Legislature(1997 - 1998)
04/08/1997 08:04 AM House STA
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE STATE AFFAIRS STANDING COMMITTEE
April 8, 1997
8:04 a.m.
MEMBERS PRESENT
Representative Jeannette James, Chair
Representative Ethan Berkowitz
Representative Fred Dyson
Representative Kim Elton
Representative Mark Hodgins
Representative Ivan Ivan
Representative Al Vezey
MEMBERS ABSENT
All members present.
COMMITTEE CALENDAR
*HOUSE BILL NO. 188
"An Act relating to calculation of compensation for the public
employees' retirement system."
- HEARD AND HELD
HOUSE BILL NO. 200
"An Act relating to subpoenas of the Administrative Regulation
Review Committee; and providing for an effective date."
- PASSED CSHB 200(STA), as amended, OUT OF COMMITTEE
HOUSE BILL NO. 79
"An Act relating to the offense of possession of tobacco by a
person under 19 years of age."
- HEARD AND HELD
HOUSE JOINT RESOLUTION NO. 21
Relating to amendment of Title VIII of the Alaska National Interest
Lands Conservation Act.
- SCHEDULED BUT NOT HEARD
(* First public hearing)
PREVIOUS ACTION
BILL: HB 188
SHORT TITLE: DEFINITION OF COMPENSATION IN PERS
SPONSOR(S): REPRESENTATIVE(S) COWDERY
JRN-DATE JRN-PG ACTION
03/12/97 640 (H) READ THE FIRST TIME - REFERRAL(S)
03/12/97 640 (H) STATE AFFAIRS, FINANCE
04/08/97 (H) STA AT 8:00 AM CAPITOL 102
BILL: HB 200
SHORT TITLE: SUBPOENA POWER: ADMIN. REG. REVIEW COMMIT
SPONSOR(S): REPRESENTATIVE(S) JAMES
JRN-DATE JRN-PG ACTION
03/18/97 737 (H) READ THE FIRST TIME - REFERRAL(S)
03/18/97 737 (H) STATE AFFAIRS
03/25/97 (H) STA AT 8:00 AM CAPITOL 102
03/25/97 (H) MINUTE(STA)
04/03/97 (H) STA AT 8:00 AM CAPITOL 102
04/03/97 (H) MINUTE(STA)
04/08/97 (H) STA AT 8:00 AM CAPITOL 102
BILL: HB 79
SHORT TITLE: MINOR IN POSSESSION OF TOBACCO
SPONSOR(S): REPRESENTATIVE(S) BUNDE, James
JRN-DATE JRN-PG ACTION
01/16/97 90 (H) READ THE FIRST TIME - REFERRAL(S)
01/16/97 90 (H) STA, JUDICIARY, FINANCE
04/03/97 (H) STA AT 8:00 AM CAPITOL 102
04/03/97 978 (H) COSPONSOR(S): JAMES
04/08/97 (H) STA AT 8:00 AM CAPITOL 102
WITNESS REGISTER
REPRESENTATIVE JOHN COWDERY
Alaska State Legislature
State Capitol, Room 416
Juneau, Alaska 99801-1182
Telephone: (907) 465-3897
POSITION STATEMENT: Sponsor of HB 188.
MIKE McMULLEN, Personnel Manager
Division of Personnel
Department of Administration
P.O. Box 110201
Juneau, Alaska 99811-0201
Telephone: (907) 465-4431
POSITION STATEMENT: Provided testimony on HB 188.
DON ETHERIDGE, Jr., Lobbyist
Alaska State District Council Laborers
710 West 9th Street
Juneau, Alaska 99801
Telephone: (907) 586-3707
POSITION STATEMENT: Provided testimony in opposition to HB 188.
KEVIN C. RITCHIE, Executive Director
Alaska Municipal League
217 Second Street, Suite 200
Juneau, Alaska 99801
Telephone: (907) 586-1325
POSITION STATEMENT: Provided testimony in support of HB 188.
CRAIG PERSSON, Vice President
Public Safety Employees Association
6450 Airport Way, Suite 1
Fairbanks, Alaska 99709
Telephone: (907) 474-2536
POSITION STATEMENT: Provided testimony in opposition to HB 188.
WALTER WILCOX, Legislative Assistant
to Representative Jeannette James
State Capitol, Room 102
Juneau, Alaska 99801-1182
Telephone: (907) 465-3743
POSITION STATEMENT: Provided testimony on HB 200.
REPRESENTATIVE CON BUNDE
Alaska State Legislature
State Capitol, Room 104
Juneau, Alaska 99801-1182
Telephone: (907) 465-4843
POSITION STATEMENT: Sponsor of HB 200.
PATRICIA SWENSON, Legislative Assistant
to Representative Con Bunde
State Capitol, Room 104
Juneau, Alaska 99801-1182
Telephone: (907) 465-4843
POSITION STATEMENT: Provided testimony on HB 200.
LOREN JONES, Director
Division of Alcoholism and Drug Abuse
Department of Health and Social Services
P.O. Box 110607
Juneau, Alaska 99811-0607
Telephone: (907) 465-2071
POSITION STATEMENT: Provided testimony in support of CSHB 79(STA).
CATHERINE REARDON, Director
Division of Occupational Licensing
Department of Commerce and Economic Development
P.O. Box 110806
Juneau, Alaska 99811-0806
Telephone: (907) 465-2534
POSITION STATEMENT: Provided testimony on CSHB 79(STA).
ACTION NARRATIVE
TAPE 97-37, SIDE A
Number 0001
The House State Affairs Standing Committee was called to order by
Chair Jeannette James at 8:04 a.m. Members present at the call to
order were Representatives James, Elton, Hodgins, Ivan and Vezey.
Members absent were Berkowitz and Dyson. Representative Berkowitz
arrived at 8:05 a.m.; and Representative Dyson at 8:06 a.m.
