Legislature(1997 - 1998)

04/10/1997 05:14 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                               
                             MINUTES                                           
                    SENATE FINANCE COMMITTEE                                   
                         April 10, 1997                                        
                            5:14 P.M.                                          
                                                                               
  TAPES                                                                        
                                                                               
  SFC-97, #94 & #95, Sides 1 & 2 (000-590, 590-000)                            
  SFC-97, #96, Side 1 (000-138)                                                
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Senator  Bert  Sharp,  Cochair,  Senate  Finance  Committee,                 
  reconvened the meeting at approximately 5:14 P.M.                            
                                                                               
  PRESENT                                                                      
                                                                               
  In addition  to COCHAIR SHARP,  SENATORS DONLEY,  TORGERSON,                 
  PARNELL  and  ADAMS  were  present   when  the  meeting  was                 
  reconvened.  COCHAIR PEARCE and  SENATOR PHILLIPS arrived as                 
  the meeting was in progress.                                                 
                                                                               
  Also Attending:                                                              
  MIKE  MCMULLEN, Personnel  Manager,  Division of  Personnel,                 
  Department   of   Administration   (DOA);    BROOKE   MILES,                 
  Administrator, Public  Offices Commission  (APOC), DOA;  ART                 
  CHANCE,  Consultant, House  and  Senate Finance  Committees;                 
  JOHN  CYR,  President,  NEA-Alaska;  MIKE GREANY,  Director,                 
  Legislative Finance Division; fiscal  analysts and aides  to                 
  committee members.                                                           
                                                                               
  Also Attending Via Teleconference:                                           
  SUSIE BARNETT,  Professional Assistant, Select  Committee on                 
  Legislative  Ethics,  Anchorage;  GARY  BADER, Chair,  State                 
  Personnel  Board,  Anchorage;    NEIL  SLOTNICK,   Assistant                 
  Attorney General, Department of Law.                                         
                                                                               
  SUMMARY INFORMATION                                                          
       SB 105  LEGISLATIVE ETHICS CODE REFORM                                  
                                                                               
       SUSIE BARNETT, GARY BADER, NEIL SLOTNICK, MIKE MCMULLEN                 
       and  BROOKE  MILES  testified  on  the bill.    SENATOR                 
       PHILLIPS MOVED Amendment #1.  COCHAIR  PEARCE objected.                 
       Amendment #1 FAILED by  a 3 to 4 vote.   SENATOR DONLEY                 
       MOVED Amendment  #2.  Without  objection, Amendment  #2                 
       was  ADOPTED.    SENATOR  DONLEY  MOVED  Amendment  #3.                 
       SENATOR   TORGERSON   objected,   then   withdrew   his                 
       objection.  Amendment  #3 was  ADOPTED without  further                 
       objection.  SENATOR DONLEY MOVED Amendment #4.  Without                 
       objection,  Amendment #4 was  ADOPTED.   SENATOR DONLEY                 
       MOVED   Amendment   #5,  then   withdrew   his  motion.                 
       Amendment #6  was not  offered.   SENATOR DONLEY  MOVED                 
       Amendment #7.   SENATOR  ADAMS objected,  then withdrew                 
                                                                               
