Legislature(2019 - 2020)BUTROVICH 205

04/23/2019 03:30 PM STATE AFFAIRS

Note: the audio and video recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.

Download Mp3. <- Right click and save file as
Download Video part 1. <- Right click and save file as

Audio Topic
03:33:20 PM Start
03:34:08 PM HB48
04:14:37 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
-- Public Testimony <Time Limit May Be Set> --
<Bill Hearing Canceled>
+ Bills Previously Heard/Scheduled TELECONFERENCED
        HB  48- TEMP STATE EMPLOYEES IN PART EXEMPT SVCE                                                                    
3:34:08 PM                                                                                                                    
VICE CHAIR  COGHILL announced the  consideration of CS  FOR HOUSE                                                               
BILL NO. 48(FIN)  am "An Act removing from the  exempt service of                                                               
the state persons who are  employed in a professional capacity to                                                               
make a  temporary or  special inquiry,  study, or  examination as                                                               
authorized by  the governor  and including  those persons  in the                                                               
partially exempt  service of the  state; repealing  the authority                                                               
of  the governor  or  a  designee of  the  governor to  authorize                                                               
higher  pay than  is otherwise  allowable  for certain  partially                                                               
exempt  employees   in  the   executive  branch;   requiring  the                                                               
commissioner  of  administration  to   submit  a  report  to  the                                                               
legislature; and providing for an effective date."                                                                              
3:35:03 PM                                                                                                                    
REPRESENTATIVE  T.  WILSON,  Alaska  State  Legislature,  Juneau,                                                               
sponsor of HB  48, introduced the bill speaking  to the following                                                               
sponsor statement:                                                                                                              
     The  purpose of  CSHB48(FIN) am  is to  discontinue the                                                                    
     historical practice  by the  Executive Branch  of using                                                                    
     AS  39.25.110(9) to  unilaterally establish  high level                                                                    
     executive exempt positions that  have no salary limits.                                                                    
     The  statute  was  enacted  to   employ  persons  in  a                                                                    
     professional capacity  to make  a temporary  or special                                                                    
     inquiry,   study   or   examination   by   establishing                                                                    
     "temporary exempt" positions.                                                                                              
     CSHB 48(FIN)  am would  eliminate the  establishment of                                                                    
     "temporary exempt" positions  and place these positions                                                                    
     in  the  partially  exempt service.  Positions  in  the                                                                    
     partially exempt  service are included in  the position                                                                    
     classification  plans  established under  AS  39.25.120                                                                    
     and are compensated according to  the pay plan under AS                                                                    
     39.27.011. It  would limit the  amount paid to  a newly                                                                    
     hired   temporary   employee.   It  applies   only   to                                                                    
     employment  contracts entered  into, on,  or after  the                                                                    
     effective  date that  AS 39.23.110(9)  is repealed.  It                                                                    
     does  not affect  the salary  of existing  employees or                                                                    
     individuals hired  prior to the  effective date  of the                                                                    
     CSHB 48(FIN)  am requires that  not later than  60 days                                                                    
     after the effective date of  this Act, the Commissioner                                                                    
     of   Administration   prepare   and   submit   to   the                                                                    
     legislature  a  report  that includes  a  list  of  all                                                                    
     positions  in  exempt service  of  the  state under  AS                                                                    
     39.25.110  and  the  partially exempt  service  of  the                                                                    
     state under  AS 39.25.120  and the salary  and proposed                                                                    
     salary schedule for each of the positions.                                                                                 
3:36:56 PM                                                                                                                    
REPRESENTATIVE T. WILSON said she'd like  to be able to provide a                                                               
list of  the employees  in these  temporary exempt  positions but                                                               
she has  been unable to  get that  information. What is  clear is                                                               
that some  people have  been in these  positions for  years. When                                                               
the statute  was put  in place  it was for  jobs that  required a                                                               
special  skillset that  paid  more  but were  needed  for just  a                                                               
limited period of time. She clarified  that this is not about the                                                               
current  Governor. "You  can pretty  much name  any governor  and                                                               
they  have not  been  utilizing this  statute in  a  way that  we                                                               
thought it  was actually  put in." She  explained that  the House                                                               
Finance  Committee capped  the salaries  that  previously had  no                                                               
limit. The  bill was subsequently  amended on the House  floor to                                                               
require a report  listing the individuals in  these positions and                                                               
their salaries.                                                                                                                 
