Legislature(2001 - 2002)

05/08/2001 12:41 PM Senate RLS

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                     ALASKA STATE LEGISLATURE                                                                                   
                      SENATE RULES COMMITTEE                                                                                  
                            May 8, 2001                                                                                         
                            12:41 p.m.                                                                                          
                               DRAFT                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Drue Pearce, Chair                                                                                                      
Senator John Cowdery, Vice Chair                                                                                                
Senator Randy Phillips                                                                                                          
Senator Gene Therriault                                                                                                         
Senator Johnny Ellis                                                                                                            
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All Members Present                                                                                                             
                                                                                                                              
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
CS FOR HOUSE BILL NO. 198(RLS)(efd add)                                                                                         
"An  Act  relating  to  a post-retirement   pension  adjustment  for                                                            
certain  persons   receiving  benefits  under  the  Elected   Public                                                            
Officers  Retirement  System, and  establishing  and  relating to  a                                                            
Compensation  Commission for State  Officials; and providing  for an                                                            
effective date."                                                                                                                
     APPROVED FOR CALENDARING                                                                                                   
                                                                                                                                
EXTENSION OF PATRICK COUGHLIN'S CONTRACT                                                                                        
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
HB 198 - See Finance Report dated 5/6/01.                                                                                       
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
Ms. Melanie Lesh                                                                                                                
Aide to Representative Hudson                                                                                                   
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Testified for the sponsor of HB 198.                                                                     
                                                                                                                                
Mr. Guy Bell, Director                                                                                                          
Division of Retirement and Benefits                                                                                             
Department of Administration                                                                                                    
PO Box 110200                                                                                                                   
Juneau, AK  99811-0200                                                                                                          
POSITION STATEMENT:  Answered questions about HB 198.                                                                         
                                                                                                                                
Senator John Torgerson                                                                                                          
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION  STATEMENT:     Answered   questions  about  the   contract                                                          
extension for Patrick Coughlin.                                                                                                 
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 01-12, SIDE A                                                                                                            
Number 001                                                                                                                      
                                                                                                                                
                                                                                                                                
CHAIRMAN DRUE  PEARCE called the Senate  Rules Committee  meeting to                                                          
order at 12:41 p.m.  All members were present.                                                                                  
                                                                                                                                
          HB 198-PUB OFFICERS RETIREM'T COLA/COMPENSATION                                                                   
                                                                                                                                
MS. MELANIE LESH, aide  to Representative Bill Hudson, sponsor of HB
198, informed  the committee that  HB 198 received a hearing  in the                                                            
Senate Finance  Committee the previous morning and  that she and Guy                                                            
Bell were available to answer questions.                                                                                        
                                                                                                                                
SENATOR THERRIAULT asked for an explanation of the problem.                                                                     
                                                                                                                                
MS. LESH  explained the  Elected Public  Officers Retirement  System                                                            
(EPORS), unlike  the Public Employees  Retirement System  (PERS) and                                                            
the Teachers Retirement  System (TRS), was not designed to include a                                                            
cost of living adjustment.   PERS and TRS retirees receive an annual                                                            
adjustment  of 75 percent of the change  in the cost of living.   HB
198 would provide a cost  of living adjustment for EPORS members but                                                            
includes only those members  who have been retired for over 10 years                                                            
and have had  no change to their retirement  benefits in  that time.                                                            
Legislative members of  EPORS are excluded because changes have been                                                            
made to office allowances and to the salary.                                                                                    
                                                                                                                                
SENATOR  COWDERY  asked what  source  of funding  will  be used  and                                                            
whether it will cost the retirees anything.                                                                                     
                                                                                                                                
MS. LESH replied the retirees contributed to EPORS at 7 percent.                                                                
                                                                                                                                
SENATOR COWDERY  asked if the retirees will contribute  more at this                                                            
time to receive an added benefit.                                                                                               
                                                                                                                                
MS. LESH said she does not believe so.                                                                                          
                                                                                                                                
MR. GUY  BELL,  Director of  Retirement  and Benefits,  said that  a                                                            
person no longer contributes to the system once retired.                                                                        
                                                                                                                                
SENATOR PHILLIPS asked if EPORS was repealed by the voters.                                                                     
                                                                                                                                
MS. LESH said  it was but it was reinstated  by the court  for those                                                            
members  who  were  participating.     She  explained  that  no  new                                                            
participants  will be  added but a  cost of living  benefit  will be                                                            
added from  this time forward.   Representative  Hudson believes  an                                                            
inequity  exists for governors  and lieutenant  governors because  a                                                            
conflict  exists in statute  regarding the  governor's salary.   One                                                            
provision ties the salary  to a range and step but another provision                                                            
sets the amount,  which has taken  precedence. That salary  has been                                                            
$83,000 since  1983.  Representative Hudson believes  that could not                                                            
have  been foreseen  by  the members  of EPORS  when  they made  the                                                            
decision to stay with that system.                                                                                              
                                                                                                                                
