's up
to me to convince my peers and my superiors that their [the
employee's] view is correct. But in a formal sense, I am a
representative of management," he related. In further response
to Representative Dahlstrom, Mr. Spalding confirmed that he
represents management in unfair labor practices or labor
disputes.
REPRESENTATIVE DAHLSTROM inquired as to whose side Mr. Spalding
is on during collective bargaining negotiations.
MR. SPALDING replied that he would sit on the management side.
In further response to Representative Dahlstrom, Mr. Spalding
confirmed that during his tenure with MEA and the City of
Unalaska he hasn't represented labor.
Number 0963
REPRESENTATIVE DAHLSTROM informed the committee that the
correspondence she has received in opposition to Mr. Spalding's
confirmation have nothing to do with his character or quality of
work. The concern has been in regard to the view that there is
a lack of balance with regard to the labor side [of the Alaska
Labor Relations Agency].
REPRESENTATIVE LYNN echoed Representative Dahlstrom's comments.
He noted his concern that Mr. Spalding would represent the
management side rather than the labor side on this agency.
REPRESENTATIVE GUTTENBERG asked if Mr. Spalding was asked to
apply for this position.
MR. SPALDING replied yes. In further response to Representative
Guttenberg, Mr. Spalding related that at the time he applied, it
wasn't clear to him that there were designated seats. Mr.
Spalding said that he didn't believe the application related for
which seat it would be, rather it was simply an application for
the agency. Given his background in labor, Mr. Spalding felt
that he [has the qualifications].
REPRESENTATIVE GUTTENBERG inquired as to why Mr. Spalding,
coming from a background in management, would believe he is fit
for a seat representing the other side.
MR. SPALDING said that he isn't sure that the seat is designated
for the labor side. Furthermore, the question of fairness in a
quasi-judicial role isn't limited to one's position, but rather
being fair, paying attention to the law, and being consistent in
decisions and rulings isn't unique to either side, he opined.
Mr. Spalding said that he has amassed quite a bit of knowledge
in this area over the last 30 years.
REPRESENTATIVE GUTTENBERG inquired as to Mr. Spalding's view as
to why the statute has different designations for positions. He
also inquired as to why Mr. Spalding feels that a person could
be on many sides of an issue and be able to represent different
aspects of the issue.
MR. SPALDING related that he has spent time on both sides of the
table, and therefore has an appreciation for that. The
aforementioned, he opined, provides some level of qualification.
Number 1210
DENNIS NIEDERMEYER, Appointee to the Alaska Labor Relations
Agency, offered to answer any questions or concerns. In
response to Representative Rokeberg, Mr. Niedermeyer said that
it's his understanding that he is to fill a seat that is
statutorily required to have a background in management. Mr.
Niedermeyer informed the committee that for the last 21 years he
has worked for the Lake and Peninsula School District as the
district business manager and as such has been actively involved
in the management of the organization.
Number 1270
LAURA PLENART, Personnel Board, informed the committee that she
has lived in Alaska since 1990 and has worked in management with
McDonalds for the last 20 years. She noted that she has dealt
with all different levels of employees. Her belief that she
could contribute is why she applied when asked to serve.
REPRESENTATIVE GUTTENBERG asked if McDonalds provides any ethics
training and diversity training.
MS. PLENART replied yes, and related that she hasn't had to deal
with many problems. She further related that currently she
works with a franchisee in a one-store situation.
REPRESENTATIVE GATTO observed that Ms. Plenart went from crew to
manager in seven years. He asked if one could expect that if he
or she is a "go getter".
MS. PLENART said that she didn't believe it to be extraordinary
but rather that anyone who wanted to succeed could do so.
CHAIR ANDERSON now turned to the public testimony on these
appointees.
Number 1387
JOHN GIUCHICI, International Brotherhood of Electrical Workers
(IBEW) and the Fairbanks Central Labor Council, related his
strong opposition to the confirmation of Mr. Spalding to the
labor seat on the Alaska Labor Relations Agency. Mr. Giuchici
informed the committee that for quite a few years Mr. Brickely,
Golden Valley Electric Association (GVEA), served on the
employer seat for the Alaska Labor Relations Agency. For that
seat to be filled by a human resources person isn't acceptable,
he opined. In response to Representative Guttenberg, Mr.
Giuchici stated that he hasn't negotiated with MEA.
