Legislature(1993 - 1994)
03/10/1994 03:00 PM L&C
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE LABOR AND COMMERCE STANDING COMMITTEE March 10, 1994 3:00 p.m. MEMBERS PRESENT Rep. Bill Hudson, Chairman Rep. Joe Green, Vice Chairman Rep. Brian Porter Rep. Bill Williams Rep. Eldon Mulder Rep. Joe Sitton Rep. Jerry Mackie MEMBERS ABSENT None COMMITTEE CALENDAR HB 353: "An Act repealing the requirement of an annual audit of the receipts and expenditures applicable to certain property managed under the Horizontal Property Regimes Act." CSHB 353(L&C) PASSED OUT OF COMMITTEE *HB 381: "An Act relating to the commercial fishing revolving loan fund and the fisheries enhancement revolving loan fund; and providing for an effective date." CSHB 381(L&C) PASSED OUT OF COMMITTEE HB 507: "An Act relating to licensure by the State Medical Board and temporary permits for certain optometrists." CSHB 507(HESS) PASSED OUT OF COMMITTEE HB 255: "An Act relating to application of the Public Employment Relations Act to municipalities and other political subdivisions." SSHB 255 HEARD AND HELD IN COMMITTEE (* First public hearing.) WITNESS REGISTER REP. JEANNETTE JAMES Alaska State Legislature State Capitol Juneau, Alaska 99801-1182 465-3744 Position Statement: Sponsor of HB 353 BILL McNULL 921 W. 6th Ave., Suite 100 Anchorage, Alaska 99501 276-2535 Position Statement: Supported HB 353 (Spoke via teleconference) TRACEY RICKER Remax of Southeast 8800-219 Glacier Hwy. Juneau, Alaska 99801 789-4794 Position Statement: Opposed HB 353 CHERYL SUTTON, staff Rep. Carl Moses Alaska State Legislature State Capitol Juneau, Alaska 99801-1182 465-4451 Position Statement: Presented HB 381 and CSHB 381(L&C) for prime sponsor FRANK HOMAN Commercial Fisheries Entry Commission 8800 Glacier Hwy., #109 Juneau, Alaska 99801 789-6160 Position Statement: Supported CSHB 381(L&C) MARTIN RICHARDS, Director Division of Investments Department of Commerce and Economic Development P.O. Box 34159 Juneau, Alaska 99803-4159 465-2510 Position Statement: Discussed priority list REP. CARL MOSES Alaska State Legislature State Capitol Juneau, Alaska 99801-1182 465-4451 Position Statement: Sponsor of HB 381 JERRY McCUNE United Fisherman of Alaska 211 4th St., Suite 112 Juneau, Alaska 99801 586-2820 Position Statement: Supported CSHB 381(L&C) GREG WINEGAR, Manager Division of Investments Department of Commerce and Economic Development P.O. Box 34159 Juneau, Alaska 99803-4159 465-2510 Position Statement: Answered questions on HB 381 REP. CYNTHIA TOOHEY Alaska State Legislature State Capitol Juneau, Alaska 99801-1182 465-4919 Position Statement: Presented CSHB 507(HESS) DR. JOAN GILINECK 1305 21st Ave., Suite 101 Fairbanks, Alaska 99701 452-7524 Position Statement: Supported HB 507 (Spoke via teleconference) DR. ROY BOX 9309 Glacier Hwy., Suite A-102 Juneau, Alaska 99801 789-3175 Position Statement: Supported HB 507 JOSEPH EASAW, JR., Staff Rep. Al Vezey Alaska State Legislation State Capitol Juneau, Alaska 99801-1182 465-3719 Position Statement: Presented HB 255 JOAN WILKERSON APEA/AFT, AFL-CIO 211 Fourth St., Suite 306 Juneau, Alaska 99801 586-2334 Position Statement: Opposed HB 255 CLAUDIA DOUGLAS NEA-ALASKA 114 Seward Juneau, Alaska 99801 586-3090 Position Statement: Opposed HB 255 and SSHB 255 PREVIOUS ACTION BILL: HB 353 SHORT TITLE: CONDOMINIUM ASSOCIATION MANAGEMENT SPONSOR(S): REPRESENTATIVE(S) JAMES JRN-DATE JRN-PG ACTION 01/07/94 2020 (H) PREFILE RELEASED 01/10/94 2020 (H) READ THE FIRST TIME/REFERRAL(S) 01/10/94 2020 (H) LABOR & COMMERCE, STATE AFFAIRS 03/08/94 (H) L&C AT 03:00 PM CAPITOL 17 03/10/94 (H) L&C AT 03:00 PM CAPITOL 17 BILL: HB 381 SHORT TITLE: COMM'L FISH LOANS FOR CERTAIN OBLIGATIONS SPONSOR(S): REPRESENTATIVE(S) MOSES,Olberg,Grussendorf JRN-DATE JRN-PG ACTION 01/18/94 2097 (H) READ THE FIRST TIME/REFERRAL(S) 01/18/94 2097 (H) LABOR & COMMERCE, FINANCE 03/10/94 (H) L&C AT 03:00 PM CAPITOL 17 BILL: HB 507 SHORT TITLE: LICENSING OF OPTOMETRISTS AND PHYSICIANS SPONSOR(S): HEALTH, EDUCATION AND SOCIAL SERVICES BY REQUEST JRN-DATE JRN-PG ACTION 02/16/94 2416 (H) READ THE FIRST TIME/REFERRAL(S) 02/16/94 2416 (H) HES, LABOR & COMMERCE 03/01/94 (H) HES AT 03:00 PM CAPITOL 106 03/01/94 (H) MINUTE(HES) 03/02/94 2576 (H) HES RPT CS(HES) 5DP 2NR 03/02/94 2576 (H) DP: KOTT, VEZEY, BUNDE, TOOHEY, BRICE 03/02/94 2576 (H) NR: OLBERG, NICHOLIA 03/02/94 2576 (H) -FISCAL