Legislature(2017 - 2018)GRUENBERG 120

03/30/2017 03:00 PM STATE AFFAIRS

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03:16:10 PM Start
03:17:33 PM Presentation: Vote by Mail by the Anchorage Municipal Clerk's Office
03:45:10 PM HB181
04:43:27 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Presentation: Vote by Mail by the Anchorage TELECONFERENCED
Municipal Clerk's Office
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 181 LEGISLATURE PER DIEM AND TRAVEL ALLOWANCE TELECONFERENCED
Moved CSHB 181(STA) Out of Committee
-- Public Testimony --
+= HB 163 DPS LAW ENFORCE. SVCS: AGREEMENTS/FEES TELECONFERENCED
Scheduled but Not Heard
        HB 181-LEGISLATURE PER DIEM AND TRAVEL ALLOWANCE                                                                    
                                                                                                                                
3:45:10 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."   [Before  the committee, adopted  as a                                                               
work  draft on  3/28/17,  was the  proposed committee  substitute                                                               
(CS)  for   HB  181,   Version  30-LS0717\J,   Gardner,  3/28/17,                                                               
hereafter referred to as Version J.]                                                                                            
                                                                                                                                
                                                                                                                                
3:45:47 PM                                                                                                                    
                                                                                                                                
BERETT  WILBER,  Staff, Representative  Jonathan  Kreiss-Tomkins,                                                               
Alaska  State Legislature,  on behalf  of Representative  Kreiss-                                                               
Tomkins,  prime  sponsor  of  HB  181,  referred  to  the  email,                                                               
included in  the committee packet,  stating answers  to questions                                                               
that were  posed in  the House  State Affairs  Standing Committee                                                               
meeting of 3/28/17.                                                                                                             
                                                                                                                                
MS. WILBER  relayed question  1:  "How  does the  State Officer's                                                               
Compensation Commission  (SOCC) recommendation process  work, and                                                               
what does  the SOCC consider?"   She mentioned that  Kate Sheehan                                                               
[Director,  Division of  Personnel  and  Labor Relations  (DPLR),                                                               
Department of  Administration (DOA)]  relayed during  the 3/28/17                                                               
committee  meeting that  the SOCC  systematically considers  each                                                               
group for which it is  charged with making recommendations at its                                                               
meetings:      the   governor  and   the   lieutenant   governor;                                                               
legislators;  and department  commissioners.   After  considering                                                               
each position or  group of positions, it decides  whether to make                                                               
recommendations.  She indicated that  in the event it chooses not                                                               
to make  recommendations, it sends  a letter stating that  it has                                                               
chosen  not  to  make  recommendations   to  change  salaries  or                                                               
compensation.   She  said that  all the  information -  including                                                               
minutes of the SOCC hearings,  public testimony, and SOCC reports                                                               
- can  be found on the  SOCC website and is  accessible through a                                                               
link  on the  Alaska  State Legislature's  Bill  Action &  Status                                                               
Inquiry System (BASIS).                                                                                                         
                                                                                                                                
MS.  WILBER stated  question 2:    "If SOCC  currently has  legal                                                               
authority to set  legislative per diem, why  does the Legislative                                                               
Council  Joint  Committee  (Legislative Council)  still  set  the                                                               
policy?"  She explained that in 2009  - a year after the SOCC had                                                               
been  formally  established   -  it  issued  its   first  set  of                                                               
recommendations.   The SOCC recommended that  Legislative Council                                                               
should continue  to set moving  expenses and per  diem allowances                                                               
for legislators  in addition to salary  increases for legislators                                                               
and commissioners.   She stated  that since the  legislature took                                                               
no action to reject those  recommendations, they were adopted "as                                                               
law."    She  added  that AS  24.10.130(c)  requires  Legislative                                                               
Council to  set a per  diem policy for legislators  in accordance                                                               
with whatever  the SOCC recommends.   Since the  SOCC recommended                                                               
that Legislative  Council continue  to set legislative  per diem,                                                               
Legislative  Council,  following  the  letter  of  the  law,  has                                                               
continued to do so.                                                                                                             
                                                                                                                                