Number 1461
JAY QUAKENBUSH, President, Fairbanks Building Trades, said he
believes the seat [to which Mr. Spalding is being appointed] was
placed in statute as a labor seat to provide balance on the
agency. Mr. Quakenbush remarked that he wished someone in labor
in Fairbanks had been called to apply.
TIM SHARP, Laborers Local 942, related his strong opposition to
the appointment of Mr. Spalding to the Alaska Labor Relations
Agency, which he characterized as the governor attempting to
manipulate the Alaska Labor Relations Agency by stacking it with
essentially three management seats. The intent of a tri-parte
board is one of balance. Mr. Sharp said:
Apparently under this administration balance threatens
some of our leaders in Juneau. The effort goes well
beyond partisanship and even the hint of fairness. If
the agenda was simple partisanship, I could deal with
that. Looking for labor people with an "R" attached
to their name, simply come to a Ted Stevens' event or
Don Young fundraiser and you'll find hundreds of them.
Even look to some of the unions here that have
endorsed Governor Murkowski, again, many qualified
people that would've been happy to serve. I don't
know Mr. Spalding and I don't need to know him, he
could well be a very good man. And that, of course,
is not the point here today as everyone knows. He
sits on the other side of the table; he's not from
labor. Let workers continue to have at least one
voice in the process that was designed to give them
fair elections and contracts. This move also goes
well beyond the (indisc.); it's insulting to the
people that represent workers as well as dangerous for
the workers who happen to be appealing to this board
for fairness in their decision-making. ... It also
further lends to the mistrust of the system in
general. I guess at some point you have to ask who's
running the circus there sometimes. Candidates ask me
why some of labor tends to support Democrats instead
of Republicans. These are ... the very types of moves
that the folks in the majority promised us they would
never support, when talking to organized labor during
the election process. These are also the very type of
thing the minority talks about that will happen under
a Republican administration. Is it the handiwork of
the administration or the Republican party or are your
strategists so shortsighted or just arrogant? If you
allow this to happen, what do you think will be thrown
up in your faces for you to remember the next time
when you come to us for support? Please put him [Mr.
Spalding] back into the management slot where he
belongs, we could support that.
REPRESENTATIVE LYNN said that no one part of any group should be
painted with such a broad brush.
MR. DERR informed the committee that Mr. Spalding is a
registered Democrat.
Number 1670
RAY SMITH informed the committee that he is a former member of
the Alaska Labor Relations Agency on which he served for six
years. He offered to answer any questions.
ROBERTA DEMOSKI, IBEW, informed the committee that she knows Mr.
Spalding personally as she works with him on a daily basis and
has sat across the table from him in negotiations, arbitration,
unfair labor practices, federal litigation, and state
litigation. Unequivocally, Mr. Spalding is a very competent and
knowledgeable advocate for management, and therein lays the
problem. For Mr. Spalding to be appointed to the labor seat
violates the spirit and the intent of the statute, she opined.
Ms. Demoski informed the committee that she has served on the
Alaska Labor Relations Agency and found it invaluable that each
member has to listen to the perspective brought to the table by
the other members. This isn't about being fair and unbiased,
rather it's about being forced to listen to the various
perspectives of the other members. Therefore, Ms. Demoski
strongly opposed the appointment of Mr. Spalding to the Alaska
Labor Relations Agency.
Number 1778
DON VALESKO, President, Anchorage Central Labor Council;
Business Manager, Alaska District Council of Laborers; Business
Manager, Public Employees Local 71; addressed the seat to which
Mr. Spalding is being appointed. He said that the issue isn't
about the individual, but rather providing a level playing field
for issues that come before the agency. Mr. Valesko related
that after 26 years of working on the labor side, it would be
difficult for him to really see management's perspective. Mr.
Valesko expressed concern with the Alaska Labor Relations Agency
because it seems that three management representatives are being
strategically placed on it. Therefore, Mr. Valesko requested
that the committee seriously consider Mr. Spalding's name.
MR. DERR turned to the statute concerning the makeup of the
Alaska Labor Relations Agency. The statute specifies that two
seats of this agency must have a background in management, two
seats must have a background in labor, and two seats must be
from the general public. The applications and recommendations
were considered and the three people up for confirmation filled
the [qualifications] and were sorted in regard to the open
seats. From that the people were chosen who would do the best
job.
