1996-03-22                     House Journal                      Page 3269
HB 545                                                                       
HOUSE BILL NO. 545 by the House Rules Committee by request of                  
the Governor, entitled:                                                        
                                                                               
An Act relating to the cost-of-living differential for certain public         
employees residing in the state and the criteria for determining               
eligibility for the differential; and providing for an effective date.         
                                                                               
was read the first time and referred to the State Affairs and Finance          
Committees.                                                                    
                                                                               
The following fiscal notes apply:                                              
                                                                               
Zero fiscal note, Dept. of Administration, 3/22/96                             
Zero fiscal note, Dept. of Revenue, 3/22/96                                    
Zero fiscal note, Dept. of Transportation & Public Facilities, 3/22/96         
                                                                               
The Governor's transmittal letter, dated March 22, 1996, appears               
below:                                                                         
                                                                               
Dear Speaker Phillips:                                                         
                                                                               
Under the authority of art. III, sec. 18, of the Alaska Constitution, I am     
transmitting a bill that would clarify how the state applies the cost of       
living pay differential for public employees.  This bill sets up a             
framework of eligibility criteria and defines state residency for the          
purpose of pay differentials which are required for certain public             
employees under collective bargaining agreements.  By codifying the            
states interpretation of the pay differentials, this legislation will help     
avoid conflicts and legal actions on this issue.                               
                                                                               
The state has been in disputes with employees of the marine highway            
system over a definition of state residency and the eligibility criteria       
for the pay differential.  Arbitrators have used different, and sometimes      

1996-03-22                     House Journal                      Page 3270
HB 545                                                                       
inconsistent, criteria in resolving the disputes.  Confusion over the          
criteria and whether it is subject to union bargaining has also led to         
court litigation.  This diverse situation has made it difficult to             
administer the differential program.                                           
                                                                               
This bill resolves most of the uncertainty in the program by applying          
the permanent fund dividend definition of state resident, which has            
been tested in court.  In addition, this bill authorizes the Department        
of Administration to adopt regulations to further clarify the criteria for     
pay differentials as the need arises.  This would make it clear that the       
department has this authority and that criteria for the pay differential       
is not subject to collective bargaining.                                       
                                                                               
I urge your prompt action on this bill.                                        
                                                                               
						Sincerely,                                                               
						/s/                                                                      
						Tony Knowles                                                             
						Governor