Legislature(2007 - 2008)BELTZ 211

03/11/2008 01:30 PM LABOR & COMMERCE

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Heard & Held
Heard & Held
Bills Previously Heard/Scheduled
Including But Not Limited to:
Heard & Held
Moved SB 289 Out of Committee
Moved HJR 25 Out of Committee
                    ALASKA STATE LEGISLATURE                                                                                  
          SENATE LABOR AND COMMERCE STANDING COMMITTEE                                                                        
                         March 11, 2008                                                                                         
                           1:33 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator Johnny Ellis, Chair                                                                                                     
Senator Gary Stevens, Vice Chair                                                                                                
Senator Bettye Davis                                                                                                            
Senator Lyman Hoffman                                                                                                           
Senator Con Bunde                                                                                                               
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
COMMITTEE CALENDAR                                                                                                            
HOUSE JOINT RESOLUTION NO. 25                                                                                                   
Urging  the United  States  Congress to  support  the freedom  to                                                               
choose unions.                                                                                                                  
     MOVED HJR 25 OUT OF COMMITTEE                                                                                              
SENATE BILL NO. 289                                                                                                             
"An Act  relating to home energy  conservation and weatherization                                                               
for  purposes  of certain  programs  of  the Alaska  Housing  and                                                               
Finance Corporation."                                                                                                           
     MOVED SB 289 OUT OF COMMITTEE                                                                                              
SENATE BILL NO. 294                                                                                                             
"An Act  relating to the pay  and duties of commissioners  of the                                                               
Regulatory  Commission of  Alaska, establishing  the position  of                                                               
executive  director of  the Regulatory  Commission of  Alaska and                                                               
defining the duties  and powers of the position,  and placing the                                                               
executive  director   and  administrative   law  judges   of  the                                                               
Regulatory Commission of  Alaska in the exempt  service under the                                                               
State Personnel Act."                                                                                                           
     HEARD AND HELD                                                                                                             
SENATE BILL NO. 297                                                                                                             
"An  Act   relating  to  the  compensation   for  certain  public                                                               
officials,  officers, and  employees  not  covered by  collective                                                               
bargaining agreements;  relating to pay increments  for longevity                                                               
in state service; and providing for an effective date."                                                                         
     HEARD AND HELD                                                                                                             
SENATE BILL NO. 160                                                                                                             
"An  Act establishing  an Alaska  health care  program to  ensure                                                               
insurance  coverage   for  essential  health  services   for  all                                                               
residents  of  the state;  establishing  the  Alaska Health  Care                                                               
Board  to  define  essential health  care  services,  to  certify                                                               
health care  plans that provide  essential health  care services,                                                               
and to administer  the Alaska health care program  and the Alaska                                                               
health   care  fund;   establishing   the   Alaska  health   care                                                               
clearinghouse to administer the  Alaska health care program under                                                               
the  direction  of the  Alaska  Health  Care Board;  establishing                                                               
eligibility  standards and  premium assistance  for persons  with                                                               
low income;  establishing standards  for accountable  health care                                                               
plans;  creating  the  Alaska health  care  fund;  providing  for                                                               
review  of  actions and  reporting  requirements  related to  the                                                               
health care program; and providing for an effective date."                                                                      
     HEARD AND HELD                                                                                                             
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: HJR 25                                                                                                                  
SHORT TITLE: SUPPORTING RIGHT TO FORM LABOR UNIONS                                                                              
SPONSOR(s): REPRESENTATIVE(s) HARRIS                                                                                            
05/10/07       (H)       READ THE FIRST TIME - REFERRALS                                                                        
05/10/07       (H)       STA                                                                                                    
05/12/07       (H)       STA RPT 3DP 1NR 2AM                                                                                    
05/12/07       (H)       DP: GRUENBERG, DOLL, LYNN                                                                              
05/12/07       (H)       NR: JOHANSEN                                                                                           
05/12/07       (H)       AM: ROSES, COGHILL                                                                                     
05/12/07       (H)       STA AT 9:00 AM CAPITOL 106                                                                             
05/12/07       (H)       Moved Out of Committee                                                                                 
05/12/07       (H)       MINUTE(STA)                                                                                            
01/28/08       (H)       TRANSMITTED TO (S)                                                                                     
01/28/08       (H)       VERSION: HJR 25                                                                                        
01/30/08       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/30/08       (S)       L&C, STA, FIN                                                                                          
02/07/08       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
02/07/08       (S)       -- MEETING CANCELED --                                                                                 
02/09/08       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
02/09/08       (S)       Heard & Held                                                                                           
02/09/08       (S)       MINUTE(L&C)                                                                                            
02/12/08       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
02/12/08       (S)       Scheduled But Not Heard                                                                                
02/16/08       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
02/16/08       (S)       -- MEETING CANCELED --                                                                                 
03/11/08       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
BILL: SB 289                                                                                                                  
SHORT TITLE: HOME ENERGY CONSERVATION                                                                                           
SPONSOR(s): SENATOR(s) HOFFMAN                                                                                                  
02/19/08       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/19/08       (S)       L&C, FIN                                                                                               
03/04/08       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
03/04/08       (S)       Heard & Held                                                                                           
03/04/08       (S)       MINUTE(L&C)                                                                                            
03/10/08       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
