Legislature(2017 - 2018)BARNES 124
03/07/2018 03:15 PM LABOR & COMMERCE
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ALASKA STATE LEGISLATURE HOUSE LABOR AND COMMERCE STANDING COMMITTEE March 7, 2018 3:20 p.m. MEMBERS PRESENT Representative Sam Kito, Chair Representative Adam Wool, Vice Chair Representative Andy Josephson Representative Louise Stutes Representative Chris Birch Representative Gary Knopp Representative Colleen Sullivan-Leonard MEMBERS ABSENT Representative Mike Chenault (alternate) Representative Bryce Edgmon (alternate) COMMITTEE CALENDAR HOUSE BILL NO. 309 "An Act disapproving all recommendations of the State Officers Compensation Commission relating to the compensation, benefits, and allowances of state officers; and providing for an effective date." - HEARD & HELD CONFIRMATION HEARINGS Commissioner, Department of Commerce, Community & Economic Development (DCCED) Mike Navarre - Kenai Board of Massage Therapists David Edwards-Smith - Soldotna Board of Barbers and Hairdressers Vershawn Idom - Anchorage Alaska Labor Relations Agency Lon Needles - Valdez Alcoholic Beverage Control Board ("ABC Board") Sara Erickson - Soldotna Board of Examiners in Optometry Eric Lingle Board of Certified Direct-Entry Midwives Kenni Linden - Palmer - HEARD PREVIOUS COMMITTEE ACTION BILL: HB 309 SHORT TITLE: REJECT OFFICERS COMP. COMMISSION REPORT SPONSOR(s): REPRESENTATIVE(s) GUTTENBERG 01/26/18 (H) READ THE FIRST TIME - REFERRALS 01/26/18 (H) L&C, FIN 03/05/18 (H) L&C AT 3:15 PM BARNES 124 03/05/18 (H) Heard & Held 03/05/18 (H) MINUTE(L&C) 03/07/18 (H) L&C AT 3:15 PM BARNES 124 WITNESS REGISTER CHAIR SAM KITO Alaska State Legislature Juneau, Alaska POSITION STATEMENT: Testified in the hearing on HB 309. REPRESENTATIVE DAVID GUTTENBERG Alaska State Legislature Juneau, Alaska POSITION STATEMENT: Testified as prime sponsor of HB 309. MIKE NAVARRE Commissioner Designee Department of Commerce, Community, and Economic Development (DCCED) Juneau, Alaska POSITION STATEMENT: Testified in the confirmation hearing. DAVID EDWARDS-SMITH, Chair Board of Massage Therapists Juneau, Alaska POSITION STATEMENT: Testified as an appointee to the Board of Massage Therapists. VERSHAWN IDOM, Appointee Board of Barbers and Hairdressers Office of the Governor POSITION STATEMENT: Testified as an appointee to the Board of Barbers and Hairdressers. LON NEEDLES, Board Member Alaska Labor Relations Agency Alaska Department of Labor and Workforce Development Valdez, Alaska POSITION STATEMENT: Testified as a appointee to the Alaska Labor Relations Agency. SARA ERICKSON Alcoholic Beverage Control Board (ABC Board) Office of the Governor Soldotna, Alaska POSITION STATEMENT: Testified as an appointee to the Alcoholic Beverage Control Board (ABC Board). ERIC LINGLE, Public member Board of Examiners in Optometry Office of the Governor Juneau, Alaska POSITION STATEMENT: Testified as an appointee to the Board of Examiners in Optometry. KENNI LINDEN, Public Member Board of Certified Direct-Entry Midwives Office of the Governor Palmer, Alaska POSITION STATEMENT: Testified as an appointee to the Board of Certified Direct-Entry Midwives. ACTION NARRATIVE 3:20:20 PM CHAIR SAM KITO called the House Labor and Commerce Standing Committee meeting to order at 3:20 p.m. Representatives Sullivan-Leonard, Knopp, Birch, Josephson, Wool, and Kito were present at the call to order. Representatives Stutes arrived as the meeting was in progress. 3:22:04 PM The committee took an at-ease from 3:22 p.m. to 3:22 p.m. 3:22:30 PM CHAIR KITO passed the gavel to Vice-Chair Wool. HB 309-REJECT OFFICERS COMP. COMMISSION REPORT 3:23:08 PM CHAIR SAM KITO, Alaska State Legislature, testified in the hearing on HB 309. He continued his presentation from where he had left off in the previous hearing. CHAIR KITO reviewed slide 8, "Current Compensation": Base Salary $50,400 Per diem based on federal short-term rate Relocation expenses provided Travel per diem provided Non-Juneau Base = $75,150 Juneau Base = $68,692.5 Total All Legislators Base = $4.49 Million 3:23:59 PM REPRESENTATIVE KITO moved on to slide 9, "Option A": Base Salary $42,000 Per day stipend $180 for Regular session $150 for extended session $50 for first special session $30 for second special session $10 for third special session $0 for an additional special sessions Per diem based on federal per diem Non-Juneau Base = $73,635 Juneau Base = $58,200 Total All Legislators Base = $4.37 Million 3:26:56 PM REPRESENTATIVE SULLIVAN-LEONARD asked whether there is any consideration given to special meetings such as subcommittees. CHAIR KITO answered there is not. He explained it would work the way it does now with travel per diem and expenses. 