03/17/2009 09:00 AM Senate STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| SB78 | |
| SB23 | |
| HB63 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 63 | TELECONFERENCED | |
| *+ | SB 78 | TELECONFERENCED | |
| *+ | SB 69 | TELECONFERENCED | |
| + | SB 23 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
SENATE STATE AFFAIRS STANDING COMMITTEE
March 17, 2009
8:59 a.m.
MEMBERS PRESENT
Senator Linda Menard, Chair
Senator Kevin Meyer, Vice Chair
Senator Hollis French
Senator Joe Paskvan
MEMBERS ABSENT
Senator Albert Kookesh
COMMITTEE CALENDAR
SENATE BILL NO. 78
"An Act relating to the powers and duties of the legislative
audit division."
HEARD AND HELD
SENATE BILL NO. 23
"An Act repealing the defined contribution retirement plans for
teachers and for public employees; providing a defined benefit
retirement plan for teachers and public employees; making
conforming amendments; and providing for an effective date."
HEARD AND HELD
CS FOR HOUSE BILL NO. 63(FIN)
"An Act relating to the Council on Domestic Violence and Sexual
Assault."
HEARD AND HELD
SENATE BILL NO. 69
"An Act reestablishing the Alaska Commission on the Status of
Women; and relating to the purpose and powers of the Alaska
Human Relations Commission."
BILL POSTPONED TO March 19, 2009
PREVIOUS COMMITTEE ACTION
BILL: SB 78
SHORT TITLE: LEGISLATIVE AUDIT DIVISION POWERS
SPONSOR(S): SENATOR(S) DYSON
01/26/09 (S) READ THE FIRST TIME - REFERRALS
01/26/09 (S) STA, FIN
03/17/09 (S) STA AT 9:00 AM BELTZ 211
BILL: SB 23
SHORT TITLE: REPEAL DEFINED CONTRIB RETIREMENT PLANS
Sponsor(S): Senator(S) Elton
01/21/09 (S) PREFILE RELEASED 1/9/09
01/21/09 (S) READ THE FIRST TIME - REFERRALS
01/21/09 (S) L&C, STA, FIN
02/12/09 (S) L&C AT 1:30 PM BELTZ 211
02/12/09 (S) Heard & Held
02/12/09 (S) MINUTE(L&C)
02/19/09 (S) L&C AT 1:30 PM BELTZ 211
02/19/09 (S) Heard & Held
02/19/09 (S) MINUTE(L&C)
02/26/09 (S) L&C AT 1:30 PM BELTZ 211
02/26/09 (S) Moved CSSB 23(L&C) Out of Committee
02/26/09 (S) MINUTE(L&C)
02/27/09 (S) L&C RPT CS 4DP 1NR NEW TITLE
02/27/09 (S) DP: PASKVAN, MEYER, THOMAS, DAVIS
02/27/09 (S) NR: BUNDE
03/17/09 (S) STA AT 9:00 AM BELTZ 211
BILL: HB 63
SHORT TITLE: COUNCIL DOMESTIC VIOLENCE: MEMBERS, STAFF
SPONSOR(S): REPRESENTATIVE(S) FAIRCLOUGH, HOLMES, COGHILL,
WILSON
01/20/09 (H) READ THE FIRST TIME - REFERRALS
01/20/09 (H) STA, FIN
01/20/09 (H) PREFILE RELEASED 1/16/09
02/12/09 (H) STA AT 8:00 AM CAPITOL 106
02/12/09 (H) Moved CSHB 63(STA) Out of Committee
02/12/09 (H) MINUTE(STA)
02/13/09 (H) DP: JOHNSON, GATTO, SEATON, GRUENBERG,
WILSON, PETERSEN, LYNN
02/13/09 (H) STA RPT CS(STA) 7DP
02/26/09 (H) FIN AT 1:30 PM HOUSE FINANCE 519
02/26/09 (H) Moved CSHB 63(FIN) Out of Committee
02/26/09 (H) MINUTE(FIN)
02/27/09 (H) DP: THOMAS, GARA, CRAWFORD, JOULE,
AUSTERMAN, KELLY, FAIRCLOUGH, SALMON,
02/27/09 (H) STOLTZE
02/27/09 (H) FIN RPT CS(FIN) 9DP
03/02/09 (H) VERSION: CSHB 63(FIN)
03/02/09 (H) TRANSMITTED TO (S)
03/09/09 (S) READ THE FIRST TIME - REFERRALS
03/09/09 (S) STA, FIN
03/17/09 (S) STA AT 9:00 AM BELTZ 211
WITNESS REGISTER
SENATOR FRED DYSON
Alaska State Legislature
Juneau AK
POSITION STATEMENT: Presented SB 78 as sponsor.
