HOUSE FINANCE COMMITTEE MAY 7, 1997 2:15 P.M. TAPE HFC 97 - 127, Side 1, #000 - end. TAPE HFC 97 - 127, Side 2, #000 - end. TAPE HFC 97 - 128, Side 1, #000 - end. TAPE HFC 97 - 128, Side 2, #000 - #156. CALL TO ORDER Co-Chair Gene Therriault called the House Finance Committee meeting to order at 2:15 P.M. PRESENT Co-Chair Hanley R e p r e s e n t a t i v e Grussendorf Co-Chair Therriault Representative Kohring Representative Davies Representative Martin Representative Davis Representative Moses Representative Foster Representative Mulder Representative Kelly was not present for the meeting. ALSO PRESENT Representative Alan Kemplen; Tuckerman Babcock, Staff, Senator Lyda Green; Art Chance, Counsel to the Senate Finance Committee, Labor Issues, Juneau; Cynthia Hora, Deputy Attorney General, Criminal Division, Department of Law; Mike McMullen, Personnel Manager, Division of Personnel, Department of Administration; Bill Church, Supervisor, Division of Retirement and Benefits, Department of Administration; John Cyr, President, National Education Association, Juneau; Geron Bruce, Legislative Liaison, Department of Fish and Game. SUMMARY HB 47 An Act relating to authorizing the Department of Corrections to provide an automated victim notification and prisoner information system. HB 47 was HELD in Committee for further consideration. HB 159 An Act relating to sale, possession, and purchase of tobacco and tobacco products; amending Rules 603 and 611(d), Alaska Rules of Appellate Procedure; and providing for an effective date. 1 CS HB 159 (FIN) was reported out of Committee with a "no recommendation" and with fiscal notes by the Department of Administration one new and one dated 4/17/97, the Department of Law dated 4/17/97, the Department of Revenue dated 4/17/97, the Department of Public Safety dated 4/17/97, the Alaska Court System dated 4/17/97 and the Department of Commerce and Economic Development dated 4/17/97. SB 141 An Act relating to permits to carry concealed handguns; and relating to the possession of firearms. HCS CS SB 141 (FIN) was reported out of Committee with individual recommendations and with three fiscal notes by the Department of Public Safety two dated 3/26/97 and one dated 4/3/97. SB 150 An Act relating to moving expenses of state employees, to compensatory time for state employees, and to calculation of compensation for the public employees' retirement system. HCS CS SB 150 (FIN) was reported out of Committee with individual recommendations and with a zero fiscal note for all departments dated 4/4/97. SENATE BILL 141 "An Act relating to permits to carry concealed handguns; and relating to the possession of firearms." Representative Kohring recommended "lumping" the remaining amendments #3, #4, #5, #6, #8 & #9 together into one amendment. Co-Chair Therriault replied that to date, the Committee has not cut-off members debate, noting that action would not be taken. Representative J. Davies MOVED to adopt Amendment #3. [Copy on file]. Co-Chair Therriault OBJECTED. Representative J. Davies explained that the amendment would add include a stipulation clarifying that the applicant not have been convicted of a domestic violence crime within a six year period. TUCKERMAN BABCOCK, STAFF, SENATOR LYDA GREEN, spoke to AS 11.61.200(a)(8) & (9) which prohibits the possession of a fire arm while a person is committing a trespass in the first or second degree while in violation of a court order or communicating with another person in violation of a 2 domestic violence order. Representative J. Davies pointed out that the referenced standards were specific, whereas, the amendment stipulates the six year historical standard. A roll call vote was taken on the MOTION. IN FAVOR: Grussendorf, J. Davies OPPOSED: Kohring, Martin, G. Davis, Foster, Therriault, Hanley Representatives Kelly, Moses and Mulder were not present for the vote. The MOTION FAILED (2-6). Representative J. Davies MOVED to adopt Amendment #4. [Copy on file]. Co-Chair Therriault OBJECTED. Representative J. Davies explained that Amendment #4 would add further clarification of when a person would be in violation of a notice as provided in section (c). Mr. Babcock commented that section would change the criminal trespass statutes for all criminal trespass in Alaska and would not be limited to addressing permits or related to firearms. A roll call vote was taken on the MOTION. IN FAVOR: J. Davies, Grussendorf OPPOSED: Kohring, Martin, G. Davis, Foster, Therriault Representatives Kelly, Moses, Mulder and Hanley were not present for the vote. The MOTION FAILED (2-5). Representative J. Davies MOVED to adopt Amendment #5. [Copy on file]. Co-Chair Therriault OBJECTED. Representative J. Davies explained that Amendment #5 would require that an applicant not be suffering from mental illness as defined in AS 47.30.915 within the past six years. Mr. Babcock commented that under federal law, anyone who has been adjudicated or committed to a mental institution would be prohibited from possessing any firearm. Representative Grussendorf questioned how thorough the background checks were. Mr. Babcock responded that the Department of Public Safety (DPS) provides a