Legislature(2013 - 2014)HOUSE FINANCE 519
04/12/2013 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB7 | |
| SB95 | |
| SB47 | |
| SB62 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 21 | TELECONFERENCED | |
| += | SB 18 | TELECONFERENCED | |
| + | TELECONFERENCED |
CS FOR SENATE BILL NO. 95(FIN)
"An Act relating to the compensation, allowances,
geographic differentials in pay, and leave of certain
public officials, officers, and employees not covered
by collective bargaining agreements; relating to the
compensation and geographic differentials in pay of
certain justices and judges; relating to certain
petroleum engineers and petroleum geologists employed
by the Department of Natural Resources; relating to
increased pay for certain partially exempt employees
of the state in specific circumstances; making
conforming amendments; and providing for an effective
date."
2:31:53 PM
Representative Costello MOVED to ADOPT the proposed
committee substitute for CSSB 95, Work Draft 28-GS1101\C,
(Wayne, 4/11/13).
Vice-Chair Neuman OBJECTED for discussion.
DANIEL GEORGE, STAFF, REPRESENTATIVE BILL STOLTZE discussed
that the CS included five changes. He pointed to page 2,
lines 24 through 25 where language clarified who would be
subject to the leave accrual portions of the legislation.
He noted that previously the section had referred to
"officers and employees of the state employed before July
1, 2013, are entitled to personal leave with pay that
accrues as follows..." The language had been changed to
read "Officers and employees of the state who are first
employed before July 1, 2013, in a position for which leave
may accrue are entitled to personal leave with pay that
accrues as follows..." He noted that the same change had
been made to page 3, lines 5 through 6.
Mr. George pointed to the next change on page 4, line 12
where the word "and" had replaced the word "or" at the end
of the sentence ["(1) be exempt from the limitation under
(b) of this section; and..."]. He directed attention to
page 4, lines 15 through 21 where paragraph (e) had been
inserted.
2:34:26 PM
Mr. George reiterated the change on page 4, line 12, where
the word "or" had been replaced with the word "and" at the
end of the sentence. He pointed to the next change on page
4, lines 15 through 21 where a paragraph (e) had been
inserted. A drafting error had been corrected on page 12,
line 18, where the language "sec. 15" replaced "sec. 16" to
maintain consistency throughout the paragraph.
Representative Holmes asked about page 4, lines 15-21.
2:36:02 PM
CURTIS THAYER, DEPUTY COMMISSIONER, DEPARTMENT OF
ADMINISTRATION, pointed to various staff available for
questions. He mentioned that HB 195 was a similar bill. The
bill established the consistency for cost of living
allowances for non-covered employees of 1 percent, 1
percent, and 2.5 percent for the next 3 years respectfully.
He detailed that the increases had recently been bargained
with the public employee unions. The bill also reduced
leave accrual for new hires; current employees were
grandfathered into the previous accrual rate. Additionally,
a leave cap of 1,000 hours was created for the first time;
hours that were currently earned and were over 1,000 hours
were protected. The bill decreased the percentage between
pay increments for exempt and partially exempt employees
from 3.75 percent to 3.25 percent every 2 years.
Mr. Thayer continued to discuss the legislation; it would
allow the state to enhance its ability to recruit and
retain skilled professionals in highly complex and
specialized positions such as the Department of Natural
Resources manager position for the Division of Geological
and Geophysical surveys (the position had been vacant for
more than 1 year). The bill would also implement geographic
pay differentials; he noted that the CS included justices
and judges.
2:38:14 PM
Representative Munoz asked if the bill applied area cost
differentials to exempt and non-exempt employees for the
first time. If not, she wondered when the practice had been
implemented.
NICKI NEAL, DIRECTOR, DIVISION OF PERSONNEL, DEPARTMENT OF
ADMINISTRATION, replied that it was not the first time that
the geographic differential was applied to exempt
employees. She believed the statutory provision had been
adopted in 1966; the provision specifically applied to
partially exempt and non-covered classified employees. She
could not say whether the provision had first been applied
to exempt employees upon its implementation in 1966. She
detailed that a number of years ago, the provision had
begun to apply to exempt employees who were paid off of the
statutory salary schedule.