03/10/08       (S)       <Pending Referral>                                                                                     
03/11/08       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
BILL: SB 294                                                                                                                  
SHORT TITLE: RCA POSITIONS AND SALARIES                                                                                         
SPONSOR(s): LABOR & COMMERCE BY REQUEST                                                                                         
02/25/08       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/25/08       (S)       L&C, JUD, FIN                                                                                          
03/11/08       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
BILL: SB 297                                                                                                                  
SHORT TITLE: NONUNION PUBLIC EMPLOYEE SALARY & BENEFIT                                                                          
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
03/03/08       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/03/08       (S)       FIN                                                                                                    
03/06/08       (S)       L&C REFERRAL ADDED BEFORE FIN                                                                          
03/11/08       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
BILL: SB 160                                                                                                                  
SHORT TITLE: MANDATORY UNIVERSAL HEALTH CARE                                                                                    
SPONSOR(s): SENATOR(s) FRENCH                                                                                                   
04/23/07       (S)       READ THE FIRST TIME - REFERRALS                                                                        
04/23/07       (S)       HES, L&C, FIN                                                                                          
09/10/07       (S)       HES AT 1:30 PM Anch LIO Conf Rm                                                                        
09/10/07       (S)       Heard & Held                                                                                           
09/10/07       (S)       MINUTE(HES)                                                                                            
01/30/08       (S)       HES AT 1:30 PM BUTROVICH 205                                                                           
01/30/08       (S)       Heard & Held                                                                                           
01/30/08       (S)       MINUTE(HES)                                                                                            
02/18/08       (S)       HES AT 1:30 PM BUTROVICH 205                                                                           
02/18/08       (S)       Moved CSSB 160(HES) Out of Committee                                                                   
02/18/08       (S)       MINUTE(HES)                                                                                            
02/19/08       (S)       HES RPT CS  3DP 1DNP  NEW TITLE                                                                        
02/19/08       (S)       DP: DAVIS, THOMAS, ELTON                                                                               
02/19/08       (S)       DNP: DYSON                                                                                             
02/26/08       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
02/26/08       (S)       Heard & Held                                                                                           
02/26/08       (S)       MINUTE(L&C)                                                                                            
02/28/08       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
02/28/08       (S)       Heard & Held                                                                                           
02/28/08       (S)       MINUTE(L&C)                                                                                            
03/11/08       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
WITNESS REGISTER                                                                                                              
SENATOR HOFFMAN                                                                                                                 
Alaska State Capitol                                                                                                            
Juneau, AK                                                                                                                      
POSITION STATEMENT: Sponsor of SB 289.                                                                                        
DANA OWEN                                                                                                                       
Staff to Senator Ellis                                                                                                          
Alaska State Capitol                                                                                                            
Juneau, AK                                                                                                                      
POSITION STATEMENT: Commented on SB 294.                                                                                      
TONY PRICE, Chairman                                                                                                            
Regulatory Commission of Alaska (RCA)                                                                                           
Anchorage, AK                                                                                                                   
POSITION STATEMENT: Supported SB 294 with a few changes.                                                                      
RICH GAZAWAY, Commissioner                                                                                                      
Regulatory Commission of Alaska (RCA)                                                                                           
Anchorage, AK                                                                                                                   
POSITION STATEMENT: Supported SB 294 with a few changes.                                                                      
SENATOR LISEL MCGUIRE, Chairman                                                                                                 
Regulatory Commission of Alaska Task Force                                                                                      
Alaska State Capitol                                                                                                            
Juneau, AK                                                                                                                      
POSITION STATEMENT: Supported SB 294.                                                                                         
ANNETTE KREITZER, Commissioner                                                                                                  
Department of Administration (DOA)                                                                                              
Juneau, AK                                                                                                                      
POSITION STATEMENT: Supported SB 297.                                                                                         
KEVIN BROOKS, Deputy Commissioner                                                                                               
Department of Administration (DOA)                                                                                              
Anchorage, AK                                                                                                                   
POSITION STATEMENT: Presented SB 297.                                                                                         
CHRIS CHRISTIANSON, Deputy Administrative Director                                                                              
Alaska Court System                                                                                                             
Juneau, AK                                                                                                                      
POSITION STATEMENT: Didn't agree with magistrate pay and                                                                      
retroactivity for judges provisions in SB 297.                                                                                  
CHRISTINE SCHLOUSS, Attorney                                                                                                    
Anchorage, AK                                                                                                                   
POSITION STATEMENT: Supported SB 297.                                                                                         
MARGO LACHAPELLE, Employee Representative                                                                                       
Bethel Supervisory Unit (SU)                                                                                                    
Bethel, AK                                                                                                                      
POSITION STATEMENT: Would support SB 297 contingent on making                                                                 
longevity language consistent with her unit's contract.                                                                         
SENATOR FRENCH                                                                                                                  
Alaska State Capitol                                                                                                            
Juneau, AK                                                                                                                      
POSITION STATEMENT: Sponsor of SB 160.                                                                                        
MARY RAYMOND, representing herself                                                                                              