background check requiring that a set of finger prints be taken. It is 3 important when denying someone a privilege under state law that there be a demarkation point rather than just a doctor's recommendation. He stressed that Senator Green would be more comfortable dealing with a set standard. A roll call vote was taken on the MOTION. IN FAVOR: J. Davies, Grussendorf OPPOSED: Kohring, Martin, G. Davis, Foster, Therriault Representatives Moses, Mulder, Kelly and Hanley were not present for the vote. The MOTION FAILED (2-5). Representative J. Davies MOVED to adopt Amendment #6. [Copy on file]. Co-Chair Therriault OBJECTED. Representative J. Davies noted that Amendment #6 would provide that a person ordered by a court to complete an alcohol treatment program or substance abuse program, not be allowed to apply for three years following the completion of the program. Mr. Babcock responded that current law would only affect certain persons already banned under federal law from carrying a firearm. The only people affected by the proposed amendment would be people who had successfully completed an alcohol or drug abuse program. Representative J. Davies argued that if a person had been ordered by a court to complete an alcohol treatment program, would suggest that person has evidence of abuse of alcohol or drugs. A roll call vote was taken on the MOTION. IN FAVOR: J. Davies, Grussendorf OPPOSED: Martin, G. Davis, Foster, Kohring, Therriault Representatives Moses, Mulder, Kelly, and Hanley were not present for the vote. The MOTION FAILED (2-5). Representative J. Davies MOVED to adopt Amendment #8. [Copy on file]. Co-Chair Therriault OBJECTED. Representative J. Davies explained that Amendment #8 would specify that victims of domestic violence, employees or volunteers of domestic violence shelters, would not be liable for any injury caused in the course of defending themselves or others in the shelter against attack. 4 Mr. Babcock stated that would be limited to a conceal carry permit statute as opposed to limiting the liability for the employee. He suggested that it would apply only to Section 18.65 involving concealed permits. Representative J. Davies noted that shelter operators have requested that concealed carried weapons be specifically excluded from shelters. If a person is carrying openly, the shelter operators would be more comfortable. If the State makes a public policy decision for those in the shelter, inclusion of the proposed language would address the potential threats. Mr. Babcock made no comment. Representative Martin suggested that inclusion of the language could make the shelters much safer. Mr. Babcock noted that Senator Green would have no objection to the concept, although, how it would apply and what the legal ramifications would be have not been considered. A roll call vote was taken on the MOTION. IN FAVOR: J. Davies, Grussendorf, Martin OPPOSED: G. Davis, Foster, Kohring, Therriault Representatives Moses, Mulder, Kelly, and Hanley were not present for the vote. The MOTION FAILED (3-4). Representative J. Davies MOVED to adopt Amendment #9. [Copy on file]. He explained that the amendment would prohibit the use of a handgun on a school bus or school sanctioned event. Representative Kohring OBJECTED for the purpose of discussion. Mr. Babcock commented that Senator Green suggested that the prohibition would be better placed in AS 11.61.210(a)(7) along with the language limiting firearms on school property. He suggested that information was clear that it would be prohibitive without the authorization of a school administrator. Representative J. Davies WITHDREW the original Amendment #9 and MOVED a new Amendment #9. [Copy on file]. He explained that the new amendment would use the language that was in the original Amendment #9 and would be added to subsection (7) & (8). There being NO OBJECTION, it was adopted. CYNTHIA HORA, DEPUTY ATTORNEY GENERAL, CRIMINAL DIVISION, DEPARTMENT OF LAW, spoke to whether posting signs in public 5 places would create a sufficient basis for a criminal trespass charge. She pointed out that even if a sign was posted, the individual would have to be confronted before a criminal trespass conviction could be brought forward. She advised that Amendment #4 would address the Department's recommended coverage. Mr. Babcock commented that the amendment is not a concern with regard to evidence of misconduct on either the part of the concealed weapon holder or anyone who wishes to carry openly in a public building. He stated that the primary concern which the amendment would address would be to make a major revision in the criminal trespass statute regarding access to public buildings. He reiterated that all concerns of the Department of Public Safety have been address in SB 141. (Tape Change HFC 97-127, Side 2). Co-Chair Hanley MOVED to report HCS CS SB 141 (FIN) out of Committee with individual recommendations and with the accompanying fiscal notes. Representative Grussendorf OBJECTED to ask a question regarding the fiscal notes. He pointed out that the initial bill operated from program receipts, and had an added supplemental request. Representative Grussendorf noted that the fees