02/22/2001 08:02 AM House STA
| Audio | Topic |
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+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE STATE AFFAIRS STANDING COMMITTEE
February 22, 2001
8:02 a.m.
MEMBERS PRESENT
Representative John Coghill, Chair
Representative Jeannette James
Representative Hugh Fate
Representative Gary Stevens
Representative Peggy Wilson
Representative Harry Crawford
Representative Joe Hayes
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE JOINT RESOLUTION NO. 8 (MLV)
"An Act relating to supporting polling places at military
installations."
- MOVED HCS CSSJR 8 (MLV) FROM COMMITTEE
HOUSE BILL NO. 123
"An Act relating to the use of frequent flyer miles or another
bonus earned on travel paid for by the state."
- HEARD AND HELD
PREVIOUS ACTION
BILL: SJR 8
SHORT TITLE:VOTING SITES AT MILITARY INSTALLATIONS
Jrn-Date Jrn-Page Action
01/25/01 0171 (S) READ THE FIRST TIME -
REFERRALS
01/25/01 0171 (S) STA
02/01/01 (S) STA AT 3:30 PM BELTZ 211
02/01/01 (S) Moved CS(STA) Out of
Committee
MINUTE(STA)
02/02/01 0255 (S) STA RPT CS 4DP NEW TITLE
02/02/01 0255 (S) DP: THERRIAULT, PHILLIPS,
HALFORD,
02/02/01 0255 (S) DAVIS
02/02/01 0255 (S) FN1: ZERO(S.STA)
02/05/01 (S) RLS AT 10:45 AM FAHRENKAMP
203
02/05/01 (S) Moved Out of Committee
02/05/01 (S) MINUTE(RLS)
02/05/01 0268 (S) RULES TO CALENDAR 2/5/01
02/05/01 0276 (S) READ THE SECOND TIME
02/05/01 0276 (S) STA CS ADOPTED UNAN CONSENT
02/05/01 0276 (S) ADVANCED TO THIRD READING
UNAN CONSENT
02/05/01 0276 (S) READ THE THIRD TIME CSSJR
8(STA)
02/05/01 0277 (S) PASSED Y20 N-
02/05/01 0278 (S) TRANSMITTED TO (H)
02/07/01 0254 (H) READ THE FIRST TIME -
REFERRALS
02/07/01 0254 (H) MLV, STA
02/07/01 0269 (H) CROSS SPONSOR(S): MURKOWSKI
02/13/01 (H) MLV AT 3:30 PM CAPITOL 120
02/13/01 (H) Moved HCS CSSJR 8(MLV) Out of
Committee
MINUTE(MLV)
02/14/01 0315 (H) MLV RPT HCS(MLV) 6DP
02/14/01 0315 (H) DP: MURKOWSKI, HAYES, GREEN,
CHENAULT,
02/14/01 0315 (H) MASEK, KOTT
02/14/01 0315 (H) FN1: ZERO(S.STA)
02/14/01 0315 (H) REFERRED TO STATE AFFAIRS
02/14/01 0329 (H) CROSS SPONSOR(S): COGHILL,
MASEK,
02/14/01 0329 (H) FOSTER
02/22/01 (H) STA AT 8:00 AM CAPITOL 102
BILL: HB 123
SHORT TITLE:USE OF BONUSES EARNED ON STATE TRAVEL
Jrn-Date Jrn-Page Action
02/09/01 0282 (H) READ THE FIRST TIME -
REFERRALS
02/09/01 0282 (H) STA, FIN
02/09/01 0282 (H) REFERRED TO STATE AFFAIRS
02/22/01 (H) STA AT 8:00 AM CAPITOL 102
WITNESS REGISTER
SENATOR LOREN LEMAN
Alaska State Legislature
Capitol Building, Room 516
Juneau, Alaska 99801
POSITION STATEMENT: Testified as sponsor of SJR 8.
SHELLEY GROWDEN, Elections Supervisor, Central Region
Division of Elections
Office of the Lieutenant Governor
675 Seventh Avenue, Suite H3
Fairbanks, Alaska 99701-4594
POSITION STATEMENT: Testified in favor of SJR 8.
REPRESENTATIVE ANDREW HALCRO
Alaska State Legislature
Capitol Building, Room 414
Juneau, Alaska 99801
POSITION STATEMENT: Testified as sponsore of HB 123.
KATHY DIETRICH, Business Agent
Alaska State Employees Association, AFSCME Local 52
315 Barnette Street, Suite 104
Fairbanks, Alaska
POSITION STATEMENT: Testified on HB 123.
KIM GARNERO, Director of Finance
Department of Administration
Post Office Box 110204
Juneau, Alaska 99811
POSITION STATEMENT: Testified on HB 123.
KARLA SCHOFIELD, Deputy Director
Administrative Services
Legislative Affairs Agency
Alaska State Legislature
Capitol Building
Juneau, Alaska 99801
POSITION STATEMENT: Testified on HB 123.
DAVE STEWART, Personnel Manager
Division of Personnel
Department of Administration
Post Office Box 110201
Juneau, Alaska 99811-0201
POSITION STATEMENT: Testified on HB 123.
DON ETHERIDGE, Business Representative
Public Employees Local 71
Alaska State AFL-CIO
710 West Ninth Street
Juneau, Alaska 99801
POSITION STATEMENT: Testified in opposition to HB 123.
BRUCE LUDWIG, Business Manager
Alaska Public Employees Association/Alaska Federation of
Teachers
211 Fourth Street, Number 306
Juneau, Alaska 99801
POSITION STATEMENT: Testified in opposition to HB 123.
