MINUTES SENATE FINANCE COMMITTEE April 16, 1997 8:11 A.M. TAPES SFC-97, # 112, Sides 1 & 2 (000-590, 590-000) SFC-97, # 113, Side 1 (000-425) CALL TO ORDER Senator Bert Sharp, Cochair, Senate Finance Committee, convened the meeting at approximately 8:11 A.M. PRESENT In addition to COCHAIR SHARP, COCHAIR PEARCE, SENATORS PHILLIPS, DONLEY, TORGERSON, PARNELL and ADAMS were present when the meeting was convened. Also Attending: ALISON ELGEE, Deputy Commissioner, Department of Administration; MIKE GREANY, Director, Legislative Finance Division; RANDY WELKER, Legislative Auditor, Division of Legislative Audit; ED FLANAGAN, Deputy Commissioner, Department of Labor; ART CHANCE, Consultant, House and Senate Finance Committees; and aides to committee members. SUMMARY INFORMATION SB 55 AMEND DEFINITION OF "PROGRAM RECEIPTS" COCHAIR PEARCE MOVED for adoption of a draft CS. SENATOR ADAMS objected, then withdrew his objection. Without further objection, CSSB 55(FIN) was adopted. SENATOR PHILLIPS MOVED for adoption of Amendment #1. COCHAIR PEARCE objected. Testimony was heard from ALISON ELGEE, RANDY WELKER and MIKE GREANY. Amendment offered. COCHAIR PEARCE MOVED CSSB 55(FIN) from committee with individual recommendations and an updated fiscal note. Without objection, CSSB 55(FIN) was REPORTED OUT with a zero fiscal note from the Senate Finance Committee. SB 105 LEGISLATIVE ETHICS CODE REFORM SENATOR PHILLIPS MOVED to rescind previous action in failing to adopt Amendment #1. SENATOR DONLEY objected. The motion CARRIED by a 6 to 1 vote and Amendment #1 was before the committee. Amendment #1 FAILED by a 2 to 5 vote. 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. SB 151 PUBLIC EMPLOYMENT LABOR RELATIONS COCHAIR PEARCE MOVED for adoption of Amendment #1. COCHAIR SHARP objected. Testimony was heard from ED FLANAGAN. The objection was withdrawn, and Amendment There being no objection, Amendment #2 was ADOPTED. COCHAIR PEARCE MOVED Amendment #3. COCHAIR SHARP objected, then withdrew his objection. Without further objection, Amendment #3 was ADOPTED. SENATOR ADAMS MOVED Amendment #4. COCHAIR SHARP and COCHAIR PEARCE objected. Amendment #4 FAILED by a 3 to 3 vote. SENATOR ADAMS MOVED Amendment #5. COCHAIR PEARCE objected. Amendment #5 FAILED by a 3 to 3 vote. SENATOR ADAMS MOVED Amendment #6. COCHAIR PEARCE objected. Amendment #6 FAILED by a 3 to 3 vote. SENATOR ADAMS MOVED Amendment #7. COCHAIR SHARP objected. Testimony was heard from ART CHANCE. COCHAIR SHARP withdrew his objection and Amendment #7 was ADOPTED. SENATOR ADAMS MOVED Amendment #8. COCHAIR PEARCE objected. Amendment #8 FAILED by a 3 to 3 vote. SENATOR ADAMS did not offer Amendments #9 - PEARCE objected. SENATOR ADAMS withdrew his motion without objection. COCHAIR SHARP MOVED Amendment #15. SENATOR ADAMS objected, then withdrew his objection. Without further objection, Amendment #15 was ADOPTED. COCHAIR SHARP MOVED Amendment #16. SENATOR DONLEY MOVED for adoption of an Amendment to Amendment #16. Without objection, the Amendment to Amendment #16 was ADOPTED. Amendment #16 was ADOPTED by a 6 to 1 vote. COCHAIR SHARP MOVED Amendment #17. There being no objection, Amendment #17 was adopted. SENATOR ADAMS MOVED Amendment #14. COCHAIR PEARCE objected. Amendment #14 FAILED by a 2 to 4 vote. COCHAIR PEARCE MOVED Amendment #18. COCHAIR SHARP objected, then withdrew his objection. Without further objection, Amendment previous action in failing to adopt Amendment #14. There being no objection, Amendment #14 was before the committee. Amendment #14 FAILED by a 3 to 4 vote. COCHAIR PEARCE MOVED CSSB 151(FIN) from committee with individual recommendations. SENATOR ADAMS objected. By a vote of 4 to 3, CSSB 151(FIN) was REPORTED OUT with individual recommendations, a previous fiscal note from the Department of Law (277.0), new fiscal notes from the Department of Labor (263.9), the Court System (14.7), and forthcoming fiscal notes from the Department of Administration and the Department of Labor. SENATE BILL NO. 55 "An Act relating to the definition of certain state receipts; and providing for an effective date." COCHAIR PEARCE MOVED for adoption of a draft CS, version B. SENATOR ADAMS objected for the purpose of an explanation. COCHAIR PEARCE noted the changes on page 2, lines 3-6 using language from a similar bill passed last year, and a change on page 3, lines 9-13 that added specific entities to the list of fund receipts, those being the children's trust, commercial fisheries test fishing operations, and the public utilities commission. Contracting language from the governor's bill was moved up to page 2, line 6. SENATOR ADAMS withdrew his objection. Without further objection, CSSB 55(FIN) was adopted. SENATOR PHILLIPS MOVED for adoption of Amendment #1. He requested the drafter insert the language in the appropriate sections. It would add rental receipts to page 2, line 3 and cover