03/18/2004 03:31 PM Senate STA
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= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
SENATE STATE AFFAIRS STANDING COMMITTEE
March 18, 2004
3:31 p.m.
TAPE (S) 04-18 & 19
MEMBERS PRESENT
Senator Gary Stevens, Chair
Senator John Cowdery, Vice Chair
Senator Bert Stedman
Senator Gretchen Guess
Senator Lyman Hoffman
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE JOINT RESOLUTION NO. 31
Relating to urging the United States Congress to compensate the
State of Alaska for the effect of federal land ownership on the
state's ability to fund public education.
MOVED CSSJR 31(STA) OUT OF COMMITTEE
SENATE BILL NO. 338
"An Act relating to actionable claims against state employees;
relating to the state's defense and indemnification of its
employees and former employees with respect to claims arising
out of conduct that is within the scope of employment; amending
the Public Employment Relations Act regarding claims against the
state or state employees; and providing for an effective date."
MOVED CSSB 338(STA) OUT OF COMMITTEE
SENATE BILL NO. 292
"An Act relating to youth courts and to the recommended use of
criminal fines to fund the activities of youth courts; and
relating to accounting for criminal fines."
MOVED CSSB 292(STA) OUT OF COMMITTEE
CS FOR HOUSE BILL NO. 414(JUD)
"An Act relating to filling a vacancy in the office of United
States senator, and to the definition of 'political party.'"
MOVED SCS CSHB 414(STA) OUT OF COMMITTEE
CS FOR HOUSE BILL NO. 91(FIN)
"An Act relating to medical benefits for retired peace officers
after 20 years of credited service."
HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: SJR 31
SHORT TITLE: FEDERAL FUNDING FOR EDUCATION
SPONSOR(s): RULES
02/16/04 (S) READ THE FIRST TIME - REFERRALS
02/16/04 (S) STA, RES
03/18/04 (S) STA AT 3:30 PM BELTZ 211
BILL: SB 338
SHORT TITLE: CLAIMS AGAINST STATE EMPLOYEES
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
02/16/04 (S) READ THE FIRST TIME - REFERRALS
02/16/04 (S) STA, JUD
03/11/04 (S) STA AT 3:30 PM BELTZ 211
03/11/04 (S) Heard & Held
03/11/04 (S) MINUTE(STA)
03/18/04 (S) STA AT 3:30 PM BELTZ 211
BILL: SB 292
SHORT TITLE: USE CRIMINAL FINES FOR YOUTH COURTS
SPONSOR(s): SENATOR(s) STEDMAN
02/04/04 (S) READ THE FIRST TIME - REFERRALS
02/04/04 (S) STA, FIN
03/18/04 (S) STA AT 3:30 PM BELTZ 211
BILL: HB 414
SHORT TITLE: U.S.SENATE VACANCY/DEF OF POLITICAL PARTY
SPONSOR(s): JUDICIARY
01/28/04 (H) READ THE FIRST TIME - REFERRALS
01/28/04 (H) STA, JUD
02/03/04 (H) STA AT 8:00 AM CAPITOL 102
02/03/04 (H) Heard & Held
02/03/04 (H) MINUTE(STA)
02/04/04 (H) JUD AT 1:00 PM CAPITOL 120
02/04/04 (H) -- Meeting Canceled --
02/05/04 (H) STA AT 8:00 AM CAPITOL 102
02/05/04 (H) Moved CSHB 414(STA) Out of Committee
02/05/04 (H) MINUTE(STA)
02/09/04 (H) JUD AT 1:00 PM CAPITOL 120
02/09/04 (H) <Bill Hearing Postponed to 2/16/04>
02/12/04 (H) STA RPT CS(STA) 3DP 1DNP 3NR
02/12/04 (H) DP: SEATON, COGHILL, WEYHRAUCH;
02/12/04 (H) DNP: BERKOWITZ; NR: GRUENBERG, HOLM,
02/12/04 (H) LYNN
02/16/04 (H) JUD AT 1:00 PM CAPITOL 120
02/16/04 (H) Moved CSHB 414(JUD) Out of Committee
02/16/04 (H) MINUTE(JUD)
02/18/04 (H) JUD RPT CS(JUD) NT 5DP 2NR
02/18/04 (H) DP: SAMUELS, ANDERSON, OGG, HOLM,
02/18/04 (H) MCGUIRE; NR: GRUENBERG, GARA
03/04/04 (H) TRANSMITTED TO (S)
03/04/04 (H) VERSION: CSHB 414(JUD)
03/05/04 (S) READ THE FIRST TIME - REFERRALS
03/05/04 (S) STA, JUD
03/18/04 (S) STA AT 3:30 PM BELTZ 211
BILL: HB 91
SHORT TITLE: RETIRED PEACE OFFICER'S MEDICAL BENEFITS
SPONSOR(s): REPRESENTATIVE(s) ANDERSON
02/12/03 (H) READ THE FIRST TIME - REFERRALS
02/12/03 (H) L&C, FIN
02/21/03 (H) L&C AT 3:15 PM CAPITOL 17
02/21/03 (H) Moved Out of Committee
02/21/03 (H) MINUTE(L&C)
02/24/03 (H) L&C RPT 4DP 1NR
02/24/03 (H) DP: GATTO, CRAWFORD, GUTTENBERG,
02/24/03 (H) ANDERSON; NR: ROKEBERG
03/18/03 (H) FIN AT 1:30 PM HOUSE FINANCE 519
03/18/03 (H) Heard & Held
03/18/03 (H) MINUTE(FIN)
02/17/04 (H) FIN AT 1:30 PM HOUSE FINANCE 519
02/17/04 (H) Heard & Held
02/17/04 (H) MINUTE(FIN)
02/19/04 (H) FIN AT 1:30 PM HOUSE FINANCE 519
02/19/04 (H) Moved CSHB 91(FIN) Out of Committee
02/19/04 (H) MINUTE(FIN)
02/23/04 (H) FIN RPT CS(FIN) NT 3DP 7NR
02/23/04 (H) DP: CROFT, FATE, WILLIAMS; NR: MEYER,
02/23/04 (H) HAWKER, JOULE, MOSES, CHENAULT, FOSTER,
02/23/04 (H) HARRIS
03/04/04 (H) TRANSMITTED TO (S)
03/04/04 (H) VERSION: CSHB 91(FIN)
03/05/04 (S) READ THE FIRST TIME - REFERRALS
03/05/04 (S) STA, L&C, FIN
03/18/04 (S) STA AT 3:30 PM BELTZ 211
03/18/04 (S) Heard & Held
03/18/04 (S) MINUTE(STA)
04/01/04 (S) STA AT 3:30 PM BELTZ 211
04/01/04 (S) Moved CSHB 91(STA) Out of Committee
04/01/04 (S) MINUTE(STA)
04/02/04 (S) STA RPT SCS 3NR SAME TITLE
04/02/04 (S) NR: STEVENS G, COWDERY, STEDMAN
04/13/04 (S) L&C AT 1:30 PM BELTZ 211
WITNESS REGISTER
Senator Gene Therriault
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Sponsor SJR 31
Kent Briggs
CSG West
Sacramento, CA
POSITION STATEMENT: Testified on SJR 31
Brian Allred
No address provided
POSITION STATEMENT: Testified on SJR 31
Gail Voightlander
Department of Law
PO Box 110300
Juneau, AK 99811-0300
POSITION STATEMENT: Commented on the amendment to SB 338
Patricia Ware
Director, Division of Juvenile Justice
Department of Health &
Social Services
PO Box 110601
Juneau, AK 99801-0601
POSITION STATEMENT: Expressed departmental support for SB 338
Whitney Cushing Jr.
United Youth Courts of Alaska
Homer, AK 99603
POSITION STATEMENT: Supports SB 338
Diane Ivy-Dahlin
Wrangell Youth Center
Wrangell, AK 99929
POSITION STATEMENT: Supports SB 338
Alehandra Chavarria
Ketchikan Youth Center
Ketchikan, Alaska 99901
POSITION STATEMENT: Supports SB 338
Timothy A. Lower
Sitka Youth Center
Sitka, AK 99835
POSITION STATEMENT: Supports SB 338
Jesse Kinsland
Mat-Su LIO
POSITION STATEMENT: Supports SB 338
Heath Hilyard
Aide to Representative Lesil McGuire
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Introduced CSHB 414 for Representative
McGuire, sponsor
Don Roberts Jr.