PAT DAVIDSON, Auditor
Division of Legislative Audit
Alaska State Legislature
Juneau AK
POSITION STATEMENT: Answered questions about SB 78.
JESSE KIEHL, Staff
to Senate District B
Alaska State Legislature
Juneau AK
POSITION STATEMENT: Presented SB 23.
PAT SHIER, Director
Division of Retirement and Benefits
Department of Administration (DOA)
Juneau AK
POSITION STATEMENT: Answered questions about SB 23.
REPRESENTATIVE ANNA FAIRCLOUGH
Alaska State Legislature
Juneau AK
POSITION STATEMENT: Presented HB 63 as sponsor.
ACTION NARRATIVE
8:59:35 AM
CHAIR LINDA MENARD called the Senate State Affairs Standing
Committee meeting to order at 8:59 a.m. Present at the call to
order were Senators Meyer, Paskvan, and Menard. Senator French
arrived soon thereafter.
SB 78-LEGISLATIVE AUDIT DIVISION POWERS
9:00:40 AM
CHAIR MENARD announced the consideration of SB 78.
9:00:44 AM
SENATOR FRED DYSON, Alaska State Legislature, sponsor of SB 78,
said auditor Pat Davidson has frustrated him over the years
because she is always right. "I have come to the conclusion that
it's a very well-run function and they have done an excellent
job for us." Ms. Davidson tells him that her authority is
limited to audits of state organizations. He would like to
expand it to cover any organization that receives state funds.
SB 78 does that. He has heard that some of the pass-through
grants of state divisions were "kinda insider deals" where the
people steering the grants gave the money to very close
associations, including family members. He is not asserting that
that is true, but he is concerned about it. He has asked Ms.
Davidson to audit things that he thought were being misused. She
told him she doesn't have that authority. When Governor
Murkowski took office he said he was surprised at how little
auditing there was in the executive branch. The auditors have
done magnificent work, and he wants to give them the authority
to do audits anywhere public funds pass through state hands. The
legislature is a steward of public funds.
SENATOR DYSON said Ms. Davidson doesn't arbitrarily audit
things. She is subject to the legislature's direction. There is
a drafting error on page 1, line 4. The drafter changed "shall"
to "may" and it should be changed back. The other change on page
2 clarifies that the legislature and the audit office have the
authority to track public money that goes through the state.
9:04:56 AM
SENATOR MEYER asked if this would include federal money passed
through the state, including the economic stimulus money that
the state will receive.
SENATOR DYSON said his intention is to give the authority to
audit any public monies that pass through state hands.
9:05:34 AM
SENATOR FRENCH asked if the boy scouts got $5,000 to work on
their ball fields, would SB 78 allow for a total audit of all
boy scouts or would it just be limited to the $5,000?
SENATOR DYSON said his intention is to only track the money that
went through the state. He hears from his district that grants
from the state are getting siphoned off for other projects. The
auditor could chase that down. He would like to see SB 78 made
into a committee bill.
PAT DAVIDSON, Auditor, Division of Legislative Audit, said she
agreed with changing "shall" to "may". That wouldn't weaken her
current authority. In existing law there are two areas that make
the audit division as effective as it is. Item number 6 allows
access at all times to books, accounts, reports and other
records -- whether confidential or not -- of every state agency.
It also requires assistance and cooperation of all state
officials and other state employees on the inspection,
examination, and audit of state agency accounts. That makes the
audit division effective and efficient. Because both Section 5
and 6 refer to state agencies, in Section 11 the committee may
want to extend the division's authority to nonprofits or local
governments. "We are a service agency to the legislature. If
it's the legislature's policy call that you want us to be
following that state money to wherever it goes, I'm fine with
that." It is unclear if she is now allowed to audit once the
money has left the state agencies. If there is a grant agreement
that allows the department to audit the money, her division can
do an audit. There is money that flows out of the state without
many strings attached, like revenue sharing, and she can't audit
those. It's fine if the legislature gives the audit division
that authority, but it should consider whether it wants the
auditors to have access to confidential information at that
local level. That is an effectiveness and efficiency issue.
CHAIR MENARD asked if she supported the bill as written.