3:49:15 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  WOOL asked  for  clarification on  the answer  to                                                               
question   2.     He  stated   his   understanding  that   former                                                               
Representative Mike  Doogan intended  the SOCC  to set  per diem;                                                               
the SOCC was tasked with  setting per diem; the recommendation by                                                               
the SOCC was  that Legislative Council continue to  set per diem;                                                               
therefore,  Legislative Council  agreed  to continue  to set  per                                                               
diem.                                                                                                                           
                                                                                                                                
MS.   WILBER   responded   that  under   the   2008   authorizing                                                               
legislation,   the  SOCC   was  required   to  set   policies  on                                                               
allowances,  benefits, and  salary.   She relayed  that per  diem                                                               
falls  under  those  policies; however,  there  was  no  specific                                                               
mandate that the SOCC set a rate  of per diem.  She added that it                                                               
was fully  within the  authority of the  SOCC to  ask Legislative                                                               
Council to continue to recommend per diem rates.                                                                                
                                                                                                                                
REPRESENTATIVE WOOL  referred to the statutes  and commented that                                                               
the  direction regarding  establishing per  diem "seemed  kind of                                                               
circular."   He  suggested  that  the SOCC  could  set per  diem,                                                               
transmit it in a recommendation, and it would be acceptable.                                                                    
                                                                                                                                
MS. WILBER answered yes.                                                                                                        
                                                                                                                                
REPRESENTATIVE WOOL asked what the  necessity is for the proposed                                                               
legislation; the SOCC already has  the authority to set per diem,                                                               
even though it hasn't chosen to do so.                                                                                          
                                                                                                                                
MS. WILBER replied, "That is true."   She said the SOCC currently                                                               
has the authority  to set legislative per diem; it  has chosen to                                                               
pass  that task  on to  Legislative  Council.   She offered  that                                                               
under  Version J,  the SOCC  would be  required to  recommend per                                                               
diem, and Legislative Council no  longer would have the authority                                                               
to set  a policy in  accordance with the  SOCC's recommendations.                                                               
The policy  for per diem would  be that which was  recommended by                                                               
the SOCC.                                                                                                                       
                                                                                                                                
REPRESENTATIVE  WOOL asked  if under  Version J,  the SOCC  would                                                               
have to  set the per diem  - a definitive actual  dollar amount -                                                               
and not  be allowed to defer  to Legislative Council for  the per                                                               
diem recommendation.                                                                                                            
                                                                                                                                
MS. WILBER  responded that  Representative Wool's  assessment was                                                               
not quite  correct.  She  stated that the  SOCC does not  have to                                                               
set a  precise numerical rate  for per  diem under Version  J; it                                                               
would  be responsible  for setting  the  policy.   She relayed  a                                                               
hypothetical  example:   the SOCC  recommends that  the per  diem                                                               
rate  be  200  percent  of  the  federal  per  diem  rate.    She                                                               
reiterated  that it  does not  have  to set  a precise  numerical                                                               
rate.                                                                                                                           
                                                                                                                                
REPRESENTATIVE WOOL offered his  understanding that under Version                                                               
J,  the SOCC  could not,  as  policy, recommend  that some  other                                                               
entity recommend a per diem rate.                                                                                               
                                                                                                                                
MS. WILBER  replied that  Version J  states that  legislators may                                                               
receive  per diem  allowance during  the legislative  sessions as                                                               
recommended  by the  SOCC.    She said  that  the mechanism  that                                                               
legally allowed  Legislative Council to set  policy in accordance                                                               
with  what the  SOCC recommended  would be  taken out  of statute                                                               
under Version J.   She referred to page 1, line  14, of Version J                                                               
and  pointed  out  that  the  proposed  legislation  deletes  "an                                                               
applicable per  diem allowance policy" from  the section allowing                                                               
Legislative Council  to set  policy in  accordance with  what the                                                               
SOCC  recommends.   She  mentioned  that she  would  get a  legal                                                               
opinion  on this  point; however,  she offered  her understanding                                                               
that Legislative  Council's authority  to set  per diem  does not                                                               
exist under Version J.                                                                                                          
                                                                                                                                
3:55:44 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KNOPP  paraphrased from  the answer to  question 2                                                               
regarding legal authority to set  per diem, which read as follows                                                               
[original punctuation provided]:                                                                                                
                                                                                                                                
     The    SOCC's recommendations,   along    with   salary                                                                  
     increases  for legislators  and  commissions,  included                                                                  
     the following instructions:                                                                                              
                                                                                                                                