Kodiak, AK 99615
POSITION STATEMENT: Testified on CSHB 414
Representative Tom Anderson
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Sponsor HB 91
Mike Fox
Public Safety Employees Association (PSEA)
Juneau, AK 99801
POSITION STATEMENT: Gave presentation relating to CSHB 91
Charlie Hanson
Lemon Creek Corrections Officer
Juneau, AK 99801
POSITION STATEMENT: Testified in support of CSHB 91
Kevin Richie
AK Municipal League
Juneau, AK 99801
POSITION STATEMENT: Opposed CSHB 91
Melanie Millhorn
Director, Division of Retirement & Benefits
Department of Administration
PO Box 110200
Juneau, AK 99811-0200
POSITION STATEMENT: Commented on the fiscal note for CSHB 91
Maurice Hughes
Trooper & PSEA member
Juneau, AK 99801
POSITION STATEMENT: Supported CSHB 91
Larry Semmens
City of Kenai
Kenai, AK 99611
POSITION STATEMENT: Spoke in opposition to CSHB 91
ACTION NARRATIVE
TAPE 04-18, SIDE A
CHAIR GARY STEVENS called the Senate State Affairs Standing
Committee meeting to order at 3:31 p.m. Present were Senators
Cowdery, Stedman, Guess, and Chair Gary Stevens. Senator Hoffman
arrived soon thereafter.
SJR 31-FEDERAL FUNDING FOR EDUCATION
CHAIR GARY STEVENS announced SJR 31 to be up for consideration.
He asked for a motion to adopt the committee substitute (CS) as
the working document.
SENATOR JOHN COWDERY made a motion to adopt CSSJR 31 \Q version
as the working document. There being no objection, it was so
ordered.
SENATOR GENE THERRIAULT, sponsor of SJR 31, stated that he would
reference a series of charts as he explained the resolution. He
read the following into the record:
SJR 31 relates to urging the United States Congress to
compensate the State of Alaska for the effect of
federal land ownership on the state's ability to fund
public education.
This legislation stems from a resolution adopted in
July of 2002 by the Executive Committee of the Council
of State Governments-WEST urging its membership of
thirteen states to support and pass joint resolutions
expressing how federal land ownership hinders western
states' ability to fund education.
The CS adds a whereas paragraph to page 2, lines 27,
which ties this resolution to the overall effort of
CSG-WEST. Since this effort began, all 13 states have
introduced similar resolutions and all but four (CA,
WA, CO, AK) have passed them.
The resolution is the result of years of research and
preparation by the legislators from the State of Utah
and their legislative staff who have developed the
statistics and dollar amounts you see in this
resolution.
The Western Governors' Association has also endorsed
this resolution, which is termed "APPLE" for Action
Plan for Public Land and Education.
Western states as a group are falling behind in
education funding when measured in growth of real per
pupil expenditures during the period of 1979-1998.
Eleven of the twelve states with the lowest real
growth in pupil expenditures are western states. The
growth rate of real per pupil expenditures in the
thirteen western states is less than half (28 percent
versus 57 percent) of that in the thirty-seven other
states [graph 1]. On average, enrollment in western
states is projected to increase dramatically while the
growth rate in other states is actually projected to
decrease (2002-2011 western states 7.1 percent versus
2.6 percent). If you look at graphs 2 & 3 you can see
that in the eastern part of the country the actual
student populations are projected to decrease while
the western states are experiencing growth.
Yet, western states' state and local taxes as a
percentage of income are as high or higher than other
states (1998-1999 western states 11.1 percent versus
10.9 percent). You can see on handout page 4 how we
compare to the other states across the nation as far
as percentage of personal income that is contributed
to education efforts. That's pages 4 & 5. Western
states' commitment to education as a percentage of
state budget is equal to that of other states. That is
spelled out in handout page 6 and page 7.
I think it's interesting to note that the State of
Alaska shows 20 percent going to education and I think
that's because they looked at total expenditures and
of course we have inflation proofing of the permanent
fund and the dividend itself. [It] all gets counted as
spending so that actually suppresses our numbers
slightly.
The problem lies with the federal government and the
enormous amount of land it owns in western states. If
an imaginary line were drawn from Montana to New
Mexico, no state east of that line has more than 14
percent of its land owned by the federal government.
No state west of that line has less than 27 percent of
their land federally owned (with the exception of
Hawaii). Four western states have more than 62 percent
of their land federally owned. If you look at handout
pages 8, 9, 10 & 11 it graphically shows the
difference between the eastern half of the United
States and the western half of the United States with
regards to the percentage of land that is controlled
by the federal government.
The primary way that federal land ownership impacts
the funding of education in western states is through
enabling acts and property taxes. Most enabling acts
for western states, including Alaska, promised to give
five percent of the proceeds from the sale of federal
land for the benefit of public education. In 1977 the
federal government abandoned its original policy to
dispose of public lands depriving the states of public
education funding estimated to be over $14 billion.
This resolution does not recommend that federally
owned lands be sold, only that states be compensated
as promised.
States are not allowed to assess property tax on
federal lands, impacting western states in an amount
over $4 billion annually. The federal government does
provide "payment in lieu of taxes" (PILT) since states
cannot tax federal lands, but the amount of PILT
payments coming to the states in 2001 was only abut
four percent of the annual property tax revenue lost
by western states.
This resolution proposes to: create legislative
awareness, educate the public, build a western states
coalition to petition Congress to compensate
adequately the western states in the United States.
In summary, western states are financially harmed in a
significant way by the amount of federal land
ownership. The conclusion is that federal land
ownership hinders western states' ability to fund
public education.
CSG-WEST has formed this APPLE initiative with a
steering committee, which is chaired by Speaker Martin
Stevens in the Utah House of Representatives and I, as
Senate President, also sit as a member of that
steering committee. The steering committee will work
like a strategic planning group who will press the
case to Congress and the Judiciary. The first meeting
of the steering committee will be in the CSG-WEST
annual meeting in Anchorage on September 25th of this
year.
CHAIR GARY STEVENS asked how PILT money comes into the different
districts.
SENATOR THERRIAULT replied the money that is available to the
state is supposed to be considered a payment in lieu of property
taxes, but the actual amount that states receive is very small
compared to the amount that could be assessed if the land were
all privately owned.
SENATOR JOHN COWDERY asked if there is a definition of "just
compensation."
SENATOR THERRIAULT said it would be optimistic to expect $4
billion per year from the federal government, but "I guess just
compensation would be as much as we could get." He established
that he preferred the broad language to a specific dollar
amount.
SENATOR GRETCHEN GUESS referred to page 2, line 12 and asked for
clarification of the $4 billion amount as it relates to property
tax.
SENATOR THERRIAULT thought it was the estimated annual impact if
property tax could be levied against federal land.
SENATOR GUESS asked if that was the federal land the state was
supposed to get and didn't.
SENATOR THERRIAULT thought it was all the federal land.
SENATOR GUESS asked what would happen to impact aid if this were
to happen.
SENATOR THERRIAULT said this wouldn't necessarily be a lump sum
payment. The federal government would likely increase the PILT
payments because you can't levy tax on federal land.
SENATOR GUESS noted that she didn't have anything in her packet
explaining how impact aid is calculated and asked if that
information was available.
SENATOR THERRIAULT acknowledged that information wasn't in the
packets.
SENATOR GUESS asked whether there were Alaska specific numbers
rather than western state numbers.
KENT BRIGGS from Sacramento interjected to say that based on
computations of the Utah policy office, Alaska would receive a
total of $8 billion.
BRIAN ALLRED from Salt Lake City spoke via teleconference to
clarify that they would receive one-time revenue of about $5.6
billion or ongoing revenue of approximately $2.25 billion. With
regard to an earlier question about property taxes, he explained
that the $4 billion was computed with the following assumptions:
The 4.1 percent federal land ownership is an average of the non-
western states and assumes that the western states have the same
percentage of federal land ownership. Then it assumes that the
effective tax rate for each state is applied and the land is
valued at $525 per acre. Those were the figures used to compute
the approximate $4 billion figure on property taxes.