CHAIRWOMAN  PEARCE asked if  this bill applies  to former  governors                                                            
and lieutenant governors only.                                                                                                  
                                                                                                                                
MS. LESH said it is also for their surviving spouses.                                                                           
                                                                                                                                
CHAIRWOMAN PEARCE asked how many people this bill will apply to.                                                                
                                                                                                                                
MR. BELL said  the bill and fiscal  note apply to three people;  one                                                            
former governor,  one former lieutenant governor,  and one surviving                                                            
spouse of a lieutenant governor.                                                                                                
                                                                                                                                
SENATOR PHILLIPS asked  how many retirees are in the potential pool.                                                            
                                                                                                                                
MR. BELL  said the potential  pool contains  one other governor  who                                                            
receives a  retirement benefit from  EPORS but that person  will not                                                            
be eligible  under the ten year provision  for another seven  years.                                                            
This  bill only  applies to  those  whose salaries  are effectively                                                             
fixed in statute, which  includes governors and lieutenant governors                                                            
only.                                                                                                                           
                                                                                                                                
SENATOR  COWDERY asked  the average  amount those  retirees  receive                                                            
now.                                                                                                                            
                                                                                                                                
MR. BELL  said he  does not know  the average  but those  retirement                                                            
benefits  vary  from very  small  to several  thousand  dollars  per                                                            
month.  He noted  the division considers the amounts  to be personal                                                            
so does not disclose detailed information.                                                                                      
                                                                                                                                
MS. LESH said  the EPORS benefit depends  on the number of  years of                                                            
state  service.   The  amount is  based  on 5  percent  per year  of                                                            
service up to  a maximum of 75 percent of the salary  from which the                                                            
person retired.                                                                                                                 
                                                                                                                                
SENATOR COWDERY asked if the bill applies to three people.                                                                      
                                                                                                                                
MS.  LESH said  there  are currently  three  retirees  and the  next                                                            
person will not be eligible for seven years.                                                                                    
                                                                                                                                
CHAIRWOMAN  PEARCE  asked  why  HB 198  is  not  considered  special                                                            
legislation.                                                                                                                    
                                                                                                                                
MS. LESH said  Representative Hudson's original version  of the bill                                                            
included a salary  increase for the governor to $110,000  but it was                                                            
amended  twice in  the House  and that  increase was  removed.   She                                                            
noted that  increasing the  governor's salary  itself would  resolve                                                            
the problem but  this approach resolves the problem  as well without                                                            
the  political  controversy   of  raising  the  governor's   salary.                                                            
Representative  Hudson  allowed the  removal of  that provision  and                                                            
then tried  to broaden yet  narrow the bill  to individuals  who had                                                            
received no  increases in over ten  years and who have been  retired                                                            
and receiving benefits for ten years.                                                                                           
                                                                                                                                
SENATOR  PHILLIPS  asked  what  other  category   of  civil  service                                                            
employees the same five percent calculation applies to.                                                                         
                                                                                                                                
MR. BELL  said this legislation  parallels  the judicial  retirement                                                            
system. A  judge accrues 5  percent per year  up to a maximum  of 75                                                            
percent.                                                                                                                        
                                                                                                                                
SENATOR  COWDERY asked how  many salary  increases legislators  have                                                            
received during the same period.                                                                                                
                                                                                                                                
MS. LESH  answered legislators  salary changes  are included  in the                                                            
back up information.   They have received  increases several  times.                                                            
Legislators are  also excluded from the purview of  this legislation                                                            
because of  the office allowance increases.   Representative  Hudson                                                            
wished  to limit  the fiscal  impact of  this legislation  so it  is                                                            
focused on the most extreme cases.                                                                                              
                                                                                                                                
SENATOR COWDERY noted that  he spends more than his office allowance                                                            
provides so he does not  consider it to be a benefit.  He noted that                                                            
he cannot support this legislation.                                                                                             
                                                                                                                                
CHAIRWOMAN PEARCE asked for a motion to calendar HB 198.                                                                        
                                                                                                                                
SENATOR THERRIAULT asked  if the Legislative Council will absorb the                                                            
costs.                                                                                                                          
                                                                                                                                
MS. LESH said  that section was added in the House  Rules Committee.                                                            
The Legislative Council agreed it could absorb that cost.                                                                       
                                                                                                                                
