Legislature(2009 - 2010)BELTZ 211

04/02/2009 09:00 AM STATE AFFAIRS


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SB 157 CERTIFICATES OF PARTICIPATION FOR SUBPORT TELECONFERENCED
Moved SB 157 Out of Committee
Bills Previously Heard/Scheduled
= SB 126 REEMPLOYMENT OF RETIREES; EXEMPT SERVICE
Moved CSSB 126(STA) Out of Committee
                    ALASKA STATE LEGISLATURE                                                                                  
            SENATE STATE AFFAIRS STANDING COMMITTEE                                                                           
                         April 2, 2009                                                                                          
                           9:01 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Linda Menard, Chair                                                                                                     
Senator Kevin Meyer, Vice Chair                                                                                                 
Senator Hollis French                                                                                                           
Senator Albert Kookesh                                                                                                          
Senator Joe Paskvan                                                                                                             
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 157                                                                                                             
"An  Act  directing  the Alaska  Permanent  Fund  Corporation  to                                                               
transfer  $22,700,000 from  the  principal of  the mental  health                                                               
trust fund to the Alaska  Mental Health Trust Authority; relating                                                               
to  the development  of  revenue-producing  facilities on  mental                                                               
health  trust  land  and  to   the  Alaska  Mental  Health  Trust                                                               
Authority Subport  Office Building;  authorizing the  issuance of                                                               
certificates of  participation for construction of  the building;                                                               
approving  leases  of  all  or   part  of  the  building  by  the                                                               
Department  of Administration;  and  providing  for an  effective                                                               
date."                                                                                                                          
     MOVED SB 157 OUT OF COMMITTEE                                                                                              
                                                                                                                                
SENATE BILL NO. 126                                                                                                             
"An Act amending  the State Personnel Act to place  in the exempt                                                               
service  the  chief  economist   and  state  comptroller  in  the                                                               
Department   of  Revenue   and  certain   professional  positions                                                               
concerning  oil   and  gas  within  the   Department  of  Natural                                                               
Resources; relating  to reemployment  of and  benefits for  or on                                                               
behalf  of reemployed  retired teachers  and public  employees by                                                               
providing  for   an  effective  date  by   amending  the  delayed                                                               
effective date for  secs. 3, 5, 9,  and 12, ch. 57,  SLA 2001 and                                                               
sec. 19, ch. 50, SLA 2005; and providing for an effective date."                                                                
     MOVED CSSB 126(STA) OUT OF COMMITTEE                                                                                       
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 157                                                                                                                  
SHORT TITLE: CERTIFICATES OF PARTICIPATION FOR SUBPORT                                                                          
SPONSOR(S): SENATOR(S) OLSON                                                                                                    
                                                                                                                                
03/18/09       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/18/09       (S)       STA, FIN                                                                                               
04/02/09       (S)       STA AT 9:00 AM BELTZ 211                                                                               
                                                                                                                                
BILL: SB 126                                                                                                                  
SHORT TITLE: REEMPLOYMENT OF RETIREES; EXEMPT SERVICE                                                                           
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
02/27/09       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/27/09       (S)       STA, L&C, FIN                                                                                          
03/24/09       (S)       STA AT 9:00 AM BELTZ 211                                                                               
03/24/09       (S)       Heard & Held                                                                                           
03/24/09       (S)       MINUTE(STA)                                                                                            
03/26/09       (S)       STA AT 9:00 AM BELTZ 211                                                                               
03/26/09       (S)       Heard & Held                                                                                           
03/26/09       (S)       MINUTE(STA)                                                                                            
03/31/09       (S)       STA AT 9:00 AM BELTZ 211                                                                               
03/31/09       (S)       <Above Item Removed from Agenda>                                                                       
03/31/09       (S)       MINUTE(STA)                                                                                            
04/02/09       (S)       STA AT 9:00 AM BELTZ 211                                                                               
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
DENISE LICCIOLI, Staff                                                                                                          
to Senator Donny Olson                                                                                                          
Alaska State Legislature                                                                                                        
Juneau AK                                                                                                                       
POSITION STATEMENT: Presented SB 157.                                                                                         
                                                                                                                                
REPRESENTATIVE CATHY MUNOZ                                                                                                      
Alaska State Legislature                                                                                                        
Juneau AK                                                                                                                       
POSITION STATEMENT: Presented SB 157.                                                                                         
                                                                                                                                
