Legislature(1993 - 1994)
04/13/1994 09:09 AM Senate STA
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE STATE AFFAIRS COMMITTEE
April 13, 1994
9:09 a.m.
MEMBERS PRESENT
Senator Loren Leman, Chair
Senator Mike Miller, Vice Chair
Senator Robin Taylor
MEMBERS ABSENT
Senator Jim Duncan
Senator Johnny Ellis
COMMITTEE CALENDAR
SENATE BILL NO. 199
"An Act relating to employees of the division of elections."
CS FOR HOUSE BILL NO. 277(JUD)
"An Act relating to public employers defending and indemnifying
public employees and former public employees with respect to claims
arising out of conduct that is within the scope of employment."
CS FOR HOUSE BILL NO. 347(FIN)
"An Act relating to long-term plans of certain state agencies and
recommendations regarding elimination of duplication in state
agency functions."
SENATE BILL NO. 244
"An Act relating to investments of the permanent fund in certain
limited partnerships each of whose principal purpose is investment
in securities of public or private companies; and providing for an
effective date."
PREVIOUS SENATE COMMITTEE ACTION
SB 199 - See State Affairs minutes dated 4/23/93.
HB 277 - No previous senate committee action.
HB 347 - No previous senate committee action.
SB 244 - See State Affairs minutes dated 1/28/94.
WITNESS REGISTER
Bruce Aronson
Office of the Ombudsman
P.O. Box 113000, Juneau, AK 99811-3000¶465-4970
POSITION STATEMENT: in favor of SB 199
Mike McMullen, Manager
System Services
Division of Personnel/EEO
Department of Administration
P.O. Box 110201, Juneau, AK 99811-0201¶465-4430
POSITION STATEMENT: testified on SB 199
Joe Swanson, Director
Division of Elections
P.O. Box 110017, Juneau, AK 99811-0017¶465-4611
POSITION STATEMENT: in favor of SB 199
Eric Musser, Aide
Representative Porter
State Capitol, Juneau, AK 99801-1182¶465-4930
POSITION STATEMENT: prime sponsor of HB 277
Susan Cox, Assistant Attorney General
Civil Division
Department of Law
P.O. Box 110300, Juneau, AK 99811-0300¶465-3603
POSITION STATEMENT: testified on HB 277
Representative Sean Parnell
State Capitol, Juneau, AK 99801-1182¶465-2995
POSITION STATEMENT: prime sponsor of HB 347
Jack Fargnoli
Office of Management & Budget
P.O. Box 110020, Juneau, AK 99811-0020¶465-3568
POSITION STATEMENT: in favor of HB 347
Carl F. Brady, Jr., Trustee
Alaska Permanent Fund Corporation
2100 Atwood Drive, Anchorage, AK 99517¶
POSITION STATEMENT: in favor of SB 244
William H. Scott, Executive Director
Alaska Permanent Fund Corporation
P.O. Box 25500, Juneau, AK 99802-5500¶465-2047
POSITION STATEMENT: in favor of SB 244
Ralph C. Seekins, Trustee and Chairman of the Board
Alaska Permanent Fund Corporation
1625 Old Steese Hwy., Fairbanks, AK 99701¶452-1991
POSITION STATEMENT: in favor of SB 244
Jim Kelly, Research & Liaison Officer
Alaska Permanent Fund Corporation
P.O. Box 25500, Juneau, AK 99802-5500¶465-2047
POSITION STATEMENT: in favor of SB 244
ACTION NARRATIVE
TAPE 94-26, SIDE A
Number 001
CHAIRMAN LEMAN calls the Senate State Affairs Committee to order at
9:09 a.m.
Number 009
CHAIRMAN LEMAN brings up SB 199 (ELECTIONS EMPLOYEES IN CLASSIFIED
SERVICE) as the first order of business before the Senate State
Affairs Committee. The chairman calls the first witness.
Number 032
BRUCE ARONSON, Office of the Ombudsman, states the Ombudsman
continues to support SB 199. Mr. Aronson adds the only other
comment Mr. Fowler wants communicated to the committee is that the
Ombudsman thinks section 3 is not necessary, given the existing
rules for moving folks into classified service.
Number 049
CHAIRMAN LEMAN states the committee has an amendment in the bill
file which was drafted by the ombudsman and would address section
3.
Number 057
SENATOR TAYLOR expresses concern over classifying employees, and
asks how one would get rid of someone like Charlotte Thickstun.
Number 082
MR. ARONSON responds that, under SB 199, the Director of the
Division of Elections would still be an exempt position.
SENATOR TAYLOR asks how one would get rid of forty-some incompetent
employees at DEC (Department of Environmental Conservation).
