Legislature(2017 - 2018)GRUENBERG 120

03/28/2017 05:30 PM House STATE AFFAIRS

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Heard & Held
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Heard & Held
Heard & Held
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Moved CSHB 13(STA) Out of Committee
        HB 181-LEGISLATURE PER DIEM AND TRAVEL ALLOWANCE                                                                    
6:04:30 PM                                                                                                                    
CHAIR KREISS-TOMKINS  announced that the final  order of business                                                               
would be  HOUSE BILL NO.  181, "An Act  relating to per  diem for                                                               
legislators; relating  to a travel allowance  for legislators and                                                               
legislative  employees;  and  relating   to  the  State  Officers                                                               
Compensation Commission."                                                                                                       
6:04:44 PM                                                                                                                    
The committee took an at-ease from 6:04 p.m. to 6:07 p.m.                                                                       
6:07:06 PM                                                                                                                    
BERETT  WILBER,  Staff, Representative  Jonathan  Kreiss-Tomkins,                                                               
Alaska  State   Legislature,  presented  HB  181   on  behalf  of                                                               
Representative Kreiss-Tomkins,  prime sponsor, with the  use of a                                                               
PowerPoint  presentation.   She began  by referring  to Slide  2,                                                               
entitled  "What's the  point of  HB 181?"   She  stated that  the                                                               
intent of  HB 181 is  to empower the State  Officers Compensation                                                               
Commission (SOCC) to set legislative per diem.                                                                                  
MS.  WILBER referred  to Slide  3,  entitled "How  does per  diem                                                               
currently work?"  She relayed  that legislative per diem is money                                                               
paid  to  legislators to  cover  lodging,  meals, and  incidental                                                               
expenses  related to  legislators'  work  during the  legislative                                                               
session.  It is automatically  paid to a legislator unless he/she                                                               
contacts  the  Legislative  Affairs  Agency  (LAA)  and  declines                                                               
payment, which may be done on a  daily basis.  She added that the                                                               
current per  diem policy for  Alaska legislators has been  set by                                                               
the  Legislative Council  Joint  Committee (Legislative  Council)                                                               
since 1993.   She explained that  the current policy is  that the                                                               
legislative per diem is equal to  the highest rate of federal per                                                               
diem for the location of session.                                                                                               
6:08:29 PM                                                                                                                    
MS. WILBER referred  to Slide 4, entitled "What  does the highest                                                               
federal  rate mean?"   She  stated  that the  U.S. Department  of                                                               
Defense (DoD)  sets the federal  per diem rate for  Alaska, which                                                               
is the  rate for  a non-contiguous  state.   Alaska's legislative                                                               
per diem  rate is  currently the  highest federal  short-term per                                                               
diem  rate.   She referred  to the  information on  the chart  on                                                               
Slide 4,  which lists  the maximum lodging  rate, meal  rate, and                                                               
incidental rate for  Juneau for two seasons.   She indicated that                                                               
the rate changes seasonally:  the  total maximum per diem for the                                                               
summer is $295 and for the winter  is $275.  She pointed out that                                                               
the  rate may  also  be adjusted  by DoD  according  to a  market                                                               
shift; for  example, it was  set at  $213 earlier in  the current                                                               
session and recently was changed to $275.                                                                                       
6:09:57 PM                                                                                                                    
REPRESENTATIVE  LEDOUX said  that her  understanding is  that the                                                               
seasonal change  is the  beginning of  March; however,  the chart                                                               
shows May as the beginning of the seasonal change.                                                                              
MS. WILBUR explained that the  seasonal dates listed on the chart                                                               
indicate yearly  changes for  winter and  summer.   She suggested                                                               
that  there are  additional "de  facto" adjustments  made by  DoD                                                               
based on local rates for lodging, meal, and living expenses.                                                                    
6:11:09 PM                                                                                                                    
MS. WILBUR  referred to Slide  5, entitled "Two Slide  History of                                                               
SOCC &  Leg Per Diem,  Pt. 1,"  and asked, "Why  does legislative                                                               
per  diem work  the way  it does?"   She  mentioned that  Slide 5                                                               
gives a short history on legislative  per diem and how it relates                                                               
to the SOCC.   She relayed that in 1986,  the SOCC was authorized                                                               
and  vested  with  full power  to  set  legislative  compensation                                                               
salaries,  including per  diem,  but  could only  do  so after  a                                                               
constitutional amendment was approved.   Until the constitutional                                                               
amendment was  passed, statutory  guidelines were  adopted making                                                               
legislative per diem rates the same  as those of [other] State of                                                               
Alaska (SOA)  employees.   These guidelines  were to  be repealed                                                               
once the constitutional amendment passed.                                                                                       
MS. WILBUR stated that by  1992, the constitutional amendment had                                                               
neither  been  passed nor  offered  to  voters.   She  said  that                                                               
applying the  SOA per diem  rates to legislators was  intended to                                                               
be a short-term  solution.  She offered that doing  so turned out                                                               
to  be an  accounting  "nightmare":   at  that time,  legislators                                                               
could receive  per diem  during both  session and  interim; there                                                               
was  a  short-term  rate  for legislators  not  living  in  their                                                               
permanent  residences during  session  or while  traveling to  do                                                               
legislative business; there was  a long-term rate for legislators                                                               
living  in their  permanent  residences  while doing  legislative                                                               
business; and there  was a variation on each rate  based on where                                                               
a legislator lived.                                                                                                             
MS.  WILBUR  related that  a  floor  amendment [Amendment  2]  to                                                               
Senate Bill  99, an  omnibus licensing bill,  was offered  by the                                                               
chair  of  Legislative Council  in  1993  [the Eighteenth  Alaska                                                               
State  Legislature, (1993-1994)].    The  amendment withdrew  the                                                               
authority  to   set  travel  reimbursement   and  per   diem  for                                                               