Number 1939
CHAIR ANDERSON commented that Mr. Spalding qualifies in terms of
competence and is a nice person. With regard to testimony
regarding the solicitation for boards and commissions, Chair
Anderson said that he wasn't aware that such occurs. He assumed
that there are web sites and information [available regarding
applying to be a member of a board or commission]. Therefore,
he felt it was a bit disingenuous to suggest that the governor
would contact folks.
MR. DERR interjected that there are times when folks are
contacted, such a when there aren't applicants. In further
response to Chair Anderson, Mr. Derr said that no one from labor
solicited membership.
CHAIR ANDERSON surmised that Mr. Derr believes "it's the
governor's prerogative ... as long as it's within the statutory
reference, anyway."
MR. DERR agreed.
CHAIR ANDERSON opined that from the testimony today, including
that of Mr. Spalding, it seems that Mr. Spalding brings more of
a management perspective.
MR. DERR said that many things have to be balanced, including
the political affiliation. He reiterated that Mr. Spalding is a
Democrat. As with any appointment, a judgment call is made.
CHAIR ANDERSON acknowledged that it's the prerogative of the
governor to make nominations, but the legislature should analyze
and balance [those nominations]. In this case, it seems that
the Alaska Labor Relations Agency is a bit too far toward the
management side. If other members agree, then Mr. Spalding's
name will be held.
REPRESENTATIVE ROKEBERG stated a point of order, and related
that it isn't the committee's duty to hold this nominee.
CHAIR ANDERSON remarked that he didn't recall Representative
Rokeberg objecting when the committee held the name of the
marine pilot. He said there is precedence with the committee
for holding an appointee for further evaluation.
Number 2085
REPRESENTATIVE GUTTENBERG related his understanding that Mr.
Derr didn't view the statutory language referring to a
representative of labor to necessarily refer to organized labor.
MR. DERR agreed, and reiterated that the statute specifies that
the appointee have a labor background.
REPRESENTATIVE GUTTENBERG pointed out that each [appointee] to
the Alaska Labor Relations Agency being considered today is a
member of labor management. In the same context, Representative
Guttenberg surmised that Mr. Derr would consider them all
eligible for the management position.
MR. DERR explained that it would depend upon who applied and his
or her background.
REPRESENTATIVE GUTTENBERG said all but one [of the appointees to
the Alaska Labor Relations Agency] are management.
Theoretically, all members of organized labor holding an
administrative position would be considered [as eligible for a
management position]. However, he suggested such would be
viewed as folly in most situations.
Number 2148
MR. DERR, in response to Representative Gatto, specified that
the appointees to the Alaska Labor Relations Agency include one
for each designation: public, management, and labor.
REPRESENTATIVE GATTO opined that folks are picking on Mr.
Spalding, although it could be the case for any of the
appointees. Therefore, he questioned why there has been so much
testimony on one individual when it could've been directed at
any of the others.
MR. DERR said that most of the time [his recommendations] are
based on the applications and references. The references for
Mr. Spalding were excellent. He restated that sometimes it
comes down to a judgment call.
CHAIR ANDERSON reminded everyone that there is a public process
during which the public is able to comment on these
appointments, which is what occurred here.
REPRESENTATIVE ROKEBERG stated that the legislature and the
committee has a duty to interpret its own statutes, which is
what is being done here.
REPRESENTATIVE LYNN clarified that he isn't criticizing Mr.
Spalding, but rather the nomination.
REPRESENTATIVE DAHLSTROM said that the communications she has
received on Mr. Spalding's appointment have been in regard to
whether his appointment falls within the bounds of the statute.
Number 2269
REPRESENTATIVE CRAWFORD opined that if Mr. Spalding had been
nominated for the management seat, then there wouldn't have been
a problem. He likened it to the perception of himself in that
he has been on the management side at some points during his
career, although he has mainly been on the labor side. He
surmised that anyone who knew him would object to him receiving
a management [designated] seat. "I'm labor, this ... man ...
he's management and I think it's clear that this ... is a labor
chair and the man's management ... it's just that it's not right
to put him in a labor chair," he said.
Number 2310
CHAIR ANDERSON asked if there is any objection to forwarding the
names of the following appointees to the following boards: Mr.
Niedermeyer, Alaska Labor Relations Agency; Mr. Plenart,
Personnel Board. There being no objection, those names will be
forwarded to the full body for consideration.