Representative Munoz asked for comment on a McDowell Group
study and any impact it had on the cost differential
calculations.
2:39:52 PM
Ms. Neal replied that the McDowell Group had recommended
the establishment of geographic differential pools. There
were five pools (including a base pool) and locations had
been grouped based on survey results. She relayed that
differences between surveys were not statistically
significant. For example, one pool including ranges above
base of 5 percent to 17 percent may have been grouped with
a geographic differential of 11 percent. She restated that
a statistically significant difference between the pools
did not exist.
Vice-Chair Neuman asked the department to comment on other
changes in the CS.
Ms. Neal communicated that Sections 1 through 3 had been
added in the Senate CS. The sections provided geographic
differential to judges and justices on $100,000 of their
base salary; the current geographic differential was
applied to $40,000. She shared that the proposed
differential was consistent with rates established in
Section 15 of the bill. Sections 4 and 5 had been amended
to clarify that leave accrual rates were determined based
on an employee's first date of hire as opposed to the
employee's most recent appointment date. An editing error
on page 4, line 12 had been corrected and the word "or" had
been replaced with the word "and" at the end of the
sentence.
Ms. Neal continued to address changes in the CS. A
subsection (e) had been added to the bill on page 4 [lines
15 through 21]. She relayed that the wording of the section
was consistent with wording in Section 6 that addressed
what would occur if 15 days of personal leave was not used
during a 12-month period. She elaborated that the leave
would be canceled without pay unless an agency head
certified in writing that the employee was denied the
opportunity to take the leave. Section 20 had been amended
in the Senate CS to define public officers as heads of
principle departments of the executive branch and permanent
and temporary employees in the executive branch (not
including the governor and lieutenant governor). She
continued that Section 16 had been incorrectly referenced
in Section 24, page 12, line 18 and had been corrected to
read "sec. 15."
Vice-Chair Neuman WITHDREW his OBJECTION. There being NO
further OBJECTION, Work Draft 28-GS1101\C was ADOPTED.
Representative Costello asked the department to comment on
the problem the bill attempted to solve related to leave.
She wondered if the bill would prevent a person from saving
leave to use at a future date for something like an
extended vacation.
2:44:54 PM
Mr. Thayer replied the bill would require a person who had
over 400 hours of leave to use 112.5 hours of leave. The
department had bargained with unions that one week of the
112.5 total could be cashed out. He added that employees
could choose to cash out all but one week of leave.
Mr. Thayer addressed the leave issue as a whole. He
explained that the absence of a cap on leave had been
brought to the forefront during the department's
negotiations with unions. He noted that a cap that had
existed on sick leave had been removed. He conveyed that
the state currently had an unfunded leave liability of $164
million. One of the bargaining goals was to address the
issue by slowing down the accrual for new employees after
July 1, 2013; the change applied to the three bargaining
units and the legislation would extend the change to non-
covered employees. The bill placed a cap of 1,000 hours on
accumulated leave (the cap had also been bargained with the
unions; the Classified Employees Association union had a
cap of 825 hours). He furthered that there were 10
employees that made up 35,000 hours of leave that was
valued at $1.6 million. He stated that the value of leave
over $1,000 was $1.2 million. Under the legislation, the
liability of the future 10 employees in outlying years
would be $400,000 instead of $1.6 million.
Mr. Thayer continued that the mandatory usage of leave had
been increased under the legislation. The existing usage
requirement was one-week of leave per year; the requirement
had been increased to two weeks of leave for employees with
below 400 hours of leave; employees with over 400 hours of
leave would be required to take three weeks of leave with
the ability to cash in one of the three weeks. He explained
that a person with 400 hours of leave was accumulating 270
hours, but they would only be required to use 112 hours. He
listed items used by the bill to address the $164 million
leave liability including the leave cap, new accrual
ratings, and increasing the mandatory leave usage. He added
that the current liability would not increase because the
department was actively working to reduce the amount to a
manageable level.
