HOUSE STATE AFFAIRS STANDING COMMITTEE March 19, 1998 8:02 a.m. MEMBERS PRESENT Representative Jeannette James, Chair Representative Ivan Ivan, Vice Chairman Representative Ethan Berkowitz Representative Joe Ryan Representative Kim Elton Representative Mark Hodgins MEMBERS ABSENT Representative Al Vezey COMMITTEE CALENDAR HOUSE BILL 463 "An Act establishing the Alaska public building fund; and providing for an effective date." - MOVED HB 463 OUT OF COMMITTEE HOUSE BILL 468 "An Act relating to damages awarded in complaints before the State Commission for Human Rights." - HEARD AND HELD SENATE BILL 307 AM "An Act relating to conditions for filling vacancies in the office of United States senator; and providing for an effective date." - HEARD AND HELD HOUSE BILL 408 "An Act establishing the Alaska Seismic Hazards Safety Commission." - MOVED CSHB 408(STA) OUT OF COMMITTEE HOUSE BILL 466 "An Act relating to violations of state election laws." - SCHEDULED BUT NOT HEARD (* First public hearing) PREVIOUS ACTION BILL: HB 463 SHORT TITLE: ESTABLISH ALASKA PUBLIC BUILDING FUND SPONSOR(S): STATE AFFAIRS Jrn-Date Jrn-Page Action 3/04/98 2499 (H) READ THE FIRST TIME - REFERRAL(S) 3/04/98 2499 (H) STATE AFFAIRS, FINANCE 3/19/98 (H) STA AT 8:00 AM CAPITOL 102 BILL: HB 468 SHORT TITLE: DAMAGE AWARDS HUMAN RIGHTS COMMISSION SPONSOR(S): RULES Jrn-Date Jrn-Page Action 3/09/98 2565 (H) READ THE FIRST TIME - REFERRAL(S) 3/09/98 2565 (H) STATE AFFAIRS 3/19/98 (H) STA AT 8:00 AM CAPITOL 102 BILL: SB 307 SHORT TITLE: U.S. SENATE VACANCIES SPONSOR(S): SENATOR(S) HALFORD, Leman, Green, Miller, Torgerson, Pearce, Ward, Phillips, Taylor, Kelly; REPRESENTATIVE(S) Barnes Jrn-Date Jrn-Page Action 2/16/98 2525 (S) READ THE FIRST TIME - REFERRAL(S) 2/16/98 2525 (S) JUDICIARY 3/02/98 (S) JUD AT 1:30 PM BELTZ ROOM 211 3/02/98 (S) MINUTE(JUD) 3/03/98 (S) RLS AT 11:35 AM FAHRENKAMP RM 203 3/03/98 (S) MINUTE(RLS) 3/03/98 2716 (S) JUD RPT 2DP 1NR 3/03/98 2716 (S) DP: TAYLOR, MILLER NR: PARNELL 3/03/98 2716 (S) ZERO FISCAL NOTE (GOV) 3/04/98 2735 (S) RULES TO CALENDAR 3/4/98 3/04/98 2737 (S) READ THE SECOND TIME 3/04/98 2737 (S) ADVANCED TO THIRD READING UNAN CONSENT 3/04/98 2737 (S) READ THE THIRD TIME SB 307 3/04/98 2737 (S) COSPONSOR: KELLY 3/04/98 2737 (S) PASSED Y19 N1 3/04/98 2737 (S) EFFECTIVE DATE(S) SAME AS PASSAGE 3/04/98 2737 (S) DUNCAN NOTICE OF RECONSIDERATION 3/05/98 2756 (S) RECON TAKEN UP - IN THIRD READING 3/05/98 2756 (S) RETURN TO SECOND FOR AM 1 UNAN CONSENT 3/05/98 2756 (S) AM NO 1 OFFERED BY DONLEY 3/05/98 2756 (S) AM NO 1 ADOPTED Y11 N9 3/05/98 2757 (S) AUTOMATICALLY IN THIRD READING 3/05/98 2757 (S) PASSED ON RECONSIDERATION Y15 N5 3/05/98 2757 (S) EFFECTIVE DATE(S) SAME AS PASSAGE 3/05/98 2759 (S) TRANSMITTED TO (H) 3/06/98 2533 (H) READ THE FIRST TIME - REFERRAL(S) 3/06/98 2533 (H) STATE AFFAIRS 3/19/98 (H) STA AT 8:00 AM CAPITOL 102 BILL: HB 408 SHORT TITLE: SEISMIC HAZARDS SAFETY COMMISSION SPONSOR(S): REPRESENTATIVES(S) DAVIES Jrn-Date Jrn-Page Action 2/16/98 2329 (H) READ THE FIRST TIME - REFERRAL(S) 2/16/98 2329 (H) STATE AFFAIRS, FINANCE 3/19/98 (H) STA AT 8:00 AM CAPITOL 102 WITNESS REGISTER PATRICK LOUNSBURY, Secretary to Representative James Alaska State Legislature Capitol Building, Room 102 Juneau, Alaska 99801 Telephone: (907) 465-3743 POSITION STATEMENT: Presented HB 463. JACK KREINHEDER, Senior Policy Analyst Office of Management and Budget Office of the Governor P.O. Box 110020 Juneau, Alaska 99811-0020 POSITION STATEMENT: Explained the provisions HB 463. KEITH GERKEN, Architect Division of General Services Department of Administration P.O. Box 110210 Juneau, Alaska 99811 Telephone: (907) 465-5683 POSITION STATEMENT: Answered questions on HB 463. JAMES HORNADAY, Legislative Assistant to Representative Pete Kott Alaska State Legislature Capitol Building, Room 204 Juneau, Alaska 99801 Telephone: (907) 465-6848 POSITION STATEMENT: Presented HB 468. MITCHELL GRAVO, Lobbyist Alaska Hotel Motel Association 170 Botanical Circle Anchorage, Alaska 99515 Telephone: (907) 244-2884 POSITION STATEMENT: Provided information on HB 468. PAULA HALEY, Executive Director Alaska Human Rights Commission 800 A Street, Number 204 Anchorage, Alaska 99501 Telephone: (907) 276-7474 POSITION STATEMENT: Testified in opposition to HB 468. FRANK ROSE, President Alaska Lodging Management P.O. Box 72478 Fairbanks, Alaska 99707 Telephone: (907) 474-8555 POSITION STATEMENT: Testified on HB 468. KAREN ROGINA, Executive Director Alaska Hotel and Motel Association P.O. Box 104900 Anchorage, Alaska 99510 Telephone: (907) 272-1229 POSITION STATEMENT: Testified on HB 468. BILL STOLTZE, Legislative Assistant to Senator Rick Halford Alaska State Legislature Capitol Building, Room 121 Juneau, Alaska 99801 Telephone: (907) 465-4958 POSITION STATEMENT: Testified on behalf of Senator Halford, sponsor of SB 307. JIM BALDWIN, Assistant Attorney General, Civil Division, Office of the Attorney General Department of Law P.O. Box 110300 Juneau, Alaska 99811 Telephone: (907) 465-3600 POSITION STATEMENT: Provided testimony on SB 307. REPRESENTATIVE JOHN DAVIES Alaska State Legislature Capitol Building, Room 422 Juneau, Alaska 99801 Telephone: (907) 465-4457 POSITION STATEMENT: Sponsor of HB 408. ROD COMBELLICK, Chief Engineering Geology Division of Geological and Geophysical Surveys Department of Natural Resources 794 University Avenue, Suite 200 Fairbanks, Alaska 99707 Telephone: (907) 451-5007 POSITION STATEMENT: Testified in support of HB 408. NICO BUS, Manager Administrative Services Department of Natural Services and Manager Administrative Services Department of Military and Veterans Affairs 400 Willoughby Avenue Juneau, Alaska 99801 Telephone: (907) 465-2406 POSITION STATEMENT: Testified in support of HB 408. ACTION NARRATIVE TAPE 98-38, SIDE A Number 0001 CHAIR JEANNETTE JAMES called the House State Affairs Standing Committee meeting to order at 8:02 a.m. Members present at the call to order were Representatives James, Ivan, Ryan, and Elton. Representatives Berkowitz and Hodgins arrived at 8:07 a.m. HB 463 - ESTABLISH ALASKA PUBLIC BUILDING FUND Number 0003 CHAIR JAMES announced the first order of business is HB 463, "An Act establishing the Alaska public building fund; and providing for an effective date," sponsored by the House State Affairs Committee. Number 0012 PATRICK LOUNSBURY, Secretary to Representative James, Alaska State Legislature, came before the committee. He said HB 463 is an act establishing the public building fund, it's a concept that we believe is consistent with the public's desire for more responsible accountable government. It's the idea that agencies actually pay rent for the space allocated into a special account created in the general fund. This money would then be used for maintenance and dovetails pretty nicely with the deferred maintenance priority that the majority has recognized. Whereas, the deferred maintenance task force is an effort to catch up, the Alaska public building fund lets us keep up. Number 0037 JACK KREINHEDER, Senior Policy Analyst, Office of Management and Budget (OMB), Office of the Governor, came before the committee. He asked if Keith Gerken, Department of Administration, could join him. CHAIR JAMES thanked both of them for their assistance on deferred maintenance issues. MR. KREINHEDER noted they discussed the rent concept in prior testimony on the deferred maintenance task force bill. He stated HB 463 is fairly straightforward, all it does is establish a fund, there's no direct fiscal impact, pro or con, just from establishing the fund but it is an important piece of improving maintenance and management of state facilities. As was mentioned in committee a few weeks ago, the Administration is pursuing - putting a rent structure in place for state facilities. We're looking at putting it into place for the fiscal year 2000 budget on sort of a pilot basis for a few facilities. We're still considering which facilities to include, what is doable for that first year, and so on. MR. KREINHEDER indicated it is possible to do a rent-structure without this public building fund, however, we would be kind of hamstrung without an account to put this money into because we could collect rent and pass the rent onto the Department of Transportation and Public Facilities (DOT/PF), whichever department is maintaining the buildings but we wouldn't be able to have the money carry on from year-to-year. To really deal with the long- term maintenance for state facilities, you need to be able to save some money to replace systems or do major maintenance on systems down the road rather than having to deal with (indisc. - noise) on a year-to-year basis. If this bill did not pass, for whatever reason, I think we would probably proceed with the rent but this is really a key piece of the project. Number 0109 KEITH GERKEN, Architect, Division of General Services, Department of Administration, was next to testify. He said this simply creates a mechanism to collect rent and to use, to spend it and be accountable for it. But if the committee wants to talk about how it would work or why that makes sense we could do that... CHAIR JAMES said they'll see what questions the members will have. She noted Representative Hodgins and Berkowitz are present. Number 0124 REPRESENTATIVE KIM ELTON said he would be interested in the thoughts that were behind designating the Department of Administration rather than the Department of Transportation and Public Facilities as the manger of the fund. MR. GERKEN replied this debate has gone on for a long time, OMB, DOT/PF and Administration have been working jointly for about two years on a number of facilities issues. One is where the function (indisc.) building responsibilities be, and the consensus has generally been, amongst the three entities, that DOT/PF would like to be a transportation oriented agency and that the Department of Administration is the general services provider to other services within government services to other agencies and that at least the management of the fund, if not the provision of service, should be in the Department of Administration. That's their sense at this time and DOT/PF is in agreement with that. CHAIR JAMES stated she supports having the fund managed by the Department of Administration. Number 0149 REPRESENTATIVE FRED DYSON said, "Aren't what we are doing here is making a mechanism so that the dedicated funds, kind of like program receipts that come from the rent, will no longer go into the general fund with this bill?" He asked if that was correct. MR. KREINHEDER responded this public building fund would be an account within the general fund and money would have to be appropriated from it by the legislature every year for maintenance purposes. Number 0164 CHAIR JAMES explained it is not a dedicated fund, it is a designated fund, legislation was passed last year to specifically identify it - a lot of program receipts are designated for a specific use. That does not negate the possibility that the legislature could take the money and do something else with it, the problem is that they would be politically stopped from doing that. She asked wouldn't this be another one of the sweeps that we would have to do as long as we still owe the Constitutional Budget Reserve. The issue was that as long as we owe money to the Constitutional Budget Reserve, then at the end of every fiscal year any money that's left over in any general fund account, with exception of the earnings (indisc.) of the permanent fund, get swept away to pay back into the Constitutional Budget Reserve. So every year when we do a budget, as long as we owe the money and it's probably billions or more now, that we have use out of that fund, then we have to have a three-quarter vote to undo the sweep and put them all back again. She indicated some of those funds didn't have any money in it and believes we got rid of them last year - Representative Therriault had a bill to do that. But this would be one of those funds, like the marine highway fund where the revenue goes in there and then they get to keep that for use, but we still have to appropriate it. So it's not dedicated in the extent that that's all it can be used for, it's just that that's all we're suppose to allocate it for. It's a designated fund so it doesn't need to have a constitutional amendment. The only way we can have a dedicated fund is with a constitutional amendment. Number 0204 REPRESENTATIVE DYSON reiterated the rents, lease money, and all that stuff goes into this pot - designated fund, if responsible organization doesn't spend it all at the end of the year, then we have to have a three-quarter vote to keep those funds from going to the constitutional budget reserve. CHAIR JAMES replied that's correct. REPRESENTATIVE DYSON said, "I think that falls short of what you want to accomplish. Building maintenance particularly, but all kinds of facility maintenance doesn't happen in annual cycles. And indeed on an airplane - you're maybe going to do a major two- thousand hours, so you can't spend the money, you have to do the major on the engine all at one time. And so you have to accumulate the funds - smart pilots put $10 an hour or so into a fund, so that when they get there -- you're going to do a major foundation or building repair on a building, you've got to accumulate a bunch of funds ahead of time in some kind of rational way. So I see that every year, the legislature having to do this three-quarter vote over a lot of detailed things for a lot of buildings. And I see that as a problem." Number 0233 CHAIR JAMES stated it's just a little line in this whole group that we're doing that currently. It's only one account, in a lot of them, that we're doing that currently and we will have to as we owe the Constitutional Budget Reserve. It's not the only thing we'll have to do it for. She said she looks at it as an accounting mechanism more than anything else because by segregating the money and putting it in an account, it does allow for the tallying and reviewing it more than it would if it was accounted for an account. And if you just had it in an account, it would come off the bottom line of the general funds that are left over instead of being specified what's left over for. So it's really