NOTE (DCED) 3/2/94 03/02/94 2576 (H) FIN REFERRAL ADDED 03/10/94 (H) L&C AT 03:00 PM CAPITOL 17 BILL: HB 255 SHORT TITLE: LOCAL EXEMPTION FROM PERA BILL VERSION: SSHB 255 SPONSOR(S): STATE AFFAIRS JRN-DATE JRN-PG ACTION 03/26/93 794 (H) READ THE FIRST TIME/REFERRAL(S) 03/26/93 794 (H) STATE AFFAIRS 03/29/93 838 (H) CRA AND FIN REFERRALS ADDED: 03/29/93 838 (H) CRA, STA, FIN 04/15/93 (H) CRA AT 01:00 PM CAPITOL 124 04/16/93 (H) CRA AT 01:30 PM CAPITOL 124 01/14/94 2061 (H) SPONSOR SUBSTITUTE INTRODUCED-REFERRALS 01/14/94 2061 (H) CRA, STATE AFFAIRS, FINANCE 01/25/94 (H) CRA AT 01:00 PM CAPITOL 124 01/25/94 (H) MINUTE(CRA) 01/26/94 2150 (H) CRA RPT 2DP 3DNP 2NR 01/26/94 2150 (H) DP: TOOHEY, OLBERG 01/26/94 2150 (H) DNP: WILLIS, WILLIAMS, DAVIES 01/26/94 2150 (H) NR: SANDERS, BUNDE 01/26/94 2150 (H) -ZERO FISCAL NOTE (DCRA) 1/26/94 01/26/94 2150 (H) REFERRED TO STATE AFFAIRS 02/02/94 2229 (H) STA & FIN REFERRAL CHANGED TO L&C & STA 03/10/94 (H) L&C AT 03:00 PM CAPITOL 17 ACTION NARRATIVE TAPE 94-21, SIDE A Number 001 CHAIRMAN HUDSON convened the meeting at 3:13 p.m., announced there was a quorum, and invited Rep. James to present HB 353. HB 353 - CONDOMINIUM ASSOCIATION MANAGEMENT Number 050 REP. JEANNETTE JAMES, Prime Sponsor of HB 353, stated that HB 353 was introduced to correct a glitch in the law. In 1963 when the condominium law was enacted there was a requirement for an outside audit for condo associations on an annual basis. When the law was changed in 1985 it eliminated the audit requirement. Rep. James stated there is a committee substitute for HB 353 that changes the law so that the requirements of condominiums built before 1987 are the same as condominiums built after 1987. Number 087 BILL McNULL, attorney, President of the Board of Directors of the Alaska Chapter of Community Association Institute, testified on HB 353. Mr. McNull stated that the concern of the association is the expense of an audit for a small condominium complex; i.e., 8-12 unit building. Mr. McNull explained that an audit is approximately $2,500.00 to $3,500.00 for a condo complex of this size. MR. McNULL stated that the requirement includes using a certified public accountant (CPA). MR. McNULL stated that the secondary market has requirements that include annual audits of larger condo complexes by CPA's. MR. McNULL suggested that HB 353 state that there is no audit required unless required by the secondary market or the association chooses to have the audit done. MR. McNULL stated that each association requires that the members pay money into a reserve account and should be periodically looked at by a CPA to make sure they are in order. Number 160 REP. JAMES commented that whether or not there needs to be an audit is a matter of philosophy. She added that the condominium association should be able to decide for themselves if they want one through their bylaws. REP. JAMES asserted that if the requirement was to have an audit every five years instead of annually the expense would be the same. REP. JAMES added that AS 34.08 is specific in its requirement of the kinds of records you have to keep. These records are required to be available to the members at any time and could be used by the secondary market instead of an audit. Number 196 MR. McNULL stated that it's the responsibility of each board to keep the complex marketable and this includes the ability to get financing on the secondary market. Number 215 TRACEY RICKER, Property Manager, Remax of Southeast, testified in opposition of HB 353. She said she has been a property manager in Juneau for ten years and stated that in her experience an outside independent review of condominium associations should be required at least annually. She added that small complexes may not need an annual review. MS. RICKER stated that there are three types of reviews that a CPA can perform that would be effective. She said the committee may want to require an annual audit by an Outside CPA for associations of 50 condos or more and something less for 50 and under. Number 245 CHAIRMAN HUDSON asked what the differences were between the two committee substitutes. Number 255 REP. JAMES stated one change was to "level the playing field" between those condos built before 1987 and those after. The other change provides for an audit if the board or manager determines one is needed. REP. MACKIE stated that