had once again been reduced. Mr. Babcock commented that the Department of Public Safety has expressed concern that without an increase in volume, there would be a deficit in program receipts. The Alaska Peace Officers Association objects to lowering the fees. Following discussion regarding the fiscal impact, Representative Grussendorf WITHDREW the OBJECTION to moving the bill from Committee. There being no further objection, it was so moved. HCS CS SB 141 (FIN) was reported out of Committee with "individual recommendations" and with fiscal notes by the Department of Public Safety, two dated 3/26/97 and one dated 4/3/97. HOUSE BILL 159 "An Act relating to sale, possession, and purchase of tobacco and tobacco products; amending Rules 603 and 611(d), Alaska Rules of Appellate Procedure; and providing for an effective date." Co-Chair Therriault MOVED to report CS HB 159 (FIN) from Committee with individual recommendations and with the 6 accompanying fiscal notes. There being NO OBJECTION, it was so ordered. CS HB 159 (FIN) was reported out of Committee with a "no recommendation" and with fiscal notes by the Alaska Court System dated 4/17/97, the Department of Commerce and Economic Development dated 4/17/97, the Department of Public Safety dated 4/17/97, the Department of Revenue dated 4/17/97, the Department of Law dated 4/17/97, and two zero fiscal notes by the Department of Administration, one dated 4/17/97 and one new. SENATE BILL 150 "An Act relating to moving expenses of state employees, to compensatory time for state employees, and to calculation of compensation for the public employees' retirement system." ART CHANCE, COUNSEL TO THE SENATE FINANCE COMMITTEE, LABOR ISSUES, JUNEAU, provided a sectional analysis of the proposed legislation. Section #1 would remove certain provisions for coverage under the collective bargaining act and the Public Employment Relations Act (PERA). Section #2 would require an employee who voluntarily transfers to another location commit to five years at the location or pay the State all costs incurred with that move. He noted that Section 39.24.60 of the bill was intended to eliminate any informal compensatory retirement arrangements between employees and supervisors. Mr. Chance continued, Section #3 would remove overtime compensation from the definition of compensation for the purpose of calculating Public Employees Retirement System (PERS) benefits as a cost savings measure. This section would only effect new employees. Any change to PERS eligibility must be prospective because of the relationship that PERS has with employees based on the time they entered into the system. Representative J. Davies inquired if adoption of Section #3 would create an additional tier within the system. Mr. Chance stated that there would be an additional kind of calculation of eligibility for PERS. Representative Grussendorf referenced the moving expense component regarding "voluntary" transfer. Mr. Chance replied that there are provisions in both the labor agreement and personnel rules regarding an employee making their self available to transfer for another position. There are other provisions for an "involuntary" transfer. If a person voluntarily offers to move to a new location, at that time they must commit to five years or be financially responsible for paying the moving costs. Discussion 7 followed regarding moving expenses. Mr. Chance spoke to the pay scale differential provided in moving to certain locations in the State. He added that the State is not obligated to pay the moving expenses on a new hire. Representative J. Davies observed that the proposed changes would not save the State money, but instead would prevent people who currently work for the State to be able to apply for the positions that are opening. Consequently, two classes of people would be created; those that work for the State and those that do not. Those that work for the State would be penalized for applying for the new positions. Representative Martin asked if the proposition would apply to teachers also. Mr. Chance replied that it would apply only to the PERS employees. Any teaching employees would be in the Teacher's Retirement System (TERS). MIKE MCMULLEN, PERSONNEL MANAGER, DIVISION OF PERSONNEL, DEPARTMENT OF ADMINISTRATION, noted that Section #2 of the proposed legislation would add two new provisions. Section 39.24.50 would require employees to repay with interest if they leave within five years. He noted that Tier 2, passed in 1986, addresses that issue. Since 1986, the employees in Tier 2 must have a geographic differential covering half of the credited service in order for the geographical differential to count towards retirement. That issue has been solved. The new provisions in PERS would apply only to new hires. People in PERS before 1986 have the opportunity to be phased out. He stressed that this section applies only to State employees. It would create a significant difference between the travel for a new hire and the travel for a current employee. Current regulations provide that a new hire is required to pay-back the full amount without interest if they leave within two years. For each six months