Homer, AK                                                                                                                       
POSITION STATEMENT: Supported SB 160.                                                                                       
PATRICK DALTON, representing himself                                                                                            
Delta Junction, AK                                                                                                              
POSITION STATEMENT: Commented on SB 160.                                                                                      
ACTION NARRATIVE                                                                                                              
CHAIR JOHNNY ELLIS called the Senate Labor and Commerce Standing                                                              
Committee meeting to order at 1:33:10 PM. Present at the call to                                                              
order were Senators Davis, Hoffman and Ellis.                                                                                   
          HJR 25-SUPPORTING RIGHT TO FORM LABOR UNIONS                                                                      
1:34:12 PM                                                                                                                    
CHAIR ELLIS announced HJR 25 to be up for consideration.                                                                        
SENATOR DAVIS moved to report HJR 25 from committee with                                                                        
individual recommendations and zero fiscal note. There were no                                                                  
objections and it was so ordered.                                                                                               
                SB 289-HOME ENERGY CONSERVATION                                                                             
1:35:22 PM                                                                                                                    
CHAIR ELLIS announced SB 289 to be up for consideration.                                                                        
SENATOR  HOFFMAN,  sponsor  of  SB   289,  said  he  had  had  no                                                               
additional comments.                                                                                                            
SENATOR  DAVIS  moved  to  report  SB  289  from  committee  with                                                               
individual  recommendations and  attached  fiscal note(s).  There                                                               
were no objections and it was so ordered.                                                                                       
               SB 294-RCA POSITIONS AND SALARIES                                                                            
1:36:52 PM                                                                                                                    
CHAIR ELLIS announced SB 294 to be up for consideration.                                                                        
DANA OWEN, staff to Senator  Ellis, explained this measure is the                                                               
result of the  work of the Regulatory Commission  of Alaska (RCA)                                                               
Task Force. Two of the  recommendations were singled out for this                                                               
bill because they had broad support.                                                                                            
1:37:25 PM                                                                                                                    
SENATOR BUNDE joined the committee.                                                                                             
MR. OWEN explained that Sections 1,  2 and 3 stipulate that a new                                                               
executive  director will  be part  of the  exempt service  and it                                                               
moves  administrative law  judges into  the exempt  service (from                                                               
partially  exempt).   Section  3  changes  the   pay  levels  for                                                               
commissioners from a  Step C, Range 26, to Step  F, Range 30. The                                                               
remainder  of the  bill authorizes  the commission  to employ  an                                                               
executive director in an administrative position.                                                                               
1:40:05 PM                                                                                                                    
CHAIR ELLIS asked the RCA chair's opinion of this legislation.                                                                  
TONY PRICE, Chairman, Regulatory  Commission of Alaska, supported                                                               
SB 294 with a  couple of changes. One is that  it's not clear who                                                               
employs  administrative  law  judges;  it  could  be  either  the                                                               
commission  or the  executive director.  He also  proposed adding                                                               
language stating  "The executive  director shall  not participate                                                               
in  the   adjudication  of   any  matter   to  come   before  the                                                               
commission."  This  would  address  issues  that  arose  in  past                                                               
His  final  recommendations  were  first to  AS  42.05.254(a)  to                                                               
increase the RCA  cap from what it is presently  at .7 percent to                                                               
.9 percent. Some people say they  don't want to increase the cap,                                                               
but their budget  is set; this allows him to  collect the revenue                                                               
to feed  it. He said  he didn't think they  would be at  the cap,                                                               
but he  didn't know what next  year's revenues would be.  He also                                                               
suggested  increasing the  RCA  cap in  AS  42.06.286(a) from  .7                                                               
percent to .9 percent for the same reason.                                                                                      
1:42:46 PM                                                                                                                    
SENATOR STEVENS joined the committee.                                                                                           
CHAIR ELLIS asked him to  submit those suggestions in writing. He                                                               
then  asked him  to comment  on the  commission's overall  needs,                                                               
underfunding and understaffing and  why this should be compelling                                                               
MR. PRICE responded  that his presentation to the  Task Force was                                                               
86 minutes,  but he would  give them  a briefer version.  At this                                                               
level of  staffing they have  three engineer positions,  but only                                                               
one  is filled.  They need  all three.  The commission's  utility                                                               
financial analyst needs to have  a very high skills set regarding                                                               
accounting and financial  review; it has five  of those positions                                                               
and only  two are filled  - with staff  that have been  there for                                                               
over five years, and "their docket  load is oppressive to say the                                                               
least." He  explained that they  are in the situation  where they                                                               
have  taken  staff  that  were legal  office  assistants  to  the                                                               
commissioners,  redefined their  jobs  and put  them  in the  ALJ                                                               
section to  help move orders  out; the commissioners now  have no                                                               
support. However,  he said,  the commissioners  can do  their own                                                               
Complicating  all this  is another  change that  has dramatically                                                               
increased  the   workload.  Besides   all  the   other  statutory                                                               
deadlines, last  year another bill  imposed a  six-month deadline                                                               
on  all  things  that  did  not  otherwise  have  one.  They  are                                                               
completing dockets  virtually days before the  statutory deadline                                                               
or on  the day  of. They  don't have the  revenues or  the staff.                                                               
Alternatively, they will have to  hire consultants from the Lower                                                               
48 and pay them at a much higher rate.                                                                                          
CHAIR ELLIS said  Mr. Price's concerns are not unique  to the RCA                                                               
and he was personally convinced  they needed to take some action.                                                               