present law requires an audit and the CS would not require one. Number 280 REP. JAMES responded that the old law enacted in 1965 required an audit every year by an Outside accountant. The law changed in 1985, requiring that condos built after 1987 did not have to have an audit. REP. JAMES asserted that the state should not be telling condo associations that they need to have an audit. She believed they should choose for themselves. Number 299 REP. MACKIE asked if there were any other areas of business where state law requires audits. Number 303 MS. RICKER responded that it is good practice to establish a review by an independent party on an annual basis for the comfort of all parties involved. Number 320 CHAIRMAN HUDSON stated he supported the language in the CS that allows for owner discretion in requiring audits or reviews. Number 330 MS. RICKER stated she thinks a minimum standard should be established by the state. She added that the standard should be that a review or compilation by an independent party or an independent CPA should be done annually based on the size of the complex. Number 340 REP. PORTER asked if it was her understanding that the present law does not require any audits now. Number 350 MS. RICKER responded that those associations that opt in to the Universal Common Interest Ownership Act are required to have audits. Number 360 REP. MACKIE asked if he was correct in his understanding that this legislation would take out the requirement for audits for everyone. Number 371 MS. RICKER responded that he was correct. Number 374 REP. JAMES added that she felt it was out of the realm of the state to require that associations of people should have their books audited. REP. SITTON stated that he believes a secondary audit is the function of a loan application. He added that he believes government has gone too far in micromanaging the public's affairs. Number 420 REP. PORTER moved the adoption of the 3/9/94 committee substitute. No objections were heard; it was so ordered. REP PORTER moved passage of CSHB 353(L&C) with zero fiscal note. No objections were heard; it was so ordered. HB 381 - COMM'L FISH LOANS FOR CERTAIN OBLIGATIONS CHAIR HUDSON announced that HB 381 as the next bill before the committee and introduced Rep. Carl Moses, the bill's sponsor. Number 450 CHERYL SUTTON, Fisheries aide to Rep. Carl Moses, asked if the committee would like her to speak to the committee substitute or the original bill. The Chair asked that she discuss the 3/9/94 work draft version first. Number 482 CHAIRMAN HUDSON asked that the record reflect that HB 381 was placed in a subcommittee for discussion of the IRS and child support provisions. He added that his staff worked with the subcommittee and prime sponsor and produced the 3/9/94 version presently before the committee. REP. WILLIAMS moved adoption of the CS referenced above. No objections were heard; it was so ordered. Number 500 MS. SUTTON read a sponsor statement for CSHB 381(L&C). She said CSHB 381(L&C) adds four new elements to AS 16.10: 1) refinancing of private bank loans 2) loans to upgrade existing vessels and gear for quality improvement 3) loans to satisfy federal tax obligations with specific qualifications 4) transfer of funds that are not needed for current loan demand between the commercial fishing revolving loan fund and the fisheries enhancement revolving loan fund. MS. SUTTON said the Commercial Fishing Loan Program is a primary source of loans to Alaska fishermen and one of only two lenders authorized by law to take Alaska Limited entry permits as collateral. One of the basic tenets of the Commercial Fishing Revolving Loan Fund was to maintain a resident Alaskan fishery. If permits go up for auction because of seizure, there is no control over keeping them in state. MS. SUTTON said the IRS currently is not receptive to making pay arrangements with fishermen who are in arrears on their federal tax obligations. According to the IRS, 74% of the Alaska resident limited entry permit holders in arrears who have filed tax returns owe $10,000.00 or less. These Alaskans are not tax evaders, but simply fishermen facing a crisis. CSHB 381(L&C) adds a new section on page 3, Section 2, which sets forth loan criteria for the Department of Commerce to follow. The first criterion would be the individual has to have filed past and current tax returns; the second, the