Legislature(1997 - 1998)
04/10/1997 05:14 PM Senate FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 150 PUB. EMPLOYEES: MOVING, COMP TIME & PERS
ART CHANCE testified on behalf of the bill. Also
testifying were MIKE MCMULLEN and JOHN CYR. COCHAIR
PEARCE MOVED Amendment #1. Without objection,
Amendment #1 was ADOPTED. COCHAIR PEARCE MOVED
Amendment #2. Without objection, Amendment #2 was
ADOPTED. COCHAIR PEARCE MOVED Amendment #3. Without
objection, Amendment #3 was ADOPTED. COCHAIR PEARCE
MOVED CSSB 150(FIN) from committee with individual
recommendations. SENATOR ADAMS objected, then withdrew
his objection. Without further objection, CSSB
150(FIN) was REPORTED OUT with two previous zero fiscal
notes from the Department of Labor, previous zero
fiscal notes from the Department of Administration and
the Senate State Affairs Committee, and a new zero
fiscal note from the Department of Public Safety.
SENATE BILL NO. 150
"An Act relating to moving expenses of state employees, to
compensatory time for state employees, and to calculation of
compensation for the public employees' retirement system."
ART CHANCE, Consultant, House and Senate Finance Committees,
informed the committee that the bill was directed at some
specific cost items in state employment. Section 1 removed
the particular items from the scope of bargaining under the
Public Employment Relations Act (PERA). Section 2 required
that any state employee who voluntarily transfers to another
location commit to five years at that location or repay all
state incurred moving costs with interest. A change to AS
39.24.060 was intended to eliminate informal compensatory
time arrangements between employee and supervisors. The
Federal Labor Standards Act (FSLA) and all the state
collective bargaining agreements require that compensatory
time arrangements be formal, written agreements. Private
arrangements were common in state service. It would require
that the employee be paid rather than receive the time off.
The purpose was to remove large time-off liabilities and to
force accountability on the part of supervisors who enter
into informal arrangements. Section 3 removed overtime
compensation from the definition of compensation for the
purpose of calculating Public Employees Retirement System
(PERS) benefits as a cost-saving measure.
SENATOR ADAMS inquired if there were any other state
employees similar to public safety officers that would be
relocated in the same manner. MR. CHANCE responded that the
provision only applied to an employee who voluntarily
transfers so that a state relocation wouldn't subject one to
repayment of moving costs. SENATOR ADAMS then inquired
about restrictions on overtime compensation with respect to
safety workers such as fire fighters. MR. CHANCE said there
were many ways to pay fire fighters and other emergency
service employees under the FLSA. It was easy to design a
compensation arrangement for fire fighters other than a low
wage and a short work week with a lot of overtime. SENATOR
ADAMS reiterated his concern with that class of workers. In
response to a question from SENATOR ADAMS, MR. CHANCE stated
that he worked on contract to the House and Senate Finance
Committees for $10 thousand.
MIKE MCMULLEN, Personnel Manager, Division of Personnel,
DOA, addressed the committee again. He called attention to
Section 3 which created a fourth tier in the PERS. The
legislation was intended to address specific problems, such
as a belief that some employees in the final few years of
their employment would move to an area of high geographic
differential and schedule themselves for an extraordinary
amount of overtime and thus boost their retirement from
those activities. He pointed out that Tiers 2 and 3
addressed some of this and a solution could be to address
such situations through collective bargaining rather than
create a fourth tier retirement for the entire PERS. He
noted there were several situations in the state where
overtime was built into the employment process such as fire
fighters and to hire more fire fighters to eliminate the
overtime was not applicable in a fire emergency. He listed
other types of employees such as snow-removal and
international airport workers. He explained the differences
in the PERS that would be established with a Tier 4, noting
that it would be more difficult than the Tier 2 and 3
changes, and the monetary effect on the retirement system
would be zero. It would take thirty years for Tier 4 to
have a full effect, which would be almost invisible.
In response to a question from SENATOR PARNELL, MR. MCMULLEN
said overtime for the state was in the realm of two to three
percent of total payroll. He explained that the
calculations worked out to a net effect of 3/4 of one
percent over a thirty year period.
SENATOR TORGERSON asked what section of the bill affected
PERS and municipalities. MR. MCMULLEN replied that Section
3 affected all PERS employers and employees.
COCHAIR PEARCE explained that the original concern that led
to Section 3 was the Anchorage Police Department and
acknowledgment that there were a number of long-term
employees of the department who signed up for maximum
overtime in an effort to increase their retirement benefits.
There was some question as to whether that was a safe
situation. It was found that the system could not be
changed for the present employees but could be changed for
future employees so that overtime could not be used to bump
up retirement.
JOHN CYR, President, NEA-Alaska, testified that the first
two sections of the bill had no impact on employees
represented by NEA. Section 3 impacted classified school
district employees such as maintenance and custodial
workers. He noted in the last few years they had seen their
employment status go from year-round to seasonal because of
funding cutbacks. SB 150 would deny these low-wage people,
who do not schedule their own overtime, to use their
overtime for retirement. It impacted a class of people that
he didn't believe the bill was intended for. In response to
a question from COCHAIR PEARCE, MR. CYR explained that those
workers were now seasonal or part-time employees and did not
qualify for unemployment compensation. Additional
discussion about school district employees led to
conversation about how to exempt them from the legislation.
COCHAIR PEARCE indicated she would be willing to work with
Mr. Cyr on language to remedy the situation because the
legislation was not intended for those types of employees.
COCHAIR PEARCE informed the committee that she had three
amendments to offer. The first was at the request of the
Department of Public Safety regarding waiving a moving
expense repayment if a written finding was made that the
voluntary relocation was made in the best interest of the
state. COCHAIR PEARCE MOVED Amendment #1. Without
objection, Amendment #1 was ADOPTED.
COCHAIR PEARCE MOVED Amendment #2 which would rewrite
language on page 2, lines 19-21. Without objection,
Amendment #2 was ADOPTED.
COCHAIR PEARCE MOVED Amendment #3 that added language to
page 2, line 17, regarding an employee moving or leaving
state service within five years. There were some questions
about the definition of "leaving state service" which was
explained by MR. CHANCE.
End SFC-97 # 95, Side 2
Begin SFC-97 # 96, Side 1
COCHAIR SHARP asked if there was objection to the amendment.
There being none, Amendment #3 was ADOPTED.
COCHAIR SHARP brought up page 2, line 21, after the word
"transfers" and inquired how it would apply if "terminates"
were included in the language. MR. CHANCE believed
dismissal would be considered an involuntary action and come
under the same provisions as an involuntary transfer.
There was general discussion and explanation about various
topics related to the bill including collective bargaining
agreements.
COCHAIR PEARCE, stating her intent to work with Mr. Cyr on
an amendment regarding concerns about school employees,
MOVED CSSB 150(FIN) from committee with individual
recommendations. SENATOR ADAMS objected, then withdrew his
objection. Without further objection, CSSB 150(FIN) was
REPORTED OUT with two previous zero fiscal notes from the
Department of Labor, previous zero fiscal notes from the
Department of Administration and the Senate State Affairs
Committee, and a new zero fiscal note from the Department of
Public Safety.
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