Legislature(1993 - 1994)

04/28/1994 03:22 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                   SENATE LABOR AND COMMERCE                                   
                         April 28, 1994                                        
                           3:22 P.M.                                           
  MEMBERS PRESENT                                                              
 Senator Tim Kelly, Chairman                                                   
 Senator Steve Rieger, Vice Chairman                                           
 Senator Bert Sharp                                                            
 Senator Georgianna Lincoln                                                    
 Senator Judith Salo                                                           
  MEMBERS ABSENT                                                               
  COMMITTEE CALENDAR                                                           
 CS FOR SENATE BILL NO. 244(STA)                                               
 "An Act relating to equity investments of the permanent fund; and             
 providing for an effective date."                                             
 HOUSE BILL NO. 394                                                            
 "An Act relating to limited partnerships; and providing for an                
 effective date."                                                              
 CS FOR HOUSE BILL NO. 277(JUD)                                                
 "An Act relating to public employers defending and indemnifying               
 public employees and former public employees with respect to claims           
 arising out of conduct that is within the scope of employment."               
 SENATE BILL NO. 290                                                           
 "An Act making appropriations to satisfy the monetary terms of                
 certain collective bargaining agreements for certain public safety            
 employees under an arbitrator's decision; and providing for an                
 effective date."                                                              
  PREVIOUS ACTION                                                              
 SB 244 - See State Affairs minutes dated 1/28/94 and 4/13/94.  See            
          Labor and Commerce minutes dated 4/19/94.                            
 HB 394 - See Labor & Commerce minutes dated 3/24/94 and 3/31/94.              
 HB 277 - See State Affairs minutes dated 4/13/94.  See Labor &                
          Commerce minutes dated 4/26/94.                                      
 SB 290 - No previous action to record.                                        
  WITNESS REGISTER                                                             
 Carl Brady                                                                    
 Permanent Fund Corporation                                                    
 Anchorage, Ak.                                                                
  POSITION STATEMENT:   Supported SB 244.                                      
 Eric Musser                                                                   
 c/o Representative Brian Porter                                               
 State Capitol                                                                 
 Juneau, Ak. 99801-1182                                                        
  POSITION STATEMENT:   Commented on HB 277.                                   
 Nancy Usera, Commissioner                                                     
 Department of Administration                                                  
 P.O. Box 110200                                                               
 Juneau, 99811-0200                                                            
  POSITION STATEMENT:   Commented on SB 290.                                   
 Art Chance                                                                    
 Department of Administration                                                  
 P.O. Box 110200                                                               
 Juneau, Ak. 99811-0200                                                        
  POSITION STATEMENT:   Commented on SB 290.                                   
 Keith Perrin, President                                                       
 Public Safety Employees Association                                           
  POSITION STATEMENT:   Commented on SB 290.                                   
  ACTION NARRATIVE                                                             
  TAPE 94-33, SIDE A                                                           
  Number 001                                                                   
 CHAIRMAN KELLY called the Labor and Commerce meeting to order at              
 3:22 p.m. and announced  SB 244  (PERMANENT FUND INVESTMENTS - LTD            
 PARTNERS) to be up for consideration.                                         
 SENATOR KELLY said the first amendment they had was on page 1, line           
 7 after "interest in a" insert "non-recourse" and after "ownership            
 in a" insert "non-recourse."                                                  
 CARL BRADY, Permanent Fund Corporation, said he had no objection to           
 SENATOR KELLY said the second amendment was on page 2, line 3 after           
 "approved" to insert "at least."                                              
 MR. BRADY had no objection to that one either.                                
 SENATOR SHARP moved to adopt CSSB 244(L&C).  There were no                    
 objections and it was so ordered.                                             
 SENATOR SHARP moved to pass CSSB 244(L&C) from committee.  There              
 were no objections and it was so ordered.                                     
 UPDATE) to be up for consideration.                                           
 SENATOR RIEGER moved to pass HB 394 from committee with individual            
 recommendations.  There were no objections and it was so ordered.             
 EMPLOYEES) to be up for consideration.                                        
 ERIC MUSSER, Legislative Aide to Representative Brian Porter, said            
 essentially, HB 277 to a public employee is the same as an officers           
 and directors liability policy in the private sector.  The would              
 cover a gap in non covered employees.  The Municipality of                    
 Anchorage asked them to introduce this legislation.  This gives the           
 lending community reassurance that there are provisions for defense           
 and/or indemnification.                                                       
 MR. MUSSER said on page 5, line 1, they had no problem with                   
 removing the word "oral."                                                     
 Number 127                                                                    
 SENATOR LINCOLN moved on page 5, line 1 to delete "oral."  There              
 were no objections and it was so ordered.                                     
 SENATOR RIEGER moved on page 5, line 2 to delete "or implied."                
 There were no objections and it was so ordered.                               
 SENATOR RIEGER moved to insert "written and expressed" on line 2.             
 There were no objections and it was so ordered.                               
