HOUSE LABOR AND COMMERCE STANDING COMMITTEE April 22, 1998 3:20 p.m. MEMBERS PRESENT Representative Norman Rokeberg, Chairman Representative John Cowdery, Vice Chairman Representative Bill Hudson Representative Jerry Sanders Representative Joe Ryan Representative Tom Brice Representative Gene Kubina MEMBERS ABSENT All members present COMMITTEE CALENDAR HOUSE BILL 323 "An Act relating to the calculation of credited service in the public employees' retirement system for noncertificated employees of school districts, regional educational attendance areas, and state boarding schools; and providing for an effective date." - MOVED CSHB 323(L&C) OUT OF COMMITTEE CS FOR SENATE BILL 334(FIN) "An Act relating to guidelines and standards for state training programs; relating to the Alaska Human Resource Investment Council; extending the termination date of the state training and employment program; and providing for an effective date." - MOVED HCSCSSB 334(L&C) OUT OF COMMITTEE HOUSE BILL 479 "An Act relating to recognition of employers who hire Alaskans." - MOVED CSHB 479(L&C) OUT OF COMMITTEE * HOUSE BILL 477 "An Act relating to common interest communities; and amending Rule 72(k), Alaska Rules of Civil Procedure." - HEARD AND HELD * HOUSE BILL 433 "An Act establishing a tax credit for taxpayers engaged in a trade or business who employ certain persons who are state residents; and providing for an effective date." - MOVED CSHB 433(L&C) * HOUSE BILL 389 "An Act relating to an exemption from the requirement for payment for overtime under a voluntary written agreement for certain employees in the airline industry; and providing for an effective date." - SCHEDULED BUT NOT HEARD * HOUSE BILL 276 "An Act relating to the compensation and terms and conditions of employment of the heads and deputy heads of principal executive departments of the state." - SCHEDULED BUT NOT HEARD (* First public hearing) PREVIOUS ACTION BILL: HB 323 SHORT TITLE: PERS CREDIT FOR NONCERTIFICATED EMPLOYEES SPONSOR(S): REPRESENTATIVES(S) BRICE, Kubina Jrn-Date Jrn-Page Action 1/15/98 2054 (H) READ THE FIRST TIME - REFERRAL(S) 1/15/98 2054 (H) LABOR & COMMERCE, HES 2/11/98 (H) L&C AT 3:15 PM CAPITOL 17 2/11/98 (H) MINUTE(L&C) 4/03/98 (H) L&C AT 3:15 PM CAPITOL 17 4/03/98 (H) MINUTE(L&C) 4/22/98 (H) L&C AT 3:15 PM CAPITOL 17 BILL: SB 334 SHORT TITLE: STATE TRAINING PROGRAMS/HUMAN RES.COUNCIL SPONSOR(S): FINANCE Jrn-Date Jrn-Page Action 3/06/98 2770 (S) READ THE FIRST TIME - REFERRAL(S) 3/06/98 2770 (S) FINANCE 3/24/98 (S) FIN AT 9:00 AM SENATE FINANCE 532 3/27/98 (S) FIN AT 8:00 AM SENATE FINANCE 532 3/31/98 (S) FIN AT 9:00 AM SENATE FINANCE 532 4/01/98 (S) FIN AT 9:00 AM SENATE FINANCE 532 4/01/98 (S) RLS AT 12:10 PM FAHRENKAMP RM 203 4/01/98 (S) MINUTE(RLS) 4/01/98 3090 (S) FIN RPT CS 4DP 3NR NEW TITLE 4/01/98 3090 (S) DP: SHARP, PEARCE, PHILLIPS, TORGERSON; 4/01/98 3090 (S) NR: PARNELL, DONLEY, ADAMS 4/01/98 3090 (S) FISCAL NOTES TO CS 4/01/98 3090 (S) (DHSS, GOV, LABOR, DOE-3) 4/01/98 3090 (S) ZERO FISCAL NOTE TO CS (ADM) 4/02/98 3112 (S) ZERO FNS TO CS (DHSS/S.FIN, DOE/S.FIN-3) 4/02/98 3113 (S) RULES TO CALENDAR 4/2/98 4/02/98 3114 (S) READ THE SECOND TIME 4/02/98 3114 (S) FIN CS ADOPTED UNAN CONSENT 4/02/98 3114 (S) ADVANCED TO THIRD READING UNAN CONSENT 4/02/98 3114 (S) READ THE THIRD TIME CSSB 334(FIN) 4/02/98 3115 (S) PASSED Y17 N1 E2 4/02/98 3115 (S) EFFECTIVE DATE(S) SAME AS PASSAGE 4/02/98 3115 (S) DUNCAN NOTICE OF RECONSIDERATION 4/03/98 3139 (S) RECONSIDERATION NOT TAKEN UP 4/03/98 3139 (S) TRANSMITTED TO (H) 4/06/98 2882 (H) READ THE FIRST TIME - REFERRAL(S) 4/06/98 2882 (H) LABOR & COMMERCE, FINANCE 4/17/98 (H) L&C AT 3:15 PM CAPITOL 17 4/22/98 (H) L&C AT 3:15 PM CAPITOL 17 BILL: HB 479 SHORT TITLE: RECOGNITION FOR EMPLOYERS OF ALASKANS SPONSOR(S): LABOR & COMMERCE Jrn-Date Jrn-Page Action 4/01/98 2832 (H) READ THE FIRST TIME - REFERRAL(S) 4/01/98 2832 (H) LABOR & COMMERCE, FINANCE 4/06/98 (H) L&C AT 3:15 PM CAPITOL 17 4/17/98 (H) L&C AT 3:15 PM CAPITOL 17 4/22/98 (H) L&C AT 3:15 PM