SENATOR GUESS admitted to being confused about the argument for
the request. She questioned whether it was the 1977 change in
federal policy regarding disposal of public lands or were the
PILT payments simply not keeping pace.
MR. BRIGGS replied it is both. When states entered the union,
the Enabling Act promised the new states 5 percent of all lands
for public education. But when the Federal Lands Policy
Management Act of 1977 was passed, the Organic Act on BLM lands
essentially did away with those sales. He asked Mr. Allred to
verify that assessment, which he did.
He continued to say that PILT money doesn't amount to a great
deal and described the payment as acknowledgement and
compensation for the burden that public lands place on western
states.
SENATOR GUESS noted that PILT goes to all states.
MR. BRIGGS clarified that PILT goes to all public lands states.
SENATOR GUESS asked whether PILT and impact aid were synonymous.
MR. BRIGGS told her that when PILT was adopted it was largely a
western initiative then asked Mr. Allred to verify.
MR. ALLRED didn't hear the question.
SENATOR GUESS asked if PILT makes up for military bases and
other non-tax land that the federal government has in all
states.
MR. ALLRED explained that impact aid is compensation for
military base lands, "but PILT payments apply to not just
military base, but to, as Kent mentioned, payment in lieu of
taxes recognizing the burden that federal land ownership places
on the states in general, not just with military bases."
CHAIR GARY STEVENS asked Senator Therriault to remain in the
room in case there were more questions then asked Mr. Briggs and
Allred whether they had testimony to present.
MR. ALLRED replied he did not have testimony, but he was
available to answer questions.
MR. BRIGGS replied the information he wanted to impart is that
Alaska is critical because it is the home of Senator Ted
Stevens. Senator Stevens is Chairman of Appropriations and a
member of the Labor and Education Subcommittees. "If we had to
pick a person in the United States Senate who is absolutely
essential, it would be Senator Stevens." He expressed sincere
appreciation for Senator Therriault's support.
CHAIR GARY STEVENS confirmed that Alaska is very proud of
Senator Ted Stevens.
SENATOR COWDERY made a motion to move CSSJR 31(STA) from
committee. There being no objection, it was so ordered.
SB 338-CLAIMS AGAINST STATE EMPLOYEES
CHAIR GARY STEVENS announced SB 338 to be up for consideration
and noted that amendment 1 was passed at the last hearing and he
would like a motion to adopt amendment 2.
SENATOR COWDERY made a motion to adopt amendment 2. There being
no objection, it was so ordered.
23G-2
10/7/2004
(2:31 PM)
A M E N D M E N T 2
OFFERED IN THE SENATE STATE BY _____________________
AFFAIRS COMMITTEE
TO: Proposed CS for SB 338 (23-LS )
Add the following new subsection to proposed AS 09.50.253
(Actionable claims against state employees):
"( ) The provisions of this section are in addition
to and do not supersede a term in a state employee
collective bargaining agreement addressing legal defense
and indemnity."
CHAIR GARY STEVENS asked Ms. Voitlander to explain the
amendment.
GAIL VOITLANDER, Department of Law, recapped that at the
previous hearing PSEA (Public Safety Employees Association) was
concerned about the implications on collective bargaining
related to defense and indemnity issues. Amendment 2 addresses
those concerns and makes it clear that the certification process
for the attorney general to convert a claim against a state
employee to a claim against the state is in addition to an
employee's right to defense and indemnity that is set forth in a
collective bargaining agreement. She understood that PSEA
concurs with the amendment.
CHAIR GARY STEVENS asked whether anyone from PSEA was available
to speak to the issue and no one spoke up.
There were no further comments or questions.
SENATOR BERT STEDMAN made a motion to move CSSB 338(STA) from
committee with attached zero fiscal note. There being no
objection, it was so ordered.
SB 292-USE CRIMINAL FINES FOR YOUTH COURTS
CHAIR GARY STEVENS announced SB 292 to be up for consideration.
SENATOR BERT STEDMAN, sponsor of SB 292, explained that youth
courts provide a way for the state to deal with youths who are
first time misdemeanants without adversely affecting their adult
record and without impacting the adult judicial system. These
are courts that are established and run by youths and provide a
good educational tool for all participants. The recidivism rate
is considerably lower than the regular court system.
Even though youth court cases cost less than district and
superior court cases, stable funding threatens the future of the
programs. This bill provides the much-needed financial support
so that youth courts can continue to provide unique, successful
and cost effective services to the state. Finally, he noted that
there is considerable support for this legislation in the House
for Representative Ogg's companion bill.
CHAIR GARY STEVENS asked him to speak briefly to the funding
mechanism.
SENATOR STEDMAN estimated that the fiscal note is double the
actual cost, which he believes to be about $500,000. "On the
House side they've added in an additional $200,000 in the HESS
budget. They've pigeonholed some money there."
SENATOR GRETCHEN GUESS said she agrees that youth courts are
more efficient, but she wanted to know where the money goes now
and where would funds be diverted from to go to youth courts.
SENATOR STEDMAN deferred to the division director.
SENATOR GUESS asked if there was a proposed amendment.
SENATOR STEDMAN predicted that the proposal to use 25 percent of
the court-imposed fines would change and the percentage would
probably go down.
PATRICIA WARE, director of the Division of Juvenile Justice
within the Department of Health and Social Services (DHSS),
expressed strong support for youth courts. "They are a critical
component of Alaska's juvenile justice system in the state."
The amendment the division suggested for the companion House
bill calls for allocating approximately 10 percent of the court-
imposed fines for the program. Based on FY03 data from the court
system, that would yield approximately $430,000 per year.
She expanded on the sponsor's funding explanation saying that
she understood that in the House Finance subcommittee close out
a new budget component entitled "Youth Courts" is proposed in
the division budget. The Division of Youth Justice would move
existing general funds to pay for youth courts and an additional
$200,000 would be added. "So on the House side the current
total, by the time they added in some additional federal dollars
that we still have remaining, was $508,300. That was CSHB
375(FIN)."
SENATOR HOFFMAN asked how the $508,000 compared to last year.
MS. WARE replied they are paying $279,500 general fund for youth
courts this fiscal year and they have $28,800 in federal money.
"So this is basically an additional $200,000 as offered by the
House side."
SENATOR HOFFMAN questioned the information in his packet that
stated, "an increment of $200,000 added by Representative Hawker
and the HESS subcommittee will bring the youth court back up to
$508,000."
MS. WARE noted that she didn't have the documentation he was
referencing then explained that DHSS historically paid for youth
courts with federal dollars, which have become scarce. Although
she wasn't sure what was meant by "back up," she assured him
that the division made a commitment to support youth courts and
had cut other programs so that they could continue that support.
SENATOR STEDMAN stated, "that roughly adds into the top number
of total funds used in 2002 so it's trying to move the funding
amount back up to where youths courts were, for lack of a better
word, fully funded."
SENATOR GUESS asked if there was increasing demand for youth
courts.
MS. WARE assured her there is increased demand and the division
has, "pretty much done what we can do with the existing
funding."
SENATOR GUESS asked if there was demand for the amount specified
in the fiscal note.
MS. WARE contended that amount of funding wasn't necessary
because it would more than double what is currently spent on
youth courts. The $508,000 that is on the table includes an
additional $200,000, which would allow for expansion.
CHAIR GARY STEVENS judged that statement to be remarkable. He
said, "I've never heard anybody before the State Affairs ask for
less money. How wonderful."
SENATOR GUESS stated that she would like to know more about the
areas of demand so that those areas could be targeted since the
efficacy of the program is documented. She asked Ms. Ware to
provide that information at some point.
She questioned where and how the court-imposed fines are
currently allocated and what might and might not be funded in
the future.
MS. WARE confessed that she wasn't the best person to answer
that question, but she did know that the money goes into the
general fund.
SENATOR GUESS remarked that in some ways the fiscal note is zero
because the money is rerouted rather than new.
CHAIR GARY STEVENS understood how money in the adult system is
spent, but he wasn't sure whether anyone is paid in the youth-
court system.