HB 188 - DEFINITION OF COMPENSATION IN PERS
The first order of business to come before the House State Affairs
Standing Committee was HB 188, "An Act relating to calculation of
compensation for the public employees' retirement system."
CHAIR JEANNETTE JAMES called on Representative John Cowdery,
sponsor of HB 188, to present the bill.
Number 0080
REPRESENTATIVE JOHN COWDERY, Alaska State Legislature, read the
following sponsor statement into the record:
"HB 188 was introduced at the request of Anchorage Mayor Rick
Mystrom.
"The current definition of compensation for the Public Employees
Retirement System allows for the use of overtime in the calculation
of pension benefits.
"This definition invites abuse of the system through the use of
overtime loading to inflate an employee's high three years.
Salaries have been inflated by as much as $40,000 to $50,000 per
year in extreme cases through the use of overtime. This increases
the long term liability to the State in its retirement systems.
"HB 188 amends AS 39.35.680(8) to exclude overtime from the
definition of "Compensation" for all new employees."
REPRESENTATIVE COWDERY explained the Public Employee Retirement
System (PERS) was calculated on an employees' highest three years
consisting of the following: base pay, employee contribution,
cost-of-living differential, leave, and overtime. The Municipality
of Anchorage had been experiencing an increasing amount of
"overtime padding" where some retiring employees maximized the
amount of overtime to maximize their pensions. In the past year
alone, the municipality had reported overtime payments as high as
$76,000 a year. The bill would simply exclude overtime from the
calculation of the benefit.
Number 0221
CHAIR JAMES asked Representative Cowdery if overtime was time and
a half or premium pay?
REPRESENTATIVE COWDERY replied overtime was anything above the
salary base pay. In addition, the bill would only affect new
hires; it would not be retroactive.
Number 0246
REPRESENTATIVE AL VEZEY said overtime was pay at the overtime rate,
and premium time was pay above the normal hourly rate. The point
that Chair James raised was a good one, however; it was not defined
anywhere.
Number 0281
REPRESENTATIVE ETHAN BERKOWITZ asked Representative Cowdery if the
best three years were adjusted for inflation or were just flat
dollars?
Number 0296
REPRESENTATIVE COWDERY replied flat dollars. Any three high years
could be calculated.
Number 0318
CHAIR JAMES wondered, if a person's base pay required him to work
six days a week, would the sixth day be counted because it would
receive a time-and-a-half rate of pay.
Number 0343
REPRESENTATIVE COWDERY replied, "Yes." It was overtime.
CHAIR JAMES responded then only the premium was overtime as far as
she was concerned.
REPRESENTATIVE COWDERY replied there was the occasional overtime
worked beyond the 37.5 hours a week for state employees. The bill,
he reiterated, was based on the base salary.
Number 0393
REPRESENTATIVE IVAN IVAN asked Representative Cowdery if this was
a problem in Anchorage?
Number 0405
REPRESENTATIVE COWDERY replied, "Yes." In the police and fire
departments there had been as high as $1,500 of overtime used for
the purpose of retiring. He reiterated the bill was not
retroactive; it was perceived as an abuse of the past and the
purpose was to deal with the problem in the future.
Number 0454
REPRESENTATIVE FRED DYSON commented on the part-time and seasonal
professions, such as, firefighting. The nature of the work
required lots and lots of overtime, not by choice, but by demand.
Therefore, was the case of a firefighter more valid because it was
seasonal? he asked.
REPRESENTATIVE COWDERY replied he did not know if it would be more
valid. He reiterated the bill was not talking about the past; it
was talking about the future. If the bill was to pass, the law
would be in place and the firefighters would have to live by it.
He understood, however, that there were emergency situations that
demanded a lot of overtime.
Number 0557
REPRESENTATIVE VEZEY said state employees who worked seasonally did
not accrue a year's pay in a calendar year. They could have to
work three years to accrue one calendar year of retirement credit,
for example.
Number 0581
REPRESENTATIVE KIM ELTON stated the presentation made by
Representative Cowdery indicated this was an employee problem. He
defined this issue as a management or political problem. For
example, in the case of the police officers, it could be argued
that there were not enough police officers to reduce the amount of
overtime needed. He was concerned that the police officers would
lose out because of a management problem. Furthermore, overtime
was approved by management.
Number 0667
REPRESENTATIVE COWDERY replied there was a problem. He did not
know if it was a management or an employee problem, however. Maybe
the bill would solve the problem. In addition, the debate in
Anchorage was to create all new hires in PERS rather than the
existing system.
Number 0737
REPRESENTATIVE MARK HODGINS agreed with the bill. He suggested
changing Sec. 2, however, to make it equal for everybody. There
could be changes made in another committee to prevent two tiers,
for example.
Number 0784
REPRESENTATIVE COWDERY replied the act would take effect on the
effective date.
REPRESENTATIVE HODGINS stated this was a good fix for a mounting
problem.
Number 0821
REPRESENTATIVE COWDERY explained there were many things included in
the definition of "compensation" and the bill just added one more
thing to the definition - overtime. If there was better language
to clarify Sec. 2, he would not have a problem changing it.
Number 0846
REPRESENTATIVE ELTON stated retirement and benefits could not be
reduced which was why the multiple tier system had been created for
the state.
Number 0865
REPRESENTATIVE DYSON asked Representative Cowdery where the bill
went next?
REPRESENTATIVE COWDERY replied the House Finance Committee.
REPRESENTATIVE DYSON asked Representative Cowdery where had the
bill been?
REPRESENTATIVE COWDERY replied the House State Affairs Standing
Committee was the first committee of referral.
REPRESENTATIVE DYSON asked Representative Cowdery if there was a
fiscal note attached?
REPRESENTATIVE COWDERY replied there was a zero fiscal note.
