Legislature(1993 - 1994)

02/08/1994 05:00 PM TRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
  Number 087                                                                   
  HB 46 - STATE-PAID TRAVEL MILEAGE CREDITS                                    
  CHAIR FOSTER stated that he was neutral on CSHB 46 and it                    
  would be a committee decision as to whether or not to move                   
  the bill.                                                                    
  Number 098                                                                   
  REPRESENTATIVE TERRY MARTIN, Prime Sponsor of HB 46,                         
  introduced CSHB 46 by stating, "CSHB 46 represents a simple                  
  and efficient effort to reduce the budget and potential                      
  waste in departmental operations.  It targets the abuse and                  
  under-regulated tabulation of frequent flier credit miles by                 
  state employees during state paid flights.  The purpose of                   
  the bill is to apply all mileage earned through state travel                 
  to the specific department authorizing the ticket.  State                    
  employees conducting business, at state expense, should                      
  relinquish awarded miles as property of the state.  As                       
  frequent flier award certificates are issued, they should in                 
  turn be applied to future travel expenses incurred by the                    
       "The bill should also enhance efficiency by deterring                   
  and limiting the number of employees attending the same                      
  meeting.  In the same instance, it will promote information                  
  sharing and increase a team effort to reduce excessive                       
  travel in certain divisions.  In terms of the national                       
  perspective, as of last year 14 states had frequent flier                    
  policies.  All 14 describe the mileage as `property of the                   
  state' and require a central collection location in a                        
  division to maintain enforcement and consolidate travel                      
  data.  In some cases, states whose employees travel                          
  extensively have two frequent flier mileage numbers:  one                    
  for personal travel and one for state business.                              
       "In an effort to curb travel expenses, all state                        
  agencies should maintain a permanent, cumulative file of                     
  their personnel's travel records.  The file should include,                  
  at a minimum, the total current airline frequent flier                       
  mileage accrued by state employees at state expense.                         
  Coupled with the passage of CSHB 46, tracking and recording                  
  funds spent on travel will help reduce waste in each                         
  departmental budget and should assist administrators in                      
  reaching a more fiscally conservative approach to state                      
  Number 174                                                                   
  REPRESENTATIVE HUDSON commented that this subject is not a                   
  new one, and asked Representative Martin what the current                    
  position of the airlines was, in contrast to Alaska                          
  Airline's past position that frequent flier points were a                    
  bonus to the flier and nothing else.                                         
  Number 186                                                                   
  REPRESENTATIVE MARTIN responded that this was something that                 
  would have to be worked out with the airlines, but 14 other                  
  states already have such programs.  He added that he is                      
  amazed that the airlines are able to do this with IBM, ARCO,                 
  and other private enterprises as well and that Alaska                        
  Airlines has a monopoly going on and no incentive to                         
  cooperate.  He added that a Juneau outfit, U.S. Travel,                      
  would be able to set up such a program for every department                  
  of state government.                                                         
  Number 210                                                                   
  REPRESENTATIVE HUDSON stated that he has always felt                         
  frequent flier miles are not state assets, but rather                        
  employee entitlements, since often employees traveling on                    
  state business must fly at night and on weekends.  He                        
  expressed concern that, through CSHB 46, the organized                       
  employees of the state, rather than legislators and the                      
  governor and other such employees, are being asked to give                   
  up something that the state doesn't own.                                     
  Number 231                                                                   
  REPRESENTATIVE MARTIN responded that, if this is the case,                   
  it should be an explicitly stated component of the employee                  
  benefits package.                                                            
  Number 243                                                                   
  REPRESENTATIVE HUDSON commented that the dialogue taking                     
  place was very important and emphasized his belief that the                  
  state has no call on the mileage points at issue.  The state                 
  has a responsibility to pay the fare, and if they don't                      
  think the fare is appropriate, they should negotiate for a                   
  lower fare. He cited an earlier attempt to negotiate for a                   
  lower fare when Mark Air first flew into Juneau and offered                  
  blocks of seats at lower fares for state travelers, adding                   
  that in his mind such an approach was the proper way to do                   
  it -- not via the proposals contained in CSHB 46.  He                        
  further added that he thought CSHB 46 would have a                           
  demoralizing effect.                                                         
  Number 261                                                                   
  REPRESENTATIVE MARTIN responded that a decision clearly                      
  should be made by the legislature on how to treat the                        
  mileage.  He also commented that Mark Air's past efforts had                 
  been honest ones to save millions of dollars, but employees                  
  went over to Alaska Air and flew with them in order to get                   
  the free mileage.                                                            
  Number 270                                                                   
  REPRESENTATIVE FOSTER restated his position that he would                    
  either move or not move CSHB 46 at the end of discussion and                 
  ask for a vote thereon.                                                      
  Number 276                                                                   
  REPRESENTATIVE MACKIE stated that he understood CSHB 46 only                 
  deals with employees who are part of an organized bargaining                 
  unit and under contract and does not effect legislators, the                 
  governor, the governor's people, or other political people                   
  who are, nonetheless, state employees.  He asked                             
  Representative Martin why that was the case.                                 