CHAIR ANDERSON asked if there is any objection to forwarding the
name of Mr. Spalding, Alaska Labor Relations Agency, to the full
body for consideration.
REPRESENTATIVE LYNN objected.
CHAIR ANDERSON announced that he would hold the name of Mr.
Spalding.
REPRESENTATIVE ROKEBERG indicated that it would be appropriate
to hold the name of an appointee for the purpose of further
investigation. However, it's not proper to object to the
nomination and not forward the name.
CHAIR ANDERSON specified that Mr. Spalding's name is being held
for further investigation.
REPRESENTATIVE ROKEBERG clarified that it's not the committee's
purpose to say whether it approves or disapproves of the
nomination, that's the purpose of the joint session of the
legislature. He acknowledged that one can verbalize that
there's a problem with the nomination in terms of the statutory
construction, although that doesn't preclude the committee from
forwarding the name.
REPRESENTATIVE GATTO stated a point of order, and asked if it's
the committee's duty to determine whether an appointee qualifies
or to determine whether or not "we like him."
CHAIR ANDERSON specified that the committee is charged with
determining whether an appointee qualifies. Chair Anderson
noted that the Senate Labor and Commerce Standing Committee has
held Mr. Spalding's name as well.
The committee took an at-ease from 4:26 p.m. to 4:30 p.m.
HB 539-UNIV. STUDENT PRACTICUM LIABILITY/WAGES
TAPE 04-43, SIDE B
CHAIR ANDERSON announced that the next order of business would
be HOUSE BILL NO. 539, "An Act exempting a person who allows a
student of the University of Alaska to gain practical work
experience with the person while participating in a practicum
from vicarious liability as an employer, and exempting the
student participating in a practicum from the Alaska Wage and
Hour Act and workers' compensation coverage."
Number 2316
REPRESENTATIVE LYNN moved to adopt CSHB 539, Version 23-
LS1837\D, Craver, 4/16/04, as the working document. There being
no objection, Version D was before the committee.
HEATH HILYARD, Staff to Representative Lesil McGuire, Alaska
State Legislature, informed the committee that there are two
substantial differences between Version A and Version D. In
Section 1 of Version D, lines 11-13 were inserted in order to
clarify that university interns aren't paid for their services.
With regard to workers' compensation claims, the language on
page 4, line 5-31, of Version A was deleted per conversations
with the university. Mr. Hilyard related that in general this
legislation limits vicarious liability for the employers of
university practicum students. The university feels the
aforementioned is necessary. Furthermore, Representative
McGuire decided to sponsor this legislation on behalf of the
House Judiciary Standing Committee because university practicum
programs are valuable in gaining on-the-job work experience.
The university practicum programs are particularly [useful] in
the construction- and health-related industries. This
legislation clarifies that the employer of these students is
responsible for its liability, the university for its, and the
intern is responsible for any liability as a result of the
practicum. There is no desire to extend the liability for the
intern's actions to the employer or the university, which this
legislation clarifies.
Number 2179
DON ETHERIDGE, Lobbyist for the Alaska State American Federation
of Labor and Congress of Industrial Organizations (AFL-CIO),
related that he has been working with the university on this
legislation. He explained that both are trying to determine the
best way to exempt the student from being allowed the minimum
wage. A concern regarding workers' compensation remains. The
concern is in regard to what happens if a student intern is hurt
on the job because when exempted from the minimum wage, there is
no employer-employee relationship. Therefore, he didn't believe
the student intern would be covered under workers' compensation.
REPRESENTATIVE CRAWFORD inquired as to what would happen if a
student intern was injured due to negligence.
MR. ETHERIDGE related his understanding that if a student intern
is injured due to negligence on behalf of the employer, the
student intern would be allowed to sue the employer. However,
if the injury is due to the student intern's own negligence the
student intern couldn't bring forth a lawsuit.
REPRESENTATIVE GATTO inquired as to where the burden of proof
lays in the situation mentioned by Mr. Etheridge.
MR. ETHERIDGE said that he didn't know and deferred to an
attorney.
Number 2067
JAKE POOLE, Director, Tanana Valley Campus, University of Alaska
- Fairbanks, related that a number of programs at the Tanana
Valley Campus require students to participate in practicum
programs as part of the degree program. The Tanana Valley
Campus averages about 50-75 students each semester that look to
complete such training. The practicum programs range from the
allied health arena to early childhood [development], culinary
arts, and to the trades. The key point is that this legislation
will allow the students to be placed in a practicum setting that
is the best for the students while ensuring that the practicum
providers and students are in the best position with regard to
workers' compensation and any liability.