individual would have to have executed an agreement with the federal government for repayment; and third, the individual may receive only one loan during his or her lifetime to satisfy past tax obligations; and the fourth, the loan may not exceed $30,000.00. MS. SUTTON stated the refinancing provision would allow fishermen to combine debt service on permit loans and boat loans or with loans from other private lending institutions. It would also provide for a better interest rate and more reasonable repayment schedule. There have been instances where a fisherman owned a limited entry permit free of encumbrances and held a boat loan through a private banking institution. Through circumstances beyond the fisherman's control, the debt obligation on the boat could not be met and the boat was confiscated by the lender. In this situation, a fisherman has no means of participating in the fishery and no means of meeting the debt obligation. MS. SUTTON said CSHB 381(L&C) would allow the Department of Commerce and Economic Development to transfer funds that are not needed for current loan demand between the Commercial Fishing Revolving Loan Fund and the Fisheries Enhancement Revolving Loan Fund. MS. SUTTON stated this bill addresses constituent needs of every legislator. The crisis in salmon fisheries has affected every area of the state. Much of what has happened in the salmon industry is well beyond the control of fishermen. The CSHB 381(L&C) would provide some small measure of support and help through a secured loan process in these difficult times. Number 543 REP. PORTER asked, What is the other fund that can take a permit? Number 558 MS. SUTTON responded that the other fund is the Commercial Fishing and Agricultural Bank. CHAIR HUDSON asked for people who would like to testify on this bill. Number 560 FRANK HOMAN, Commercial Fishing Entry Commission, testified in support on CSHB 381(L&C). He stated that he testified before the subcommittee and would be glad to answer any questions. Number 574 REP. WILLIAMS moved the following letter of intent: It is the intent of the House Labor and Commerce Committee that the Division of Investments exercise particular care in forecasting loan demand in order to fully accommodate all new commercial fishing lending needs that arise from the modification of the commercial fishing loan program by the Eighteenth Alaska State Legislature. It is further the intent of the House Labor and Commerce Committee that use of the Commercial Fisheries Revolving loan Fund for loans for refinancing purposes succeed all other commercial fishing lending needs in priority. Finally, it is the House Labor and Commerce Committee's intent that transfers of excess funds from the Commercial Fisheries Revolving Loan Fund be permitted only after commercial fishing loan needs, including any anticipated loans for purchase of Individual Fishing Quotas, have been met. Number 579 REP. SITTON suggested that the committee make the law clearer instead of using the letter of intent. Number 584 CHAIRMAN HUDSON responded that it was a matter of prioritizing the available funds. Number 610 MARTIN RICHARDS, Director, Division of Investments, Department of Commerce and Economic Development, testified that at the subcommittee meeting the Division offered a proposed list that showed how the Division would prioritize if funds were short. The intent language follows this list. Number 630 REP. PORTER asked if there was still a set of requirements fishermen would be held to before the state would lend any money out of this fund. Number 636 MR. RICHARDS responded that all the qualifications that exist in the program would stay there. TAPE 94-21, SIDE B Number 001 REP. WILLIAMS moved adoption of the letter of intent. No objections were heard; it was so ordered. Number 030 MS. SUTTON stated that the letter of intent hopefully would offer some level of comfort as to how the loans would be administered. Number 037 REP. MACKIE asked why the intent of the letter wasn't put into statute so the intent would be law. REP. MOSES stated that he felt it important to leave some discretion to the division as times change. REP. WILLIAMS stated that the priorities are covered by regulations that the Division of Investment works under. He added, "what we're trying to do is move the IFQ loans up underneath the IRS loans, have them third in line. The