03/18/2019 03:15 PM House LABOR & COMMERCE

        HB 48- TEMP STATE EMPLOYEES IN PART EXEMPT SVCE                                                                     
                                                                                                                                
3:52:25 PM                                                                                                                    
                                                                                                                                
CO-CHAIR LEDOUX announced  that the next order  of business would                                                               
be HOUSE  BILL NO. 48, "An  Act removing from the  exempt service                                                               
of the state persons who  are employed in a professional capacity                                                               
to make a temporary or  special inquiry, study, or examination as                                                               
authorized by  the governor  and including  those persons  in the                                                               
partially exempt service of the state."                                                                                         
                                                                                                                                
3:52:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TAMMIE WILSON, Alaska  State Legislature, as prime                                                               
sponsor  of HB  48, introduced  the bill  and read  the following                                                               
sponsor statement [original punctuation provided]:                                                                              
                                                                                                                                
     AS 39.25.110(9)  was supposed to allow  the governor to                                                                    
     appoint  someone   for  some  "temporary   and  special                                                                    
     inquiry". Because  they are  temporary, exempts  do not                                                                    
     get PERS  or regular  State leave, health  insurance or                                                                    
     other  State benefits.  However,  the  statute has  not                                                                    
     been used in  that manner. It has instead  been used to                                                                    
     establish   positions  without   the   intent  of   the                                                                    
     positions  being temporary,  which  would then  entitle                                                                    
     employees to PERS and all other benefits.                                                                                  
                                                                                                                                
     The purpose of  HB 48 is to  discontinue the historical                                                                    
     practice   by  the   Executive  Branch   of  using   AS                                                                    
     39.25.110(9)  to  unilaterally  establish  highly  paid                                                                    
     executive  level temporary  exempt positions  that have                                                                    
     no salary limits. There  are positions established many                                                                    
     years ago  using this statute  that still  exist today.                                                                    
     Some  are  unbudgeted  and  do  not  appear  in  agency                                                                    
     position  counts. Several  attempts have  been made  to                                                                    
     obtain a  complete list of these  positions and current                                                                    
     salary   levels,   but   these   attempts   have   been                                                                    
     unsuccessful.                                                                                                              
                                                                                                                                
     HB  48 is  intended to  eliminate the  establishment of                                                                    
     "temporary  exempt" positions  and instead  place these                                                                    
     positions in the partially  exempt service. Persons may                                                                    
     be "appointed" to  partially exempt positions, however,                                                                    
     they will  be subject to  salary limits like  all other                                                                    
     state employees.  HB 48  will force  the administration                                                                    
     to be  more transparent and  allow all employees  to be                                                                    
     treated fairly.                                                                                                            
                                                                                                                                
REPRESENTATIVE WILSON  addressed the 0-dollar fiscal  note, which                                                               
she  said  could  be interpreted  as  the  administration  either                                                               
attempting  to  withhold  their exempt  positions  or  expressing                                                               
indifference because it doesn't impact them.                                                                                    
                                                                                                                                
3:54:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HANNAN  expressed concern that the  words "exempt"                                                               
and "temporary  exempt" were being  used interchangeably.   After                                                               
looking at  the statute, she  said, it appeared that  the current                                                               
bill  speaks to  those  under AS  39.25.110(09) [Exempt  Service;                                                               
persons employed in  a professional capacity to  make a temporary                                                               
or special  inquiry, study  or examination  as authorized  by the                                                               
governor],  which   are  temporary;  however,  they   were  being                                                               
referred to as exempt.   She continued by saying that referencing                                                               
those positions as exempt is  precarious because exempt positions                                                               
are a much  broader category.  Alaska's  deputy attorney general,                                                               
for  example,  is  an  exempt position  and  isn't  temporary  in                                                               
nature.  She  asked if the term or phrasing  for that subcategory                                                               
should be "temporaries."                                                                                                        
                                                                                                                                
REPRESENTATIVE WILSON acknowledged that  it was one specific area                                                               
of statute  that would be  eliminated and deferred to  her staff,                                                               
Remond Henderson.                                                                                                               
                                                                                                                                
3:56:30 PM                                                                                                                    
                                                                                                                                
REMOND  HENDERSON, Staff,  Representative  Tammie Wilson,  Alaska                                                               
State  Legislature, on  behalf  of  Representative Wilson,  prime                                                               
sponsor of HB  48, stated that the current  bill was specifically                                                               
designed  to  address  only   those  temporary  exempt  positions                                                               
established by AS 39.25.110(09).                                                                                                
                                                                                                                                