Number 097
MIKE MCMULLEN, Division of Personnel & EEO, Department of
Administration states the department does not have a position on
sections 1 and 2 of SB 199, but is opposed to section 3. The
Department of Administration supports the amendment to delete
section 3. The legislature has already passed provisions for
employees whose positions are moved from exempt or partially exempt
to classified service. Those provisions are under AS 39.25.150.
Mr. McMullen states that the process has worked well in the twelve
years since the provisions were passed; those provisions have been
used several times. Difficulties and confusion occurs when the
legislature writes exceptions to those provisions.
Number 147
CHAIRMAN LEMAN asks if there are any questions for Mr. McMullen.
Hearing none, the chairman calls Mr. Swanson to testify and notes
that the committee has two amendments on SB 199.
Number 151
JOE SWANSON, Director, Division of Elections states that when he
became Director of the Division of Elections, he reviewed the
personnel files of the employees and found there was not one
employee who met the minimum qualifications for the job they held.
As long as the division is subject to the possibility of employees
being replaced for other than work related criteria, he thinks that
problem will always exist. Mr. Swanson says that it is his opinion
from a division director's standpoint, and he has been the director
of three different divisions for a total of thirteen years, that if
the entire core and all the experience of an organization is
removed, it will be almost impossible for that division to
function. The State of Alaska could come very close to having a
"very bad" election if this kind of thing continues to happen.
MR. SWANSON states he does not disagree with Senator Taylor that it
is difficult to remove incompetent employees. There are means
within the system to remove incompetent personnel, however, the
manager has to have the guts to do it. It removing incompetent
employees is possible, Mr. Swanson states he has done so several
times before. It is painful, and takes a lot of work, but it is
better than hiring people with zero qualifications.
Number 184
CHAIRMAN LEMAN asks Mr. Swanson if he thinks it should be easier to
remove employees who hold classified positions.
Number 190
MR. SWANSON responds there has be a balance between protecting
classified personnel and being able to remove incompetent persons
in classified positions. We would not want a manager to be able to
just walk in and fire an employee. Then we would end up with all
arbitration being handled through the Court System, which would be
much more expensive than handling problems through a personnel-type
system.
Number 198
CHAIRMAN LEMAN asks if there are further questions for Mr. Swanson.
Hearing none, the chairman asks if anyone else wishes to testify.
Number 200
There being no further witnesses, the chairman offers amendment #1.
Amendment #1 is to page 4, lines 12 through 15, and would delete
section 3.
CHAIRMAN LEMAN asks if there is any objection or discussion
relating to amendment #1. Hearing none, the chairman states
amendment #1 has been adopted.
Number 211
SENATOR MILLER offers amendment #2 as a conceptual amendment, the
amendment being to leave the four regional supervisors positions
exempt, and not classify those positions.
Number 223
SENATOR RANDY PHILLIPS states he would support that amendment. He
thinks the Director of the Division of Elections should have the
ability to supervise the field offices.
Number 227
MR. MCMULLEN adds he does not think the amendment should stipulate
the number of regional supervisors, because it could create a
problem if the number of supervisors was to change.
SENATOR MILLER agrees with Mr. McMullen's point.
Number 235
CHAIRMAN LEMAN states the amendment will just specify "regional
supervisors" and not list the number of supervisors.
CHAIRMAN LEMAN asks if there is any discussion regarding the
amendment. The chairman asks if there is objection to the adoption
of the amendment. Hearing none, amendment #2 is adopted.
CHAIRMAN LEMAN asks the pleasure of the committee regarding SB 199.
SENATOR MILLER makes a motion to discharge SB 199 from the Senate
State Affairs Committee with individual recommendations.
Number 238
CHAIRMAN LEMAN, hearing no objection, orders SB 199 released from
committee with individual recommendations.
Number 262
CHAIRMAN LEMAN brings up HB 277 (INDEMNIFICATION OF PUBLIC
EMPLOYEES) as the next order of business before the Senate State
Affairs Committee. The chairman calls Mr. Musser to testify.
Number 265
ERIC MUSSER, Aide to Representative Porter, states HB 277 would
codify current state policy, which indemnifies employees for
actions that occur during the normal scope of their employment. HB
277 also provides for exceptions to the indemnification of
employees. An exception would occur when a collective bargaining
agreement addresses indemnification. The collective bargaining
agreement would supersede the provisions in HB 277. Also, if the
acts or omissions of the employee were the result of gross
negligence or misconduct, the employee would not be indemnified.
MR. MUSSER states there is also a provision in the bill
establishing the employees rights.
MR. MUSSER states there is a provision allowing the employer to
settle claims or actions without the consent of the employee, so
long as it settles all claims or actions on behalf of the employee.
Number 308
CHAIRMAN LEMAN asks Mr. Musser if there have been cases of
employees who have had suits brought against them and who have not
been defended by their employer.