3:28:14 PM REPRESENTATIVE BIRCH said that 57 of the 60 legislators have to travel away from home. He shared his understanding that the aim of the proposed bill is to restore per diem to Juneau legislators. He asked what else was at the core of the question. CHAIR KITO said that in his analysis, he was attempting to identify how to equitably compensate legislators across the board. He said that in the original report in 2009-2010 it was acknowledged that 100 percent of the short term per diem rate was not required to live in Juneau, Alaska. He added there is no public record or written record but there is action that shows Juneau legislators would receive 75 percent of the rate. He said that as a long term per diem rate, there was a $7,000 to $7,500 difference for Juneau, Alaska, legislators as a base. He added 100 percent of the per diem rate now for non-Juneau legislators is around $24,000 and he said he thinks it is not reasonable to assume that $24,000 is what it costs for non- Juneau legislators to live in Juneau, Alaska. 3:31:20 PM REPRESENTATIVE KNOPP spoke to slide 12, "Option B". He noted that in two years there have been eight special sessions. He added that costs go up for housing during the summer months. He suggested the salary compensation committee should examine the issue. 3:33:08 PM CHAIR KITO answered that it was true that legislators do not have control over the call to special sessions. He acknowledged that legislators residing outside the 50-mile limit would still be eligible to receive per diem, they just would not get the meeting stipend. He said it doesn't decrease pay effectively. He shared his concern that the more special sessions there are, the more revenue legislators receive. He said the potential with Option B was to decrease the cost of session by over $1 million. REPRESENTATIVE KNOPP spoke to a Department of Defense (DoD) chart for per diem rates. He said he put forward a resolution in the previous year to follow the guidelines. He added it didn't gain traction or move forward. He asked Chair Kito whether he had examined the federal rate. 3:36:24 PM CHAIR KITO said he thinks if the federal per diem rate is avoided, it is more reasonable to focus on per diem as costs for being in a location that is not the primary residence. He said he did review the federal per diem rates and attempted to acknowledge the cost to relocate but also address the disproportionate compensation that in this case Juneau legislators receive. 3:37:44 PM REPRESENTATIVE JOSEPHSON said he wonders what the public would think of the word "stipend." CHAIR KITO answered that he was trying to identify what the issues were. He said he thinks the salary commission has failed to address legislative compensation at all. He said it is clear to him that there are two forms of compensation: the base salary and per diem. He suggested the per diem is a combination of compensation and the acknowledgement of living expenses. He said he was trying to push the attention to session for the first 90 days and not have as many extended sessions as legislators would not get compensated at the same level. CHAIR KITO stated there aren't any minutes from the commission meetings. He said he didn't know who was speaking and towards the end of the second meeting he started recognizing their voices. He said he believes the commission was operating outside of the law in reducing Juneau legislator pay by $18,000. He said that to believe that amount is strictly provided to him or to other legislators for relocation does not make sense. He said that lead him to the conclusion that per diem is a combination of compensation and living expenses. He underlined that relocation costs are designated separately 3:43:35 PM VICE-CHAIR WOOL shared his understanding that the total package is per diem and salary, and part of that per diem is considered compensation and not considered compensation for room and board. He said he also thinks lowering the per diem is lowering some of the actual salary. He added cutting per diem entirely for Juneau legislators is cutting their salary. CHAIR KITO said under Option D, the amount of budgeting is the same. He said all of the options he looked at would decrease the amount of money spent on legislative compensation. VICE-CHAIR WOOL said constituents ask, "Why do you guys need $300 a day to live in Juneau, Alaska?" 