MS. DAVIDSON replied, "If the legislature wants the audit
division to be able to follow all state money into local
governments and nonprofits, then I believe that Section 11 will
do that for us" But the two other concerns are public policy
issues. "Do you want us to be able to look at confidential
information, if generated, and require the assistance of state
and local officials?" Those are efficiency and effectiveness
issues.
9:12:06 AM
CHAIR MENARD assumed this would require an increase in staff.
MS. DAVIDSON said there is a zero fiscal note because it doesn't
mandate any additional audits. It allows the Budget and Audit
Committee to approve additional audits. Currently, about 70
percent of her workload is mandated by statute. The other 30
percent is from legislative requests approved by the committee,
and they are dealt with on a first come, first served basis. If
those audit reports aren't completed in a timely manner, she
will hear about it. A staffing discussion would follow. This may
increase the workload, but she would have to see.
SENATOR MEYER asked what her backlog is now. If someone requests
an audit and it is approved, does it take a year to complete?
MS. DAVIDSON said it will take about six to nine months. Federal
auditors are talking to her about additional requirements for
the stimulus money. "Normally that statewide single audit that
covers all the federal requirements eats up about 60 percent of
our budget - it's going to be going up, and that workload is
probably going to be there for the next four to five years."
9:14:29 AM
SENATOR MEYER said, "She doesn't need any additional staff to do
what's being asked of her in the bill; it's just that if we want
it done faster than the six to nine months or year ... then we
would have to add staff, and of course that would change the
fiscal note." He is concerned about the federal money. The state
is responsible for state money. But, for example, if federal
money came to the state and was passed to the school district,
what would the state do with the results of the audit?
MS. DAVIDSON said the federal government is more consistent
about putting audit requirements on their money than the state
is. The federal government wants the state to be accountable for
any federal money passed to the state. The system that is set up
now is the single audit approach. So when federal money comes to
a school district - either directly or from the state - when the
auditors are in there, they will be doing federal compliance
work to make sure the money is spent in accordance with the
federal requirements. The state agencies are responsible for
taking any findings from those audits and acting on them. "And
so right now the layer for federal money is pretty well
complete, but with all single audits, there's thresholds for
what you have to audit and what you don't have to audit."
Federal dollars passing through now generally have audit
requirements with them.
9:16:58 AM
SENATOR MEYER asked if that includes the stimulus money.
MS. DAVIDSON said the U.S. Office of Management and Budget,
General Accounting, and the Inspector General in each department
are scrambling to come up with "compliance supplements," which
are the regulations that the auditors will have to follow when
auditing that money. Her understanding is that "they're cranking
those things up for us to look at more - rather than less --
when it comes to the economic stimulus money."
SENATOR FRENCH asked if receiving a small amount of state money
would enable the legislative Audit and Budget Committee to order
an audit of the entire organization. Language on page 2, lines
24 and 25, suggests that the receipt of just a little state
money would allow a "thorough top-to-bottom review of any
organization that got any amount of money from the state." In
terms of efficiency, it would concern him if the auditors were
asked to look at the Alaska boy scout organization "from stem to
stern" because it got $5,000 for a ball field. That would not be
a wise use of state resources. He asked Ms. Davidson if the bill
language was broader than it should be.
9:19:12 AM
MS. DAVIDSON said the way she read it and based on her
background, "we would follow the state money." But there would
be some overlap. If, for example, $5,000 of state money was
comingled with $10,000 of Rasmussen money, "we would limit
ourselves as much as possible to the $5,000; however, when you
get into an organization that small you're not going to find a
sophisticated accounting system where they are setting up
controls ... for different pots of money, and as a result ...
our evaluation would be of the system overall." But there would
be a focus on just the state's $5,000.
SENATOR FRENCH said Ms. Davidson has a sterling reputation, but
for posterity he asked that the language be tightened with
respect to the powers of the audit committee and auditing board.
9:21:27 AM
SENATOR PASKVAN said if the audit is approved, could the
approving language have those restrictions?
MS. DAVIDSON said the audits that are approved by the
Legislative Budget and Audit committee are generated by
individual legislators. They write to the committee chair
requesting an audit. In that request they have to identify what
the objective is, and she has to understand what the requester
wants. The legislature has authority over state funds, but she
is not sure that even the legislature can order an audit of
raffle receipts of an organization. There is an inherent
limitation on what can be audited because the authority comes
from the legislature. The bill will allow her to move from state
agencies down to nonprofits and local governments. "I didn't
read it to expand it beyond state funds or federal funds flowing
from the state."
9:23:49 AM
SENATOR DYSON remembered previous conversations with Ms.