Number 312
MR. MUSSER responds the impetus behind the legislation is that
there have been several cases where employees who were in the
process of either buying or selling a home, were stopped from doing
so because they were a party to an action.
CHAIRMAN LEMAN asks if there are further questions of Mr. Musser.
Hearing none, he calls Ms. Cox to testify.
Number 336
SUSAN COX, Assistant Attorney General, Department of Law reiterates
Mr. Musser's statements, and says it will not change any existing
practices, but simply codify them.
Number 349
CHAIRMAN LEMAN asks Mr. Musser if the Alaska Municipal League has
taken a position on HB 277.
Number 350
MR. MUSSER responds the Alaska Municipal League supports HB 277,
and there should be a letter of support in committee members bill
file packets.
CHAIRMAN LEMAN asks if any opposition has been voiced to HB 277.
MR. MUSSER replies there has been no negative testimony on the
bill.
SENATOR TAYLOR asks if HB 277 would merely codify common law.
Number 359
MS. COX responds she does not know that there is necessarily a
common law obligation for employers to indemnify their employees.
But it is certainly ongoing practice to do so.
Number 363
SENATOR TAYLOR says he has been told, regarding other legislation,
that a letter of indemnification has been sent to volunteers
working in behalf of the state on emergency response planning
teams. When it was researched, there was nothing found to indicate
an emergency response planning team or a member of a team had ever
been sued in the United States. Senator Taylor continues to
describe a problem in indemnifying emergency response planning
teams. He comments that situation is directly related to this
bill.
Number 387
MS. COX replies she is not familiar with the situation to which
Senator Taylor is referring. However, there may be a difference
between indemnification of public employees and indemnification of
volunteers.
SENATOR TAYLOR comments the state ought to stand behind volunteers
who perform a public service for the state.
Number 408
CHAIRMAN LEMAN asks if there are any further questions of the
witnesses or if anyone else wishes to testify. Hearing none, the
chairman calls a brief at ease.
Number 409
CHAIRMAN LEMAN calls the Senate State Affairs Committee back to
order.
Number 413
SENATOR TAYLOR makes a motion to discharge HB 277 from the Senate
State Affairs Committee with individual recommendations.
Number 415
CHAIRMAN LEMAN, hearing no objection, orders HB 277 released from
committee with individual recommendations.
Number 422
CHAIRMAN LEMAN brings up HB 347 (STATE LONG-TERM PLANNING) as the
next order of business before the Senate State Affairs Committee.
The chairman calls on the sponsor to testify.
Number 424
REPRESENTATIVE SEAN PARNELL, prime sponsor of HB 347, states HB 347
requires departments to establish six-year, long range plans.
Representative Parnell describes provisions of HB 347 as outlined
in the sponsor statement on the bill.
Number 451
CHAIRMAN LEMAN asks Representative Parnell if he is trying to
encourage a budget based not on historical record, but on needs.
Number 459
REPRESENTATIVE PARNELL states that is definitely the direction he
is going with HB 347, and that the bill is based on Texas
legislation.
Number 466
SENATOR MILLER asks Representative Parnell how he intends to compel
the governor to adhere to the provisions in HB 347 if the bill is
passed.
Number 470
REPRESENTATIVE PARNELL replies that compelling administrations to
adhere to performance-based budgeting systems has proven to be the
prime problem with this type of budgeting system.
Number 484
REPRESENTATIVE PARNELL states the Court System has proposed two
amendments that they would like to see adopted. The first would be
to change to term "court system", which appears throughout the
bill, to "judicial branch". The second amendment would amend
section 1 on page 3, line 7, which would insert after "government",
"the compilation shall include the plan for the judicial branch as
submitted". Representative Parnell states he is not opposed to
either of these amendments and asks that a member of the Senate
State Affairs Committee offer them.
SENATOR TAYLOR makes a motion to offer amendment #1.
Number 495
CHAIRMAN LEMAN asks if there is any objection to amendment #1.
Hearing none, the chairman states amendment #1 has been adopted.
Number 507
REPRESENTATIVE PARNELL clarifies that amendment #1 includes both
changes suggested by the Court System.
CHAIRMAN LEMAN asks if anyone else wishes to testify on HB 347.
Number 511
JACK FARGNOLI, Director's Office, Office of Management & Budget
(OMB), states OMB supports HB 347 for two reasons: first, it is a
good approach, and secondly, it is the direction in which OMB has
itself been moving, and in which it intends to keep moving. When
OMB discovered that Representative Parnell was interested in this
legislation, OMB contacted him to express their support. It is
true that for this type of system to work, is entirely predicated
on the good will of the governor and the legislative branch.
Number 528
SENATOR MILLER asks when HB 347 became a priority of the
administration.
MR. FARGNOLI replies that the administration has had an
inter-agency working group on the subject for about a year.