CAPITOL 17 BILL: HB 477 SHORT TITLE: COMMON INTEREST COMMUNITIES SPONSOR(S): LABOR & COMMERCE BY REQUEST Jrn-Date Jrn-Page Action 3/31/98 2814 (H) READ THE FIRST TIME - REFERRAL(S) 3/31/98 2814 (H) LABOR & COMMERCE, JUDICIARY 4/20/98 (H) L&C AT 3:15 PM CAPITOL 17 4/20/98 (H) MINUTE(L&C) 4/22/98 (H) L&C AT 3:15 PM CAPITOL 17 BILL: HB 433 SHORT TITLE: TAX CREDIT FOR HIRING STATE RESIDENTS SPONSOR(S): REPRESENTATIVES(S) ROKEBERG Jrn-Date Jrn-Page Action 2/18/98 2353 (H) READ THE FIRST TIME - REFERRAL(S) 2/18/98 2354 (H) L&C, JUDICIARY 4/22/98 (H) L&C AT 3:15 PM CAPITOL 17 WITNESS REGISTER KRAG JOHNSEN, Administrative Assistant to Senator Drue Pearce Alaska State Legislature Capitol Building, Room 518 Juneau, Alaska 99801 Telephone: (907) 465-6594 POSITION STATEMENT: Provided information on SB 334. DWIGHT PERKINS, Special Assistant Office of the Commissioner Department of Labor P.O. Box 21149 Juneau, Alaska 99802-1149 Telephone: (907) 465-2700 POSITION STATEMENT: Testified on SB 334. RANDY LORENZ, Student Intern to Representative Norman Rokeberg Alaska State Legislature Capitol Building, Room 24 Juneau, Alaska 99801 Telephone: (907) 465-6547 POSITION STATEMENT: Provided information on HB 479. ED FLANAGAN, Deputy Commissioner Department of Labor P.O. Box 21149 Juneau, Alaska 99802-1149 Telephone: (907) 2700 POSITION STATEMENT: Testified on HB 479. ACTION NARRATIVE TAPE 98-49, SIDE A Number 0001 CHAIRMAN NORMAN ROKEBERG called the House Labor and Commerce Standing Committee meeting to order at 3:20 p.m. Members present at the call to order were Representatives Rokeberg, Cowdery, Hudson, Ryan and Brice. Representatives Kubina and Sanders arrived at 3:23 and 3:25 p.m. respectively. HB 323 - PERS CREDIT FOR NONCERTIFICATED EMPLOYEES Number 0007 CHAIRMAN ROKEBERG announced the committee's first order of business was HB 323, "An Act relating to the calculation of credited service in the public employees' retirement system for noncertificated employees of school districts, regional educational attendance areas, and state boarding schools; and providing for an effective date." Number 0011 REPRESENTATIVE TOM BRICE made a motion to adopt the proposed committee substitute LS1350\E, Cramer, 4/21/98, as the working draft. There being no objections, that version was before the committee. Number 0014 REPRESENTATIVE BRICE made a motion to move HB 323 from the committee with individual recommendations [and attached fiscal note]. CHAIRMAN ROKEBERG objected for a description of what the committee substitute does. REPRESENTATIVE BRICE noted Section 1 was added. He explained that it would provide direction to the Department of Administration to base the expected increase in cost for this benefit which is to be paid for by the employees who will be receiving the benefit. For about a 40 percent increase in their contribution they will receive a 30-year retirement and a 5-year vestment as opposed to the current 40-year retirement and 7 and 3/4-year vestment. Section 1. AS 39.35.160 is amended by adding a new subsection to read: (c) Beginning July 1, 1998, a noncertificated employee of a state boarding school or of a school district or regional educational attendance area shall pay a contribution surcharge. The amount of the surcharge is the difference between the amount the employer would have had to contribute under AS 39.35.250 - 39.35.290 for the employee when treating the employee's credited service as service earned under AS 39.35.300(c) or 39.35.310(c) less the amount the employer would have had to contribute under AS 39.35.250 - 39.35.290 without treating the employee's credited service as service earned under AS 39.35.300(c) or AS 39.35.310(c). CHAIRMAN ROKEBERG, stated "Let me understand this now, this allows for example a school employee that normally would have to take the summer off to -- his normal contribution of 6.75 percent which he normally pays he would be allowed to pay that and then he also - he would pay the employee that, that is to say would pay the employer match