2:48:28 PM
Representative Gara pointed to page 4, line 8. He addressed
emergency situations that would enable an employee to use
more than 1,000 hours of leave. He thought the exception
would be permissible in situations beyond an employee who
was denied the opportunity to use leave. He wondered what
happened if a single mom with four children developed a
serious medical condition and needed the leave in order to
receive treatment. He asked if the hypothetical situation
would be covered under the bill.
Mr. Thayer replied that 1,000 hours of leave was worth
approximately 6 months. He communicated that union members
had access to emergency leave that would provide up to one
month of health care. He relayed that non-covered employees
would have to rely on leave donated by colleagues.
Representative Gara asked if the department saw a problem
with the limit. Mr. Thayer replied in the negative.
Representative Gara believed there was a problem. He
elaborated that a union employee would receive health care,
but no pay for an additional month; and a mother with
cancer needing extensive treatment could not use accrued
leave she had earned and worked for to help her through the
circumstance.
Mr. Thayer stated that 1,000 hours would be available to
the employee for use.
Representative Gara relayed that medical conditions could
last beyond 6 months in some circumstances.
Vice-Chair Neuman observed that a Department of Law
employee was available for questions as well.
2:51:14 PM
Ms. Neal clarified that an employee could accrue up to
1,000 hours and could use any of the leave they accrued.
She restated the potential medical situation as described
by Representative Gara and noted that employees of all
bargaining units and non-covered employees could receive
donated leave from coworkers. She expounded that an
employee would be paid for any donated leave received;
health insurance would continue for the any particular
month when an employee was in paid-leave status at the
first of the month. She specified that unions had
additional leave programs such as an emergency leave bank
that employees could contribute to and a catastrophic leave
bank; supervisors and confidential units had catastrophic
leave as well. She relayed that a generous amount of leave
was available. She added that employees were typically
generous with leave donation when a coworker had a medical
situation.
2:52:46 PM
Representative Gara asked for a description of the
catastrophic leave bank.
Ms. Neal replied that the catastrophic leave bank was
available to several unions and possibly more. She
explained that provisions differed by agreement; however,
the bank was most commonly filled by employees who
separated from the state with an excess leave balance. She
discussed that years back there had been a distinction
between annual and sick leave; when the conversion took
place many employees ended up with excess sick leave
because only a portion had been converted to personal
leave. The excess sick leave was available to an employee
when they had a significant medical condition. The balance
canceled when an employee terminates state service; all or
a portion of the units were placed into the catastrophic
leave bank. The bank was then available for union members
to maintain pay status typically for health insurance
purposes. She stated that most commonly the bank provided
enough leave to keep an employee in pay status the first
couple of days of the month to ensure their health
insurance is paid.
Representative Gara asked whether anyone was contributing
to the catastrophic leave banks currently.
Ms. Neal answered that some units had a substantial
balance. She shared that there were still employees with
excess sick leave balances. She stated that the balance
would likely be exhausted in many years; however, a balance
currently existed that employees continued to contribute
to.
2:55:16 PM
Representative Kawasaki asked how much leave existed in the
catastrophic and other union funds. He wanted to ensure
that protection existed for future years. Ms. Neal
responded that the department maintained and had access to
the accounts. She would follow up with the balances.
Representative Kawasaki referred to an amendment related to
the geographic pay differentials he had planned to offer to
a similar bill (HB 195); he did not plan to offer the
amendment to SB 95. He understood that there had been
controversy when the first differentials had been adopted.
He did not have reason to disagree with the McDowell Group
study, but he observed that for differential pay Fairbanks
was a 3 and Anchorage was a zero. He listed other
communities that were listed as zeros (Delta, Denali,
Cantwell) and guessed that the locations were on the road
system and would be more expensive. He wondered how
frequently the survey was conducted.
Mr. Thayer replied that a survey was supposed to be done
every five years; the most recent study had been completed
in 2009. The department would ask for an allocation from
the legislature in FY 15 for an updated study.
2:57:54 PM
Representative Kawasaki looked at language in Section 16 of
the bill noted that the geographic pay differential survey
was subject to appropriation, which was always the case. He
wanted to ensure that the division would conduct the
survey. He was interested to know whether the survey
results and pay rates across the state were changing. He
believed the department should have the information. He
noted that the survey was not a given because the
legislation specified that it would be done subject to
appropriation. He wanted the department to regularly ask
for money to fund the survey.