                                                                               
       his objection.  Without further objection, Amendment #7                 
       was ADOPTED.  SENATOR DONLEY MOVED Amendment #8.  There                 
       being no objection, Amendment #8  was ADOPTED.  COCHAIR                 
       PEARCE MOVED Amendment  #9.  SENATOR PHILLIPS  MOVED to                 
       divide  the amendment.    COCHAIR  PEARCE withdrew  her                 
       motion, as did SENATOR PHILLIPS.   COCHAIR PEARCE MOVED                 
       Amendment #9.  SENATOR PHILLIPS objected.  Amendment #9                 
       was ADOPTED by  a 6 to  1 vote.   SENATOR DONLEY  MOVED                 
       Amendment #10.  COCHAIR PEARCE objected.  Amendment #10                 
       was ADOPTED  by a  5 to 2  vote.  COCHAIR  PEARCE MOVED                 
       Amendment #11.   Without objection,  Amendment #11  was                 
       ADOPTED.  SENATOR DONLEY MOVED  Amendment #12.  SENATOR                 
       ADAMS  objected.   SENATOR DONLEY withdrew  his motion.                 
       COCHAIR PEARCE MOVED CSSB 105(FIN)  from committee with                 
       individual  recommendations.   Without  objection, CSSB
       105(FIN) was REPORTED  OUT with a previous  zero fiscal                 
       note from Legislative Affairs Agency, a previous fiscal                 
       note from  the Department of  Administration (151.2), a                 
       new fiscal  note from the Department  of Administration                 
       (58.9) and new zero fiscal notes from the Department of                 
       Labor and the Department of Law.                                        
       HB 75   APPROPRIATIONS: OPERATING BUDGET                                
       HB 76   APPROPRIATION: MENTAL HEALTH PROGRAM                            
                                                                               
       COCHAIR SHARP MOVED  to adopt  CSHB 75(FIN) am(brf  sup                 
       maj  pfld)  and   CSHB  76(FIN)  for  the   purpose  of                 
       amendments.  Without objection, the bills were ADOPTED.                 
       Finance  Subcommittee close-outs were  taken up for the                 
       Department  of  Revenue  and  the  Department  of  Law.                 
       COCHAIR SHARP MOVED for incorporation of the Department                 
       of Revenue Subcommittee recommendations  into HB 75 and                 
       HB  76.    SENATOR ADAMS  objected,  then  withdrew his                 
       objection.   Without further objection,  the Department                 
       of  Revenue  Subcommittee recommendations  were ADOPTED                 
       and incorporated into CSHB 75(FIN) am(brf sup maj pfld)                 
       and   CSHB   76(FIN).     COCHAIR   SHARP   MOVED   for                 
       incorporation  of the  Department  of Law  Subcommittee                 
       recommendations  into  HB  75  and   HB  76.    Without                 
       objection,   the   Department   of   Law   Subcommittee                 
       recommendations were ADOPTED and incorporated into CSHB
       75(FIN) am(brf sup maj pfld) and CSHB 76(FIN).                          
       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.                       
       SB 151  PUBLIC EMPLOYMENT LABOR RELATIONS                               
                                                                               
       SB  151  was  not  heard.    It  was  HELD  for  future                 
       consideration.                                                          
  SENATE BILL NO. 105                                                          
  "An  Act  relating to  legislative  ethics; relating  to the                 
  filing  of disclosures by  certain legislative employees and                 
  officials; and providing for an effective date."                             
                                                                               
  COCHAIR SHARP pointed  out that the  bill was introduced  by                 
  the Rules  Committee on  behalf of  the Select  Committee on                 
  Legislative Ethics and had been  considerably revised in the                 
  State  Affairs  Committee.     He  invited   teleconferenced                 
  testimony from Ms. Barnett.                                                  
                                                                               
  SUSIE BARNETT, Professional  Assistant, Select Committee  on                 
  Legislative Ethics, Anchorage,  noted the bill was  52 pages                 
  long.    Basically, the  first  half related  to legislative                 
  branch ethics  while the  second half  related to  executive                 
  branch ethics, although some sections were intermixed.  Much                 
  of the bill  was considered  housekeeping, such as  subpoena                 
  powers, fund  raising during session, gifts,  earned income,                 
  et cetera.  There  were no major changes to  that clarifying                 
  language.                                                                    
                                                                               
  SENATOR PHILLIPS inquired  if legislators  could fund  raise                 
  for non-profit  organizations.   MS. BARNETT  said that  was                 
  under Section 18  in which new  language was added to  allow                 
  solicitation   of   gifts   on  behalf   of   a   charitable                 
  organization.                                                                
                                                                               