an accounting mechanism to be able to identify those rents that are paid in this account and to be used for those purposes. UNIDENTIFIED SPEAKER said that was correct. Number 0253 REPRESENTATIVE DYSON said, "What I hope doesn't happen - and maybe you can tell me madam chair how your bill address this, is that, toward the end of the budget cycle, you all are scurrying around trying to find legitimate and semi-legitimate things to spend the money on, (indisc.) it gets swept away. And the money doesn't get used as efficiently as if it had -- we set it up so that it encourages better stewardship." MR. KREINHEDER replied, "The purpose of the fund is exactly the opposite - to be able to keep money over from year to year. This sweep is really a technicality that's, I guess I would say overridden by the legislature, and as the chair mentioned, this is one of I think dozens of such funds - marine highway funds and so on. This would be no different, there's no need to spend the money at the end of the year, the money is technically swept, but then reappropriated to the fund. So the purpose is to keep that money available for future years maintenance needs. Of course, a large part of it would be spent for current year maintenance needs but there would be no need to spend money at the end of the year." Number 0279 CHAIR JAMES said, "If we didn't do this, if we didn't have this fund, and the money is just transferred to DOT/PF to do the work, then what your fears are - might happen. Because if you didn't spend the money this year, it would be down in the total of other general funds, which doesn't have any identification or any kind of allocation. So it would just be dumped in and so, yes, there would be an indication that you maybe should spend because if the year- end goes by it will be gone. And it has to be appropriated so you can only spend up to the appropriation anyway." CHAIR JAMES stated "I think that the other thing that we miss in this whole process - because there's an appropriation process, and we appropriate for each budget, and the spending frenzy that we talk about is when there was an appropriation and you get toward the end of the year and you haven't spent all of your appropriation then you rush out and spend it because once the year goes by you've lost that appropriation then you'd have to get another one for it. In this particular case you still would have to get an appropriation for what you spend but there would be no reason to lose that ability to spend it this year or next year because the money is there, the appropriation should be (indisc.)." Number 0303 MR. GERKEN said he believes, how it would work, there would be both operating and capital appropriations from the fund. And capital appropriations, he thinks for the items that Representative Dyson was talking about - a new roof. The major items would need to be planned, specifically appropriated by the legislature from the fund, and finding a way to make that work. Although we always like flexibility, he didn't think there would be the flexibility if the Administration simply chose to make a major capital investment out of the fund because there was money there. It would need to be based on an appropriation. CHAIR JAMES stressed, "We don't have any new money here, or we may have new money here. But the whole process of charging rent has to come out of the appropriation in the general fund the agency is spending. When it comes to funding the agency budget, there will be a line in there for rent as opposed to - if they owned the building there wouldn't be. If they were leasing the building, the lease would be appropriated somewhere. If, the way we're currently doing it, there would not be a line for rent. So how that fits is a legislative appropriation process, whether there's an addition to the money that's being appropriated - from what's currently or not, but it certainly would be reallocated. There really isn't any new money because the money that you're paying the rent with is still money that we have to appropriate." Number 0329 REPRESENTATIVE ELTON asked if he understood that they will be adding another line to agency budgets, and that line would be designated for rents or leases, or would that be under an existing line (indisc.). CHAIR JAMES said she thinks it would be rent, but suggested they ask the Administration how they plan to deal with that. MR. KREINHEDER noted he would let Mr. Gerken speak to the leasing side. MR. KREINHEDER referred to the agencies in the State Office Building. Currently the full cost of operating and maintaining that building is born by the Department of Transportation. The process we would use would be similar to the data processing charge-back system that was put in place a few years ago. He stated there would be a line added to the agency budgets, Department of Natural Resources, Department of Revenue, and so on. The Department of Revenue, for example, would have a rent line in its budget, they wouldn't have to take that out of their existing programs, that money that DOT/PF is now spending on the State Office Building would be allocated among the various agency budgets and they would have that money to pay rent. Number 0348 MR. KREINHEDER said, "Down the road, rental rates would be adjusted. Frankly there is a little bit of concern I think in the departments with this approach because, clearly if we're not spending enough to maintain the buildings today - there's no silver bullet or magic answer here. If we need to spend more there will be some pressure to increase rents. Our answer is basically that this would be a gradual process over time." MR. KREINHEDER referred to Chair James statements on no new money. He indicated she was referring to something slightly different. He said, "The one advantage that we are looking at with the rent, that improved maintenance or new money that we could use to improve maintenance, without raising rents or increasing the amount, is that a rental rate structure would allow you to capture some additional federal funds for example and non-G.F. sources. For example, [the Division of ] Retirement and Benefits currently is paying nothing for their space, but they're providing retirement services for all the communities around the state and so on, and we feel it is appropriate that that cost for that space be paid for by the retirement system." Number 0370 CHAIR JAMES stated what she meant by no new money, was that it's a different way of budgeting. The money that would be allocated to DOT/PF to do this would be put in other places. Chair James remarked she doesn't necessarily agree, that if we haven't been keeping up our buildings, and if it's assumed that that's because they haven't had the money. If that's true, then we're going to start keeping them up. Certainly we're going to have to have some money to do that. She indicated that's the whole appropriation issue, that's not what we're dealing with here, so it's quite likely that there will be an additional appropriation for that. CHAIR JAMES mentioned some offices in comparison to others are plush. She believes, if they're paying by the square foot, they will not take any more space than they need. When they argue for their budget they might say, "Well, we could have less space (indisc.) and so therefore, we don't have to pay so much in rent, so we can have it for programs, and so forth." Chair James said she thinks there is an incentive there by letting people know how much their space costs are in their calculations of their programs and so forth, and there will be an added benefit from that process. Number 0393 REPRESENTATIVE DYSON made a motion to move HB 463 with individual recommendations and attached zero fiscal notes. Hearing no objections, HB 463 moved from the House State Affairs Standing Committee. HB 468 - DAMAGE AWARDS HUMAN RIGHTS COMMISSION Number 409 CHAIR JAMES announced the next order of business is HB 468, "An Act relating to damages awarded in complaints before the State Commission for Human Rights," sponsored by the House Rules Committee. Number 0411 JAMES HORNADAY, Legislative Assistant to Representative Pete Kott, Alaska State Legislature, came before the committee to present HB 468. He said you should have before you HB 468, a sponsor statement, a fiscal note and a letter from Paula Haley, the director for the State Commission for Human Rights. Mr. Hornaday read the following statement: "House Bill 468 amends AS 18.80.130(1) to the effect that if the decision of the State Commission for Human Rights is delayed more than 90 days after the complaint was filed, the commission may not award back pay for wages that the complainant would have earned after the 90th day after the complaint was filed. "The State Commission for Human Rights investigates claims of discrimination by employers, including cases alleging wrongful discharge due to alleged discrimination. Some 5,000 calls are received each year, with nine investigators and two supervisors doing investigative work. Two hundred seventy-five cases are presently on hold. "We are advised that there is a major problem with delay. Sometimes cases take over two years to come to a determination. If the findings show probable cause, a reconciliation agreement is presented to the employer which includes payment of back wages for the entire time period the matter was under consideration. The potential monetary impact can be staggering. Further, the claim is still subject to review by other jurisdictions (local human rights commissions, Equal Employment Opportunity Commission and so forth). "This legislation provides incentive to the employee to find other employment as well as encouragement to the commission to expedite the process. We are advised that some 62 percent of cases do not have substantial evidence to proceed. Quick and speedy decisions are in the best interest of both the employee and employer." Number 0439 REPRESENTATIVE ETHAN BERKOWITZ asked does he get to ask questions of somebody now. CHAIR JAMES replied let's hear from Mitch Gravo first. Number 0432 MITCHELL GRAVO, Lobbyist, Alaska Hotel Motel Association, came before the committee to provide information on HB 468. He noted the Alaska Hotel Motel Association asked to have this bill brought forward. He indicated some members are on teleconference and could probably speak better to specific examples. MR. GRAVO said the bill really tries to balance the interest of three different parties, the commission which has to resolve these issues, the complainant which brings the complaint before the commission, and then the defendant or the employer that has to wait for a decision by the commission. Mr. Gravo stated the association thought a 90-day window is a reasonable time to reach or not reach a decision and that if a decision isn't reached within 90 days, the employer shouldn't be further penalized. The employee would get back-wages for 90 days and it would be an inducement on the commission's part to take action. He deferred to the folks on teleconference that actually have been through this process for a year-and-a-half or two years. Number 0460 REPRESENTATIVE BERKOWITZ asked, in this provision, what happens if the defendant causes the delay. MR. GRAVO replied he didn't know how a defendant can cause a delay. REPRESENTATIVE BERKOWITZ said for example you'll drag while the investigation is going on, attempt to continue dates. He noted that there are all kinds of ways. MR. GRAVO said he thinks that would probably need to be addressed, the examples that were brought to his attention were not as a result of the defendant causing the delay. He added that he thinks that's a good point and would need to be addressed. Number 0471 REPRESENTATIVE BERKOWITZ mentioned that he fundamentally has a concern with this in terms of the equities for the situation. In an instance where a plaintiff has a legitimate complaint, the plaintiff bears the burden of the inefficiencies of the system. That doesn't seem like the most equitable resolution if we're trying to generate an incentive so the Human Rights Commission can go through its case load faster, he is not sure how Mr. Gravo can explain to him philosophically why a deserving plaintiff bears the burden for the failings of the system. MR. GRAVO said he thinks he'll have to address that to the Human Rights Commission because they're not making the decision in a timely manner. REPRESENTATIVE BERKOWITZ acknowledged that he understands that but the proposition sets a time limit. He asked how the time limit is fair to a deserving plaintiff. Number 0484 REPRESENTATIVE JAMES agreed that dragging it out isn't to the benefit of the plaintiff. She mentioned she has known people on both sides of this issue and has also known people who have had a valid claim. Chair James indicated the trauma that they've had to go through for a long period, of not knowing whether they're on, is terrible. So she thinks speeding up the process that certainly everyone wins. She said, "The other thing is, is there's a cause and effect. That having been doing my life work ... as a small business accounting and tax preparation, payroll, all of those issues, it seems to me like that, if we could speed up the process, there would be less resistance from employers to have a better ability to understand what's right and what's wrong." REPRESENTATIVE JAMES said she doesn't believe that these employers ever do anything purposely, but sometimes they are trapped because they've done something they thought was okay and it turns out it wasn't. If they could get those decisions quicker that would help them - many times they have another one pending before that one is settled because they don't know what they're doing, and they think they're doing it right but they're not. So speeding up the process will have a cause and effect to having fewer people be unfairly discharged. REPRESENTATIVE BERKOWITZ said, "I agree completely I just don't care to (indisc. - laughter). Madam Chairman, I'm just not sure this is the best mechanism." Number 0506 REPRESENTATIVE ELTON said he believes they are kind of getting to the nub of it and it seems to him that there are two ways of resolving the situation on speeding things up. And one of the ways is this way, which is a way