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. 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.