He  said  that  most  legislators had  not  heard  his  comments.                                                               
Positions   throughout  state   government  are   having  trouble                                                               
recruiting people.                                                                                                              
1:50:06 PM                                                                                                                    
RICH  GAZAWAY,   RCA  commissioner,   agreed  with   Mr.  Price's                                                               
CHAIR ELLIS  said he would  have a committee  substitute prepared                                                               
with some of his proposed changes.                                                                                              
1:50:51 PM                                                                                                                    
SENATOR LISEL  MCGUIRE, chair  of the RCA  Task Force,  wanted to                                                               
add "a little bit of soul"  to Mr. Price's comments. She said the                                                               
RCA is  one of the  most important  commissions in the  state. It                                                               
deals  with   highly  technical   complex  matters   that  affect                                                               
consumers in  the state  more than any  other commission.  Yet it                                                               
has a  great challenge recruiting  and retaining  staff including                                                               
the highly technical positions  and the commissioners themselves.                                                               
She said  RCA commissioners  effectively act  as a  Supreme Court                                                               
judge  because they  preside over  for example,  the TAPS  tariff                                                               
case affecting  billions of dollars  to consumers  and producers.                                                               
But  they  are at  the  lower  level  salary  in looking  at  the                                                               
SENATOR  McGUIRE  said  you  want   folks  with  juris  doctorate                                                               
degrees,  CPAs,  business  backgrounds   and  experience  in  the                                                               
private sector. These are the  kinds of individuals who will come                                                               
from the private sector and those make a lot more money.                                                                        
She said she thought the  commission needed an executive director                                                               
who  would  act  as  a   manager.  Currently,  one  of  the  five                                                               
commissioners   serves   as   chair,   but  he   also   has   the                                                               
administrative function of hiring  and firing and the rudimentary                                                               
business part of the commission.                                                                                                
SENATOR  MCGUIRE emphasized  that  she was  very  disturbed as  a                                                               
lawmaker to  see the volumes  of rate  cases with which  they are                                                               
dealing.  One department  has only  one person  who has  only two                                                               
years on the job in the office.                                                                                                 
CHAIR ELLIS  said he supports  this legislation. He thinks  it is                                                               
necessary  to  pay  quality  wages   to  the  commissioners,  but                                                               
considers the  position on  of public service  as well.  While he                                                               
supported the entire  package, the staff vacancies  and staff pay                                                               
were more important to him.                                                                                                     
SENATOR  MCGUIRE thanked  the RCA  commissioners who  are looking                                                               
out for the state's best interests.                                                                                             
        SB 297-NONUNION PUBLIC EMPLOYEE SALARY & BENEFIT                                                                    
1:58:27 PM                                                                                                                    
CHAIR ELLIS announced SB 297 to be up for consideration.                                                                        
ANNETTE  KREITZER,  Commissioner,  Department  of  Administration                                                               
(DOA), said  the state has  the same challenges  with recruitment                                                               
and retention that other employers  have. The governor has tasked                                                               
the executive  working group created  under AO 237 to  review the                                                               
issue of recruitment  and retention. That report  is available on                                                               
the department's web  page.  She said the  labor negotiations are                                                               
one  part  of addressing  recruitment  and  retention, but  those                                                               
decisions are  made at the  bargaining table. The  contracts have                                                               
been offered to seven unions and  she has agreements with four so                                                               
far. These contracts are the best in 15 years.                                                                                  
She said  that changes  in compensation  for state  employees not                                                               
covered by  a bargaining agreement  must be  accomplished through                                                               
legislation and that's  what SB 297 does. Each  union contract is                                                               
unique and  there are other elements  of pay in addition  to COLA                                                               
or service  steps contained in  each one; her  job is to  look at                                                               
the  final full  effect of  the monetary  components of  each and                                                               
consider the  fiscal impact on  the state. She said  her proposed                                                               
budget will be reduced this year.                                                                                               
COMMISSIONER  KREITZER  said the  criticism  that  this bill  has                                                               
service   steps  not   offered   to  one   particular  union   is                                                               
disingenuous in her  opinion. Because one of the  five offers she                                                               
made to  that union included service  steps in addition to  a 40-                                                               
hour work week.                                                                                                                 
She said  the changes in  the offers she  has made will  help the                                                               
state  retain  the  professional knowledgeable  state  employees.                                                               
Each negotiation is  different and one can't simply  pick out one                                                               
element of an offer that a  union refused and say you can't offer                                                               
that to  anyone else because we  turned it down. The  estimate of                                                               
the cost  of the service steps  she offered to the  SU (which she                                                               
brought  up today  because of  a full-page  ad in  today's Juneau                                                               
Empire on this  topic.) was $1.9 million for FY09.  That is still                                                               
a big  number and so is  the $8.5 billion unfunded  liability for                                                               
state employee and retiree pensions and health benefits.                                                                        
COMMISSIONER KREITZER said she wanted  to set the stage by saying                                                               
they are  all dealing with the  same issues of trying  to build a                                                               
bridge to  a gas line  with production declining  at a rate  of 6                                                               
percent a year. She is trying  to hold down spending while trying                                                               
to do sustainable contracts.                                                                                                    
SENATOR   BUNDE   said   the  legislature   recently   passed   a                                                               
supplemental  bill that  included a  substantial amount  of money                                                               
for  these negotiations  and asked  what impact  that had  on her                                                               