that punishes a person who has made a complaint that may be a legitimate complaint. REPRESENTATIVE ELTON stipulated the other way is to put the resources that Human Rights Commission needs in place. He expressed that anybody who has dealt with the Human Rights Commission - we're not questioning its mission, but anybody's that's dealt with the Human Rights Commission knows that they don't have the resources to do it. The delay isn't because of the Human Rights Commission dragging their feet, and in many cases he said he doesn't believe the delay is because somebody in industry, or that owns a small business, is dragging their feet. REPRESENTATIVE ELTON indicated the delay is because they have many more complaints then they have the staff to deal with it. He called attention to the fiscal note, he said he believes it dramatically demonstrates the resources that they need. What bothers him is that we're going to try to fix the situation in which somebody that makes a complaint is going to be ultimately the person that suffers the most, rather than put the resources in place that they need to work in a timely manner. Representative Elton pointed out that this isn't the only place that those resources are short. For example the Office of the Ombudsman, sometimes it takes well over a year to get something through the system. They're burdened with the same kinds of procedural things that the Human Rights Commission does. He said you have to give probably 30 days for a person to respond to a request for information, we don't want to put the kind of burden on a small business in which they're told they have to respond in five days, that just doesn't work. What bothers him about this approach, is this is the punitive approach. He said he would be willing to guess, if this bill makes it through the system, this fiscal note won't be attached to it when it comes out the other end. And this is what we need to solve the situation. CHAIR JAMES added that because there are no deadlines now, she doesn't believe there is an incentive to get things done. She noted she's not questioning whether the 90 days is a good number or not, she's suggesting there needs to be some kind of closure in some length of time. Chair James said, "Given, we would pass something like this, the Human Rights Commission, or whoever it is, whoever was asking for a budget for them, would certainly have better numbers to deal with, to request that then they do currently. In fact is, there's probably no willingness to give them any more money now because there's nothing driving it, and we need to have a driver on here that would make them do that." Number 0548 REPRESENTATIVE MARK HODGINS said he believes it's imperative that we put a closure on this and put a time limit on it for the plaintiff. He implied you can have things that are drug-out for years for the plaintiff and that their life is topsy-turvy. He said they need to understand that they're going to have a certain amount of time, and then there is going to be a resolution. REPRESENTATIVE HODGINS referred to the fiscal note. He said, "Unless the Human Rights Commission is falling further, and further, and further behind, they don't need 55 people. If they're right now at a year-and-a-half, is there time for closure, and they're constant with that, then somehow or another they've screwed up in not getting the process going. If they are indeed falling behind every day, to where it's now a year-and-a-half, next month it's two years, and then further than that, then they do need more people. But the fact is, is if they are sitting at a constant delay, then they don't need more people, they need to clean up their act. And I want to be very specific in talking with somebody during the course of this bill that can answer some of those questions for me to find out what the delay actually is and how constant it is." Number 0564 REPRESENTATIVE DYSON suggested they go slower and be more careful because he is a little bit outraged with some the comments that have been made. He informed the committee that he has served on the Human Rights Commission for two-and-a-half years. He said, "Their [Human Rights Commission's] caseload has gone up (indisc.) of magnitude in the last seven or eight years and until recently, got no more resources. The Human Rights Commission itself, the commissioners continually push the staff to get the cases closed. And I believe we're the second state in the nation to do the radical thing that has a downside, is to do triage and not investigate every case. And certainly some of the cases are frivolous, some of them are spiteful, some of them are misapplied and ignorant, and so on. But the very serious decision that folks who file a discrimination complaint, that some of them weren't going to be done. And for the first time in seven or eight years they're actually making progress on reducing the backlog. And in the two-and-a-half years I served there, I didn't see mismanagement, people goofing off you know, I saw folks absolutely overwhelmed with the workload and trying to make it work." REPRESENTATIVE DYSON continued. He said "I also saw the tragedies on both ends. The small business who had a disgruntled employee who filed a complaint that then put the business owner in the grips of a monster that was going to have a hold of him and jerking him around, for whatever it took to get through the process. And I saw the ones where people were really badly treated, and it takes a long time to sort them out. And you look at the extremes and you see real problems with doing it, you know, with how the system works. So there is (indisc.), people, the commissioners really pushing to get things resolved as quickly as possible. Steps have been made and I think to just keep saying you've got to do better without providing a means to do so, there's got to be real limits to that. So I don't think..." Number 0601 CHAIR JAMES stated Representative Dyson made a really good point, and it's one of the same points she has made on every single budget for the state and disagrees with just cutting the bottom line of the budget. Chair James said, "But what I do agree that ought to be done is take a look, and what are we doing we shouldn't be doing." She indicated there are quicker and more efficient ways of doing things. And just because it's taking this long, it doesn't mean that there aren't ways to simplify it. She noted, as a commissioner, that wasn't Representative Dyson's chore, that would be the staff. CHAIR JAMES said one of the things we get ourselves into is, "we've always done it this way." An example is the Ombudsman's Office. And that's what she's [the ombudsman] has set up now - with greatly reduced funds, she has set up this triage, where they have this sieving process. The ombudsman said some 5,000 calls are received each year with nine investigators. Chair James said it's the same thing we put the Board of Fisheries and the Board of Game through, they have to review every single suggestion that comes to them. And there has to be a sieving process because we can't afford as a state to pay for all these things, we have to have a sorting system. CHAIR JAMES indicated she is not really comfortable with the 90 days, but will wait and hear what the testimony is. She said, "But I think we need a number. And I think then we also need to ask them to figure out how they can do it faster by sorting and taking those who are suspicious of being false claims and get rid of them quickly instead of maybe putting them off longer. ... I have done efficiency work in offices and I have been amazed when you get through and there's two less people in the office because there's so many things you don't need to do. I think it's really important that we look at that." Number 0624 REPRESENTATIVE BERKOWITZ said first of all we're proceeding on the assumption that they're not screening that way. He said he thinks it would be fair to hear from the Human Rights Commission to see what their screening process is. Because if it turns out that they are indeed screening, then they're working at what we would consider a fully efficient mode, then this criticism is a little premature. REPRESENTATIVE BERKOWITZ said the second point he wants to make is the alternative to taking causes of action in front of the Human Rights Commission is to take it to court. He said, "You want to talk about delays, I can assure you that the court delays will be extreme and the cost will be much higher. And that's particularly so if you take a civil rights action to (indisc. - coughing) court and win a judgement there. So this is a pretty cost-effective alternative at this point." CHAIR JAMES announced she would like to hear from the people on teleconference before they went any further. MR. GRAVO indicated he has one closing comment. He said, "What I'm hearing is that if you put a number in the bill it will force a very focused discussion of the budget issue at the next committee. This will have a fiscal note now, so it will have to go to House Finance and there will be a real thorough discussion of all of the equities including the budget issue and I'm sure you'll hear about that from the commissioner. But if this bill does anything, it will do that." CHAIR JAMES thanked Mr. Gravo for reminding us again that it's the responsibility of the State Affairs Committee to sort out pieces of legislation that have either a good effect or bad effect on the affairs of the state. She concluded this is the proper place to hear this first and it does go to finance who will deal with the fiscal note of it. Chair James indicated she is not real convinced that 90 days is effective, and we might want to change that because we do have some responsibility in that area. Number 0649 PAULA HALEY, Executive Director, Alaska Human Rights Commission, spoke in opposition to HB 468 via teleconference. She mentioned one of their volunteer commissioners, Chairperson Martha Gore, is also present. Ms. Haley indicated her testimony will perhaps help answer some of the questions that have already been posed. MS. HALEY noted the Human Rights Commission fully understands the frustration to parties created by current backlog and the resulting delays in investigation. Their case load has nearly tripled in the past 15 years and they've seen their inventory rise even when they have completed more cases each year than the year before. To more promptly resolve complaints of discrimination, the agency has revised procedures, amended its regulations to reduce the time for filing complaints, and with our help amended its statute last year to allow for cost savings. In addition, resources provided to the commission, with the support of the governor and legislature last year, allowed the agency to reduce its backlog by 24 percent. MS. HALEY said, "While the commission appreciates that employers want prompt resolution of complaints, it believes that HB 468 is unnecessary. But more importantly, this bill will likely have the opposite affect and increase costs and workloads for employers and I'd like to tell you why. First of all, the commission is not aware of any instance where delay in processing a claim has resulted in an increase in the amount of damages. This is because employment discrimination law does not allow for unlimited damages to accrue while the clock is ticking. The law requires every person with a pending complaint must find alternative or try to find alternative employment, or other means of income to offset the potential damages. This legal principal can be seen in the amount of back-pay awards that are arrived at through the decisions or settlements of employment cases before the agency." Number 0690 MS. HALEY pointed out that over the last ten years the average amount of back pay provided by private employers, in cases where the commission found substantial evidence of discrimination, is $4,713. She said the commission is aware of the particular concerns expressed by some employers who would like a 90-day prejudgement cap on back-pay awards. Notably, in none of those examples raised by the employers were damages increased because of the time it took to process a complaint. In fact, in only one of those cases was any back-pay provided. In that case, a 61-year-old Alaska Native woman brought an age and race discrimination complaint against the former managers of Chena Hot Springs Resort, the staff found substantial evidence of discrimination. In this instance, the fired employee secured another higher paying job three weeks after she was terminated. Chena Hot Springs Resort paid only $2,400 in back-pay in a pre-hearing settlement. MS. HALEY stated, "While the commission does not see the need for a 90-day prejudgement cap, it does see disadvantages. This bill may expose employers to double-jeopardy and more serious consequences than they now face. The Equal Employment Opportunity Commission, our federal counterpart, has reviewed HB 468 stating that a 90-day damage cap is not compatible with federal law. If this bill passes, EEOC will have to pursue additional remedies available to it in every case where we find substantial evidence of discrimination. These remedies, of the federal agency include full back pay as well as compensatory and punitive damages. So where now, when cases are brought to the Alaska Human Rights Commission, employers may be only liable for back-pay. In the future, if the bill passes, they could be subjected to compensatory and punitive damages in amounts far greater than our average back-pay award of $4,713." MS. HALEY said, additionally, the bill could subject employers to the added burdens of duel investigation. Presently under a contract with the federal agency, the commission investigates the vast majority of discrimination complaints filed by Alaskans. Because the 90-day cap is not compatible with federal law, EEOC may terminate our contract. In that case, employers would have to face separate investigations by both agencies. Also, when people learn that damages have been capped at 90 days, they may choose to go to court, federal or state, where damages could be greatly increased. MS. HALEY explained, "We at the commission strive to make our procedures as informal as possible, and employers can now