  MS.  BARNETT continued  her  overview  of  the  bill.    She                 
  directed attention to  Section 8.  Their  recommendation was                 
  that the  legislature disclose conflict of interest publicly                 
  and the language  spells out how the  disclosure requirement                 
  should be  handled.   Section 12, the  contracts and  leases                 
  section, was difficult  to work with.  The legislation eases                 
  the prohibition on participation  in certain state contracts                 
  and leases and sets a new requirement for full disclosure of                 
  participation.    Section 17  concerned spousal  and spousal                 
  equivalent  lobbyists.    The  committee  had  not  taken  a                 
  position  as  to whether  that  should  be allowed,  but  if                 
  allowed, they recommended increased  disclosure requirements                 
  for  those in  the  legislative branch.   The  language also                 
  appeared  in changes to the executive branch.  The committee                 
                                                                               
                                                                               
  recommended increasing the  annual gift  limit from $100  to                 
  $250 in Section 18.                                                          
                                                                               
  Section 36 was  in response to  concerns of the House  Rules                 
  Committee  regarding the  complainant.   Language  clarifies                 
  that the  complainant must sign  a statement that  they have                 
  reason to believe there  had been a violation  and clarifies                 
  that  they  may  have  to   testify  before  the  committee.                 
  Sections  39  and  40  deal  with  corrective  action.    It                 
  empowered  the committee to go  back and file formal charges                 
  if corrective  action was not  completed by a  legislator or                 
  legislative employee found in violation.  Sections 43 and 44                 
  set out  timetables for sanctions while Section  47 sets out                 
  recommended sanctions.  Sections  45 and 46 set out  who the                 
  appointing authority  for a  legislative employee would  be.                 
  Sections  48-51  and  55  dealt  with requiring  legislative                 
  employees,  Range  19 and  above,  and the  ethics committee                 
  members to  file the  annual financial  disclosure with  the                 
  APOC.     Section  41  proposes  language   which  clarifies                 
  discovery  procedures.   The  committee  did not  include an                 
  amendment   to   tie  discovery   to  restrictions   on  the                 
  complainant because  the complainant  was not usually  under                 
  the  committee's jurisdiction.   There was  brief discussion                 
  about  information being  released before  the person  being                 
  complained about even knows about the complaint.                             
                                                                               
  MS. BARNETT  concluded her  overview by  stating that  other                 
  sections not highlighted had  either non-substantive changes                 
  or were not controversial.                                                   
                                                                               
  COCHAIR SHARP noted the disclosure date change from April 15                 
  to February 15.   MS. BARNETT said the Ethics  Committee had                 
  recommended  April  15,  but  the  State  Affairs  Committee                 
  changed it to February 15 to allow  the information to be in                 
  front   of   the  legislature   during  session.     Further                 
  clarification was provided by MS. BARNETT.                                   
                                                                               
  In response to a question from SENATOR PHILLIPS, MS. BARNETT                 
  commented that the committee addressed the issue of lobbyist                 
  spouses of legislators and chose not to take a position, but                 
  recommended  tightened disclosure requirements as set out in                 
  the bill.  There was brief discussion on this topic.                         
                                                                               
  GARY BADER, Chair, State Personnel Board, testified next via                 
  teleconference  from  Anchorage.    The  board  had  several                 
  concerns with the legislation.  Several significant  changes                 
  would directly impact the  work of the personnel board.   It                 
  removed  from  the  attorney  general's  office  the  ethics                 
  oversight  responsibility  for  state  officials and  public                 
  employees  and  assigned  it to  the  personnel  board.   It                 
  created a  two-tiered system of  ethics, one for  all public                 
  employees  including state  officials, the  other for  state                 
  officials only, which would be confusing to administer.   It                 
  assigned  responsibilities  to  a  citizen  volunteer  board                 
                                                                               