MS. WARE stated that youth courts are a great bang for the buck
because students and attorneys donate their time. Sometimes they
have to pay rent and some of the larger youth courts pay for a
portion of the salary for an executive director or program
coordinator, but volunteers do most of the work.
Juveniles are referred to youth court from the Division of
Juvenile Justice where the initial screening and intake is done.
Whenever appropriate the cases are referred to the non-profit
agency that runs the youth court. She referred to a data sheet
and stated that, "The amount of match for what they actually get
in grants is striking. In FY04 youth courts across the state
received $270,000 with community panels and youth court matching
funds of $490,000 in cash, $370,000 in in-kind services for a
total of $1.13 million." In addition to that, youth courts also
provide many community work-service hours and restitution.
To document that the Division of Juvenile Justice relies heavily
on youth courts she pointed out that in the last fiscal year
they handled 14 percent of the referrals made to the division.
SENATOR HOFFMAN asked if she had a list of where the youth
courts are located.
MS. WARE named: Anchorage, Mat-Su, Delta Junction, Juneau,
Kenai/Homer, Kodiak, Nome, Fairbanks, Ketchikan, Valdez,
Wrangell, and Kake.
SENATOR HOFFMAN noted there is no youth court in Bethel.
MS. WARE told him the division awarded a grant for a youth court
in Bethel, but the non-profit provider that accepted the grant
didn't get the program started. This grant cycle they have been
working with the Yukon Kuskokwim Health Corporation to refinance
children's services to qualify for 100 percent federal Medicaid
so the division won't be working with Bethel this fiscal year,
but they hope to do so in the future.
SENATOR STEDMAN made a motion to amend as follows: Page 1, line
9 insert, "up to" before "25 percent".
There was no objection and the amendment was adopted.
CHAIR GARY STEVENS opened public testimony.
WHITNEY CUSHING JR. testified via teleconference from Homer in
support of SB 292. As the President of the United Youth Courts
of Alaska he asserted that, other than the Alaska Legislature,
no group has "a greater commitment to community and value of
service." They provide a valuable service across the state, are
very cost effective, and have remarkably reduced the recidivism
rate.
TAPE 04-18, SIDE B
3:20 pm
DIANE IVY-DAHLIN testified via teleconference from Wrangell. She
is the youth court coordinator in the community and requested
funding support for statewide youth court programs. "The
Wrangell Youth Court Program has become one of our communities
fastest growing youth led diversionary programs." In the last
three years, first-time-offender juvenile crime rates have
decreased by more than 30 percent and youth membership has more
than quadrupled. These programs have proven to be a success in
Alaska and nationwide. She encouraged members to ensure that
there is a youth court program in each of their communities and
"to listen to what these future leaders have to offer."
SENATOR STEDMAN thanked Ms. Ivy-Dahlin for her work and
suggested that Senator Hoffman was probably listening carefully
to the successful report from Wrangell.
ALEHANDRA CHAVARRIA testified via teleconference from Ketchikan
to say that he has been involved in the local youth court for
the last three years. He reported that the Ketchikan Youth Court
has very effectively provided restorative justice sentencing to
more than 100 youths in the community. They have provided over
8,000 hours of service to various organizations in the
community.
SENATOR STEDMAN thanked the young citizens from Ketchikan who
took time to testify.
TIMOTHY A. LOWER testified via teleconference as the interim
director of the Sitka Youth Court, a volunteer position that he
is proud to hold. He reported that, "both the victims and the
offenders who have participated in the restorative justice
activities have consistently expressed satisfaction with the
outcomes of their cases." When the program was active between
November 1999 and March 2003, no one that completed the Sitka
program re-offended. They estimate that recidivism is now up to
about 3 percent, but that is still remarkably low. Because of a
lack of stable long-term funding, the program was moved among a
variety of non-profits and is now inactive.
"SB 292 presents a hope for a different future for Alaskan youth
courts. It offers an opportunity for volunteers and staff
members of these other courts in our state to continue to pursue
community healing." He urged members to support the bill.
SENATOR STEDMAN asked how many active volunteers participated in
the Sitka Youth Court.
MR. LOWER thought they had about 12 active members at any given
time. Now they have two youths who are involved to the extent
possible since the court is inactive.
JESSE KINSLAND testified via teleconference from Mat-Su. He
stated that he has been with the program for three years and has
benefited personally. Currently he is the ethics secretary and
one of his jobs is to review defendant's surveys. He has found
that defendants are generally appreciative of the program and of
particular benefit is the fact that after successfully
completing the program the defendant has no criminal record.
There was no further public testimony.
CHAIR GARY STEVENS noted that the amended bill was before the
committee. There were no further questions or comments and he
asked for a motion.
SENATOR GUESS made a motion to move CSSB 292(STA) with attached
fiscal note. There being no objection, it was so ordered.
CSHB 414(JUD)-U.S.SENATE VACANCY/DEF OF POLITICAL PARTY
CHAIR GARY STEVENS announced CSHB 414(JUD) to be up for
consideration and asked Representative McGuire's aide to
identify himself.
HEATH HILYARD, staff to Representative Lesil McGuire, sponsor,
advised that the bill does two things. First, it addresses the
process for filling U.S. Senate vacancies in Alaska statute. The
22nd Legislature changed the policy to allow the governor to
make an appointment to fill a vacancy instead of holding a
special election, as was previously the case. HB 414 makes the
policy change again to redress the issues that were brought up
including the concern about legislative intent regarding
circumventing the initiative process. The sponsor, on behalf of
the House Judiciary Committee, wants to go on record to refute
the allegation. HB 414 ensures that the people have the ability
to fill these vacancies through a special election.
Second, the bill addresses the definition of political parties.
Currently political parties are recognized after receiving three
percent of the total vote in a gubernatorial election. The
version of the bill under consideration changes that to include
congressional elections as well.
He further explained that sections 6 through 8 are housekeeping
sections with regard to inserting "United States senator" in the
language and enumerating the process by which special elections
are conducted.
CHAIR GARY STEVENS asked for verification that there is already
a process for filling a vacancy for a U.S. representative and
this addresses U.S. senate vacancies in the same manner
MR. HILYARD agreed.
SENATOR JOHN COWDERY thought he heard that the governor would
still have the authority to temporarily appoint a replacement.
MR. HILYARD pointed to section 3, AS 15.40.145, which
specifically states that, "the governor may, at least five days
after the date of the vacancy but within 30 days after the date
of the vacancy," make a temporary appointment.
SENATOR COWDERY asked, "What's the limit on the days left to
require an election?"
MR. HILYARD read section 2 of the bill and interpreted it to
mean that there would be no more than a 90-day gap.
SENATOR HOFFMAN asked what happens if the people like the
current system and they want the governor to make the decision
because it's more cost effective and quicker. He opined that
this legislation circumvents the people that like the system.
MR. HILYARD replied this is in response to the Trust the People
Initiative and would change the system back to what it was. If
Alaskan voters agree with the current system, they can vote no
on the ballot initiative.
SENATOR HOFFMAN said his point is that if this passes there
won't be a ballot.
MR. HILYARD said this legislation was introduced in response to
voters that signed a ballot initiative. Although he understood
the point, he said they haven't received much public response in
support of the current system.
SENATOR HOFFMAN insisted that the people should be able to
decide whether they like the current system in which the
governor makes the appointment versus spending time and money on
a special election. "If we proceed with this bill we'll never
find out."
SENATOR GRETCHEN GUESS agreed with Senator Hoffman's point that
the bill is circumventing the public. She argued that everyone
that signed the petition didn't do so because they want a
change. Some people in her district want to vote to keep the
process the same.
With regard to Senator Cowdery's question, she said that she
read the statute and she understands that if a vacancy happens
on May 1 there would be a special election, a primary election,
and a general election. "If it's 90 days within the primary,
it's the primary. If it's 90 days within the general, it's the
general." She asked for verification that if vacancies occur in
the late fall then there would be three elections. "As you know,
it's hard enough to get people to the primary let alone the
general." She asked if they've discussed that at all.
MR. HILYARD said he didn't have a copy of the existing statute
with him, but he didn't think they'd addressed that particular
point. He understood that section 2, which revises AS 12.40.140,
would potentially address that point.