Ms. Thayer understood Representative Kawasaki's intent and
ensured that the department would make the funding request
at the five-year mark.
Representative Edgmon pointed to pages 6 and 7 of the bill
and stressed that the geographic differential numbers
between communities did not make sense. He looked at
various communities: Fairbanks was a 3, nearby Delta
Junction was a zero, Dillingham was a 37, nearby King
Salmon was a 50, Bethel was at 50, Nome was a 37. He
emphasized that the numbers were all over the map. He
wondered what could take place to bring the numbers into
alignment.
Mr. Thayer relayed that the department had emailed
responses to committee members' questions on April 11,
2013. He replied that the Bethel differential was higher
than those for Dillingham and Nome because the 2009
McDowell Group study assigned cost differentials to various
locations throughout the state based on a household
consumption survey and a retail price survey. He furthered
that below the differentials assigned to the locations
Bethel had been a 1.53, Dillingham was a 1.37, and Nome was
at 1.39. The study had also recommended that the state
define geographic differential pay pools in the various
communities. He elaborated that based on the
recommendations Bethel had been placed at 50 percent;
whereas Dillingham and Nome had been placed at 37 percent.
He furthered that the household consumption and retail
price surveys had looked at utilities, cost of fuel,
transportation costs, and home prices. He explained that in
some of the rural areas such as Glennallen and Tok many
residents did not have mortgages, which was factored into
the study as a low cost of living in the areas compared to
Fairbanks or Anchorage with home values of $300,000 or
$400,000. He noted that the McDowell Group could discuss
the survey with members.
Representative Edgmon did not want to belabor the point,
but restated that the numbers in the survey were disparate.
Vice-Chair Neuman had heard similar comments from other
committee members.
3:02:50 PM
Representative Thompson wondered why Valdez and Cordova
were at 11 and Yakutat was at zero. He looked at page 7 of
the bill and noted that Deadhorse was listed as 50 percent.
He relayed that state employees traveled to the community
to keep snow cleared at the airport; he wondered if the
employees were living in state housing and whether they
received a 50 percent differential or per diem. He asked
about the Coldfoot community as well.
Ms. Neal answered that if Deadhorse was an employee's duty
station they would receive the [50 percent] differential;
however, if their duty station was in Fairbanks the
employee would receive the Fairbanks differential and per
diem.
Representative Thompson asked for verification that an
employee based in Fairbanks traveling to Deadhorse for 3
weeks of work would be paid the Fairbanks differential and
per diem.
Ms. Neal replied in the affirmative.
3:03:55 PM
Representative Wilson asked about the household consumption
survey. She wondered if the survey looked at the price of
housing or if a person had a mortgage.
Mr. Thayer replied that the study had looked at both items.
He noted that phone interviews had been conducted with
employees to help with the study.
Representative Wilson asked how much the studies cost. Mr.
Thayer replied that the survey cost approximately $500,000.
Representative Wilson wondered how many employees were
contacted for the study. Ms. Neal replied that the study
results indicated how many employees were contacted in each
location. She could follow up with the data and informed
members that the study was available on the department's
website.
Representative Wilson speculated that the state could
conduct a cost of living survey for less than $500,000. She
recalled that communities did not believe the prior study
was accurate. She wondered if there would be a better way
to conduct the study.
Ms. Neal replied that the study determined the cost of
living in an area and included responses from a random
sample of community members. The prior study had cost just
under $400,000 and the department estimated the following
study would be around $500,000, but that it would not
exceed the amount.
3:06:12 PM
Representative Wilson asked if a Request for Proposal was
submitted for the survey. Ms. Neal answered in the
affirmative.
Vice-Chair Neuman asked Representative Holmes to look at
the cost of the surveys to see if there were ways to reduce
the number.