Number 0902
CHAIR JAMES stated she did not understand the zero fiscal note
because the state would save money.
Number 0918
REPRESENTATIVE COWDERY replied the state would not save any money
until it happened. The state would not undo anything.
CHAIR JAMES stated she understood it was the operations that were
measured and not the liabilities for the funding ratio of the
General Fund. However, it had been a cause for concern in the past
that the funding ratio stay constant and sufficient. It was hard
to realize that there would not be a fiscal note attached to the
bill. A positive fiscal note would be from communities that would
take advantage of this.
Number 0975
MIKE McMULLEN, Personnel Manager, Division of Personnel, Department
of Administration, was the first person to testify in Juneau. The
retirement benefit was now based on the average of the high five
instead of the high three as a result of the passage of Tier III
last year. It would be more difficult for an employee to build up
and sustain his overtime for retirement over a five year period
compared to a three year period. Therefore, Tier III already had
addressed this issue.
MR. McMULLEN further stated that Representative Elton was correct.
Overtime was a management decision. In addition, upon passage of
the bill, it would be necessary to identify the new hires and
forever thereafter track them as a separate group in order not to
calculate their overtime creating a two tier system for the
employer. In the past, when Tier II and Tier III were enacted, the
new rates applied to everybody. Moreover, there were prohibitions
in statute against reducing retirement benefits for employees.
Therefore, Sec. 2 would apply to those hired after the effective
date of the bill. There were employees who moved to a high cost-
of-living area for their final three years so that the overtime
would be based on the higher differential rate and the combination
would go into their retirement calculation. The Tier II program
provided that the geographic differential could only be counted if
over half of an employee's service was at the higher differential.
Number 1241
CHAIR JAMES asked Mr. McMullen what was in Tier I, II and III that
allowed for the retirement compensation to be calculated the same?
Number 1265
MR. McMULLEN replied the difference was in the tracking. Tier II
changed the geographic differential provision so that the employer
deducted the full percentage from the employee, but upon
retirement, the record was reviewed to determine if the majority of
the service was at the higher level or not. Tier III changed the
benefit calculation from three years to five years. For Tier II
and III, the employer did not have to distinguish between its
employees; it continued to make the same deductions. Tier IV, on
the other hand, affected the calculation determination and required
a distinction between employees.
Number 1352
CHAIR JAMES stated there was no other way to reduce benefits.
Number 1367
MR. McMULLEN stated the way to keep them the same was to off-set
the difference.
Number 1394
REPRESENTATIVE BERKOWITZ asked Mr. McMullen if the segregation for
the different tiers of employees was done on a computer?
MR. McMULLEN replied, "Yes." The system was computerized. Mr.
Bill Church, Division of Retirement and Benefits, was also here
today. He could answer the question better. The bill required
that the employer make the distinction rather than the retirement
system.
Number 1394
REPRESENTATIVE BERKOWITZ asked Mr. McMullen if this would be a
difficult technical step to take for the state?
MR. McMULLEN replied it would take work to make the distinction
because all of the hiring offices in the departments would have to
get the right information from the new hire to determine the tier
he or she was under.
REPRESENTATIVE BERKOWITZ stated that information would already be
part of the employee record.
MR. McMULLEN replied, "Not necessarily." A person could have
worked for the Municipality of Anchorage in the past which would
not be part of the record. There were dozens of steps in the
enrollment process, and this was a minor burden that would not be
looked at for the next 20 years.
Number 1506
REPRESENTATIVE BERKOWITZ asked Mr. McMullen which state employees
would this bill impact?
Number 1511
MR. McMULLEN replied there were state employees who worked overtime
as a matter of course, such as, firefighters. Airport safety
officers worked a schedule where there was a quarter of an hour of
overtime per day because they did not get a real break. Therefore,
someone hired after the effective date of the bill would be treated
differently.
Number 1567
CHAIR JAMES asked Mr. McMullen if the employees under a collective
bargaining unit could make a different deal than state law?
MR. McMULLEN replied retirement was outside the scope of collective
bargaining. But, rates to accommodate the same thing, for example,
could be collectively bargained. At some point, an employer would
note that this would be an employment and recruitment problem.
Number 1620
REPRESENTATIVE BERKOWITZ asked Mr. McMullen if it was possible for
seasonal workers to negotiate overtime pay away from the contract?
MR. McMULLEN replied the state was subject to the Fair Labor
Standards Act (FLSA) which mandated overtime pay for time over 40
hours in a week.
REPRESENTATIVE BERKOWITZ asked Mr. McMullen if it was possible for
seasonal workers to negotiate overtime pay away from the contract
in terms of PERS?
MR. McMULLEN replied, "No." Workers could negotiate for a 20
percent higher rate of pay for those hired after the effective date
of the bill, for example, to take care of the difference.
Number 1669
REPRESENTATIVE ELTON asked if a seasonal employee would loose
status in the retirement tier if he was hired in another tier?
MR. McMULLEN replied employees were in whatever tier they were
first hired into, even if they left the work force for 10 years.
Number 1702
REPRESENTATIVE ELTON stated there could be costs outside of the
retirement and benefit system, if every PERS unit had to track its
employees differently. He asked Mr. McMullen if that would be a
minor or a major cost?
Number 1725
MR. McMULLEN replied it was a matter of the Division of Finance
making computer changes, training, and departments following the
provision for the next 20 years. The division was not asking for
a fiscal note because it made changes to the payroll system all of
the time. In addition, there were 20 questions as part of the new
hire process so this would be question 21. It was just one more
cog in the process.
Number 1725
DON ETHERIDGE, Jr., Lobbyist, Alaska State District Council,
Laborers, was the next person to testify in Juneau. The council
opposed the bill. It recognized that there were problems in some
cases, but it was a management problem. The council was trying to
help management take care of the problem to protect those that
justified their overtime work. He worked 22 years for the Alaska
Marine Highway System averaging 1,000 hours of overtime per year.