legislators from the  SOCC and gave the  authority to Legislative                                                               
MS. WILBUR  relayed that from  1994 to 2017,  Legislative Council                                                               
has had  the authority to  set legislative  per diem; it  has set                                                               
the per diem at  the highest federal rate of per  diem set by DoD                                                               
and based  on the  location at  which a  person is  receiving per                                                               
6:14:28 PM                                                                                                                    
MS. WILBUR  referred to Slide  6, entitled "Two Slide  History of                                                               
SOCC & Leg Per Diem, Pt. 2,"  to discuss the history of the SOCC.                                                               
She said that  Legislative Council withdrew the  authority to set                                                               
per  diem  from the  SOCC  because  the  SOCC  had not  yet  been                                                               
enacted.   She relayed that  in 2008, the SOCC  was reestablished                                                               
as a  fully functioning commission.   Former  Representative Mike                                                               
Doogan  introduced House  Bill [260]  to repeal  and replace  the                                                               
defunct SOCC  statutes and  establish a  new system,  which would                                                               
(indisc.)  the commission  to set  salaries for  legislators, the                                                               
governor, the lieutenant  governor, and department commissioners.                                                               
She  stated that  the  intent  of this  legislation  was to  keep                                                               
legislators "at arm's  length" from the process of  having to set                                                               
their  own  compensation  to  avoid  conflicts  of  interest,  to                                                               
decrease inequity  in the system  of setting rates, and  to avoid                                                               
having to  adjust legislative salaries through  legislation.  She                                                               
added that  it does not  look good when legislators  adjust their                                                               
own  salaries  by  legislation,   even  when  the  adjustment  is                                                               
necessary  and consistent  with  market prices.   She  maintained                                                               
that the  proposed legislation would require  Legislative Council                                                               
to  set per  diem in  accordance with  the recommendation  of the                                                               
MS.  WILBUR  relayed   that  the  language  in   House  Bill  260                                                               
pertaining to  the SOCC was subsequently  incorporated into House                                                               
Bill 417  by the House  Finance Committee and passed  both bodies                                                               
[as SCS  CSHB 417(FIN)],  establishing the SOCC  as it  is today.                                                               
Consequently,  the  SOCC  sets   salaries  for  legislators,  the                                                               
governor and  lieutenant governor, and  department commissioners.                                                               
She said  that currently  the SOCC  does not  address legislative                                                               
per diem.   She stated  that in  2009, the SOCC  recommended that                                                               
legislative  salaries be  increased from  $24,000 to  $50,400 per                                                               
year.   It also  eliminated interim per  diem, which  had allowed                                                               
legislators  to  claim  per  diem  during  interim  if  they  had                                                               
performed up to four hours of work on any given day.                                                                            
6:17:02 PM                                                                                                                    
REPRESENTATIVE  LEDOUX  asked  if  the SOCC  ever  recommended  a                                                               
salary increase after 2009.                                                                                                     
MS.  WILBUR  responded that  the  SOCC  made recommendations  for                                                               
salary  increases for  the governor  and  lieutenant governor  in                                                               
2011,  which the  legislature adopted;  in  2014, it  recommended                                                               
salary  increases   for  commissioners,  which   the  legislature                                                               
rejected.  She stated that in  2015, the SOCC recommended that if                                                               
a deputy  commissioner was offered  the position  of commissioner                                                               
and  his/her  salary  was  currently greater  than  that  of  the                                                               
commissioner, he/she would  not have to take a pay  cut to become                                                               
6:18:54 PM                                                                                                                    
REPRESENTATIVE WOOL referred to the  idea of the SOCC setting the                                                               
compensation  for  legislators with  the  intent  of keeping  the                                                               
process "at  arm's length" from  legislators.  He  suggested that                                                               
if the SOCC's recommendation is  subject to legislative approval,                                                               
then that  brings the decision within  arm's length.  He  gave an                                                               
example:   the  SOCC decides  to recommend  a legislative  salary                                                               
increase of 25  percent, because the legislators have  not had an                                                               
increase since  2009.   He asked  if it  could be  perceived that                                                               
there is an  expectation for the legislature to  act depending on                                                               
the political whim at the time.                                                                                                 
MS. WILBUR responded  that she will address that  in a subsequent                                                               
6:20:14 PM                                                                                                                    
MS.  WILBUR  said  that  even  though  the  SOCC  had  the  legal                                                               
authority to  set legislative per  diem as  far back as  2009, it                                                               
decided not to  do so; it wanted Legislative  Council to continue                                                               
to set travel allowances and legislative per diem.                                                                              
6:20:40 PM                                                                                                                    
MS.  WILBUR   referred  to  Slide  7,   entitled  "Current  legal                                                               
relationship,"  and   explained  that  it  describes   the  legal                                                               
relationship between the  SOCC and per diem policy.   She relayed                                                               
that  AS 24.10.130(c)  of Article  03, entitled  "Compensation of                                                               
Legislators," states  that the  Alaska Legislative  Council shall                                                               
adopt  a policy  in accordance  with AS  39.23.540(d).   She said                                                               
that AS 39.23.540(d) states that the  SOCC shall set the rate and                                                               
form of compensation benefits and allowances for legislators.                                                                   
6:21:21 PM                                                                                                                    
MS. WILBUR  referred to Slide 8,  entitled "State of the  SOCC in                                                               
2007."    She  stated  that  the  SOCC  is  a  five-person  board                                                               
appointed  by  the governor:    the  speaker  of the  House  puts                                                               
forward two  nominees; the president  of the Senate  puts forward                                                               
two nominees; and the governor  chooses one nominee from each and                                                               
appoints three people from the  public.  The commissioners on the                                                               
board serve "staggered"  four-year terms; they meet  no more than                                                               
once  per year  and  no less  than  once every  two  years.   The                                                               