IFQ loan bill is still in Finance." CHAIR HUDSON asked the next witness to testify. Number 066 JERRY McCUNE, United Fisherman of Alaska, testified in support of CSHB 381(L&C). He dittoed Ms. Sutton's statement. Number 087 CHAIRMAN HUDSON asked Mr. McCune if he was satisfied with the letter of intent. Number 087 MR. McCUNE responded that he was. Number 130 REP. MULDER offered a technical amendment to the letter of intent: delete the word "expansion" and insert "modify." Number 166 REP. GREEN suggested that subsection (I) be deleted in AS 16.10.320 so that you could borrow for the permit and then the boat and vice versa. He read that subsection. Number 188 GREG WINEGAR, Loan Manager, Division of Investments, Department of Commerce and Economic Development, explained to Rep. Green how the program came about. He answered questions regarding AS 16. MR. WINEGAR stated that he thought the deletion of subsection (I) would be a substantial expansion of the program. Number 225 REP. GREEN asked Mr. Winegar to look into this issue and be prepared to explain it to the next committee. Number 237 REP. MACKIE asked Rep. Moses if HB 381 would encourage rather than discourage fishermen to not pay their taxes. Number 248 REP. MOSES responded that he couldn't imagine a person having that attitude and that the restrictions in the bill provided plenty of protection. Number 258 REP. WILLIAMS moved passage of CSHB 381(L&C) with individual recommendations and a zero fiscal note. No objections were heard; it was so ordered. HB 507 - LICENSING OF OPTOMETRISTS AND PHYSICIANS CHAIR HUDSON announced that HB 507 was the next bill before the committee. Number 296 REP. CYNTHIA TOOHEY, Co-Chair of the HESS Committee, read the following sponsor statement on CSHB 507(HESS): Section 1 addresses the concerns of the State Medical Board for interviewing applicants for licensure in person. They would like it to be expanded to "the board or its designated representative." This would lessen the cost in time, money, and inconvenience for applicants who wish to practice medicine in the state. Section 2 deals with granting a temporary permit for locum tenens for the purpose of providing temporary medical coverage for an underserved area as approved by the board. Under current statute, locum tenens permits may only be issued to physicians who are substituting for an absent physician. With this change, a temporary permit may be issued to a physician who will be practicing in an area that does not have a regular residing physician. In Section 3 of this bill, a locum tenens permit may be issued to a nonresident optometrist for the purpose of assisting or substituting for an optometrist licensed under AS 08.72. Alaska has a lot of solo practitioners in remote and semi- remote areas of the state. If a practitioner becomes injured, seriously ill or must leave temporarily, he presently must close down his clinic. This can bring a hardship to his patients, especially if the time away extends to several months. REP. TOOHEY explained that the only change from the original bill to the committee substitute appears on page 1, line 6: the word "shall" was changed to "may." Number 328 REP. SITTON asked why medical professionals need interviews when they have extensive backgrounds and degrees that could be looked at instead. Number 337 REP. TOOHEY explained that the testimony in the Health, Education and Social Services Committee held that it was very important to have face to face interviews rather than just looking at the paper trail of someone's educational experience alone. REP. SITTON asked if the rest of the medical profession was handled in the same way as HB 507 proposes to handle optometrists. REP. TOOHEY replied yes. Number 357 DR. ROY BOX, a licensed optometrist who practices in Juneau, testified in support of the locum tenens addition to HB 507, saying it was basically his idea and that's why he got appointed to testify on it. Dr. Box stated that there are only approximately 50 optometrists practicing in the state, and ten of them work for various and sundry government agencies, and that leaves 40, so if anyone gets sick or needs to leave their practice for a period of time, as a practical matter there is no one to fill in for them. He said HB 507 would protect the public as far as the licensure is concerned because that it requires that the medical personnel filling