REPRESENTATIVE GUTTENBERG noted that some legislative offices
have university interns, who receive a stipend to cover some of
their costs and expenses while in Juneau. He asked if other
programs pay stipends.
MR. POOLE specified that those individuals involved in a
practicum aren't paid and students in a paid position are in an
internship. In further response to Representative Guttenberg,
Mr. Poole related that at the Tanana Valley Campus there are
practicum programs for dental assisting, medical assisting,
phlebotomy, culinary arts, early childhood [development], some
trades, and the paralegal program.
Number 1934
JAN GEHLER, University of Alaska - Anchorage, said she would
like to echo Mr. Poole's comments. She highlighted that the
employer partners are critical to student success. She related
that there are practicum programs established for the allied
health programs, radiographic technology, a series of medical
and clinical laboratory instruction, dental assisting, and
medical assisting. There are also [practicum programs] for
transportation power or automotive and diesel technology
programs as well as the culinary arts, occupational safety and
health technology, and a suite of aviation programs. Ms. Gehler
mentioned that [the university] does distinguish between
internships of which some are paid and some are not and
practicums, which are usually driven by some program
accreditation standards that require no pay be received. She
explained that those students in a field-based learning
experience have a structured program of study that's overseen by
a faculty member and collaborated with someone on site. Up to
this point, developing the memorandum of agreements (MOAs) have
been fairly straightforward. However, in this era it's a fairly
laborious process negotiating with risk management personnel
from employers, who are understandably concerned about their
exposures. Ms. Gehler opined that this legislation will go a
long way to help the faculty and support staff return to the
business of instruction rather than negotiating language in
MOAs. She characterized the legislation as a step in the right
direction.
REPRESENTATIVE ROKEBERG said that he didn't see the workers'
compensation language in Version D. He asked if the university
is in agreement with the exclusion of workers' compensation
requirements.
Number 1779
JAMO PARRISH, University of Alaska, informed the committee that
the legislation was originally drafted to cover vicarious
liability, minimum wage, and workers' compensation. However,
there was an objection to workers' compensation by organized
labor, AFL-CIO. He expressed hope that practicum sites would be
attracted without the workers' compensation provision.
REPRESENTATIVE ROKEBERG asked if traditionally the practicum
programs provide workers' compensation.
MR. PARRISH related that among the complaints from practicum
sites is that they would be responsible for workers'
compensation. However, under Alaska law it's not clear how it
would work. Therefore, Mr. Parrish would let it "ride" on the
basis of whatever the court would decide. He related that there
are cases outside of Alaska that have held that the benefit the
student receives from the practicum site and the education is
sufficient consideration for an employment relationship such
that workers' compensation would apply. The aforementioned was
of concern for the practicum sites as well as [minimum wage] and
vicarious liability. Therefore, the hope is that addressing two
of the three issues would allow [the legislation] to go forward.
REPRESENTATIVE ROKEBERG expressed concern because it sounds as
if the university wants to gamble and allow those employers
participating in the practicum program to make their own
judgment and allow the courts to make a decision. However,
Representative Rokeberg viewed this as a matter of public
policy. Representative Rokeberg opined that the students should
either have workers' compensation or not have it. He predicted
that he would probably side with the university because he
believes [requiring workers' compensation] may be a deterrent to
the successful continuation of these practicum programs if
additional burdens are placed on the employers. However, the
participants should have coverage if injured, he said.
REPRESENTATIVE GUTTENBERG indicated concern with placing a
student in a vulnerable situation in which the remedy after
being injured is to go to court.
Number 1635
REPRESENTATIVE ROKEBERG reminded the committee that the growing
workers' compensation claims are accelerating health care costs
and health care insurance costs. He suggested that perhaps one
way to address this is to require that a student in one of these
programs have basic health care coverage, which would be the
primary coverage for any injury.
REPRESENTATIVE GATTO posed a scenario in which a student is
injured and the student applies for his or her insurance, which
says that the claim sounds like a workers' compensation claim.
In such a situation the student would be abandoned unless he or
she obtained representation, which is often difficult.
Representative Gatto inquired as to how that would be resolved.
REPRESENTATIVE ROKEBERG suggested that the legislature make the
policy.