ACTION NARRATIVE
TAPE 01-15, SIDE A
Number 0001
CHAIR JOHN COGHILL called the House State Affairs Standing
Committee meeting to order at 8:02 a.m. Representatives
Coghill, Stevens, Wilson, Crawford, and Hayes were present at
the call to order. Representatives James and Fate arrived as
the meeting was in progress.
SJR 8 - VOTING SITES AT MILITARY INSTALLATIONS
Number 0099
CHAIR COGHILL announced the first order of business as CS FOR
SENATE JOINT RESOLUTION NO. 8(STA), Relating to supporting
polling places at military installations.
Number 0215
SENATOR LOREN LEMAN, Alaska State Legislature, testified as
sponsor of SJR 8. He introduced himself as the state senator
representing Elmendorf Air Force Base as well as parts of
northwest Anchorage and east Anchorage. He said SJR 8 addresses
the prospect of changing what has been a consistent policy of
[Alaska's] Division of Elections, to allow voters on military
installations to vote on their posts and bases.
SENATOR LEMAN explained that in December 1999, the United States
Department of Defense issued a directive advising installation
commanders not to allow their facilities to be used for polling
or voting. If that directive were to be followed, the military
voters could no longer vote in their neighborhoods. Congress
took action and [Alaska's United States] Senator [Ted] Stevens
authored an amendment to an appropriations bill that postponed
the effective date of the Department of Defense directive.
SENATOR LEMAN further explained that the issue has now come to
the fore in Anchorage, which holds local elections in April.
Election officials are working right now with the municipality
on setting up the election sites for the municipal elections.
They are faced with uncertainty about whether the facilities at
Fort Richardson and Elmendorf AFB will be available as they
historically have been for the municipal elections.
SENATOR LEMAN said there are two ways to remedy the impacts of
the Department of Defense directive. The first is to have the
Department of Defense rescind its directive. The second is to
take Congressional action. Congress is working on the second
remedy; HJR 8 addresses the first one. Congress last year was
considering a House resolution that dealt with this issue and he
understands that the same issue is being taken up again in this
Congress. It is his belief that military men and women, like
other voters, should be allowed to vote in their neighborhoods.
He noted that AS 15.15.090 requires a polling place to be
located within a precinct unless a location more suitable or
more convenient to the voter is identified.
SENATOR LEMAN said the committee would hear testimony from
election officials that the places they have identified on the
bases and posts are, indeed, suitable; they're close to the
people who vote, they're adequate; and, therefore, they should
continue to be used as polling places. In closing, Senator
Leman commended the Division of Elections for doing an
outstanding job of running elections and making the opportunity
to vote available to all Alaskans.
Number 0631
SHELLEY GROWDEN, Elections Supervisor, Central Region, Division
of Elections, Office of the Lieutenant Governor, testified via
teleconference that her jurisdiction includes both Fort
Wainwright and Eielson Air Force Base. She said the Division of
Elections is very supportive of SJR 8, as there was a problem
before the 2000 primary election getting confirmation from the
military bases regarding whether or not the Division of
Elections was going to be allowed [to have polling places] on
base for the elections.
MS. GROWDEN testified that about a month before the primary in
July, she received official notification from Eielson AFB that
the Division of Elections could not have a polling place on
base. She also was denied permission to use the school, which
is a state-owned facility on Eielson AFB. Election officials
worked with Senator Stevens' office, "and finally the President
signed the appropriations bill and I notified Eielson AFB of
that," she said. "But it came down to about 30 days before the
election, so it caused a lot of concern on [the Division of]
Elections part not knowing if we were going to be allowed to
have a polling place on base."
MS. GROWDEN estimated that there are more than 6,000 registered
voters on Eielson AFB, and, "If we move a polling place, we're
required under the Federal Voting Rights Act to receive pre-
clearance from the Unites States Department of Justice, which is
a 60-day process, and then Alaska law requires us to notify each
registered voter ...."
MS. GROWDEN said she would like to see more participation by
military voters in local and state elections, not just in the
presidential elections. "If we locate polling places off base,
we are going to be affecting the voter turnout for our military
voters, which is already ... very low ...." She added, "As
Senator Leman stated, we all in Alaska enjoy the privilege of
being able to vote right in our neighborhoods, and this would
not be the case for military voters."
Number 0828
MS. GROWDEN explained that in the case of Eielson AFB, she would
have to move the polling place to Moose Creek or North Pole, and
for Fort Wainwright, she would have to find a place that's not
already currently used that could handle that many voters. "It
definitely is going to be difficult on both elections
administration and the voters if we start having to make that
many voters go off base and have to find transportation to a
polling place outside of their neighborhood," she said. "So I
definitely support [HJR 8] and I hope we can get the Department
of Defense or Congress to rescind the directive for good."
REPRESENTATIVE STEVENS asked if the Kodiak Coast Guard Base is
in the Central Region.
MS. GROWDEN said it in a different region.
REPRESENTATIVE STEVENS described a similar situation affecting
2,500 people on the Kodiak Island Coast Guard Base who have no
polling place there.
CHAIR COGHILL noted that Representative James had joined the
committee meeting.
CHAIR COGHILL mentioned that Fort Wainwright is in the middle of
his district and takes up a big chunk of it, so he has a
"tremendous interest" and is very supportive [of SJR 8].
REPRESENTATIVE CRAWFORD commended Senator Leman on SJR 8,
saying, "Anything that helps get people out to the polls I think
is a good thing ...."