respond to charges of discrimination without hiring lawyers, and many many do. However, if they must defend complaints in courts of law, employers will logically feel compelled to secure a legal representation." Number 0703 MS. HALEY said, "Finally, I think you may have the fiscal note, we just sent it down yesterday. To me the legislative mandate and to safeguard the rights of Alaskans with claim of discrimination, if this bill passes we would seek to process all our cases within 90 days. Accomplishing this within 90 days will require an enormous increase to the agency's budget. In the first year we would need to eliminate our backlog in order to process the new cases coming in within the time frame. This would require almost five times our current budget and then once we got rid of the backlog and could face just the new cases coming in we would still need a total of approximately 24 additional staffs to process in the time contemplated by this particular piece of legislation." MS. HALEY stated, for these reasons, the commissioners and I ask that you not support HB 468. Number 0714 REPRESENTATIVE BERKOWITZ asked approximately what percentage of your cases are employment discriminations. MS. HALEY replied the vast majority of their cases are employment discrimination, but did not have a percentage number. She said, "But I would tell you that most of our Alaskans do view the Human Rights Commission as the agency to assist in that area. Out of 471 [cases, 415 were employment discrimination]..." TAPE 98-38, SIDE B Number 0001 MS. HALEY continued. "...investigator because of the rise in filings. At the same time we had a reduction in staff. We went from 26 staffs to 15 - at that same time our complaint load tripled." She said they ended up putting cases on hold and they stay on hold anywhere from nine months to a year. That's the big problem. Once they get to an investigator, depending on the nature of the case, they could be completed in two months, nine months or a year - if there's very complicated facts and many many witnesses, and volumes of evidence, so it varies. Ms. Haley reported the national average for processing cases is over 440 days, that's national - all of our civil rights enforcement agencies in the country. Number 0017 REPRESENTATIVE BERKOWITZ asked what is the screening process. MS. HALEY replied, "Well you might get the sense from the numbers alone. If we get 5,000 calls a year, and that's 5,000 people who have problems, they think we can help them with, we accept anywhere between 400 and 500 complaints. So many of those people, first of all are clearly in the wrong place, we try to hook them up with the right people. But some of them we, by virtue of explaining what the obligation is under the statute, are dissuaded from filing because of our process of education, that they may not have enough to make a claim, they may not be within the jurisdiction of the agency, etcetera. So many of our callers never become complainants." CHAIR JAMES asked how many, of the ones that you do, are brought to successful conclusion and how many are denied. MS. HALEY responded, "Well, in last year's statistics, and they're probably a little bit off, and I can explain to you why from prior years, but in last years statistics 62 percent we found no substantial evidence of discrimination, so around 60 percent of the cases we found that there was not enough evidence to go forward to a hearing. Now I would say, Madam Chairman and committee members, that may in fact be a problem in the employment situation, but it was not discriminatory. There may have been some unfairness, some miscommunication, some misunderstanding, but it was not discrimination. So there may have been good reason for the employee to bring the complaint, but once we listened to both sides and talked to witnesses and gathered evidence we found that indeed the promoted individual was more qualified or other people were also penalized for certain transgressions in the workplace." Number 0061 CHAIR JAMES asked you don't do this until you actually find them, so if they're down on the list somewhere, or up on the list, you spend time on them as they come in, is that how that works. MS. HALEY replied because of the delays, the Human Rights Commission tries to resolve them in reverse chronological order, with some exceptions. If they see a complaint that was jurisdictional, but they believed there is really not good reason, they had to take it because it's jurisdictional, they will assign that sooner. She said they have some individuals who may have disabilities where they're very ill. We may assign them sooner. But for the most part, they do handle them in reverse chronological order. The problem they have, is they can't preinvestigate, but they do try to get as much information up-front so that if a case looks like it is probably not going anywhere a supervisor might be able to handle it out of order in its backlog holding area. Number 0081 CHAIR JAMES said if 60 percent of them turn out to be nondiscriminatory and they stayed in the process, and were handled in the reverse chronological order, it's very likely if there was a way to sort them out that the process for the valid cases would go quicker. MS. HALEY said she could appreciate that point of view. She said she believes, that what is sometimes problematic, is that even in some of these cases where there's no substantial evidence of discrimination, it took a lot of information hunting and witness testimony and reviewing of records to determine that that indeed was the case. Not all of the no-substantial evidence cases are necessarily quick cases. CHAIR JAMES indicated she can understand that too, because she understands that process. Number 0099 REPRESENTATIVE HODGINS referred to Ms. Haley's comments on the length of backlog. He reiterated that they hold things for nine months to a year, the national average is 440 days, and asked do you think you're getting close to the national average. MS. HALEY replied, "We may be hitting close, or a little bit over the national average. I have to say that we have seen a huge increase in our complaints at the same time we saw a decrease in staff. And what happens nationally, is most of the agencies saw a huge increase without the decrease in staff. And I can tell you a lot of that was the result of the Americans With Disabilities Act and awareness in the area of that particular issue." REPRESENTATIVE HODGINS said well, working those numbers, it looks like maybe 90 days would be fairly close, 90 days to 120 days would probably fit in your process if you didn't have the backlog. He said, "And I say that because if you hold something for nine months to a year, and the national average is 440 days, and you're actually doing that, or did I misunderstand, and after the year, then it's 440 days for you." MS. HALEY replied that he did not misunderstand, what she is not understanding, in terms of his question, is that he thought the 90 or 120 days would work. She said, "Our cases aren't even assigned for close to a year. And what I must say so I don't mislead the committee members is the average of 440 days that I had given you, which is from the EEOC database, is for cases to be completed through investigation, it doesn't include the hearing process which I think this bill contemplates." REPRESENTATIVE HODGINS asked how much time does the hearing process take. Number 0138 MS. HALEY replied they currently have a little bit over 40 cases in their hearing unit and they're developing, unfortunately, a backlog in that unit as well. The Human Rights Commission has right now, cases scheduled in 1999 to go to hearing. Now, that scheduling is not always simply because the commission can't get the cases to hearing, the respondents sometimes can't get to hearing as quickly as they might like because of their schedule, or the schedules of their attorneys if they choose to hire one. So many times the delays of the hearing's stage are due to the scheduling problems of all the parties not simply the commission's workload. REPRESENTATIVE HODGINS asked if you did not have the backlog, would you have to hold the cases nine months to a year before you assigned them. MS. HALEY replied no, in fact the Human Rights Commission's backlog is a new problem. She indicated, when she first came to the agency 10 years-ago, her mission was to resolve cases more quickly and she accomplished that. But that was a short-lived victory because cases went up so quickly in the "90s." Ms. Haley said they actually got most of their cases, the vast majority of them, to complete resolution within approximately a year. But that was at a time when they had only 260 filings per year and the filings were driven up by increase in population, greater awareness, and other things. And as a result, with their staff static and down from 26 to 15, they just lost the ability to keep up. REPRESENTATIVE HODGINS asked if they had no backlog, and somebody brought in a case today, you're saying that it's going to be 440 days on average before it's resolved. MS. HALEY said, "If you were talking about getting the case all the way through hearing, I think that it might be a reasonable assumption. I think that most of the cases - I dont' know of any fair employment practice agencies across the country that are state agencies with the kind of inventory we have that are doing things faster than a year, I can say that." REPRESENTATIVE HODGINS asked so you think 440 days is a valid amount for somebody that comes in and puts in a case today, 440 days from today it should be resolved, is that correct. Number 0182 MS. HALEY responded, "Well, it's hard for me to say, I think everything in a perfect world would be resolved in a year or less. That's what I truly believe - if you had the adequate resources." REPRESENTATIVE HODGINS said it looks like they kick out about 90 percent of potential plaintiffs in their screening. He asked how much time do you spend in the screening to kick out 90 percent versus the hearing situations and preparing cases, is that a big portion of your time. MS. HALEY replied it can take a fair amount of time to screen because usually the people who call their agency are not sophisticated, they understand that they experienced something that they believe is bad, and the commission has to try to ferret out, whether the bad thing meets the four corners of our statute. She said they try to get all those calls through in 15 to 20 minutes - maximum time spent on the call, some of them, of course, are much shorter, but it does take a fair amount of time. If an investigator is assigned to what they call "inquiry week," it basically takes all of his or her time during that week, just given the volume of calls, it's better than 100 calls a week. REPRESENTATIVE HODGINS noted the commission can actually screen somebody in 15 minutes and then they probably would have different levels that they would kick them into different interview situations if they fall within certain parameters of a screener's judgement. Number 0211 MS. HALEY said, "Let me give you a thumbnail sketch. If the person has basically articulated a claim under AS 18.80, we actually send them, or they can walk in and get it if they're in the Anchorage area, a questionnaire. And we put, at that point, the burden on them to write down what their claim is and why they feel it's appropriate before the agency. And we added that step because we found, when the potential complainant had no involvement early on, some times they would just have us do the drafting of a complaint and then they would vanish. So this puts a little bit of a burden on the complainant or potential complainant, up-front. Once that comes in, we turn that with their assistance usually in a telephonic interview into a draft complaint which is what the statute contemplates, we draft the complaint. We make it clear to them we're not their advocates, nor do we represent the potential respondent's interests. And if we didn't have the backlog that complaint would be immediately assigned for investigation. Because we have the backlog that complaint now goes into a hold bin." REPRESENTATIVE HODGINS asked Ms. Haley if she was experiencing a longer and longer delay in the resolution of these cases on an average. Number 0232 MS. HALEY replied yes, the commission had more and more time, but because of the assistance from the legislature last year with additional resources they're seeing that trend turn. She indicated it's turning more slowly than they would like it, but they did a number of things in the past two years, they changed their regulation to reduce the time for filing, they streamlined their internal procedures, they amended the statute to save them money at the hearing level - and they could use that money toward other things. They also were able to get two additional investigators. Last year, if the committee looked at them, they only had seven investigators and two supervisors. REPRESENTATIVE HODGINS asked, what you're saying then is that with seven additional people, you've actually turned the tide on the backlog, where you don't have quite as long a backlog now. MS. HALEY replied yes. The Human Rights Commission has reduced its backlog by 24 percent. They have seen in nine months the positive impact of additional resources and their backlog is closer to a nine-months backlog than a year-long backlog. REPRESENTATIVE HODGINS referred to the fiscal note. He said, "You initially say 55 positions would be added to the agency to clear its backlog of cases. Then I assume you would be looking at seven or less for continuing employment to keep those down, is that correct." Number 0258 MS. HALEY replied, "Representative Hodgins, that's not correct because I was doing the fiscal note based on the bill itself which doesn't simply say we have to process promptly, but we have to process in 90 days. And to do it in 90 days - which means an investigation, a conciliation where we try to settle if we found that there was in fact substantial evidence of discrimination, discovery, setting a hearing, holding a hearing, having a decision, in 90 days would be incredibly labor intensive. And that's why you see for the long term 24 additional staff." REPRESENTATIVE