in be licensed by another state or province. DR. BOX added that this provision would also help in the area of specialty care. Small towns often don't have enough business to have their own specialist, but under this bill specialist could come to these towns to hold clinics periodically. Number 372 DR. JOAN GILINECK, board member of the State Medical Board, testified in support of HB 507 and the interviewing process. She said the board feels the interview process provides a window of observation that is not otherwise available to scrutinize the applicant and compliment the written application. She said there are 19 states that require an interview with a board member; there are three states who require an interview with the full board; there are five states who require an oral examination; there are eleven states that require a possible interview; and there are 15 states she thought that require no interview. She said these statistics say something about the value that other states attach the interviewing process. Of course the value of the interview will be in direct proportion to the experience and the skill of the interviewer. Number 420 REP. PORTER asked if the changes being discussed would affect licensing for all physicians. Number 430 DR. BOX stated that the first two sections apply to the medical licensing law and Section 3 applies only to optometrists. Number 447 REP. PORTER asked Dr. Gilineck if HB 507 would allow phone interviews. Number 452 DR. GILINECK responded that a telephonic interview would be allowed under certain circumstances. REP. MACKIE moved passage of HB 507 with individual recommendations and fiscal note. No objections were heard; it was so ordered. HB 255 - LOCAL EXEMPTION FROM PERA CHAIR HUDSON announced HB 255 as the next bill before the committee. He introduced Rep. Al Vezey as the prime sponsor of the bill and asked him to join members at the table. REP. VEZEY stated that Mr. Easaw was prepared to give the opening statement. Number 480 JOSEPH EASAW, JR., staff, Rep. Al Vezey, provided the following sponsor statement on HB 255: The intent of HB 255 is to allow municipalities the option of removing themselves from PERA (Public Employees Relation Act). Under this proposed legislation, a municipality could make such a decision with the approval of the voters of the municipality. It was the intent of the 1972 legislation to allow municipalities to opt out of PERA. As the law currently exists, a municipality under PERA, for all practical purposes, cannot remove themselves. This determination has been brought about by decisions of the court. This condition has resulted in diminished control over local self-determination. Existing legislation as interpreted by the courts has put local governing bodies in a position where one governing body can obligate all future governing bodies. This bill is intended to correct what the legislature has inadvertently allowed the court to mandate on local governments by placing the decision making process back into the hands of local governing officials and the people. Number 540 REP. SITTON asked what HB 255 would do to employees currently in collective bargaining agreements in municipalities. Number 548 MR. EASAW responded that if there is a collective bargaining agreement in place it will remain in effect. Number 555 REP. SITTON stated he saw the list of municipalities who had the chance to opt out of PERA and didn't and wondered if HB 255 was requested by them in order to give them another chance. Number 560 MR. EASAW replied that the intent of the language does not give any time frame for those municipalities to act. That decision came by court decision in 1975 in the case of Petersburg vs. State. Mr. Easaw stated that some interpret the decision to still allow municipalities to opt out. REP. MULDER asked if his understanding was correct that current law provides that municipalities will be included in PERA unless they opt out and HB 255 would change the law to say that PERA would not apply to municipalities unless the municipality holds an election as set out in subsection (b). MR. EASAW stated that under current statutes if you are a new municipality forming you have a reasonable amount of time to opt out of PERA. He said PERA does not permit a municipality to opt out of it after its employees have started to organize. Number 592 REP. MULDER asked if