REPRESENTATIVE STEVENS asked about voter registration on
military bases, citing an example of permission being denied to
do so on the Coast Guard base in Kodiak. He suggested that
Senator Leman look into that, too.
SENATOR LEMAN observed that the Coast Guard is under the
jurisdiction of the Department of Transportation rather than the
Department of Defense, so the situation may be a little
different. In his district, at Elmendorf AFB, there is a person
called a "voting officer" who coordinates such efforts. He
understands that they allow voter registration on the base at
Elmendorf. He agreed that voter registration on bases should be
encouraged and any inconvenience remedied.
Number 1100
CHAIR COGHILL asked Ms. Growden if the Elections Division
conducts registration drives at Eielson AFB or Fort Wainwright.
MS. GROWDEN said for all the election cycles, she works with the
unit voting officers. This past year, in 2000, there was a very
proactive unit voting officer at Fort Wainwright. The Division
of Elections worked with that officer to sponsor several
registration drives. Her staff has been invited to participate
in registration drives at Fort Wainwright as well. She assured
the committee that the military regularly sponsors voter
registration drives.
REPRESENTATIVE HAYES asked Senator Leman if any resolutions to
address this issue have been introduced in this Congress.
SENATOR LEMAN said he thinks it has not been introduced this
session, but he believes that both the president and the
secretary of defense are trying to approach it administratively,
and that legislation may not be necessary. However, Senator
Leman thinks it probably should be dealt with by legislation so
this doesn't become an issue in the future.
REPRESENTATIVE HAYES asked Ms. Growden if there is a backup plan
if no solution comes [from the federal level].
MS. GROWDEN said the Elections Division will have to locate
those polling places off base, and has been looking for the best
locations. She is hoping that Fort Wainwright will continue to
allow voting on base. She explained:
I just could not be in a military-owned facility, so I
moved to the school from the post library, and that
seemed to appease the military personnel for Fort
Wainwright. That was not the case for Eielson [AFB],
however. When I offered to move to the school, it was
still an issue of, "No, you can't be on base." And so
for Eielson, my first choice would be to go to the
Moose Creek fire station. I've talked to the fire
chief out there. They were a little concerned because
I already have a polling place in that facility, but
they would in a pinch allow us to use that facility.
Beyond that, those voters would have to go to North
Pole ...[and] I just could not allow voters to have to
travel that far to go cast their vote.
So I'm hoping that Fort Wainwright will continue to
allow me to use a state-owned facility, the school
there, and if not, we would have to look at Tanana
Junior High School, if the school district would allow
us to use that facility. Again though, a very large
precinct is already using this school and the school
is overcrowded, so we're still just not exactly sure
if Fort Wainwright doesn't allow us on where we would
end up going.
Number 1440
REPRESENTATIVE WILSON moved to report HCS CSSJR 8 (MLV) out of
committee with individual recommendations and the accompanying
fiscal notes. There being no objection, HCS CSSJR 8 (MLV) was
reported out of the House State Affairs Standing Committee.
CHAIR COGHILL announced a brief at-ease.
HB 123 - USE OF BONUSES EARNED ON STATE TRAVEL
Number 1499
CHAIR COGHILL announced the next item of business, HOUSE BILL
NO. 123, "an Act relating to the use of frequent flyer miles or
another bonus earned on travel paid for by the state."
Number 1534
REPRESENTATIVE ANDREW HALCRO came forward to speak as sponsor of
HB 123. He noted that he had introduced a similar bill in the
last session and that he did not intend any negative commentary
on state travel or those who travel on state business. He
recognized that state employees who travel make a sacrifice.
However, he said the subject of HB 123 is a legitimate topic on
which discussion is merited. Frequent flyer miles earned on
travel paid for by the state constitute a legitimate state
asset. Other states, including Oregon and California, strictly
prohibit the use of bonuses earned while on state paid travel to
be redeemed. The federal government also prohibits it, and he
thinks at a time when the state is struggling [financially], the
projected savings of HB 123 could be funneled back into much
needed programs that the legislature is currently underfunding.
REPRESENTATIVE HALCRO said he was "absolutely shocked and amazed
by these fiscal notes." According to HB 123, any subsequent use
of travel benefits gained on state-paid travel would be an
ethics violation. "It requires absolutely no oversight, no
accounting, and no supervision," he said. "According to these
fiscal notes, it is going to cost the State of Alaska an average
of $200,000 a year to do nothing."
REPRESENTATIVE HALCRO noted that he is in the travel business,
and said he has had many conversations with travel agents and
agency owners about how participation in frequent flyer programs
tends to dictate travel choices. He expressed concern about
government travelers choosing not the lowest-priced carrier, but
the one awarding frequent flyer miles. Some states, including
California, have negotiated contract airfares with carriers in
exchange for the promise that frequent flyer miles will not be
redeemed.
REPRESENTATIVE HALCRO described HB 123 as very simple and
straightforward. "It simply states that if you travel on state
business, paid for by the state, you cannot redeem those
frequent flyer miles earned for personal benefit," he said. He
pointed out that the state does not let employees take computers
or other state assets that may be part of their jobs. Those
assets stay with the state, and so should frequent flyer miles.
Number 1788
REPRESENTATIVE HALCRO noted that the issue predates his arrival
in the legislature, going back to 1988. He said frequent-flyer
miles are not part of collective bargaining agreements, are not
claimed as compensation on employees' federal income tax
returns, and that salaried employees are not eligible for
overtime. He doubted that anyone takes a job with the state
simply because he/she is going to get frequent flyer miles.