MR. PARRISH said that he would agree with everything related to
protecting the student if it didn't result in losing practicum
sites. He opined that the university is trying to get good jobs
for Alaskans. To the extent that the university is impeded from
good practicum sites, the students aren't going to be educated.
Mr. Parrish highlighted that the difference between the student
and the employee is that the student isn't doing the job for the
employer, and thus it's not fair to saddle the practicum sites
with workers' compensation. Although it would be best to
resolve the issue via statute, for the university it would be
best to eliminate workers' compensation. He noted that although
the university has some health insurance that it offers students
in most practicums, it's not very generous insurance.
Furthermore, students make the decision to attend school and
choose programs that require practicums and thus students can
make the decision regarding whether they want to learn. Mr.
Parrish concluded by saying that he believes the student should
be provided the opportunity, and the responsibility should lay
with each individual for his or her own fault.
REPRESENTATIVE LYNN related his understanding from Mr. Parrish
that the intern doesn't provide any benefit to the site. If
that's the case, he questioned why anyone would host an intern
program.
MR. PARRISH indicated that there is a misunderstanding between a
practicum student and an intern. Practicum students aren't
doing work like interns do and practicum students aren't paid as
interns usually are. Basically, practicum students follow the
worker and occasionally are involved in the tasks of the worker,
but only if the worker is with the practicum student. The
benefit these [host] sites receive is by contributing to the
education of people such that they can work in the industry.
Students aren't sent out to advance the labor interests of
employers, rather they are sent out to learn. The
aforementioned is carefully monitored.
Number 1337
REPRESENTATIVE CRAWFORD related that his wife did a practicum
when she was obtaining her degree as a mental health counselor.
Sometimes counselors are injured by their patients. Had his
wife been injured during the practicum, it seems that her
recourse would've been through workers' compensation with either
the university or the clinic. Representative Crawford expressed
the need for there to be a policy regarding who is actually
liable.
MR. PARRISH opined, "I almost think we'd be better off without a
bill than imposing workers' comp liability on the practicum
site." He predicted that imposing workers' compensation
liability on the practicum sites would damage the program. He
noted the possibility that "they" could obtain workers'
compensation.
CHAIR ANDERSON, noting that he is also the chair of the Labor &
Workforce Development Committee for National Conference of State
Legislatures, said that he understands the concerns on both
sides. He added that he isn't particularly concerned. Chair
Anderson related his understanding that the next committee of
referral for HB 539 is the House Judiciary Standing Committee.
He further related that he wanted to forward this legislation,
although he didn't want to kill the legislation with a vote.
REPRESENTATIVE ROKEBERG said that he shared Chair Anderson's
concerns. He noted that the original HB 539 included the
workers' compensation exclusion language, which he preferred so
that the university could continue to operate. Representative
Rokeberg related that although he is willing to forward the
legislation, he suggested that for this legislation to have any
success it would need to encompass [the workers' compensation
exclusion language] in the next committee of referral. Although
he indicated that this committee should do the aforementioned,
time is getting short. He offered to make a conceptual
amendment. Representative Rokeberg said that his intention
would be to statutorily allow the university to have a practicum
and allow the employers to not have workers' compensation
coverage on those practicum students.
Number 1118
PETE KELLY, University of Alaska, said that he believes adding
Section 3 in HB 539 to Version D would be Representative
Rokeberg's conceptual amendment.
REPRESENTATIVE GUTTENBERG said he wasn't sure of the effect of
such a conceptual amendment. Therefore, he indicated his
preference for [forwarding] the legislation without the
conceptual amendment. He pointed out that students in practicum
situations are often in high risk situations and should be
afforded some coverage whether from the [host] employer or the
practicum [program] itself.
REPRESENTATIVE ROKEBERG questioned why an employer would host a
practicum student, if the employer would face an increased rate
[in workers' compensation].
CHAIR ANDERSON inquired as to Mr. Kelly's preference in regard
to forwarding the legislation to the next committee of referral
or adopting the conceptual amendment.
MR. KELLY related that the university would prefer the
[conceptual] amendment as described earlier. However,
discussions had led to [Section 3 of the original legislation]
being eliminated in Version D. He said he would rather return
to discussions with organized labor before reinserting [Section
3 of the original legislation]. Mr. Kelly also agreed with
Representative Rokeberg's earlier mention regarding time growing
short. Mr. Kelly committed to the committee that he would get
back with it regarding the language and if it's a problem, the
university will have to go without the legislation this year.