3:46:44 PM REPRESENTATIVE BIRCH said, "This applies equitably to everybody." He added that more than half of legislators are from Anchorage, Alaska, and would receive no per diem if there were special sessions in that city. He said he think the idea that [per diem] is compensation is really a misnomer. He added he thinks the idea of throwing out the recommendation from the commission is "a step too far." 3:48:12 PM REPRESENTATIVE SULLIVAN-LEONARD commended Representative Kito for bringing the discussion forward. She indicated she had looked at the federal side and at other states on the per diem issue. She added she was not pleased with the compensation committee and she thinks it didn't come across as an unbiased committee. 3:49:50 PM REPRESENTATIVE STUTES noted that on slide 14, "Option D", the base salary numbers are backwards: Non-Juneau Base = $70,000 and Juneau Base = $77,020. CHAIR KITO answered that was correct. REPRESENTATIVE STUTES stated she agrees with Representative Sullivan-Leonard that the salary commission was "off-kilter" with their assessment. She questioned the difference in compensation for living expenses if one legislator has a 3- bedroom apartment during session and another rents a room. CHAIR KITO stated the committee, with respect to the proposed bill, had three options: to move nothing forward, to reject the recommendation of the commission, or consider something different. 3:51:56 PM REPRESENTATIVE JOSEPHSON said, "I'm not comfortable with this discussion." He said he agrees about the commission's work, but that he is not comfortable setting his own salary. 3:53:49 PM CHAIR KITO addressed slide 13, "Option C": Base Salary $30,000 Per day stipend $300 for Regular session $150 for extended session $50 for first special session $30 for second special session $10 for third special session $0 for an additional special sessions Per diem based on state long-term rate of $78 per day Non-Juneau Base = $64,020 Juneau Base = $57,000 Total All Legislators Base = $3.82 Million CHAIR KITO identified that the base salary can be adjusted and can apply equitably to every legislator. CHAIR KITO moved to slide 14, "Option D": Base Salary $70,000 No meeting stipend Per diem based on state long-term rate of $78 per day Non-Juneau Base = $70,000 Juneau Base = $77,020 Total All Legislators Base = $4.60 Million CHAIR KITO spoke to "Cost Comparison" in slides 15-21, starting on slide 16: ASOCC Overall difference from current 90-day: ($55,687.50) 120-day: ($74,925.00) Three special sessions in first year: ($134,662.50) CHAIR KITO moved through the Cost Compensation slides: Option A Overall Difference from current 90-day: ($118,642.50) 120-day: ($52,560.00) Three special sessions in first year: $47,295.00 Option B Overall Difference from current 90-day: ($58,297.50) 120-day: ($161,505.00) Three special sessions in first year: ($1,172,452.50) Option C Overall Difference from Current 90-day: ($670,297.50) 120-day: ($773,505.00) Three special sessions in first year: ($1,784,,452.50) Option D Overall Difference from Current 90-day: $109,702.50 120-day: ($263,505.00) Three special sessions in first year: ($1,436,452.50) 4:00:55 PM REPRESENTATIVE STUTES requested Chair Kito review slide 17 with the graph. CHAIR KITO explained the blue line on the left is the base compensation. He pointed to lines showing current compensation between non-Juneau and Juneau, Alaska, legislators. He pointed out that overall compensation, including per diem, for a non- Juneau legislator could be as much as $110,000, while Juneau, Alaska, legislators would still receive $50,400, for a difference of $60,000 in a single year with 3 special sessions. 4:02:58 PM VICE-CHAIR WOOL remarked that the commission had said they "didn't want people coming to this job for the money." He said he thought it was not reasonable to think anyone does the job for the money. He observed there are savings in all of Chair Kito's options and he said if he were a Juneau legislator it would affect his ability to run for office. CHAIR KITO shared his personal decisions based on the current situation. He remarked that the legislature was becoming a full-time job that precludes working elsewhere. 4:08:15 PM VICE-CHAIR WOOL removed his objection. 