02/01/2022 03:30 PM Senate STATE AFFAIRS

             SB 145-LEGISLATOR RETROACTIVE PER DIEM                                                                         
                                                                                                                                
3:59:39 PM                                                                                                                    
CHAIR SHOWER announced the consideration of SENATE BILL NO. 145                                                                 
"An Act relating to per diem for legislators; and providing for                                                                 
an effective date."                                                                                                             
                                                                                                                                
4:00:17 PM                                                                                                                    
SENATOR ROGER HOLLAND, speaking as sponsor of SB 145, read the                                                                  
sponsor statement into the record:                                                                                              
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     In 2018,  the legislature passed an  ethics reform bill                                                                    
     in  HB 44.  This legislation  was deemed  substantially                                                                    
     similar  to  a  citizen's  initiative  signed  by  over                                                                    
     40,000 Alaskans    Removing the issue  from the ballot.                                                                    
     One of the key components  of the initiative was to end                                                                    
     per diem  payments if a  budget had not been  passed by                                                                    
     the end  of the 121-day  session, and not to  allow per                                                                    
     diem payments to  resume until after a  budget had been                                                                    
     passed. The public reportedly  viewed this provision as                                                                    
     an  incentive  for  legislators to  finish  their  work                                                                    
     without   subjecting   government  employees   to   the                                                                    
     uncertainty brought on by perpetual pink slips.                                                                            
                                                                                                                                
     To  the dismay  of many  supporters of  the initiative,                                                                    
     legislative  council  later  decided  that  legislators                                                                    
     could  receive retroactive  back-pay  for their  missed                                                                    
     per  diem   payments  once  the  budget   passed.  This                                                                    
     apparent  circumvention  of  the process  strikes  many                                                                    
     voters  as  dishonest  and erodes  public  trust.  Very                                                                    
     simply,  the  lack of  per  diem  payments provides  an                                                                    
     incentive to  finish our  one true  job of  providing a                                                                    
     budget  in  a timely  fashion  before  the end  of  the                                                                    
     regular session.  Allowing either per diem  payments or                                                                    
     retroactive per  diem payments creates an  incentive to                                                                    
     not pass a budget on time.                                                                                                 
                                                                                                                                
     SB  145 seeks  to remedy  the situation  by prohibiting                                                                    
     retroactive per  diem payments after a  failure to pass                                                                    
     a  budget during  the regular  session and  disallowing                                                                    
     per diem  payments to  resume until  after a  budget is                                                                    
     passed.  I  believe  this  bill  takes  a  step  toward                                                                    
     restoring that  public's trust and aligns  the law with                                                                    
     the intent of the citizens.                                                                                                
                                                                                                                                
4:02:27 PM                                                                                                                    
SENATOR HOLLAND presented the sectional analysis for SB 145.                                                                    
                                                                                                                                
[Original punctuation provided with some formatting changes.]                                                                   
                                                                                                                                
     Sec. 1                                                                                                                   
     Amends  AS 24.10.130(b),  relating  to legislative  per                                                                    
     diem, to prohibit the  retroactive authorization of per                                                                    
     diem for legislators beginning the  day after the 121st                                                                    
     day of  the legislative session  until the day  a fully                                                                    
     funded operating budget is passed by the legislature.                                                                      
                                                                                                                                
     Sec. 2                                                                                                                   
     Provides for an immediate effective date.                                                                                  
                                                                                                                                
4:03:02 PM                                                                                                                    
SENATOR HOLLAND  summarized that the  fiscal impact of SB  145 is                                                               
indeterminate because nobody knows how  many days it will take to                                                               
pass  an  operating budget  after  the  121st  day of  a  regular                                                               
session.                                                                                                                        
                                                                                                                                
He added  that enacting this  legislation will result  in savings                                                               
because per diem would not be paid after day 121.                                                                               
                                                                                                                                
CHAIR  SHOWER  offered his  belief  that  this  would not  be  an                                                               
additive cost.                                                                                                                  
                                                                                                                                
SENATOR HOLLAND  said the simple  reading of the statute  is that                                                               
legislators are  not entitled to  per diem  after day 121  if the                                                               
budget has not passed. SB 145  clarifies that per diem may not be                                                               
paid retroactively.                                                                                                             
                                                                                                                                
4:04:42 PM                                                                                                                    
SENATOR  REINBOLD said  she likes  the  bill and  it matches  the                                                               
intent of the ballot initiative.                                                                                                
                                                                                                                                
CHAIR SHOWER  commented on learning  about the  ballot initiative                                                               
and  per diem  when he  was a  freshman legislator.  He expressed                                                               
appreciation that SB 145 clarifies and codifies what happens.                                                                   
                                                                                                                                
4:07:06 PM                                                                                                                    
SENATOR  HOLLAND commented  that  the legislature  paid per  diem                                                               
retroactively but  has not  been honoring  the statutory  PFD. He                                                               
opined that  SB 145 will go  a long way toward  putting faith and                                                               
confidence back in the legislature.                                                                                             
                                                                                                                                
CHAIR SHOWER said this puts downward pressure on legislators to                                                                 
do the right thing.                                                                                                             
                                                                                                                                
4:09:12 PM                                                                                                                    
CHAIR SHOWER held SB 145 in committee for future consideration.