Number 0950
REPRESENTATIVE DAHLSTROM moved to report CSHB 539, Version 23-
LS1837\D, Craver, 4/16/04, out of committee with individual
recommendations and the accompanying fiscal notes. There being
no objection, CSHB 539(L&C) was reported from the House Labor
and Commerce Standing Committee.
HB 545-STATE REAL PROPERTY LEASE EXTENSIONS
CHAIR ANDERSON announced that the final order of business would
be HOUSE BILL NO. 545, "An Act relating to the extension under
the State Procurement Code of terms for leases for real estate
and certain terms for certain state contracts for goods and
services; and providing for an effective date."
Number 0890
VERN JONES, Chief Procurement Officer, Division of General
Services, Department of Administration, reminded the committee
that at the last hearing Representative Rokeberg mentioned some
concerns, which have been addressed [in the proposed committee
substitute (CS)]. The first concern was the vague nature of
establishing a market rate for which to base a reduction in
rent. The aforementioned concern is addressed on page 1, lines
10-12, which read: "The market rental value must be established
by a real estate broker's opinion of the rental value or by an
appraisal of the rental value." With regard to the section
addressing the extension of contracts for goods or services,
that section has been removed [in the proposed CS] and its
title. Therefore, the proposed CS deals strictly with
extensions of real estate or office space leases.
Number 0815
REPRESENTATIVE ROKEBERG moved to adopt CSHB 545, Version 23-
LSGH2150\D, Bannister, 4/15/04, as the working document. There
being no objection, Version D was before the committee.
REPRESENTATIVE ROKEBERG noted that [Version D] no longer
includes the "brother-in-law section". He also noted that
Version D references the court system on page 1, line 7, which
the drafter indicated may be a separation of powers issue
[because] the legislature has granted to the judicial branch the
ability to have its own procurement code. He related that he
has checked with the judicial branch, which has related its
support of this legislation and lack of concern with regard to
the possible separation of powers issue.
REPRESENTATIVE ROKEBERG said he has only one remaining concern,
which is the [cost savings] of 5 percent below the market rental
value of the real property. The aforementioned is the trigger
of the statute. Representative Rokeberg recalled that the
original statute allows an extension [when there are cost
savings of] 10 percent and [the lessor] agrees to make
modifications to comply with the Americans with Disabilities Act
of 1990 (ADA) or [when there are cost savings of] 15 percent
below the current rate in the lease without ADA. He explained
that the change [encompassed in Version D] reflects
fundamentally higher market values and the prevailing rates at
the time, and therefore has universal applicability. By going
to the 5 percent at a higher barrier, it seems that it would be
appropriate to have a 10 percent [barrier] in order to prevent
potential mischief.
CHAIR ANDERSON passed the gavel to Vice Chair Gatto.
MR. JONES agreed, but noted that leases that aren't ADA
compliant would be an exception. Therefore, it would generally
be [a cost savings of] 15 percent, which he viewed as too high.
He opined the importance of the rate being tied to a reduction
of the market value rather than the existing rates paid. It was
thought that 5 percent is reasonable. "But that in itself,
isn't as critical as tying it to the market rate," he stated.
REPRESENTATIVE ROKEBERG agreed. He posed a situation, what he
indicated to be a typical situation, in which there is a $.02
per square foot rental rate. In such a situation, 5 percent
would only be $.10 per square foot. Representative Rokeberg
asked if Mr. Jones felt that 10 percent along with the market
rate barrier would be workable.
MR. JONES responded that 10 percent would be better than the
current statute.
REPRESENTATIVE ROKEBERG pointed out that this would allow the
department to move forward with a sole source type contract, and
he expressed the need to avoid the appearance of any
noncompetitive type of acquisition or continuation of lease.
MR. JONES said that 10 percent seems fully reasonable and
achievable.
Number 0465
REPRESENTATIVE ROKEBERG moved that the committee adopt the
following amendment:
Page 1, line 9;
Delete "five"
Insert "ten"
REPRESENTATIVE CRAWFORD objected for discussion purposes.
Representative Crawford said that if the market continues as it
is, it would seem to make sense. However, if the market becomes
"over built" and demand falls to the level of the 1980s, he
questioned what would happen with a 10-year lease. He asked if
in such a situation, any negotiation could happen [when the
market changes].