CHAIRWOMAN  PEARCE clarified that  the fiscal note has been  adopted                                                            
into CCSHB 103.                                                                                                                 
                                                                                                                                
The committee took a brief at-ease.                                                                                             
                                                                                                                                
SENATOR  THERRIAULT  moved  to calendar  HB  198.   There  being  no                                                            
objection, the motion carried.                                                                                                  
                                                                                                                                
CHAIRWOMAN  PEARCE noted a  contract to extend  the hire of  Patrick                                                            
Coughlin  as the project  director of the  Joint Pipeline  Committee                                                            
was before the  committee.  The Joint Pipeline Committee  will cease                                                            
to function after  January 14, 2002 because it is  established to do                                                            
interim work,  but Mr. Coughlin's  contract extension will  continue                                                            
until the end of the next legislative session.                                                                                  
                                                                                                                                
SENATOR  COWDERY  asked  why  do an  extension  rather  than  a  new                                                            
contract.                                                                                                                       
                                                                                                                                
CHAIRWOMAN  PEARCE explained  that Mr. Coughlin's  current  contract                                                            
expires  on July 15,  2001 and pointed  out that  rather than  enter                                                            
into new contracts, most contracts are extended.                                                                                
                                                                                                                                
SENATOR  COWDERY asked  if Mr. Coughlin  was employed  by the  Joint                                                            
Committee on Mergers.                                                                                                           
                                                                                                                                
CHAIRWOMAN PEARCE said  he was not, he was an oil and gas specialist                                                            
at the Department of Natural Resources.                                                                                         
                                                                                                                                
SENATOR  THERRIAULT   moved  to  approve  Mr.  Coughlin's   contract                                                            
extension through the end of next session.                                                                                      
                                                                                                                                
SENATOR PHILLIPS expressed concern about the cost.                                                                              
                                                                                                                                
SENATOR JOHN TORGERSON,  Chairman of the Senate Resources Committee,                                                            
said the  cost of an  expert is  high and that  the legislature  has                                                            
paid more  for attorney fees.  He noted this  contract is  different                                                            
because the amount will be paid in advance.                                                                                     
                                                                                                                                
SENATOR COWDERY asked if the legislature is paying a retainer.                                                                  
                                                                                                                                
SENATOR TORGERSON  explained that Mr. Coughlin will  be paid $20,000                                                            
per month during  session, otherwise he will be paid  an hourly fee.                                                            
                                                                                                                                
SENATOR COWDERY asked what Mr. Coughlin will do.                                                                                
                                                                                                                                
SENATOR  TORGERSON said  he will  advise the  committee on  pipeline                                                            
issues and tax structure.                                                                                                       
                                                                                                                                
SENATOR COWDERY  asked if Mr. Coughlin will also work  on the permit                                                            
process and the Economic Limit Factor.                                                                                          
                                                                                                                                
SENATOR  TORGERSON  said   he will,   and  that  Mr.  Coughlin  does                                                            
excellent work.                                                                                                                 
                                                                                                                                
SENATOR COWDERY asked how  billings for Mr. Coughlin's work over the                                                            
allotted amount will be handled.                                                                                                
                                                                                                                                
SENATOR  TORGERSON explained  the  Legislative  Council will  review                                                            
that matter.                                                                                                                    
                                                                                                                                
CHAIRWOMAN PEARCE added  that the Legislative Council has dealt with                                                            
that experience with a number of contracts in the past.                                                                         
                                                                                                                                
SENATOR  RICK  HALFORD  asked if  Mr.  Coughlin  will be  paid  from                                                            
legislative session expenses.                                                                                                   
                                                                                                                                
CHAIRWOMAN  PEARCE said she  did not know  but when the legislature                                                             
returns to  Juneau for the  next session,  if more money is  needed,                                                            
the change will be made then.                                                                                                   
                                                                                                                                
SENATOR THERRIAULT  asked if Mr. Coughlin  will work out  of Juneau.                                                            
                                                                                                                                
SENATOR TORGERSON said he will be based in Anchorage.                                                                           
                                                                                                                                
SENATOR THERRIAULT questioned  what will take place if the committee                                                            
is dissatisfied with Mr. Coughlin's work.                                                                                       
                                                                                                                                
SENATOR  TORGERSON   answered  Mr.   Coughlin's  contract   contains                                                            
standard termination language.                                                                                                  
                                                                                                                                
CHAIRWOMAN PEARCE announced  that, with no objection, Mr. Coughlin's                                                            
contract was approved.   She then recessed the meeting  to a call of                                                            
the Chair at 1:05 p.m.                                                                                                          
                                                                                                                                
                                                                                                                                

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