MS.  KREITZER replied  that she  had concluded  negotiations with                                                               
GGU  and   with  the  supervisory   unit  and  that  is   in  the                                                               
supplemental. The supervisory unit has  ballots out now to decide                                                               
on whether  or not to  accept that offer  with a closing  time of                                                               
2:02:40 PM                                                                                                                    
KEVIN BROOKS,  Deputy Commissioner, Department  of Administration                                                               
(DOA), walked  them through  SB 297. He  said it  restates salary                                                               
schedules  and   identifies  a  number  of   positions  that  are                                                               
specifically  set  in statute.  Section  1  raises limited  entry                                                               
commissioners  from Range  26, Step  C to  Range 27  and no  step                                                               
reference.  Section  2  is  conforming  language  addressing  the                                                               
Alaska  State   Defense  Force.   Section  3  raises   the  chief                                                               
procurement officer  from a  Range 24  to a  Range 27.  Section 4                                                               
addresses the  step limitation for  deputy commissioners  who are                                                               
appointed. Current language  says they are appointed  at not less                                                               
than Step  A or  more than  Step F and  new language  deletes the                                                               
reference to steps because it's  limiting when people come to the                                                               
state  from  the  private  sector  or  are  promoted  from  other                                                               
2:05:53 PM                                                                                                                    
MR. BROOKS said Section 5  restates the salary schedule contained                                                               
in Title 39  to reflect a 5.5 percent increase.  Sections 6 and 7                                                               
provide for raising  the salary schedule by 3 percent  in July 1,                                                               
2008 and 3 percent more in July 1, 2009.                                                                                        
Section 8  adds a new  subsection that allows for  pay increments                                                               
every  two years  beyond Step  F; currently  an individual  would                                                               
progress  from Steps  A through  F annually  and after  that adds                                                               
more years between steps according to AS 39.27.022.                                                                             
He explained  in 1972 longevity  steps A-F were added  to statute                                                               
to reward people  for longer service, but now that  is more of an                                                               
obstacle and extra steps are  needed to keep employees on longer.                                                               
It is tied to an annual "good" review rating.                                                                                   
2:08:43 PM                                                                                                                    
SENATOR  BUNDE asked  if people  ever receive  less than  good or                                                               
adequate reviews and why are they retained.                                                                                     
MR.  BROOKS   answered  that  some  individuals   receive  a  low                                                               
acceptable or  unacceptable rating. There  is a process  for them                                                               
to  go through  of identifying  areas that  need improvement  and                                                               
developing a  plan. In  some cases they  are retained  and others                                                               
SENATOR BUNDE asked if a majority of reviews are good or better.                                                                
MR. BROOKS answered  it was safe to say a  majority of review are                                                               
mid-acceptable or higher.                                                                                                       
SENATOR BUNDE asked if the  range is unacceptable, acceptable and                                                               
MR.  BROOKS  replied there  are  five  different rankings  within                                                               
"entirely unacceptable" and "outstanding."                                                                                      
SENATOR BUNDE said the positions  in this bill are non-bargaining                                                               
MR. BROOKS replied yes, but many  of them would receive an annual                                                               
review using a standard form for classified people.                                                                             
SENATOR BUNDE  said he  thought merit  pay was  a good  idea, and                                                               
that he  would like more  information on how many  are acceptable                                                               
and unacceptable.                                                                                                               
MR. BROOKS said he could get  some data on that; it was important                                                               
to tie it to a certain level  of performance and one of the items                                                               
the  task force  talked  about was  bring  accountability to  the                                                               
COMMISSIONER KREITZER  added that this  won't be done all  in one                                                               
year. The  working group report  talks about improvements  to the                                                               
merit  system  and how  it  can't  work  without a  co-effort  to                                                               
prepare proper  evaluations. She is  trying to figure out  how to                                                               
make the evaluation process simpler  for supervisors so they will                                                               
see the value in it and do them.                                                                                                
SENATOR  BUNDE  said he  is  trying  to  avoid a  Lake  Woebegone                                                               
situation where everyone is above average.                                                                                      
MR.  BROOKS  said   Section  8  had  a   couple  of  subsections;                                                               
subsection (i) ties this to the  pay plan that is in Title 39.25.                                                               
Subsection  (j)  allows  for   the  legislature  and  independent                                                               
agencies within the  legislative branch to choose  to apply these                                                               
types  of  merit increases  to  their  staff  or not.  Section  9                                                               
addresses  pay  for commissioners  within  the  RCA as  mentioned                                                               
2:14:16 PM                                                                                                                    
Section  10  repeals  former  AS  39.27.022  that  addressed  the                                                               
longevity steps that are now  in section AS 39.27.011. Section 11                                                               
covers  executive branch  salary overrides.  He explained  that a                                                               
number  of   employees  in  the  executive   branch  are  exempt,                                                               
partially  exempt and  classified, and  he identified  the exempt                                                               
ones on  a salary  override. In  other words  they are  not being                                                               
paid off of the salary schedule;  they are being paid some amount                                                               
that has been determined by  their employer to be appropriate and                                                               
adequate.  The goal  is  if  someone has  already  had their  pay                                                               
adjusted, it won't be adjust again  at 5.5 percent. It applies to                                                               
commissioners and others who are not part of the salary system.                                                                 
MR. BROOKS  said Section  12 covers  judicial employees.  It also                                                               
mistakenly groups  magistrates with  judges and he  had suggested                                                               
language  for  that.  Section 13  addresses  the  University  and                                                               
states that they  are under the policies that are  adopted by the                                                               
Board  of  Regents and  not  covered  by  this bill.  Section  14                                                               