It was not by choice; the job had to be done. He stuck with it
because it would help his retirement. If that incentive was cut
out, it would create a recruitment problem because there were a lot
of areas that troopers would not move to, for example. It was
unfair to blanket everybody with those who abused the system to
correct the problem. There must be a way to handle the abuses
without hurting everybody.
Number 1890
CHAIR JAMES stated that earnings were how much a person made in a
year, not necessarily what a person made in a day or an hour. In
Fairbanks, the fire and policemen worked a lot of overtime, and
their salaries reflected that. She agreed it was a management
decision; management approved overtime. She also understood that
overtime was necessary. She questioned the concept of counting the
extra hours in the week as overtime rather than calling it premium
time. "It seems to me if you have the people working just for the
straight time, and you counted the straight time but not the
overtime premium, then you would be at the same place based on the
value of the work that you need done - whether you have new
employees or the same employees." It would create a more level
playing field because more people would be working more overtime
rather than new people being hired as a way to cut down on the cost
of retirement.
Number 1991
MR. ETHERIDGE replied in his situation his overtime was the same
just about ever year. The department figured it was cheaper,
overall, to pay the overtime for two men than it was to hire a
third man. The same amount of work was accomplished for less
dollars. He worked on average of 6 days a week, 12 hours a day.
A lot of people would be better off in the scenario Chair James
presented. The Local 71 folks usually worked scheduled overtime -
seven days a week all summer, for example. And the hours did not
count towards vested time, but the dollars that they did earn
helped build up the overtime earnings when they were vested.
Number 2104
REPRESENTATIVE DYSON asked Mr. Etheridge how long a person had to
work in the state system before being eligible for retirement?
MR. ETHERIDGE replied five years.
REPRESENTATIVE DYSON asked Mr. Etheridge if a person could retire
at a certain age?
MR. ETHERIDGE replied a person could retire after 30 years; or 55
years of age under Tier I; and 60 years of age under Tier II.
REPRESENTATIVE DYSON asked Mr. Etheridge, if a person could retire
after 30 years or at 55 or 60 years of age, whichever came first or
last?
MR. ETHERIDGE replied whichever came first.
Number 2142
REPRESENTATIVE BERKOWITZ commented that there did not appear to be
a definition of overtime in statute. Maybe, this issue could be
resolved by developing a definition of overtime.
Number 2153
CHAIR JAMES responded that would be a big issue to fix because
overtime and premium time were not separated. She did not think it
could be done in this bill.
Number 2172
REPRESENTATIVE ELTON stated that a definition was not needed before
because we did not put it in statute. Now that we were putting it
in statute, it was time for a definition.
CHAIR JAMES stated she was not convinced that a definition was
needed; it was a different issue than what was before us now.
Number 2204
KEVIN C. RITCHIE, Executive Director, Alaska Municipal League
(AML), was the next person to testify in Juneau. In November of
1996 at its annual conference, the AML membership passed a policy
statement which include the following section:
"3. Basis for Computation of PERS Benefits: The League supports
changes to the computation of PERS benefit to exclude overtime pay
and leave cash-in from the calculation of retirement benefits."
Number 2230
CHAIR JAMES stated this appeared to be a good deal for the
municipalities but not necessarily the state. She wondered if it
was possible to sort out the municipal employees, such as, the
firefighters.
Number 2259
MR. RITCHIE asked Chair James if she was talking about firefighters
mainly?
CHAIR JAMES replied firefighters and others who worked seasonally.
Seasonal employees did not work a full year so if their overtime
was taken away they would get even less. A person's expenses
lasted for 12 months even if he or she did not work a full year.
She would prefer to look at an annual wage as opposed to an hourly
or weekly wage. In addition, some took a job because it could be
extended. It seemed proper to include the straight-time hours as
opposed to the premium pay in a retirement plan. But she also
understood that the municipalities were asking the state for
relief. She agreed with Representative Elton that the issue could
be managed differently without changing the retirement computation,
especially since it was such a generous and costly retirement
system. She wondered if this could be done for the municipalities
as well.
Number 2341
MR. RITCHIE replied the Fair Labor Standards Act was passed in 1938
but it was not mandated until 1986 which kicked hundreds of state
employees into the overtime categories that were not there before.
The FLSA was designed for a post-depression, back-to-work,
industrial society. Firefighters at the local level were affected
by this because of their rigid shifts. Rigid shifts had not been
factored into the FLSA.
Number 2395
REPRESENTATIVE ELTON stated there were the following three ways to
address the problem: hire enough people to do the work, manage the
departments better, or adopt HB 188. He asked Mr. Ritchie if all
three options had been discussed by the AML before adopting the
recommendation?
Number 2436
MR. RITCHIE replied the recommendation was done by a finance sub-
committee of the AML. He was not familiar with all of its
discussion. In some cases management worked, and in some cases it
did not. For example, in the case of snow removal, sometimes there
were dry years requiring no overtime.
TAPE 97-37, SIDE B
Number 0020
REPRESENTATIVE ELTON stated he was concerned that by adopting the
bill, the first two options were taken off of the table. There
would not be incentive to hire enough people, for example. He was
sympathetic to the snow removal example, but in reality strong
mayors often made a low-ball decision to be seen as a thrifty
manager. And, the employees had to bear the brunt of the low-ball
decision if the mayor was wrong. For example: they were on the
road for 24 hours a day, away from their families, and missing
their kid's school play. Now, their overtime would not count
towards retirement. "It seems to me that the only person losing in
this is the person that has to bear the brunt of decisions that we
make as elected political officials or city department heads." He
was more in favor of a rigid management style.