SENATOR GUESS said it addresses it if the vacancy occurs within
90 days and the statute addresses it if it's within 90 days of a
primary. "But if you're outside of that at all you're going to
have ... three elections backed up in a year."
SENATOR COWDERY chimed in to say you're not elected in a primary
you're just a candidate.
SENATOR GUESS replied, "Under the current statute if the vacancy
occurs within 90 days of the primary, then the primary would be
the special election."
SENATOR COWDERY was still unclear.
MR. HILYARD admitted he hadn't reviewed the provision closely
enough to be able to answer definitively.
CHAIR GARY STEVENS was comfortable with Senator Guess's
interpretation. "It's pretty clear that there would be multiple
elections."
SENATOR GUESS asked if the person that's appointed could run for
the office in the special election.
MR. HILYARD asked Senator Guess to bear with him a moment.
CHAIR GARY STEVENS commented that he saw nothing that would
preclude...
MR. HILYARD interrupted to say, "I was going to come to the same
conclusion. I don't see anything that specifically precludes
that."
SENATOR GUESS asked if House Judiciary made that conscious
decision because it's an interesting catch-22. The appointed
individual could then run as an incumbent after as few as 60
days in office.
MR. HILYARD said he didn't remember that specific issue being a
topic of discussion at that particular hearing. He couldn't say
whether it was discussed at any other time. "So I would say, my
guess would be, no it was not a conscious decision to exclude
that or to exclude that language that you're discussing."
SENATOR GUESS said she would appreciate a response on that point
from the sponsor and the committee. "It can definitely be used
to gain the system in a way that I don't think the public
necessarily wants."
MR. HILYARD agreed to look back at the committee record to try
to determine whether or not that point was addressed or any
concern expressed.
SENATOR GUESS noted that the statute still uses mail, delivery
or telegram as the options for nominating and communicating. In
fact, "At this point, no one could put themselves into this race
by fax. That's the point that I'm making." Since some of the
sections were housekeeping measures, she suggested it might be
appropriate to clean up that sort of language.
MR. HILYARD felt confident that that might have been an
oversight on the part of House State Affairs and House Judiciary
Committees.
SENATOR GUESS referred to page 2, line 7 and asked whether the
term qualified goes back to constitutionally qualified because
she saw nothing in statute on qualifications.
MR. HILYARD was fairly certain that refers to age and residency
requirements.
SENATOR GUESS suggested making that clarification.
MR. HILYARD remarked that inserting "constitutionally" before
"qualified" might work.
SENATOR GUESS wondered why AS 15.40.075 was being repealed
because the rest of the sections made sense. She acknowledged
that she was the only member with the statute book and explained
that the section refers to, "how someone declares in a
prevailing time and some of the specifics that are going on."
She asked Mr. Hilyard to get back to her on that point.
MR. HILYARD conceded he didn't know why that was included, but
he thought it was from the drafters.
SENATOR GUESS said she knew the answer to the following but,
"Although I see the legislative intent, I want to get it on the
record that if this bill passes, and [indisc.] it's
substantially similar so the initiative is pulled off the
ballot, there is nothing that is stopping the legislative body
from passing this next November. It just takes three days to
pass a bill if people wanted to do that. And if the initiative
goes through it would be two years before a statute change. Am I
correct?"
MR. HILYARD said that is correct. One Legislature can't bind
another so even though that's in the intent language they can't
provide for that statutorily.
SENATOR GUESS stated for the record that her biggest concern is
that this might develop the same way the initiative to increase
and inflation proof the minimum wage did. The Legislature passed
a bill similar to the initiative and then removed the inflation
proofing the following session. "I think it's that type of
gerrymandering, and I use that in the broad sense, that really
gets the public not trusting us as legislators."
CHAIR GARY STEVENS noted that he was aware that the newspapers
wrote about the Legislature repealing the inflation proofing the
next year. He asked Mr. Hilyard to verify that the sponsors of
HB 414 said that that was not their intention.
MR. HILYARD replied that is correct. That isn't the intent and
Representative McGuire has made it clear that any effort to make
that change would be, "over her dead body."
SENATOR GUESS said thanks for the clarification and she trusts
Representative McGuire at her word, but she heard the same
argument from the sponsors on the minimum wage bill and it
happened anyway. "And there wasn't a vote to try to leverage
that support or even find out where people were with inflation-
proofing and now it's gone."
DON ROBERTS JR. testified via teleconference from Kodiak to say
that he took issue with the definition of political party
saying, "I don't think a vote for a particular candidate should
be deemed support for a particular party. And I don't think a
person should be put in a dilemma of voting for a particular
candidate by supporting their party. I think it stifles
political discourse and it results in a mindless 'vote for me'
approach to campaigning that the people have to suffer through
each election cycle."
MR. HILYARD pointed out that page 4, lines 11-13 is part of the
definition of "political party" and removing it would be "a
substantial change in policy and one that was not necessarily
our intent to completely eliminate."
SENATOR GUESS said Mr. Roberts made a good point. She understood
why the definition is being expanded, but she joined him in
asking why have [the definition] at all.
MR. HILYARD explained that recognizing a particular party by
tying the votes an individual candidate receives has a long-
standing policy. He wasn't sure why that definition was used,
but "this expands it to give parties more opportunity to be
recognized, thus a greater opportunity to participate in the
political process."
SENATOR GUESS asked if he knew the gubernatorial election in
which this began.
MR. HILYARD said he didn't have that information.
There was no further public testimony.
CHAIR GARY STEVENS thanked Mr. Roberts for bringing the issue to
light then asked if there were further comments or questions.
SENATOR GUESS made a motion to adopt a state affairs
indeterminate fiscal note. "I think we've talked about the
multiple elections you could have in a year. I'm not sure why
this bill has a zero fiscal note on it; it's really
indeterminate. We don't know the cost to the state of this bill.
We keep having multiple fiscal notes that say zero and it really
isn't there, it's indeterminate. So I will move that at this
time."
CHAIR GARY STEVENS asked her to restate her motion.
SENATOR GUESS said she was moving a state affairs indeterminate
fiscal note on to HB 414.
CHAIR GARY STEVENS asked if there was any discussion and there
was none.
SENATOR HOFFMAN noted the bill says it has no fiscal impact on
the Division of Elections, but he assured members that a special
election would cost money and the department should know what
the cost would be. "At least, at a minimum, we have to have an
indeterminate fiscal note."
SENATOR COWDERY said, "That's assuming there is an election..."
but there's no assurance there would be an election.
CHAIR GARY STEVENS made the point that if the election were to
take place at the same time as a primary or general election,
then it would be difficult to separate the individual costs.
SENATOR COWDERY added, "I don't even know how you come up with
the fact that you're even going to have an election."
SENATOR GUESS remarked that the previous discussion
substantiates why the fiscal note should be indeterminate. "You
don't know one way or another ... and that's an okay thing, but
I think it needs to be reflected in this bill."
CHAIR GARY STEVENS restated the motion and called for a roll
call vote.
The motion to adopt the indeterminate fiscal note failed 2 to 3
with Senators Hoffman and Guess voting yea and Senators Cowdery,
Stedman and Chair Gary Stevens voting nay.
CHAIR GARY STEVENS asked if there was further discussion.
SENATOR GUESS asked if the committee was going to clean up the
bill.
CHAIR GARY STEVENS announced that he would prefer that the bill
move on to the Judiciary Committee with the issues that were
brought up. He asked for a motion.
SENATOR COWDERY motioned to move CSHB 414(JUD) to the next
committee of referral with individual recommendations and
accompanying zero fiscal note.
SENATOR GUESS objected and said she would speak to her
objection.
It's a slight disappointment in this committee as the
issues that I brought up are all state affairs issues;
they're not judicial issues except for maybe the
qualified voter, which is a judicial issue. This body
should be doing its work and not passing a bill to
judiciary, per our Senate President, when there's
issues about the appointment and whether or not
someone who's appointed can run and some of these
other cleanup matters and the fact that some of the
statutes might be wrong. So, it's a slow process -
besides the fact that it circumvents the public.
SENATOR COWDERY said the sponsor's representative is aware of
the questions that were raised and he would provide the answers
to the next committee.