                                                                               
  instead of  trained supervisors  and the  AG's office.   The                 
  primary  responsibility  for  policing   ethics  regulations                 
  should  continue  with  the  personnel  board and  the  AG's                 
  office.  The  system has worked  well and he questioned  why                 
  fix  what isn't  broken.    MR.  BADER  next  addressed  the                 
  Department  of Administration fiscal note, which he believed                 
  was  understated.    He  elaborated,   adding  that  without                 
  adequate  funding and  staff, the  administration  of ethics                 
  regulations would crush  under its  own weight with  doubled                 
  workload.  MR. BADER concluded by suggesting an amendment to                 
  AS 39.52.350(c) to allow the  personnel board the discretion                 
  to either hear the complaint itself  or to appoint a hearing                 
  officer.                                                                     
                                                                               
  COCHAIR  PEARCE commented  that  there  had  been  egregious                 
  violations of ethical  standards by administrative  officers                 
  in the previous administration.  She knew the  charges never                 
  got to the personnel  board because they were buried  by the                 
  AG's office and  administrative staff.  Currently  there was                 
  no public notice or oversight when a complaint was filed and                 
  handled  internally,  as opposed  to the  legislative ethics                 
  system.  She also  pointed out there were two  standards for                 
  legislators and employees which was not that confusing.  She                 
  hoped that all state employees would  try to meet the higher                 
  standard.                                                                    
                                                                               
  NEIL  SLOTNICK, Assistant  Attorney  General, Department  of                 
  Law, testified next  via teleconference from Anchorage.   He                 
  described  his   background  information,  noting   that  he                 
  supervised all ethics action taken by the AG's office and to                 
  his knowledge, none of  the complaints had been buried.   He                 
  welcomed an inquiry into  actions over the last three  years                 
  and described  how complaints  had been  processed.   He had                 
  concerns with changing a system that worked well.  He called                 
  attention  to a draft analysis (in  committee packets and on                 
  file)  which  raised  problems with  the  legislation.   His                 
  comments were  limited to  changes to  the executive  branch                 
  ethics.  The  net effect would  lower the standards for  the                 
  higher  tier of state  officials and  came from  a misguided                 
  intent  to import  some of the  legislative ethics  into the                 
  executive branch.  There was a fundamental difference in the                 
  two branches in that the legislative branch had to answer to                 
  public opinion, whereas  the executive branch  did not.   He                 
  urged  that  the existing  high  standards in  the executive                 
  branch ethics act be kept, pointing out that the legislation                 
  would quietly repeal  the high  standards for 300-400  state                 
  officials, board and  commission members,  yet leave in  the                 
  more rigorous standard  for public employees.   He supported                 
  one  unified  standard  for  the   executive  branch.    Two                 
  standards   created   additional   legal   difficulties   in                 
  interpretation and administration.   MR. SLOTNICK elaborated                 
  on this point.                                                               
                                                                               
  COCHAIR  SHARP  inquired  how many  of  the  charges against                 
                                                                               
                                                                               
  public employees had been made public and how the perception                 
  of  irregular  actions  came  to  the  public.    MR.  BADER                 
  explained   the  process   of   the  confidential   reports.                 
  Resolution of violations  involve the employee's  supervisor                 
  and  those  that should  be made  public  are included  as a                 
  condition of  settlement.  COCHAIR  PEARCE stated   that her                 
  previous comments had not been directed toward Mr. Slotnick,                 
  noting that most complaints  do not rise to the  AG's office                 
  because they were handled at the departmental level.                         
                                                                               
  COCHAIR  SHARP  invited  testimony  from  those  present  in                 
  Juneau.                                                                      
                                                                               
  MIKE  MCMULLEN, Personnel  Manager,  Division of  Personnel,                 
  DOA,  testified  first.    He   addressed  the  question  of                 
  confidentiality, citing AS 39.52.340(a).                                     
                                                                               