          Session per diem, travel expenses, moving                                                                           
          allowances, and office expense accounts shall not                                                                   
          be considered compensation. (AS 24.10.100.)                                                                       
                                                                                                                              
          The Legislative Council shall set the amount and                                                                    
          rules governing moving expense and per diem                                                                         
          allowances. (AS 24.10.130.)                                                                                         
                                                                                                                                
REPRESENTATIVE  KNOPP  asked  if   the  SOCC  currently  has  the                                                               
authority  to set  per diem,  since  the SOCC  is a  compensation                                                               
commission  and  the  statute  clearly   says  per  diem  is  not                                                               
compensation.                                                                                                                   
                                                                                                                                
MS. WILBER explained that the  language that Representative Knopp                                                               
cited  is from  the 2009  recommendation of  the SOCC,  not state                                                               
statute.   She said that  AS 24.10.130 does not  specifically say                                                               
that  "Legislative  Council  shall   set  the  amount  and  rules                                                               
governing  moving expenses  and  per diem  allowances"; the  SOCC                                                               
cites  AS  24.10.130 as  the  authority  under which  Legislative                                                               
Council can continue to do so.                                                                                                  
                                                                                                                                
3:58:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   WOOL   repeated   the   first   sentence   under                                                               
"instructions"  [in the  answer  to question  2  in the  e-mail],                                                               
which read  [original punctuation provided]:   "Session per diem,                                                               
travel expenses, moving  allowances, and  office expense accounts                                                               
shall  not  be  considered  compensation. (AS  24.10.100.)"    He                                                             
suggested that  the implication is that  the language immediately                                                               
preceding the reference is included in that statute.                                                                            
                                                                                                                                
MS. WILBER apologized  for the lack of clarity.   She stated that                                                               
the SOCC included  a reference to AS 24.10.100  within its policy                                                               
recommendations; the  sentence before  it does  not refer  to the                                                               
statutory language of AS 24.10.100, which read:                                                                                 
                                                                                                                                
     Sec. 24.10.100.  Salary of legislators.                                                                                  
     Legislators  shall receive  a monthly  salary under  AS                                                                    
     39.23. The president  of the senate and  the speaker of                                                                    
     the  house of  representatives  may receive  additional                                                                    
     compensation under AS 39.23 during tenure of office.                                                                       
                                                                                                                                
REPRESENTATIVE WOOL  asked who makes  the decision that  per diem                                                               
is not compensation.  He  offered his understanding that per diem                                                               
is for room and board and  not to be considered compensation even                                                               
if it is more than expenses.                                                                                                    
                                                                                                                                
MS.  WILBER replied  that  in  her research  on  this issue,  she                                                               
discovered   inconsistency   in    "what   group   decides   what                                                               
compensation is."   She deferred  the question to  Jessica Geary,                                                               
Finance  Manager,   Legislative  Administrative   Services  (LAS)                                                               
[Legislative Affairs Agency (LAA)].                                                                                             
                                                                                                                                
REPRESENTATIVE WOOL  restated his question regarding  who decided                                                               
that per  diem is  not compensation?   He asked  if per  diem not                                                               
being considered  compensation was  for Internal  Revenue Service                                                               
(IRS) purposes.                                                                                                                 
                                                                                                                                
4:01:06 PM                                                                                                                    
                                                                                                                                
JESSICA  GEARY,   Finance  Manager,   Legislative  Administrative                                                               
Services(LAS),  Legislative  Affairs   Agency(LAA),  stated  that                                                               
there  are   two  ways   to  look   at  compensation:     taxable                                                               
compensation and untaxable compensation.   She said that per diem                                                               
is  a reimbursement  of  expenses;  the IRS  states  that if  the                                                               
amount does  not exceed  the maximum federal  rate, one  does not                                                               
have  to   pay  taxes  on  that   per  diem  and  it   is  deemed                                                               
"substantiated."    She  stated  that  is  the  rule  the  agency                                                               
follows;  the  Alaska  Society of  Certified  Public  Accountants                                                               
(ASCPA) prepares a legislator tax  guide each year, which reviews                                                               
the rates  and other  issues.   She reiterated  that per  diem is                                                               
reimbursement for expenses.                                                                                                     
                                                                                                                                