3:38:11 PM                                                                                                                    
CHAIR COGHILL  asked where  and how many  inquiries were  made to                                                               
get information and salary levels for these temporary employees.                                                                
3:38:22 PM                                                                                                                    
REMOND HENDERSON,  Staff, Representative T. Wilson,  Alaska State                                                               
Legislature, Juneau,  explained that  the first request  was sent                                                               
in  August  2017 and  eventually  the  Office of  Management  and                                                               
Budget  provided a  consolidated  response. However,  it did  not                                                               
include the  positions that  were specifically  established under                                                               
this statute. It  was a laundry list of all  exempt and partially                                                               
exempt positions  without specifically identifying  the positions                                                               
established under this statute. Early  this year the sponsor made                                                               
another attempt to  get the information and while  there has been                                                               
some response, they have not received a comprehensive list.                                                                     
SENATOR MICCICHE noted that AS  39.25.110(9) talks about "persons                                                               
employed  in  a professional  capacity  to  make a  temporary  or                                                               
special  inquiry,  study  or examination  as  authorized  by  the                                                               
governor." He said he has some  of those skills and he knows that                                                               
this  expertise  is  not  cheap.  He  asked  how  hiring  such  a                                                               
specialist for a short period would be handled.                                                                                 
MR. HENDERSON  explained that  someone could  be hired  under the                                                               
exempt service statute which does not have salary limits.                                                                       
3:41:00 PM                                                                                                                    
CHAIR COGHILL asked  if repealing this statute  closes one avenue                                                               
for hiring individuals with specific expertise.                                                                                 
MR. HENDERSON  clarified that  the bill does  not close  a hiring                                                               
avenue; it  moves the positions  from exempt to  partially exempt                                                               
and places a cap on the salary.                                                                                                 
VICE  CHAIR COGHILL  expressed satisfaction  with the  answer. He                                                               
asked Senator Micciche if that addressed his concerns.                                                                          
SENATOR MICCICHE responded that he  needed to review the statutes                                                               
a little more.                                                                                                                  
SENATOR KAWASAKI asked  the sponsor if she had an  idea about who                                                               
was hired under AS 39.25.110(9).                                                                                                
3:42:21 PM                                                                                                                    
REPRESENTATIVE T. WILSON  said she's spent a lot  of time looking                                                               
at the  book that shows  the position control numbers  (PCNs) and                                                               
the salary  for each of the  positions and she learned  that some                                                               
of these individuals are being  paid out of the governor's office                                                               
and  are not  temporary. Switching  these positions  to partially                                                               
exempt  will   result  in  the   PCNs  being  listed   under  the                                                               
appropriate agency  and there will  be a  cap on the  salary. She                                                               
offered her  understanding that initially these  exempt positions                                                               
were used for  political appointments or favors.  She opined that                                                               
it's  not necessary  to have  these kinds  of positions  if there                                                               
isn't  transparency  about   who  they  are  and   why  they  are                                                               
classified as  temporary when they  really aren't.  Employees who                                                               
are  not temporary  should get  all the  benefits that  come with                                                               
fulltime service, she said.                                                                                                     
3:44:00 PM                                                                                                                    
SENATOR KAWASAKI asked  if there is a  definition for "temporary"                                                               
so that  a governor could  hire a  specialist for a  specific job                                                               
without putting  it out for a  request for proposal (RFP)  or any                                                               
other method of procurement.                                                                                                    
REPRESENTATIVE T. WILSON said Mr.  Henderson described other ways                                                               
of doing that. It's not  that the governor's office couldn't hire                                                               
the same  individuals, it's  that it would  be under  a different                                                               
statute. HB 48 establishes that process.                                                                                        
SENATOR KAWASAKI asked,  should the bill pass, if  it wouldn't be                                                               
necessary  to work  with  the Governor's  Office  to ensure  that                                                               
specialty   hiring  is   done  through   the  process   the  bill                                                               
MR. HENDERSON restated that the  governor or a commissioner could                                                               
still hire the same kind  of individuals with specialized skills;                                                               
it's just that the positions  would move from exempt to partially                                                               
