CS FOR HOUSE BILL NO. 417(FIN) am "An Act relating to the compensation for certain public officials, officers, and employees not covered by collective bargaining agreements; relating to pay increments for longevity in state service; and providing for an effective date." Co-Chair Hoffman MOVED to ADOPT SCS CSHB 417(FIN), labeled 25-GH2011\E, Wayne, 4/6/08, as the working document before the Committee. Co-Chair Stedman OBJECTED. He reported on a legal opinion which declared that the amendment added to the bill on the House Floor was a violation of the separation of powers doctrine. Co-Chair Stedman WITHDREW his OBJECTION. There being NO OBJECTION, SCS CSHB 417(FIN) was adopted. 10:28:53 AM ANNETTE KREITZER, COMMISSIONER, DEPARTMENT OF ADMINISTRATION, commented that the bill is in front of the Committee to provide a cost of living adjustment of 5.5 percent, 3 percent, and 3 percent for fiscal years 2008, 2009, 2010, for non-covered state employees in the executive, legislative and judicial branches. Commissioners and other fully exempt executive branch employees currently on a salary override are not included in this legislation. The intent is to address the issues of recruitment and retention. 10:30:28 AM KEVIN BROOKS, DEPUTY COMMISSIONER, DEPARTMENT OF ADMINISTRATION, addressed the positions set in statute and the sections of the bill: Section 1 adjusts compensation for the commissioners for the limited entry commission. Section 2 conforms language for the Alaska State Defense Force. Section 3 changes the pay for the chief procurement officer in the Division of General Services. Section 4 removes a statutory limitation on the appointment of deputy commissioners. Section 5 readjusts the salary schedule for classified and partially exempt employees to reflect a cost of living adjustment effective July 1, 2007. Section 6 provides for a 3 percent cost of living for FY 2009 and Section 7 does the same for FY 2010. Section 8 makes changes to the current longevity step process for employees who reach Step F. Section 9 addresses pay for Regulatory Commission of Alaska commissioners. Section 10 repeal the current longevity step language. Section 11 provides salary adjustments for certain exempt officers and employees of the executive branch. Section 12 provides for judicial employees, including magistrates. Judges would not receive a retroactive adjustment. Section 13 specifies that employees of the university are entitled to salary increases. Section 14 is prospective language to address the steps. Section 15 is transition language. Sections 16 and 17 deal with retroactivity. 10:37:59 AM Co-Chair Stedman addressed the three fiscal notes. Co-Chair Hoffman voiced appreciation for the need to get beyond a frozen pay scale. He wondered if the bill would provide research information about which jobs are needed and how to fund them. Ms. Kreitzer thought there was a bill that deals with elected officials' and commissioners' salaries. She shared historical information about the matchup. She did not object to Co-Chair Hoffman's suggestion of a salary survey. Senator Elton emphasized that the bill does not increase legislators' pay. 10:41:38 AM Senator Huggins requested more information about retroactivity. Mr. Brooks explained that retroactivity is applied where appropriate with non-covered employees. Senator Huggins asked what that costs. Ms. Kreitzer shared the intent to keep parity between the covered and non- covered employees. Mr. Brooks said the retroactive piece is in another appropriation bill. RECESSED: 10:43:40 AM RECONVENED: 2:41:16 PM BRUCE LUDWIG, BUSINESS MANAGER, ALASKA PUBLIC EMPLOYEES ASSOCIATION/ALASKA FEDERATION OF TEACHERS, shared statistics about his organization's membership. He emphasized the difficulty of recruiting and retaining employees. He pointed out that only exempt and partially exempt employees will benefit from this bill. He thought it should be applied to 85 percent of employees instead of 8 percent. 2:47:12 PM PHILLIP TSCHERSICH, KODIAK, spoke as a member of the supervisory unit with the Department of Fish and Game. He said he was disappointed with contract negotiations. He related the causes for poor retention rates in Alaska. He testified in support of HB 417 for all unionized and non- unionized employees. 2:50:27 PM JOE DINNOCENZO, KODIAK, said he works for the Department of Fish and Game. He noted poor morale as recruitment and retention issues grew over the past 30 years. He testified in support of HB 417. 2:52:04 PM NICK SAGALKIN, KODIAK, reported that he also works for the Department of Fish and Game. He agreed with the previous testimony and spoke in support of HB 417. He reported that a salary study in the Department of Fish and Game was completed. 2:53:47 PM STEVE THOMSEN, KODIAK, agreed with the previous testifiers. He shared experience with negotiation issues such as retention. He testified in support of HB 417. 2:54:52 PM JEFF WADLEY, KODIAK, an employee of the Department of Fish and Game, testified in support of HB 417. 2:55:40 PM TONY PRICE, REGULATORY COMMISSION OF ALASKA, referred to Section 9 of the bill, which amends Regulatory Commission of Alaska Commissioner pay. He spoke of the expertise needed to make rate decisions and of the need to attract qualified applicants. He maintained that the level of pay for commissioners needed to be raised to range 30. Senator Dyson asked if a range 27 is high enough to attract and retain desired employees. He requested clarification regarding the specifics of range 27. Mr. Price discussed steps A-F for range 27. 2:59:56 PM BOB MURPHY, KODIAK, testified in support of HB 417 as it applies to unionized and non-unionized employees. 3:01:49 PM ANNETTE KREITZER, COMMISSIONER, DEPARTMENT OF ADMINISTRATION, said Senator Dyson was correct in his conclusion about range 27. She explained that collective bargaining is a process. It is difficult when one piece is turned down. She described what led to arbitration with the union. Senator Elton summarized his understanding of Section 9. He described scenarios where new commissioners could come in at varying salaries. Ms. Kreitzer thought it would free the Governor to offer a range of salaries in order to improve recruitment. Senator Elton thought there would be situations where inequity results. Ms. Kreitzer saw it differently. She reiterated that the intent was to provide more flexibility. Senator Elton listed occupations where recruitment is a problem. Ms. Kreitzer suggested that disparity in salaries is acceptable. Senator Elton requested more information about recruitment tactics and salaries. 3:08:25 PM Senator Dyson asked for an explanation of step M. Ms. Kreitzer said that the salary schedule only goes through A-F because if it were to go to step N, it would not fit in the statute book. The language deals with that problem by saying that every two years there will be a 3.75 percent increase. CSHB 417(FIN)am was HEARD and HELD in Committee for further consideration. 3:09:38 PM