Legislature(2017 - 2018)GRUENBERG 120

03/15/2018 03:15 PM STATE AFFAIRS

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Audio Topic
03:18:52 PM Start
03:20:05 PM HB400
03:52:54 PM HB71
04:20:30 PM HB352
04:48:42 PM Presentation: Indirect Expenditures – Wwami
05:17:33 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 352 VOTER REGISTRATION & PFD APP REGISTRATION TELECONFERENCED
Heard & Held
+ Indirect Expenditure Hearing TELECONFERENCED
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 71 NO ST. EMPLOYEE PAY INCREASE FOR 2 YRS TELECONFERENCED
Heard & Held
-- Public Testimony --
+= HB 400 FEES FOR FIRE PREVENTION MEASURES TELECONFERENCED
Moved HB 400 Out of Committee
          HB 71-NO ST. EMPLOYEE PAY INCREASE FOR 2 YRS                                                                      
                                                                                                                                
3:52:54 PM                                                                                                                    
                                                                                                                                
CHAIR KREISS-TOMKINS  announced that  the next order  of business                                                               
would be  HOUSE BILL  NO. 71, "An  Act relating  to compensation,                                                               
merit   increases,  and   pay  increments   for  certain   public                                                               
officials,  officers, and  employees  not  covered by  collective                                                               
bargaining agreements; and providing for an effective date."                                                                    
                                                                                                                                
[Before the committee was Version O.]                                                                                           
                                                                                                                                
3:53:43 PM                                                                                                                    
                                                                                                                                
CHAIR KREISS-TOMKINS opened public testimony on HB 71.  After                                                                   
first determining no one wished to testify, Chair Kreiss-Tomkins                                                                
closed public testimony on HB 71.                                                                                               
                                                                                                                                
3:54:07 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BIRCH  echoed his comments from  the prior hearing                                                               
on  HB 71,  noting he  was disappointed  to see  the wage  freeze                                                               
component  removed from  the bill.    He recalled  that when  the                                                               
provision  was placed  in  the  bill and  a  floor amendment  was                                                               
subsequently pulled.   He assumed that since the  language was no                                                               
longer in  the bill  that a floor  amendment could  be considered                                                               
during operating budget deliberations.                                                                                          
                                                                                                                                
3:54:58 PM                                                                                                                    
                                                                                                                                
The committee took a brief at-ease.                                                                                             
                                                                                                                                
3:55:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KNOPP asked  for clarification  on what  the bill                                                               
does.   He did not  have any issue  with the pay  dates proposed;                                                               
however, he was unsure of the goal of the bill.                                                                                 
                                                                                                                                
3:56:30 PM                                                                                                                    
                                                                                                                                
CHAIR KREISS-TOMKINS related his  understanding that currently if                                                               
a  governor wanted  to donate  a portion  of his/her  salary, the                                                               
governor  would receive  the salary  and  be taxed  for the  full                                                               
amount.  This  bill would give the governor an  option to waive a                                                               
portion of the salary and not be taxed for the entire salary.                                                                   
                                                                                                                                
REPRESENTATIVE  KNOPP asked  whether  the  legislature wanted  to                                                               
limit the option to one individual  or should it extend to anyone                                                               
who would like that option.                                                                                                     
                                                                                                                                
CHAIR  KREISS-TOMKINS stated  that there  was some  discussion at                                                               
the  last  committee hearing  [on  3/8/18]  to potentially  allow                                                               
commissioners to do so.                                                                                                         
                                                                                                                                
REPRESENTATIVE KNOPP  offered his  belief that  doing so  for one                                                               
individual would set a bad precedent.                                                                                           
                                                                                                                                
3:58:16 PM                                                                                                                    
                                                                                                                                
LESLIE RIDLE,  Commissioner, Department of  Administration (DOA),                                                               
stated  that  the  bill  could  be  extended  to  the  lieutenant                                                               
governor,  the commissioners  and  legislators but  not to  other                                                               
state employees.                                                                                                                
                                                                                                                                