4:02:17 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON  expressed  her  understanding  that  the                                                               
federal government has declared per diem non-taxable.                                                                           
                                                                                                                                
MS. GEARY responded that there is  a special section of IRS code,                                                               
which is 162(h), that applies  specifically to state legislators.                                                               
She  said that  it  covers  different circumstances;  legislators                                                               
participating  in  a legislative  session  can  receive per  diem                                                               
allowance up to  the maximum federal rate for every  day that the                                                               
legislature is in session.                                                                                                      
                                                                                                                                
REPRESENTATIVE JOHNSON  asked for  clarification that  the amount                                                               
up to the federal rate is non-taxable.                                                                                          
                                                                                                                                
MS. GEARY replied that is correct  as long as the maximum federal                                                               
rate is not exceeded.                                                                                                           
                                                                                                                                
REPRESENTATIVE  JOHNSON  asked if  per  diem  is referred  to  as                                                               
compensation if  it is taxable.   She added, "... but  maybe it's                                                               
just a matter of semantics."                                                                                                    
                                                                                                                                
MS. GEARY answered  that's accurate.  She said in  one case it is                                                               
considered  reimbursement; in  another it  is considered  income.                                                               
She  added that  even  if you  are  taxed on  the  amount, it  is                                                               
reimbursement for expenses.  She offered  that if a per diem rate                                                               
exceeding  the  federal  rate  was   authorized,  part  would  be                                                               
reimbursement and the excess would  be income; to the legislators                                                               
it is still referred to as "session per diem."                                                                                  
                                                                                                                                
4:04:00 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  WOOL asked  if legislators  have always  received                                                               
100 percent of federal per diem.                                                                                                
                                                                                                                                
MS. GEARY  replied that  they have  received the  maximum federal                                                               
rate since 1994, when the federal rate was established.                                                                         
                                                                                                                                
REPRESENTATIVE  WOOL mentioned  the  different  situation of  the                                                               
Juneau legislators:   they  get per  diem, but  it is  taxed; and                                                               
they do  not receive  housing reimbursement.   He asked  if their                                                               
per diem is not considered compensation.                                                                                        
                                                                                                                                
MS. GEARY  responded that it  depends on how  it is viewed.   She                                                               
said  it is  compensation, because  it is  taxed; however,  it is                                                               
also session per diem.                                                                                                          
                                                                                                                                
4:05:35 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KNOPP  restated that  any amount over  the federal                                                               
maximum rate  is taxable, and  legislators currently  receive the                                                               
federal rate  while the legislature is  in session.  He  said the                                                               
federal rate is  comprised of the short-term rate for  30 days or                                                               
less and the long-term  rate for 31 days to 180  days.  He stated                                                               
that  legislators are  receiving the  short-term rate,  even when                                                               
they exceed  30 days.   He  asked if  the difference  between the                                                               
short-term rate, which is $275,  and the long-term rate, which is                                                               
about $206, is taxable income.                                                                                                  
                                                                                                                                
MS. GEARY  explained that the  long-term rate established  by the                                                               
federal government  in November  2014 applies to  those traveling                                                               
under the federal travel policy.   She mentioned that the federal                                                               
government  has strict  rules  in its  travel  policy, which  the                                                               
legislators are not required to  follow; Alaska's legislators are                                                               
not required to  use the federal long-term rates.   She concluded                                                               
by saying that  if the legislative per diem rate  does not exceed                                                               
the federal maximum per diem rate, it will not be taxed.                                                                        
                                                                                                                                
4:07:43 PM                                                                                                                    
                                                                                                                                
MS. WILBER continued  by stating question 3:  "How  does per diem                                                               
work for State of Alaska  (SOA) executive branch employees?"  She                                                               
relayed that  SOA employees  have different  per diem  rates than                                                               
legislators and legislative  employees; the rates are  set by the                                                               
commissioner  of the  Department  of Administration  (DOA) or  by                                                               
collective  bargaining.   She  referred  to additional  documents                                                               
further  detailing SOA  employee  per diem  rates,  which can  be                                                               
accessed  digitally through  the  links on  the  e-mail:   "State                                                               
travel  office";  "one-pager  on  the  SOA  rates";  and  "Alaska                                                               
Administrative Manual section on travel."                                                                                       
                                                                                                                                