Davidson where he asked if she could hire contract auditors, and
she had indicated that she could. If the committee thinks
something is a priority, the tools are in place to hire help.
Ms. Davidson made a good point about what access an auditor will
have when auditing a non-state organization. He will fix that
language today. He asked again to make SB 78 a committee bill
because it is excellent public policy.
SENATOR MEYER moved to adopt Amendment 1, which inserts the word
"duties" and on Page 1, lines 4 and 5, deletes "may", and
inserts "shall". There was no objection and Amendment 1 was
adopted.
SENATOR FRENCH moved Amendment 2, conceptually, as follows: On
page 2, line 24, "that the audit function be restricted to the
state dollars that an organization receives and not an umbrella
audit." He trusts Ms. Davidson, but the language says: "perform
an audit of an organization that receives money from or through
the state." That is a sweeping statement and is too broad.
SENATOR DYSON said that would be good. "I would encourage you to
consider whether or not that it includes federal funds that flow
through the state." He wants the language to include "public
funds flowing through the state."
SENATOR FRENCH said no one wants to see fraud, waste, or abuse.
On the other hand, the powers of the federal government to watch
its money versus the state's ability to watch state money is out
of whack. State money should only be spent to watch state
dollars. He suggested taking a day to tighten the language and
pass it out in the next hearing.
SENATOR MEYER said the sponsor requested a day to rework it.
SENATOR FRENCH said he will draft something for the sponsor.
9:28:55 AM
CHAIR MENARD held SB 78 and took a brief at-ease.
SB 23-REPEAL DEFINED CONTRIB RETIREMENT PLANS
9:30:32 AM
CHAIR MENARD announced the consideration of SB 23.
SENATOR PASKVAN said he took over sponsoring the bill for former
Senator Kim Elton. He and Senator Elton's staff have invested a
tremendous amount of energy into SB 23, "and I am honored to
carry this legislation forward on behalf of Senator Elton and
the bill's eight remaining cosponsors." He said the Senate Labor
and Commerce Committee took a very good bill and made it a
little better by taking the recommendations of the Chief
Financial Officer of the Fairbanks North Star Borough, who
presented testimony on his own behalf. SB 23 is sound social
policy. Teachers, police, firefighters, and other public
employees earn the right to a dignified retirement. The bill
will help recruit and retain workers. It is sound fiscal policy.
"We know that between the DB [defined benefit] and the DC
[defined contribution], it's nearly a wash." There are studies
about a better bang for the buck from the National Institute of
Retirement Security. The DB adds a stabilizing influence, and
the 2006 expenditures and retirement benefits in the state of
Alaska accounted for 6,270 jobs and paid $385 million in income
within the state. It was $1 billion in total economic output,
and it accounted for $155 million in federal, state, and local
tax revenues.
JESSE KIEHL, Staff to Senate District B, Alaska State
Legislature, said the bill may need a new short title because it
doesn't repeal the DC plan. Those statutes remain on the books.
It places virtually all new hires of the state, municipalities,
and school districts into the DB pension system. It also
provides a choice to a very limited group of professionals who
are already vested in some other pension system. They would be
people who have retirement security, like a retired military
person who would be a "great catch" for an employer. The other
new ones would go into the least expensive tier: Tier III for
the public employees retirement system (PERS) and Tier II for
the teachers retirement system (TRS). "Those are the most
restrictive of the defined benefit - the pension systems - the
most difficult to vest in a pension, the most difficult in, most
importantly, the health care benefit; however, they still
provide a very good and adequate and secure retirement for their
beneficiaries who remain in public employment long enough to
vest in the benefits." He referred to the information in the
committee packets and on the public record.
9:36:21 AM
MR. KIEHL said the greatest benefits to the state and the school
districts are the great incentives for employees to stay on. It
also helps recruit better employees. The DC plan allows
employees to take away the employer's money and the money that
came out of their paychecks when they leave, but under the DB
system an employee can cash out their own money but not the
state money that was put into the pension program. That money
stays, earns interests and dividends, and helps fund the
benefits for others. It is a strong incentive for employees to
stay. That is important because the state and school districts
spend a lot of money training employees. It is not at all
uncommon to spend $15,000 training a new employee. Public safety
employers say they spend over $150,000 to train a new employee.
Turning them over in a hurry is not good management. Defined
benefit systems help keep good employees.
9:38:04 AM
SENATOR MEYER asked about employees who have no intention to
stay, like college professors who like to go from college to
college to advance their careers. Would they have an option? Are
the only people who can choose between the two plans ones who
are already vested in a DB plan?