HODGINS asked if she would assume then that maybe a figure like 100 days or 120 days would be more appropriate. MS. HALEY said she thinks there would be very little difference to the fiscal note if it was 90 versus 100 or 120 days. REPRESENTATIVE HODGINS asked if there was a discrimination season where you have more people during certain times of the year that come in with more complaints such as in the fall when there might be layoffs after summer. Number 0276 MS. HALEY replied no, the commission actually hasn't seen a season, but if you note for example, new companies coming into town, they will see more complaints then for failure to hire. If you note that a large company does a major layoff, they will see more complaints at that time. So, if you see something in the news, that reflects some major employment activity, they will usually see the impact of that. But they don't see it, for example at the end of seasonal employment. REPRESENTATIVE HODGINS asked what changes would she recommend to the Human Rights Commission if you have to sit on a 90-day -- if this bill goes through the way it does. What would be the massive changes you'd have to make to comply with this. MS. HALEY said, "I think that if I had to tell the current staff that we were going to process within 90 days, we would need to - basically a five times the staff in a short term, and three times the staff in the long term. I don't know how we could simply tweak the process (indisc. - teleconference interference) and make small changes to the statute and accomplish that end." Number 0301 CHAIR JAMES asked Ms. Haley if she had any calculations, or averages of the time it takes to settle a claim from the time that you start the investigation. She said it seems like the commission does a little bit of process, and then you put them on a list. From the time that they're picked up off the list and to conclusion, do you have any average time limit - that length of time that takes. MS. HALEY stated she doesn't have an average, she could certainly provide it to the committee members from the day it's assigned. One of the reasons she doesn't carry that figure around in her head is that it is so varied, depending on the case, as she said some of them may be a couple of months. She said, "We had one instance where a case went on for better than two years in investigation because the respondent would not provide the documentation and would not respond to our lawful subpoena, and that kind of delay occurs with some regularity." CHAIR JAMES announced we've talked about that issue too, if we do anything with this bill, we probably need to address that. Number 0318 REPRESENTATIVE ELTON said if you have a caseload in the neighborhood of 500, but you get 5,000 calls, you're taking like one in ten cases. He indicated he was curious, if you have any sense on how many people don't pursue a claim with the commission simply because of the time line, simply because it's nine months before you even assign a case and then it takes longer after that. He asked is that a threshold that some people just don't want to bother with. MS. HALEY said she thinks that the commission believes anecdotally that some people in fact are choosing not to file with them now due to the delay. She indicated they don't have a significantly staggering statistical trend to say that in fact is true. But if the State Affairs Committee looked at their annual report we would see that their filings are in slight decline now, and it's too early for that decline to be due to their regulatory change to 180 days. Ms. Haley said, "So our guess is, that's given the population of Alaska's continuing to rise, and that we don't believe as much as we'd like that discrimination or employment concerns have gone away, that we're probably seeing that impact because neither side wants to wait. The commission staff doesn't want to delay it. It makes it harder to do our job." Number 0339 REPRESENTATIVE ELTON asked Ms. Haley how much time do you or members of your staff spend in training with employers so that it's not just an agency that is resolving conflicts, but is an agency that also tries to prevent conflicts. MS. HALEY said, "I think that that's an area that we see as we deal with sort of the emergency room of many many more complaints than in the past that does slip away from us. I'm the primary trainer, and as division director, I don't have the time to be away from the shop as often as people request my presence. I must say though that when we go out and educational seminars, I think they're really positive and people do learn what their rights and responsibilities are. But I also have to tell you that we generally see complaint filings go up if I've been in a community and I've been talking to people about their rights and responsibilities. While I am training managers and supervisors about the right thing, I'm also making employees aware of rights they might not have been aware of up until that point and we tend to see complaint filings go up in that area." Number 0361 REPRESENTATIVE DYSON said, "Paula, Representative Hodgins was kind of relentlessly I think pursuing a line of logic that I think kind of paints you into a trap, logically, and I think you kind of spoke to me about this a little bit on the phone. But indeed if, with your present whatever it is seven or nine investigators, you're gaining on the backlog, I don't think that you have made it clearer why you would need 24 investigators if the backlog was eliminated. I want to give you an opportunity to make that apparent discrepancy a little clearer or be more logical." MS. HALEY stressed the reason that there would be a difference is that this doesn't - were currently in a statute that says resolve promptly and we recognize we're not doing that. This bill says resolve from start to finish, from complaints to decision in 90 days. In order to do that, the commission couldn't simply look at how long it would take them to get rid of the backlog, they had to look at how many cases an investigator could handle, if an investigator had to investigate the case. The commission figured it would have to be done in 45 days maximum, or 40 days because, if they find substantial evidence of discrimination, it then has to go to the hearing unit, it has to be set for hearing, there has to be an opportunity for discovery, and aside from the due process concerns they would have employers that might not want to have to respond to their queries in five days or ten days. But aside from that, the Human Rights Commission figured they would have to dramatically reduce the caseload of their current staff so they could be on that particular case and moving it all of the time. That's why you see more staff attached to this particular bill. REPRESENTATIVE DYSON said he believes Ms. Haley is still not addressing the "logic problem." We, who are not involved in your work, perhaps ignorantly think that each investigative case is going to take the same amount of time to do the investigation, process the paper, appear at the hearings and so on regardless of what the time frame is. A case is going to take a certain amount of man-hours regardless of the deadlines on it. He indicated, from his perspective, that he has not yet heard her explain why. It must be that the number of hours each case would take would dramatically expand - if with the time deadline. He asked if he was making himself clear. Number 0400 MS. HALEY said she thinks she understands, but if she doesn't provide the information that clarifies it please ask again. She emphasized the difference is, under the Human Rights Commission's current system, they ask employers for information at the front end and they may or may not give it, it's permissive. Then as they go along and focus in on complainant witnesses, they also obtain information, they talk to respondent witnesses, they may put out a request for information and that would be a 30-day turnaround. Those procedures, as they know them, would have to go out the window. Because with 90 days you can't give people 30 days to reply, then review it, and maybe you have to ask them something else, and give them another ten days. You wouldn't have that, you would have to be on the phone to them all of the time, you would have to be following them, explaining why you need it quickly. You wouldn't be able to wait a week to call the second witness and work on another case, you'd have to call the second witness the next day or the next hour. So that would be the difference. MS. HALEY pointed out each investigator now has 40 cases, in fact they're closer to 50, and that drops back because they can't manage more than 50. If you had to process 40 cases in 90 days you just couldn't do it. You couldn't move 40 cases in 90 days. Ms. Haley said, "So they would probably be only carrying a handful of cases, definitely less than 10. I think it would probably be like 3 or 4, or 5 - in order to move those 4 or 5 cases in 90 days. Otherwise we would in effect continue with the concept of a damage cap and complainants - if we took too long would suffer had there been discrimination." Number 0432 REPRESENTATIVE DYSON said, "What I just heard you say was that because of the tighter time-frame, you'd have to be bugging people more often to get the information going. And are you saying then it's going to take three times as much staff because of the increased intensity of the bugging or nagging the folks to get their paperwork in." MS. HALEY replied in part she is saying that. She further explained, if you have a 90-day time-frame, you basically have to have that case with you at all times. You can't put the case down, you have to be moving it all the time, you can't put it aside and address something else, you can't put it aside and draft up a determination in another case. You have to work it, you just don't get a chance to exhale, you have to work them constantly. REPRESENTATIVE DYSON affirmed the commission loses a great deal of efficiency because they can't fill out their work day with other work because they have to stay right on top of it in order to meet the time frames. Number 0450 CHAIR JAMES said, "One of the things that - just kind of building on a question that I asked you, it isn't necessarily how much - you indicated didn't have any kind of an average length of time from the day that they're assigned. But it seems to me like, that what I've been hearing you testify now about the procedure that you have to go through the witness issue, all of those kinds of things, I could visualize what it is that you're doing. And it seems unreasonable to me that you wouldn't be able to provide, and maybe you said you would, an average." Chair James asked Ms. Haley what's the shortest time as an example that she's ever been able to solve a problem, what's the longest time, or what is the average time that it takes? She said, "Because it seems to me like, to be able to satisfy the requirement that is being requested here that whether we pass this bill or not there needs to be an answer when there's a public out there that is being damaged in some way, shape or form. And so we need to have those kinds of numbers to know what's reasonable." She indicated she hasn't heard that yet because of the backlog and because of the extra amount of cases that people are working on together. CHAIR JAMES referred to her private accounting business as an example. She said, "And I know myself, from my work, is that if I'm working on one account, and I don't do anything else but that account, I can get it done in a fairly short time because to continue to keep my mind on the account makes me more efficient. Every time I lay that account down and go to something else, when I come back to that one I have to refresh my mind all over again and I have to figure out now let's see, where did I leave off, and what did I do and where am I. And so, I know that there's a greater efficiency from taking something from the start to the finish. And I'm not advocating this, that's the way you need to do things, because I know that there are times when you can't get people on the phone and you can't get the information, and you're waiting for something, you need to go to something else. But, it seems to me like you could give us some numbers like what is a reasonable time to expect that once a claim is filed and it goes to be assigned, what is a normal length of time to anticipate to getting a response." Number 0483 MS. HALEY said she would be happy to provide the committee with their average, she can give it both from beginning to end and will also calculate it from assignment to end. She stated, "I will also though say with the caveat that the average time has gone up enormously because of the increase in the workload. But I think you are right, in fact we talk to the investigators all the time about this as a training tool. If you put a case down, for a very long time, and you go back to it, you do have to refresh your memory. So there is some value in a lower caseload per investigator and we recognize that and would like to work to that end. And so we have that in mind, but if you look at the 90 days, I think Madam Chairman, you mentioned something else that's key, if I'm asking someone to provide me with comparative personnel files, I don't think it's going to be fair to ask that 'mom and pop' employer to do that in 5 days. And these constraints would require me to really have staff put the pressure on the employer to turn things around immediately. They wouldn't be able to have their normal 30 days to provide information, and that is also a concern of mine in terms of its impact on business." Number 0503 FRANK ROSE, Alaska Lodging Management, President, testified on HB 468 via teleconference. He said, after listening to the discussion, he indicated he might be misunderstanding what the intent of this bill happens to be. He indicated he doesn't believe that there's an intent here, with what is being proposed, to get around or not go through proper due process to resolve complaints. He also said he doesn't believe that there's a limitation on the time-frame that the due process should take relative to resolving the complaint. Mr. Rose said he believes what the bill is