  Number 281                                                                   
  REPRESENTATIVE MARTIN replied that under absolutely no                       
  circumstances was it his intent that legislators, the                        
  governor, the governor's people, or other political people                   
  be exempted from the requirements of CSHB 46.  He added that                 
  any state of Alaska employee should be responsible for                       
  turning in the frequent flier miles to the state and the                     
  airline should be responsible for the points being credited                  
  to the state or state agency.                                                
  Number 296                                                                   
  REPRESENTATIVE MACKIE expressed concern that only organized                  
  bargaining units would be losing frequent flier benefits.                    
  Number 302                                                                   
  REPRESENTATIVE MARTIN responded that they then needed to add                 
  words to the effect of "no one" to the bill.                                 
  Number 312                                                                   
  REPRESENTATIVE MACKIE continued to express concern regarding                 
  the seeming exemption of legislators and other political                     
  employees from the terms of the CSHB 46, according to his                    
  interpretation of AS 39.                                                     
  Number 317                                                                   
  REPRESENTATIVE MARTIN expressed willingness to amend CSHB
  46, though he stated that he did not construe AS 39 to say                   
  what Representative Mackie interpreted it as saying.                         
  Number 318                                                                   
  REPRESENTATIVE MACKIE stated to Chair Foster that he was not                 
  trying to be dilatory, but according to his reading, it was                  
  obvious CSHB 46 only dealt with employees in organized                       
  Number 320                                                                   
  REPRESENTATIVE MARTIN said that this was the first he had                    
  ever heard of Representative Mackie's interpretation of CSHB
  Number 330                                                                   
  REPRESENTATIVE VEZEY made the point that he recognized the                   
  demoralizing effect of losing benefits, but it certainly                     
  wouldn't be as demoralizing as the loss of a job or having a                 
  cohort lose a job.  He added that he, personally, places                     
  jobs at a higher priority than travel benefits.                              
  Number 340                                                                   
  REPRESENTATIVE DAVIS stated that he had been under the                       
  impression that there is no mechanism for the airlines to                    
  credit the state, but Representative Martin's testimony                      
  contradicted that impression.  He asked Representative                       
  Martin to confirm that if the state paid for the tickets,                    
  the state could, under law, receive the frequent flier                       
  Number 351                                                                   
  REPRESENTATIVE MARTIN responded that there is currently no                   
  mechanism in the state to implement a program such as he is                  
  suggesting.  He added that he is frustrated with the entire                  
  situation, although U.S. Travel has told him that they could                 
  do it through a very simple process.                                         
  Number 373                                                                   
  REPRESENTATIVE DAVIS asked Representative Martin to clarify                  
  what U.S. Travel is and if it is a travel agency.                            
  Number 376                                                                   
  REPRESENTATIVE MARTIN replied affirmatively, indicating that                 
  U.S. Travel is a travel agency.  He mentioned receiving a                    
  program from U.S. Travel, but said he hadn't had the time to                 
  go down and see U.S. Travel.  He added that U.S. Travel has                  
  told him that if the bill goes through, they can set up the                  
  system for the state.                                                        
  Number 380                                                                   
  CHAIR FOSTER reminded the committee that CSHB 46 had been in                 
  a subcommittee consisting of Representative Mulder and                       
  Representative Mackie and asked if there were any comments                   
  the subcommittee wished to make.                                             
  Number 382                                                                   
  REPRESENTATIVE MULDER responded that he had asked the                        
  representative of Alaska Airlines if they had done anything                  
  like this, and they had not, and they were not excited about                 
  having the opportunity to do it.  He added that many state                   
  employees don't look at travel as a benefit; rather, they                    
  view it as part of the job.  He concluded that he does not                   
  feel that CSHB 46 is all that necessary at this point in                     
  time, although the issue it addresses is certainly fair game                 
  when looking for ways to cut overall spending.                               
  Number 395                                                                   
  REPRESENTATIVE MULDER stated that in deference to Chair                      
  Foster's request, he and Representative Mackie had moved                     
  CSHB 46 out of subcommittee so that it could be discussed by                 
  the entire committee.                                                        
  Number 399                                                                   
  REPRESENTATIVE MACKIE asked Representative Martin to confirm                 
  that what he was proposing was adding a new section which                    
  would result in all state employees being addressed in                       
  CSHB 46.                                                                     
  Number 404                                                                   
  REPRESENTATIVE MARTIN confirmed that CSHB 46 addresses all                   
  state employees.                                                             
  Number 406                                                                   
  REPRESENTATIVE MACKIE commented that he felt he had a better                 
  understanding, but he would like to see if the bill could                    
  work before implementing it as legislation and, ultimately,                  
  he agrees with Representative Hudson that negotiating lower                  
  fares with the airlines is really the answer, not CSHB 46.                   