MR. KIEHL replied in the affirmative.
SENATOR MEYER asked about giving an option to any new employee.
MR. KIEHL replied that the University of Alaska has something
like that, but it creates more costs. The actuaries call it
"adverse selection." The most expensive people to provide a
secure pension to, like people 10 years from retirement, are
just about guaranteed to choose the DB plan, and people who cost
the least, like those entering state service at a young age, are
more likely to choose the DC plan. It changes the demographics
of the pool and ends up costing more. There is also the question
of retirement security. The recent market has shown that
professional managers invest better. The professional investment
managers in the Department of Revenue who manage the pension
trust funds were down about 22 percent at the end of 2008.
Record losses in the market hit everybody. The DC accounts were
down about 35 percent. "A staggering difference." The DOA has
told state departments that when a state employee goes to an
investing seminar offered to those in the DC plan by the state,
it's work time. So the state pays troopers, biologists, file
clerks, and others to learn about investing instead of doing
their state work. At the same time, the state is paying
professional investment managers. That may not be the most
efficient use of state resources.
SENATOR MEYER said it seems that the state is having to go
outside to recruit employees. So offering a choice of plans may
get more younger people who want a DC plan. It is not that big
of an issue to him, but it might be helpful for recruitment.
9:43:30 AM
SENATOR FRENCH asked that a letter to Pat Shier from Buck
Consultants on February 12, 2009 about the relative costs of the
two plans be put on the record. He asked for those numbers and
how Mr. Shier saw it.
9:44:08 AM
PAT SHIER, Director, Division of Retirement and Benefits,
Department of Administration (DOA), said page 1 of that letter
has a comparison of the DB and DC plans for PERS. This is normal
cost only. "You see the 2.97 percent at the top of that column -
- that's the average normal cost rate for a DB employee -- 7.98
percent for medical cost normal, and the total 10.95 compared to
the DCR rate of 5 percent for pension, 0.38 for occupational
death and disability, 0.85 percent for health, 3 percent for the
health reimbursement arrangement, for a total of 9.23."
SENATOR FRENCH asked him how the medical costs can be so wildly
different. One is 7.98 for medical normal cost rate for DB Tier
III, and DCR is 0.85 plus 3 percent, which is half of what the
state is paying for the Tier III employees.
MR. SHIER said most of that is plan design. Also, a significant
feature separating the DB plan from the DC plan for health is
that one must retire out of the system in the DC plan to get the
employer-paid health plan. It is unclear to many people that the
DC retirement plan is actually a hybrid. The health plan in that
system is paid entirely by employer contributions. That's the
0.85 percent. That describes the cost of putting money away now
to pay health claims under that plan for those that gain access
by retiring out of the system and staying long enough. There is
cost sensitivity in the new plan because even retirees will have
to pay some portion of the premium. "We are designing into that
some health improvement features and other sensitivities to cost
in- and out-network mixes. Those are not in the current health
plan right now."
SENATOR MEYER asked about making the plan optional to new
employees. What costs would be associated with that? The DB plan
is more expensive to the state, so would it be beneficial if
some new employees took the DC plan because they don't plan on
staying in Alaska for more than five or six years? Is the
administration still neutral?
MR. SHIER said the administration is concerned about any change
in the retirement systems that would add to future cost or to
the unfunded liability. The fiscal note still shows a
significant increase in costs for 2011 and on, even under the
limited-choice provision of the current bill. The administration
is taking a cautious position. He doesn't know what the bill
will do for recruitment. About 20 percent of the PERS workforce
are DC; thousands of people have been hired under the new tier
for both TRS and PERS. Individuals may be incented to stay
longer; "however, we must remember that in the defined benefit
plan, after 10 years an individual can leave the state of Alaska
public employment with the state of Alaska or a political
subdivision or a school district - it's actually a little
shorter than that - and they take with them that guarantee to
pay a pension and health care for the rest of their life after
they retire. Age 60 would be the normal retirement age." Under
the current DC plan, a worker must stay in the system for a
sufficient number of years and then retire directly out of the
system in order to have access to the health care benefit. "We
really don't have the data to show definitively that recruitment
and retention are materially affected by the current DCR plan."
9:50:50 AM
SENATOR MEYER asked if administrative costs would increase by
making the plans optional to all new employees.
MR. SHIER said the complexity of a choice would add
administration costs. The DOA would strive to reduce costs.
