Legislature(2017 - 2018)GRUENBERG 120
03/15/2018 03:15 PM House STATE AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| HB400 | |
| HB71 | |
| HB352 | |
| Presentation: Indirect Expenditures – Wwami | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 352 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| += | HB 71 | TELECONFERENCED | |
| += | HB 400 | TELECONFERENCED | |
HB 71-NO ST. EMPLOYEE PAY INCREASE FOR 2 YRS
3:52:54 PM
CHAIR KREISS-TOMKINS announced that the next order of business
would be HOUSE BILL NO. 71, "An Act relating to compensation,
merit increases, and pay increments for certain public
officials, officers, and employees not covered by collective
bargaining agreements; and providing for an effective date."
[Before the committee was Version O.]
3:53:43 PM
CHAIR KREISS-TOMKINS opened public testimony on HB 71. After
first determining no one wished to testify, Chair Kreiss-Tomkins
closed public testimony on HB 71.
3:54:07 PM
REPRESENTATIVE BIRCH echoed his comments from the prior hearing
on HB 71, noting he was disappointed to see the wage freeze
component removed from the bill. He recalled that when the
provision was placed in the bill and a floor amendment was
subsequently pulled. He assumed that since the language was no
longer in the bill that a floor amendment could be considered
during operating budget deliberations.
3:54:58 PM
The committee took a brief at-ease.
3:55:50 PM
REPRESENTATIVE KNOPP asked for clarification on what the bill
does. He did not have any issue with the pay dates proposed;
however, he was unsure of the goal of the bill.
3:56:30 PM
CHAIR KREISS-TOMKINS related his understanding that currently if
a governor wanted to donate a portion of his/her salary, the
governor would receive the salary and be taxed for the full
amount. This bill would give the governor an option to waive a
portion of the salary and not be taxed for the entire salary.
REPRESENTATIVE KNOPP asked whether the legislature wanted to
limit the option to one individual or should it extend to anyone
who would like that option.
CHAIR KREISS-TOMKINS stated that there was some discussion at
the last committee hearing [on 3/8/18] to potentially allow
commissioners to do so.
REPRESENTATIVE KNOPP offered his belief that doing so for one
individual would set a bad precedent.
3:58:16 PM
LESLIE RIDLE, Commissioner, Department of Administration (DOA),
stated that the bill could be extended to the lieutenant
governor, the commissioners and legislators but not to other
state employees.
3:58:42 PM
KATE SHEEHAN, Director, Division of Personnel & Labor Relations,
Department of Administration (DOA), stated that because certain
salaries were set through legislation or the State Officers
Compensation Commission (SOCC) there would need to be
legislation to waive a portion of the salary in order not to be
taxed on it. That was not the same for other employees, so this
would be limited to the positions that the commissioner just
read.
3:59:10 PM
REPRESENTATIVE LEDOUX stated that the committee was currently
considering HB 71, so the bill could include everyone.
COMMISSIONER RIDLE answered that job classes she just listed
were set by the SOCC and included commissioners, legislators,
governor and lieutenant governor. She reported that everyone
else's salaries are set via collective bargaining and the State
Personnel Act; therefore, they are in a different class of
employees.
REPRESENTATIVE LEDOUX said she did not understand why all
employees cannot donate their salary back.
MS. SHEEHAN responded that under the Fair Labor Standards Act
the employer must pay for all hours worked; even salaried
employees are subject to some requirements; therefore, it was
not an option for some employees to donate their time.
REPRESENTATIVE LEDOUX asked for further clarification that a
federal law restricts the donation.
4:01:10 PM
REPRESENTATIVE WOOL suggested that if the governor wanted to
donate to a nonprofit that he would need to accept the money and
donate it and obtain a tax credit. This bill would allow the
governor to reduce his/her salary without incurring a tax
penalty.
COMMISSIONER RIDLE answered yes. She related her understanding
that the state is not a charity in terms of tax deductions,
noting she was not a tax attorney. She acknowledged that it
would be foregoing a salary and just not receiving it at all.
REPRESENTATIVE LEDOUX asked why it was not written to include
all the people it could include.
COMMISSIONER RIDLE answered that Governor Walker was interested
in doing so.
REPRESENTATIVE LEDOUX acknowledged that he could legally donate
the salary, but for the tax issue.
COMMISSIONER RIDLE answered yes.
4:03:06 PM
REPRESENTATIVE BIRCH offered his belief that the bill was about
avoiding federal income tax on salary. If one were to decline
the salary the person could not redirect it. He recalled that
he had seen newscasts that indicated Governor Walker wanted to
redirect the salary to police dogs and a myriad of other things.
He related his understanding that this bill allows for tax
avoidance.
COMMISSIONER RIDLE, with respect to redirecting the governor's
salary, advised that the funds would not be remitted to the
governor but would remain in the general fund. He stated that
Governor Walker wanted to be able to reduce his income and not
pay tax on something he did not receive, which would not be an
avoidance of tax.