commissioners  may  not  serve  on  any  other  state  boards  or                                                               
commissions  or   in  any  group   for  which  the   board  makes                                                               
recommendations for at  least four years before  becoming an SOCC                                                               
commissioner.  A  legislator would have to wait  four years after                                                               
his/her term ended before being eligible to serve on the SOCC.                                                                  
MS. WILBUR mentioned that the  duties of an SOCC commissioner are                                                               
to  set  salaries  for the  governor,  the  lieutenant  governor,                                                               
legislators, and  department commissioners.   She  clarified that                                                               
the  legislature  does  not  have   the  power  to  approve  SOCC                                                               
recommendations  but does  have the  power to  reject them.   The                                                               
legislature  may  refrain  from acting,  therefore  adopting  the                                                               
recommendations de  facto, or it  may pass legislation  to reject                                                               
the  recommendations.     She  explained  that   to  reject  SOCC                                                               
recommendations, legislators  must pass a  bill within  the first                                                               
60 days of the session  rejecting the recommendations.  She added                                                               
that the SOCC  puts forward a package of  recommendations so that                                                               
to reject  the recommendations, the legislature  must reject them                                                               
"wholesale."   She gave an  example:  the  SOCC may not  allow an                                                               
increase  in  the  lieutenant governor's  salary  but  reject  an                                                               
increase in commissioners' salaries.                                                                                            
6:23:35 PM                                                                                                                    
REPRESENTATIVE  WOOL  asked  what determines  SOCC's  agenda  for                                                               
making recommendations.                                                                                                         
MS. WILBUR replied  that it is written into statute  that SOCC is                                                               
to assess  if changes need to  be made, and that  assessment must                                                               
be  performed at  least once  every two  years and  no more  than                                                               
every year.   The assessment  entails a systematic analysis  of a                                                               
variety of  data to decide  if compensation and salary  rates are                                                               
appropriate  and  if  recommendations   are  needed.    The  SOCC                                                               
considers  rates  of  other states,  past  legislative  salaries,                                                               
cost-of-living,  inflation  rates,  and an  abundance  of  salary                                                               
6:25:04 PM                                                                                                                    
MS. WILBUR  referred to Slide  9, entitled "SOCC  Membership," to                                                               
point out the current and past members of the board.                                                                            
6:25:32 PM                                                                                                                    
REPRESENTATIVE  WOOL  referred  to  Slide 9  and  asked  for  the                                                               
meaning  of "Public/House  of  Representatives"  after the  first                                                               
name under current members.                                                                                                     
MS. WILBUR explained  that each member is a  public member, whose                                                               
nomination comes  from the House of  Representatives, the Senate,                                                               
or the  governor.  She pointed  out the one vacant  seat shown in                                                               
the chart.                                                                                                                      
CHAIR KREISS-TOMKINS  asked if  that vacancy  has been  filled by                                                               
the governor.                                                                                                                   
MS. WILBUR replied that she  believes that Scott Cunningham holds                                                               
that seat, although the name is not yet on the SOCC website.                                                                    
6:26:40 PM                                                                                                                    
MS. WILBUR  referred to  Slide 10, entitled  "What would  it look                                                               
like if  SOCC set per diem?"   She mentioned that  she spoke with                                                               
Jessica   Geary   [Accounting    Finance   Manager,   Legislative                                                               
Administrative Services] of  LAA, who indicated that  she sees no                                                               
technical   or   logistic   difficulties,   under   the   current                                                               
legislative  accounting system,  with the  SOCC setting  per diem                                                               
rates.    She  stated  that the  SOCC  already  uses  data-driven                                                               
methods  to  craft fair  and  logical  proposals for  legislative                                                               
salaries and could do the same regarding per diem.                                                                              
MS.  WILBUR  pointed out  that  the  SOCC  is an  apolitical  and                                                               
impartial body  specifically designed to remove  legislators from                                                               
the awkward position  of setting their own  compensations and per                                                               
diems.    Tasking  the  SOCC with  that  function  supports  that                                                               
intent.   She said that with  authority over both salary  and per                                                               
diem,  the SOCC  can maintain  a balance  between cost-of-living,                                                               
which per  diem is intended  to cover,  and salary, to  make sure                                                               
that  legislators'  living expenses  are  covered  and a  diverse                                                               
range of  good candidates  are attracted to  public office.   She                                                               
added that  since the SOCC  meets a  minimum of every  other year                                                               
and  a  maximum   of  once  per  year,  it   can  make  necessary                                                               
adjustments or  address unexpected  changes without the  need for                                                               
legislation.   She suggested  that consequently,  legislative per                                                               
diem  would  cease  to  consume   legislative  time,  money,  and                                                               
6:28:23 PM                                                                                                                    
REPRESENTATIVE  LEDOUX asked  if  her  understanding is  correct:                                                               
the SOCC  has the  authority to perform  the tasks  mentioned but                                                               
has not performed them.                                                                                                         
MS.  WILBUR  replied that  in  statute,  in  the records  of  the                                                               
committee meetings  to establish  the SOCC,  and in  SOCC meeting                                                               
records,  there is  evidence to  suggest  that the  SOCC has  the                                                               
legal power  to set  per diem;  however, Legislative  Council has                                                               
been performing  this task for the  past nine years and  the SOCC                                                               
has declined to contest that.                                                                                                   
MS. WILBUR,  in response to  Representative LeDoux, said  that HB
181 would require the SOCC to  set per diem rates.  She confirmed                                                               
that currently  the SOCC has  authority under statute to  set per                                                               
diem rates;  it is  not using  this authority;  and HB  181 would                                                               