of 6.75. So the employee would pay the entire amount of those months they were not directly employed and reimbursed by the employer, is that correct." REPRESENTATIVE BRICE replied yes. CHAIRMAN ROKEBERG said, so there wouldn't be any negative impact as far as the school districts. REPRESENTATIVE BRICE replied no. Number 0030 REPRESENTATIVE JOE RYAN said, "Okay, this is in the same that the classified employees - the teachers would pay for make (indisc.)," REPRESENTATIVE BRICE responded that their contribution rate would be - they're both roughly around - totally 20 percent. REPRESENTATIVE RYAN commented, "They are making, like the teachers make their contribution agreements (indis.--fading)." Number 0035 CHAIRMAN ROKEBERG withdrew his objection to the motion. He asked if there were further objections. There being none, CSHB 323(L&C) moved from the House Labor and Commerce Standing Committee. The chairman noted for the record that the attached zero fiscal note was a technical oversight of part of the motion made. CSSB 334(FIN) - STATE TRAINING PROGRAMS/HUMAN RES.COUNCIL Number 0049 CHAIRMAN ROKEBERG announced the committee's next order of business was CSSB 334(FIN), "An Act relating to guidelines and standards for state training programs; relating to the Alaska Human Resource Investment Council; extending the termination date of the state training and employment program; and providing for an effective date." Number 0050 KRAG JOHNSEN, Legislative Administrative Assistant to Senator Drue Pearce, came forward to present CSSB 334(FIN). He stated they have a number of amendments which should be in the committee members' bill packets and there was a sheet labeled "background information" which was for the committee's basic information on the creation of the (indisc.) and some guidelines on the council membership. CHAIRMAN ROKEBERG stated, in order to expedite matters there are three amendments in the packet. He asked if the bill sponsor and the Senate Finance Standing Committee agreed with the amendments. CHAIRMAN ROKEBERG noted for the record that Representatives Kubina is in attendance. MR. JOHNSEN answered in the affirmative, noting the Senate Finance Standing Committee presented the amendments. Number 0062 DWIGHT PERKINS, Special Assistant, Office of the Commissioner, Department of Labor(DOL), came forward to testify on SB 334. CHAIRMAN ROKEBERG asked if the department has any objections to the three amendments. MR. PERKINS responded the department has no objections and supports the three amendments. Number 0064 CHAIRMAN ROKEBERG designated the first amendment as Amendment 1. He noted the amendment increases the number of members on the committee. Number 0066 REPRESENTATIVE JOHN COWDERY made a motion to move Amendment 1, Version P. There being no objections, Amendment 1 was adopted. Page 1, Line 9 Section 1(a)(2) Delete: 21 Insert: 26 Page 1, Line 11 Section 1(a)(2) Delete: [] Page 2 line 22 Section 2(c) Delete: lines 22-24 CHAIRMAN ROKEBERG referred to Amendment 2. He noted it allows three meetings instead of a maximum of two meetings of the board. Number 0070 REPRESENTATIVE COWDERY made a motion to move Amendment 2, Version P. There being no objections, Amendment 2 was adopted. Page 3, Line 29 Section 7 Delete: two Insert: three CHAIRMAN ROKEBERG referred to Amendment 3. He said this merely cleans up the language to Alaska Temporary Assistance Program (ATAP); it was a technical amendment. Number 0075 REPRESENTATIVE COWDERY made a motion to move Amendment 3. There being no objections, Amendment 3 was adopted. Page 9, Line 2 Delete: Alaskans on Temporary Assistance Plan employment education and job training programs Insert: Alaska Temporary Assistance Program (ATAP) Number 0078 CHAIRMAN ROKEBERG addressed Amendment 4, page 8. He said, "This is the Alaska Professional Development Institute in the Department of Administration. It was felt that the requirements set forth in the bill under the (f) subsection were more appropriate to the Alaska Professional