HARRY NOAH, Executive Director                                                                                                  
Land Trust Office of the Mental Health Trust                                                                                    
Department of Natural Resources                                                                                                 
Anchorage AK                                                                                                                    
POSITION STATEMENT: Spoke in support of SB 157.                                                                               
                                                                                                                                
VERN JONES, Chief Procurement Officer                                                                                           
Alaska Department of Administration                                                                                             
Juneau AK                                                                                                                       
POSITION STATEMENT: Spoke in support of SB 157.                                                                               
                                                                                                                                
JEFF JESSE                                                                                                                      
Alaska Mental Health Trust Authority                                                                                            
Anchorage AK                                                                                                                    
POSITION STATEMENT: Spoke in support of SB 157.                                                                               
                                                                                                                                
JEFF BUSH, Deputy Mayor                                                                                                         
City and Borough of Juneau                                                                                                      
Juneau AK                                                                                                                       
POSITION STATEMENT: Spoke in support of SB 157.                                                                               
                                                                                                                                
WAYNE JENSEN, Architect                                                                                                         
Juneau AK                                                                                                                       
POSITION STATEMENT: Answered questions regarding SB 157.                                                                      
                                                                                                                                
DEVEN MITCHELL, Investment Manager                                                                                              
Department of Revenue                                                                                                           
Juneau AK                                                                                                                       
POSITION STATEMENT: Answered questions regarding SB 157.                                                                      
                                                                                                                                
DAN WAYNE, Attorney                                                                                                             
Legislative Legal and Research Services Division                                                                                
Alaska State Legislature                                                                                                        
Juneau AK                                                                                                                       
POSITION STATEMENT: Explained the CS to SB 126.                                                                               
                                                                                                                                
AGNES MORAN, Parent                                                                                                             
Ketchikan AK                                                                                                                    
POSITION STATEMENT: Spoke in support of the original SB 126.                                                                  
                                                                                                                                
HANNAH RAMISKEY, Grandparent                                                                                                    
Ketchikan AK                                                                                                                    
POSITION STATEMENT: Spoke in support of the original SB 126.                                                                  
                                                                                                                                
GINGER BLAISDELL, Director of Administrative Services                                                                           
Department of Revenue                                                                                                           
Juneau AK                                                                                                                       
POSITION STATEMENT: Spoke in support of the original SB 126.                                                                  
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
9:01:57 AM                                                                                                                    
CHAIR LINDA MENARD called the Senate State Affairs Standing                                                                   
Committee meeting to order at 9:01 a.m. Senators Kookesh,                                                                       
Paskvan, Meyer, and Menard were present at the call to order.                                                                   
                                                                                                                                
        SB 157-CERTIFICATES OF PARTICIPATION FOR SUBPORT                                                                    
                                                                                                                                
9:02:59 AM                                                                                                                    
CHAIR MENARD announced the consideration of SB 157.                                                                             
                                                                                                                                
DENISE  LICCIOLI,  Staff to  Senator  Donny  Olson, Alaska  State                                                               
Legislature,  sponsor, said  the  Department of  Labor needs  new                                                               
office space  in Juneau. The lease  on the current space  will be                                                               
up in June  of 2012, and no  other space in Juneau  will hold the                                                               
300 employees who work in  the department. Other space is needed,                                                               
and it  will likely  need to be  built because of  the lack  of a                                                               
suitable  building   in  Juneau.   SB  157  will   authorize  the                                                               
certificates  of  participation  "for  one of  the  options  that                                                               
exists  for taking  care  of that  need for  space."  Even if  it                                                               
doesn't pass there will need to  be an RFP [request for proposal]                                                               
issued for  space, and that is  a fairly long process.  Given the                                                               
timing, it  is important to  move on  this. There are  two state-                                                               
owned office  buildings that house  three state  departments that                                                               
are  in bad  need of  significant renovation.  The Department  of                                                               
Administration approached the Mental Health  Trust to look into a                                                               
joint  project  to satisfy  some  of  those  needs. It  would  be                                                               
mutually beneficial.                                                                                                            
                                                                                                                                
9:06:21 AM                                                                                                                    
MS. LICCIOLI  said the core  mission of  the trust is  to develop                                                               
and  manage trust  assets for  mental  health beneficiaries.  The                                                               
trust  owns  this  land,  and  it is  in  the  top  priority  for                                                               
development. SB  157 will  enable the trust  to develop  the much                                                               
needed office and retail space on  land it owns. The offices that                                                               
are  in need  of better  facilities would  benefit. The  proposed                                                               
building  will  use  modern  construction  standards  and  energy                                                               
efficiency.  This new  facility  will save  the  state money  and                                                               
provide a  steady revenue to  the trust.  SB 157 will  enable the                                                               
trust to move forward with the construction.                                                                                    
                                                                                                                                