3:06:49 PM
Representative Gara had seen numbers changed in the past
based on personal experience and knowledge of committee
members. He surmised that Representative Thompson,
Representative Edgmon, or other committee members may be
able to point out illogical geographical pay differentials
and to modify the numbers until more accurate data was
available.
Representative Gara pointed to page 4, lines 6 through 8.
He asked for verification that a state employee could use
more than 1,000 hours of leave if they had been denied the
opportunity to use it.
Ms. Neal replied that the provision would enable an
employee to accumulate more than 1,000 hours of leave if
they were denied the opportunity to use it during that
year. She noted that the ability was subject to the
adoption of regulations by the personnel board. She added
that providing the ability was the department's intent.
Representative Gara wondered if the department was keeping
track of leave hours that employees were not able to use.
Ms. Neal replied that an employee would be required to keep
their leave balance at 1,000 hours or below at the end of
the leave year. Employees had the ability to use leave or
to cash it in to keep the level at 1,000 hours. The
department did not allow employees to accumulate more than
1,000 hours of leave.
Representative Gara queried how the department would grant
more than 1,000 hours to people who had been denied the
opportunity to use leave. Ms. Neal replied that DOA
notified employees and supervisors prior to the end of a
leave year that the employee would exceed the maximum
allowable limit at the end of the year. She detailed that
the employee had the option of scheduling the leave with
the supervisor's approval or cashing it out to keep the
number of hours at or below 1,000.
3:09:44 PM
Representative Gara asked for verification that the
department allowed employees who were denied the
opportunity to use the leave to exceed the 1,000 limit.
Ms. Neal responded in the affirmative. She elaborated that
regulations would allow the department head to certify that
an employee had been denied the opportunity to use the
leave, which would enable their leave balance to accrue
beyond the 1,000 hour limit.
3:11:15 PM
Representative Thompson asked whether money had been set
aside to fund the leave balance or if it was unfunded.
Ms. Neal replied that the state had a reserve account. The
balance was sufficient to pay the leave for the next year,
but it was not sufficient to pay out all of the existing
leave.
Representative Thompson shared that when he had been mayor
[City of Fairbanks] the city had 200 employees and a
$700,000 unfunded leave balance. He expounded that the city
had eventually set the money aside and had begun funding
unused leave on an annual basis. He asked for verification
that the state had a leave balance set aside to help offset
the problem.
Ms. Neal answered in the affirmative.
Representative Gara MOVED to ADOPT Amendment 1:
Page 4, line 8:
Insert "leave" after "or for illness confirmed in
writing by a physician"
Representative Wilson OBJECTED.
Representative Gara spoke to the amendment. He explained
that there were rare circumstances in which a person knew
they would need to take time off due to illness. He
believed that a person was entitled to leave earned above
1,000 hours if an illness required them to take time off.
He understood the state's goal with the cap, but stressed
that an exception should exist in cases of serious illness.
He detailed that the extra 40 to 80 or more hours would
make a difference to individuals. He cited various
financial responsibilities a person may have such as caring
for children, paying for school, and other. He opined that
an exception for medical leave was of equal importance to
the one allowable exception that enabled employees who were
not permitted to use leave to accumulate over 1,000 per
year. He stated that under the circumstance employees
should be granted access to leave earned; he considered it
a work ethic reward.
Representative Thompson asked how the amendment would read
in the bill.
Representative Gara pointed to page 4, line 7 and stated
that the amendment would modify the bill to read
"...because the officer or employee was denied the
opportunity to use personal leave or for illness confirmed
in writing by a physician."
Representative Thompson pointed to the drafted amendment
and observed that it would insert the word "leave" [after
"or for illness confirmed in writing by a physician"].
Representative Gara MOVED to AMEND Amendment 1 to read:
Page 4, line 8
Insert after "leave" "or for illness confirmed in
writing by a physician"
Representative Holmes OBJECTED for discussion.
Vice-Chair Neuman asked Representative Gara to clarify how
the amendment would read in the bill.
Representative Gara replied that with the proposed
amendment the bill would read "...because the officer or
employee was denied the opportunity to use personal leave
or for illness confirmed in writing by a physician."