require them to use that authority to set per diem rates.                                                                       
6:30:29 PM                                                                                                                    
MS. WILBUR referred  to Slide 11 and stated that  on the right of                                                               
the slide  is a list  of the reports  that the SOCC  consulted to                                                               
make 2015  salary recommendations  - evidence of  its data-driven                                                               
approach to setting  salaries.  She pointed out  the statement on                                                               
the left of the slide indicating  that the SOCC will meet to make                                                               
recommendations   later  this   year;  therefore,   the  proposed                                                               
legislation is timely.                                                                                                          
6:31:05 PM                                                                                                                    
MS.  WILBUR referred  to Slide  12 to  give thanks  to those  who                                                               
assisted her with her research.                                                                                                 
6:31:41 PM                                                                                                                    
REPRESENTATIVE  TUCK  referred  to   Slide  6,  which  cites  the                                                               
legislation proposed  by Mike  Doogan.  He  pointed out  that the                                                               
slide indicates that the SOCC  was to adjust legislative salaries                                                               
every five years.   He asked if  that was correct or  if that was                                                               
eliminated from the bill.                                                                                                       
MS. WILBUR explained that she  inserted the language about having                                                               
to adjust salaries  every five years to  illustrate how difficult                                                               
it would be  for the legislators to set their  own salaries.  She                                                               
added that  to keep  up with  inflation and  cost-of-living, they                                                               
would  have to  adjust the  salaries often.   She  said that  she                                                               
regrets using  such specific information,  since it was  meant to                                                               
be representational and not factual.                                                                                            
6:33:01 PM                                                                                                                    
REPRESENTATIVE LEDOUX asked if the  SOCC has given any reason why                                                               
it has not considered either  a legislative salary increase, or a                                                               
legislative  salary  decrease within  the  last  13 years.    She                                                               
suggested that  it hasn't considered  the legislature at  all and                                                               
asked if there is an explanation for that.                                                                                      
MS. WILBUR answered that the  SOCC considers the legislature, but                                                               
making recommendations is a different matter.                                                                                   
6:34:13 PM                                                                                                                    
REPRESENTATIVE WOOL  asked how many state  legislatures determine                                                               
their  own  salary, and  he  offered  his  belief that  the  U.S.                                                               
Congress does vote on its own salary.   He stated that he grew up                                                               
in  a state  in which  lawmakers voted  on their  own salary  and                                                               
still do.                                                                                                                       
MS.  WILBUR  referred  to  a  list,  entitled  "2017  Legislative                                                               
Compensations By State," in the  committee packet.  She said that                                                               
she does not know the specific  number but said she believes that                                                               
19  states  have  independent  compensation  commissions  to  set                                                               
legislative salaries.                                                                                                           
6:35:51 PM                                                                                                                    
REPRESENTATIVE BIRCH stated  that in his experience,  per diem is                                                               
usually  based on  reimbursable  expenses, and  he suggested  the                                                               
SOCC might consider  such a system of payment.   He conceded that                                                               
paying a flat per diem rate is  easier.  He pointed out that many                                                               
of  the legislative  staff  are from  out of  Juneau  and do  not                                                               
receive per  diem.  He  asked, "How do  you reconcile that?"   He                                                               
mentioned  that 12  out  of 14  commissioners  in the  governor's                                                               
cabinet  are  domiciled  outside  of   Juneau.    He  stated  his                                                               
understanding  that there  are  some  housing accommodations  for                                                               
these  commissioners.   He  asked  for an  estimate  of how  many                                                               
legislative staffers are from out of town.                                                                                      
MS. WILBUR  replied that she  does not  know and will  defer that                                                               
question  to  Pamela  Varni [Executive  Director,  LAA],  who  is                                                               
present in the audience.                                                                                                        
REPRESENTATIVE  BIRCH  responded that  he  would  like to  better                                                               
understand   this   issue   and   if   the   responsibility   for                                                               
accommodating out-of-town staff lies with him or with the SOCC.                                                                 
MS. WILBUR  commented that legislative  staff do not  receive per                                                               
diem or  compensation and there  has been litigation in  the past                                                               
concerning  this.    She said  that  SOA  departmental  employees                                                               
receive  meals and  incidentals  as well  as  travel and  lodging                                                               
reimbursements  from the  state if  they  are away  from home  to                                                               
work.  She added that those  rates are set by the commissioner of                                                               
the Department of Administration  (DOA), and for these employees,                                                               
the policy  for per diem  and reimbursement is clearly  stated in                                                               
the  Alaska Administrative  Manual (AAM).   Legislative  staff do                                                               
not receive per  diem.  Legislators do receive per  diem, and the                                                               
policy  for  legislative  per  diem would  be  addressed  in  the                                                               
proposed legislation.                                                                                                           
REPRESENTATIVE BIRCH  asked how  per diem  is calculated  for SOA                                                               
employees.   He asked if lodging  is fully reimbursed and  a meal                                                               
allowance  is offered.   He  clarified  that he  is referring  to                                                               
employees of departments, not legislative employees.                                                                            
MS. WILBUR answered that per  diem for state employees who travel                                                               
for  work  consists  of  lodging  expenses,  which  are  paid  in                                                               
advance, a  $60 meal allowance,  and reimbursement  of incidental                                                               
expenses.  She  said that the question is,  Why can't legislators                                                               
just  jump on  the SOA  rate?   She explained  that SOA  employee                                                               