CHAIR MENARD asked how old the buildings are.                                                                                   
                                                                                                                                
MS. LICCIOLI  said the  Department of  Public Safety  building is                                                               
about 40 years old.                                                                                                             
                                                                                                                                
9:08:58 AM                                                                                                                    
REPRESENTATIVE CATHY  MUNOZ, Alaska  State Legislature,  said the                                                               
public safety building  was supposed to be temporary  when it was                                                               
built in 1970.  The state will have to  invest considerable funds                                                               
to bring it up  to standard or replace it. The  other site is the                                                               
Department of  Fish and Game  building in Douglas that  was built                                                               
in  the 1950s.  It  needs major  rehabilitation. Both  facilities                                                               
would require  about $8.5 million of  renovation. The legislation                                                               
is to allow the Mental Health  Trust to develop the land, and the                                                               
parcel in  the bill has  been a  priority for development  by the                                                               
trust for  many years.  The trust  holds land  throughout Alaska.                                                               
Its mission is  to develop these lands to the  maximum benefit of                                                               
its  beneficiaries. The  timing  of the  legislation is  critical                                                               
because the old  buildings are in dire need of  repair. The lease                                                               
is  soon to  expire for  the labor  department building,  and the                                                               
state  doesn't want  to remain  in that  space. There  will be  a                                                               
savings  to the  state  of $13  million over  the  course of  the                                                               
lease.  The trust  will receive  revenue for  the next  20 to  30                                                               
years. As the landowner, the trust  provides the land and half of                                                               
the construction costs.  The bill will allow the  trust to access                                                               
$22.7  million in  trust funds.  The state  will meet  a critical                                                               
need for space. The bonds will  be paid back with the revenues of                                                               
the leases. This is a win-win proposal.                                                                                         
                                                                                                                                
9:13:24 AM                                                                                                                    
SENATOR KOOKESH asked what the revenue will be to the trust.                                                                    
                                                                                                                                
REPRESENTATIVE MUÑOZ said  trust funds are managed  by the Alaska                                                               
Permanent  Fund. The  rate  of  return will  start  out as  being                                                               
similar to its current investments,  but over time the revenue to                                                               
the trust will increase greatly.                                                                                                
                                                                                                                                
SENATOR KOOKESH said  the money earns interest now, and  if it is                                                               
spent, there has to be some sort of income.                                                                                     
                                                                                                                                
9:15:07 AM                                                                                                                    
SENATOR MEYER  said a  big concern  is the  loss of  property tax                                                               
when a state entity builds a building.                                                                                          
                                                                                                                                
REPRESENTATIVE MUÑOZ said the City of Juneau supports this.                                                                     
                                                                                                                                
SENATOR MEYER  said it  will raise  property taxes  for everybody                                                               
else [in Juneau]. It won't go on the private tax roles.                                                                         
                                                                                                                                
REPRESENTATIVE MUÑOZ  said the city  recognizes the need  for the                                                               
employees  to be  in a  space that  meets the  requirements of  a                                                               
state lease. Those requirements are not being met.                                                                              
                                                                                                                                
SENATOR MEYER  said those same  needs could  be met by  a private                                                               
developer without losing property taxes.                                                                                        
                                                                                                                                
REPRESENTATIVE MUÑOZ said  there are a lot  of financial benefits                                                               
to working  with the trust.  The property tax situation  could be                                                               
discussed by the city. The city sees this as positive.                                                                          
                                                                                                                                
9:16:56 AM                                                                                                                    
SENATOR MEYER asked what rent the state is currently paying.                                                                    
                                                                                                                                
REPRESENTATIVE MUÑOZ  said the state  is paying $2.33  per square                                                               
foot. Renovations  are needed, so when  the lease is up  the rate                                                               
will  likely change.  The rent  on  the proposed  facility has  a                                                               
negotiated  ceiling of  $3.50 per  square foot.  That rate  is in                                                               
line with Class B space around  the state. The state often has to                                                               
invest  funds beyond  the square  footage rate  in order  to meet                                                               
state standards with lighting and technology.                                                                                   
                                                                                                                                
9:18:09 AM                                                                                                                    
SENATOR MEYER asked about adequate parking.                                                                                     
                                                                                                                                
REPRESENTATIVE MUÑOZ  said the  site is 4.5  acres, and  there is                                                               
sufficient land for parking.                                                                                                    
                                                                                                                                