being presented for is to provide a limitation on the liability that an employer might incur relative to back-wages. Due process can continue to go forward. MR. ROSE said some of the comments that he has heard today provide for, or have indicated that the employee would be unduly penalized because of the 90-day requirement. He stated, "I would say that both the employee and employer have great potential to be penalized because of the longevity of some of these cases that happen to arise or come up, or the liability associated with the back-wages. From an employer's standpoint, I understand that the employee certainly has a right to go out and search for other employment, and should they find other employment then the cumulation of back- wages would stop. But there is no guarantee. And I can tell you from a small businessman's perspective, the fact that a case could go on for two years, and if the employee does not get a job or (indisc.) of that even a $6.00 an hour employee could accumulate back-wages of $24,000 - $25,000 and that is without consideration of overtime and perhaps other issues or legal costs. By far the employer is going to look toward settlement of this thing regardless if they're at fault or not. I assume that most employers are going to think they're not at fault, but I can tell you that specific case that I was involved in, which is the one that Ms. Haley had indicated, I was quite sure I wasn't at fault, but there was no way that I could sit back and potentially incur the huge liabilities, rather it would be in my benefit to settle the case even though I felt strongly that I was in the right." MR. ROSE stated the 90-day requirement, or the 90-days liability limitation seems to be in line with what Ms. Haley indicates in that the average award has been between $3,000 and $4,000 as far as back-wages are concerned. He said he thinks that's what she said. That is a rate of $6.00 to $7.00 an hour, it would prove to be somewhere on the order of 3 months or 90 days back-wages or so. So that seems to be in line. Mr. Rose implied that 90 days is ample time for an employee, who has lost their job for whatever reason, to find another job and also provide incentive for that employee to look for another job. If it takes 465 days to process a claim, and all the resources are available, then perhaps that should be looked at as far as the procedure is concerned. It seems like an awful long time to come to a conclusion on a particular case. Number 0553 REPRESENTATIVE BERKOWITZ said, "Just sort of looking at this roughly, it seems to me there's three types of plaintiffs. There's those people, who perhaps have insufficient evidence to make their case, that have something that they can perceive as legitimate. There's those people who have legitimate complaints, and there's sort of the out and out extortion effort. And on the other side of the ledger you can have defendants who are innocent and those who are guilty." REPRESENTATIVE BERKOWITZ pointed out he has a concern with the 90- day limit on back-pay. He said it's not for those people who are trying to do extortion, but it's for those people who have legitimate complaints and they might be going against someone who's culpable. He said, "My experience has been culpable defendants tend to drag out the process much as possible. They'll 'heel-drag' when it comes time to providing discovery. They'll be unavailable. We heard testimony here that on occasion they don't comply with subpoenas. There's an incentive built in to stay out there longer than 90 days because that's the only cap you've got. And I appreciate that you're very scrupulous in what you do. What I'd ask you, if there was a less scrupulous employee who was culpable, can't you see the possibility for abuse with a 90-day scheme." Number 0568 MR. ROSE said his comment to that would be that, if deadlines are not met, relative to providing certain discovery materials or other information, he certainly feels that end employer should be held responsible for that. And perhaps there, again as we've heard today from Representative James, should be an addition or amendment to this proposed bill that would allow for that. He said, "What I am referring to is a situation where all information has been provided that has been requested by the Human Rights Commission, that information is in hand, and then there's still another two- years wait before we come to any conclusion on what the outcome of that case may be." He indicated that's where his concern lies. REPRESENTATIVE BERKOWITZ said, "And I agree wholeheartedly with that concern. I grew up in a small business so I understand how hamstrung you can get by even seemingly small issues of $10,000 or $20,000." Number 0580 CHAIR JAMES said, "If there was this time limit on and we heard testimony from the Human Rights Commission that many people do find another job and so therefore the amount, if they are to win their case is less, it would appear to me that those people who - that the Human Rights Commission might hurry up faster on those people that didn't have a job. And those people that did have a job, maybe there's no rush on them. There might be a different way of evaluating who's first on this issue. I don't necessarily know that the 90 days is a good number, but having a limit to me is interesting." CHAIR JAMES pointed out that she has experienced having someone file against her in the Human Rights Commission and she ended up home free, however, it was pretty shaky. And the reason wasn't because of what she or her staff did, it's what they didn't do. She said, "It was like a bookkeeping problem, and many cases are made on what you don't have in your files - not on what you did. And that's a part of the human rights law that is terribly distressing to me because, as an accountant for small business, I found I had some small business people who literally had to lock their door because they had made a good decision in letting someone go. And yet they didn't have all of the documents in their personnel file and those other things that they needed ... and they were just a small 'mom and pop' business. And that's, I think very very sad because this nation was build on 'mom and pops' in their backyard and in their garage. And I think we have made the laws so severe that those are some of the people who are also being penalized." Number 0609 KAREN ROGINA, Executive Director, Alaska Hotel and Motel Association, testified on HB 468 via teleconference. She said they are the number one employer of entry-level workers in the State of Alaska, and due to the transient nature of entry-level workers and the seasonality of their industry, issues of hiring and termination are of great interest to their membership. Ms. Rogina stated they are in support of the concept of having reasonable time limits on the time in which these cases can be resolved. She said they see it as a fairness issue to the employee and to the employer where timely resolution allows everyone to get on with things and take responsibility for their future. In the case of an employee, it provides more incentive to have them seek other employment instead of having drag out, and it places responsibility on the employer to provide the information and to avoid the situation in the first place. MS. ROGINA indicated their association receives a lot of questions from their members statewide, and the American Hotel and Motel Association spends a lot of time training employers on how to avoid these kinds of things. She said, "And so we see that this kind of bill would put a little more teeth into the whole resource issue and put it where it belongs in terms of educating employers on how to avoid these claims in the first place, and also perhaps additional investigators so that timely resolution can occur." CHAIR JAMES said she was glad that Ms. Rogina mentioned the education process because there is a great learning curve for people who are employers. She said she believes the Hotel and Motel Association is not only the biggest hiring of entry-level people but they also have the biggest hiring of various ethnic groups and so forth, so they're the most vulnerable for these kinds of discrimination cases to come forward. Chair James urged Ms. Rogina to continue her education process with her employers so they know just exactly what is required of them to be able to substantiate whatever decision that they make. CHAIR JAMES announced HB 468 will be held in the House State Affairs Standing Committee for further discussion. SB 307 - U.S. SENATE VACANCIES Number 0643 CHAIR JAMES announced the next order of business is SB 307 am, "An Act relating to conditions for filling vacancies in the office of United States senator; and providing for an effective date," sponsored by Senator Halford. CHAIR JAMES made reference to HB 377, which was previously heard in committee and is the companion to SB 307. [HB 377 is currently in the House Rules Committee]. Number 0651 BILL STOLTZE, Legislative Assistant to Senator Rick Halford, Alaska State Legislature presented SB 307. He explained SB 307 makes a simple change to our statute regarding the appointment of U.S. senators by requiring the person appointed by the governor to fill a vacancy shall be a member of the same party as the predecessor and that the appointment be confirmed by the legislature. Mr. Stoltze indicated it's a fairly straightforward policy call. Number 0664 REPRESENTATIVE BERKOWITZ said he believes the primary thrust is to ensure that the will of the voters is upheld as best as possible. MR. STOLTZE acknowledged that's the primary thrust. REPRESENTATIVE BERKOWITZ asked Mr. Stoltze, "You don't have any particular (indisc.) of either one of our senators right now." MR. STOLTZE indicated this really isn't about any particular individuals or who happens to be governor. He said, "I think you want to fix a leaky roof while it's sunny rather than wait until it's raining." Number 0674 JIM BALDWIN, Assistant Attorney General, Civil Division, Office of the Attorney General, Department of Law, said this bill differs slightly from Representative Hodgins' bill in that it would add the confirmation requirement by the majority of the members of the legislature in joint session. He said he thinks the House bill makes it a caucus confirmation question. MR. BALDWIN reported that as SB 307 went through the Senate committees, it merely had the requirement on it that the appointee be from the same political party as the predecessor in office; however, that was changed on the floor of the Senate to add the confirmation requirement. Therefore, the department did not get to testify in any committee about the confirmation issue so the Department of Law wanted to make the record today of their position on the legal issue involving confirmation. He said, "We made it here in connection with Representative Hodgins' bill, but it's a slightly different approach." Number 0693 MR. BALDWIN said Article 17 of the U.S. Constitution provides for how U.S. senators are to be appointed or elected and it states that the legislature of any state may empower the executive thereof to make temporary appointments until the people fill the vacancies by election as the legislature may direct. There's no mention in the U.S. Constitution about a confirmation requirement. In Alaska, the power of appointment is viewed as an executive power and that confirmation is a sharing of that executive power. Under the Alaska Supreme Court case of Bradner v. Hammond, our supreme court said that the legislature may participate in the executive's power of appointment only in situations where it is specifically authorized under our constitution. MR. BALDWIN said he believes there is a very clear legal issue about the validity of the confirmation requirement and that it should be carefully considered. He said this a point which he has often been in disagreement with the legislature about - because the legislature as an institution often is fond of a confirmation requirement to share in the power of the appointment and that seems to be the policy that's expressed here. However, it can complicate the appointment situation. As we look down the road, if there is a disagreement between the governor and the legislature over a particular appointment, he thinks history has shown us that this can become a difficult situation, not only for the governor but also for the legislature. For example, in the early days of the state, Governor Egan had a disagreement with the legislature about an appointment to fill a state office, and this went on for some time because of the confirmation requirement that we have in existing law for filling vacancies. He indicated it complicated the timeliness within which the position could be filled and that harms everyone when it cannot be done expeditiously. Mr. Baldwin said, "There can be some difficult situations presented to the legislature in the appointment process if there cannot be, in the confirmation process, the governor can present the legislature with difficult choices which is exactly what happened between Governor Egan and the legislature in those days. So it's a two-edge sword here, by wanting to participate in the process, it not only slows it down, but it..." TAPE 98-39, SIDE A Number 0001 MR. BALDWIN continued. ...future felt that the legislature's participation was not appropriate and that the matter should be litigated before an appointment is made to fill the vacancy. Or a particular appointment could be - the validity of it could be under a cloud until litigation is resolved. Mr. Baldwin said he believes it's a very important issue for consideration. He urged the committee to return the bill back to its original version, as it was considered in the Senate committees, and not as it was amended on the floor [where it didn't have the confirmation requirement by the legislature]. CHAIR JAMES noted she only has one version of SB 307 amended, Version E. She pointed out there is no provision for confirmation in this bill. CHAIR JAMES asked what if we didn't have the confirmation. She said she can understand his argument on the confirmation and that she has a tendency of not wanting to going through process either. The way the current process