Legislature(1997 - 1998)
04/10/1997 05:14 PM Senate FIN
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
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.
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