                                                                               
  End SFC-97 #94, Side 1, Begin Side 2                                         
                                                                               
  MR.    MCMULLEN    continued    with     discussion    about                 
  confidentiality.  He  then brought  up Mr. Bader's  proposed                 
  amendment to allow the personnel board the option of hearing                 
  a case or  engaging a  hearing officer, noting  that was  in                 
  Section 58 of the State Affairs CS.                                          
                                                                               
  MR.  MCMULLEN  next  addressed  the  fiscal  note  from  his                 
  department, which would  require an  additional four  staff.                 
  He gave additional  information about how the  process would                 
  work.                                                                        
                                                                               
  SENATOR ADAMS  clarified that the fiscal note related to the                 
  State Affairs CS and inquired what  it would be if they went                 
  back to the original version.  MR. MCMULLEN said it would be                 
  zero because the executive  branch act was not moved  in the                 
  original bill.   COCHAIR  SHARP questioned  the fiscal  note                 
  regarding impacts to  the Department of Law  considering the                 
  shift of responsibility.                                                     
                                                                               
  BROOKE MILES, Administrator, Public Offices Commission, DOA,                 
  testified that the commission took no position regarding the                 
  new additional filers  under either  the legislative  ethics                 
  section or the public  employee ethic section, but  they did                 
  attach a fiscal note representing the additional work caused                 
  by  new filers.   There were three  proposed amendments with                 
  technical comments  that had  been provided  for members,  a                 
  copy of  which is  on file.   The first  dealt with  spousal                 
  lobbyist  and the  additional option to  provide disclosure.                 
  The lobbying law could be amended to require a lobbyist when                 
  registering  to  identify  a  spousal  relationship  on  the                 
  registration  form, which  would provide  public information                 
  early in the  process.  The  second comment had  to do  with                 
  gifts to legislators  and legislative employees.   MS. MILES                 
  stated that "legislative employees" should  be added to page                 
                                                                               
                                                                               
  12, line 27.  The final comment related to Section 72 (pages                 
  41-42) relating to close economic association disclosures by                 
  executive branch officials.  She stated that since they work                 
  differently than  legislative officials, it  seemed it would                 
  be easier for them to disclose on their financial statements                 
  April 15 and update within sixty days.                                       
                                                                               
  COCHAIR PEARCE  supported MS. MILES' suggestions, noting she                 
  would be offering them as amendments.                                        
                                                                               
  SENATOR DONLEY inquired  about a situation in  which a filer                 
  does not have  all the information  required at the time  of                 
  filing  an  APOC report,  but notes  it  on the  report, and                 
  subsequently  acquires  and  files  the  information.    The                 
  commission typically sends a notice that the filer failed to                 
  disclose, making it look  as though it was intentional.   He                 
  believed  there  should  be a  graduated  policy  and wanted                 
  specific language to address that type of situation.                         
  COCHAIR SHARP invited the committee to bring up amendments.                  
                                                                               
  SENATOR  PHILLIPS  MOVED  Amendment  #1.     COCHAIR  PEARCE                 
  objected.     SENATOR  PHILLIPS   explained  the   amendment                 
  regarding  spousal lobbyists.   SENATOR DONLEY spoke against                 
  the amendment.  SENATOR ADAMS suggested taking the executive                 
  branch  portion  out  of the  bill.    There was  additional                 
  discussion.                                                                  
                                                                               
  A roll call vote was taken  on the MOTION to adopt Amendment                 
  IN FAVOR: Torgerson, Adams, Phillips                                         
  OPPOSED: Donley, Parnell, Pearce, Sharp                                      
  Amendment #1 FAILED by a 3 to 4 vote.                                        
                                                                               
  SENATOR DONLEY explained Amendment #2.  It would allow draws                 
  from a political campaign fund to an office  expense account                 
  to continue over  a series of  years to avoid an  individual                 
  tax liability problem.   SENATOR DONLEY MOVED  Amendment #2.                 
  Without objection, Amendment #2 was ADOPTED.                                 
                                                                               