 SENATOR KELLY noted that the intent was for it to go into effect 90           
 days after signature.                                                         
 SENATOR SALO moved to pass SCS CSHB 277(L&C) from committee with              
 individual recommendations.  There were no objections and it was so           
 be up for consideration.                                                      
 NANCY USERA, Commissioner, Department of Administration, said this            
 bill is the result of an arbitration held between the Public Safety           
 Employees Association (PSEA) and the State of Alaska.  It is the              
 award given by Arbiter Litton, the terms of which she is to present           
 to the legislature.                                                           
 One of the things she thinks is particularly important is of the              
 substantial number they see associated with the PSEA award, a fair            
 portion of that is retroactive to 1992.  If they were to delete the           
 retroactive portion, she said the PSEA award would be approximately           
 SENATOR SALO asked her if it was possible to go back to the table             
 to do anything to the award after the arbitration.  COMMISSIONER              
 USERA said if the legislature rejected the terms, the parties would           
 go back to the negotiating table.  Otherwise they could go back               
 only if both parties agreed.                                                  
 SENATOR KELLY asked her if the administration opposed this                    
 legislation.  COMMISSIONER USERA said they thought the terms of the           
 award were very bad for the state and for management.  There are              
 provisions in it that they don't like or agree with.                          
 SENATOR SALO asked why the Public Safety Employees Association                
 prevailed in arbitration.  COMMISSIONER USERA said she couldn't               
 speculate on it.                                                              
 SENATOR SALO asked if they mutually selected the arbiter.                     
 COMMISSIONER USERA said they mutually agreed to selecting an                  
 SENATOR KELLY asked for someone to present them the terms of the              
 COMMISSIONER USERA explained one of the problems she has with the             
 award is that it goes back to 1992 and the state's economic                   
 scenario is much different now.  Two other provisions are                     
 particularly troublesome to the state, because of their                       
 precedential nature.  One of them is related to the bill they just            
 passed from committee regarding indemnification.  The arbiter                 
 awarded not only indemnification for civil precedent, but also for            
 criminal actions.  That is a very dangerous precedent.                        
 The other difficult provision from a precedential standpoint is               
 this arbiter's award has what is called an "evergreen clause" which           
 awards the monetary terms in every succeeding year.  Obviously, she           
 said, this is not something most unions would want to give away (an           
 automatic COLA).                                                              
 ART CHANCE, Labor Relations, said he was the state's representative           
 in the arbitration, itself, though not in the negotiations.  He               
 reviewed some of the "high points" of the provisions in the award.            
 SENATOR KELLY asked for a copy of the award.                                  
 Number 516                                                                    
 SENATOR LINCOLN asked what would happen if this bill didn't make it           
 through the legislative process.  COMMISSIONER USERA answered that            
 Terry Cramer, Legal Services, said it would mean the terms and                
 conditions would go into effect.  There would just be no money to             
 pay for it.  She pointed out that they had been negotiating for 18            
 months, and, if the negotiations can be protracted and delayed,               
 there is very little incentive to come to agreement - especially if           
 there is supposed to be some give and take on either side.                    
 KEITH PERRIN, President, Public Safety Employees Association,                 
 clarified the intent of the indemnification clause is to apply to             
 negotiated "beyond duty" type action - applying to an individual              
 involved in some kind of action while employed.                               
 Regarding the health insurance which is $470 in the award, he said            
 the current amount is $423 and they hadn't had an increase in                 
 contributions since 1991.  Insurance rates have gone up every year,           
 he noted. If this contract is not funded, their insurance will not            
 last another year.                                                            
 MR. PERRIN disagreed with the Commissioner that they would go back            
 to the table if this contract was not funded.                                 
 SENATOR KELLY asked if there was anybody from the state explaining            
 the state's financial scenario or was it irrelevant.  MR. PERRIN              
 answered yes, that the Commissioner was there.                                
 Number 566                                                                    
 SENATOR SALO said she knows that sometimes the reason contracts are           
 drawn out can be the fault of one or both of the parties.  She                
 asked him how he would characterize their negotiations.  MR. PERRIN           
 said they absolutely were not trying to lengthen the negotiations.            
 SENATOR SALO said it is her experience that the arbitrator almost             
 always makes the contract retroactive to the date of expiration of            
 the last agreement.  MR. PERRIN said that was his experience.  He             
 asked that if there is no responsibility on the state's behalf for            
 the entire contract period, what incentive does it have to                    
 negotiate in a timely fashion.                                                
  TAPE 94-33, SIDE B                                                           
  Number 580                                                                   
 SENATOR LINCOLN asked him what would happen instead of going back             
 to the table if the legislature did not pass SB 290.  MR. PERRIN,             
 noting that he wasn't an attorney, said they think their                      
 arbitration is binding on both parties.  Secondly, they believe the           
 statutes clearly indicated, if you are going to take action to                
 disallow this contract, you must do so within 60 days of the                  
 appropriations bill being introduced, and that 60 days is passed.             
 He thought they would need a court decision to rectify that issue.            
 SENATOR KELLY said he was going to reject the binding arbitrator              
 from Boston.  He thought this was an elitist contract for 424                 
 people and an average of $18,324 is entirely too high.  It does a             
 disservice to the rest of the state employees and certainly does a            
 disservice to the public.  He thought the public would be outraged            
 if they knew the facts behind this case.                                      
 SENATOR LINCOLN reminded him that she asked the Commissioner what             
 would happen if the legislature didn't act on this bill.  She                 
 responded that would mean that it would go into effect, we just               
 wouldn't pay the tab.                                                         
 SENATOR KELLY said he would not pass this bill out of committee in            
 its current form.  He then adjourned the meeting at 4:12 p.m.                 

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