travel  consists of  a  brief  trip, and  rates  are  set by  the                                                               
commissioner of DOA  and/or by collective bargaining  units.  She                                                               
added that  none of these  characteristics apply  to legislators;                                                               
the nature  of legislator  travel -  to move  to Juneau  for four                                                               
months -  is very different  from SOA employee travel.   Applying                                                               
SOA per diem  policy to legislators - that is,  paying for travel                                                               
and lodging in advance - would be very difficult.                                                                               
6:43:11 PM                                                                                                                    
REPRESENTATIVE  WOOL  reiterated  that   when  a  state  employee                                                               
travels for  work -  such as to  visit a facility  or check  on a                                                               
dock -  it involves a  plane ticket,  a few nights  lodging, some                                                               
meals, and  possibly a  taxi.   He said  that legislators  are in                                                               
Juneau for  months and generally  have different  housing options                                                               
other   than  a   nightly  hotel.     These   alternative  living                                                               
arrangements  are typically  less  expensive  than nightly  hotel                                                               
expenses.   He concluded  that this  "gray area"  of compensation                                                               
would be addressed by the SOCC under the proposed legislation.                                                                  
6:46:01 PM                                                                                                                    
KATE  SHEEHAN,   Director,  Division   of  Personnel   and  Labor                                                               
Relations  (DPLR),  Department  of Administration  (DOA),  stated                                                               
that under  state statute, she  serves as secretary to  the SOCC.                                                               
In  response  to  Representative   LeDoux's  question  on  salary                                                               
increase recommendations  since 2009, she stated  that there have                                                               
been  recommendations, but  not for  the legislature.   The  SOCC                                                               
considers each  person or  group -  the governor,  the lieutenant                                                               
governor,  the legislators,  and the  department commissioners  -                                                               
then has a  discussion and determines recommendations.   It meets                                                               
several   times,  votes   on   the   recommendations,  issues   a                                                               
preliminary report by  November 15, and issues a  final report to                                                               
the legislature ten days after the beginning of session.                                                                        
REPRESENTATIVE  LEDOUX commented  that  it was  curious that  the                                                               
SOCC,  which  was  authorized to  deal  with  legislative  salary                                                               
issues, has made no recommendations since it was formed in 2009.                                                                
MS. SHEEHAN responded  that in the past four years,  the SOCC has                                                               
only  met twice  and has  determined for  various reasons  not to                                                               
make recommendations for wage increases.                                                                                        
REPRESENTATIVE  LEDOUX  asked if  those  reasons  have been  made                                                               
MS.  SHEEHAN responded  yes.   She stated  that the  meetings are                                                               
public and meeting  minutes are posted on the SOCC  website.  She                                                               
stated that she  has been in her position just  under three years                                                               
so has been to only one  SOCC meeting; the determination was made                                                               
at  that  meeting that  there  would  be no  recommendations  for                                                               
salary increases due to budgetary issues.                                                                                       
6:48:56 PM                                                                                                                    
CHAIR KREISS-TOMKINS asked how the  SOCC agenda is determined and                                                               
what method  it uses to  choose the categories of  state officers                                                               
that it will consider for compensation.                                                                                         
MS. SHEEHAN  answered that  the SOCC considers  each group  - the                                                               
governor,  the lieutenant  governor, the  commissioners, and  the                                                               
legislators.   There is data  provided for each group,  and there                                                               
is  discussion on  each  group.   She  said that  recommendations                                                               
might be  no salary  increases or some  salary increases  and not                                                               
others.  She  reiterated that the legislature may  either take no                                                               
action, in  which case  the recommendations  are adopted,  or the                                                               
legislature may reject all the recommendations.                                                                                 
6:50:02 PM                                                                                                                    
REPRESENTATIVE TUCK commented  that in 2009, there was  a bill to                                                               
reject the  SOCC recommendations.   He asked if  legislators paid                                                               
taxes on their interim per diem.                                                                                                
MS.  SHEEHAN responded  that she  was not  sure.   She said  that                                                               
there  are  not  always  taxes   paid  on  per  diem,  but  there                                                               
potentially  could be  taxes  on  per diem  if  it  is above  the                                                               
federal rate.                                                                                                                   
REPRESENTATIVE TUCK  expressed his understanding  that additional                                                               
compensation was  awarded when a  legislator left  his/her normal                                                               
workplace  to  conduct legislative  activity.    He offered  that                                                               
Juneau legislators  get per  diem because  they also  leave their                                                               
workplaces and forego other earnings;  they receive 35 percent of                                                               
what is  received by "traveling"  legislators and are taxed.   He                                                               
suggested that per diem is a  part of compensation; it is part of                                                               
legislative  salaries;  and  by   statute  it  is  determined  by                                                               
Legislative Council.                                                                                                            
6:52:22 PM                                                                                                                    
REPRESENTATIVE WOOL  responded that he has  heard the explanation                                                               
that  the  per diem  paid  to  Juneau  legislators, which  is  75                                                               
percent  of  the per  diem  paid  to non-Juneau  legislators,  is                                                               
taxed, because  they live in  their own  houses and eat  in their                                                               
own  kitchens.   Their  per  diem is  more  like  income and  not                                                               
compensation for  travel, lodging,  and meals.   He asked  if the                                                               
SOCC considers per  diem to be income, since  the living expenses                                                               
for legislators  vary greatly.   He mentioned  that the  SOCC has                                                               
not  recommended a  cost-of-living increase  in salary  since its                                                               
inception, and  he suggested it  may consider an increase  in per                                                               
diem to be a  raise.  He asked if that has  been discussed by the                                                               