  SENATOR DONLEY explained Amendment #3 regarding fund raising                 
  by legislators during election years.   SENATOR DONLEY MOVED                 
  Amendment #3.  SENATOR TORGERSON objected for the purpose of                 
  a  question,  there  was  lengthy  discussion  and  he  then                 
  withdrew his objection.   Amendment  #3 was ADOPTED  without                 
  further objection.                                                           
                                                                               
  SENATOR DONLEY explained  his next amendment and  then MOVED                 
  Amendment #4.  Without objection,  Amendment #4 was ADOPTED.                 
                                                                               
                                                                               
  SENATOR DONLEY MOVED Amendment #5,  then gave an explanation                 
  regarding how public  opinion polls should  be counted as  a                 
  contribution  to  a campaign.    He  felt it  was  a serious                 
  problem  and would like  to clear it  up, but it  may be too                 
                                                                               
                                                                               
  complicated at this time.  There was considerable discussion                 
  about this topic and SENATOR DONLEY withdrew his motion.                     
                                                                               
  SENATOR DONLEY spoke briefly about Amendment #6 but did  not                 
  offer it.                                                                    
                                                                               
  SENATOR  DONLEY  offered  a  conceptual amendment  regarding                 
  reimbursement on  page 4, line 12 and  page 5, line 1, after                 
  "nominal" that would read: "or the legislator or legislative                 
  employee reimburses the state for the cost."  SENATOR DONLEY                 
  MOVED Amendment #7.   SENATOR ADAMS objected,  then withdrew                 
  his objection.  Without further  objection, Amendment #7 was                 
  ADOPTED.                                                                     
                                                                               
  SENATOR DONLEY MOVED Amendment #8: page  4, line 16 and page                 
  5, line 5, inserting "or facsimile" after "telephone".                       
                                                                               
  End SFC-97 #94, Side 2                                                       
  Begin SFC-97 #95, Side 1                                                     
                                                                               
  After  brief  discussion  and  there   being  no  objection,                 
  Amendment #8 was  ADOPTED.   COCHAIR PEARCE MOVED  Amendment                 
  summarized  the  effect   of  the  three  portions   of  the                 
  amendment, which MS. MILES had previously commented on.                      
  SENATOR PHILLIPS  MOVED to  divide the  amendment.   COCHAIR                 
  PEARCE withdrew her motion, as did SENATOR PHILLIPS.                         
                                                                               
  COCHAIR PEARCE restated and MOVED  Amendment #9, which would                 
  be only section 1 of  APOC's Proposed Amendments related  to                 
  spousal lobbyists.   SENATOR PHILLIPS objected and  spoke to                 
  his objection.  There was additional discussion.                             
                                                                               
  A roll call vote was taken on  the MOTION to adopt Amendment                 
  IN FAVOR:  Parnell, Torgerson, Adams, Donley, Pearce, Sharp                  
  OPPOSED:  Phillips                                                           
  Amendment #9 was ADOPTED by a 6 to 1 vote.                                   
                                                                               
  SENATOR DONLEY MOVED Amendment #10  to page 23, line 5.   It                 
  dealt with confidentiality  and privacy of persons  who file                 
  complaints, holding  them to  the same  restrictions as  the                 
  subject of the complaint.  COCHAIR  PEARCE objected and gave                 
  an example that addressed her objection.  There  was further                 
  discussion on the matter.                                                    
                                                                               
  A roll call vote was taken on the MOTION to adopt  Amendment                 
  IN FAVOR: Phillips, Donley, Parnell, Torgerson, Sharp                        
  OPPOSED: Adams, Pearce                                                       
  Amendment #10 was ADOPTED by a 5 to 2 vote.                                  
                                                                               