4:04:39 PM
CHAIR KREISS-TOMKINS suggested that currently, as a legislator,
if he wanted to donate his salary to the state, he would pay
taxes on his $50,000 salary. He expressed an interest in
opening it up for legislators to waive their salaries.
COMMISSIONER RIDLE answered yes.
4:05:14 PM
REPRESENTATIVE BIRCH offered his belief that it was bad form to
do "one-offs" on legislation. He suggested that people could
write a check to a charitable organization.
4:05:45 PM
REPRESENTATIVE LEDOUX said her problem was that [Governor
Walker's] donation last year was highly publicized. She
suggested that passing this would be like "having your cake and
eating it, too." She suggested that most people who declined
their salaries would not be able to direct it to specific
[programs] and the declined salaries would remain in the general
fund. She surmised the governor would have more authority to
redirect the funds.
4:07:01 PM
REPRESENTATIVE JOHNSON stated that the governor could set his
own salary as long as it fell below a certain threshold.
COMMISSIONER RIDLE answered yes, that the governor could waive a
portion of his/her salary.
REPRESENTATIVE JOHNSON asked whether the salary could be waived
by month or must it be for a year.
COMMISSIONER RIDLE referred to page 1, line 7, of HB 71, which
read, " ... governor may waiver a portion of the annual salary
...."
4:08:02 PM
REPRESENTATIVE JOHNSON confirmed the governor would waive
his/her salary at the beginning of the year or fiscal year.
COMMISSIONER RIDLE responded that logistically it would be
figured out and accomplished through payroll. In further
response, she agreed it would likely be administered as an
annual request and waiver.
REPRESENTATIVE JOHNSON related her understanding that the bill's
goal would be to waive a portion of the income and not to
redirect the salary to a specific program.
COMMISSIONER RIDLE answered yes; that the salary would not be
received by the governor and would remain in the general fund.
4:10:08 PM
REPRESENTATIVE TUCK related his understanding that there would
be a cap, so that the governor would determine his/her salary.
COMMISSIONER RIDLE answered yes; the bill would allow the
governor to waive but not increase his/her salary.
4:10:35 PM
REPRESENTATIVE TUCK asked for further clarification on the
mechanics of the waiver and if the governor could choose to stop
the waiver.
COMMISSIONER RIDLE answered that she assumed the administration
would initiate it at beginning of year. She surmised it would
be harder but not impossible for different scenarios; however,
the department has not considered the mechanics yet. She added
that the administration preferred continuity in its processes.
4:11:47 PM
REPRESENTATIVE KNOPP referred to the explanation of changes and
time period and it appeared to sunset on June 30, 2019 and asked
for further clarification.
MS. SHEEHAN answered that that the original bill was for a two-
year period consistent with the two-year pay freeze. Version O
removed the section that limited it to the two-year period. In
further response, she stated that the explanation of changes
attempted to explain that the bill could extend past 2019.
REPRESENTATIVE KNOPP asked for further clarification on the
Section 3 of HB 71 and the reason for the two-week rather than
biweekly salary.
MS. SHEEHAN answered that a semi-monthly pay period payroll is
on the first or fifteenth of each month and the hours vary for
each pay period. A biweekly pay was more consistent since it
contains 75 hours for each pay period, spans two work weeks so
it was clearer. Some employees fall within semi-monthly and
others in biweekly.
4:14:13 PM
REPRESENTATIVE BIRCH asked for further clarification on the
organization that sets the governor's salary. He suggested it
might be helpful to hear from that organization. He remarked
that the 24 versus 26 weeks for semi-monthly or bi-monthly
seemed fine.
COMMISSIONER RIDLE pointed out that this bill was brought up
last year, that the State Officers Compensation Commission
(SOCC) met last fall but did not comment on bill.
4:15:57 PM
REPRESENTATIVE TUCK referred to Section 2 of the explanation of
changes for HB 71, which read as follows [original punctuation
provided]:
Section 2: New section. Removes language that
temporary salary schedules do not affect salaries of
employees in a bargaining unit represented by a labor
union established under the Public Employment
Relations Act and adds the term "pay period" to the
title. Language that was removed is now found in
section 3 of the bill.
REPRESENTATIVE TUCK referred to deleted language was in Section
2 of HB 71, which read, "[SALARY RATES ESTABLISHED UNDER
AUTHORITY OF THEIS SECTION DO NOT AFFECT THE SALARIES OF
EMPLOYEES PROVIDED FOR BY A COLLECTIVE BARGAINING AGREEMENT
...." He offered his belief that the deleted language should be
left in the bill.
MS. SHEEHAN answered that the language was still in the bill but
was under Section 3 in proposed [Alaska Statute] AS
39.27.012(c), which Section 2 would also amend. She related her
understanding that the Legislative Legal and Research Services
attorney used this bill as the vehicle to move to the bi-weekly
pay schedule, so they rearranged the bill. The intent was not
to change the provisions in AS 39.27.012.