Travel is part of most jobs, including his.
REPRESENTATIVE HALCRO hoped HB 123 would foster a more frugal
approach to travel, including more extensive use of alternatives
such as teleconferencing and video conferencing. A state
employee might be less likely to travel and would not have the
option of choosing a more expensive carrier because of the
incentive of frequent flyer miles.
REPRESENTATIVE HALCRO pointed out that HB 123 does not call for
any supervision or oversight. He called attention to fiscal
notes from the Legislative Affairs Agency and from the
administration. He said the fiscal note from the administration
is for $265,000 "to implement a law that doesn't require them to
do anything."
REPRESENTATIVE HALCRO said the state spends an average of $15.7
million a year on travel. He thought the possible state savings
were between $500,000 to $2 million based on redeemed frequent
flyer tickets. There is no way to pinpoint an exact savings,
but even one ticket used for future state travel is a saving.
REPRESENTATIVE HALCRO observed that not every state employee
travels, so why should those who travel receive a benefit that
other employees do not get. If frequent flyer miles are
perceived as a benefit of employment, that benefit should be
included in collective bargaining agreements.
CHAIR COGHILL told Representative Halcro that the chair's
intention was not to act on HB 123 that day, but only to have
the first hearing. He concurred that he had reservations about
the fiscal notes, which were received just before the meeting
and required more scrutiny than the committee could give them in
the next hour.
Number 2127
REPRESENTATIVE STEVENS voiced concern that HB 123 "might be
creating some traps for ethics violations." He asked if a state
employee would be given a separate frequent flyer card to use
when flying on state business. He wondered if he would be
risking an ethics violation by using his own card when traveling
on behalf of several different state agencies.
REPRESENTATIVE HALCRO explained that HB 123 is based on the
honor system, and there is no intent on his part to create an
ethics trap. There are no reporting requirements. The federal
government encourages employees to establish a separate frequent
flyer account for government travel, but that is not mandated.
REPRESENTATIVE WILSON commented that she has to pay out of her
own pocket for airfare required to travel throughout her
district, and that it would be nice to be able to use frequent
flyer miles to cover some of those costs.
REPRESENTATIVE HALCRO said she could do so. He thought a person
should keep frequent flyer miles earned on personal travel, but
that miles earned on state travel belong to the state. He added
that Representative Wilson was traveling because she had need,
not because she wanted frequent flyer miles.
REPRESENTATIVE FATE declared a potential conflict of interest
because a member of his immediate family is on the board of
directors of Alaska Airlines. He then asked Representative
Halcro if he had asked any airlines about the impact HB 123
might have on their costs and bookkeeping. He also wanted to
know if frequent flyer miles are redeemable to the state, and if
so, what the state would do with that credit.
REPRESENTATIVE HALCRO said that several years ago, the state had
approached Alaska Airlines about accruing mileage credit based
on employees' travel. The airline at that time said it was not
set up to handle that. He didn't know if that airline or any
other had been approached since then. Two weeks ago in an
overview, the administrations procurement people talked about
how they were trying to consolidate travel onto a credit card
and reported that Alaska Airlines had taken notice of the amount
of money that the state spends on air travel with that carrier,
and that the administration thought it might be in a position to
negotiate better airfares. Representative Halcro thought it
might help in negotiating better airfares if mileage credits
earned on state travel were not going to be redeemed.
REPRESENTATIVE HALCRO cited a 1983 opinion from an assistant
attorney general that it would be "wholly defensible" if the
state were to require that frequent flyer miles accrued through
state travel be used for subsequent state travel.
Number 2661
CHAIR COGHILL wanted to know more about how the federal
government handles frequent flyer miles. He understood that an
Internal Revenue Service (IRS) ruling had prompted the statement
of federal government policy.
REPRESENTATIVE HALCRO explained that frequent flyer mileage has
come under IRS scrutiny for years because it is a tangible
benefit that could be considered income. He thought in order to
protect itself, the federal government had simply stated that it
didn't want to get involved with frequent flyer mileage. A
number of states in order to remove themselves from the legal
question have said, like the federal government, that if an
travels on state business, that employee is prohibited from
using the consequent mileage credit for personal travel because
"that represents income which is thereby required to be claimed
to the IRS."
REPRESENTATIVE HALCRO pointed out that in Oregon and California,
which have these policies in effect, every one of the
communities is accessible by road as contrasted with Alaska,
which has [many] communities that can only be reached by air.
CHAIR COGHILL requested clarification about the $15.7 million
Representative Halcro had mentioned. Was that for overall
travel or just for airfare?
REPRESENTATIVE HALCRO said the $15.7 million spent in FY 2000
was for air travel only, and that the figure did not include
[travel by] the University or the Alaska Industrial Development
and Export Authority (AIDEA), divisions which have separate
accounting.
REPRESENTATIVE CRAWFORD believed frequent flyer miles to be an
implicit benefit, comparable to coffee breaks. Although not
specifically mentioned in collective bargaining contracts that
is where it the issue should be addressed if the state decides
it wants to save money by taking away an implicit benefit that
state employees have enjoyed for a number of years. He thought
the state should be prepared to offer the employees something in
return.
Number 2838
CHAIR COGHILL thought the points Representative Crawford was
raising were among those that should be brought up in later
discussion by the committee. He wanted to keep confine the
current discussion to questions and answers.