Costs are not insignificant in calculating the amount of DC
balance an individual may have if he or she chooses to switch to
DB. "Every time we make a change to the system, we do introduce
some complexity and we have some costs."
SENATOR PASKVAN said the fiscal note indicates that in 2012 the
cost will be about $16 million, and that is based on the
assumption of all people returning to DB.
MR. SHIER said that is accurate. The identifier reflects that
number. In conversations with the sponsor's staff, it was
retooled. It produced a fiscal note, dated 3/16/09, showing a
slightly lower number: $15 million. That reflects the idea that
there will be choice.
SENATOR PASKVAN said, "So that the public policy issue is framed
a little more closely, that $15 million is the cost in reference
to approximately a $3 billion payroll, so that $15 million is
maybe one half of one percent of a payroll cost."
MR. SHIER said it reflects the change in the normal cost rate,
and that increase for both PERS and TRS, when including the
health portion, goes over 1 percent.
9:55:00 AM
CHAIR MENARD held SB 23 over and the committee took a brief at-
ease.
CSHB 63(FIN)-COUNCIL DOMESTIC VIOLENCE: MEMBERS, STAFF
9:56:27 AM
CHAIR MENARD announced the consideration CSHB 63(FIN).
REPRESENTATIVE ANNA FAIRCLOUGH, Alaska State Legislature,
speaking as sponsor, said Alaska has ranked number one in sexual
assault in the nation for 28 out of the last 30 years. "We have
some horrific numbers in this state ... when it comes to
violence." The 25th legislature created a taskforce to relook at
how Alaska delivered services to people who experience domestic
violence and sexual assault. The taskforce created a report. She
was chair of the taskforce and sponsor of the legislation. It
had bipartisan and bicameral support. Senator Elton endorsed
CSHB 63(FIN).
REPRESENTATIVE FAIRCLOUGH said the bill changes the number of
council members from seven to nine. It adds one new public
member and a member from the Department of Corrections (DOC).
The Department of Health and Human Services previously had the
DOC under it. This will give the taskforce the opportunity to
start talking about prevention as well as accountability, and go
through the full spectrum about what happens to the victim and
the perpetrator. The bill also requires one of the public
members to be from a rural community, and the CS defines that
community as having a population of 7,500 or less.
REPRESENTATIVE FAIRCLOUGH said the bill changes the term of
office from two to three years because council members didn't
get adequate training and only sometimes saw a budget once
during their term. It will give them more historical
perspective. There was great controversy in previous years in
funding the council. There was concern that the Alaska Network
on Domestic Violence and Sexual Assault is currently written in
statute that the governor "shall" talk to the network and review
nominations from the council. There is consensus to change that
"shall" to "may". She encourages the governor to use the
resources of the network, which is a membership program with 19
entities throughout Alaska. The bill clarifies that a public
member can't be a state employee. When she was the executive
director it seemed like everyone was a state employee. They were
all doing a good job, but it didn't feel like there was a true
public member.
10:02:16 AM
REPRESENTATIVE FAIRCLOUGH said many of the described changes are
in Section 1 of the bill. Section 3 changes the quorum
requirements. Section 4 changes the employment status of the
council staff, except for the executive director, to nonexempt
positions. Section 5 modifies the language in statute that deals
with exempt employees. Section 6 adds a new subsection dealing
with the appointment of a new member on the council.
10:03:44 AM
REPRESENTATIVE FAIRCLOUGH said there is a question if staff
would have to take a pay decrease to move to nonexempt
positions. She also doesn't know if the employees would have a
waiting period for health insurance and if preexisting
conditions will be covered. She has a conceptual amendment to
strip that part of the bill and find out if she can rewrite it.
It can also be worked on in committee. The taskforce supported
the change because the council staff should not be exposed when
governors change, because continuity is important. She doesn't
want people to lose benefits or wages. "We were trying to secure
their positions currently as they exist today, and let them have
that nonexempt position."
CHAIR MENARD said she could reschedule the bill for Thursday.
REPRESENTATIVE FAIRCLOUGH suggested having the changes refer
only to future employees, but that could create an inequity.
SENATOR PASKVAN asked why the definition of "rural" is 7,500.
REPRESENTATIVE FAIRCLOUGH said the other body wanted Bethel to
be considered a rural community. There are five different
definitions of rural in state statute. That definition may
increase the number of applicants to the council.
CHAIR MENARD held HB 63 in committee.
10:09:44 AM
CHAIR MENARD adjourned the Senate State Affairs meeting at 10:09
a.m.
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