Number 0094
REPRESENTATIVE BERKOWITZ stated police officers ran up big overtime
because they were either working undercover or waiting in court.
This type of inefficiency had not been addressed anywhere in the
system. The bill seemed to be driven by police overtime and there
was a different way of "skinning the cat." He asked Mr. Ritchie
what other alternatives had been used to reduce overtime?
Number 0127
MR. RITCHIE replied any time overtime could be reduced, money would
be saved. And sometimes hiring more people to reduce overtime was
not efficient. If a municipal government did not try to limit
overtime, it would not be fulfilling its management obligation to
the public.
Number 0160
CRAIG PERSSON, Vice President, Public Safety Employees Association,
was the first person to testify via teleconference in Fairbanks.
He represented the State Troopers, the Juneau Police Department and
several other law enforcement agencies. The association opposed
the bill because it was a management problem. In Fairbanks, the
airport had a severe overtime problem because of short staffing.
But through negotiations and a change in the work schedule it
reduced the overtime greatly. There were clauses in the bargained
agreements with the state troopers that management could call
anybody for overtime; it was not based on seniority. The padding
of overtime was a problem within the collective bargaining
agreement itself which could be solved by management and the union.
The association did not believe in penalizing everybody in the
state for a problem that could be occurring in several
municipalities. This was a slap in the face of the men and women
who helped keep the streets safe.
Number 0248
REPRESENTATIVE BERKOWITZ asked Mr. Pearson if he knew much about
the problem with the Anchorage Police Department? He wondered if
the municipality had explored ways of reducing overtime.
MR. PEARSON replied he could not answer the question because he was
not familiar with the agreement in Anchorage and the problems. He
did know that Fairbanks had worked with its state personnel and had
been able to solve a lot of the overtime problems; not all of them,
but a great portion of them. Under staffing for the state troopers
was necessitated by budget cuts. The bill penalized the folks for
what had happened through the legislature.
Number 0290
REPRESENTATIVE BERKOWITZ asked Mr. Pearson if there was anything
that would preclude a municipality from negotiating separately on
this issue with a police department?
MR. PEARSON replied, "No." A municipality could work on a separate
letter of agreement, for example, on the overtime problem.
Number 0344
REPRESENTATIVE BERKOWITZ commented there were definitions of
overtime in statute, but he had not had a chance to review them.
A definition was crucial before it could be amended; it was unfair
to push an interpretation down to the courts and bargaining units.
Number 0373
CHAIR JAMES stated the intent of overtime in the bill was all of
the hours at whatever rate over and above the regularly scheduled
work time including time and a half and double time. A definition
could be made in terms of the bill, as opposed to changing the
definition throughout the statutes - the typical way the statutes
were messed up. She was open to discussing such an amendment.
Number 0406
REPRESENTATIVE BERKOWITZ said he was interested in providing a
conceptual amendment.
Number 0436
CHAIR JAMES asked Representative Cowdery what did he expect
overtime to mean in HB 188?
Number 0443
REPRESENTATIVE COWDERY replied anything over the base pay that was
paid at an overtime pay - time and a half and double time.
Moreover, in Anchorage, the police and fire departments had their
own separate retirement system consisting of four tiers. Now, all
new hires were under PERS. The bill talked about future hires
only.
Number 0546
REPRESENTATIVE COWDERY further stated the present police chief
opted out of the local police retirement system and opted for PERS
instead.
Number 0570
CHAIR JAMES stated, historically, a person maintained his existing
benefits despite changes to the system.
CHAIR JAMES asked the committee members if they wanted to adopt a
conceptual amendment today or hold the bill over to prepare an
actual amendment to be discussed later?
Number 0621
REPRESENTATIVE ELTON replied he wanted to hold the bill over. The
bill created a fourth tier which was a big step. In the last
several decades only three tiers had been created; the speed
appeared to be picking up. In addition, this was the only
committee of referral where substantive issues could be debated.
He suggested holding the bill beyond Thursday even.
Number 0661
CHAIR JAMES replied she did not intend to hold the bill beyond
Thursday. In addition, the House Finance Committee - the next
committee of referral - did more substantive changes to bills than
any other committee. It behooved the House State Affairs Standing
Committee to fix things as good as it could before reaching the
House Finance Committee.
CHAIR JAMES announced she would hold the bill over until Thursday,
April 10, 1997, to look at the overtime definition issue further.
HB 200 - SUBPOENA POWER: ADMIN. REG. REVIEW COMMIT
The next order of business to come before the House State Affairs
Standing Committee was HB 200, "An Act relating to subpoenas of the
Administrative Regulation Review Committee; and providing for an
effective date."
CHAIR JAMES called on Walter Wilcox, Legislative Assistant to
Representative Jeannette James, to present the bill.
Number 0730
WALTER WILCOX, Legislative Assistant to Representative Jeannette
James, explained that Sarah Felix, Department of Law, pointed out
some problems with the bill at the last hearing. Upon review, and
learning that the attorney's general office would represent the
committee if sued, we took her advise.
MR. WILCOX explained the portion dealing with the arrest was
dropped so that a denied subpena would go to the superior court for
action.
MR. WILCOX explained the language in Section 1 (5) was changed to
read:
"(5) is signed by the chair of the committee."
MR. WILCOX explained the language "or the chair's designee" needed
to be deleted.
Number 0811
REPRESENTATIVE ELTON moved that the committee substitute (0-
LS0777/B, Cook, 4/4/97) be adopted. There was no objection, the
committee substitute was so adopted.
Number 0824
REPRESENTATIVE IVAN asked Mr. Wilcox to explain the changes again.
Number 0837
MR. WILCOX explained in Section 1 (c) the original language read:
"(c) A witness who is under subpoena and neglects or refuses to
attend a meeting of the Administrative Regulation Review Committee
may be arrested and brought before the committee by any person
charged with the enforcement of state law. The only warrant of
authority necessary to authorize an arrest under this subsection is
(1) a copy of the subpoena;
(2) a copy of proof of service of the subpoena; and
(3) a written direction for the arrest of the witness signed by the
chair and by a majority of the members of the committee."