REPRESENTATIVE HALCRO thought Representative Crawford had raised
a question. He noted that the Anchorage Police Department
allows its officers to take patrol cars home. The car take-home
program is valuable because it increases the feeling of safety
in the community, but an officer who retires from the force does
not get to keep the car. In addition, he thinks it will be hard
to convince the public that a commissioner who makes upwards of
$80,000 a year needs to be compensated "because we took away one
of their vacations achieved by claiming frequent flyer miles on
travel paid for by the state," he said. "I think we'd all have
a hard time selling that to our constituents."
Number 2931
KATHY DIETRICH, Business Agent, Alaska State Employees
Association (ASEA), AFSCME Local 52, testified by
teleconference. She expressed concern that HB 123 was
impractical, would create inefficiencies in state government,
and was unreasonable to place on employees. She explained that
the Alaska State Employees Association represents the general
government unit, the largest unit of state employees with 7200-
7500 members.
MS. DIETRICH referred to the sponsor's statement re utilizing
travel awards.
TAPE 01-15, SIDE B
MS. DIETRICH pointed out that the state already has control over
directing employees to choose travel that is in the state's best
interest. This bill is not necessary to address that problem if
it really is a problem. In California and Oregon, there a many
airlines from which to choose, so it's a very different
situation.
MS. DIETRICH observed that Alaska Airlines had developed a
frequent flyer program to create loyalty among travelers, not
for paying for the travel, but for the actual travel. "That's
why you can actually receive mileage in two ways, ... [by]
paying for it and for traveling," she said. Two-thirds of ASEA
members travel once a year. At that rate, it would take them 20
years before they would raise enough mileage to actually secure
a trip. "I think it's [an] unreasonable burden to ... expect
them to track that mileage for 20 years in order to redeem it to
the state."
MS. DIETRICH said the ASEA members who are more frequent
travelers travel not for meetings that could be resolved through
videoconferencing. They travel because they're providing
services all over the state. They include public health nurses,
environmental specialists, and social workers. They're away
from their families and homes, often traveling in very difficult
circumstances; they're wasting their own time waiting in
airports.
Number 2773
REPRESENTATIVE HALCRO argued, "You do get the miles for paying
for the travel. You don't get miles when you redeem frequent
flyer awards and take a free trip. You get miles on tickets
that are purchased."
MS. DIETRICH understood what he was saying but thinks he
misinterpreted what she said.
REPRESENTATIVE HALCRO again referred to conversations he has had
with travel agents and agency owners [who said] they thought on
a number of occasions, travel choices were based on those
carriers in which a traveler has a vested (frequent flyer)
interest. Back in the early 1980s when Mark Air's rates were
half that of Alaska Airlines, he heard that Mark Air "couldn't
get anybody to travel on their planes because everybody was a
member of the Alaska Airlines mileage program."
CHAIR COGHILL directed discussion to the fiscal note issue.
Number 2663
KIM GARNERO, Director of Finance, Department of Administration,
came forward to testify. She addressed the impact HB 123 would
have on the executive branch of state government. The bill
requires that mileage earned on state travel be used for
subsequent state travel. Obtaining any net benefit from HB 123
is problematic for several reasons.
Number 2633
MS. GARNERO testified:
First, no pooling of miles is allowed. This means
that before any benefit could be had, an individual
would need to make 18 round trips between Juneau and
Anchorage. Only then could that traveler redeem
20,000 miles for a free ticket for their own
subsequent state travel. Only a small percentage of
state employees would ever qualify for free travel.
Second, mileage seats are controlled capacity
inventory, and state travel needs do not necessarily
mesh with the available supply at the individual
traveler level.
Third, turning frequent flyer miles into a state asset
requires stewardship. This means implementing a
consistent tracking function that can be independently
verified. The information could only be gathered in
each department where the travel authorization is
processed to reimburse the traveler. This means
additional workload at the individual agency level.
The workload for the travel clerk includes tracking
mileage earned by each traveler, monitoring the
balance for usage, and initiating routine compliance
procedures. We anticipate the need for substantial
compliance and enforcement efforts over the first few
years of implementation. Depending on the level of
effort, much of the responsibility would fall to
supervisors, management personnel, and human resource
professionals. All of this would be counterproductive
to an effective work environment.
State policies already ensure maximum benefit for our
travel expenditures. The lowest available fares are a
requirement. This proposed legislation would provide
little additional benefit to the state in the way of
free travel and would substantially increase the need
for oversight and enforcement.
CHAIR COGHILL noted that she had provided a degree of
understanding about how the administration arrived at the fiscal
note. He then apologized to Ms. Dietrich for inadvertently
cutting off her testimony, and asked if there was more she
wished to say.
MS. DIETRICH wanted to make another point, and Chair Coghill
promised to give her the opportunity shortly.
Number 2485
REPRESENTATIVE STEVENS thought for the state employees, it would
be far preferable not to use their own frequent flyer numbers.
It would be better if the state would get the ticket and use its
frequent flyer number and all credit would go onto the state's.
MS. GARNERO said she had spoken two days ago with the operations
manager for the Alaska Airlines mileage plan. He said they are
not allowing pooling for any of their customers ... [and] to his
knowledge, none of their customers are setting up a separate
travel account to capture their business mileage credits
separately from their personal mileage credits.
MS. GARNERO pointed out that Representative Halcro had
emphasized that mileage credits are a state asset. Management
has a responsibility to safeguard assets. "We do that for the
computers and the trucks and everything," she said, "and if the
miles became a state asset, we would have that responsibility.
That's where the independent verification of the records comes
from. There's nothing in the bill that speaks to an honor
system. It says that the Department of Administration would be
responsible for adopting regulations to implement the bill."