MS. SHEEHAN replied  that the SOCC has  not discussed legislative                                                               
per diem since 2009.                                                                                                            
REPRESENTATIVE  WOOL  asked  if   the  SOCC,  as  a  compensation                                                               
commission,  considers   compensation  in  totality  and   if  it                                                               
considers  other sources  of compensation,  such  as received  by                                                               
Juneau legislators.                                                                                                             
MS. SHEEHAN responded  yes.  She said that would  be presented to                                                               
the  SOCC  for consideration  along  with  office allowances  and                                                               
6:54:38 PM                                                                                                                    
REPRESENTATIVE LEDOUX  asked if it is  fair to say that  the SOCC                                                               
has not looked at anything  with respect to the legislature since                                                               
MS. SHEEHAN replied  that the SOCC looked at  the historical wage                                                               
increases  for  the legislature  and  what  legislators in  other                                                               
states earn.   She said that her recollection is  that it did not                                                               
look at anything  beyond that, but she added that  she would have                                                               
to refer to the minutes.                                                                                                        
REPRESENTATIVE  LEDOUX  offered  that  the  SOCC  looked  at  the                                                               
salaries  in   other  states   and  decided   not  to   make  any                                                               
MS. SHEEHAN answered  that the SOCC considers  the current budget                                                               
REPRESENTATIVE  LEDOUX  noted  the  difference  between  a  state                                                               
employee  and a  legislator  regarding per  diem  expenses.   She                                                               
asked  if there  was  such  a thing  as  long-term  per diem  for                                                               
employees in the executive branch and, if so, what that is.                                                                     
MS. SHEEHAN  answered that  there is long-term  per diem,  and it                                                               
depends on the housing arrangement.   She said that the executive                                                               
branch may  need to send  employees to  oversee a project  for an                                                               
extended  time.   In  that  case, the  employees  will  be in  an                                                               
apartment-type setting  and will provide their  own meals; meals,                                                               
incidentals, and  lodging allowances are  reduced.  She  said she                                                               
believed the meal and incidental allowance to be $30 per day.                                                                   
REPRESENTATIVE LEDOUX  asked if the state  arranged the apartment                                                               
or lodging  or if the employee  was given an allowance  to secure                                                               
his/her  own  lodging.    She  asked  if  there  was  a  separate                                                               
allowance for food and incidentals.                                                                                             
MS. SHEEHAN  relayed that the  state does secure the  housing and                                                               
pays for it.   She said there are times  when employees stay with                                                               
family or friends,  in which case they get the  very reduced rate                                                               
of $30,  or they may  own a home in  the location.   She conceded                                                               
that she  did not know  if, in some  instances, the state  paid a                                                               
set  amount  and  the  employee  secured  his/her  own  long-term                                                               
housing.   She  said she  would provide  that information  to the                                                               
REPRESENTATIVE  LEDOUX  mentioned  that legislators  bring  their                                                               
cars to  Juneau for the session  and cannot rent a  car in Juneau                                                               
for the three or four months that  they are in Juneau.  She asked                                                               
if the executive branch allows employees  to rent cars for one to                                                               
four months while working at a  different location or if they are                                                               
expected to ship their cars to the location.                                                                                    
MS. SHEEHAM  responded that she did  not know the answer  to that                                                               
and would provide that information to the committee.                                                                            
6:59:16 PM                                                                                                                    
REPRESENTATIVE BIRCH stated  that there are many  staff that move                                                               
to Juneau  for the session  - they don't  live in Juneau  but are                                                               
there  for work.   He  asked if  the long-term  per diem  rate is                                                               
available or offered to them.  He  asked Ms. Sheehan if she had a                                                               
sense of  how many staff  were in that  category and if  there is                                                               
opportunity for them to mitigate some of the relocation costs.                                                                  
MS. SHEEHAN  stated that she  does not work with  legislative per                                                               
diems and salaries, and she deferred to Ms. Varni.                                                                              
7:00:31 PM                                                                                                                    
REPRESENTATIVE  TUCK referred  to Slide  7.   He relayed  that AS                                                               
24.10.130(c) states  that "the  Alaska Legislative  Council shall                                                               
adopt  a   policy  in  accordance  with   AS  39.23.540(d)",  and                                                               
AS.39.23.540(d) states that "the  commission shall make available                                                               
to  the governor  and presiding  officers  of each  house of  the                                                               
legislature a final report of  its findings and recommendations".                                                               
He offered  that the speaker  and senate president  receive these                                                               
reports  annually  in  the  first ten  days  of  the  legislative                                                               
session.  He continued reciting  AS 39.23.540(d), which read "its                                                               
findings  and  recommendations  as  to   the  rate  and  form  of                                                               
compensation,  benefits, and  allowances" and  declared that  per                                                               
diem is an  allowance.  He stated that AS  24.10.130(c) refers to                                                               
"an  applicable per  diem allowance  policy" and  added that  the                                                               
conditions  of the  policy should  be  established in  accordance                                                               
with the  statute.  He suggested  that the intent of  the statute                                                               
is  for  the  SOCC  to   meet,  report  its  findings,  and  make                                                               
recommendations  to  the  presiding   officers  of  both  bodies;                                                               
Legislative Council shall  adopt a policy in  accordance with the                                                               
duties of  the SOCC.   He stated that  he did not  understand why                                                               
that was  not occurring  as such  and added  that it  appears the                                                               
SOCC has  been "punting" by not  making recommendations regarding                                                               
the legislature.                                                                                                                
MS. SHEEHAN stated  that she asked the former  director [of DPLR]                                                               
why the  SOCC does not consider  legislative per diem.   She said                                                               
