Legislature(1993 - 1994)
04/28/1994 03:22 PM L&C
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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 None 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 that. 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. SENATOR KELLY announced HB 394 (UNIFORM LIMITED PARTNERSHIP ACT 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. SENATOR KELLY announced CSHB 277(JUD) (INDEMNIFICATION OF PUBLIC 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 ordered. SENATOR KELLY announced SB 290 (APPROP: PUBLIC SAFETY EMPLOYEES) to to 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 $7,075. 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 arbitrator. SENATOR KELLY asked for someone to present them the terms of the arbitration. 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.