Number 533
SENATOR MILLER comments, if this was such a priority of the
administration, they should have come forward with a bill in
January.
MR. FARGNOLI responds he appreciates Senator Miller's comments; the
administration did not consider it to be a trivial project to
undertake, and frankly did not feel ready for it before that time.
CHAIRMAN LEMAN adds the concept is good, but he just hopes HB 347
is not an exercise in futility.
Number 543
MR. FARGNOLI states he certainly hopes so too.
Number 545
CHAIRMAN LEMAN asks if there are further questions or if anyone
else wishes to testify on HB 347. Hearing none, the chairman asks
the pleasure of the committee.
SENATOR MILLER makes a motion to discharge HB 347 from the Senate
State Affairs Committee with individual recommendations.
Number 547
CHAIRMAN LEMAN, hearing no objection, orders HB 347 released from
committee with individual recommendations.
Number 549
CHAIRMAN LEMAN brings up SB 244 (PERMANENT FUND INVESTMENTS - LTD
PARTNERS) as the next order of business before the Senate State
Affairs Committee and calls the first witness.
Number 555
CARL BRADY, Jr., Trustee, Alaska Permanent Fund Corporation,
introduces Mr. Scott and Mr. Seekins. Mr. Brady describes the
impetus behind SB 244. The corporation's and Mr. Brady's reasoning
is contained in a memorandum and six attachments which were
submitted to the Senate State Affairs Committee.
TAPE 94-26, SIDE B
Number 594
MR. BRADY continues his dissertation on SB 244.
Number 581
CHAIRMAN LEMAN asks if there are any questions of Mr. Brady.
Hearing none, the chairman calls Mr. Scott to testify.
Number 580
BILL SCOTT, Executive Director, Alaska Permanent Fund Corporation,
adds that SB 244 would provide for greater security and analysis of
an investment. It is not a liberalization of how the corporation
invests, but rather a greater concentration of analysis.
Number 555
RALPH SEEKINS, Trustee and Current Chairman of the Board, Alaska
Permanent Fund Corporation, states he takes his responsibility as
a member of the board very seriously. He says the corporation is
constantly grading itself on how well it is doing against other
institutional investors. Mr. Seekins tells of a conference on
alternative investments he recently attended in Colorado.
Number 498
CHAIRMAN LEMAN comments he remains cautious about investments due
to the Executive Life situation.
Number 490
MR. SCOTT states that the Executive Life investments were made with
virtually no supervision and outside control. The permanent fund
has excellent and very restrictive internal controls in making
investments. So Mr. Scott does not believe that one could compare
the Executive Life investments with those made by the Permanent
Fund Corporation in any way, shape, or form.
Number 476
MR. BRADY adds that Washington and Oregon have over three billion
dollars between them invested in this type of investment.
Number 464
CHAIRMAN LEMAN notes the committee has an amendment to SB 244, and
asks Mr. Scott to describe what the amendment would do.
Number 461
MR. SCOTT states the amendment would substitute an entire new
version for the original bill that was introduced. The first
version was hastily drafted, and the corporation came up with what
it believes would be a better definition of the limitations of the
sort of investment that might be done under SB 244. It more
clearly addresses the investment, as opposed to the vehicle for the he
investment. Mr. Scott believes that "limited partnership" has
negative connotations.
MR. SCOTT states the original bill principally addressed limited
partnerships. The corporation asks that the committee amend SB 244
by substituting the amendment for the original version.
Number 444
CHAIRMAN LEMAN states there would be several complications involved
in doing what Mr. Scott is asking the committee to do. The first
is that the original title is not valid in relation to the new
version being proposed by the corporation; the new version does not
have an effective date. Secondly, the connotation of "limited
partnership" will still carry through, because the short title of
the bill will not be changed.
MR. SCOTT asks the chairman if there is a solution to this minor
impasse.
Number 429
CHAIRMAN LEMAN responds that Legislative Legal Services could
handle the problem.
JIM KELLY, Research & Liaison Officer, Alaska Permanent Fund
Corporation, suggests a simple title of "An Act relating to equity
investments of the Permanent Fund."
Number 418
SENATOR MILLER makes a motion to adopt amendment #1.
Number 407
CHAIRMAN LEMAN asks if there is any objection to amendment #1.
Hearing none, he states the amendment has been adopted. The
chairman asks if there is anyone else who wishes to testify on
SB 244.
Number 400
SENATOR TAYLOR makes a motion to discharge SB 244 from the Senate
State Affairs Committee with individual recommendations.
Number 398
CHAIRMAN LEMAN, hearing no objection, orders SB 244 released from
committee with individual recommendations.
Number 393
CHAIRMAN LEMAN adjourns the Senate State Affairs Committee Meeting
at 10:16 a.m.
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