REPRESENTATIVE  HANNAN   surmised  that  the  current   bill  was                                                               
intended for political appointees that  were hired for a specific                                                               
purpose.  She suggested including  a timeframe that would dictate                                                               
the  length  of  their  temporary   employment.    She  asked  if                                                               
Representative Wilson had considered that.                                                                                      
                                                                                                                                
REPRESENTATIVE  WILSON replied  that she  was unsure  because the                                                               
administration  was not  responsive.   She reflected  on a  phone                                                               
call from an  anonymous caller who informed her of  a position in                                                               
Anchorage that was  being paid an "exorbitant" amount  and had no                                                               
Position  Control  Number  (PCN),  adding  that  this  particular                                                               
position  was  not   political.    She  explained   that  if  the                                                               
governor's office had  extra money and wanted to  hire someone as                                                               
a  temporary  employee  there  would  be  no  way  to  find  that                                                               
position.   Alternatively,  they could  be  put into  a PCN  and,                                                               
unlike others  who wouldn't go  through this  process, designated                                                               
to  the correct  job classification  with a  corresponding salary                                                               
and benefits.   However, under AS 39.25.110(09)  someone could be                                                               
making  twice as  much as  another individual  with the  same job                                                               
title, solely because they were  hired by the governor under that                                                               
specific part  of the statute.   She opined that this  should not                                                               
be happening, and it was time for it to end.                                                                                    
                                                                                                                                
REPRESENTATIVE  HANNAN  related  that she  shared  Representative                                                               
Wilson's concern.   She restated her suggestion of  putting a one                                                               
or  two-year  timeframe  on  temporary  exempt  positions.    She                                                               
pointed out  that the  process to make  a position  exempt exists                                                               
under  that  same  statute,  which  involves  going  through  the                                                               
personnel board, classification, and a  public notice period.  It                                                               
still allows an individual to  be appointed, she noted, and avoid                                                               
the  probationary   period  that  one  would   encounter  with  a                                                               
classified  job.    She  questioned  whether  defining  how  long                                                               
'temporary' was would mitigate those  temporary hires that end up                                                               
working for 10-years off the books with no PCN.                                                                                 
                                                                                                                                
REPRESENTATIVE  WILSON emphasized  that  she  was more  concerned                                                               
with  the hidden  employee  names and  funds  than the  temporary                                                               
aspect.   She offered  her belief  that, originally,  the statute                                                               
was for projects that required  hiring someone for a short amount                                                               
of  time   who  would  be   paid  more  for   their  "specialized                                                               
knowledge;"  however,  the  way  it's been  used  over  time  has                                                               
strayed from  that initial intent.   She  opined that as  long as                                                               
this particular  part of the  statute exists it will  continue to                                                               
be abused.  She  further noted that adding a timeframe  of 3 or 6                                                               
months  would  not help  designate  a  specific salary  to  these                                                               
positions, like most jobs have.   She pointed out that this would                                                               
not  take  away the  [governor's]  ability  to write  a  specific                                                               
contract for someone.                                                                                                           
                                                                                                                                
4:00:56 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STUTES  asked for  an example of  the type  of job                                                               
being discussed.                                                                                                                
                                                                                                                                
MR.  HENDERSON   described  a  unit  within   the  Department  of                                                               
Corrections  (DOC) called  an  "investigative  unit" under  which                                                               
they established temporary  exempt positions titled "Professional                                                               
Conduct  Investigator"  using  the aforementioned  statute.    He                                                               
stated that the  position received 173,000 dollars  in salary and                                                               
benefits  and further  noted that  it was  created in  FY 17  and                                                               
existed  until the  current commissioner  cut it  from the  FY 20                                                               
budget.                                                                                                                         
                                                                                                                                
REPRESENTATIVE STUTES posited that  temporary exempt positions do                                                               
not receive benefits.                                                                                                           
                                                                                                                                
4:02:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WILSON acknowledged that  they are not supposed to                                                               
receive benefits  under the  statute's original  intent; however,                                                               
it's not being utilized accordingly.                                                                                            
                                                                                                                                
REPRESENTATIVE STUTES surmised that  there are some employees who                                                               
receive a salary  and benefits but are off the  books and have no                                                               
PCN.  She asked if this was correct.                                                                                            
                                                                                                                                