MR. HILYARD confirmed that he would do so adding that he would
be happy to personally brief Senator Guess.
SENATOR GUESS thanked Mr. Hilyard.
SENATOR HOFFMAN suggested that there wasn't a time crunch and he
could see no reason not to hold the bill and work on it. "I
didn't understand that we were going to be moving this today,"
he said.
CHAIR GARY STEVENS stated that he would like to move the bill
that day and unless he heard otherwise that's what would happen.
SENATOR HOFFMAN asked if the committee could take a few minutes
to amend the bill.
CHAIR GARY STEVENS called an at-ease for a few minutes to
discuss amendments.
TAPE 04-19, SIDE A
5:00 pm
CSHB 91(FIN)-RETIRED PEACE OFFICER'S MEDICAL BENEFITS
CHAIR GARY STEVENS reconvened the meeting and announced CSHB
91(FIN) to be up for consideration and recognized Representative
Anderson.
REPRESENTATIVE TOM ANDERSON, sponsor of HB 91, reported that HB
91 had undergone a lot of deserved scrutiny in the House Finance
Committee
HB 91 is about recruiting and retaining state troopers,
firefighters, and correctional officers by providing them with
medical coverage at their retirement of 20 years. "No one would
disagree that these men and women are risking their lives and
their health. ... I think it's really important to differentiate
a peace officer versus another occupation because of that health
and safety risk."
The bill removes the additional five year requirement for peace
officers to receive medical benefits and reestablished parity by
allowing the full medical benefit in a normal retirement. He
noted that the administration has been working on "a realistic
and workable" fiscal note and they are beginning to see the
potential in cost savings. Peace officers pay a higher PERS
contribution to compensate for their fewer years of required
service before normal retirement, he said and that fact should
be taken into consideration.
He asked members to note the letters of support and pointed out
that Representative Hawker asked for and received written
assurance from the Municipality of Anchorage stating that this
wouldn't adversely affect their budget. It is relevant, he said,
that the bill came out of the House with so many cosponsors.
He observed that Kevin Richie of the Alaska Municipal League was
in the audience and would undoubtedly speak against the bill,
but to refute his testimony he said, "this is a balance. We're
losing men and women to borough, federal, [and] out-of-state
jobs. Recruiting is tougher and tougher and this is an incentive
for them. They've certainly put in their time. No one will deny
that." He asked the committee to address any state affairs
issues and pass the bill on to the Finance Committee where
fiscal concerns could be addressed.
SENATOR BERT STEDMAN said he could appreciate the request to
pass fiscal concerns along to the Finance Committee and he could
understand why there is a lot of interest in the proposed
changes. "I think most folks, given the options, would work less
and retire with more benefits." This increases cost to the
communities in a financially challenging time. He questioned why
the bill was coming forward now instead of later when the
committee could respond to the funding issue under the PERS
system.
REPRESENTATIVE ANDERSON replied the ever-present question is why
bring forward a bill that may cause added burden. The answer is
because there is a balance here. "It comes down to where we have
critical mass and problem and where we don't." The reason he
sponsored the bill is because of the difficulty associated with
recruitment and retention. Giving this benefit isn't as much
about whether these people are deserving; it's more about the
necessity of keeping these people applying for and working in
these jobs. "We felt it was becoming a detriment not to have
better retirement. We wanted to correct back to what the
retirement used to be." This is a change that is necessary he
insisted.
SENATOR STEDMAN remarked that all the current PERS issues aren't
related to rising healthcare costs, but those costs are
substantial and this bill would increase the weighting. The
inability to accurately predict increasing medical costs is of
great concern.
Referring to a letter from the City of Fairbanks, he noted that
they oppose this bill because of the increased funding
requirement that they are already facing for their retirement
package. This is a contractual obligation and therefore is not
open for renegotiation. "There is a five percent cap increase on
their contributions every year. They were up against the cap
last year and are up against the cap this year and will probably
be up against the cap again the following year." It's creating a
substantial impact on the municipalities' general funds and
cutting services is about their only option. Because some would
look at this as an unfunded mandate, he asked what suggestions
he might have for municipalities.
REPRESENTATIVE ANDERSON replied that is a good question, but the
mayor of the largest city in the state is on record saying that
they would find ways to comply. He said he would hope that other
communities would do the same. The funding debate could go on
forever and everyone could pass the buck, but with a partnership
it can be done. He wasn't sure what prompted Fairbanks to send
the letter as recently as today when the bill has been around
for more than a year. The Fairbanks police certainly approve of
the bill. He said.
SENATOR COWDERY said he has been involved with police and fire
for a long time and he found that dispatchers experience a lot
of burnout and he wasn't sure whether they have early retirement
now or not.
REPRESENTATIVE ANDERSON thought that Representative Hawker had a
bill addressing that issue.
SENATOR COWDERY commented that he thinks they deserve
consideration as much as anyone else.
REPRESENTATIVE ANDERSON pointed out that Mike Fox would say that
this bill isn't costing any money in the end because the state
loses when well-trained officers leave early. If a captain
retires after 20 years service and a sergeant comes in as the
replacement, there is a pay differential. "It's our belief that
it's not as expensive as submitted." He deferred to Mr. Fox to
respond to Senator Cowdery's comment.
CHAIR GARY STEVENS opened public testimony and asked Mr. Fox to
begin.
MIKE FOX, Public Safety Employees Association employee, gave a
7-minute power point presentation on HB 91.
Analysis: This bill provides medical benefits for
peace officers at normal retirement instead of working
5 years beyond normal retirement.
It removes the disincentives for peace officers to
take normal retirement and reestablishes parity with
all the PERS members.
The Public Employees Retirement System Mission: On
January 1, 1961, the Alaska Legislature established
the Public Employee Retirement System to attract and
retain qualified people in the public service
employment.
Who is, by statute, affected by this bill: Peace
officers, firefighters, chiefs of police, regional
public safety officers, correctional officers,
correctional superintendents, probation officers, fire
chiefs.
The 2003 validation report for PERS lists 2,893 active
occupation [indisc.] members, but this bill would
affect only Tier II and III members.
History of the law:
Tier I: Major medical is provided to all benefit
recipients.
Tier II: - In 1986 HB 252 by Representatives Duncan
and Miller created Tier II. Major medical is provided
at age 60.
Tier III - Created in 2001. Major medical is provided
after a 10-year vesting period at age 60 or at normal
retirement. Except peace officers must work 5 extra
years.
HB 91 deletes the five extra years for peace officers.
The justification for change includes:
· The current law withholds benefits from peace
officer members of PERS unless an extra 5 years
is worked.
· It undermines the intent of peace officers' own
retirement.
· It inhibits recruitment and retention.
· It causes inequality among PERS members.
Fiscal Note 2: Approximately $.85 million - half
from general fund money. Employer contribution
change across the board is + .12% or .97% if
applied to just police/fire payroll. For a person
earning $50,000 per year, the increase in
employer contribution would be $60 per year. $30
a year would be from the general fund.
The fiscal note did not consider any savings HB
91 would generate in operational costs. It's just
one side of the coin.
[Mr. Fox showed a graph showing employer
contribution as a percent of salary.] Everyone
talks about PERS indebtedness in PERS and this
graph shows that in FY90 the contribution was
about 12 percent. In FY 94 it was about 17
percent. This year it's at 13.42 percent. This
fiscal note would raise this by .12 of 1 percent.
So the 13.42 percent would go up to 13.54
percent.
The employee contribution is steady. All other
PERS members contribute 6.75 percent while peace
officer PERS members contribute 7.5 percent. They
pay that extra to compensate for their shorter
period of service required for normal retirement
- to maintain equality in PERS.
The next graph helps illustrate turnover in
corrections and you can see the decline between 0
and 20. Almost 10 percent of the officers have
left in one year on the job; another 10 percent
have left in two years on the job. There is
significant room for improvement in retention of
corrections officers.
The next graph shows by year class, the
percentage of troopers still working compared to
those who have left. You can see a steady decline
from year 1 troopers to year 20 troopers. The
blank year classes are years where no one was
hired.
Improved retention equals savings. Savings in
recruiting and training are enjoyed by reducing
turnover. Recruiting and trainings costs equal
approximately $104,871 per trooper. Public Safety
provided that number.