3:58:42 PM                                                                                                                    
                                                                                                                                
KATE SHEEHAN, Director, Division  of Personnel & Labor Relations,                                                               
Department of  Administration (DOA), stated that  because certain                                                               
salaries  were  set through  legislation  or  the State  Officers                                                               
Compensation   Commission  (SOCC)   there   would   need  to   be                                                               
legislation to waive  a portion of the salary in  order not to be                                                               
taxed on it.  That was not  the same for other employees, so this                                                               
would  be limited  to the  positions that  the commissioner  just                                                               
read.                                                                                                                           
                                                                                                                                
3:59:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  LEDOUX stated  that the  committee was  currently                                                               
considering HB 71, so the bill could include everyone.                                                                          
                                                                                                                                
COMMISSIONER  RIDLE answered  that  job classes  she just  listed                                                               
were  set by  the SOCC  and included  commissioners, legislators,                                                               
governor  and lieutenant  governor.   She reported  that everyone                                                               
else's salaries are  set via collective bargaining  and the State                                                               
Personnel  Act;  therefore, they  are  in  a different  class  of                                                               
employees.                                                                                                                      
                                                                                                                                
REPRESENTATIVE  LEDOUX  said  she  did  not  understand  why  all                                                               
employees cannot donate their salary back.                                                                                      
                                                                                                                                
MS. SHEEHAN  responded that  under the  Fair Labor  Standards Act                                                               
the  employer  must  pay  for all  hours  worked;  even  salaried                                                               
employees  are subject  to some  requirements; therefore,  it was                                                               
not an option for some employees to donate their time.                                                                          
                                                                                                                                
REPRESENTATIVE  LEDOUX asked  for  further  clarification that  a                                                               
federal law restricts the donation.                                                                                             
                                                                                                                                
4:01:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  WOOL suggested  that  if the  governor wanted  to                                                               
donate to a nonprofit that he  would need to accept the money and                                                               
donate it  and obtain a  tax credit.   This bill would  allow the                                                               
governor  to  reduce  his/her  salary  without  incurring  a  tax                                                               
penalty.                                                                                                                        
                                                                                                                                
COMMISSIONER RIDLE  answered yes.  She  related her understanding                                                               
that  the state  is not  a charity  in terms  of tax  deductions,                                                               
noting she  was not  a tax  attorney.   She acknowledged  that it                                                               
would be foregoing a salary and just not receiving it at all.                                                                   
                                                                                                                                
REPRESENTATIVE LEDOUX  asked why  it was  not written  to include                                                               
all the people it could include.                                                                                                
                                                                                                                                
COMMISSIONER RIDLE  answered that Governor Walker  was interested                                                               
in doing so.                                                                                                                    
                                                                                                                                
REPRESENTATIVE LEDOUX  acknowledged that he could  legally donate                                                               
the salary, but for the tax issue.                                                                                              
                                                                                                                                
COMMISSIONER RIDLE answered yes.                                                                                                
                                                                                                                                
4:03:06 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BIRCH offered  his belief that the  bill was about                                                               
avoiding federal  income tax on salary.   If one were  to decline                                                               
the salary  the person could not  redirect it.  He  recalled that                                                               
he had  seen newscasts that  indicated Governor Walker  wanted to                                                               
redirect the salary to police dogs  and a myriad of other things.                                                               
He  related  his understanding  that  this  bill allows  for  tax                                                               
avoidance.                                                                                                                      
                                                                                                                                
COMMISSIONER RIDLE,  with respect  to redirecting  the governor's                                                               
salary,  advised that  the funds  would  not be  remitted to  the                                                               
governor but  would remain in the  general fund.  He  stated that                                                               
Governor Walker  wanted to be able  to reduce his income  and not                                                               
pay tax  on something he did  not receive, which would  not be an                                                               
avoidance of tax.                                                                                                               
                                                                                                                                