4:08:54 PM REPRESENTATIVE KNOPP stated he knows there is an impact, so he is open to the discussion. He added he was not so sure that he is ready to adopt a committee substitute. REPRESENTATIVE JOSEPHSON asked Chair Kito for confirmation that the proposed bill contains Option B. CHAIR KITO answered the committee substitute contains Option B, which establishes a salary of $3,315 with the additional compensation for the speaker of the house and the president of the senate. He spoke to the stipend language. He said in subsection C there is a proposal for those legislators not in Juneau not to receive a meeting stipend but to receive lodging per diem. He added that each member would be entitled to an annual allowance for office expenses. VICE-CHAIR WOOL asked for clarification that Juneau and non- Juneau legislators would receive the same per diem. CHAIR KITO answered Juneau legislators would not receive per diem. 4:12:59 PM REPRESENTATIVE KNOPP said he would not support adoption of the CS and prefers to address the original bill. VICE-CHAIR WOOL confirmed if the committee rejects the CS as a working document, the original bill is still before the committee. 4:14:43 PM REPRESENTATIVE BIRCH stated he was opposed to the substitute and to the original bill proposal. He said he doesn't think it's the legislators' option to reject the commission's findings. He said he would return to the salary commission and ask them to review the decision. 4:16:06 PM REPRESENTATIVE STUTES asked whether the CS was also from Representative Guttenberg. CHAIR KITO clarified he had not worked in collaboration with Representative Guttenberg on HB 309. He asked to be recused from voting as the result impacts him directly. 4:17:17 PM REPRESENTATIVE STUTES asked whether Representative Guttenberg supports the CS. CHAIR KITO answered that he had discussed expanding the scope of the proposed bill with Representative Guttenberg, but he did not know whether Representative Guttenberg agreed with specific components of the CS. 4:17:50 PM REPRESENTATIVE JOSEPHSON said he thinks there is cause to delay the decision because the committee needs a legal opinion about whether Chair Kito can recuse himself. 4:20:45 PM REPRESENTATIVE KNOPP said he thinks the CS should be held and no action should be taken at this time. He said the committee has 90 days to reject or adopt the compensation committee's recommendation. VICE-CHAIR WOOL said the commission decision affects three legislators. He said he thinks it's not that simple and there is a compensation component. 4:22:29 PM REPRESENTATIVE STUTES said she agrees with holding the CS over. CHAIR KITO explained the commission's recommendation would go into effect if no action is taken by the following Wednesday and the window for action was the first 60 of legislative session. 4:23:20 PM The committee took an at-ease from 4:23 p.m. to 4:24 p.m. 4:24:33 PM REPRESENTATIVE DAVID GUTTENBERG, Alaska State Legislature, testified as prime sponsor of HB 309. He said the commission had been established to depoliticize legislative salaries and he said he felt the commission had attempted to create public policies through the salary discussion. He said there were a lot of questions that went unanswered. He added that when listening to the second meeting, he had the clear impression that a lot of decisions were taken off the record. He indicated at the second meeting the commission approved the minutes, but the minutes were still not on public record. He stated he feels there needs to be a hands-off process to depoliticize legislator salaries. 4:27:34 PM REPRESENTATIVE BIRCH shared his understanding that the commission recommendation was to eliminate per diem for legislators who reside within 50 miles of the site of legislative session. He asked for confirmation that the proposed bill would reject the recommendation. REPRESENTATIVE GUTTENBERG answered the bill would reject the commission's recommendation but that he was not asking the committee to pass it out of committee. He added that rejecting the commission's recommendations was the only course of action available. He underlined that the most important part is to have the dialogue. He said he was "not going to push it to the floor" but that he thought a discussion was needed to examine the commission's findings. 4:29:46 PM REPRESENTATIVE JOSEPHSON moved to table HB 309. 4:30:11 PM REPRESENTATIVE KNOPP objected. The CS for the bill had not been adopted. He pointed out the need to take action by Wednesday. He stated if the committee adopts a committee substitute (CS), "we are killing it." He said the bill could go through to the House Finance Committee and onto the House Floor by Wednesday unless the committee adopts a CS. 4:31:37 PM The committee took an at-ease from 4:31 p.m. to 4:32 p.m. 4:32:17 PM REPRESENTATIVE JOSEPHSON made a motion to table the CS to HB 309. There being no objection, it was so ordered. 