REPRESENTATIVE STEVENS understood that if 18 legislators travel
to Juneau there would be no benefit to the state. The only
benefit to the state is if one legislator traveled 18 times.
"You've got really a nightmare of bookkeeping to try to keep
track of it..."
MS. GARNERO agreed.
REPRESENTATIVE STEVENS asked about her statement that a state
traveler's need often does not mesh with the availability of
free seats.
MS. GARNERO said that during fishing season, there are not many
seats available to Southeast Alaska at the "saver" mileage rate
[20,000 miles]. You can always get the "peak" mileage for
35,000 miles.
MS. DIETRICH offered an example. She was trying to make
reservations five months in advance, and found she would have to
travel three days earlier and come home four days after her
preferred dates in order to get mileage space available, and
that is why HB 123 would be very impractical and unreasonable
and inefficient to expect state employees to try to plan state
basis on mileage.
Number 2219
KARLA SCHOFIELD, Deputy Director, Administrative Services,
Legislative Affairs Agency, Alaska State Legislature, came
forward to testify. She said:
Currently we track a lot of travel for legislators.
House Bill 123 would require that we'd have to add to
our legislative database. Most of our employees don't
travel as much as legislators, but this bill would
require that we keep track of their mileage. Our
employees are often in layoff. They go on and off the
payroll, and they can do this over several years.
This bill would require if you came back from layoff,
that we would have to know how many miles you have.
I can also envision a legislator not knowing how many
miles they've accumulated that belong to the state and
I think it might be easier for them to call us and
say, "How many miles do I have? Do I have enough
miles to turn in for a free ticket so the state gets
the benefit of that?" I also think even if it were
strictly an honor system, that would that probably be
one thing, but what could easily happen is a presiding
officer might want to know which legislator had enough
mileage to turn in a free ticket. I just think that
we would need to know who has miles. It's further
complicated because there'd be more than one mileage
company. Legislators travel all over the country for
business meetings, and we'd have different mileage
programs and we'd have to keep track of that.
The other thing that happens in the legislative branch
is we often get requests for information about various
things legislators do. I think we would get requests
asking how much mileage they might have acquired.
REPRESENTATIVE STEVENS asked if she was prepared to answer
questions on ethics issues or if that was outside her realm of
expertise.
MS. SCHOFIELD said she would not want to answer questions
regarding ethics, but that she could foresee getting questions
from the Ethics Committee about how much mileage a legislator
might have used.
Number 2066
REPRESENTATIVE WILSON noted that it is hard to know how much
mileage one has because the airlines are usually three months
behind. She asked if Legislative Affairs would have the same
kind of problem if somebody wanted to know.
MS. SCHOFIELD thought they would know what travel had been paid
for and how many miles a legislator should have. She added that
legislators have allowance accounts as well as authorized
travel, and she thought they would have to be keeping track of
what mileage applied to each of those separately.
REPRESENTATIVE HAYES asked if legislators could take their
office account as personal monies, could mileage bought from
that account also be considered personal mileage?
MS. SCHOFIELD expected that was the way it would be interpreted.
Number 1985
DAVE STEWART, Personnel Manager, Department of Administration,
Division of Personnel, came forward to testify. He said the
chief points he would like to make had been raised by
Representative Crawford. They deal with the obligation to
collectively bargain a change in benefit, real or perceived. He
testified:
The legislation proposed in HB 123 creates an
obligation for the State of Alaska to negotiate with
the 12 executive branch unions and the unions that
represent the employees in the University of Alaska
system. Eleven of the current executive branch
bargaining units do not contain language in their
contracts that deal with the issue of frequent flyer
miles; however, one collective bargaining agreement
contains specific language permitting personal use of
miles accrued for state-paid travel.
Under the Public Employees Relations Act, the unions
have a duty to bargain for successor agreements on
terms and conditions or changes in terms and
conditions, but they're under no obligation to bargain
changes during the life of an active contract. What
that means is that {HB 123}, if it were put in place,
would be immediately effective on non-covered
employees, specifically, exempt employees, partially
exempt employees, legislative employees, and judicial
employees. One of the footnotes in the fiscal note
indicates that it is likely that the unions will not
bargain a change in benefit until the successor
agreements are negotiated, beginning in the fall of
2003 to be effective in fiscal year 2004, which is why
the fiscal note is designed the way it is.
It is our belief that if the unions do negotiate on
[mileage credit], they'll negotiate an equal financial
consideration to the miles accrued, and not
necessarily to the miles redeemed; so that the actual
financial impact of negotiating terms or changes in
benefits would exceed the possible savings. We'd be
paying for all the miles accrued and reaping benefit
only from those miles that were redeemed.
Another point that we'd like to make is that both
legislative bodies and the executive branch recognize
that there are difficult-to-fill job classes in state
service. One of the aims of ... programs in [both]
the Department of Administration and the Division of
Retirement and Benefits is to retain qualified and
good public employees, and I would raise the question
of the impact of this legislation on retention
strategies, both in legislative bodies and [in] the
executive branch ....
REPRESENTATIVE CRAWFORD asked if the issue of frequent flyer
miles had ever come up in contract negotiations.
MR. STEWART said it arose at the table in the last round of
negotiations, and consequently wound up in the supervisory
bargaining contract. It arose as an issue due to legislation
that had been introduced in a previous session of the
legislature. He did not know if the issue had come up at any of
the other tables.
Number 1743
DON ETHERIDGE, Business Representative, Public Employees Local
71, Alaska State AFL-CIO, came forward to speak in opposition to
HB 123. He said:
We already have our lawyers dusting off their books
for past practice and a few other little choice legal
things that we were looking at that if this bill was
to be enacted, we would be moving forward with.
