Legislature(1993 - 1994)
04/28/1994 03:22 PM Senate L&C
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SENATE LABOR AND COMMERCE
April 28, 1994
3:22 P.M.
MEMBERS PRESENT
Senator Tim Kelly, Chairman
Senator Steve Rieger, Vice Chairman
Senator Bert Sharp
Senator Georgianna Lincoln
Senator Judith Salo
MEMBERS ABSENT
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.
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