4:17:30 PM
REPRESENTATIVE JOHNSON asked for further clarification on the
non-union exempt employees and wage freeze. She asked for
further clarification on the exempt employees who would be
affected by the pay freeze.
COMMISSIONER RIDLE, after confirming the question, answered that
the original bill would have affected anyone not in the union,
including the executive branch, the legislature, and the
university.
4:18:51 PM
REPRESENTATIVE JOHNSON related her understanding that this was
the language Representative Birch wanted included in the bill,
but it was removed in Version O.
COMMISSIONER RIDLE offered her belief that was correct.
4:19:23 PM
REPRESENTATIVE LEDOUX asked for further clarification on how the
federal government accomplishes salary waivers for presidents.
COMMISSIONER RIDLE was unsure but offered to research it for the
committee.
CHAIR KREISS-TOMKINS announced that HB 71 would be held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB400 Sponsor Statement 3.7.18.pdf |
HSTA 3/8/2018 3:15:00 PM HSTA 3/13/2018 3:15:00 PM HSTA 3/15/2018 3:15:00 PM |
HB 400 |
| HB400 Sectional Analysis 3.7.18.pdf |
HSTA 3/8/2018 3:15:00 PM HSTA 3/13/2018 3:15:00 PM HSTA 3/15/2018 3:15:00 PM |
HB 400 |
| HB400 ver A 2.28.18.pdf |
HSTA 3/1/2018 3:15:00 PM HSTA 3/8/2018 3:15:00 PM HSTA 3/13/2018 3:15:00 PM HSTA 3/15/2018 3:15:00 PM |
HB 400 |
| HB400 Fiscal Note DPS 3.1.18.pdf |
HSTA 3/1/2018 3:15:00 PM HSTA 3/8/2018 3:15:00 PM HSTA 3/13/2018 3:15:00 PM HSTA 3/15/2018 3:15:00 PM |
HB 400 |
| HB400 Amendment 1 3.7.18.pdf |
HSTA 3/8/2018 3:15:00 PM HSTA 3/13/2018 3:15:00 PM HSTA 3/15/2018 3:15:00 PM |
HB 400 |
| HB400 Amendment2 3.13.18.pdf |
HSTA 3/13/2018 3:15:00 PM HSTA 3/15/2018 3:15:00 PM |
HB 400 |
| HB400 Amendment3 3.14.18.pdf |
HSTA 3/15/2018 3:15:00 PM |
HB 400 |
| HB 71 Sectional Analysis 3.7.18.pdf |
HSTA 3/8/2018 3:15:00 PM HSTA 3/15/2018 3:15:00 PM |
HB 71 |
| HB71 ver O 3.2.18.pdf |
HSTA 3/8/2018 3:15:00 PM HSTA 3/15/2018 3:15:00 PM |
HB 71 |
| HB 71 Explanation of Changes 3.7.18.pdf |
HSTA 3/8/2018 3:15:00 PM HSTA 3/15/2018 3:15:00 PM |
HB 71 |
| HB352 Sponsor Statement 2.15.18.pdf |
HSTA 3/15/2018 3:15:00 PM |
HB 352 |
| HB 352 Sectional Analysis 2.26.18.pdf |
HSTA 3/15/2018 3:15:00 PM |
HB 352 |
| HB0352 ver A 2.16.18.pdf |
HSTA 3/15/2018 3:15:00 PM |
HB 352 |
| HB352 Fiscal Note DOE 3.12.18.pdf |
HSTA 3/15/2018 3:15:00 PM |
HB 352 |
| HB352 Fiscal Note DOR 3.12.18.pdf |
HSTA 3/15/2018 3:15:00 PM |
HB 352 |
| HB 352 Amendment March 7 2018.pdf |
HSTA 3/15/2018 3:15:00 PM |
HB 352 |
| HB 352 Supporting Doc NEW voter Opt-Out Mailer.pdf |
HSTA 3/15/2018 3:15:00 PM |
HB 352 |
| HB 352 Supporting Doc UPDATE voter mailer.pdf |
HSTA 3/15/2018 3:15:00 PM |
HB 352 |
| HB 352 Supporting Document - DOE bullets points.pdf |
HSTA 3/15/2018 3:15:00 PM |
HB 352 |
| HB 352 Supporting Document - Election Policy Work Group Report.pdf |
HSTA 3/15/2018 3:15:00 PM |
HB 352 |
| HB 352 Supporting Document - Excerpt from 2017 DOE Fiscal & Policy Challenges Report.pdf |
HSTA 3/15/2018 3:15:00 PM |
HB 352 |
| HB 352 Supporting Document 15PFVR-Statement-of-Costs.pdf |
HSTA 3/15/2018 3:15:00 PM |
HB 352 |
| HB352 Letter of Support_Speaker Edgmon.pdf |
HSTA 3/15/2018 3:15:00 PM |
HB 352 |
| H STA Indirect Expenditure Hearings 3.13.18.pdf |
HSTA 3/15/2018 3:15:00 PM |