provides  prospective  application  of  the  steps  to  not  harm                                                               
someone in the middle of his  salary schedule. Section 15 is more                                                               
transition language.                                                                                                            
2:17:35 PM                                                                                                                    
He  said  the  retroactivity  addresses  the  first  5.5  percent                                                               
increase going back to July 1, 2007.                                                                                            
MR.  BROOKS wrapped  up that  he  has heard  the statement  "high                                                               
level employees" and  this bill really covers  about 1,500 people                                                               
- 14 commissioners,  75 directors, but it includes a  lot of rank                                                               
and   file  folks.   It's  much   broader  than   he  has   heard                                                               
SENATOR ELLIS asked why this bill was introduced on March 3.                                                                    
MR. BROOKS answered  that the administration has  been working on                                                               
this since the fall; they could  have offered it earlier and have                                                               
been running  different scenarios, but  they have been  in active                                                               
negotiations with different unions.                                                                                             
SENATOR  ELLIS  asked  if  the specific  timing  related  to  any                                                               
negotiations with public employees.                                                                                             
MR. BROOKS answered no.                                                                                                         
SENATOR BUNDE  asked if language  on page  4, line 3,  applies to                                                               
legislative staff.                                                                                                              
MR.  BROOKS  answered it  applies  to  all legislative  employees                                                               
including the Legislative Affairs Agency (LAA).                                                                                 
2:20:19 PM                                                                                                                    
CHRIS CHRISTIANSON, Deputy  Administrative Director, Alaska Court                                                               
System,  said  all employees  in  the  judicial branch  are  non-                                                               
covered.  It  is  the  largest  group  of  non-covered  employees                                                               
outside  of  the  University  and   the  lowest  paid  branch  of                                                               
government; approximately  70 percent of its  employees are Range                                                               
15  or below.  Largely  because of  this they  have  a very  high                                                               
turnover rate which  translates into high training  costs, a high                                                               
ratio  of   supervisors  to  clerks  and   other  inefficiencies.                                                               
Notwithstanding the pay,  he said, many of them  are hard working                                                               
He  said over  the last  15 years  state employees  have received                                                               
COLA  adjustments  much  less  than the  rate  of  inflation.  In                                                               
today's dollars  what he pays  a Range 10 today  is substantially                                                               
less than what he paid to a Range 10 twenty years ago.                                                                          
In addition  to the COLA the  bill proposes to change  the scheme                                                               
of  longevity  pay  which  addresses   a  very  real  problem  of                                                               
retaining long  term employees. He  stated that most  entry level                                                               
employees at  the court system are  a Range 8 or  10. The highest                                                               
ranking person at the court might be  a Range 16. So there is not                                                               
a lot of upward mobility to get people to stay a long time.                                                                     
2:22:28 PM                                                                                                                    
MR.  CHRISTIANSON said  he didn't  agree with  two provisions  in                                                               
this  bill:  one  was  magistrate  pay.  They  don't  have  their                                                               
salaries set  in statute  and are ordinary  state employees  on a                                                               
salary schedule. However, he has  received indication that change                                                               
would be supported.                                                                                                             
The other  provision is  the retroactivity  for judges.  The bill                                                               
lumps judges  together with political appointees  in denying them                                                               
retroactive pay for the current  fiscal year. Judges, unlike most                                                               
other  state  employees,  do  not get  longevity  pay.  A  normal                                                               
employee  over  the  course  of   an  18-year  career  will  have                                                               
increases equal  to 40 percent of  their salary; a judge  who has                                                               
worked for  18 years  gets exactly  the same pay  as a  brand new                                                               
judge.  They are  uniquely dependent  on getting  cost of  living                                                               
adjustments from the legislature for their pay raises.                                                                          
During the 20-year period prior  to the 2006 pay raise, inflation                                                               
ran about 77 percent and judges  got pay raises equal to about 50                                                               
percent. They  went from the  highest paid state court  judges in                                                               
the country  down to the 48   ranked in the  country. The results                                                               
were very  negative; they had  judicial positions for  example in                                                               
Bethel that couldn't be filled  because qualified people wouldn't                                                               
apply. Also,  the courts face  smaller applicant pools  that tend                                                               
to  be much  younger and  less qualified  that in  the past.  The                                                               
legislature  realized  there was  a  problem  two years  ago.  He                                                               
remarked between  the day the judges  got that pay raise  and the                                                               
end of the current fiscal year  the inflation rate is going to be                                                               
between  7 and  8 percent;  so judges  will lose  roughly 7  to 8                                                               
percent  of the  amount the  legislature thought  was a  suitable                                                               
amount two years ago. He advised  to not start down the path they                                                               
took 20  years ago  when judges' pay  was gradually  chipped away                                                               
because small COLA  adjustments were not made on  a regular basis                                                               
and large  adjustments have  to be made  every few  decades after                                                               
having lots of problems.                                                                                                        
CHAIR ELLIS remarked  that he was talking to  legislators who are                                                               
a Range 10, plus  some per diem; so they would try  to keep it in                                                               
2:25:48 PM                                                                                                                    
CHRISTINE SCHLOUSS,  Anchorage Attorney, said  she used to  be an                                                               
assistant public  defender and a  member of the  Teamsters Union.                                                               
She  is very  pro-union, but  on  this issue  she disagreed  with                                                               
union  people who  speak out  against this  bill because  a union                                                               
contract did  not contain the  longevity steps. That is  what she                                                               