Representative Holmes asked for the administration to
comment on the amendment. She did not believe the language
in Amendment 1 would accomplish the sponsor's intent. She
detailed that the bill section related to how much leave a
person could accumulate; whereas, the sponsor had discussed
the amendment in the context of how much leave a person
could use. She understood that the legislation would allow
an employee to accumulate 1,000 hours of leave; a person
who became ill could use all 1,000 hours, but would not be
accumulating additional hours.
Vice-Chair Neuman clarified that the amendment to Amendment
1 was before the committee.
Representative Holmes WITHDREW her OBJECTION. There being
NO further OBJECTION, Amendment 1 was AMENDED.
Vice-Chair Neuman restated the amendment as amended.
Representative Gara affirmed.
Representative Munoz asked if the amendment would allow for
a continual accumulation of hours over the 1,000 hour
limit.
Ms. Neal replied in the affirmative. She clarified that an
employee's leave balance would reduce if they became ill
and began to use their leave. As long as the employee
remained in paid-leave status they would continue to accrue
leave. She furthered that when an employee was on leave
full-time they would use leave faster than they accrued it;
therefore, they would fall below the 1,000 hours and would
not reach a point where they would accumulate beyond 1,000
hours.
Vice-Chair Neuman pointed to language on page 4, line 4
stating that the personnel board may adopt regulations. He
wondered if the provision allowed the board to adopt
regulations that would cover the amendment.
Ms. Neal answered in the affirmative.
3:19:42 PM
Representative Thompson pointed to a situation in which a
person may realize they would need major surgery 5 or 6
months in the future that would require recovery time. He
asked for verification that the amendment would allow the
person to accumulate more than 1,000 hours to ensure they
had sufficient leave time accrued for recovery.
Ms. Neal affirmed.
Representative Costello stated that the intent of Amendment
1 was to allow a person to accrue and use more leave. She
observed that under the system a person could not accrue
more than 1,000 hours of leave while they were in paid-
leave status. She believed the amendment could also address
a situation where a person knew they would need to take
leave in the future to deal with a medical issue. She
detailed that if the person accrued more than 1,000 hours
and had a letter from a doctor they would be allowed to use
the total hours of leave earned.
Ms. Neal replied that the tracking of the issue might prove
challenging.
Representative Costello countered that under the current
bill the department would track individuals accruing more
than 1,000 hours who had not been permitted to take leave.
She wondered why there would be a difference in the ability
to track one circumstance and not another.
Ms. Neal agreed that tracking would be available for
conditions under the amendment [if adopted].
Vice-Chair Neuman added that the amendment would allow the
personnel board to adopt regulations to deal with the
issues.
3:23:12 PM
Representative Kawasaki pointed to a circumstance in which
a person had saved up leave in anticipation of double knee
replacement surgery. He believed individuals were planning
ahead for major medical needs more frequently. He wondered
if a person could take leave if another person in their
family was ill.
Ms. Neal replied in the affirmative; a person could take
leave to care for a family member. She pointed to the
existence of federal and state family leave acts.
Representative Kawasaki spoke in support of the amendment.
He discussed that the Fairbanks Memorial Hospital had a
leave bank and a maximum leave cap of 650 hours; however,
the hospital also had the ability to surpass the limit for
items such as adult care. He provided an example of a
husband and wife sharing duties to care for elder family
members. He believed the circumstances were arising more
and more frequently.
Representative Gara asked for verification that a person
could use leave if they accrued it. Another committee
member or an administration representative replied in the
affirmative [inaudible].
Representative Wilson wondered if the department was in
favor of the amendment. She stated that the issue
represented a policy call and related to how much liability
the state would have. She believed 1,000 hours of leave was
substantial. She read the proposed amendment: "for illness
confirmed in writing by a physician." She stressed that
there were a multitude of illnesses, some of which would
have a minor impact; however, the minor illnesses could
also be brought to a supervisor for increased leave
approval under the amendment. She surmised that the intent
of the existing exception that would allow an employee to
exceed 1,000 hours of leave was related to specific
situations where specialists with unique expertise could
not take time off. She opined that the current language
would not create a significant amount of tracking for the
department, but that the amendment could increase that
number substantially and may require DOA to employ a person
to provide the tracking function. She believed the
amendment was counterproductive to the goal of reducing the
state's liability.