Pioneer Homes, Public Safety and Fish and Game employees, and Foreign Trade Offices. It had been a concern brought up by the department and he offered it on their behalf. COCHAIR PEARCE objected. ALISON ELGEE, Deputy Commissioner, Department of Administration, testified that they were interested in recognizing the rents that Pioneer Home residents pay for residing there as something other than general fund program receipts. The revenues would continue to be appropriated and subject to the same scrutiny, but as rents were raised, they would get some credit toward the general fund expenditures by recognizing them as being specific to the Pioneer Home programs. There was discussion between SENATOR PARNELL and MS. ELGEE about where the language should appear in the bill. COCHAIR PEARCE invited Mr. Welker and Mr. Greany to the table to comment on their recommendations. In response to a question from SENATOR TORGERSON, MS. ELGEE discussed employee housing rental receipts and noted there was not lease agreement. MIKE GREANY, Director, Legislative Finance Division, described the bill and the columns of appropriations. He informed the committee that SB 55 would move some of the general fund appropriations to the other funds column and they would no longer be counted as general fund. It would move about $55 million of designated receipts from the general fund and move them off budget. He expressed concerns about moving closer to a form of dedication and away from the notion that the majority of receipts the state takes in were not dedicated were available to the legislature for appropriation. He explained in further detail. RANDY WELKER, Legislative Auditor, Division of Legislative Audit, testified that the bill represented strictly a budgetary consideration of which column you want the receipts to show up in. He said it didn't matter from an accounting perspective because there were still mechanisms to track the receipts. The bill was drafted to narrowly define what receipts were moving out of the general fund category into other funds so that only those things where a third party had a significant influence over how the funds must be spent would be moved. In response to a question from COCHAIR SHARP, MR. GREANY responded that there would be less than $500 thousand of receipts for Fish and Game, Foreign Trade offices and Public Safety. Additional discussion ensued among COCHAIR PEARCE, SENATOR PHILLIPS and MS. ELGEE about keeping a narrow definition and housing receipts. A roll call vote was taken on the MOTION to adopt Amendment IN FAVOR: Adams, Phillips OPPOSED: Torgerson, Parnell, Pearce, Sharp Amendment #1 FAILED by a 2 to 4 vote. Amendment #2 was not offered. COCHAIR PEARCE MOVED CSSB 55(FIN) from committee with individual recommendations and an updated fiscal note. Without objection, CSSB 55(FIN) was REPORTED OUT with a zero fiscal note from the Senate Finance Committee. 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 noted that SB 105 was back before the committee on a rescind vote. He noted there were a number of amendments that had been considered. SENATOR DONLEY brought up previous discussion about a peculiarity in existing law. The only state official allowed to continue to raise money during the legislative session was the Lieutenant Governor and he believed it should be equal for all candidates. He had a draft amendment on the issue but thought it had been adequately addressed. SENATOR PHILLIPS MOVED to rescind previous action in failing to adopt Amendment #1. COCHAIR SHARP and SENATOR DONLEY objected. A roll call vote was taken on the MOTION. IN FAVOR: Phillips, Torgerson, Parnell, Adams, Pearce, Sharp OPPOSED: Donley The motion CARRIED by a 6 to 1 vote and Amendment #1 was before the committee. There was brief discussion on the merits of the amendment. A roll call vote was taken on the MOTION to adopt Amendment IN FAVOR: Adams, Phillips OPPOSED: Torgerson, Parnell, Donley, Pearce, Sharp Amendment #1 FAILED by a 2 to 5 vote. 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. 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 objected to the bill as expensive and not needed. He cited previous legislative appropriation concerning Indian Country, audits of native corporations and believed they should get away from people bashing. End SFC-97 #112, Side 1, Begin Side 2 COCHAIR PEARCE MOVED for adoption of Amendment #1. COCHAIR SHARP objected for the purpose of explanation. COCHAIR PEARCE stated the amendment included employees of juvenile detention facilities in the list of employees prohibited from striking. SENATOR DONLEY asked for the administration's position on the amendment. ED FLANAGAN, Deputy Commissioner, Department of Labor, testified that the amendment would mitigate some of the harm and lessen the negative impact of language in the bill. There would still be many employees in youth correction