Legislature(2009 - 2010)

2009-02-27 Senate Journal

Full Journal pdf

2009-02-27                     Senate Journal                      Page 0379
SB 126                                                                                                                        
SENATE BILL NO. 126 BY THE SENATE RULES COMMITTEE                                                                               
BY REQUEST OF THE GOVERNOR, entitled:                                                                                           
          "An Act amending the State Personnel Act to place in                                                                  
          the exempt service the chief economist and state                                                                      
          comptroller in the Department of Revenue and                                                                          
          certain professional positions concerning oil and gas                                                                 
          within the Department of Natural Resources; relating                                                                  
          to reemployment of and benefits for or on behalf of                                                                   
          reemployed retired teachers and public employees by                                                                   
          providing for an effective date by amending the                                                                       
          delayed effective date for secs. 3, 5, 9, and 12, ch. 57,                                                             
          SLA 2001 and sec. 19, ch. 50, SLA 2005; and                                                                           
          providing for an effective date."                                                                                     
was read the first time and referred to the State Affairs, Labor and                                                            
Commerce and Finance Committees.                                                                                                
The following fiscal information was published today:                                                                           
 Fiscal Note No. 1, zero, Department of Natural Resources                                                                       
 Fiscal Note No. 2, zero, Department of Administration                                                                          
 Fiscal Note No. 3, zero, Department of Revenue                                                                                 
Governor's transmittal letter dated February 25:                                                                                

2009-02-27                     Senate Journal                      Page 0380
Dear President Stevens:                                                                                                         
Under the authority of Article III, Section 18, of the Alaska                                                                   
Constitution, I am transmitting a bill amending the State Personnel Act                                                         
to place in the exempt service the chief economist and state                                                                    
comptroller in the Department of Revenue and certain professional                                                               
positions concerning oil and gas within the Department of Natural                                                               
Resources; and relating to the re-employment of retired state                                                                   
Employment of experienced professional staff with knowledge of the                                                              
oil and gas industry, world markets and science and engineering                                                                 
specific to the oil and gas business is vital to the State's interest. The                                                      
State must have the ability to make informed decisions on issues that                                                           
will have a profound impact on its economic future. The division of oil                                                         
and gas and the division of geological and geophysical survey of the                                                            
Department of Natural Resources (DNR) are responsible for assessing                                                             
the state's mineral resources, overseeing the assessment and collection                                                         
of a large portion of the state's revenues related to oil and gas                                                               
development, as well as management of the state's oil and gas                                                                   
resources. DNR, through these divisions, must maintain an                                                                       
experienced professional staff as well as recruit new staff. To do so,                                                          
DNR must be able to offer salaries at least somewhat competitive with                                                           
Alaska's oil and gas industry. Failure to do so could lead to substantial                                                       
future losses in oil and gas revenues.                                                                                          
Additionally, the Department of Revenue has had difficulties                                                                    
recruiting and retaining qualified candidates for the high-level chief                                                          
economist and state comptroller positions at the current salary levels.                                                         
By way of specific example, the state comptroller position has been                                                             
filled by four comptrollers in the previous four years, largely because                                                         
of the non-competitive salary schedule. The Department of Revenue                                                               
has also experienced substantial difficulty recruiting qualified                                                                
candidates for the chief economist due to salary constraints.                                                                   
Finally, the bill would extend the sunset clause applicable to the                                                              
retired employee rehire program from July 1, 2009 to July 1, 2013.                                                              
One substantive effect of this change is to allow those retired                                                                 
employees who participate in either the Public Employees Retirement                                                             
System of Alaska (PERS) or the Teachers' Retirement System of                                                                   

2009-02-27                     Senate Journal                      Page 0381
Alaska (TRS), who have returned to active employment and who                                                                    
elected to have their retirement benefits continue during the time that                                                         
they are re-employed, to continue to receive their retirement benefits.                                                         
Extending the sunset date would also allow the rehire program to be                                                             
available to other retired state employees. As the program presently                                                            
exists, a rehired retiree must within 30 days of re-employment elect to                                                         
continue receiving retirement benefit payments during re-employment.                                                            
Extending the repeal date would have a positive effect in helping                                                               
reduce employee shortages experienced by both PERS and TRS                                                                      
employers. The program has proven to be an attractive option for                                                                
retired employees who are considering whether to return to active                                                               
employment and significantly helps the State of Alaska in filling                                                               
workforce gaps. Also, extending the sunset date by four years provides                                                          
the state with additional time necessary to analyze the employee                                                                
shortages in the various employment sectors and to continue to                                                                  
develop plans to meet anticipated shortages due to the large number of                                                          
employees slated for retirement in the next several years.                                                                      
The legislative history of this retiree rehire election program indicates                                                       
that there has already been several extensions of the retiree rehire                                                            
program. The 2001 amendments provided for the repeal of the election                                                            
provision on July 1, 2005. During the 2005 legislative session, the                                                             
statutes were amended to extend the election provisions to July 1,                                                              
2009. To further extend the repeal dates for both PERS and TRS                                                                  
members would allow those retired employees to assist the state by                                                              
returning to active employment and to elect to have their retirement                                                            
benefits continue during re-employment.                                                                                         
I urge your prompt and favorable action on this bill.                                                                           
Sarah Palin