  COCHAIR PEARCE MOVED Amendment #11,  comprised of sections 2                 
  and 3 of APOC's Proposed Amendments, previously discussed by                 
                                                                               
                                                                               
  MS. MILES.  Without objection, Amendment #11 was ADOPTED.                    
                                                                               
  SENATOR DONLEY discussed a proposal  related to an oversight                 
  with the last  campaign finance reform  law with respect  to                 
  applicability  to  the  governor  and  lieutenant  governor.                 
  SENATOR  DONLEY moved  the proposal as  conceptual Amendment                 
  put in writing.  SENATOR DONLEY withdrew his motion.                         
                                                                               
  COCHAIR SHARP asked if there was no further discussion, what                 
  the pleasure  of the  committee was.   COCHAIR  PEARCE MOVED                 
  CSSB    105(FIN)    from    committee     with    individual                 
  recommendations.    Without  objection,  CSSB  105(FIN)  was                 
  REPORTED  OUT  with   a  previous  zero  fiscal   note  from                 
  Legislative Affairs Agency, a previous  fiscal note from the                 
  Department of Administration (151.2), a new fiscal note from                 
  the Department of Administration (58.9)  and new zero fiscal                 
  notes from  the Department  of Labor and  the Department  of                 
  Law.                                                                         
                        Recess 7:14 P.M.                                       
                       Reconvene 7:35 P.M.                                     
  After  recess,  COCHAIR PEARCE  chaired  the portion  of the                 
  meeting  relating  to  the  operating  budget.   Because  of                 
  technical problems,  the first part  of the meeting  did not                 
  record.  The following was taken from log notes.                             
                                                                               
  CS FOR HOUSE BILL NO. 75(FIN) am(brf sup maj pfld)                           
  "An Act  making appropriations  for the  operating and  loan                 
  program expenses of state  government, for certain programs,                 
  and to capitalize funds; making  an appropriation under art.                 
  IX, sec.  17(c), Constitution of  the State of  Alaska, from                 
  the constitutional budget reserve fund; and providing for an                 
  effective date."                                                             
                                                                               
  CS FOR HOUSE BILL NO. 76(FIN)                                                
  "An Act making appropriations for  the operating and capital                 
  expenses  of  the  state's integrated  comprehensive  mental                 
  health program; and providing for an effective date."                        
                                                                               
  COCHAIR SHARP  MOVED to  adopt CSHB  75(FIN) am(brf  sup maj                 
  pfld)  and  CSHB  76(FIN)  for  the purpose  of  amendments.                 
  Without objection, the bills were ADOPTED.                                   
                                                                               
  Finance  Subcommittee  close-outs  were  taken  up  for  the                 
  Department of Revenue and the Department of Law.                             
                                                                               
  COCHAIR   SHARP   discussed   the   Department  of   Revenue                 
  subcommittee  recommendations and  referred to  his  April 9                 
  memo which outlined them, a copy of which is on file.  There                 
  were two structural changes to the department's budget.  One                 
  was  to  the Child  Support  Enforcement Division  (CSED) to                 
  encourage more cost-effective ways of performing services by                 
                                                                               
                                                                               
  using about 25 percent of CSED funds for a six-month private                 
  sector  contract  to  provide  full  service  child  support                 
  enforcement  services  for   performance  comparison.    The                 
  subcommittee also  adopted intent language  related to those                 
  contractual  services.    The other  change  eliminated  the                 
  Gaming  Division component  and  returned charitable  gaming                 
  responsibility to the Income and Excise  Audit Division.  He                 
  summarized by noting  the total general fund  reduction from                 
  FY 97 authorized was $433.3 thousand.                                        
                                                                               
  COCHAIR SHARP MOVED  for incorporation of the  Department of                 
  Revenue Subcommittee recommendations  into HB 75 and  HB 76.                 
  SENATOR ADAMS objected for the purpose of discussion.                        
                                                                               
  End of  log notes; the tape (SFC-97, # 95, Side 1) continues                 
  at this point.                                                               
                                                                               