MR. WILCOX explained the attorney's general office did not think
that was a good way to handle the situation. It should be a court
action in lieu of a committee action. Therefore, the following
language was adopted:
"(c) If a witness who is under subpoena neglects or refuses to
attend a meeting of the Administrative Regulation Review Committee,
the committee may bring an action in superior court to enforce the
subpoena."
MR. WILCOX further explained the second change was in Section 1
(5), of which, the last four words needed to be stricken from the
committee substitute.
CHAIR JAMES announced an amendment was needed to delete the last
four words on page 2, line 5.
Number 0946
REPRESENTATIVE BERKOWITZ moved that the language "or the chair's
designee" be deleted on page 2, line 5. There was no objection,
Amendment 1 was approved.
REPRESENTATIVE ELTON asked, for clarification, if the attorney's
general office would bring action to the superior court?
MR. WILCOX replied if the committee was sued the attorney's general
office would defend it. And if the committee went out and arrested
people there would be a greater chance of running afoul of the law.
Number 0990
REPRESENTATIVE BERKOWITZ asked if there was anticipation about
spending too much money on the reimbursement of expenses for food
and lodging in (3).
CHAIR JAMES replied the anticipation for the expenses would be
negligible.
Number 1021
MR. WILCOX replied the individuals that would be affected by a
subpena resided here in Juneau. They would be on the state payroll
so there would not be a need for any reimbursement.
REPRESENTATIVE BERKOWITZ explained he asked the question because he
wanted to be sure that people would not be pulled from across the
state.
MR. WILCOX replied that was not the intent.
Number 1047
REPRESENTATIVE VEZEY moved that CSHB 200(STA), as amended, move
from the committee with individual recommendations and the attached
fiscal note(s).
REPRESENTATIVE ELTON objected. A roll call vote was taken.
Representatives James, Dyson, Ivan and Vezey voted in favor of the
motion. Representatives Berkowitz and Elton voted against the
motion. The CSHB 200(STA), as amended, was so moved from the House
State Affairs Standing Committee.
HB 79 - MINOR IN POSSESSION OF TOBACCO
The next order of business to come before the House State Affairs
Standing Committee was HB 79, "An Act relating to the offense of
possession of tobacco by a person under 19 years of age."
CHAIR JAMES called on Representative Con Bunde, sponsor of HB 79,
to present the bill.
Number 1125
REPRESENTATIVE CON BUNDE, Alaska State Legislature, stated the goal
of HB 79 was to strength existing access laws for the use and
purchase of tobacco.
REPRESENTATIVE BUNDE announced there was a committee substitute (0-
LS0348/H, Chenoweth, 4/7/97) based on the last hearing of the bill
and explained the sections.
REPRESENTATIVE BUNDE explained Section 1 (A) changed the location
of the vending machines to at least 10 feet away from any entrance
to the premises that the public may use, or as far as possible for
smaller stores.
REPRESENTATIVE BUNDE explained Sec. 2 dealt with persons under 19
years of age and the use of false identification as a violation.
REPRESENTATIVE BUNDE explained Sec. 3 added new language to exempt
a person under the age of 19, to comply with the Synar Amendment,
who made a controlled buy under the auspices of a police officer or
law enforcement agency.
REPRESENTATIVE BUNDE explained Sec. 4 defined proof of age, tobacco
product, and vending machine.
REPRESENTATIVE BUNDE explained Sec. 5 prevented anybody from
preempting a local government's right to pass a local tobacco tax.
REPRESENTATIVE BUNDE explained Sec. 6 caused the revocation of a
license for people selling tobacco illegally.
REPRESENTATIVE BUNDE explained Sec. 7 added new language that
prevented a person from selling tobacco unless a business license
endorsement was purchased.
REPRESENTATIVE BUNDE explained Sec. 8 raised the fee for the
business license endorsement from $25 to $100.
REPRESENTATIVE BUNDE explained Sec. 9 added new language to change
the time a business license could be suspended or revoked to 90
days for the first offense; to 180 days, if there was a previous
conviction in the past 24 months; and to 1 year, if there were two
or more convictions within the past 24 months.
REPRESENTATIVE BUNDE explained Sec. 10 limited the business license
endorsement suspension to the retail outlet where the violation
occurred; not system wide.
REPRESENTATIVE BUNDE explained Sec. 11 added new language that
required tobacco products to be in a secure place that was
accessible only by authorized employees. It also defined the term
"defined place".
REPRESENTATIVE BUNDE explained Sec. 12 added a new subsection that
required retailers to notify all employees that state law
prohibited the sell of tobacco. It also required carding all
persons under the age of 27 to comply with federal law.
REPRESENTATIVE BUNDE explained Sec. 13 provided for the disposal of
money collected into the General Fund.
REPRESENTATIVE BUNDE explained Sec. 14 allowed for the separate
accounting of the money for a training program for the clerks.
REPRESENTATIVE BUNDE explained Sec. 15 required that an accused
minor be charged, prosecuted, and sentenced in the district court
in the same manner as an adult while a parent, guardian, or
custodian was present.
Number 1420
PATRICIA SWENSON, Legislative Assistant to Representative Con
Bunde, explained Sec. 7 was tied to Sec. 12 (i). Section 12 (i)
required all those that sold tobacco products to take a class every
other year that provided information about the federal/state laws
and regulations. The subsection also prevented the sell of single
cigarettes unless they met all the federal labeling requirements
and warnings.
REPRESENTATIVE BUNDE stated this was a federal requirement.
CHAIR JAMES replied she understood that.