exempt  and the  salary would  be capped.  He added  that if  the                                                               
exempt statute  is used, a  higher salary is available.  The bill                                                               
allows somebody to be hired at a step F.                                                                                        
3:46:34 PM                                                                                                                    
SENATOR REINBOLD  thanked the sponsor  and stated support  for HB                                                               
48 because it closes an important loophole.                                                                                     
SENATOR MICCICHE summarized that  the bill eliminates the ability                                                               
to  hire  professionals  in  exempt   service  and  allows  those                                                               
professionals to  be hired  in the  partially exempt  service. He                                                               
asked  if  the  highest  compensation  in  the  partially  exempt                                                               
service is $10,979 per month.                                                                                                   
MR. HENDERSON  answered yes; range  30 step F is  $10.9 thousand.                                                               
He  deferred   further  explanation  to  Nancy   Sutch  with  the                                                               
Department of Administration.                                                                                                   
3:48:36 PM                                                                                                                    
SENATOR MICCICHE  asked, should HB  48 pass, what is  the highest                                                               
somebody employed  in a  professional capacity  could be  paid in                                                               
the partially exempt service.                                                                                                   
3:48:50 PM                                                                                                                    
NANCY  SUTCH, Deputy  Director, Division  of Personnel  and Labor                                                               
Relations,  Department of  Administration, Juneau,  answered that                                                               
somebody hired after the effective date  could start at step F of                                                               
a range.  She noted  that a provision  in AS  39.27.011(k) allows                                                               
the  governor to  authorize a  higher pay  than Step  F but  that                                                               
would  typically  be  the  cutoff. She  said  Mr.  Henderson  has                                                               
information about the salary for that step.                                                                                     
SENATOR  MICCICHE pointed  out that  the bill  repeals subsection                                                               
(k) so  that option would not  be available. He said  the warning                                                               
that goes  with that  is that  $10.9 thousand  is less  than half                                                               
what a  critical specialist  would receive. On  the upper  end of                                                               
that skillset  it would be  nearly impossible to get  somebody to                                                               
accept that  salary. He  commented that it's  often a  bargain to                                                               
hire  a specialist  for the  length of  a project,  but the  bill                                                               
doesn't seem to allow that.                                                                                                     
3:51:10 PM                                                                                                                    
MR. HENDERSON said he believes  a specialist could still be hired                                                               
temporarily at a high salary  under the exempt service. The other                                                               
option would  be to contract  for the specific  expertise without                                                               
doing an RFP.                                                                                                                   
CHAIR  COGHILL  asked   Ms.  Sutch  if  she   agrees  with  those                                                               
MS. SUTCH  replied the position would  have to fall under  one of                                                               
the 43 categories of exempt service listed in AS 39.25.110.                                                                     
CHAIR  COGHILL  asked if  she  agrees  that  there would  be  the                                                               
ability to contract for specific expertise under AS 39.                                                                         
MS. SUTCH said her basic  understanding is that contracting would                                                               
be possible as long as the procurement rules were followed.                                                                     
SENATOR MICCICHE  said the downside of  repealing AS 39.23.110(9)                                                               
is  that it  adversely impacts  the ability  to temporarily  hire                                                               
somebody with highly specialized  expertise who commands a salary                                                               
that is much higher than $10,900 a month.                                                                                       
REPRESENTATIVE T.  WILSON advised  that the  Governor has  a bill                                                               
that also deletes  paragraph (9) which leads her  to believe that                                                               
he doesn't see the purpose of keeping that section of statute.                                                                  
3:55:02 PM                                                                                                                    
SENATOR KAWASAKI said he'd like to  know who these people are and                                                               
how long they've been in  these temporary positions. He asked Ms.                                                               
Sutch if she could provide that information to the committee.                                                                   
MS.  SUTCH replied  she could  provide  a report  that lists  the                                                               
individuals  who  are  in  a  temporary  position.  The  specific                                                               
agencies  would  need to  supply  information  about what  duties                                                               
those individuals have  been assigned and that  would take longer                                                               
to assemble.                                                                                                                    
SENATOR KAWASAKI said he'd initially  be satisfied with a list of                                                               
the people working under paragraph (9) and their salaries.                                                                      