HARRY NOAH, Executive Director,  Land Trust Office, Mental Health                                                               
Trust,  Department  of Natural  Resources,  said  the trust  will                                                               
invest  $22.7 million,  and  "we're asking  7.5  percent on  that                                                               
money, which basically is on par  with what we would get for that                                                               
money in the  permanent fund under normal  conditions. We're also                                                               
asking for 8  percent of the value  of the land as  per the lease                                                               
of the land." Ultimately the building  will be paid for, and then                                                               
there will be a cash flow.  There are still negotiations with the                                                               
state on  what that number will  be. This bill will  set an upper                                                               
limit, but there will be some negotiating after the bill passes.                                                                
                                                                                                                                
9:20:46 AM                                                                                                                    
VERN  JONES,  Chief  Procurement Officer,  Alaska  Department  of                                                               
Administration, said  the state has  been working with  the trust                                                               
and he  believes that  the building will  provide the  state with                                                               
savings and  solve several problems.  The Department of  Labor is                                                               
housed in a  large building and the lease is  ending. There is no                                                               
vacant  space  in   Juneau,  and  a  new  building   will  be  an                                                               
improvement. There  have been issues  with the  current facility.                                                               
The bill  solves other problems  for his division,  which manages                                                               
several  state  office  buildings, including  the  Public  Safety                                                               
building  that was  built in  1970 as  a temporary  structure. It                                                               
needs a  lot of work. The  Fish and Game building  in Douglas has                                                               
numerous problems.  Wind, rain, and  snow comes through  the gaps                                                               
in the walls  and windows. The state is very  reluctant to invest                                                               
millions  into  facilities  that  are well  beyond  their  usable                                                               
lives. It  would be throwing  good money  after bad. SB  157 will                                                               
get the state  into energy efficient buildings  that are suitable                                                               
for state employees.  His division provided the  analysis, and it                                                               
shows  a  substantial  savings  over  the  years.  It  is  fairly                                                               
conservative  because  it  only  includes  the  current  list  of                                                               
deferred maintenance, and who knows  how much more work will need                                                               
to  be done.  In fact,  the buildings  will probably  need to  be                                                               
replaced. Even though the state  still has to negotiate the lease                                                               
rate, the bill is in the state's best interest.                                                                                 
                                                                                                                                
9:24:44 AM                                                                                                                    
JEFF JESSE, Alaska  Mental Health Trust Authority,  said Mr. Noah                                                               
and  Representative  Muñoz  explained  the  bill  well.  The  DOA                                                               
approached the  trust and the trust  land office did a  great job                                                               
of  assessing options  and potential  returns. This  will benefit                                                               
the trust.                                                                                                                      
                                                                                                                                
JEFF BUSH,  Deputy Mayor,  City and Borough  of Juneau,  said the                                                               
assembly took up an ordinance to  change the zoning to allow this                                                               
project to proceed. The city is fully supportive.                                                                               
                                                                                                                                
9:26:58 AM                                                                                                                    
WAYNE  JENSEN,  Architect,  Juneau,  said his  company  has  been                                                               
working on this project and can answer questions.                                                                               
                                                                                                                                
SENATOR KOOKESH asked how much parking is required.                                                                             
                                                                                                                                
MR. JENSON  said there are  two requirements. The city  has land-                                                               
use requirements,  and the lease will  have parking requirements.                                                               
Both  will  be  an  obligation of  the  trust.  The  requirements                                                               
generally depend on  the size of the building.  There is adequate                                                               
parking space.                                                                                                                  
                                                                                                                                
9:29:25 AM                                                                                                                    
DEVEN MITCHELL,  Investment Manager, Department of  Revenue, said                                                               
the project  is a convergence  of a  variety of missions  for the                                                               
trust  and   the  state   of  Alaska.   The  practice   of  using                                                               
certificates  has been  used  a number  of  times throughout  the                                                               
state. It is a means  of borrowing money for specific facilities.                                                               
It was  used recently  for a  virology lab  at the  university in                                                               
Fairbanks. It was used for  the replacement of the "API" facility                                                               
in Anchorage, which was a  similar partnership for something that                                                               
was  badly needed.  The  certificates that  he  would sell  would                                                               
receive ratings  in the  low double-a  category. "The  state sold                                                               
general  obligation  bonds  today,  which is  a  slightly  better                                                               
credit than  a subject-to-appropriation  credit, but  the 20-year                                                               
bonds  -  and  these  were  approved  in  November  of  2008  for                                                               
transportation projects throughout the  state - the true interest                                                               
cost  was 4.04  percent." The  fiscal note  assumes 5.5  percent,                                                               
which is  obviously conservative in today's  market. Today's rate                                                               
is indicative of what might be possible.                                                                                        
                                                                                                                                