Our members have looked at this for many years not so
much as the benefit but a little bit of a compensation
for the time they spend away from home, for traveling
at night, and a lot of the folks that travel aren't
paid for their travel hours, not only the exempt
employees but there's a lot of the contract employees
also that don't get paid for their full travel hours.
Most of the members that I represent through Local 71
travel ... once a year at most. That's to go out to
Kenai for some training. So it would take nine to ten
years for these guys to get a ticket on the state
dime. If your account doesn't stay active, they start
dumping the miles, so they would never get a free
ticket off of this anyway from the state miles.
The other thing that was being talked about was not
taking the cheapest airlines. Well, in most of
Alaska, we don't have a choice. There's very seldom
that we have a choice who we're going to fly with. It
was alluded to earlier when Mark Air was trying to
bring their service into Southeast Alaska. There's a
lot of folks flew those flights, and many of them I've
talked to said they'd never fly another one if they
were given [a free] ticket [because of the poor
service]....
When I was still a state employee and they were
talking about this the first time around, it was my
intention at that time that I wasn't going to travel
on my own time anymore if that's the way we were going
to play the game. I wasn't going to turn in for the
miles and I wasn't going to travel on my own time, so
I was going to spend an extra night if necessary or
leave the meetings or the job early to fly on the
company time and not my own. I know I'm not the only
one that thinks that. So I know that you'd be looking
at an increase in per diem costs if [HB 123] was to be
passed. We just have a problem with the fact that
this is looked at as such a great benefit for the
public employee. And its not such a great benefit.
It's a benefit, I agree with that, but it's mighty
small compensation for those that have to be away from
home.
If we're going to look at saving money, let's look at
saving big money instead of nickels and dimes here on
travel costs that could be reimbursed by these
tickets. Video conferencing: that'll stop a lot of
the travel if it was available more to the state
organizations. During a lot of our discussions on
classification issues and everything else, we did
quite a bit of that, and I think we need to do more of
that. It works, and that'll save money in the long
run. But there's a lot of places where we're wasting
a lot more money than [can be saved with HB 123].
Number 1444
BRUCE LUDWIG, Business Manager, Alaska Public Employees
Association (APEA)/Alaska Federation of Teachers (AFT), noted
that he is also Secretary Treasurer of the Alaska AFL-CIO. He
said APEA/AFT represents two bargaining units within state
government and all four bargaining units at the University of
Alaska. The largest of those bargaining units is the
Supervisory Unit, which for about ten years has had a letter of
agreement, reached by bargaining, stating that mileage is
retained by the employee. Many of the members travel, and they
incur additional [unreimbursed] expenses because of that.
MR. LUDWIG said:
I've always thought there was a conspiracy between
Alaska Airlines and the administration because I know
we all try to make the most out of a day's travel.
Alaska Airlines has that early flight that goes up [to
Anchorage] in the morning about 6:30 or 7:00 [a.m.],
and you come back at 8:00 p.m.; and I kind of thought
the governor talked them into doing that to get a lot
more work hours out of people. [Laughter]
The point I'm making is that there's a lot of time
that the state gains out of that, a lot of extra hours
that my members put in but don't get compensated for.
This [individually retaining the frequent flyer
mileage] is one small part of the compensation
package, and we look at it this way.
Our retirement system has been degraded several times.
It's no longer competitive. Our members at the City
of Fairbanks bailed out of PERS [Public Employees'
Retirement System] because it isn't competitive. The
compensation that we pay people [isn't competitive].
We can't get biologists, we can't get programmers, we
can't get engineers because we don't pay them enough.
And I'd suggest that there are two audiences. I'm
sure this sticks in the craw of a lot of the public
that the state's paying for a ticket and somebody's
getting the mileage off of it. But there's another
audience out there that we need to look at that Mr.
Stewart raised, and that's attracting and retaining
qualified people to do the state's business. We have
to have qualified people. We have to have good people
that go in and audit BP's books so that we know how
much income tax we're entitled to. And if we don't,
we don't get that money. We lose when we don't have
qualified employees. And this is a part of it, not a
big part, but it's a part of it.
Number 1230
MR. LUDWIG told of federal employees who just let their mileage
credit accumulate during their working years, saving it up to
use after they retire.
MR. LUDWIG underscored Ms. Garnero's point that there is already
an obligation on the part of employees in scheduling the travel
to find the most efficient means of getting there. If someone
is buying a ticket and traveling at a different time
specifically to get mileage that's costing the state money,
there are avenues of redress that are currently available. He
is aware of an ethics complaint that was filed against a state
employee for using a car-rental agency other than one offering
reduced government rates.
MR. LUDWIG suggested negotiating reduced hotel rates for state
employees during the summer instead of paying the high rates
charged in Anchorage during the tourist season. "There's more
efficient ways of saving the state money than reducing further
the compensation package for state employees," he concluded.
REPRESENTATIVE STEVENS wanted to know more about possible
consequences to an employee under the Alaska's ethics laws.
MR. LUDWIG said the ultimate penalty under the ethics laws is
termination of employment. "If they suspected that you did it
on purpose, there's a good chance that you'd end up getting
dismissed," he said.
CHAIR COGHILL added that there certainly would be a hearing over
that.
MR. LUDWIG emphasized that an employee traveling in a way that
costs the state more money is violating the Administrative Code
and penalties for that already are in effect.
CHAIR COGHILL stated his intention to hold another hearing on HB
123.