4:32:25 PM The committee took an at-ease from 4:32 p.m. to 4:33 p.m. 4:32:29 PM ^Confirmation Hearings CONFIRMATION HEARING(S): Department of Commerce, Community & Economic Development Board of Massage Therapists Board of Barbers and Hairdressers Alaska Labor Relations Agency Alcoholic Beverage Control Board ("ABC Board") Board of Examiners in Optometry Board of Certified Direct-Entry Midwives 4:33:24 PM CHAIR KITO announced the next order of business would be CONFIRMATION HEARING(S). 4:34:02 PM MIKE NAVARRE, Commissioner Designee, Department of Commerce, Community, and Economic Development (DCCED), testified in the confirmation hearing. 4:34:29 PM REPRESENTATIVE JOSEPHSON said he thinks the commissioner should be amongst the most confirmable people to ever come before a joint hearing. 4:34:39 PM REPRESENTATIVE SULLIVAN-LEONARD asked Commissioner Designee Navarre to relay his directive for the department. MR. NAVARRE stated he took the job because he was frustrated with the messaging about the state's economic and fiscal policy. He stated he would broaden the debate about why it's important for Alaska's economy to have a broader foundation for revenue. He remarked that the state is bountiful, but the economic foundation is flawed. He said he thinks there is a lack of revenue diversification. He mentioned competition in oil and gas from the Lower 48 and from other countries. He said he thinks there is a need for a broad-based tax. 4:38:03 PM REPRESENTATIVE STUTES asked Mr. Navarre to give a brief history of his qualifications for the position of commissioner. MR. NAVARRE answered that he has a bachelor's degree in Government with a minor in Economics. He added that he also spent 12 years in the Alaska Legislature House of Representatives; served 3 terms as mayor in the Kenai Borough; is the president a family company which includes the Arby's restaurants in Alaska. 4:39:46 PM CHAIR KITO stated he appreciates Mr. Navarre's lifetime service as well as the wisdom and experience that Mr. Navarre brings to the department. 4:40:21 PM REPRESENTATIVE KNOPP commented that he has served under Mr. Navarre and that "he is a transparent as you could possibly get." 4:40:58 PM CHAIR KITO announced the next order of business would be the confirmation hearings of the governor's appointments to various state boards and commissions. 4:41:06 PM DAVID EDWARDS-SMITH, Chair, Board of Massage Therapists, testified as an appointee to the Board of Massage Therapists for another term. 4:41:16 PM REPRESENTATIVE JOSEPHSON spoke to HB 110 regarding concerns with sex trafficking. He said he had concerns about the licensing issue that arose during testimony. CHAIR KITO corrected that the bill to which Representative Josephson was referring was no longer in committee and was not part of the confirmation hearing. REPRESENTATIVE JOSEPHSON restated his question. He asked Mr. Edwards-Smith how he would respect the independence of other practices. 4:44:07 PM MR. EDWARDS-SMITH answered that at the time when the board was looking at the language regarding registration, what was used was successful language that was utilized in the state of Alabama. He stated the board thought it would it would be a good idea. He added that the board is completely removing that language. He explained that what the board had wanted to do was to deal with the proliferation of sex trafficking. 4:46:23 PM VERSHAWN IDOM, Appointee, Board of Barbers and Hairdressers, testified as an appointee to the Board of Barbers and Hairdressers. CHAIR KITO asked whether a record of an assault charge would have any impact on Mr. Idom's board membership. MR. IDOM stated he doesn't think it would have any bearing on the board. He added it was a situation that got out of control and that he is still friend of the party involved. 4:47:46 PM LON NEEDLES, Board Member, Alaska Labor Relations Agency, Alaska Department of Labor and Workforce Development, He indicated he was currently a board member and was seeking reappointment. CHAIR KITO asked Mr. Needles how long he had been serving on the board. MR. NEEDLES answered membership was a three-year tenure, so he had been a member for around 2.75 years. CHAIR KITO asked for confirmation that it would be a second term. MR. NEEDLES answered in the affirmative. CHAIR KITO mentioned a charge of domestic relations issue from 1992 and asked whether it would impact his membership on the Labor Relations board. MR. NEEDLES answered that he did not think it would have any impact. 