Problems associated with peace officers working
past normal retirement include: Increased health
problems, increased risk of injury, higher
compensation, lower morale from burnout.
This graph shows that there is very limited
opportunity for peace officers to move into
administrative positions. The top bar shows
corrections officers and you can see there are
over 700 working on the floor of the prisons and
there are about 30 administrative officers in the
prisons. There's not much room for correction
officers to move off the floors of prisons.
In the State Troopers, there are about 330 people
that are working as sergeants and troopers, which
are patrol or investigative positions. There are
about 33 in the administrative positions. Once
again you can see that it's very likely for a
person to work their entire career either on the
floor of the prison or on patrol.
The normal retirement equals savings. Eliminating
the current disincentive to take normal
retirement will reduce the number of high-cost
20-year officers.
Direct savings: Replacing a 20 year trooper with
a 1 year trooper will save approximately $26,644
per year in base pay and leave. That's the
difference between a 1-year guy and a 20-year
guy. That is based solely on base pay and leave
with no shift differential, no overtime, no
geographic differential, and no other
consideration - all of which would make that
higher.
Replacing a 20-year CO2 with a 1-year CO2 would
save approximately $18,252 per year under the
same conditions.
This is in the first year. If they defer
retirement for five years, as is the current
policy, you just multiply that times five and see
if you'll save any money when guys leave at 20
for the 20 and out.
The cost versus savings balance for this bill: If
20 years are not completed there's no benefit
change and there's no cost. The bottom line - if
a person doesn't work 20 years this bill doesn't
affect them. There is no cost. If an officer
retires at 20 years instead of deferring the
associated savings help balance the cost.
It becomes a policy decision. What do you want to
do? Do you want guys to leave at 20 or do you
want to keep them after 20? If they leave before
20, there is no cost to you. If your policy is to
keep them beyond 20, there is a cost but there is
also a savings. It's a policy choice.
In conclusion: Current law undermines the intent
of normal retirement of peace officers and it
inhibits PERS mission to recruit and retain in
public service. HB 91 removes the disincentive
for peace officers to take normal retirement and
reestablishes parity among all PERS members. It's
good for peace officers and it's good policy.
CHAIR GARY STEVENS thanked Mr. Fox and noted there were no
questions.
CHARLIE HANSON, Lemon Creek corrections officer, testified in
support of HB 91. He has an undergraduate degree in human
development and a masters degree in human services, is a Tier I
employee and has more than 19 years service.
He recounted the difficulty, danger and stress associated with
being a corrections officer. Because inmates are often involved
in high-risk behavior, the instances of HIV, and hepatitis A, B,
and C are higher than the public population. This puts
corrections officers at higher risk and increases the potential
need for long-term health care benefits.
He said he was bringing a message sent from the hearts of
correctional officers throughout the system. Corrections
officers seldom make their 20-year retirement goal. "I've
watched over 250 floor staff come and go without reaching that
magic time of service within the Lemon Creek Correctional Center
alone."
Recently he asked his superintendent to look back over his 27-
year career and tell him how many corrections officers he knew
of that were able to reach the 20-year mark. "The figure he came
up with was four." That has since been increased by one. "The
likelihood that a corrections officer will reach the 20-year
mark for full retirement is bad enough. Pushing the mark to 25-
years for full medical benefits is next to impossible and
demeaning to us when we are at risk of serious long-term illness
because of our jobs."
"HB 91 will ensure an appropriate retirement package for those
of us who make it that far. It isn't cost effective to
continually pay to train new people in order to replace those
who see that the 25-year goal is unobtainable."
KEVIN RICHIE, Alaska Municipal League, apologized for entering
the process so recently and advised that a number of
municipalities recently joined to form a PERS committee because
of the impact PERS is having. Currently the issue is the five
percent increase in salary cost for the retirement program. This
is a huge issue for municipalities because in addition to the
increased 5 percent to the retirement program, they are losing
revenue sharing and have to take on more responsibility such as
DOT match.
Prior to this year the average PERS employer contribution was
6.77 percent of salary. The new actuary says that percentage
must be increased to about 25 percent of salary for each of the
next 20 years for the PERS system to achieve about 90 percent
funding. This year it's a $19-$20 million cost that
municipalities must absorb. Those that have a cap have no other
option than to cut services.
Certainly municipalities are very concerned about any increased
PERS obligation and would like the opportunity to address the
structure of the process. Currently municipalities, school
districts, and the University of Alaska fund two-thirds of the
PERS/TRS system. Finding a way to increase municipality
involvement in the analysis process of cost increases and in the
management of the program would be desirable.
According to the fiscal note, this bill would amount to a .97
percent annual cost increase in police salaries. The PERS/TRS
Board is currently considering a radical overhaul of the entire
system so "looking at the long-term, it's important to put this
change in the context of the system could be radically different
in a few years for everybody new entering the system."
CHAIR GARY STEVENS summarized that the primary testimony spoke
of the impact the bill would have on state troopers, but the
last testimony related to city police. He questioned how to put
a dollar figure on that and asked Mr. Richie whether he had a
fiscal note for local communities.
MR. RICHIE explained that the annual fiscal impact would amount
to the total police salaries multiplied times .97 percent.
SENATOR STEDMAN referred to draft fiscal note number 4 and noted
that, "using the current Valuation Assumptions, this legislation
will increase the PERS accrued liability by $8 million."
SENATOR COWDERY asked how many police in Anchorage are Tier I
employees.
MR. RICHIE said he didn't have that information.
SENATOR COWDERY said, "We all agree they're not all in PERS,
right?"
MR. RICHIE was unable to provide an answer.
SENATOR COWDERY said, "I believe some are in PERS - some of the
later hires, but the early hires I don't believe are. I think
they have their own."
There were no further questions or comments for Mr. Richie.
MELANIE MILLHORN, director of the Division of Retirement &
Benefits, said she would address her comments to draft fiscal
note number 4. She agreed with Representative Anderson that the
division has met with PSEA and that they are looking at the
suggested savings, but at present they are unable to quantify
the savings. Therefore fiscal note number 4 is the one that
Mercer Human Resources Consulting (Mercer) worked on and those
are the calculations she would address.
With regard to the concern about turnover rate, she said they
are comfortable with the information Mercer provided from a 1997
through 1999 report showing a 3 percent turnover rate. "So we
don't have anything we can use to look at a higher turnover
rate. So the amount that would cost is correct according to
Senator Stedman. That is an $8 million and it would be l97
percent for police and firefighter payroll for the next 25
years." That is calculated by looking at the population that
would be impacted and according to the evaluation report of June
30, 2002 there are 2,695 police and firefighter classifications
for PERS. For that same evaluation period, the number of Tier II
and Tier III members was 1,961. "Those are the members who would
derive benefit from this piece of legislation."
When Mercer looks at retirement rates and applies actuarial
assumptions, they project that of the 1,961 potential
beneficiaries there would be 411 that would anti-select. "Anti-
select is an insurance term meaning that those parties who
derive benefit would make that selection."
CHAIR GARY STEVENS apologized for interrupting, but he wanted to
know if the data included municipal employees.
MS. MILLHORN replied all PERS employees were included.
SENATOR COWDERY chimed in to ask if he was correct that not all
police and fire are in PERS.
MS. MILLHORN said it is her understanding that there is a
different municipal retirement program for some employees.
Continuing her testimony, she repeated that Mercer calculated
that 411 employees would benefit from this legislation, which
represents about 25 percent of the 1,961 who would be eligible.
"For the State of Alaska, the amount we would pay for this
legislation would be $856,000 annually." The evaluation report
of June 30,2002 shows that PERS is at a 75 percent funding
ratio. This means that if all the assets and liabilities were
calculated and everything that was due on that date was in fact
paid, there would be a 25 percent shortfall.
PERS hasn't been in this funding circumstance for about 20 years
she warned. There are two primary drivers that account for this
situation. First, healthcare costs represent about 30 percent of
the total PERS costs, which is significant. The second driver is
the investment earnings.
CHAIR GARY STEVENS asked whether the annual $856,000 cost
included municipal costs.
MS. MILLHORN replied municipal costs are separate. So the annual
cost to the Municipality of Anchorage would be $246,000, she
said.
