Legislature(1997 - 1998)

04/10/1997 05:14 PM Senate FIN

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

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