REPRESENTATIVE WILSON replied  that some positions do  have a PCN                                                               
while  others do  not.    She explained  that  if the  governor's                                                               
office had  money left in  their budget, they could  hire someone                                                               
underneath AS 39.25.110(09)  and not give them a PCN.   She noted                                                               
that  positions like  that, which  you can't  find in  the budget                                                               
books, are what makes things difficult.                                                                                         
                                                                                                                                
4:03:33 PM                                                                                                                    
                                                                                                                                
MR.  HENDERSON added  that some  [positions] are  identified, for                                                               
example, by a  letter "T" in front  of the last 3  letters of the                                                               
PCN.  He  stated that the only  way to truly figure  out how many                                                               
of those  positions exist is  to contact each department  and ask                                                               
them to provide that information.   He explained that the current                                                               
bill moves  one particular part  of the statute  AS 39.25.110(09)                                                               
[persons employed in a professional  capacity to make a temporary                                                               
or special  inquiry, study  or examination  as authorized  by the                                                               
governor] from Exempt Service [AS  39.25.110] to Partially Exempt                                                               
Service [AS 39.25.120],  which subjects the appointment  to a pay                                                               
plan that  is established under  statute.  He further  noted that                                                               
the governor  can still appoint  someone up  to a step  F, unless                                                               
there  are extenuating  circumstances that  can justify  the need                                                               
for a higher  paying position.  The difference, he  said, is that                                                               
someone would  no longer be  able to be  placed in a  high paying                                                               
position without a rationale.                                                                                                   
                                                                                                                                
4:05:31 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  LEDOUX  asked  who  would   approve  the  hire  if  the                                                               
administration wanted to employ someone beyond a step F.                                                                        
                                                                                                                                
MR.  HENDERSON offered  his belief  that it  was reviewed  by the                                                               
personnel board.   Nonetheless, he  said he would follow  up with                                                               
clarification from the Department  of Administration, Division of                                                               
Personnel and Labor Relations.                                                                                                  
                                                                                                                                
4:07:04 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FIELDS revealed  that  he  had asked  Legislative                                                               
Finance and the administration to  account for the personnel cost                                                               
of  political  appointees  in  the  executive  branch  and  never                                                               
received  a  response.    He  acknowledged that  he  had  been  a                                                               
political  appointee himself  and  understands that  they are  an                                                               
important part  of the democratic process;  however, everyone has                                                               
a right to understand how the  executive branch is organized.  He                                                               
expressed his appreciation  for the current bill  in the interest                                                               
of transparency.                                                                                                                
                                                                                                                                
CO-CHAIR LEDOUX  acknowledged that knowing the  personnel cost of                                                               
political  appointees in  the executive  branch would  be helpful                                                               
information to  have.  She  suggested that  Representative Wilson                                                               
follow up on that request.                                                                                                      
                                                                                                                                
4:07:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  WILSON asserted  that she  had already  requested                                                               
that  information multiple  times, which  is why  she had  looked                                                               
forward  to  seeing  the  fiscal  note  from  the  Department  of                                                               
Administration to  see if  they would list  any of  the appointed                                                               
positions.   She concluded that  the governor would be  okay with                                                               
the current bill's proposed changes due to the lack of response.                                                                
                                                                                                                                
CO-CHAIR  LEDOUX stated  that  she was  having  a difficult  time                                                               
comprehending why  there is a  0-dollar fiscal note,  adding that                                                               
it should probably  be a negative fiscal note.   She said she was                                                               
hopeful that by the bill's  next hearing the administration would                                                               
provide an explanation.                                                                                                         
                                                                                                                                
REPRESENTATIVE WILSON noted that the  bill was going to the House                                                               
Finance Committee  next where  they would  probably ask  the same                                                               
question.                                                                                                                       
                                                                                                                                
4:08:54 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  WOOL inquired  as to  Alaska's statutory  definition of                                                               
"exempt"  and "partially  exempt."   He noted  the importance  of                                                               
accounting  for employee  positions and  salaries in  the budget,                                                               
adding that it should be "a basic condition of transparency."                                                                   
                                                                                                                                
REPRESENTATIVE  WILSON agreed  to follow  up on  the definitions.                                                               
She mentioned that the last time  she went through the budget she                                                               
found two people  with the same PCN number, which  she thought to                                                               
be strange.                                                                                                                     
                                                                                                                                
4:10:12 PM                                                                                                                    
                                                                                                                                
The committee took a brief at-ease at 4:10 p.m.                                                                                 
                                                                                                                                
4:11:11 PM                                                                                                                    
                                                                                                                                
CO-CHAIR LEDOUX announced that HB 48 was held over.