CHAIR GARY STEVENS noted that there would be a number of other
municipalities that would be added to the list if there were a
thorough analysis.
MS. MILLHORN said yes and there are a total of 161 PERS
employers.
There were no further questions for Ms. Millhorn.
MAURICE HUGHES testified via teleconference from Kodiak to say
that he has been an Alaska State Trooper for 14 years and he was
speaking for the 330 state troopers and the other police
officers that are in PERS. The message he wanted to impart was
that, "The policy intending to influence police officers to work
beyond their normal retirement by withholding a retirement is
wrong." Burnout is a serious issue in this field and young
officers find it demoralizing to have to work the five extra
years.
TAPE 04-19, SIDE B
5:45 pm
LARRY SEMMENS testified via teleconference as finance director
for the City of Kenai in opposition to HB 91. He advised that he
faxed opposing resolution 2003-04 from the Alaska Government
Finance Offices Association. The resolution was dated April 18,
2003, "so although some people were not aware of this, the
finance officers were and we registered our opposition at that
time."
MR. SEMMENS reported that he also sent his written testimony to
the committee and he wanted to read it into the record as well.
[A full copy may be found in the bill file.] The primary reason
for his opposition is because the PERS system is already in
trouble and this legislation would cost money. "For Kenai, the
unfunded actuarial accrued liability is $7.4 million - almost a
whole year's general fund budget." He noted that employers have
alternatives to increasing retirement benefits if they are
having difficulty attracting and retaining qualified applicants.
Raising wages is one such option and individual municipalities
could even choose to pay health benefits after 20-years of
service. That makes it a local control issue and not an unfunded
mandate.
CHAIR GARY STEVENS told Mr. Semmens that he received the
resolution and letter some time ago.
He noted that it was after 6:00 pm and he would hold the bill
for future consideration and the committee would return to HB
414.
SENATOR GUESS stated that the bill was straightforward and you
should know where you stand on the issue so she could see no
reason why the committee shouldn't move the bill. She was ready
to make a motion.
CHAIR GARY STEVENS said he would accept the motion if she wanted
to move HB 91.
SENATOR HOFFMAN commented that the Senate President spoke of
working cooperatively, but he had seen no cooperation that day.
CHAIR GARY STEVENS said, "Well I'm certainly going to accept
that motion if you want to make it Senator Guess." After a pause
he asked, "Senator Guess, if you'll make a motion fine, if not
well go..."
SENATOR GUESS replied, "Oh I'm sorry I didn't - I'm a little
confused at where you're running your meeting. I was trying to
find my notes on the amendment of the earlier stuff."
CHAIR GARY STEVENS said, "I'm ready to move on to the other
bill, but if you'd want to make a motion on HB 91 we would
accept it."
SENATOR GUESS replied, "You're doing a very good job of putting
me between failing this bill so it stops and putting you guys on
record against police officers. So with that, we'll go to 414.
If the sponsor left, I will confer with him."
CHAIR GARY STEVENS announced he would hold HB 91 for further
study.
HB 414-U.S.SENATE VACANCY/DEF OF POLITICAL PARTY
CHAIR GARY STEVENS announced that the committee would return to
HB 414.
SENATOR GUESS stated that, "In a futile attempt to actually make
a good bill - even though it seems that all you guys want to do
is take this off the ballot - I move to delete page 3, line 31
to page 4, line 10.
CHAIR GARY STEVENS asked her to repeat.
SENATOR GUESS restated her amendment.
CHAIR GARY STEVENS stated that the motion was before the
committee and he would like Mr. Hilyard to respond.
HEATH HILYARD reintroduced himself and said that the sponsor
would not object to that amendment. He noted that SB 356, a
comprehensive election reform bill, had similar language, but
for HB 414 they had no objection to the removal.
CHAIR GARY STEVENS asked him to tell the committee exactly...
SENATOR COWDERY interrupted to say that he didn't write down the
lines.
SENATOR GUESS asked if he wanted her to say what the amendment
would do.
SENATOR COWDERY said no, just repeat so he could read it.
SENATOR GUESS repeated, "page 3, line 31 to page 4, line 10."
CHAIR GARY STEVENS asked her to explain the amendment.
SENATOR GUESS explained that it takes away the 3 percent
requirement for a political party to be recognized. "As you
know, in Alaska 65 percent are registered non-party. People vote
for the person not the party."
CHAIR GARY STEVENS stated that he was speaking for the amendment
and he believes it's a good idea.
CHAIR GARY STEVENS called for a roll call vote. The amendment
passed 4 to 0 with Senators Guess, Stedman, Cowdery and Chair
Gary Stevens voting yea.
CHAIR GARY STEVENS asked if there were further amendments.
SENATOR GUESS remarked that in the short amount of time she had
to make the amendment she would trust the sponsor to work on
clean-up language. Because she thought it was an appropriate
state affairs issue, she would make a conceptual amendment.
She made a motion to adopt conceptual amendment 1, "which is
that the temporary appointment may not run for the vacancy."
SENATOR STEDMAN asked for her reasoning.
SENATOR GUESS noted that she was pleased that the sponsor was
present because there was similar discussion in the House. She
explained that she is worried that the temporary appointee has
an incumbency advantage. She thought that was at odds with the
intent, which is to make a clean process that is separate from
an appointment.
SENATOR COWDERY commented that all sitting legislators are
incumbents and two of the committee members were appointees. He
simply didn't like the amendment.
CHAIR GARY STEVENS recognized the sponsor.
REPRESENTATIVE McGUIRE told Senator Guess that she understood
her reasoning, but it wasn't her intent that the process would
be manipulated to that extent. She said she was uncomfortable
placing that restriction and if the appointee is the person the
people want to elect in the special election, then she wants the
people's will to be exacted. She opposed the conceptual
amendment.
CHAIR GARY STEVENS asked Senator Guess if she had any comments.
SENATOR GUESS said it was a philosophical difference and there
are good arguments on both sides. Her view is that the appointee
would know from the beginning that they were filling a temporary
roll.
SENATOR COWDERY said his view is that would be taking away a
citizen's right if that stipulation were made for appointments.
CHAIR GARY STEVENS recapped that the amendment before the
committee says that a temporary appointee could not run for that
office in the special election. He asked for a roll call vote.
The amendment failed 1 to 3 with Senator Guess voting yea and
Senators Cowdery, Stedman and Chair Gary Stevens voting nay.
CHAIR GARY STEVENS asked Senator Guess if there were other
issues she wanted to address.
SENATOR GUESS replied there were, but she would work with the
sponsor on some clean up.
SENATOR STEDMAN asked Senator Guess to get back to the members
regarding any clean up language they might agree to.
SENATOR GUESS said she would do so and asked if she could use
the services of the Senate State Affairs Committee to order a CS
that would reflect the clean up language.
CHAIR GARY STEVENS said, "Okay and before us then a motion on
the CS for HB 414(JUD) as amended."
SENATOR COWDERY asked for verification that there was one
amendment.
SENATOR GUESS said that was correct.
SENATOR COWDERY said I move...
SENATOR GUESS called a point of order stating, "I think you need
to remove your last motion because we made amendments and we had
a motion on the table. So then Senator Cowdery can make the new
motion. You have a motion on the table to move, correct?"
CHAIR GARY STEVENS questioned, "Do we have a motion on the table
to move it?"
SENATOR COWDERY told Senator Guess he missed her point.
SENATOR GUESS said, "I think you just need to remove your
previous amendment to move and re..."
CHAIR GARY STEVENS said, "Because if we remove the previous
motion then now we're going to deal with the motion as amended.
Okay if you would do that Senator."
SENATOR COWDERY said, "I'll remove my object."
CHAIR GARY STEVENS said he was ready for a motion.
SENATOR COWDERY made a motion to move CSHB 414(JUD) as amended
forward with individual recommendations and the accompanying
fiscal note.
SENATOR GUESS objected.
CHAIR GARY STEVENS called for a roll call vote. The motion
passed 3 to 1 with Senators Cowdery, Stedman and Chair Gary
Stevens voting yea and Senator Guess voting nay.
SCS CSHB 414(STA) moved from committee and the meeting was
adjourned at 6:15 pm.
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