SENATOR MEYER  asked, "We've already  got the money at  5 percent                                                               
secured?"                                                                                                                       
                                                                                                                                
MR. MITCHELL  said no,  the fiscal note  provided an  estimate of                                                               
what might  be possible.  There has been  a wide  distribution of                                                               
available interest rates over the  last six months because of the                                                               
dislocation seen  in October, in  particular. There  were certain                                                               
days  you  couldn't  sell  bonds.  "A  credit  like  this  is  an                                                               
extremely  strong credit  that's recognized  in the  market. But,                                                               
still, if  you have Merrill  Lynch and Lehman Brothers  ... being                                                               
purchased  or   going  out  of   business,  then  that   type  of                                                               
dislocation  is  difficult  to overcome."  The  Matanuska-Susitna                                                               
borough  lease revenue  bonds are  supported  by the  state on  a                                                               
subject-to-appropriation  basis, "and  that is  the credit  - the                                                               
borough  pledges the  lease payments  that it  receives from  the                                                               
state,  so it's  called something  different, but  it's the  same                                                               
credit."  Those  achieved  an  interest  rate  of  just  under  6                                                               
percent,  versus 4.04  today.  "The  state's [general  obligation                                                               
bonds]  would have  priced better  than the  lease revenue  bonds                                                               
back on December 22, but maybe 50 basis points better, not 200."                                                                
                                                                                                                                
9:33:54 AM                                                                                                                    
SENATOR MEYER said his concern  is the state's overall debt load.                                                               
Are you comfortable that we can  take on this additional debt and                                                               
still maintain a good credit rating?                                                                                            
                                                                                                                                
MR. MITCHELL  said that is  one of Alaska's strengths.  The state                                                               
has  a relatively  low debt  burden, not  necessarily in  a ratio                                                               
perspective because  of Alaska's  small population,  but relative                                                               
to the  high oil revenue.  "We're well within the  parameters ...                                                               
we typically  use 5 to 8  percent as a threshold  of unrestricted                                                               
revenue as being  an acceptable level of debt  service." With the                                                               
updated  revenue   forecast,  Alaska  is  in   the  5-ish  range,                                                               
including  the Mat-Su  bonds and  the [general  obligation bonds]                                                               
that were just issued.                                                                                                          
                                                                                                                                
9:35:19 AM                                                                                                                    
SENATOR  MEYER said  Alaska's  revenue is  based  on one  source,                                                               
which isn't doing well. Oil price and production are declining.                                                                 
                                                                                                                                
MR.  MITCHELL  said  Alaska's   reserve  position  is  incredible                                                               
relative to  other states. He mentioned  the CBRF [constitutional                                                               
budget  reserve fund],  SBR [statutory  budget reserve],  and the                                                               
forward-funding  of education.  Those  allow Alaska  to retain  a                                                               
high rating  despite the  volatility of  the revenue  stream. The                                                               
state  has  protected its  position.  It  is a  relatively  small                                                               
obligation.                                                                                                                     
                                                                                                                                
CHAIR MENARD asked if the note is for 30 years.                                                                                 
                                                                                                                                
MR. MITCHELL said it is 20  years. There are two things. "There's                                                               
COPs, which are 20, and there's a lease for the facility."                                                                      
                                                                                                                                
9:36:42 AM                                                                                                                    
SENATOR MEYER said he is convinced  that this is needed. He moved                                                               
to report  SB 157 from committee  with individual recommendations                                                               
and attached  fiscal note(s).  There being  no objection,  SB 157                                                               
moved out of committee.                                                                                                         
                                                                                                                                
9:37:49 AM                                                                                                                    
The committee took a brief at-ease.                                                                                             
                                                                                                                                
        SB 126-REEMPLOYMENT OF RETIREES; EXEMPT SERVICE                                                                     
                                                                                                                                
CHAIR MENARD announced the consideration of SB 126.                                                                             
                                                                                                                                
9:40:24 AM                                                                                                                    
SENATOR PASKVAN moved to adopt  the proposed committee substitute                                                               
(CS)  to SB  126,  labeled 26-GS1035\S,  as  a working  document.                                                               
There being no objection, Version S was before the committee.                                                                   
                                                                                                                                