Development Institute if it was under the (g) section which merely providing for assessment." Page 8, lines 11-13 delete: (1) in the Department of Administration: Alaska Professional Development Institute, providing continuing education and training for employed workers; Page 10, after line 27 insert: (9) in the Department of Administration: Alaska Professional Development Institute, providing continuing education and training for employed workers; CHAIRMAN ROKEBERG noted that we're not deleting anything, we're just moving it. He asked Mr. Johnsen if the Senate Finance Committee agrees to this amendment. MR. JOHNSEN replied the Senate Finance Standing Committee saw it as a good compromise. The council would still have the ability to recommend that APDI would fall under the council's oversight, that's part of the assessment. Number 0094 MR. PERKINS said this addressed the concerns of the Department of Administration and he believes it's wholeheartedly accepted. He indicated the department was unaware of the committee meeting, but knows this addresses their concern. Number 0097 REPRESENTATIVE COWDERY made a motion to move Amendment 4. There being no objections, Amendment 4 was adopted. Number 0100 REPRESENTATIVE COWDERY made a motion to move CSSB 334(FIN) as amended with individual recommendations and attached zero fiscal note. There being no objections, HCSCSSB 334(L&C) was moved out of the House Labor and Commerce Standing Committee. CHAIRMAN ROKEBERG noted for the record that Representatives Kubina and Hudson are present and asked for a brief at ease [for approximately 30 seconds]. HB 479 - RECOGNITION FOR EMPLOYERS OF ALASKANS Number 0108 CHAIRMAN ROKEBERG called the House Labor and Commerce Standing Committee back to order and announced the committee's next order of business was HB 479, "An Act relating to recognition of employers who hire Alaskans." He noted it was previously heard [April 6, 1998]. Number 0111 RANDY LORENZ, Student Intern to Representative Norman Rokeberg, came forward to testify on HB 479. He said the requested changes have been incorporated into another proposed committee substitute. MR. LORENZ explained the new committee substitute requires the employer to pay a $30 fee for certification which could be adjusted by the Department of Labor (DOL) to cover costs - the fee will go into the general fund. He stated, "The program will encourage Alaskan hire by requiring a minimum of 80 percent of Alaskans to be employed. The employee is considered a resident if he or she is both in the recent permanent fund file and the wage file and the Department of Labor shall design the seal. According to what they had requested I believe we have covered those proposed changes in the CS [committee substitute]." CHAIRMAN ROKEBERG directed the committee's attention to "we hire Alaska 1998" graphics. REPRESENTATIVE BRICE asked, do we hire Alaska or Alaskan? MR. LORENZ said they're here for your review. He noted DOL provided a number of possibilities for the seal, noting the committee could accept one of those now. Number 0125 REPRESENTATIVE BILL HUDSON made a motion to adopt the proposed committee substitute Version H, LS1719\H, Cramer, 4/14/98. There being no objections, Version H was adopted. REPRESENTATIVE RYAN asked if there was an amendment. CHAIRMAN ROKEBERG replied no, it has been amended by Version H. Number 0131 ED FLANAGAN, Deputy Commissioner, Department of Labor, came forward to testify on HB 479. He said the proposed committee substitute addresses virtually all of the concerns that the department raised earlier. Mr. Flanagan indicated additional calculations were made and of 16,000 employing units that are on the department's UI [Unemployment Insurance] wage files, 71 percent of the employers that they report on (indisc.