  Number 420                                                                   
  REPRESENTATIVE MARTIN stated that the legislature has a                      
  responsibility, one way or the other, to do something about                  
  this.  He added that many state employees call and tell him                  
  how they and their families travel together, sometimes for                   
  30 days, on state frequent flier miles.                                      
  Number 440                                                                   
  REPRESENTATIVE HUDSON made the point that CSHB 46 is making                  
  a major public statement by, in effect, saying that nobody                   
  gets the mileage, and if you take the mileage, you get                       
  fired.  And not only that, these terms aren't even                           
  negotiable through collective bargaining or other                            
  negotiation.  Along with that, injured state employees and                   
  organized militia combine to make this very questionable                     
  public policy.  He stressed the need to know the costs of                    
  implementing, and the importance of such a program to the                    
  state -- that the rationale would have to be great.                          
  Number 463                                                                   
  REPRESENTATIVE MARTIN replied that the rationale is to save                  
  the state money.                                                             
  Number 474                                                                   
  REPRESENTATIVE HUDSON remarked that he had done a good deal                  
  of collective bargaining, and just because something is                      
  silent doesn't mean it's acted on one way or another.  In                    
  this case, according to all he's seen, Representative Hudson                 
  didn't consider frequent flier mileage ownership to be an                    
  issue to be acted upon, and considered the state to have no                  
  contractual right to the mileage.                                            
  Number 489                                                                   
  CHAIR FOSTER asked if there were any other questions.                        
  Number 494                                                                   
  REPRESENTATIVE MACKIE asked if the Department of                             
  Administration (DOA) had a position on CSHB 46.                              
  Number 495                                                                   
  JIMMY PETTY, from the audience, identified himself as the                    
  Director of the Division of General Services, and stated                     
  that the DOA has a zero fiscal note for CSHB 46 and has not                  
  prepared a position paper at this point.  He added that DOA                  
  has gone to Alaska Airlines with the idea that, if it were                   
  possible, pooling the miles could be of substantial benefit.                 
  Alaska Airlines' policy is to not allow pooling of miles, so                 
  there is no way the state can get the collective benefits of                 
  pooling mileage from Alaska Airlines.  Alaska Airlines also                  
  told DOA that they view the miles as belonging to the                        
  employees -- the traveler.                                                   
  Number 520                                                                   
  REPRESENTATIVE DAVIS asked Mr. Petty to clarify that it                      
  wasn't an illegal thing, it was just Alaska Airlines'                        
  Number 523                                                                   
  MR. PETTY confirmed Representative Davis' statement and said                 
  the question of illegality had to do with the prior bill,                    
  before the committee substitute was adopted, so that state                   
  statutes would not be violated.                                              
  Number 527                                                                   
  REPRESENTATIVE DAVIS asked Mr. Petty how much the state                      
  spends per year on travel.                                                   
  Number 528                                                                   
  MR. PETTY said the DOA does not have good indicators on how                  
  much individual travel was taking place.                                     
  Number 535                                                                   
  REPRESENTATIVE DAVIS expressed concern that the amount of                    
  money spent yearly by the state on travel is a valid                         
  question with regard to this entire issue.                                   
  Number 539                                                                   
  MR. PETTY responded that from the governor's budget,                         
  provided by Representative Martin, it was very difficult to                  
  ascertain how much money went to airlines specifically,                      
  since travel was all lumped together.                                        
  Number 540                                                                   
  REPRESENTATIVE HUDSON wondered if the travel budget                          
  indicates which airlines are flown and if mileage is claimed                 
  in every case.                                                               
  MR. PETTY acknowledged that Representative Hudson's comment                  
  was a possibility, and discussed state contracts for the                     
  best possible fare, period, without mileage incentives.                      
  Number 555                                                                   
  REPRESENTATIVE MARTIN stated there is a $46 million travel                   
  allocation, most of it for air travel.                                       
  Number 558                                                                   
  REPRESENTATIVE MACKIE said that Representative Martin's                      
  numbers are neither achievable or realistic.                                 
  Number 560                                                                   
  REPRESENTATIVE MARTIN expressed concern.                                     
  Number 568                                                                   
  REPRESENTATIVE MACKIE made a motion to move the bill from                    
  committee, in deference to the wishes of Chair Foster.                       
  Number 569                                                                   
  CHAIR FOSTER asked for a voice vote as to whether CSHB 46                    
  should be moved out of committee.  Representative Davis and                  
  Representative Vezey said "yes," all other committee members                 
  said "no," and Chair Foster declared the bill to be held in                  

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