works, as she understands it, is that when a replacement from a particular political party needs to be made, that the political party submits at least three names, the governor then would have the choice of selecting one of those three names. Chair James asked Mr. Baldwin, in the current system, what if the governor doesn't like any of those three names as a replacement, what does he do. Number 0058 MR. BALDWIN replied the current process is one that Representative Hodgins' bill was intended to remedy, it's silent as to what you do with a U.S. senator, it just says the governor shall appoint. It's for state offices that there's a difference in treatment when you have a vacancy. And that's where you get the recommendation of the district committees when you have a vacancy between the primary and the general, but that custom of obtaining the recommendations of the district committees is also carried forward to vacancies that occur after a general election as well. But (indisc. - noise) Representative Hodgins' bill [HB 377] is seeking to formalize that custom in the law. But as to U.S. senators, it's been silent about participation by party members, and it even has been silent as to whether it be from the same party or not. Mr. Baldwin said, "In fact, in one instance in our history, there was an appointment of, I believe a Republican when there was a vacancy from a..." CHAIR JAMES interjected, she noted we currently have that senator. She said, "I understand that if we're assuming that whichever political party that this senator or congressman is from has been elected by that party in the state, and that there was a philosophy that goes along with that, and so it stands to reason that if something happens to that person then there is a replacement that it should be of the same party. And I'm very very supportive of that issue. What I'm not clear about, what we should do is, how do those nominations get to the governor. And you know, one of the things that we have a problem with here, we have this problem with playing political games and that's the part of this job that I don't like, but I like to make rational decisions. Well, it would seem to me, if I was a Democrat or a Republican and I had a Democrat - or my party person in there and they left, I would certainly want that appointment to be by somebody who could be elected next time out. And it is very possible that if there isn't some participation from the party to put up the names of potential people to do that, that the governor - may be of a different party could choose somebody who met just the party requirements but actually wouldn't put in somebody that could be reelected. So I think that the next election tells the story when the public goes to vote that's the issue, and if it's early in a term, that's something else. But are you saying it's only temporary until we have a vote anyway." MR. BALDWIN replied that's right. CHAIR JAMES continued. She said so it really doesn't make any difference, as long as they qualify as a party member and that the confirmation, or the other thing, doesn't apply in this case. MR. BALDWIN replied under this bill it would. CHAIR JAMES stated she understands that, but in the reality of it, is agreeing with him that it doesn't have a place in this because we are only talking about a temporary assignment until an election can be held. MR. BALDWIN replied right. Number 0134 CHAIR JAMES asked, "If there's a certain length of time left in that period would they not go to election until the new one..." MR. BALDWIN interjected. He said he believes that's right, but he would have to look at the statute. CHAIR JAMES asked but if it's longer, then that person has to go up for election. MR. BALDWIN replied there's minimum period, if there's more time left in the term then you take it to a special election and fill the vacancy that way. He also noted, from a brief survey of what happens in other states, it's pretty common for there to be a statutory requirement that the appointment made be filled from the same party. He said he advised the governor that there really isn't much they can say about this part of it, saying that it be from the same political party, that's a policy call for the legislature to make that a requirement and that's perfectly valid. CHAIR JAMES said she would like to go a little further and say that the process of putting the names forward from the party, because the whole thing could be persuaded to be going in a different direction if the governor would put in the wrong name for whichever party it was. Chair James noted Alaska has more people who are not of a party then we do of a party, so if we were a party state, where everyone had to vote their party, it might be easier to choose. She said, "But in this case, where we have half the people who don't necessarily vote by party, and of course, I'm a strong party person, I was when I was a Democrat, and I am now - I'm a Republican. I really believe in the party structure and I think it does make a difference and so I would like to have something in here, maybe to do that." Number 0170 REPRESENTATIVE BERKOWITZ made a motion to adopt proposed Amendment LS1574\EA.1, Glover, 3/18/98 [Amendment 1]. He explained it provides that the governor should call a special election to determine (interrupted)... Representative Berkowitz said, "It seems to me, that if we're worried about the will of the people, the best thing is go to the people and allow the choice to come from them as to who they feel ought to represent them in that important post in D.C. Say the governor gets to pick, and the parties get to put the names before him, then in a way we put ourselves in the box of either, (Indisc.) someone with all the advantages of an incumbency, or else having the governor of an opposite party draw someone out who might not be capable of winning that election." Page 1, lines 5 - 13: Delete all material and insert: Sec. 15.40.010. Condition [CONDITIONS] and time of calling special election [FILLING VACANCY BY APPOINTMENT]. When a vacancy occurs in the office of United States senator, the governor [, WITHIN 30 DAYS,] shall, by proclamation and subject to AS 15.40.050, call a special election to be held on a date not less than 60 nor more than 90 days after the date the vacancy occurs [APPOINT A QUALIFIED PERSON TO FILL THE VACANCY]. However, if the [REMAINDER OF THE TERM OF THE PREDECESSOR IN OFFICE WILL EXPIRE OR IF THE] vacancy occurs on a date that is less than 180 but more than 60 days before the date of the primary election for the office [WILL BE FILLED BY A SPECIAL ELECTION BEFORE THE SENATE WILL NEST MEET, CONVENE, OR RECONVENE], the governor may not call a special election {FILL THE VACANCY]. Sec 2. AS 15.40.050 is amended to read: Sec. 15.40.050. Date of special election. The special election to fill the vacancy shall be held on the date of the first [GENERAL] election, whether primary or general, [WHICH IS HELD MORE THAN THREE FULL CALENDAR MONTHS] after the vacancy occurs if the vacancy occurs on a date that is less than 180 but more than 60 days before (1) a primary election, other than the primary election for the office; or (2) a general election. Sec. 3. AS 15.40.060 is amended to read: Sec. 15.40.060. Proclamation of special election. The governor shall issue the proclamation calling the special election at least 50 [80] days before the election. Sec. 4. AS 15.40 is amended by adding a new section to read: Sec. 15.40.075. Date of nominations. Candidates for the special election shall be nominated by petition transmitted to the director before the 21st day after the vacancy occurs by (1) the actual physical delivery of the petition in person; (2) mail postmarked not later than midnight of that date; or (3) telegram of a copy in substance of the statements made in the petition. Sec. 5. AS 15.40.030, 15.40.040, 15.40.080, and 15.40.090 are repealed. Renumber the following bill section accordingly. Number 0198 CHAIR JAMES asked Mr. Baldwin how long a temporary appointee can fill a vacancy. MR. BALDWIN referenced the language on lines 10 - 13, Version E: However, if the remainder of the term of the predecessor in office will expire or if the vacancy will be filled by a special election before the United States senate will next meet, convene, or reconvene, the governor may not fill the vacancy. MR. BALDWIN explained how he reads it is, if you don't have a naturally occurring election in that period left of the term, then you appoint. But if there's an election that comes up, then you'd do it by election. CHAIR JAMES asked what do we do currently. MR. BALDWIN replied that's in existing law, you're not changing that. Number 0223 CHAIR JAMES remarked, "It's interesting that you would come up with this, Representative Berkowitz (laughter). It seems to me like I've just been seeing pieces of paper go by here in this committee all year taking power away from the governor from the Republicans, and here you are, a Democrat and now you want to take power away from the governor." REPRESENTATIVE BERKOWITZ joking replied, it's infectious. Number 0237 REPRESENTATIVE HODGINS objected to Amendment 1. REPRESENTATIVE ELTON, speaking in support of the amendment, said if we're going to tinker with the way things are right now and contemplate the change in the way we appoint a senator, should a vacancy occur, then this would be the appropriate way of doing it. Instead of shifting controls to the legislature, why don't we shift it back to the people who are going to be served by the person who is going to be in the U.S. senate. This is the logical step to take, this is the step that ensures the process that we have now, when we select a senator it's maintained, it lets the people choose rather than a politician, or as contemplated in this bill, a small set of politicians choosing. CHAIR JAMES indicated they still have quite a lot more work to do on this bill. She asked if the objection to the amendment is maintained. She was informed there is no one on teleconference. REPRESENTATIVE HODGINS maintained his objection. CHAIR JAMES asked for a roll call vote. Representatives Elton, Berkowitz and James voted in support of it. Representatives Hodgins, Dyson and Ivan opposed it. Therefore Amendment 1 failed by a vote of 3-3. Number 0280 REPRESENTATIVE ELTON suggested it may be appropriate to ask for a fiscal note from the legislature because the bill contemplates the confirmation could happen by a majority of members in a joint session of the legislature and that could mean that we're going to need to have an interim meeting that we wouldn't otherwise have. CHAIR JAMES said she didn't think that is necessarily true, she mentioned she needs to talk to the sponsor of the bill. Chair James announced SB 307 would be held in the House State Affairs Standing Committee for further consideration. HB 408 - SEISMIC HAZARDS SAFETY COMMISSION Number 0295 CHAIR JAMES announced the next order of business is HB 408, "An Act establishing the Alaska Seismic Hazards Safety Commission," sponsored by Representative Davies. REPRESENTATIVE DYSON asked if it was her intention on moving it out today. CHAIR JAMES replied she didn't know because they haven't heard it. If we get done in time, and we're happy with it certainly we could vote on it. Number 0303 REPRESENTATIVE JOHN DAVIES, Alaska State Legislature, presented HB 408 and distributed a map which illustrates Alaska as "earthquake country." He mentioned we have some of the largest earthquakes in the world. The map lists the ten largest earthquakes that have occurred in the world in the last century or so. As you can see three of those ten have occurred in Alaska, of course everybody is familiar with the 1964 earthquake that occurred in Anchorage. TOP TEN QUAKES IN THE WORLD, 1904-1992: Chile, 1960, 9.5 Alaska, 1964, 9.2 Alaska, 1957, 9.1 Kamchaka, 1952 9.0 Ecuador, 1906 8.8 Alaska, 1965, 8.7 Assam, 1950, 8.6 Banda Sea, 1938, 8.5 Chile, 1922, 8.5 Kuriles, 1963, 8.5 REPRESENTATIVE DAVIES indicated the point of the map is to say that, while that was the second largest earthquake that occurred in recorded history, that's not an unusual earthquake for Alaska. So the point is, we should expect earthquakes to occur in the future. How often they occur and where they occur is a subject of a lot of research, some of which he was engaged in years ago. Number 0327 REPRESENTATIVE DAVIES said the purpose of the bill is to establish a "Seismic Hazard Commission." The commission would be housed in the Office of the Governor. The purpose would be to provide an umbrella, coordinating and clearinghouse kind of function for seismic hazard mitigation work. He said seismic hazard mitigation work is the work that is focused on both the design of buildings and locating buildings in such a way that damage that occurs, when the next earthquake occurs, will be minimized. So it's sort of the prevention versus response kind of issue. He said we can prevent a lot of damage if we have appropriate building codes, we can also prevent loss of lives if have appropriate building codes and land- use plans. REPRESENTATIVE DAVIES explained the commission would focus on trying to implement those ideas and coordinate them across agencies in the state. He said there currently is a significant amount of work going on, but it's mostly ad hoc. It's by one agency or the other, private groups, the Anchorage "Geotech" Commission does a lot of good work, but that focuses, of course in Anchorage. REPRESENTATIVE DAVIES said there's another commission that's the response commission that currently exists, and again, that's for planning for response. He indicated these are very closely related but are two different functions. One is to prevent as much as possible (indisc. - noise) the need for a response in case of an earthquake. So we do need to plan for responses because we will have earthquakes, they will be damaging, there will be injuries and loss of lives, so the planning function is very important. Representative Davies said that's already taken care of in the existing statutes, what he's contemplating here is the prevention part. Number 0360 ROD COMBELLICK, Chief Engineering Geology, Division of Geological and Geophysical Surveys, Department of Natural