4:09:24 PM                                                                                                                    
                                                                                                                                
MS. WILBER  relayed question 4:   "How does taxation on  per diem                                                               
rates  work?"   She  mentioned that  the  IRS allows  legislators                                                               
whose permanent  residences are  greater than  50 miles  from the                                                               
state capitol  to receive up to  the federal maximum rate  of per                                                               
diem without  being taxed  on it.   She  said Alaska's  policy is                                                               
that  legislators  who reside  within  the  50 miles  receive  75                                                               
percent of the federal per diem  rate, and the money they receive                                                               
is subject to taxation by the IRS.                                                                                              
                                                                                                                                
4:10:11 PM                                                                                                                    
                                                                                                                                
MS.  WILBER  stated question  5:    "What  kind  of per  diem  do                                                               
legislative staff receive?"  She  said that legislative staff are                                                               
eligible to  receive per diem  when they are traveling  for work;                                                               
they do not  receive a "session per diem" as  do legislators; and                                                               
they  are  entitled  to reimbursement  for  lodging,  meals,  and                                                               
travel when they are traveling  to the state capital or returning                                                               
to their  places of residence after  the session.  She  cited the                                                               
2006  Alaska  Supreme  Court  case,  Benavides  v.  State,  which                                                             
definitively determined that legislative  aides would not receive                                                               
session per diem at the same rate as legislators.                                                                               
                                                                                                                                
MS.  WILBER  relayed   question  6:    "How  does   the  pay  for                                                               
legislative staffers compare  with the pay in  the other branches                                                               
of [state]  government?"   She mentioned  that this  question was                                                               
about Representative  Wool's suggestion during the  3/28/17 House                                                               
State  Affairs  Standing  Committee  meeting  that  salaries  for                                                               
legislative staff  are adjusted  and therefore  do not  match the                                                               
salaries for  similar positions in other  branches of government.                                                               
She relayed that  in consulting with Ms. Geary,  she learned that                                                               
positions  in   the  different   branches  are   not  necessarily                                                               
comparable.   Ms.  Geary explained  that  political staffers  are                                                               
paid  at a  rate two  or four  ranges higher  [than a  comparable                                                               
executive branch  employee] to compensate them  for not receiving                                                               
overtime pay or  per diem and because their positions  tend to be                                                               
more "volatile" than non-political positions.                                                                                   
                                                                                                                                
4:12:41 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   BIRCH  expressed   his   appreciation  for   the                                                               
information presented.                                                                                                          
                                                                                                                                
REPRESENTATIVE  WOOL  concurred.   He  asked  for the  number  of                                                               
states  in  which  the  legislators  decide  their  own  salaries                                                               
through legislation.                                                                                                            
                                                                                                                                
MS. WILBER replied  that she did not know but  would provide that                                                               
information.                                                                                                                    
                                                                                                                                
4:13:56 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   JOHNSON   asked   what  year   the   legislature                                                               
transitioned from an all-year session to a 120-day session.                                                                     
                                                                                                                                
MS. WILBER  responded that she  did not  know the history  of the                                                               
length of the legislative session in Alaska.                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL expressed his belief  that in 2006, a law was                                                               
passed to reduce  the session from 120 days to  90 days; however,                                                               
the Alaska Constitution [allows for the 120 days].                                                                              
                                                                                                                                
4:15:05 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BIRCH referred  to  the  increase in  legislative                                                               
salaries from $24,000  to [$50,400] in 2006.  He  said that prior                                                               
to that, legislators  were pro-rating interim per  diem; when the                                                               
salary was increased, interim per diem was eliminated.                                                                          
                                                                                                                                
REPRESENTATIVE WOOL  stated that Representative  Birch's comments                                                               
refer  to  changes  in  salary  and  per  diem  structures.    He                                                               
suggested  that there  was a  change in  the Alaska  Constitution                                                               
making the  session 120 days.   He mentioned  a time well  in the                                                               
past in which  session was "open-ended" and lasted  well into the                                                               
summer.                                                                                                                         
                                                                                                                                
REPRESENTATIVE JOHNSON  recollected there being  long legislative                                                               
sessions when she  was a child, and there were  breaks.  She said                                                               
that at some  point, session was reduced to 120  days, then to 90                                                               
days.   She offered  that she  was trying  to find  a correlation                                                               
between the  length of the  session and  the per diem  and salary                                                               
rates.  She noted that from  1983 to 1987, the legislative salary                                                               
was $3,900 per  month, but she has no information  on the rate of                                                               
per diem at that time.                                                                                                          
                                                                                                                                