the former  director indicated  to her that  there may  have been                                                               
some  confusion  in  Section  24  regarding  Legislative  Council                                                               
setting the  per diem policy,  and an opinion was  never obtained                                                               
from the Department of Law (DOL).                                                                                               
REPRESENTATIVE TUCK  mentioned that  the statute states  that the                                                               
Alaska  Legislative Council  shall adopt  a policy  in accordance                                                               
with AS.39.23.540(d),  which names  the duties of  the SOCC.   He                                                               
expressed that a legal opinion may be warranted.                                                                                
7:04:26 PM                                                                                                                    
PAM VARNI, Executive Director,  Legislative Affairs Agency (LAA),                                                               
in response  to Representative Birch,  stated that  about 100-120                                                               
legislative staff  are reimbursed for transportation  to and from                                                               
Juneau  and [paid]  per  diem for  travel time.    She said  that                                                               
legislative staff  salaries have changed  over the years;  in the                                                               
beginning, only  leadership staff  were paid  a salary  and other                                                               
staff  were  paid   daily.    She  indicated  that   due  to  the                                                               
disparities  between   the  two   groups,  many  years   ago  the                                                               
legislature instituted salaries for all  staff in order that they                                                               
might  receive retirement  and health  benefits.   She  mentioned                                                               
that it has  been about five or six years  that legislative staff                                                               
have been  paid for  travel to  Juneau for  session and  said she                                                               
believed that before that salaries  were set higher to compensate                                                               
for the cost  of travel.  She said that  per diem for legislative                                                               
staff has been discussed; however,  the legislature has not taken                                                               
steps to establish it.                                                                                                          
MS. VARNI pointed  out that in the January 10,  2009, report, the                                                               
SOCC set the annual salary for  legislators at $50,400.  The SOCC                                                               
also  decided  that session  per  diem,  travel expenses,  moving                                                               
allowances, and office expense accounts  should not be considered                                                               
compensation.    She  added  that  the  SOCC  wanted  Legislative                                                               
Council to  set the  amount and  rules governing  moving expenses                                                               
and per  diem allowances  and made  those recommendations  in its                                                               
report; therefore, the SOCC did  not make any recommendations for                                                               
per diem.                                                                                                                       
MS.  VARNI explained  that the  state [executive  branch] pays  a                                                               
short-term per  diem rate of  $60 for  meals and a  long-term per                                                               
diem rate  of $33  for meals.   She relayed  that the  state pays                                                               
"actuals"  for  short-term lodging  or  $30  for a  noncommercial                                                               
lodging option.   She continued by  saying that the state  paid a                                                               
long-term rate  of $45  for commercial lodging  and $30  for non-                                                               
commercial  lodging.   She mentioned  that  the executive  branch                                                               
pays   actuals  [for   lodging]  according   to  the   bargaining                                                               
agreements.   She  said  that  Ms. Geary  informed  the per  diem                                                               
committee that if LAA switched  to actuals, it would need another                                                               
MS.  VARNI expressed  her opinion  that the  federal rate  of per                                                               
diem has  worked well  for the legislature.   She  suggested that                                                               
whether it is  the SOCC or DoD setting the  rates, the rates will                                                               
go up and  down.  She mentioned that since  1995, the federal per                                                               
diem  rate has  decreased 19  times and  has increased  23 times.                                                               
She gave  the following example:   The SOCC  sets a rate  of $213                                                               
per day and the  federal rate is decreased to $175  per day.  The                                                               
state is  not to  exceed the maximum  federal rate  and therefore                                                               
must tax legislators  the difference between the two  rates.  Ms.                                                               
Varni maintained that would create  a great deal of accounting by                                                               
the state to accomplish that.   She reiterated that the system of                                                               
per diem used for legislators has worked well.                                                                                  
7:09:47 PM                                                                                                                    
REPRESENTATIVE LEDOUX requested that  Ms. Varni state the federal                                                               
long-term per  diem rate and  asked if  that rate would  "work as                                                               
well" from an accounting viewpoint.                                                                                             
MS.  VARNI responded  that currently  the federal  long-term rate                                                               
for Juneau is  $206.25 per day.  She opined  that rate would work                                                               
well  and   mentioned  that  in   2014  the   federal  government                                                               
considered using  a flat rate.   She relayed that  the short-term                                                               
rate is  for 0 to 30  days, the long-term  rate is for 30  to 180                                                               
days, and for over 180 days, there is another rate.                                                                             
REPRESENTATIVE LEDOUX asked if the  $206.25 rate is the long-term                                                               
rate for 30 to 180 days.                                                                                                        
MS. VARNI responded, "That is correct."                                                                                         
REPRESENTATIVE LEDOUX  asked if using the  federal long-term rate                                                               
would work for LAA from an accounting standpoint.                                                                               
MS.  VARNI answered  that LAA  would have  no problem  with using                                                               
that  rate.   It would  pay  legislators the  short-term rate  if                                                               
traveling for  a short time  and the long-term rate  for session,                                                               
which would be 75 percent of the short-term rate.                                                                               
REPRESENTATIVE  LEDOUX asked  if  her  understanding is  correct:                                                               
when  legislators  leave  Juneau  to attend  a  conference,  they                                                               
continue to  get the  short-term Juneau per  diem rate;  they get                                                               
reimbursed actuals for their hotel but no meal allowance.                                                                       
MS. VARNI replied, "That is correct."                                                                                           
7:12:47 PM                                                                                                                    
REPRESENTATIVE  WOOL  said that  he  has  heard that  legislative                                                               
staffers are paid at a higher  range than someone in a comparable                                                               