MS. SWENSON further explained Sec. 7 was also tied to Sec. 13 and
14. Section 13 provided that the money collected from the
increased endorsement fees be deposited to the General Fund.
Section 14 deposited the money into the General Fund and accounted
for it separately so that the legislature could make appropriations
for the training program. The funds were not dedicated, however.
Number 1512
CHAIR JAMES stated the fiscal note did not show an impact.
MS. SWENSON replied there was not a fiscal note for the new
committee substitute yet.
CHAIR JAMES stated a new fiscal note would be needed before the
bill could be moved out of the committee.
CHAIR JAMES referred the committee members to page 2, line 18, "(1)
who is a prisoner at an adult correctional facility; or". The
language was discussed at the last hearing but a conclusion had yet
to be reached.
Number 1568
REPRESENTATIVE VEZEY announced he had a lot of problems with
Section 1. Section 1 (b) (2) said that employers could not put
vending machines that sold tobacco products in a break room, or not
to hire any person under 19 years of age. It left an employer no
other option.
Number 1614
REPRESENTATIVE BUNDE replied that was accurate, if a person under
19 years of age had access to a vending machine unsupervised.
Number 1625
CHAIR JAMES wondered if the exemption could be taken out to remove
that option; it was hard to define a break room.
Number 1669
REPRESENTATIVE BUNDE replied the bill itself limited where a
vending machine could be and that it had to be under supervision.
Thus, by de facto, if it was in a locked break room, it would not
meet the other requirements of the law.
Number 1710
CHAIR JAMES agreed with Representative Vezey. The bill said a
vending machine could not be in a break room.
MS. SWENSON said the provision had to do with the new Food and Drug
Administration's (FDA) regulations.
Number 1735
REPRESENTATIVE VEZEY further said he understood the intent of Sec.
3, but believed it was very unnecessary. The police currently
conducted their own sting operations without a statute that
authorized them to possess drugs, for example. He always believed
it was an affirmative defense for breaking the law. He also knew
that the police departments had limited resources and they probably
used that as an excuse not to enforce the tobacco law. He could
appreciate that given the rate of violent crimes. He did not
really object to the provision; it was just a response to a very
poor excuse.
Number 1802
CHAIR JAMES wondered if minors even needed to be used given the new
law of carding everybody under 27 years of age.
Number 1837
REPRESENTATIVE BUNDE replied there were two different types of
violations - carding and purchasing. Therefore, somebody under 19
years of age would be needed for the purchase violation.
Number 1855
REPRESENTATIVE BERKOWITZ stated not everybody was carded. That was
the problem. In addition, in response to Representative Vezey, the
provision did cut the affirmative defense of entrapment.
Number 1877
REPRESENTATIVE VEZEY stated he was concerned about the defense
aspect of an affirmative defense position. "Somebody would claim
a defense that the police did not have the authority to do this
because we didn't give it to them in statute. I think we're maybe
narrowing their authority."
REPRESENTATIVE BERKOWITZ replied affirmative defense was defined in
statute under Title 11.
REPRESENTATIVE VEZEY asked why was the provision needed then?
REPRESENTATIVE BERKOWITZ replied this was not an affirmative
defense, but a response to a vendor claiming entrapment.
Number 1959
REPRESENTATIVE IVAN asked Representative Bunde if the licensing was
part of federal law or state law?
REPRESENTATIVE BUNDE replied it was an endorsement to a business
license for the state.
Number 2085
REPRESENTATIVE IVAN asked about the Department of Commerce and
Economic Development's (DCED) training program.
MS. SWENSON replied the intent was to have a course that would go
over the federal and state laws, as well as, the applicable
regulations. It would be a condition of renewing an endorsement
every other year. The retailers would pay for the class
themselves, and part of the money would be allocated from the raise
in the endorsement fee from $25 to $100.
REPRESENTATIVE IVAN wondered if all small retailers would have to
go through the class.
MS. SWENSON replied, "Yes." Everybody that sold tobacco products
would have to go through the class to be brought up to speed on the
new regulations at least every other year.
Number 2107
CHAIR JAMES wondered if this could be done without going to Juneau,
Anchorage or Fairbanks, for example.
MS. SWENSON replied it would depend on how the department set the
class up.
Number 2132
REPRESENTATIVE ELTON asked the following: What was a retailer?
The owner? The manager? Would the clerks have to take the class?
Number 2152
MS. SWENSON replied the owner: the person responsible for running
or maintaining the establishment.
Number 2166
REPRESENTATIVE ELTON said this could create a problem because the
owners of 7-Eleven, for example, were different than the managers,
yet the managers would be responsible. He suggested a definition
of retailer was needed.
MS. SWENSON replied, "Okay."
REPRESENTATIVE BUNDE stated the intent was the local manager of the
retail outlet; not the Chief Executive Officer of 7-Eleven, for
example.
CHAIR JAMES agreed that it needed to be defined.
Number 2223
REPRESENTATIVE IVAN stated he was concerned about the small
retailers throughout the state and how they would get together with
the DCED for the class. It would be cost prohibitive to fly from
Akiak to wherever the DCED folks would be, for example.
Number 2269
REPRESENTATIVE BUNDE said he could not imagine that this type of
schooling would require somebody to fly from Akiak to Anchorage,
for example. It would probably only require correspondence.
Number 2292
CHAIR JAMES replied education was necessary. It was not as simple
as signing a waiver that indicated a person had read the
information.
Number 2372
LOREN JONES, Director, Division of Alcoholism and Drug Abuse,
Department of Health and Social Services, was the next person to
testify in Juneau. The department supported the previous committee
substitute and he did not see a lot in the current committee
substitute that would change its position.
MR. JONES stated the department was pleased to see the change to
age 27 to comply with the proposed FDA regulations.