4:17:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   KNOPP  expressed   his   appreciation  for   the                                                               
legislative  history  presented  in  the  packet.    He  referred                                                               
Representative  Johnson   to  the   information  in   the  packet                                                               
reflecting the  Juneau and non-Juneau  legislative rates  and the                                                               
Legislative Council rate adjustments.                                                                                           
                                                                                                                                
MS.  WILBER  stated  that  the  document  entitled  "Session  and                                                               
Interim Per  Diem History" was  provided by  the LAA staff.   She                                                               
also pointed out that the Interim  per diem and the salary raise,                                                               
which  was discussed,  occurred in  2009  with the  first set  of                                                               
recommendations from the SOCC.                                                                                                  
                                                                                                                                
4:19:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KNOPP  stated  that   he  does  not  support  the                                                               
proposed legislation.  He offered  that the issue being addressed                                                               
by  HB 181  is:   Is  it appropriate  for  Legislative Council  -                                                               
members of  the legislative bodies  - to  set per diem  rates for                                                               
legislators?  He said that  Legislative Council meets about every                                                               
two years,  and the federal government  has adjusted compensation                                                               
rates three  times in  the last  15 months.   He pointed  out the                                                               
many times Legislative Council has  adjusted legislative per diem                                                               
rates  to  react  to  the   federal  government's  actions.    He                                                               
suggested  that  the amount  of  work  necessary for  Legislative                                                               
Council to  set the rates  is "incredible"; he is  concerned with                                                               
the  SOCC arbitrarily  setting the  rates; and  he mentioned  the                                                               
extensive work by the federal  government to determine the rates.                                                               
He stated  that he preferred  that the long-term federal  rate be                                                               
adopted and would support a  concurrent resolution by both bodies                                                               
to do so.                                                                                                                       
                                                                                                                                
MS. WILBER responded that every  year since its inception in 2009                                                               
the SOCC  has issued either recommendations  or transmittals that                                                               
there  would   be  no  recommendations,  excluding   2010.    She                                                               
mentioned that  Legislative Council  set legislative per  diem at                                                               
the federal rate in 1994, and  it does not do any additional work                                                               
when  the rate  changes.    The LAA  accounting  staff makes  the                                                               
adjustment.                                                                                                                     
                                                                                                                                
REPRESENTATIVE KNOPP  conceded that the additional  work would be                                                               
performed by LAA  staff; however, in using the  federal rate, the                                                               
work already would have been done.   He expressed his belief that                                                               
it would  be difficult  for the  SOCC to  determine the  per diem                                                               
rate and  said that he  suspects the  SOCC would use  the federal                                                               
rate to  set per  diem.   He opined that  the short-term  rate is                                                               
"over the top"  and the long-term rate would  be more appropriate                                                               
compensation.                                                                                                                   
                                                                                                                                
4:25:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL  said that  he concurred  with Representative                                                               
Knopp.  He  suggested that using the maximum federal  rate of per                                                               
diem has been  easy to calculate and set.   He mentioned that the                                                               
SOCC  has met  almost annually;  it has  made recommendations  on                                                               
salaries,  excluding  those of  the  legislators,  which has  not                                                               
changed  since  2008; and  it  has  statutory authority  to  make                                                               
recommendations,  but has  deferred to  Legislative Council.   He                                                               
stated that the proposed legislation  would mandate that the SOCC                                                               
set the  rate instead  of Legislative Council.   He  offered that                                                               
the effect of  the proposed legislation would be  slight and said                                                               
he  is "okay  with  the status  quo  as long  as  it doesn't  get                                                               
abridged."   He  said, "I'm  not sure  it's as  broken as  people                                                               
think,  except it  gets politicized  a  lot.   Hopefully, if  the                                                               
system is working, it will stay within this framework."                                                                         
                                                                                                                                