Number 0966
REPRESENTATIVE HALCRO repeated that the intent of HB 123 was not
to condemn or punish anybody who travels on state business. He
believes they make a sacrifice and knows what it is like. But
it is important to keep the issue in the proper context. The
public has a right to expect publiuc employees to operate within
the bounds of fairness. He thinks it is fair to assume that
frequent flyer miles procured on state business are a legitimate
state asset.
REPRESENTATIVE HALCRO said that HB 123 is designed to be on the
honor system. Although it does stipulate that the Department
[of Administration] should come up with regulations, it doesn't
say anything about tracking. Neither California nor the federal
government track mileage, he said. The fiscal note looked to
him to be "[just] an attempt ... to prove that [HB 123] is
completely economically unfeasible."
REPRESENTATIVE HALCRO responded to several points that had been
raised in testimony. There is nothing in HB 123 that says
employees have to use the mileage immediately, and there are
quite few [free] seats available in Alaska in the winter.
REPRESENTATIVE HALCRO acknowledged that travel may involve some
sacrifice, but that is "part of the job." Business travel also
has benefits, for example, it allows the traveler to stay on and
enjoy personal time at the destination.
REPRESENTATIVE HALCRO noted that when a legislator takes up-
front payment of the amount in his personal account, that money
is taxed as income and the legislator is free to do whatever
he/she wants with it. There are no reporting requirements.
REPRESENTATIVE HALCRO acknowledged that "this is a very
difficult conversation." But he still thinks if the state paid
for the ticket, the resulting mileage credits should be used for
future state travel.
REPRESENTATIVE HALCRO concluded, "Once you get past what I
believe is a substantially puffed-up fiscal note, there is not
one ... legitimate argument against this piece of legislation."
Number 0392
CHAIR COGHILL said the committee would need to consider the
implications of the fiscal note. He went on to say:
The policy call as I see it in this bill is the policy
call on allowing benefits or hauling them in, and
that's balanced against the commitment of the state
employees to their work and our willingness to allow
that commitment ... [and making] sure that whatever
the state [gets the benefit for what it is paying
for]....
CHAIR COGHILL wanted to clarify the intent on reporting issues,
which he thought would be critical in making the policy call.
He asked Representative Halcro to speak to the intent at the
next hearing.
REPRESENTATIVE HAYES wanted to know how many state employees
travel enough in a year to qualify for a free ticket. He noted
that if it were possible to pool the miles, that would be an
entirely different issue.
REPRESENTATIVE HALCRO referred to the estimate in the fiscal
note that an average of ten travelers per agency earn enough
miles. Even though pooling is not allowed, if the state took a
position that miles earned on state travel could not be redeemed
for personal use, that might put the state in a better place
with the airlines to negotiate lower fares [for state travel],
if that is possible.
REPRESENTATIVE HALCRO didn't think was possible to put a
specific figure on what HB 123 would save. He again pointed out
that the state spends $16 million on travel, and said that
suggests opportunities for savings.
TAPE 01-16, SIDE A
Number 0001
REPRESENTATIVE JAMES pointed out leaving the accounting of
mileage credit to the individual does not constitute keeping
track of things in a way that is auditable. In trying to listen
to the whole issue, it seemed to her that the driving factor
behind HB 123 was not necessarily saving money for the state,
but giving some employees a benefit that other employees don't
have. "In other words, it's not fair for these people [who
travel on state business] to get this extra benefit." If
fairness is the purpose, then the only way to satisfy that
concern would be to tell individuals that they cannot take
frequent flyer miles on tickets that the state pays for, and
then drop the matter there. Then those miles are dead, not
usable, and do not need to be accounted for, she said. She
thinks the general public perceives state travel as an extra
benefit.
REPRESENTATIVE HALCRO said fairness is part of the issue.
Another part is a genuine belief that frequent flyer miles are
state assets and should be used to reduce future travel costs.
They also are a benefit, and thus a tax liability issue where
the IRS is concerned.
REPRESENTATIVE JAMES said she did not support HB 123. If there
were some real savings, she might be more convinced that HB 123
is a good idea. But she disagrees with Representative Halcro's
belief that because the state paid for these tickets, the
resulting mileage credits are a state asset. She believes the
reward belongs to the flyer, not to the one who pays for the
ticket. "You don't get the mileage until you get on the
airplane," she pointed out. "And then you get the mileage
because you're on the airplane, not because you paid for the
ticket. So that's a difference in philosophy."
REPRESENTATIVE HALCRO replied, "... When you pay for a ticket
and you get on the airplane and you take a flight and you accrue
frequent flyer miles, that's one thing. But when you redeem
those frequent flyer miles for a ticket and you get a free
ticket [and go somewhere] ... they don't give you miles, but yet
you're on the plane. So, therefore, the basis for awarding the
miles is buying the ticket."
REPRESENTATIVE JAMES made the point that some people do not
redeem mileage for free travel, but use it as she does to
upgrade to first class.
REPRESENTATIVE HALCRO noted that his company holds the state
car-rental contract in Anchorage, Fairbanks, and Juneau, "so if
there's one person in this building who benefits from state
employees' traveling, it's me." He found it ironic that he is
the one promoting legislation that he thinks would save the
state money and serve a public purpose, and yet was finding very
little support.
Number 0569
CHAIR COGHILL restated his intention to address the issue of
reporting at the next hearing of HB 123. [HB 123 was HEARD AND
HELD.]
ADJOURNMENT
There being no further business before the committee, the House
State Affairs Standing Committee was adjourned at 9:45 a.m.
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