--coughing) report card have 80 percent or more and DOL would go down to anybody with one employee. He noted the 16,000 employing unit number would sometimes include multiple locations of one employer, giving the example of Fred Meyer, Incorporated. He stated, "When I spoke earlier, we talked about our current employer report card that is 20 or more employees, we would take that all the way down to anybody that employed anybody. The "Made in Alaska" person was very concerned about that - that we shouldn't exclude the very small employers, and that wasn't our purpose in suggesting 20, we were just trying to keep it to what we already have in hand." He indicated it wasn't extremely difficult for the department to produce that report to this level. MR. FLANAGAN said he believes Mrs. Armstrong [Legislative Assistant to Representative Rokeberg] had told Mr. Perkins that the department should "take a pencil" to its fiscal note. He noted the department did not have a formal revised fiscal note for the committee. He indicated it was not the department's intention to delay the bill's progress and if the bill reached the House Finance Standing Committee, the department could pare it down to something like $12,000 if the department received straight general funds, and no fee would have to be charged. He indicated it would probably cost the department $20,000 instead of $12,000 if they had to go the program receipts route, noting it costs money anytime money had to be collected. This is a rough estimate that was done about 30 minutes ago. Mr. Flanagan said, "If we just had $12,000 straight GF, we wouldn't even have to charge a fee for the thing, but I understand ... straight GF [general fund] is always an issue." He said he guessed the department would have to set the fee in the first year and the fee could probably be reduced from the current $30 because it had been simplified, reminding the committee the initial fiscal note had been based on the many different criteria per industry, et cetera. He said the department could make this work but would like to do a little more work on the fiscal note to make this a doable thing. Number 0159 CHAIRMAN ROKEBERG asked what does the posted fiscal note say. MR. FLANAGAN replied, this one says $12,000. CHAIRMAN ROKEBERG said it was duly noted and indicated it would be addressed in the House Finance Standing Committee. Number 0162 REPRESENTATIVE RYAN asked if the chairman wanted a motion. CHAIRMAN ROKEBERG replied no, he indicated he had one more question. He stated, "Regarding the discussion about where the design was going to come from, the bill provides that your internal department graphically would do it, but what would the costs or the implications of having, like, the Arts Council [Alaska State Council on the Arts] or having a contest to award prizes." MR. FLANAGAN said the cost had not been considered in the original fiscal note and the Alaska State Council on the Arts had not been contacted for an estimate. He stated the DOL's suggestion to the chairman's staff was that the department has a very good graphic artist who, although near retirement, had given the department enough designs to last a few years. Mr. Flanagan said the department did not want to deny the Alaska State Council on the Arts the opportunity to have something, indicating the DOL's suggestion had been for reasons of simplicity and speed. CHAIRMAN ROKEBERG said he would like DOL to consider the contest only as a means of publicizing the program and noted that would be taken up later. MR. FLANAGAN indicated he understood the chairman's comments. Number 0173 REPRESENTATIVE RYAN made a motion to move Version H, the proposed committee substitute for HB 479, out of committee with individual recommendations and the accompanying $12,000 fiscal note. REPRESENTATIVE GENE KUBINA asked if there was another committee of referral. Number 0176 CHAIRMAN ROKEBERG replied, the House Finance Standing Committee. He said he believes it needs to be "picked up." Chairman Rokeberg asked if there were any objections to the motion. There being none, CSHB 479(L&C) was moved out of the House Labor and Commerce Standing Committee. HB 477 - COMMON INTEREST COMMUNITIES Number 0185 CHAIRMAN ROKEBERG announced the