facilities eligible to strike, but youth correction officers would be excluded. He supported the amendment. The objection was withdrawn, and Amendment #1 was ADOPTED. COCHAIR PEARCE MOVED Amendment #2. She explained it had been suggested by the unions because of concern over representation by labor organizations. There being no objection, Amendment #2 was ADOPTED. COCHAIR PEARCE MOVED Amendment #3. COCHAIR SHARP objected. COCHAIR PEARCE explained that the bill was not intended to break up unions and the amendment clarified that certain bargaining unions could continue. Those affected would include the Fairbanks North Star Borough and another political subdivision of the state. COCHAIR SHARP removed his objection. Without further objection, Amendment #3 was ADOPTED. SENATOR ADAMS MOVED Amendment #4. COCHAIR SHARP and COCHAIR PEARCE objected. SENATOR ADAMS explained that the amendment decertified all current unions from representing any other public employees if peace officers were members. He further explained the impact of the legislation on Petersburg and that the amendment would cut some of the costs of the legislation. COCHAIR PEARCE spoke to her objection, pointing out that Amendment #3 fixed the problem affecting Petersburg. A roll call vote was taken on the MOTION to adopt Amendment IN FAVOR: Donley, Adams, Phillips OPPOSED: Parnell, Pearce, Sharp Amendment #4 FAILED by a 3 to 3 vote. SENATOR ADAMS MOVED Amendment #5. COCHAIR PEARCE objected. SENATOR ADAMS explained that the amendment eliminated the findings in Section 1. SENATOR DONLEY spoke in favor of the amendment, stating that the findings language was inflammatory and not necessary. COCHAIR PEARCE spoke to her opposition. She commented that it was inflammatory that members of public unions had hired private investigators to investigate legislative members to find something to use to blackmail them in a vote, which happened last session. SENATOR PHILLIPS declared a conflict of interest concerning the legislation in that his wife was a state employee and asked to refrain from voting. COCHAIR SHARP objected. A roll call vote was taken on the MOTION to adopt Amendment IN FAVOR: Adams, Phillips, Donley OPPOSED: Parnell, Pearce, Sharp Amendment #5 FAILED by a 3 to 3 vote. SENATOR ADAMS MOVED Amendment #6. COCHAIR PEARCE objected. SENATOR ADAMS explained that the amendment deleted the federal labor management reporting and disclosure act being rolled into PERA and spoke to the cost. Discussion was had among COCHAIR PEARCE, SENATORS ADAMS, DONLEY and PHILLIPS regarding the amendment. A roll call vote was taken on the MOTION to adopt Amendment IN FAVOR: Phillips, Donley, Adams OPPOSED: Parnell, Pearce, Sharp Amendment #6 FAILED by a 3 to 3 vote. SENATOR ADAMS MOVED Amendment #7. COCHAIR SHARP objected. SENATOR ADAMS explained that the amendment would delete the provision to allow copying of a list of union members' addresses. COCHAIR PEARCE stated her support of the amendment. There was additional discussion among members. SENATOR PARNELL asked to hear from Mr. Chance as he was not familiar with labor elections. ART CHANCE, Consultant, House and Senate Finance Committees, stated the way the current language had been characterized was inaccurate. The language would insure that a member of the union could have a list of the membership if the member was a bonafide candidate for office. It would not make the list public record. COCHAIR SHARP withdrew his objection and Amendment #7 was ADOPTED. SENATOR ADAMS MOVED Amendment #8. COCHAIR PEARCE objected. SENATOR ADAMS explained that the amendment deleted the requirement that current arbitration awards could be funded within the state agency budget if the money was available. Current language in the bill would require that award, extensions or modifications be approved by the legislature which would delay settlement of cases and generate interest costs. COCHAIR PEARCE spoke to her objection that some modifications had been large and should be brought before the legislature. SENATOR ADAMS requested the department's response. MR. FLANAGAN stated that the amendment would allow interest arbitrations to stand and take effect without waiting for legislative approval. A roll call vote was taken on the MOTION to adopt Amendment IN FAVOR: Adams, Phillips, Donley OPPOSED: Parnell, Pearce, Sharp Amendment #8 FAILED by a 3 to 3 vote. SENATOR ADAMS did not offer Amendments #9 - #13 as they were duplicates of previous amendments. SENATOR ADAMS MOVED Amendment #14. COCHAIR PEARCE objected. SENATOR ADAMS explained that the amendment exempted anything having to do with NEA and established a separate PERA for school employees. SENATOR DONLEY asked to hear from the department on the amendment. MR. FLANAGAN explained that it left school employees in the status quo and lessened the impact and workload of required reporting. He was supportive of the