4:49:21 PM SARA ERICKSON, Alcoholic Beverage Control Board (ABC Board), Office of the Governor, stated she was nominated by the governor to serve on the ABC Board. REPRESENTATIVE WOOL asked Ms. Erickson about her experience with the ABC Board. MS. ERICKSON stated she is a lifelong Alaskan with strong interest in public service. She explained she had served on a number of boards. REPRESENTATIVE WOOL asked whether Ms. Erickson had a strong feeling about alcohol one way or another. MS. ERICKSON answered that she does not have a political agenda. She aimed to offer a different perspective. REPRESENTATIVE WOOL asked Ms. Erickson whether she is aware of the geographical representation on the board. MS. ERICKSON answered in the affirmative. 4:53:06 PM REPRESENTATIVE STUTES asked Ms. Erickson to define a "healthy alcohol industry." MS. ERICKSON answered that she thinks it is important to find the right balance of economic interests and public safety. REPRESENTATIVE STUTES asked Ms. Erickson whether she would feel it was her duty to enforce statute or police the industry. MS. ERICKSON answered, "All of the above." She added that she knows there are rules in place and that those rules need to be adhered to. She said she aimed to bring a reasonable conversation to the table. 4:55:30 PM REPRESENTATIVE WOOL asked Ms. Erickson whether she is related to a certain legislator. MS. ERICKSON replied that she is Representative Chuck Kopp's sister. She added that Representative Kopp is not "keyed in on" the issues of the ABC Board. 4:56:29 PM REPRESENTATIVE KNOPP commented the Ms. Erickson does have a close relationship with law enforcement. He said he thinks she's a great candidate. 4:57:56 PM ERIC LINGLE, Public member, Board of Examiners in Optometry, Office of the Governor, testified as an appointee to the Board of Examiners in Optometry. He indicated he was seeking reappointment. REPRESENTATIVE JOSEPHSON said the legislature had passed an important bill regarding optometry practices. He asked Mr. Lingle how he would meld the existing law with the capacity of the board to assert more authority over the destiny of the optometrist practice. MR. LINGLE surmised he was referring to one of the sections of the law that states that optometrists can remove a foreign body from the eye. He explained that's not suggesting that optometrists can engage in surgery. REPRESENTATIVE JOSEPHSON said he thought it is unclear. He asked Mr. Lingle what he thinks the law allows optometrists to do. MR. LINGLE answered he thinks it grants the board more authority but does not allow optometrists to perform surgical procedures. 5:00:03 PM KENNI LINDEN, Public Member, Board of Certified Direct-Entry Midwives testified as an appointee to the Board of Certified Direct-Entry Midwives. REPRESENTATIVE SULLIVAN-LEONARD asked about Ms. Linden's involvement with Planned Parenthood. MS. LINDEN confirmed she did previously work for Planned Parenthood and she left in July 2016 to have a baby. She added her midwife had recommended she apply for the board position. She said she had no political agenda and her interest in the board is about her interest in women's health. REPRESENTATIVE SULLIVAN-LEONARD said she knew that Ms. Linden applied to other boards and commissions and asked her to consider those as well. She said there is already representation from the valley on the board. She added she had received concerns from her constituents about Ms. Linden's involvement with Planned Parenthood. MS. LINDEN answered that she appreciates Representative Sullivan-Leonard concern. She stated she was approached by her own midwife because there hadn't been anyone else who applied for the public position. She said she is passionate about women's health and her experience with her midwife was life- changing. 5:05:49 PM REPRESENTATIVE JOSEPHSON asked Ms. Linden whether there is something that says a midwife should not be supportive of a constitutional right to choose to have an abortion. MS. LINDEN answered that to her knowledge there is not. She said midwives hold a range of views politically, culturally, and religiously. She clarified she is not a midwife, only a client. 5:09:13 PM ADJOURNMENT There being no further business before the committee, the House Labor and Commerce Stand Committee meeting was adjourned at 5:09 p.m.