  There was  lengthy discussion between  SENATOR PHILLIPS  and                 
  COCHAIR SHARP about  privatization of  CSED and the  timing.                 
  SENATOR  PHILLIPS  urged  caution  regarding  privatization.                 
  COCHAIR SHARP addressed  some of the concerns,  noting there                 
  were  ongoing discussions  with the  commissioner.   SENATOR                 
  ADAMS  withdrew  his  objection.    There being  no  further                 
  objection,   the   Department   of    Revenue   Subcommittee                 
  recommendations  were  ADOPTED  and  incorporated into  CSHB
  75(FIN) am(brf sup maj pfld) and CSHB 76(FIN).                               
                                                                               
  COCHAIR  SHARP  brought  up  the  Department of  Law  budget                 
  subcommittee close-outs  next.  He  referred to his  April 8                 
  memo of  recommendations,  a copy  of which  was before  the                 
  committee  and is  on file.   There were  several structural                 
  changes to  the department's budget  to allow identification                 
  of where the  state was directing  its legal efforts and  to                 
  align  the  budget   more  closely  with   the  department's                 
  organizational structure.  The changes included:                             
  1) returning  the Criminal  Division to  its FY96  component                 
  structure; 2) moving  to the Criminal Division  two criminal                 
  investigation and  prosecution units  currently included  in                 
  the Civil Division budget; 3) creating new components in the                 
  Civil Division;  4) creating  a separate  Administration and                 
  Support  BRU  for  the AG's  office  and  the Administrative                 
  Support  Division;  and 5)  retaining the  Statehood Defense                 
  budget in a  distinct BRU.   The  subcommittee also  adopted                 
  legislative intent related to allocations  made in the Civil                 
  Division.                                                                    
                                                                               
  End SFC-97 # 95, Side 1, Begin Side 2                                        
                                                                               
  COCHAIR SHARP  further explained  the intent  language.   He                 
  summarized  by  listing  their budget  targets  for  a total                 
  general fund reduction from FY97 authorized of $3.7 million.                 
  He read the intent language.                                                 
                                                                               
  COCHAIR SHARP MOVED  for incorporation of the  Department of                 
                                                                               
                                                                               
  Law  Subcommittee  recommendations  into HB  75  and  HB 76.                 
  Without  objection,  the  Department  of  Law   Subcommittee                 
  recommendations  were  ADOPTED  and incorporated  into  CSHB
  75(FIN) am(brf sup maj pfld) and CSHB 76(FIN).                               
                                                                               
  COCHAIR PEARCE announced the conclusion of budget close-outs                 
  for the evening  in addition  to an agenda  for the  morning                 
  meeting on close-outs.                                                       
                        Recess 8:06 P.M.                                       
                       Reconvene 8:20 P.M.                                     
                                                                               
  COCHAIR SHARP chaired the remainder of the meeting.  COCHAIR                 
  PEARCE discussed her  plan for operating  budget amendments,                 
  noting a  deadline of  3:00 P.M.  tomorrow.   COCHAIR  SHARP                 
  brought up SB 150 next.                                                      
  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.                                                               
  SENATE BILL NO. 151                                                          
  "An  Act relating  to  public  employment  labor  relations;                 
  relating to the protection of the rights of public employees                 
  under  the  Public  Employment  Relations Act;  establishing                 
  ethical  standards  for  union  representatives  of   public                 
  employees;  and  establishing  disclosure  requirements  for                 
  public employee labor organizations."                                        
                                                                               
  SENATOR ADAMS commented that he  had six amendments to offer                 
  on  the bill.  COCHAIR SHARP announced  that SB 151 would be                 
  held tentatively to the April 14 meeting.                                    
  ADJOURNMENT                                                                  
                                                                               
  The meeting was adjourned at approximately 9:15 P.M.                         

Document Name Date/Time Subjects