4:04:39 PM                                                                                                                    
                                                                                                                                
CHAIR KREISS-TOMKINS  suggested that currently, as  a legislator,                                                               
if he  wanted to  donate his  salary to the  state, he  would pay                                                               
taxes  on  his $50,000  salary.    He  expressed an  interest  in                                                               
opening it up for legislators to waive their salaries.                                                                          
                                                                                                                                
COMMISSIONER RIDLE answered yes.                                                                                                
                                                                                                                                
4:05:14 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BIRCH offered  his belief that it was  bad form to                                                               
do "one-offs"  on legislation.   He  suggested that  people could                                                               
write a check to a charitable organization.                                                                                     
                                                                                                                                
4:05:45 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  LEDOUX  said  her   problem  was  that  [Governor                                                               
Walker's]  donation  last  year   was  highly  publicized.    She                                                               
suggested that passing  this would be like "having  your cake and                                                               
eating it,  too."   She suggested that  most people  who declined                                                               
their  salaries  would not  be  able  to  direct it  to  specific                                                               
[programs] and the declined salaries  would remain in the general                                                               
fund.   She surmised  the governor would  have more  authority to                                                               
redirect the funds.                                                                                                             
                                                                                                                                
4:07:01 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON stated  that the  governor could  set his                                                               
own salary as long as it fell below a certain threshold.                                                                        
                                                                                                                                
COMMISSIONER RIDLE answered yes, that  the governor could waive a                                                               
portion of his/her salary.                                                                                                      
                                                                                                                                
REPRESENTATIVE JOHNSON  asked whether the salary  could be waived                                                               
by month or must it be for a year.                                                                                              
                                                                                                                                
COMMISSIONER RIDLE  referred to page 1,  line 7, of HB  71, which                                                               
read, "  ... governor may waiver  a portion of the  annual salary                                                               
...."                                                                                                                           
                                                                                                                                
4:08:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON   confirmed  the  governor   would  waive                                                               
his/her salary at the beginning of the year or fiscal year.                                                                     
                                                                                                                                
COMMISSIONER  RIDLE  responded  that  logistically  it  would  be                                                               
figured  out  and  accomplished  through  payroll.    In  further                                                               
response,  she  agreed it  would  likely  be administered  as  an                                                               
annual request and waiver.                                                                                                      
                                                                                                                                
REPRESENTATIVE JOHNSON related her  understanding that the bill's                                                               
goal  would be  to  waive a  portion  of the  income  and not  to                                                               
redirect the salary to a specific program.                                                                                      
                                                                                                                                
COMMISSIONER RIDLE  answered yes;  that the  salary would  not be                                                               
received by the governor and would remain in the general fund.                                                                  
                                                                                                                                
4:10:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TUCK  related his  understanding that  there would                                                               
be a cap, so that the governor would determine his/her salary.                                                                  
                                                                                                                                
COMMISSIONER  RIDLE  answered  yes;  the  bill  would  allow  the                                                               
governor to waive but not increase his/her salary.                                                                              
                                                                                                                                
4:10:35 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TUCK  asked  for  further  clarification  on  the                                                               
mechanics of the waiver and if  the governor could choose to stop                                                               
the waiver.                                                                                                                     
                                                                                                                                
COMMISSIONER RIDLE  answered that she assumed  the administration                                                               
would initiate  it at beginning of  year.  She surmised  it would                                                               
be harder  but not impossible  for different  scenarios; however,                                                               
the department has  not considered the mechanics yet.   She added                                                               
that the administration preferred continuity in its processes.                                                                  
                                                                                                                                
4:11:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KNOPP  referred to the explanation  of changes and                                                               
time period and it appeared to  sunset on June 30, 2019 and asked                                                               
for further clarification.                                                                                                      
                                                                                                                                
MS. SHEEHAN answered  that that the original bill was  for a two-                                                               
year period consistent  with the two-year pay freeze.   Version O                                                               
removed the section  that limited it to the two-year  period.  In                                                               
further  response, she  stated that  the  explanation of  changes                                                               
attempted to explain that the bill could extend past 2019.                                                                      
                                                                                                                                