DAN  WAYNE, Attorney,  Legislative  Legal  and Research  Services                                                               
Division, Alaska  State Legislature, said  the CS creates  a six-                                                               
month waiting period between the time  a person can retire and be                                                               
rehired. On  page 3, line  4, the  bill deletes the  language "in                                                               
the executive  branch of state  government". This  is significant                                                               
because "we've  taken out  the words  on line  27 similar  to the                                                               
procedure." This makes all employers subject to the procedure.                                                                  
                                                                                                                                
CHAIR  MENARD surmised  that it  deletes  "executive branch"  and                                                               
will apply to any employer.                                                                                                     
                                                                                                                                
9:43:08 AM                                                                                                                    
MR. WAYNE  said that is correct.  A memo in the  committee packet                                                               
explains a technical  change on page 3. There was  a bill in 2005                                                               
that called  for a  repeal in  2009 of  certain statutes.  Two of                                                               
those  statutes were  moved  to  other places.  So  the bill  was                                                               
amended  to  target  that language  more  accurately.  After  the                                                               
repeal  in 2010,  there won't  be language  left in  statute that                                                               
refers to rehired retirees.                                                                                                     
                                                                                                                                
CHAIR MENARD said the sunset date will be 2010 instead of 2013.                                                                 
                                                                                                                                
MR. WAYNE said  yes, and the title was changed  because Section 1                                                               
was  deleted. He  believes that  Section  1 would  have put  some                                                               
employees into exempt service.                                                                                                  
                                                                                                                                
CHAIR  MENARD said  on page  2,  line 7,  "we took  out the  word                                                               
'similar' to clarify that it  applies to all employers." The bill                                                               
was also  changed from 5 to  3 applicants. Section 1  was removed                                                               
so that DNR  employees are left as they are  now with the thought                                                               
that they would be addressed in separate legislation.                                                                           
                                                                                                                                
MR. WAYNE said it was taken out, but he doesn't know why.                                                                       
                                                                                                                                
CHAIR  MENARD said,  "On 3,  we removed  the chief  economist and                                                               
left in the comptroller."                                                                                                       
                                                                                                                                
MR. WAYNE said yes, and the title was changed to reflect that.                                                                  
                                                                                                                                
9:47:33 AM                                                                                                                    
CHAIR  MENARD apologized  that citizens  from Ketchikan  were not                                                               
allowed  to  speak  at  the  last  meeting.  She  spoke  to  them                                                               
personally,  and she  believes in  an open  process. They  are on                                                               
line today.                                                                                                                     
                                                                                                                                
AGNES MORAN,  Parent, Ketchikan, said  she has two  children. She                                                               
doesn't have access  to the CS, but she supports  the original SB
126. It allows rural schools  access to experienced educators and                                                               
administrators who  have made a  commitment to remain  in Alaska.                                                               
The  number of  participants  in the  retiree/rehire program  may                                                               
appear small but  their impact on a community is  large. Many are                                                               
certified  in  various  special  education  fields.  The  reading                                                               
specialist at her  children's school is one  such individual. The                                                               
specialist  has close  ties  to  the Native  community  and is  a                                                               
positive role  model. At  the charter school,  86 percent  of the                                                               
Alaska  Native students  scored proficient  in language  arts and                                                               
math. That is  higher than any other group in  the school. Access                                                               
to educators with  experience in special needs  is important. Her                                                               
child  spent  six  years  in the  special  needs  program.  These                                                               
teachers are resources for the  children and other educators. Her                                                               
son's  first-grade   teacher  was   fresh  out  of   college  and                                                               
overwhelmed  by  the needs  of  her  diverse group  of  students.                                                               
Fortunately  she  had access  to  experienced  educators to  help                                                               
guide her.  Schools with rehired retirees  have current openings.                                                               
Instead  of viewing  them as  barriers,  they should  be seen  as                                                               
bridges.  Students, families,  and communities  benefit from  the                                                               
experience of these rehires. She urged the passage of SB 126.                                                                   
                                                                                                                                