next order of business is HB 477, "An Act relating to common interest communities; and amending Rule 72(k), Alaska Rules of Civil Procedure," requested by the Alaska Home Builders Association by request. He indicated this is a very long and complex law and that he had asked the Alaska Home Builders Association to come up with a light version of the bill due to the late hour in the session. CHAIRMAN ROKEBERG said, "This is the Alaska [Uniform] Common Ownership Act which is - replace the Horizontal Regime Act, so it's for all condominiums and townhouse-type associations and so forth in the state. One of the key elements we found in administering the condominiums and so forth is that hearing the real estate crash in the mid-eighties, a lot of nonresident owners purchased units so there's an (indic.) amount. So there's a lot of tenants in a lot of units now and it's very difficult under the existing law to get the majority, or a high enough a number of owners to vote on any changes to the declarations and bylaws or any other revisions. So there's a sum (indisc.--noise) of that and so forth. I just wanted to bring the up today and just to make you guys aware of it in case you have anybody that's interested in this type of thing that you could pass it along to. I hope to be able to bring this up before we shut down the committees real quickly so it might have a chance to (indisc.) through if we can but I don't want to take up too much time of the committee on it so I'm going to -- if there's any questions then we'll just hold the bill over. Again, I just want to bring up so we can bring it up under bills previously heard if we can come up with a..." Number 0203 REPRESENTATIVE KUBINA indicated, basically without a hearing you'll be able to move it out the next time just by bringing it up. CHAIRMAN ROKEBERG guaranteed he wouldn't do that. REPRESENTATIVE RYAN said he would like to read the bill. Number 0205 CHAIRMAN ROKEBERG commented the bill is a tough goer. He stated he would hold HB 477 for further consideration. CHAIRMAN ROKEBERG asked for a brief at ease at 3:43 p.m. CHAIRMAN ROKEBERG called the meeting back to order at 3:51 p.m. REPRESENTATIVE HUDSON commented on the committee scheduling of a bill regarding multi year labor contracts and an opinion he received from the attorney general. CHAIRMAN ROKEBERG indicated HB 477 will be held in committee. HB 433 - TAX CREDIT FOR HIRING STATE RESIDENTS Number 0218 CHAIRMAN ROKEBERG announced HB 433, "An Act establishing a tax credit for taxpayers engaged in a trade or business who employ certain persons who are state residents; and providing for an effective date," sponsored by the chairman is before the committee. CHAIRMAN ROKEBERG referred to the committee substitute which was modified before it was heard. Number 0221 REPRESENTATIVE COWDERY made a motion to adopt proposed committee substitute, Version LS0656\F, 3/4/98 for purposes of discussion. REPRESENTATIVE RYAN requested an at ease. CHAIRMAN ROKEBERG called a brief at ease at 3:53 p.m. CHAIRMAN ROKEBERG called the meeting back to order at 3:55 p.m. He said, "Just for the -- we're going to request the committee to -- change the committee substitute fundamentally was we have adopted by the record a package for it, was to move it from a $1,000 to a $500 tax credit. This particular legislation would provide to a company for employment of those qualified individuals a tax credit of $500 not to exceed a aggregate of $75,000 in any one year. Now for those individuals who had been in the state an actual year, and had been a graduate of, or a student at a qualifying post secondary educational student, which is defined in the bill." Number 0233 REPRESENTATIVE COWDERY made a motion to move CSHB 433 with individual recommendations and attached committee fiscal note. There being no objections CSHB 433(L&C) moved from the House Labor and Commerce Standing Committee. ADJOURNMENT Number 0239 CHAIRMAN ROKEBERG adjourned the House Labor and Commerce Standing Committee at 3:58 p.m.