Resources, testified in support of HB 408 via teleconference. He said, "From my perspective, as one who works primarily in the area of earthquake geology, finding out where these areas are that are more susceptible to earthquake damage, I think this is an important bill and a seismic safety commission for Alaska is long over due." MR. COMBELLICK said, as Representative Davies indicated, Alaska is one of the most seismically active areas in the world. He noted we've been lucky for the last 34 years that we have not had any significant damage from earthquakes since the big one in 1964. However, Alaska is like a big dartboard for earthquakes and our communities are at the center of that dartboard. We've had a lot of large earthquakes occurring, many earthquakes in the magnitude of the six and seven range that fortunately have been occurring away from our developed areas, but like shooting toward a dartboard, eventually one of those darts hits a target and it's only a matter of time before one of these large earthquakes hits one of our developed areas. Mr. Combellick stated these urban areas are expanding and we know we can expect this high rate of seismic activity to continue, that there will be future large earthquakes in Alaska, which virtually guarantees that one of these urban areas will be hit. Number 0387 MR. COMBELLICK pointed out Alaska is doing pretty well in the area of emergency response preparedness primarily through the efforts of the Division of Emergency Services, the Emergency Response Commission, and through the Alaska Disaster Act. But we're way behind in the area of mitigation - things that we can do to prevent damage and thereby reduce the need for emergency response. Alaska in fact is the only seismically active state in the country that still does not have a seismic safety or advisory commission of some sort. Ironically the first seismic safety commissions that were established, starting with California, began as a result of the Alaska 1964 earthquake. People realized that this is a reality that was going to have to be addressed and that, although as Representative Davies pointed out, we cannot predict the time, size, or location of major earthquakes. We can identify areas where the damage is likely to be greater, and therefore we can plan and design our developments accordingly with proper building codes, zoning ordinances, and just better public information. MR. COMBELLICK mentioned there are presently 20 other states that have seismic advisory boards of some sort, including states in what we generally regard as low-seismic areas like Vermont, Illinois, Delaware and New York. These states all have seismic advisory boards, and these are separate from their own state emergency response commissions. He stated it's because of this need to focus the efforts of seismic mitigation in one body. MR. COMBELLICK concluded, he said he thinks that this bill is important in establishing a statewide seismic advisory commission, we have a number of agencies doing different things in this area of seismic hazards, with no-rule coordination, no real guiding force to guide us in what direction we should go in these efforts. He indicated the "geotechnical advisory commission," of the Municipality of Anchorage is a good model of something that could be done on a statewide basis. Mr. Combellick said he believes the governor's office is an appropriate place for this commission because of this need for coordination of many state and local agencies. Number 0427 NICO BUS, Manager of Administrative Services, Department of Natural Services, and the Department of Military and Veterans Affairs [shared position] came before the committee. Mr. Bus announced the Department of Natural Resources is in support of this legislation in terms of providing extra expertise in earthquakes, and those types of hazards. He indicated Director Carol Carrol isn't able to attend due to an emergency. MR. BUS said the Department of Military and Veterans Affairs, Division of Emergency Services, they have a staff of two individuals, a hazard mitigation officer and an earthquake program (indisc.) are responsible for identifying areas of danger and methods to avoid or reduce the damage. (Indisc.) works with local communities on these projects, and a commission like this would basically add a source of information to this division as well as the state Emergency Response Commission. The Emergency Response Commission resides in the Department of Environmental Conservation and has a different focus. Although they are responsible for oil hazards, he belies a commission like this would just provide added expertise and it would be beneficial to all people on this earth. CHAIR JAMES said she has a question on the fiscal note and the amendment. She stated the amendment says the Officer of the Governor shall provide staff support to the commission. And the fiscal note from the Office of the Governor assumes a "fourth-time" clerical staff will support commission activities as technical support needs will be met by existing staff in the Department of Natural Resources. Chair James mentioned, "They don't need anymore, but they need a 'fourth-time' clerical staff in the Office of the Governor." Number 0460 CHAIR JAMES said, "Yesterday, in fact is, I have a bill which would license social workers, and I was in the Labor and Commerce Committee with that and we heard testimony from Catherine Reardon [Director, Division of Occupational Licensing, Department of Commerce and Economic Development] -- because originally they told me, in my negotiations, how we did the bill - wouldn't have a fiscal note. But she came forward with a fiscal note for half-time and when she explained to us how much time she needed, probably additionally for the licensees there, and it came up to maybe 23 percent or whatever, but she said she was told she couldn't do four-quarters of a person, she had to do for half. So I assume this looks like a half here too, but you're saying it's a quarter of time of clerical staff. ... So I'm wondering, if all they need is a quarter, if they couldn't just absorb it. And so, I don't have to deal with a fiscal note here. They can deal with the fiscal note when it gets to Finance. But I think we do have to kind of take a look at it and make comments about it anyway because if it only requires a quarter of the time for clerical staff, it seems to me like that needs to be then absorbed." Number 0476 REPRESENTATIVE BERKOWITZ made a motion to adopt Amendment 1 by Representative Davies: Page 2, line 4, insert: The Office of the Governor shall provide staff support to the Commission. CHAIR JAMES asked if there were any objections. There being none, Amendment 1 was adopted. CHAIR JAMES noted the other fiscal note from Division of Geological and Geophysical Surveys, the Department of Natural Resources, is just for travel - a couple thousand dollars. REPRESENTATIVE DAVIES pointed out the fiscal note is redundant with the travel that's in the Office of the Governor and will be resolved when the bill gets to the House Finance Committee. CHAIR JAMES said the committee can move it only with the other fiscal note. REPRESENTATIVE BERKOWITZ added that it can be moved with both fiscal notes. REPRESENTATIVE DAVIES said he didn't object. Number 0490 REPRESENTATIVE BERKOWITZ mentioned he grew up in California and this type of preparedness is absolutely essential. He stated the property value saved, the loss of life, it's just incredible that we're not making preparations and it seems one of the core things that the government ought to be doing is to protect people in the contingency in this sort of an emergency. CHAIR JAMES said she agrees with his statement and intends to move the bill. She indicated her hesitancy is when we put on another level of regulations and requirements that we inhibit some activities that may not happen or are too expensive. She said you could say, if you're going to make yourself safe, that there's no expense that's too much. She asked Representative Davies what he anticipates, what kind of interference or change might he see in the construction industry in the state. Number 0505 REPRESENTATIVE DAVIES replied that's a fair question, that's one that, of course, one struggles with all the time in prevention-type activities. How much prevention is appropriate? He noted there is a provision at the end of the bill that provides that this commission would not take over responsibilities or duties away from any existing agencies. So the intent in that is to say that there's no additional regulations that would be put in place by this advisory commission. The intent is that it be a catalyst for action. So rather than being in the way of anything happening, the hope is that it would bring people together that are working on different pieces of the same puzzle and put it together. Sec. 5. This Act is not intended to transfer the Alaska Seismic Hazards Safety Commission the authorities and responsibilities of other state agencies, boards, councils, or commissions or of local governments. CHAIR JAMES asked if it would be awareness. REPRESENTATIVE DAVIES replied part of it is certainly awareness. One of its activities, that does go on from time to time, is having workshops where you bring for example structional engineers together and coach them and train them in a new addition to building code or that kind of thing. That's one of the activities that is actually done currently to some extent by some folks in "DES" and also by some, under the sponsorship of the Anchorage Geotech Advisory Commission from time to time. He said these things are happening now, but on an ad hoc basis, here and there. They need to be strengthened and they need to be coordinated. He said he thinks by bringing the existing pieces together, that the existing parts would make a stronger hold. Number 0532 REPRESENTATIVE IVAN IVAN said the only concern he has is with the role of private companies, with their architectural plans. He asked, "Must they do the same thing as you do with the fire marshall, approving buildings prior -- will we get to that point." REPRESENTATIVE DAVIES replied the way that most seismic hazard mitigation is implemented is primarily through the building code or through land use planning which happens right now. This wouldn't change that. This commission would be an advisory to those existing mechanisms of building codes. And generally, if you add a requirement to the building code, and you know about it up front, it adds very little cost. If you have to retrofit, at some time later down the road, it can be very expensive. He mentioned that is one of the issues that California is struggling with right now, there's a great issue for example with unreinforced masonry, many of those buildings are through various incentive programs. California is helping building owners retrofit some of those kinds of buildings. Those things can be expensive but the cost is recognized in those things, the building owners recognize that they are reducing their exposure and risk to law suites by doing that. So there's a tradeoff that has to be balanced in the impact of a regulation on an industry. Representative Davies said there's no new mechanism envisioned by having this commission it's just that this commission will be advisory to those existing mechanisms that provide for building codes and for land use plans. Number 0560 CHAIR JAMES stated she is troubled with the building code issue because "we change them like we change our shirt," and then we end up having buildings out of compliance. She indicated that's always bothered her, we know things more tomorrow than we do know today. She said it seems to her like we just have a practice of upgrading them all the time to new materials mostly. She said she believes the building codes are driven by the supply industry of new materials and things that they find, or new methods that they've learned. So it doesn't necessarily mean, when there's a code violation that there's a serious deficiency in the building. It seems like we're just going to add one more reason that we'll be changing our code more often and she hoping that that's not true. REPRESENTATIVE DAVIES replied he is sure that happens but he doesn't think it's as common as perhaps she implied. He said he thinks most of the codes are driven through professional organizations like the Structural Engineers Association. They're national and international groups, they go out, and one of the things that happens after a large earthquake for example is a team of engineers goes out and examines what happened and they learn lessons. And then those lessons learned are digested through many professional meetings and then are promulgated then as code revisions. They're saying, "Look, we did this wrong, we didn't tie these beams together properly," so the next revision of the code ought to provide for a flange in that kind of a joint. So those kinds of issues, and lessons learned, are then brought forward and we do learn things as time goes on and that's the natural progression of why codes change. Representative Davies said he believes we also generally provide for grand fathering, that a building is built under a particular code is legal and safe and everything as long as the building doesn't get substantially changed. If a substantial amount money is going to be invested to modify the building, or something like that, then usually the requirement is to bring the building up to code if it is a viable thing to do financially. REPRESENTATIVE BERKOWITZ said most of his experience with this has been retrofitting houses, it's easy to put in shear walls and bolt the house down to the foundation, which is all you need to do for most places and take care of the unreinforced masonry problem. He said those seem to be the big three of what to do, and indicated that's not a real problem up here. Number 0597 REPRESENTATIVE BERKOWITZ made a motion to move HB 408 as amended with individual recommendations and attached fiscal note. CHAIR JAMES asked if there were any objections. Hearing none, CSHB 408 (STA) moved from the House State Affairs Standing Committee. ADJOURNMENT Number 0611 CHAIR JAMES adjourned the House State Affairs Standing Committee at 10:14 a.m.