wanted to focus her comments on.                                                                                                
MS. SCHLOUSS  said she started  as a  public defender in  the 70s                                                               
and 80s  where salaries  were competitive  with those  in private                                                               
practice.  That is  no longer  even remotely  the case.  What she                                                               
sees frequently  now because  she litigates  against the  DAs and                                                               
public defenders  is that the  state is losing the  brightest and                                                               
the best.  These folks often come  out of law school  $150,000 to                                                               
$200,000 in debt and they start out  by not being able to keep up                                                               
with their debt. She knows  of an assistant district attorney who                                                               
drives a  cab at  night to  make ends  meet. The  Public Defender                                                               
Agency just lost  a terrific well qualified attorney  who went to                                                               
work  as a  sales  representative for  an  online legal  resource                                                               
organization  because it  pays  her  2.5 times  her  salary as  a                                                               
public defender.                                                                                                                
She urged  the legislature to  recognize that the state  needs to                                                               
have the kind  of lawyers who want to work  in public service but                                                               
could make  2.5 more in  private practice. These  longevity steps                                                               
don't  do  enough, but  they  do  something.  She urged  them  to                                                               
recognize the worth  of rank and file employees who  want to stay                                                               
working with the state by giving  them the opportunity to have at                                                               
least small step increases.                                                                                                     
2:30:12 PM                                                                                                                    
MARGO  LACHAPELLE,  Employee Representative,  Bethel  Supervisory                                                               
Unit (SU),  said she  is also  a supervisor  for the  Division of                                                               
Public Health  Nursing, Department of Health  and Social Services                                                               
(DHSS).  She said  the SU  has  been negotiating  with the  state                                                               
since December 06  and the administration refused  to include the                                                               
longevity steps  in their final  contract offer. Four  days after                                                               
her  members  voted  to  accept   the  contract,  this  bill  was                                                               
introduced  offering a  better deal  to political  appointees. By                                                               
doing so,  she felt  the administration did  not value  the state                                                               
employees with  the SUs.  In addition to  denying the  SU members                                                               
the  longevity  steps  during  negotiations,  the  administration                                                               
waited  until  after   the  ballots  went  out   to  publish  the                                                               
Governor's  Recruitment  and  Retention Task  Force  Report.  She                                                               
said, "It  echoed all the things  we've been saying for  the last                                                               
year  at the  bargaining table.  We can't  hire enough  qualified                                                               
people to staff our positions because the pay is too low...."                                                                   
She asked that  this bill be amended so that  the extra longevity                                                               
steps  for the  non-unionized employees  of the  executive branch                                                               
are  contingent  upon  the  same   steps  being  applied  to  the                                                               
unionized employees of the executive branch.                                                                                    
CHAIR ELLIS thanked  everyone for the comments and  held the bill                                                               
for further work.                                                                                                               
2:33:24 PM at ease 2:33:39 PM                                                                                               
             SB 160-MANDATORY UNIVERSAL HEALTH CARE                                                                         
2:34:14 PM                                                                                                                    
CHAIR  ELLIS announced  SB 160  to be  up for  consideration. The                                                               
committee had CSSB 160(L&C), 25-LS0728\T to consider.                                                                           
SENATOR FRENCH, sponsor of SB 160,  said he would comment on CSSB                                                               
160(L&C), 25-LS0728\T. He  said it makes six  changes, some small                                                               
and  some fairly  significant. The  first  change is  on page  3,                                                               
lines 15-17, that  broadens the view points  that are represented                                                               
on the Health Care Board.  Concerns were heard from insurers that                                                               
the  definition of  entities  that would  make  up the  insurance                                                               
representatives  on the  board was  too  narrow. So  now the  two                                                               
representatives are  one large scale  wholesaler and  small scale                                                               
retailer.  He  explained the  retailer  is  called an  "insurance                                                               
producer," an industry term that  refers to the customer oriented                                                               
on-the-ground insurance retailer.                                                                                               
2:36:20 PM                                                                                                                    
The second change is on page  5, lines 6-8, and clearly gives the                                                               
duty to the  board of making a plan that  can effectively protect                                                               
an individual from severe financial  hardship in times of medical                                                               
need  -  taking  into  account a  household's  income  and  other                                                               
relevant financial criteria. He said,  "It will make certain that                                                               
insurance  is  meaningful  for   each  Alaskan  since  a  $10,000                                                               
deductible health  care plan isn't  much use to a  household that                                                               
earns $15,000 a year."                                                                                                          
2:36:50 PM                                                                                                                    
SENATOR  FRENCH said  the  third  change came  in  response to  a                                                               
concern of Senator Stevens. It removes  a few words from what was                                                               
subsection  7 on  page  6.  It used  to  say  that Indian  Health                                                               
Service (IHS)  benefits had  to meet or  exceed the  benefits for                                                               
essential  health care  services as  defined in  the legislation.                                                               
That has been  removed to make it clear that  individuals who are                                                               
satisfied  with  the care  they  receive  through IHS  facilities                                                               
won't be subject  to the requirement to  have additional coverage                                                               
- even if  the IHS benefits don't line up  exactly with essential                                                               
health  care services.  To a  large extent,  this alleviates  the                                                               
fine  decisions the  board  would have  to make  as  to each  IHS                                                               
recipient and whether  the benefits they receive  met or exceeded                                                               
those adopted by the plan.                                                                                                      
He said he worked with  tribal representatives, and the important                                                               