under HB 255 a municipality is out of PERA unless they opt in. Number 595 MR. EASAW replied that that was true. Number 600 CHAIRMAN HUDSON stated that it was his understanding that the court has ruled that a political subdivision may not opt out if there is any organizational steps being taken by the employees. Number 606 MR. EASAW stated that the court has said that you cannot opt out of PERA unless you have done so in a reasonable time frame after organization. Number 616 REP. PORTER asked if a city currently under PERA would be able to opt out of PERA without a vote of the people if HB 255 passed. Number 619 MR. EASAW replied that HB 255 expressly states that in order for a community to opt out they must go to a vote of the people. TAPE 94-22, SIDE A Number 001 MR. EASAW stated that as he understood labor contracts, if a negotiation is ongoing, the expired contract remains in effect. Number 020 REP. PORTER asked, if a city is currently in PERA, can they take a vote of the community to determine if they want to opt out? MR. EASAW answered that he was correct. CHAIR HUDSON asked Joan Wilkerson to testify. Number 057 JOAN WILKERSON, Southeast Regional Manager for APEA/AFT, testified in opposition to HB 255. Ms. Wilkerson stated she was also speaking for the Alaska AFL/CIO and its 50,000 members state wide. MS. WILKERSON provided the following statement for the record: We adamantly oppose HB 255, as should all supporters of collective bargaining because this bill is intended to do nothing less than eliminate collective bargaining for thousands of Alaska's workers. By establishing a revolving door system of opting in or out of PERA, the bill would not only deny the basic human right to collectively bargain with their employer to employees in political subdivisions which opt out of the system, but would also render meaningless the system left behind for those areas which continue to bargain with their employees, since the notion of "good faith bargaining" will cease to exist when an employer can always threaten to opt out if it doesn't like the way things are going in negotiations. The immediate practical effect of this legislation will be full employment for attorneys, to the detriment of both taxpayers and employee groups. The legal issues raised by an election to opt out while a collective bargaining agreement is in effect will tie both the courts and the labor relations agency in knots. Even where a healthy and viable bargaining relationship exists between the local government and its employees, a small number of anti-union voters in a community, sufficient to put the issue on the ballot by initiative, can require annual elections with the attendant expenditure of public and private resources better used elsewhere. PERA has governed public employment relations in this state for 20 years. There was nothing "inadvertent" about its intent to apply to political subdivisions. A floor amendment allowed a one-time "opt-out," of which many municipalities have made use. Some, such as Fairbanks and Cordova, have subsequently elected to opt back in. Some decisions must be final and binding. The decision to engage in good faith bargaining with employees is one such decision. We urge you to go on record in support of collective bargaining and keep this bill in committee. Number 150 CHAIRMAN HUDSON asked Ms. Wilkerson what the positive benefits of PERA were for municipalities as well as for employees. Number 152 MS. WILKERSON replied that the bill as it currently exists is essentially a bill of rights for public employees in the state of Alaska. It allows them to exercise their fundamental constitutional rights to association by virtue of their relationship with each other as employees of a public government, as a public entity. It creates and answers to the Alaska Labor Relations Agency. It permits corporations to form through the associations of these employees and to collectively bargain with employers. In her limited exposure to municipalities and boroughs who have opted out, the employees have virtually no rights at all. It was her understanding from PERA itself, that the initial intent of the legislature was that if a political subdivision was going to opt out of PERA, that they should pass an ordinance which would more or less take the place of PERA. She has seen this in action in a municipality in Southeast Alaska that