of service which they complete, 25% of the charge would be forgiven. The proposed legislation would create a five year required commitment for those people already in the system. Section #2 also adds section 39.24.60 which would require that compound payments be in writing. He believed that those problems would continue to exist. The employees who currently violate, will continue to violate if the proposed law passes. Mr. McMullen spoke to Section #3 which would stipulate that the employee not be covered in the contribution on overtime or the calculation of benefits from the overtime, except those employees who are part of PERS. He spoke to the number of PERS employees where overtime is normal; snow- 8 removal, fire-fighting, fisheries and forestry. Tier #4 will require that the State decide whether the employee and employer will contribute into over-time compensation. Representative Martin questioned the compensation of overtime hours. Mr. McMullen explained that at this time, the employee and employer contribute based on total compensation. Mr. McMullen thought that it would be complicated to try to adjust service instead of earnings. A full time employee receives credit for the actual years service. Representative Grussendorf asked if the proposed legislation would save the State money. BILL CHURCH, SUPERVISOR, DIVISION OF RETIREMENT AND BENEFITS, DEPARTMENT OF ADMINISTRATION, responded that the Division has estimated that the bill will save approximately a $6 million dollar decrease from required employee contributions at the end of twenty-five years. He agreed that there would be some savings resulting from the portion contributed and now paid on overtime by the employer which would not be made in the future. Representative Grussendorf pointed out that the Administration is currently reviewing concerns of over-time compensation. He suggested that considering the proposed savings, it would be in the State's best interest to address the concerns. Mr. Church explained that there are many considerations to be made regarding the question of overtime. One would be voluntary over-time; the other would be required overtime and the added costs associated with additional employees hired. He believed that overtime could end in saving the employer money and could be used as a management tool. The bill does not adequately address the overtime concern; people will continue to work over-time. (Tape Change HFC 97-128, Side 1). In response to Representative J. Davies, Mr. McMullen explained that there are many departmental seasonal operations. The State overtime level is under 3%. The retirement system estimate is slightly over 4% in overtime pay. For those persons who get paid for overtime, their work is beyond their control and that work can not be managed in terms of more bodies; overtime will continue to be needed and paid. Mr. McMullen noted that the SBS contributions were calculated on the total earnings were based on the social security cap. Employees currently receive credit up to the cap. 9 JOHN CYR, PRESIDENT, NATIONAL EDUCATION ASSOCIATION (NEA), JUNEAU, spoke to Page 3, Section #3, Lines 22-23. He explained that the bill originally addressed State employees, then the PERS section was added. In the school districts, there are some non-certified employees who are under the PERS retirement system. Over the course of the last eight years, many of the employees have found their salary and their work year reduced. These people do not get a full year's credit toward the PERS system. They are required by their supervisors to be available for overtime. He suggested that the proposed legislation was designed to trap these employees particularly in the rural areas. They are not eligible for unemployment. GERON BRUCE, LEGISLATIVE LIAISON, OFFICE OF THE COMMISSIONER, DEPARTMENT OF FISH AND GAME, spoke to the Department's concerns with Section #2 of the proposed legislation. The Department maintains forty-eight offices throughout the State. Not all of them are manned year round. Section #2 would impact placing employees into those communities and could act as a deterrent to someone willing to accept an assignment to a remote community. These people often work without supervision and the Department is not inclined to send new State workers to those locations. Mr. Bruce added that a number of situations could occur within a persons family which could affect their five year commitment to a rural area. Currently, it is required that a person make a two year commitment when moving to a bush area. An additional concern, would be placing a person in an place which was not working out for either themselves or the community. In that instance, it would be better to reassign them. The Department is not comfortable with the five year recommended stay requirement. Mr. Bruce added that the Department uses many seasonal employees in fishery management. Many of these employees are people who have some training in biology and are permanent seasonal employees and make valuable contributions to the Department. They are required to work overtime. He stressed that it would be more expensive to replace those people with a permanent employee