REPRESENTATIVE  KNOPP  asked  for further  clarification  on  the                                                               
Section 3  of HB 71 and  the reason for the  two-week rather than                                                               
biweekly salary.                                                                                                                
                                                                                                                                
MS. SHEEHAN  answered that a  semi-monthly pay period  payroll is                                                               
on the  first or fifteenth of  each month and the  hours vary for                                                               
each pay  period.  A  biweekly pay  was more consistent  since it                                                               
contains 75  hours for each pay  period, spans two work  weeks so                                                               
it  was clearer.   Some  employees fall  within semi-monthly  and                                                               
others in biweekly.                                                                                                             
                                                                                                                                
4:14:13 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BIRCH  asked  for further  clarification  on  the                                                               
organization that  sets the governor's  salary.  He  suggested it                                                               
might be  helpful to  hear from that  organization.   He remarked                                                               
that  the  24 versus  26  weeks  for semi-monthly  or  bi-monthly                                                               
seemed fine.                                                                                                                    
                                                                                                                                
COMMISSIONER  RIDLE pointed  out that  this bill  was brought  up                                                               
last  year,  that  the  State  Officers  Compensation  Commission                                                               
(SOCC) met last fall but did not comment on bill.                                                                               
                                                                                                                                
4:15:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TUCK referred  to Section 2 of  the explanation of                                                               
changes for  HB 71, which  read as follows  [original punctuation                                                               
provided]:                                                                                                                      
                                                                                                                                
     Section   2:  New   section.   Removes  language   that                                                                  
     temporary salary  schedules do  not affect  salaries of                                                                    
     employees in  a bargaining unit represented  by a labor                                                                    
     union   established   under   the   Public   Employment                                                                    
     Relations Act  and adds  the term  "pay period"  to the                                                                    
     title.  Language  that  was removed  is  now  found  in                                                                    
     section 3 of the bill.                                                                                                     
                                                                                                                                
REPRESENTATIVE TUCK  referred to deleted language  was in Section                                                               
2  of  HB  71,  which  read,  "[SALARY  RATES  ESTABLISHED  UNDER                                                               
AUTHORITY  OF  THEIS  SECTION  DO  NOT  AFFECT  THE  SALARIES  OF                                                               
EMPLOYEES  PROVIDED  FOR  BY A  COLLECTIVE  BARGAINING  AGREEMENT                                                               
...."  He offered his belief  that the deleted language should be                                                               
left in the bill.                                                                                                               
                                                                                                                                
MS. SHEEHAN answered that the language  was still in the bill but                                                               
was   under   Section  3   in   proposed   [Alaska  Statute]   AS                                                               
39.27.012(c), which Section 2 would  also amend.  She related her                                                               
understanding that  the Legislative  Legal and  Research Services                                                               
attorney used this  bill as the vehicle to move  to the bi-weekly                                                               
pay schedule,  so they rearranged the  bill.  The intent  was not                                                               
to change the provisions in AS 39.27.012.                                                                                       
                                                                                                                                
4:17:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON asked  for further  clarification on  the                                                               
non-union  exempt  employees and  wage  freeze.   She  asked  for                                                               
further  clarification  on  the  exempt employees  who  would  be                                                               
affected by the pay freeze.                                                                                                     
                                                                                                                                
COMMISSIONER RIDLE, after confirming  the question, answered that                                                               
the original  bill would have  affected anyone not in  the union,                                                               
including  the   executive  branch,  the  legislature,   and  the                                                               
university.                                                                                                                     
                                                                                                                                
4:18:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON  related her  understanding that  this was                                                               
the language  Representative Birch  wanted included in  the bill,                                                               
but it was removed in Version O.                                                                                                
                                                                                                                                
COMMISSIONER RIDLE offered her belief that was correct.                                                                         
                                                                                                                                
4:19:23 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LEDOUX asked for  further clarification on how the                                                               
federal government accomplishes salary waivers for presidents.                                                                  
                                                                                                                                
COMMISSIONER RIDLE was unsure but  offered to research it for the                                                               
committee.                                                                                                                      
                                                                                                                                