9:51:14 AM                                                                                                                    
HANNAH RAMISKEY, Ketchikan, said she  is a grandparent of a child                                                               
who  has  struggled  and  gets  a lot  of  additional  help.  Ms.                                                               
Ramiskey  has sent  several letters,  and she  has explained  why                                                               
there was a  custodian on the Ketchikan rehire  list. That person                                                               
has  left.  She is  concerned  about  the amendments.  A  charter                                                               
school without an  experienced principal will need  to do without                                                               
one for six months or hire  someone who is not qualified. "Do you                                                               
do  without  a  reading  specialist in  Ketchikan  because  there                                                               
aren't any that  are certified in the curriculum  that you have?"                                                               
She spoke  of the  impact of waiting  six months.  She questioned                                                               
the public  process in the  creation of the  CS. She has  been at                                                               
every hearing and  didn't know when the bill  was changed. During                                                               
House  hearings she  was impressed  when a  member asked  a union                                                               
representative if it would be OK  if a retiree from another state                                                               
could double dip. The union man  said "Well yea, that's OK." So a                                                               
committed person in Alaska won't be  able to do what someone from                                                               
any other  state can do.  Ketchikan has 15  feet of rain  in some                                                               
years, so  new people often don't  last. The lack of  a Nordstrom                                                               
store seems to be an issue  for wives. She asked the committee to                                                               
look at the impact on children. "Do  we just take what we can get                                                               
even if it's not right?"                                                                                                        
                                                                                                                                
9:54:54 AM                                                                                                                    
GINGER BLAISDELL,  Director, Administrative  Services, Department                                                               
of Revenue, said she looked at  the CS last night. She noted that                                                               
Chair Menard  kept saying "all  employers" instead  of "similar",                                                               
and she  presumed the  chair was referring  to all  employers who                                                               
participate in PERS.                                                                                                            
                                                                                                                                
CHAIR MENARD said yes.                                                                                                          
                                                                                                                                
MS.  BLAISDELL  clarified  that  the bill  will  not  impact  the                                                               
private  sector. Changing  the 30-day  to 180-day  provision will                                                               
eliminate individuals  from being considered for  nearly the life                                                               
of the  program since it's now  slated to sunset in  one year. It                                                               
eliminates  the younger  spectrum  of  the retirement  community.                                                               
Changing from five  applicants to three is fine.  Typically, if a                                                               
retiree is  rehired, he or  she is the only  qualified applicant.                                                               
The one-year  extension doesn't address the  issue of unqualified                                                               
or unwilling applicants  for hard-to-fill positions. "Eliminating                                                               
the chief economist  leaves the state with a  critical vacancy in                                                               
a  position that  would  be  guiding the  state  in its  critical                                                               
global economic  strategy. Eliminating the oil  and gas positions                                                               
puts the  state at risk  for high turnover in  critical positions                                                               
in oil  and gas development."  This bill doesn't  accomplish what                                                               
was intended: providing  a hiring pool to  keep Alaskans employed                                                               
in  Alaskan jobs  regardless of  their retirement  status and  to                                                               
provide   options  for   hiring   critical   positions  for   the                                                               
departments of revenue and natural resources.                                                                                   
                                                                                                                                
9:57:53 AM                                                                                                                    
SENATOR KOOKESH  said he doesn't  like the  change of 30  days to                                                               
180 days and won't support the bill with that in it.                                                                            
                                                                                                                                
SENATOR MEYER asked about a compromise of 3 months.                                                                             
                                                                                                                                
SENATOR KOOKESH said he doesn't  like 180 days. He could probably                                                               
support 90  days. "I just don't  want to have to  wait that long,                                                               
because I come  from a rural district too and  sometimes you need                                                               
somebody  right  away." The  time  constraint  doesn't work.  The                                                               
intent of the bill was to  have a pool [of applicants]. "We might                                                               
as  well just  not pass  this bill  if we're  going to  put those                                                               
kinds of restrictions on."                                                                                                      
                                                                                                                                
SENATOR MEYER  said he agrees.  Sometimes a person gets  a little                                                               
rusty after  six months,  "and if  you indeed  need to  have this                                                               
person,  you want  him [or  her] to  come in  and hit  the ground                                                               
running." Perhaps 90 days would be better.                                                                                      
                                                                                                                                
10:00:33 AM                                                                                                                   
SENATOR KOOKESH  said he can live  with that, but he  wouldn't be                                                               
happy about it.                                                                                                                 
                                                                                                                                
SENATOR PASKVAN  asked about  a teacher retiring  out of  one TRS                                                               
school district,  and if that  means he or  she couldn't go  to a                                                               
rural district to  teach. He asked if Senator  Kookesh is worried                                                               
about that situation.                                                                                                           
                                                                                                                                
SENATOR KOOKESH said  yes, there has to be a  pool of applicants.                                                               
Often teachers in  rural Alaska have to leave  midyear. A teacher                                                               
in Angoon got  cancer, and her teacher husband had  to leave with                                                               
her for seven months.  If a school has to wait  for six months to                                                               
hire  somebody, "you're  teaching the  kids in  that school  with                                                               
substitute teachers who have never gone to college."                                                                            
                                                                                                                                