facts to  keep in mind when  looking at the interplay  between SB                                                               
160 and  the IHS  system are  first, that  any third  party payer                                                               
will  be first  in line  if an  IHS beneficiary  with third-party                                                               
insurance walks into  a clinic anywhere if they  have third party                                                               
insurance. The  second thing  to remember is  that the  amount of                                                               
money dedicated  by the federal  government to  IHS beneficiaries                                                               
is fixed  every year; it is  distributed at the beginning  of the                                                               
year and  that's the end  of it. It  is not limitless.  They have                                                               
enough  money for  day-to-day clinic  visits and  check ups,  but                                                               
when it  comes to bone  marrow transplants or a  knee replacement                                                               
or heart surgery, they may  be "rationed out," because the amount                                                               
of money allocated  that year has been used up.  So in essence SB                                                               
160 helps add to the care of any IHS beneficiary in the state.                                                                  
SENATOR FRENCH  said IHS beneficiaries  receive on  average about                                                               
$2,000  per  individual  spread   across  the  entire  population                                                               
whereas someone outside the IHS  receives about $4,000 to $5,000.                                                               
SB  160 allows  any  IHS beneficiary  to join  the  plan if  they                                                               
choose or not depending on how  satisfied they are with their own                                                               
personal situation.  Senator French said,  "SB 160 will  not back                                                               
out a single  federal dollar that is currently  being received in                                                               
Alaska for  the benefit of  IHS beneficiaries." He said  this was                                                               
the most complex change even though  it was just the reduction of                                                               
a few words.                                                                                                                    
The fourth  change was  on page  6, lines 11-14,  that has  to do                                                               
with concerns  on behalf  of the  Christian Science  Religion who                                                               
eschew  modern  medical  practices.  So SB  160  has  allowed  an                                                               
exemption for those  individuals. If they can  demonstrate to the                                                               
board that  their deeply held  religious beliefs are  contrary to                                                               
this program, they don't have  to participate. Exemptions will be                                                               
rigorously granted.                                                                                                             
SENATOR FRENCH  said the next  change is how "employees"  and the                                                               
"employer levy"  are defined. There  was concern  that "employee"                                                               
was  defined  too  broadly.  Imagine  a  business  that  employed                                                               
nothing  but military  spouses  or spouses  of  state or  federal                                                               
employees - all covered by  health insurance. There is absolutely                                                               
no need to apply an  employer levy against that employer, because                                                               
not a single one of  those individuals needs health insurance. So                                                               
an  "employee"  is   defined  as  someone  who   is  required  to                                                               
participate in the  Alaska Health Care Plan on page  8, lines 11-                                                               
20 and that means they don't have coverage anywhere else.                                                                       
2:42:06 PM                                                                                                                    
He  said  the  second  change  is with  counting  the  number  of                                                               
employees, because  you get  into problems  of defining  how many                                                               
hours a  week that  is. So,  they went  with the  payroll number,                                                               
which is  roughly equal  to what one  would imagine  10 full-time                                                               
employee equivalents  is - the  $500,000 figure. He  explained if                                                               
your  total  payroll  of  employees   that  don't  have  coverage                                                               
anywhere else  is $500,000 or  less, no levy whatsoever.  If it's                                                               
between  $500,000 and  $1,000,000 it's  1 percent;  if it's  over                                                               
$1,000,000 it's  2 percent.  This is  more business  friendly and                                                               
easier to understand.                                                                                                           
Finally,  he said  language  on  page 12,  line  18, changes  the                                                               
effective dates  to comport with  concerns Legislative  Legal had                                                               
regarding adoption of regulations.                                                                                              
2:43:48 PM                                                                                                                    
MARY  RAYMOND,  representing  herself   from  Homer,  said  after                                                               
listening  to task  forces and  various bills  to get  affordable                                                               
insurance  for the  last  20  years this  is  very exciting.  Her                                                               
concern that it was promoted as compulsory had been addressed.                                                                  
2:45:09 PM                                                                                                                    
PATRICK  DALTON,  Delta  Junction, representing  himself,  agreed                                                               
with  the public  oversight provision.  He also  suggested having                                                               
two alternative health  professionals on the Health  Care Board -                                                               
naturopath or  herbologist. However, he asserted  the legislature                                                               
has no constitutional authority to  require a citizen to contract                                                               
into any health care plan whatsoever.                                                                                           
Second, Mr. Dalton  said, an element of  hypocrisy exists because                                                               
SB 160 requires  everyone to have a health care  card and then it                                                               
turns  around and  denies coverage  to any  Alaskan who  does not                                                               
have one. He said the "preamble"  of the bill clearly states that                                                               
all  Alaskans  are  eligible  for  this  and  he  suggested  just                                                               
expanding health care coverage to  any Alaskan who can prove they                                                               
are a citizen or a resident.  That way compliance doesn't have to                                                               
be forced.  Furthermore, he asked  what criminal  penalties there                                                               
are for  not partaking in  the system.  Finally, he said  if they                                                               
have  to require  health care  coverage, even  though he  doesn't                                                               
think they  have the  right to  do that,  he suggested  having an                                                               
opt-out system.  He also asked  how someone can  demonstrate they                                                               
have  a firmly  held  religious belief  that  being a  subjective                                                               
CHAIR ELLIS thanked everyone for  sharing their thoughts and said                                                               
he would  hold SB 160  for further  work. There being  no further                                                               
business to come  before the committee, he  adjourned the meeting                                                               
at 2:49:27 PM.                                                                                                                

Document Name Date/Time Subjects