position in another state agency.  He asked if that is true.                                                                    
MS. VARNI  responded that  she has not  studied that  recently; a                                                               
salary  study  could  be  performed   to  determine  that.    She                                                               
mentioned  that staff  duties are  allocated differently  in each                                                               
legislative office.                                                                                                             
REPRESENTATIVE WOOL asked if, for example,  a Range 15, Step C in                                                               
the legislature  is different from  a range 15c in  another state                                                               
agency, or if they are uniform across the board.                                                                                
MS.  VARNI conceded  that  the two  branches  of government  have                                                               
different salary schedules.   She added that  employees under the                                                               
legislative  branch  did  not  receive  a  cost-of-living  (COLA)                                                               
increase,  which  was  received  by employees  of  the  executive                                                               
branch.    She  mentioned  that there  are  different  bargaining                                                               
units, and  she is unfamiliar  with the difference in  the salary                                                               
schedules among them.                                                                                                           
REPRESENTATIVE  WOOL  said that  he  had  heard that  legislative                                                               
staff  receive  higher compensation  due  to  varied work  hours,                                                               
varied work days, and working away from their homes.                                                                            
MS.  SHEEHAN   stated  that  range  levels   differ  between  the                                                               
executive  branch and  the legislative  branch, which  is exempt.                                                               
She  relayed  that  the  Classification  Section  [DPLR]  in  DOA                                                               
determines the  salary ranges  in the  executive branch  based on                                                               
statute; they are internally aligned  so that like pay is awarded                                                               
for like  work.  The  work of an office  assistant is a  range 8.                                                               
She said  that an exempt  agency may decide  that the work  of an                                                               
office  assistant is  Range 10  work; it  can determine  that the                                                               
work warrants a higher range.   She concluded that differences in                                                               
salary between  the two branches  may be due to  different salary                                                               
schedules,  different assignments  of salary  levels for  certain                                                               
work, or non-comparable positions between the two branches.                                                                     
7:17:13 PM                                                                                                                    
REPRESENTATIVE TUCK stated that  he recently learned that spouses                                                               
receive  per diem  for days  of travel  to and  from Juneau.   He                                                               
asked if that is correct.                                                                                                       
MS. VARNI nodded affirmatively.                                                                                                 
REPRESENTATIVE  TUCK  asked  if  under HB  181,  the  SOCC  would                                                               
consider  the different  lifestyles of  legislators or  listen to                                                               
testimony  from legislators  regarding  per diem.   He  mentioned                                                               
that some legislators  can get by with very little  and some move                                                               
their entire families to Juneau.                                                                                                
MS.  SHEEHAN responded  that the  SOCC may  consider anything  it                                                               
chooses,  and public  testimony is  taken at  its meetings.   She                                                               
expressed  her  belief there  would  be  no restrictions  against                                                               
legislators testifying.                                                                                                         
MS. VARNI  clarified that the  spouse and family of  a legislator                                                               
receive a reduced  per diem for travel to Juneau,  but not during                                                               
the session.                                                                                                                    
7:19:38 PM                                                                                                                    
REPRESENTATIVE  WOOL stated  his  understanding  that the  system                                                               
currently works fine  in that there is a set  salary that has not                                                               
been changed since  2009, but it is reviewed every  year; the per                                                               
diem  schedule that  Legislative  Council uses  is  based on  the                                                               
federal rate.   He asked Ms. Varni if she  believes the system is                                                               
working well.                                                                                                                   
MS.  VARNI  replied yes.    She  stated  that  the choice  is  to                                                               
continue to  pay the maximum federal  per diem or look  at the 75                                                               
percent.   She added  that is what  other state  legislatures do;                                                               
under  the  IRS regulations,  legislators  are  eligible for  the                                                               
federal per  diem rate.   This amount is  to pay for  lodging and                                                               
meals,  and  that is  why  Juneau  legislators  are taxed.    She                                                               
mentioned that  there are  a few  states that  pay [per  diem to]                                                               
their legislators living within 50  miles of the capitol, and she                                                               
stated  that she  is  certain that  these  legislators, too,  are                                                               
being taxed.   She  relayed that  LAA previously  taxed long-term                                                               
per diem,  because legislators  were receiving  it in  their home                                                               
towns.  She added that  the practice discontinued with the salary                                                               
increase.  She related that she  noticed on the SOCC website that                                                               
the Consumer Price  Index (CPI) for the $50,400  has increased to                                                               
7:22:11 PM                                                                                                                    
REPRESENTATIVE WOOL referred to  the document citing compensation                                                               
by  state  and asked  for  the  number  of  states in  which  the                                                               
legislature votes  on compensation  and the  number of  states in                                                               
which compensation is set by a commission.                                                                                      
MS. WILBUR replied that she would provide that information.                                                                     
7:23:05 PM                                                                                                                    
REPRESENTATIVE  LEDOUX  moved  to adopt  the  proposed  committee                                                               
substitute  (CS)  for  HB   181,  Version  30-LS0717\J,  Gardner,                                                               
3/28/17,  as the  working document.   There  being no  objection,                                                               
Version J was before the committee.                                                                                             
[HB 181 was held over.]                                                                                                         

Document Name Date/Time Subjects
HB074 Letter of Opposition 3.21.17.pdf HSTA 3/28/2017 5:30:00 PM
HB 74
HB074 DMVA Letter 3.21.17.pdf HSTA 3/28/2017 5:30:00 PM
HB 74
HB190 Fiscal Note 3.27.17.pdf HSTA 3/28/2017 5:30:00 PM
HB 190
HB 190 Flow Chart Regulation Adoption Process.pdf HSTA 3/28/2017 5:30:00 PM
HB 190
HB 190 A Sponsor Statement 3.24.17.pdf HSTA 3/28/2017 5:30:00 PM
HB 190
HB0190A.PDF HSTA 3/28/2017 5:30:00 PM
HB 190
HB181 Draft Proposed CS ver J 3.28.17.pdf HSTA 3/28/2017 5:30:00 PM
HB 181