3:26:54 PM
Mr. Thayer noted that the department had not previously
discussed the amendment. He reminded the committee that the
bill only applied to 1,300 non-covered executive branch
employees (such as employees of the Department of Law). He
shared the concern that non-life threatening illnesses may
be harder to track or defend; the goal was to cap a
liability. He stated that there was a compassion that
played into the conversation related to life threatening
illnesses. He relayed that the unions felt that six months
was a generous leave amount; the unions had been granted
the 1,000 hour cap and he felt it made sense to provide the
same number for non-covered employees.
Representative Wilson voiced her opposition to Amendment 1.
She believed the amendment would cause the issue to be
brought up for union contracts. She furthered that the idea
had come at a late notice and she did not know exactly how
it would impact the bill. She opined that if the idea was
good that it should be introduced the following legislative
session for inclusion in all contracts instead of applying
it to a limited number of employees.
3:28:41 PM
Representative Thompson spoke in support of the amendment.
He surmised that if a person knew that they were going to
need a double hip replacement or knee replacement that
regulations would specify the requirement for confirmation
by a physician explaining how many months a person would be
out of work. He believed it would be up to the department
to outline the criteria. He stressed that a person should
be able to save leave hours if they provided a letter from
a physician.
Vice-Chair Neuman stated that the personnel board was able
to adopt regulations. He remarked that there were many
unknowns related to the issue.
Representative Holmes communicated that she was "on the
fence" regarding the amendment. She believed the amendment
would not help people plan far enough ahead for illnesses
such as cancer, but that it would help people planning for
surgery. She discussed that the amendment would provide
more generous terms to exempt and partially exempt
employees than to union employees.
3:30:43 PM
Representative Costello wondered whether the amendment was
too vague or if the department could use the committee's
intent as a guideline for the adoption of regulations.
Mr. Thayer replied that the committee's testimony could be
gathered to help formulate regulations. He understood the
intent and saw a need for a similar amendment; however, he
was concerned about who would determine whether an employee
needed extra leave hours. He stressed that the state did
not want to get into situations in which an employee had a
significant amount of leave that they could cash out at any
time. He furthered that if leave accrual above 1,000 hours
was allowed it would necessary to define that it was for a
medical reason, when it would occur, and how long it would
take. He stated that the amendment alone would not allow
the department to accomplish the definition. He pointed to
a situation where an employee could amass many hours of
leave, decide not to have surgery, and then cash the leave
out at retirement.
3:32:28 PM
Vice-Chair Neuman wondered if the amendment would allow
personnel to adopt regulations that would address the
concerns.
Representative Costello was aware of the growing liability
to the state. She noted that the amendment was intended to
address circumstances in which a person needed extra leave
for use at a specific time. She pointed to the word "may"
on page 4 ["the personnel board may adopt regulations to
allow an exemption from the requirements..."] and wondered
if it meant the department would not be required to take
any action.
Ms. Neal replied that it was the department's intent to
adopt regulations, but the language did not require it to
do so.
Representative Costello asked for a track record of donated
leave hours. She wondered whether there were individuals
who received a tremendous amount of donated leave.
Ms. Neal replied in the affirmative. She elaborated that
employees were often very sympathetic when their co-workers
were sick. She had seen employees receive hundreds of hours
and referenced a specific situation in which an employee
had received over 1,000 hours of donated leave. She noted
that donated leave was not subject to the cap; it went into
a separate account and was processed on an as needed
(first-in, first-out) basis.
Vice-Chair Neuman asked for verification that a person
could not cash out donated time. Ms. Neal answered in the
affirmative.
3:35:12 PM
Representative Munoz stated that the issue of fairness was
her priority. She observed that the legislation would apply
to higher paid employees and not union employees. She
believed the lack of fairness was troubling. She wanted to
see the issue become part of future contract negotiations
and to find a way to make it fair for all employees.