CHAIR KREISS-TOMKINS announced that HB 71 would be held over.                                                                   
                                                                                                                                

Document Name Date/Time Subjects
HB400 Sponsor Statement 3.7.18.pdf HSTA 3/8/2018 3:15:00 PM
HSTA 3/13/2018 3:15:00 PM
HSTA 3/15/2018 3:15:00 PM
HB 400
HB400 Sectional Analysis 3.7.18.pdf HSTA 3/8/2018 3:15:00 PM
HSTA 3/13/2018 3:15:00 PM
HSTA 3/15/2018 3:15:00 PM
HB 400
HB400 ver A 2.28.18.pdf HSTA 3/1/2018 3:15:00 PM
HSTA 3/8/2018 3:15:00 PM
HSTA 3/13/2018 3:15:00 PM
HSTA 3/15/2018 3:15:00 PM
HB 400
HB400 Fiscal Note DPS 3.1.18.pdf HSTA 3/1/2018 3:15:00 PM
HSTA 3/8/2018 3:15:00 PM
HSTA 3/13/2018 3:15:00 PM
HSTA 3/15/2018 3:15:00 PM
HB 400
HB400 Amendment 1 3.7.18.pdf HSTA 3/8/2018 3:15:00 PM
HSTA 3/13/2018 3:15:00 PM
HSTA 3/15/2018 3:15:00 PM
HB 400
HB400 Amendment2 3.13.18.pdf HSTA 3/13/2018 3:15:00 PM
HSTA 3/15/2018 3:15:00 PM
HB 400
HB400 Amendment3 3.14.18.pdf HSTA 3/15/2018 3:15:00 PM
HB 400
HB 71 Sectional Analysis 3.7.18.pdf HSTA 3/8/2018 3:15:00 PM
HSTA 3/15/2018 3:15:00 PM
HB 71
HB71 ver O 3.2.18.pdf HSTA 3/8/2018 3:15:00 PM
HSTA 3/15/2018 3:15:00 PM
HB 71
HB 71 Explanation of Changes 3.7.18.pdf HSTA 3/8/2018 3:15:00 PM
HSTA 3/15/2018 3:15:00 PM
HB 71
HB352 Sponsor Statement 2.15.18.pdf HSTA 3/15/2018 3:15:00 PM
HB 352
HB 352 Sectional Analysis 2.26.18.pdf HSTA 3/15/2018 3:15:00 PM
HB 352
HB0352 ver A 2.16.18.pdf HSTA 3/15/2018 3:15:00 PM
HB 352
HB352 Fiscal Note DOE 3.12.18.pdf HSTA 3/15/2018 3:15:00 PM
HB 352
HB352 Fiscal Note DOR 3.12.18.pdf HSTA 3/15/2018 3:15:00 PM
HB 352
HB 352 Amendment March 7 2018.pdf HSTA 3/15/2018 3:15:00 PM
HB 352
HB 352 Supporting Doc NEW voter Opt-Out Mailer.pdf HSTA 3/15/2018 3:15:00 PM
HB 352
HB 352 Supporting Doc UPDATE voter mailer.pdf HSTA 3/15/2018 3:15:00 PM
HB 352
HB 352 Supporting Document - DOE bullets points.pdf HSTA 3/15/2018 3:15:00 PM
HB 352
HB 352 Supporting Document - Election Policy Work Group Report.pdf HSTA 3/15/2018 3:15:00 PM
HB 352
HB 352 Supporting Document - Excerpt from 2017 DOE Fiscal & Policy Challenges Report.pdf HSTA 3/15/2018 3:15:00 PM
HB 352
HB 352 Supporting Document 15PFVR-Statement-of-Costs.pdf HSTA 3/15/2018 3:15:00 PM
HB 352
HB352 Letter of Support_Speaker Edgmon.pdf HSTA 3/15/2018 3:15:00 PM
HB 352
H STA Indirect Expenditure Hearings 3.13.18.pdf HSTA 3/15/2018 3:15:00 PM