amendment. COCHAIR PEARCE informed the committee that she had a forthcoming amendment that would remove NEA from the bill and asked SENATOR ADAMS to withdraw his amendment. SENATOR ADAMS withdrew his motion without objection. COCHAIR SHARP MOVED a conceptual Amendment #15 that would change a majority of the total number of employees in a union to a total number of employees voting in a union election. SENATOR ADAMS objected and requested comment from the department. MR. FLANAGAN stated that the amendment addressed one of their many concerns and he was supportive. SENATOR ADAMS withdrew his objection. Without further objection, Amendment #15 was ADOPTED. COCHAIR SHARP MOVED Amendment #16. He explained that it excluded unpaid volunteers, such as shop stewards and chapter representatives, from reporting requirements. End SFC-97 #112, Side 2 Begin SFC-97 #113, Side 1 SENATOR DONLEY MOVED for adoption of an Amendment to Amendment #16 to add the language "other than reimbursement for actual expenses." Without objection, the Amendment to Amendment #16 was ADOPTED. COCHAIR PEARCE objected to Amendment #16 for the purpose of hearing from Mr. Chance on the section. MR. CHANCE stated the section did not require a generalized reporting by officers, stewards or representatives unless they did certain things, such as exchanging money with a public employer or engaging in a business relationship or contract with a public employer. MR. FLANAGAN didn't dispute Mr. Chances interpretation. He gave an example and stated that it would lessen the number of people required to report and thereby reduce the workload. He supported the amendment. SENATOR DONLEY inquired about what would trigger the disclosure reporting. MR. CHANCE and MR. FLANAGAN responded to the questions. A roll call vote was taken on the MOTION to adopt Amendment IN FAVOR: Phillips, Donley, Torgerson, Parnell, Pearce, Sharp OPPOSED: Adams Amendment #16 as amended was ADOPTED by a 6 to 1 vote. COCHAIR SHARP MOVED Amendment #17. He explained that it was intended to address the problem of making a contribution to a state or local candidate for public office. It would not be reportable if it was $100 or less, similar to APOC requirements. There was brief discussion. Without objection, Amendment #17 was adopted. COCHAIR PEARCE brought up Amendment #14 previously offered by SENATOR ADAMS, and noted she had Amendment #18 that exempted NEA. She noted Amendment #14 exempted NEA from the entire bill, whereas Amendment #18 exempted them from the reporting requirements. SENATOR ADAMS MOVED Amendment #14. COCHAIR PEARCE objected. There was brief discussion. A roll call vote was taken on the MOTION to adopt Amendment IN FAVOR: Adams, Phillips OPPOSED: Torgerson, Parnell, Pearce, Sharp Amendment #14 FAILED by a 2 to 4 vote. COCHAIR PEARCE MOVED Amendment #18. COCHAIR SHARP objected for the purpose of explanation. MR. CHANCE described the amendment. It would clarify the cost that could be charged to a fee payer to include contract administration. Also, if an organization had its fee established by arbitration or court action, the filing with the commissioner of Labor would satisfy the reporting requirement for labor organizations. It that was done, then the officers and employees would be exempt from the individual reporting requirements. It would avoid a duplication of effort. COCHAIR SHARP withdrew his objection. Without further objection, Amendment #18 was ADOPTED. SENATOR DONLEY stated for the record his support of Amendment #14. SENATOR ADAMS MOVED to rescind previous action in failing to adopt Amendment #14. There being no objection, Amendment A roll call vote was taken on the MOTION to adopt Amendment IN FAVOR: Adams, Phillips, Donley OPPOSED: Torgerson, Parnell, Pearce, Sharp Amendment #14 FAILED by a 3 to 4 vote. COCHAIR PEARCE MOVED CSSB 151(FIN) from committee with individual recommendations. SENATOR ADAMS objected. He pointed out there had been no public support to the legislation and he believed it was bad public policy. He reiterated previous comments in opposition. SENATOR PHILLIPS had concern that it was the wrong approach to get at the problem, instead it gets at the "rank and file." A roll call vote was taken on the MOTION. IN FAVOR: Parnell, Torgerson, Pearce, Sharp OPPOSED: Adams, Phillips, Donley By a vote of 4 to 3, CSSB 151(FIN) was REPORTED OUT with individual recommendations, a previous fiscal note from the Department of Law (277.0), new fiscal notes from the Department of Labor (263.9), the Court System (14.7), and forthcoming fiscal notes from the Department of Administration and the Department of Labor. COCHAIR SHARP made announcements about upcoming committee agendas. SENATOR DONLEY brought up discussion about an operating budget amendment concerning ASMI which was briefly addressed by COCHAIR PEARCE. ADJOURNMENT The meeting was adjourned at approximately 10:30 A.M.