Representative Gara addressed the comments provided by
other members and the administration. He communicated that
the personnel board would not need to adopt regulation if
the amendment was worded well and did not require further
delineation; however, the word "may" enabled the board to
put regulation in place if necessary. He discussed that
there were many circumstances when people planned for
medical events. He pointed to his personal experience
planning 6 months ahead for cancer surgery the prior year.
He noted that recovery time could be much longer than
anticipated. He addressed a concern that a malingerer could
sham the state; he emphasized that the state would have the
right to fire the employee. He believed adopting the
amendment would give unions a better chance at negotiating
its expansion to their members. He would like to see union
members receive the benefit as well, but it was not
possible to amend their contracts at present. He reiterated
his support for the amendment.
3:38:53 PM
Representative Wilson pointed to donated leave banks that
could be set up for employees. She believed it made a
difference that the amendment could not be applied to all
state workers. She surmised that there were items in place
that could be used to address the issue. She guessed that
unions would have negotiated for more leave if 6 months was
not sufficient.
Representative Thompson remarked that depending on someone
receiving donated leave could not be relied on. He provided
an example and stated that he may choose to donate leave to
Representative Wilson but may choose not to donate leave to
Representative Gara.
Representative Costello stated that the amendment addressed
a valid concern. She relayed that she would vote no at
present, but would write a letter asking the department to
look at the issue. She felt that the current wording may be
problematic and was willing to work with Representative
Gara during the interim to correct the issue.
A roll call vote was taken on the motion to adopt Amendment
1.
IN FAVOR: Gara, Kawasaki, Thompson, Neuman
OPPOSED: Wilson, Costello, Holmes, Munoz
The amendment failed (4/4).
3:42:51 PM
Representative Costello discussed the three previously
published fiscal notes. The first note (FN1) was from the
Office of the Governor and showed a fiscal impact of
$8,171,900 in FY 14, $4,821,800 in FY 15, and $10,664,000
in FY 16 [corrected below]. The second note (FN2) was from
the Legislature and indicated a fiscal impact of $1,281,200
in FY 14, $410,400 in FY 15, and $1,039,300 in FY 16. The
third note (FN3) was from the Alaska Court System and
included a fiscal impact of $1,088,700 in FY 14, $749,100
in FY 15, and $1,890,900 in FY 16.
Representative Holmes clarified that the FY 16 amount in
FN1 was $10,644,000.
Representative Costello affirmed.
3:44:14 PM
Representative Costello MOVED to REPORT HCS CSSB 95(FIN)
out of committee with individual recommendations and the
accompanying fiscal notes.
Representatives Kawasaki and Gara OBJECTED for discussion.
Representative Kawasaki commented that the last geographic
pay differential study had been done in 2008 and was
outdated; a capital budget appropriation had been made to
fund the 2008 study. He noted that the previous study had
been done 15 years earlier. He had not offered an amendment
that would make sure the director was required to conduct a
survey. He believed it was the department's intent to
conduct a survey, but he thought members may be more
comfortable if the language was in statute. He WITHDREW his
OBJECTION.
Representative Gara appreciated the interest that had been
expressed in Amendment 1. However, he pointed to page 4,
line 7 of the legislation and stated that it was impossible
to work out a solution with the department because statute
specified that DOA would not be allowed to do what the
amendment would do. He detailed that the only people
allowed to accumulate over 1,000 hours of leave were
employees who were denied the opportunity to use personal
leave. He stressed that the change would need to be made in
statute.
Vice-Chair Neuman remarked that an amendment could be
offered on the House floor.
There being NO further OBJECTION HCS CSSB 95(FIN) was
REPORTED out of committee with a "do pass" recommendation
and with three previously published fiscal impact notes:
FN1(GOV), FN2(LEG), FN3(CRT).
3:47:08 PM
RECESSED
3:54:16 PM
RECONVENED
| Document Name | Date/Time | Subjects |
|---|---|---|
| CS-FIN SB 7, version C (with FilmFix).pdf |
HFIN 4/12/2013 1:30:00 PM |
SB 7 |
| Memo 13-232 lnd (for CS-FIN SB 7, version C).pdf |
HFIN 4/12/2013 1:30:00 PM |
SB 7 |