than paying them overtime. Representative Mulder commented that the overtime compensation was most likely not the reason that a person signed onto a job, but rather, because the job was one they wanted to do. He agreed that overtime should be compensated, although, for purposes of retirement, it should not be calculated. Mr. Bruce replied that some of these workers look at the work they do as their career. They do 10 not plan to move into a different position, making the retirement aspect an important consideration. Their experience is a valuable asset. Representative J. Davies understood that the time of service was calculated by the number of days worked, not the number of hours. The consideration is whether your overtime compensation would be used in determining your three years of highest compensation. Mr. Chance clarified that many seasonal employees in the general government unit already have an arrangement that their overtime is often treated as compensatory time during the period that they would overwise be laid off. Those people are taking their overtime as comp-time. He continued, under the Fair Labor Standards Act, it is not "cast in stone" that the amount paid the seasonal people is a low hourly wage and a great deal of overtime. For those that are not overtime eligible, there are numerous ways to arrange a schedule so that the work demands can be met. Representative J. Davies MOVED to adopt Amendment #1. [Copy on file]. Representative Mulder OBJECTED. Representative J. Davies explained that Amendment #1 would change the time period for the moving expense calculation from five years to three years. Mr. Chance stated there is an aging and stable work-force. He agreed that anyone who had their initial PERS appointment would be subsequent to the 1986 changes. A large percentage of the State employees are Tier I employees, which will be true for the next twenty years. Co-Chair Therriault questioned if the proposed legislation would impact past employees. Mr. Chance stated that it would, although, it would not impact their retirement. Representative J. Davies stated that inclusion of five year stipulation would create a penalty clause to a few within the system. A roll call vote was taken on the MOTION. IN FAVOR: J. Davies, Grussendorf OPPOSED: G. Davis, Foster, Kohring, Martin, Mulder, Therriault Representatives Kelly, Moses and Hanley were not present for the vote. The MOTION FAILED (2-6). 11 Representative J. Davies MOVED to adopt Amendment #2. [Copy on file]. Representative Mulder OBJECTED. Representative J. Davies explained that Amendment #2 would develop a pro rated reduction of the amount of moving expenses that the employee would be responsible for repaying. Representative Mulder stated that the point of the legislation suggests that if a person accepts a position in the remote areas of the State, they must be willing to commit for a specified amount of time. He suggested that "implants" were taking jobs away from local hire. A roll call vote was taken on the MOTION. IN FAVOR: G. Davis, Grussendorf, J. Davies, Therriault OPPOSED: Foster, Kohring, Martin, Mulder Representatives Kelly, Moses, and Hanley were not present for the vote. The MOTION FAILED (4-4). Representative J. Davies MOVED to adopt Amendment #3. [Copy on file]. There being NO OBJECTION, it was adopted. Representative J. Davies MOVED to adopt Amendment #4. [Copy on file]. Representative Mulder OBJECTED. Representative J. Davies explained that Amendment #4 would eliminate the purpose of Section #3, defining overtime pay as part of compensation and then eliminating it. He noted that the seasonal workers expect that their annual compensation will be an average calculated over all the months. Representative G. Davis disagreed, pointing out that these employees have been rewarded for more than their base pay. A roll call vote was taken on the MOTION. IN FAVOR: Grussendorf, J. Davies OPPOSED: Foster, Kohring, Martin, Mulder, G. Davis, Hanley, Therriault Representatives Kelly and Moses were not present for the vote. The MOTION FAILED (2-7). Representative J. Davies MOVED to adopt Amendment #5. [Copy 12 on file]. Representative Mulder OBJECTED. Representative J. Davies explained that Amendment #5 would place a limit on the total amount of compensation that could be credited for the retirement system. (Tape Change HFC 97-128, Side 2). A roll call vote was taken on the MOTION. IN FAVOR: Grussendorf, J. Davies OPPOSED: Kohring, Martin, Mulder, G. Davis, Foster, Therriault, Hanley Representatives Kelly and Moses were not present for the vote. The MOTION FAILED (2-7). Representative Mulder MOVED to report HCS CSSB 150 (FIN) out of Committee with individual recommendations and with the accompanying fiscal note. Representative Grussendorf OBJECTED to make a statement. He noted that the Committee had not spent enough time in addressing major concerns of the legislation. He WITHDREW the OBJECTION. There being NO further OBJECTION, it was adopted. HCS CSSB 150 (FIN) was reported out of Committee with individual recommendations and with a zero fiscal note by all departments dated 4/4/97. ADJOURNMENT The meeting adjourned at 4:45 P.M. 13 **FIN128AM