REPRESENTATIVE ROKEBERG pointed out that the legislation
specifies "up to ten years", and therefore one could have a one-
year lease and this would still work. He explained:
What we're doing here is going away from looking at
the ... baseline number, currently is the current
lease value. What we're doing is changing to the
market value. So, that would allow you to go into the
market .... For example, ... if you were renting
space for $1.00 a foot and the market was now $2.00 a
foot, under the current statute you couldn't stay
there because the guy couldn't afford to lower your
rent. That means you have to go out and rebid it so
... you know you're going to end up paying the $2.00
and you couldn't extend where you were, even for $1.10
because of the current statute. This would allow you
to renew it at anywhere below that market rate, at
least 10 percent below it and stay where you're at so
that you could gain the savings. So it's a much
better standard.
REPRESENTATIVE ROKEBERG, in further response to Representative
Crawford, related that in a down market the differential would
be "squeezed" because the prevailing rate would be declining.
However, the percentage wouldn't go down with it. He opined
that typically in commercial real estate quotations of
valuations will occur rather than specifics. "It's actually
going to require the department to get a specific, single quote
now," he stated. "I think you need to have enough of a
distinction to grant you the sole source capability ...," he
opined.
Number 0229
REPRESENTATIVE CRAWFORD removed his objection. [The conceptual
amendment was treated as adopted.]
VICE CHAIR GATTO asked if the "real estate broker's opinion of
the rental value" and "an appraisal of the rental value" are
considered of equal value.
REPRESENTATIVE ROKEBERG, speaking as a real estate broker,
replied yes, and added that real estate brokers are a lot
cheaper. In a major commercial building, to obtain a full
appraisal could be extremely expensive and not necessarily
appropriate. "Having a broker's opinion of value ... would be
more consistent with testing and providing a defensible
prevailing market rate for the purposes of the statute," he
said.
REPRESENTATIVE LYNN, as an associate broker, agreed with
Representative Rokeberg.
VICE CHAIR GATTO surmised that although the language [on page 1,
lines 10-12] allows either, it seems there will be a conflict
later regarding who will insist on the more expensive appraisal.
REPRESENTATIVE ROKEBERG remarked that with a 30,000 square foot
facility with a five- to ten-year deal, it might warrant an
appraisal due to the scope and dollar amount of the project.
The intention of the CS, he opined, is to provide the department
flexibility to call for a broker's opinion versus an appraisal
depending upon the scope of the project.
VICE CHAIR GATTO surmised that whether the market goes up or
down, the existing value will be relied upon when there is a
lease extension.
REPRESENTATIVE ROKEBERG replied yes and likened it to the price
of oil going up and down.
TAPE 04-44, SIDE A
VICE CHAIR GATTO further surmised that whether [the market] goes
up or down, the ability to extend the lease is based on the
existing value. He asked if this legislation guarantees the
right to extend the lease.
REPRESENTATIVE ROKEBERG explained that the legislation allows
the Department of Administration to enter into negotiations and
an agreement for a lease extension with existing premises if a
bargain can be made below the prevailing market rate. In
further response to Vice Chair Gatto, Representative Rokeberg
confirmed that he would like [the bargain] to be at least 10
percent [below the prevailing market rate] otherwise it would
need to go out to market. He noted that there is a danger with
sole sourcing, and therefore the incentive needs to be
sufficient enough to avoid it.
VICE CHAIR GATTO recalled from a prior hearing that moving
expenses, rewiring, equipment replacement, and down time are all
significant issues [to consider] for a lease extension.
Number 0142
REPRESENTATIVE ROKEBERG related that under the current
procurement provisions, unless the standard is met, [a lease
extension] would have to go out to bid.
MR. JONES informed the committee that he just received a call
from the director of Libraries informing him that the facility
[lease] in Anchorage is due to expire. The current cost of
$1.25 is being offered under an extension while the prevailing
market rate is around $2.00 not to mention the costs encountered
in a move.
Number 0199
REPRESENTATIVE DAHLSTROM moved to report CSHB 545, Version
GH2150\D, Bannister, 4/15/04, as amended, out of committee with
individual recommendations and the accompanying fiscal notes.
There being no objection, CSHB 545(L&C) was reported from the
House Labor and Commerce Standing Committee.
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
5:20 p.m.
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