MS. SUTCH agreed to provide the information.                                                                                    
CHAIR COGHILL asked  when she could send that  information to the                                                               
MS. SUTCH offered to try to  do it sooner than the typical 10-day                                                               
turnaround for data requests.                                                                                                   
3:57:49 PM                                                                                                                    
At ease                                                                                                                         
3:59:48 PM                                                                                                                    
CHAIR COGHILL reconvened the meeting  and asked Ms. Sutch to send                                                               
the information to the committee as quickly as possible.                                                                        
MS.  SUTCH   said  she'd  work   with  committee  staff   to  get                                                               
satisfactory  information   to  the   committee  as   quickly  as                                                               
possible.  She noted  that an  older report  may be  more readily                                                               
CHAIR COGHILL said even an  older report would be instructive and                                                               
it may answer Senator Kawasaki's question.                                                                                      
SENATOR KAWASAKI said knowing who these  people are is part of it                                                               
but  he'd also  like to  know what  they're doing.  He said  it's                                                               
troublesome  when it's  not clear  how these  people are  getting                                                               
paid,  but it  also  makes sense  for the  governor  to have  the                                                               
ability to hire someone temporarily in exempt service.                                                                          
4:02:28 PM                                                                                                                    
CHAIR COGHILL asked Ms. Sutch  if she could get information about                                                               
where these individuals are assigned.                                                                                           
MS. SUTCH answered yes.                                                                                                         
CHAIR COGHILL  commented that would  likely be sufficient  and it                                                               
may  not  be   necessary  to  repeal  either   paragraph  (9)  or                                                               
subsection (k).                                                                                                                 
SENATOR WILSON pointed out that  the repeal applies to employment                                                               
entered  into  on  or  after  the effective  date.  There  is  no                                                               
intention to suddenly fire all these people, she said.                                                                          
SENATOR MICCICHE said  he'd like to say he likes  the idea but he                                                               
worries that  these sections  of statute may  be needed.  He read                                                               
the list of  exempt positions and clarified that  while he'd like                                                               
to  see  more restraints  there,  those  positions would  not  be                                                               
REPRESENTATIVE T.  WILSON talked about the  frustration trying to                                                               
run  down  who  the  people  are  and  in  what  department.  She                                                               
emphasized  that  the bill  is  about  transparency, equity,  and                                                               
ensuring that people who should receive benefits do so.                                                                         
4:08:06 PM                                                                                                                    
CHAIR  COGHILL  said  he  was  willing to  hold  the  bill  until                                                               
Thursday for Ms. Sutch to provide the report.                                                                                   
SENATOR KAWASAKI asked that the  report include information about                                                               
when the employee was appointed to the exempt position.                                                                         
MR.  HENDERSON suggested  that Ms.  Sutch also  provide the  date                                                               
that the position was established.                                                                                              
CHAIR COGHILL asked Ms. Sutch if that was possible.                                                                             
MS. SUTCH  said she didn't want  to over-promise but she'd  do as                                                               
much as she could prior to Thursday.                                                                                            
SENATOR COGHILL said thanks.                                                                                                    
4:10:27 PM                                                                                                                    
SENATOR  MICCICHE  asked  the  sponsor   if  she  had  considered                                                               
sideboards  instead of  repealing  paragraph  (9) and  subsection                                                               
REPRESENTATIVE T.  WILSON said she  didn't consider that  but she                                                               
would provide  information about avenues other  than this statute                                                               
to hire expertise and which have  a limit and which don't because                                                               
that seems to be causing some confusion.                                                                                        
4:12:49 PM                                                                                                                    
CHAIR COGHILL held HB 48 in committee.                                                                                          
SENATOR MICCICHE said he likes the  idea but he's trying to think                                                               
about  whether this  will  hamstring a  governor  from doing  the                                                               
right thing  with the right  expertise. He said he  looks forward                                                               
to hearing about the other ways to hire an expert.                                                                              

Document Name Date/Time Subjects
CSHB048(FIN) am ver U.A Sponsor Statement.pdf SSTA 4/23/2019 3:30:00 PM
HB 48
CSHB0048(FIN) am ver U.A.pdf SSTA 4/23/2019 3:30:00 PM
HB 48
CSHB048(FIN) am ver U.A Explanation of Changes.pdf SSTA 4/23/2019 3:30:00 PM
HB 48
HB 48 - Fiscal Note - DOA.pdf SSTA 4/23/2019 3:30:00 PM
HB 48