MS. WILBER clarified that under Version  J, the SOCC would not be                                                               
required to select  the amount of per diem; it  would be required                                                               
to set  the policy.   She offered that  the SOCC could  choose to                                                               
set  a flexible  scale, like  the fluctuating  federal per  diem;                                                               
they could  choose to stay with  the federal per diem  rate; they                                                               
could choose to use the short-term  rate; or they could choose to                                                               
use the  long-term rate  - 75  per cent of  the federal  per diem                                                               
rate.  She  stated that the benefit of requiring  the SOCC to set                                                               
the per  diem rate,  as opposed to  Legislative Council,  is that                                                               
doing so  "takes the decision out  of the political realm."   She                                                               
added  that  even though  it  may  be  easy to  have  Legislative                                                               
Council  set  per  diem policy,  it  inherently  politicizes  the                                                               
issue; having an apolitical body, such  as the SOCC, set per diem                                                               
would remove the politicization.                                                                                                
                                                                                                                                
REPRESENTATIVE   WOOL  expressed   his  understanding   that  the                                                               
proposed  legislation would  not  remove politicization,  because                                                               
the legislature must introduce a  bill within a certain period to                                                               
adjust  the recommendation.   Once  the bill  is introduced,  the                                                               
issue becomes political.   He opined that  removing the political                                                               
aspect of the  process is impossible.  He suggested  that in more                                                               
than  half of  states,  the legislature  is  involved in  setting                                                               
compensation.                                                                                                                   
                                                                                                                                
MS.  WILBER  clarified  that currently  and  under  the  proposed                                                               
legislation,   the   legislature   cannot   adjust   the   SOCC's                                                               
recommendations; it can only reject them through legislation.                                                                   
                                                                                                                                
4:31:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KNOPP  asked if setting  a policy through  a joint                                                               
resolution would de-politicize the issue.                                                                                       
                                                                                                                                
CHAIR  KREISS-TOMKINS commented  that the  House does  "weigh in"                                                               
through an  operating budget floor  amendment.  He opined  that a                                                               
joint resolution has merit.                                                                                                     
                                                                                                                                
MS. WILBER responded  that she does not know  which process would                                                               
be less  political, but  she opined  that passing  legislation of                                                               
any  type  is  inherently  political.     She  offered  that  the                                                               
advantage  of   the  SOCC  is   that  it  is  not   comprised  of                                                               
legislators, but of civilians with no political futures.                                                                        
                                                                                                                                
4:33:07 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TUCK  referred to  [Section  5]  of the  proposed                                                               
legislation, which read as follows:                                                                                             
                                                                                                                                
          It is the policy of the legislature that the                                                                          
       commission recommend an equitable rate and form of                                                                       
      compensation, per diem allowances during legislative                                                                      
    sessions,   benefits,   and    other   allowances   for                                                                     
     legislators.                                                                                                               
                                                                                                                                
REPRESENTATIVE TUCK asked  if his understanding is  correct:  The                                                               
authority still lies with the  legislature, as the recommendation                                                               
comes through the  legislature.  In 2009,  the recommendation was                                                               
adopted because  of the legislature  not disapproving it.   Under                                                               
the proposed  legislation, the legislature still  can disapprove;                                                               
it would  not lose  its authority;  and the  SOCC would  make its                                                               
recommendations,   which   would   become   policy   unless   the                                                               
Legislature disapproves.                                                                                                        
                                                                                                                                
MS. WILBER  said, "Yes,  that is  correct."   She added  that the                                                               
proposed legislation would not change  the mechanism by which the                                                               
SOCC makes recommendations;  it merely would add per  diem to the                                                               
list of items that it must  recommend.  She said the legislators'                                                               
ability  to  reject  the  recommendations or  allow  them  to  be                                                               
adopted through  no action would  remain unchanged  under Version                                                               
J.                                                                                                                              
                                                                                                                                
REPRESENTATIVE  TUCK  commented  that he  supports  the  proposed                                                               
legislation.  He  stated that the SOCC has performed  well in the                                                               
past in setting  compensation.  He expressed his  belief that the                                                               
SOCC's recommendation puts the public  at ease, especially in the                                                               
event  of salary,  per diem,  or benefit  increases; it  provides                                                               
"cover" for  the legislature;  it is made  up of  public members;                                                               
and  legislators  are permitted  to  testify  to  the SOCC.    He                                                               
reiterated  that  the  proposed  legislation  represents  a  good                                                               
public process.                                                                                                                 
                                                                                                                                