TAPE 97-38, SIDE A
Number 0001
MR. JONES further stated the limit in Sec. 3 (b) of "not less than
$300" was of concern to the department. Other bills were setting
a limit of "up to $250" to avoid potential jury trials. He
suggested putting a period at the end of the word "violation" on
page 2, line 28 and deleting the remaining language. The normal
punishment for a violation was a penalty of up to $250 anyway.
There had been discussions with the Department of Law regarding
this issue.
Number 0104
CHAIR JAMES replied the provision in Sec. 3 (b) was different. The
provision established a floor as opposed to a ceiling for the fine.
Number 0126
MR. JONES responded the department did not have a problem with
establishing a floor. The courts had ruled that if there was a
floor of $300 there had to be a jury trial.
CHAIR JAMES said she understood. She was wondering about moving
the floor down.
MR. JONES replied the department would not have a problem with
moving the floor below $300.
Number 0167
REPRESENTATIVE BERKOWITZ explained the courts tended to set a bail
schedule for the various violations. The courts adopted a set
amount so that there would be uniformity in the court system.
CHAIR JAMES stated if the bill set a fee at $250 that was the
amount the courts would adopt.
REPRESENTATIVE BERKOWITZ replied, "That's true."
Number 0219
MR. JONES explained that Ms. Swenson just talked to the Department
of Law yesterday and it was okay with the amount of $300. The
language needed to be cleaned up so that the fine was $300 and not
less than, however.
MR. JONES further explained that the department liked the new Sec.
7 prohibiting the sale of single cigarettes. It was in line with
the new FDA regulations.
Number 0281
REPRESENTATIVE ELTON said Sec. 7 (3) did not outlaw the sale of
single cigarettes. It only said one could not sell single
cigarettes unless the container from which they came from displayed
a warning.
CHAIR JAMES replied Representative Elton misread the provision. A
person could not open a box and sell single cigarettes from the
box.
REPRESENTATIVE ELTON replied, "Thanks." He had misread it.
Number 0344
REPRESENTATIVE BERKOWITZ wondered about the provision of the stamp
discussed earlier in the House State Affairs Standing Committee.
CHAIR JAMES replied that was a problem for the state surrounding
the tobacco tax. We were not talking about taxes. We were talking
about a warning.
Number 0383
REPRESENTATIVE BERKOWITZ said he was wondering if there would be
any disturbance to the stamp.
Number 0410
REPRESENTATIVE DYSON asked Chair James if the committee was going
to vote on the bill today?
CHAIR JAMES replied she would like to move it out today, but we
would probably run out of time.
REPRESENTATIVE DYSON asked to be excused from the meeting. He had
something important to do before 10:00 a.m.
CHAIR JAMES replied he might want to ask his minority friends to
see if they could fill his spot as a vote to move the bill before
he left.
REPRESENTATIVE ELTON said he would be here until 10:00 a.m.
REPRESENTATIVE BERKOWITZ said he would be happy to fill Mr. Dyson's
slot.
Number 0469
MR. JONES further said on page 5, lines 1-8, the department
questioned the wording in (C) of "two or more times" and in (2) of
"three or more times". Was "two or more times" needed in (C) if it
was going to be permanently revoked in (2)? he asked.
MR. JONES further stated that in Title 4 there were requirements
for servers, bartenders and waitresses who served alcohol. He
suggested looking there for language surrounding the training
course required in the bill from the Department of Commerce and
Economic Development.
Number 0614
REPRESENTATIVE IVAN stated he was still concerned about the
training.
Number 0628
CATHERINE REARDON, Director, Division of Occupational Licensing,
Department of Commerce and Economic Development, was the next
person to testify in Juneau. The division administered the
business license program for the state. A business license was
needed to conduct business in the state and every two years a $25
fee was paid for a special tobacco endorsement. The provisions
concerning education were new in version "H" so she had yet to
familiarized herself with the changes and had not given much
thought to how the department would conduct the training courses
and/or the cost associated with it.
MS. REARDON further stated the division supported the efforts and
intent of the bill to strengthen enforcement of the tobacco laws.
Thus, she did not want to stand in the way of any effort.
Enforcement had been the biggest issue between the departments. In
version "H" it appeared that the Division of Occupational Licensing
was the department that would receive the complaints, investigate
them, and deal with the Department of Law for prosecution. That
was an activity that the division did not engage in at all right
now. It did not have enforcement staff for the business license
program. It was a tax collection system, and no one had been
convicted of practicing without a business license up to this time.
Therefore, enforcement was something that the division would have
to gear towards. She would like to have some conversations with
the Department of Health and Social Services and the alcohol board
to see who could most effectively do it for the cheapest. It was
important that the state enforce this.
MS. REARDON further stated that the business license and tobacco
endorsement had been a revenue generating system rather than a
regulatory system. It was very easy to get multiple business
licenses and tobacco endorsements. Therefore, she would like to
address the issue of a business, with a revoked tobacco
endorsement, getting a new license, with a new name, the next day,
for example.
CHAIR JAMES said it appeared that whoever got the endorsement could
control the enforcement. She assumed that would be the Department
of Public Safety. It could, however, be the Department of Health
and Social Services. It needed to be identified. Whoever it was
should also authorize the endorsement.
CHAIR JAMES announced the bill would not be moved out of the
committee today. It needed to be improved before going to the
House Judiciary Standing Committee.
CHAIR JAMES suggested a diagram was needed to see how the bill
would work.
Number 1070
REPRESENTATIVE ELTON stated a new fiscal note would probably be
needed as well because there would be a cost associated with
enforcement and control.
CHAIR JAMES replied a positive fiscal note would be needed because
the state would be taking in more fees.
ADJOURNMENT
Number 1150
CHAIR JAMES adjourned the House State Affairs Standing Committee
meeting at 9:55 a.m.
| Document Name | Date/Time | Subjects |
|---|