CHAIR MENARD said that is a reasonable concern.                                                                                 
                                                                                                                                
SENATOR MEYER  moved to  adopt conceptual  Amendment 1  to change                                                               
the waiting period from 120 days to 90 days.                                                                                    
                                                                                                                                
SENATOR PASKVAN objected  in order to discuss  the amendment. His                                                               
concern is a  retiree staying in the same job.  That is different                                                               
from  the situation  that Senator  Kookesh is  talking about.  He                                                               
absolutely agrees  in accommodating  those situations  and making                                                               
sure  there  is a  big  enough  pool.  But someone  retiring  and                                                               
keeping the job is the concern.                                                                                                 
                                                                                                                                
10:03:53 AM                                                                                                                   
SENATOR KOOKESH  said 90 days will  give a gap for  looking for a                                                               
different  employee.  "The  school  is  going  to  have  to  find                                                               
somebody, and they could find somebody who's not a retiree."                                                                    
                                                                                                                                
SENATOR FRENCH  said that is a  good point with regard  to school                                                               
districts.  The  school  district  issue is  in  Section  1,  and                                                               
Section 4  relates to PERS  employees. "If  we want to  deal with                                                               
teachers, Section  1 should  be 90  days and  we could  leave the                                                               
other 180-day number alone, and still fix the concern you have."                                                                
                                                                                                                                
SENATOR KOOKESH  said he is  concerned about teachers  and hasn't                                                               
thought about other employees.                                                                                                  
                                                                                                                                
SENATOR MEYER  said he is not  sure if a similar  situation could                                                               
happen with a PERS employee.                                                                                                    
                                                                                                                                
SENATOR KOOKESH asked who wrote the CS.                                                                                         
                                                                                                                                
CHAIR MENARD  said she did and  has no problem with  changing the                                                               
number of days for both. She  is trying get something better than                                                               
the original bill  because there has not been  the attention paid                                                               
to  this that  there should  be. Some  people get  hired the  day                                                               
after retiring.                                                                                                                 
                                                                                                                                
SENATOR KOOKESH  surmised that  she wants  a separation,  but 180                                                               
days  is too  much. He  supports 90  days for  both TRS  and PERS                                                               
employees.                                                                                                                      
                                                                                                                                
10:06:32 AM                                                                                                                   
SENATOR MEYER  said there are  critical positions in  the courts.                                                               
He doesn't know how 90 days or 120 days will impact them.                                                                       
                                                                                                                                
SENATOR PASKVAN  said he has  no problem if someone  retires from                                                               
the  Fairbanks school  district  and wants  to  teach in  Angoon.                                                               
"They stop teaching  in May in Fairbanks and  they start teaching                                                               
in  August/September in  Angoon."  His problem  is  a person  who                                                               
retires from a  chair in an office  on one day, and  the next day                                                               
he or she has the same chair.                                                                                                   
                                                                                                                                
SENATOR KOOKESH  said if that  position is critical, no  one will                                                               
wait 90 days for that person.                                                                                                   
                                                                                                                                
CHAIR MENARD  said by  putting the department  on notice  it will                                                               
actively try  to recruit. If  there are stellar employees,  it is                                                               
human nature to  slide them into the same slot  when they retire.                                                               
It is tempting to keep those  good people. But it is arrogant for                                                               
any of us to think we can't be replaced.                                                                                        
                                                                                                                                
SENATOR  PASKVAN said  he supports  a  90-day change,  especially                                                               
with  the repeal  set for  July of  2010. Next  year will  be the                                                               
opportunity to look at how  many people have participated and how                                                               
many stayed in the same job or moved to another district.                                                                       
                                                                                                                                
10:09:34 AM                                                                                                                   
SENATOR  PASKVAN removed  his objection,  there being  no further                                                               
objections, conceptual Amendment 1 was adopted.                                                                                 
                                                                                                                                
SENATOR  MEYER moved  to report  the CS  to SB  126, labeled  26-                                                               
GS1035\S,   from   committee,   as   amended,   with   individual                                                               
recommendations  and  attached  fiscal note(s).  There  being  no                                                               
objection, CSSB 126(STA) moved out of committee.                                                                                
                                                                                                                                
10:10:44 AM                                                                                                                   
The meeting was adjourned at 10:10 a.m.                                                                                         
                                                                                                                                
                                                                                                                                

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