4:36:12 PM                                                                                                                    
                                                                                                                                
CHAIR KREISS-TOMKINS  opened public testimony  on HB 181.   After                                                               
ascertaining  that there  was no  one who  wished to  testify, he                                                               
closed public testimony.                                                                                                        
                                                                                                                                
REPRESENTATIVE  WOOL asked  why the  SOCC has  not recommended  a                                                               
salary increase for legislators since 2008.                                                                                     
                                                                                                                                
4:37:19 PM                                                                                                                    
                                                                                                                                
KATE  SHEEHAN,   Director,  Division   of  Personnel   and  Labor                                                               
Relations  (DPLR), Department  of Administration  (DOA), informed                                                               
the committee  that she  serves as  secretary to  the SOCC.   She                                                               
answered  that SOCC's  discussion about  compensation has  varied                                                               
from meeting to meeting.  She  said that when the SOCC decided to                                                               
take no  action, it was  due to  budget constraints.   She stated                                                               
that in the  last meeting, the SOCC's only  recommendation was to                                                               
allow a deputy  commissioner to keep his/her salary  in the event                                                               
he/she became commissioner  at a lower salary.   She relayed that                                                               
in the  meeting before the  last, the SOCC  recommended increases                                                               
to  the  governor's,  lieutenant governor's,  and  commissioners'                                                               
salaries;  it  consulted  the  Consumer  Price  Index  (CPI)  and                                                               
geographic  differentials  for  commissioners.    She  said  that                                                               
former Governor Sean  Parnell stated that he would  decline a pay                                                               
increase   for   himself   but   supported   the   increase   for                                                               
commissioners.   Ms. Sheehan added that  the legislature rejected                                                               
the SOCC recommendations that year.                                                                                             
                                                                                                                                
REPRESENTATIVE  WOOL asked  if  the  recommendations Ms.  Sheehan                                                               
related were  the only  recommendations the  SOCC has  made since                                                               
its inception.                                                                                                                  
                                                                                                                                
MS. SHEEHAN replied  that she would have to  review prior meeting                                                               
[minutes],   but   she  confirmed   that   there   has  been   no                                                               
recommendation   on   legislator    salaries   after   the   2009                                                               
recommendation.                                                                                                                 
                                                                                                                                
REPRESENTATIVE WOOL commented that  there may be some expectation                                                               
that a  legislator's job is "not  about the money" but  is public                                                               
service.   He said  for a professional  in the  executive branch,                                                               
the position is considered a  fulltime career.  He suggested that                                                               
cost  of   living,  inflation,  and  CPI   should  be  considered                                                               
regarding legislator salaries.                                                                                                  
                                                                                                                                
MS. SHEEHAN relayed that in the  last [SOCC] meeting, most of the                                                               
discussion  was  concerning  the  state budget  situation.    She                                                               
mentioned  that she  would have  to review  the minutes  of prior                                                               
meetings  to be  able  to  report on  the  discussions that  took                                                               
place.                                                                                                                          
                                                                                                                                
4:40:21 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TUCK  asked  when  the  last  wage  increase  for                                                               
legislators was prior  to 2009.  He suggested that  it had been a                                                               
long time since any wage increase before that year.                                                                             
                                                                                                                                
MS. SHEEHAN replied that she did not recall.                                                                                    
                                                                                                                                
MS. WILBER answered that she also did not have that information.                                                                
                                                                                                                                
4:41:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  LEDOUX  moved to  report  CSHB  181, Version  30-                                                               
LS0717\J,  Gardner, 3/28/17,  out  of  committee with  individual                                                               
recommendations and the accompanying zero fiscal note.                                                                          
                                                                                                                                
REPRESENTATIVE KNOPP objected.                                                                                                  
                                                                                                                                
4:42:10 PM                                                                                                                    
                                                                                                                                
A  roll  call vote  was  taken.   Representatives  Tuck,  LeDoux,                                                               
Johnson, and  Kreiss-Tomkins voted in  favor of moving  CSHB 181,                                                               
Version  30-LS0717\J, Gardner,  3/28/17,  out  of committee  with                                                               
individual  recommendations  and  the  accompanying  zero  fiscal                                                               
note.     Representatives  Knopp  and  Wool   voted  against  it.                                                               
Therefore,  CSHB 181(STA)  was reported  out of  the House  State                                                               
Affairs Standing Committee by a vote of 4-2.                                                                                    

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