did opt out and passed personnel rules which are so vague in nature that they do not afford the rights incumbent in PERA. The most basic of those rights, which are at issue right now, are the right to bargain, and for the employee the right to defend themselves through exercising the right to strike, or to send a matter to binding arbitration. Number 179 REP. PORTER stated that it was his understanding that if a municipality wanted to opt out of PERA they would have to provide some mechanism for bargaining. He added that he disagreed with Ms. Wilkerson regarding an employee's rights. He does not believe an employee would lose any rights if they were not in PERA. Number 193 MS. WILKERSON said she was not specifically speaking to the Anchorage Municipality, which Rep. Porter referred to, but she was speaking of another municipality. She added that it would be important to note that each municipality is different without PERA. Number 215 REP. MULDER stated that in 1992 the Anchorage teachers were included in PERA. He asked, if Anchorage has opted out of PERA, are the teachers out as well? Number 230 REP. PORTER answered that teachers are still in PERA. Number 235 REP. SITTON asked for an elaboration regarding binding arbitration noted in the resolution from the City of Fairbanks. REP. PORTER replied it only applied to Class 1 employees, which are only cops and firemen. Number 250 MS. WILKERSON added that binding arbitration was also dictated by statute. She stated that there were two kinds of binding arbitration: (1) interest arbitration -- the negotiation process itself and (2) the grievance process. Number 250 CLAUDIA DOUGLAS, President, National Education Association testified against HB 255 and SSHB 255. Ms. Douglas read the following statement for the record: The bill will allow municipalities or other political subdivisions, including school districts, to conduct an election to determine if employees are to continue under the provision of AS 23.40.070 - 23.40.260. Since the early 1970's state policy extended the statutory right to bargain to public employees. School employees struggled for over ten years to establish their rights under PERA. The schools and school employees have developed a successful pattern of bargaining under PERA for nearly four years. Bargaining provides public employees a good participatory way to influence decisions that affect the work place. At the bargaining table public employees share in the decision making process affecting wages and working conditions. They have become more responsive and better able to exchange ideas and information on operations with their administrators. Successful businesses are moving to management models designed to involve employees in a meaningful participatory role. Studies have shown that successful school reform occurs in school districts where mature bargaining relations exist. If SSHB 255 were to become law, labor relations between school districts and school employees would be disrupted. Good faith bargaining would give way to politics. Management and school boards would have greater latitude to delay and forestall the bargaining process. Some school districts could submit the question of continuance under PERA to voters annually or during each round of bargaining. In short the school, municipal, borough or state employee would lose. Inconsistency between units and school districts would occur. The bargaining process would be weakened and in some instances destroyed. The bill calls for a vote of the people. Who pays for the election? Will the election activate adversarial clashes between the special anti-labor groups with agendas opposed to working people? We live in a republic where representatives are elected to make decisions for their constituency in view of the public good. The issue of inclusion of school employees under PERA has been debated on the state level. A majority of the legislature, after weighing carefully the facts and information, decided it is good policy. In its declaration of the policy, it said, "the legislature finds that joint decision-making is the modern way of administering government." We urge you to oppose this bill. Number 308 CHAIRMAN HUDSON announced that he did not intend to move HB 255 at this time. He stated that he wanted the committee to hear the opposing sides. CHAIRMAN HUDSON adjourned the meeting at 5:02 p.m.