HOUSE FINANCE COMMITTEE May 11, 1997 2:45 P.M. TAPE HFC 97-139, Side 1, #000 - end. CALL TO ORDER Co-Chair Therriault called the House Finance Committee meeting to order at 2:45 p.m. PRESENT Co-Chair Hanley Representative Kelly Co-Chair Therriault Representative Kohring Representative Davies Representative Martin Representative Davis Representative Moses Representative Foster Representative Mulder Representative Grussendorf ALSO PRESENT Art Chance, Staff, Senate Finance Committee; Ed Flanagan, Deputy Commissioner, Department of Labor. SUMMARY SB 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." SB 151 was HELD in Committee for further consideration. 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." Representative Mulder MOVED to adopt Work Draft #O-LS0675\Q (copy on file). There being NO OBJECTION, it was so ordered. ART CHANCE, STAFF, SENATE FINANCE COMMITTEE reviewed section 9. He clarified that the obligation of the employee to pay a fee is dictated by contract. He further explained that it is a mandatory subject of bargaining which survives until impasse. At impasse the employer is free to implement a lock-out and the union is free to strike. A check-off refers to dues authorization or a fee authorization. This is the employee's action to have the employer take a fee from their check and transmit it to the union. The earlier version of the legislation would not have allowed a check- off prior to the effective date of a contract or subsequent to the expiration of the contract. The work draft states that the check- off is not irrevocable beyond the expiration of a contract or one year, whichever occurs first. The employee's obligation to pay dues is not changed. If the dues are not paid the union can ask that the employee be dismissed. Co-Chair Therriault noted that there were concerns regarding fragmentation. Mr. Chance noted that those sections were removed. He added that everything in the original version relating to definitions of groups of employees or bargaining unit composition have also been removed. Representative Davis noted that the definition of supervisory status was deleted. Mr. Chance explained that the Department of Labor felt that the Alaska Labor Relations Agency should address the issue. ED FLANAGAN, DEPARTMENT OF LABOR stated that section 9 is problematic. He stated that the affect of section 9 is the same. The earlier version stated that the voluntary authorization to deduct fees could not commence before the start of the contract or beyond its expiration. The committee substitute states, in section 8, that the authorization cannot be irrevocable beyond the expiration of the agreement or one year, whichever occurs first. He noted that an action by the fee payer would be necessary. He suggested that many of the fee payers will assert their right to no longer have a deduction at the expiration of the contract. He maintained that this could deprive the union of funds at a time when funds are most needed. He noted that the General Governmental Union went two years without a contract. He estimated that the committee substitute will result in more requests for termination. Mr. Flanagan acknowledged that some concerns by the Department have been addressed. He noted that the Department of Labor still has serious concerns regarding the far reaching disclosure requirements. He asserted that the disclosure requirements exceed requirements under federal law. He noted that federal law requires reports of payments in excess of $10 thousand dollars to employees or officers. The committee substitute requires disclosure of payments of $500 hundred dollars or more and expands those that are covered. Any amount spent on political activities would have to be reported. He maintained that the Alaska Public Offices Commission (APOC) should handle the reporting of political funding. Mr. Flanagan noted that municipal concerns have been obviated with the changes made by the committee substitute. Mr. Flanagan discussed the fiscal impact of the legislation. He noted that the Department of Labor's fiscal note was over $200 thousand dollars. He acknowledged that the Alaska Labor Relations Agency's fiscal note would be reduced by the legislation. He stressed that there will still be an increase in unfair labor practice activity. He stated that the Department of Labor, Commissioner's Office fiscal note will be $98 thousand dollars the first year and $91 thousand dollars each succeeding year. This would fund one Accounting Technician II position and a one-quarter time assistant attorney general for criminal prosecution. Co-Chair Therriault referred to the Consent Decree. He summarized that unless there is a mechanism to determine which fees go to collective bargaining and which goes to other, that a certain fee cannot be mandated. Mr. Flanagan noted that the accounting method has to be acceptable to the court. Co-Chair Therriault maintained that any employee could opt out of paying any fee. Representative Kelly stated that he is opposed to Alaska being a right to work state. Co-Chair Therriault stressed that any employees that raise the same concern and would be exempt from the payment of fees. He stated that he supports the right of employees to be represented by a collective bargaining agreement. He emphasized that employees should be compelled to pay for the benefit of services they receive. Representative Kelly expressed concern with section 9. He maintained that employees living under a negotiated contract should pay for the services they receive. He stated that he would not support legislation that allows employees to benefit from a negotiated contract without paying for the services. Mr. Chance asserted that as long as the contract is in effect, the person who derives a benefit from the contract has an obligation to pay a fee. He noted that they could revoke the check-off. If they revoke the check-off the payment of the fee would be between the employee and the union, not the employee and the State. Co-Chair Therriault pointed out that defendants are not entitled to collect any agency fees from the plaintiffs. Mr. Chance clarified that the Court concluded that there was not a system in place which provided the necessary constitutional protection to a service fee payer. The Court ruled that the union security agreement could not be enforced. Co-Chair Therriault concluded that individual employees will have to pay for the services they receive, as long as the organization has an accounting system that is adequate to separate the collective bargaining fee, under federal law. Representative Davies did not agree that the court decision resulted in Alaska becoming a right to work state. He noted that some labor groups may have to change their accounting practices. He stated that new legislation is not needed to allow labor groups to change their accounting practices. Representative Davies noted that the legislation utilizes double negatives. He noted that nothing prohibits a public employer from making an agreement. He observed that there is no positive requirement that fees be paid. He stressed that there would be no requirement for a service payer to pay the service fee after a year of negotiations. Mr. Chance stressed that the obligation to pay a fee should not be confused with the authority to have a check-off. Representative Davies maintained that many people will not pay the fee and it will be impossible to enforce the fee. He noted that it is not feasible to take people to court over the accumulation of fees. Mr. Flanagan pointed out that the committee substitute suspends the grievance procedure, which the fee is calculated to include. He maintained that the court may not uphold the obligation to pay. SB 151 was HELD in Committee for further consideration. ADJOURNMENT The meeting adjourned at 3:15 p.m.