2004 Commerce & Human Resources

Wages/hours, unions, retirement

January 8 – 9, 2004 – CEC Committee Meeting
January 15, 2004
January 21, 2004
January 27, 2004

February 3, 2004
February 5, 2004
February 5, 2004 – CEC Committee Meeting
February 9, 2004
February 13, 2004
February 17, 2004
February 19, 2004
February 23, 2004
February 25, 2004

March 1, 2004
March 9, 2004
March 19, 2004

DATE: January 8-9, 2004
TIME: 1:15
MEMBERS: Co-Chairmen Representative Schaefer and Senator Andreason, Co-Vice-Chairmen Representative McKague and Senator Goedde,
Lake, Trail, Crow, Bradford, Bauer, Garrett, Martinez,
Ringo, Naccarato, Senators Cameron, Stegner, Davis, Compton, Noble,
Werk, Malepeai


Senator Goedde

The Thursday afternoon session was called to order at 1:17 by Co-Chairman Schaefer.

Ann Heilman, Administrator, Division of Human Resources presented her report, assisted
by Gabe Weske. She mentioned her report is available online. (See Attachment #1) Each year
she presents her report to the Governor in October. Some things have changed since then.

She reviewed a few state policies. All raises are based on merit, across-the-board raises are
not allowed. A variety of jobs are assigned to one pay grade. There are no longevity or
automatic pay raises. According to state code, employees who are competent and fully trained
can expect to receive the middle salary of the range in the public sector. At present, state
salaries lag the market by 14.6 percent. The over-all price tag to catch up would be over 85.5
million dollars.

The Consumer Price Index grew in 2003. Unemployment in Idaho is close to the national
average of 5%. The unemployment rate is higher in rural counties, but the majority of the work
force is in the urban areas.

Her job requires that she research the private sector to compare jobs. She gave details of
her research. Her survey covered 65% of the classified state jobs. Not all jobs lag the market
by the average. Some jobs, such as nursing, lag even further behind.

The average age of a state employee is 46. The average new hire age is 36. Benefits are
more important to the older employees. An organization needs to have a wide range of ages.

Wage compression occurs when a new employee’s entry wage is close to or at the same
level as an employee who has been doing the same job much longer. If someone hires in at
less than market rate, the state is likely to get a person who needs more training, and
experienced employees bear the load.

Idaho has serious competition in the private sector, the federal level, and neighboring
states. A number of employees leave for the federal system because of the higher wages,
automatic pay raises, and promotions.

The state mandated Hay system does not account for the impact supply and demand has on
wages locally. An Information Technology Programmer Analyst and a Financial Planner are
paid the same by the state, but in the market, the IT pay average is $12,000 higher a year.

She suggested a refining of the pay schedules which would need to be done in code. With
new technology, changes can be made more easily than could have been done years ago, and
gave examples of labor, trades and crafts; skilled nursing; office support and administration.

In response to questions, she said the Hay System does not have the flexibility to address
the market fluctuations. She said it would help to break up the occupations into groups and that
several states are doing this.

She said it is unreasonable to expect market parity in one year. However, a plan is needed
to recognize there are annual market movements­a 3.3 to 3.45 annual wage growth is
projected. She said the state needs to increase state wages by 5% each year to catch up by
2009. She suggested one-time pay increases or bonuses to promote the retention of
employees. A clear, easy suggestion to take care of this problem doesn’t exist.

Among her recommendations to the Governor in October were:

1. No increase to the current salary range schedule

2. No increase to the current “policy rate.”

3. Code changes to allow for pay schedules unique to occupational groups.

4. Provide an average of 10% permanent merit raises for nursing occupations.

5. Adopt a strategy to address market salary competition

6. Provide 6.8% CEC to fund the first step toward current law requirement OR

7. Provide as much permanent CEC money as possible and refine current law to specify

market targets

8. If no funds are available, provide 2% one-time money to help with retention, and a

recognition award program for FY05.

She said that she feels doing nothing for another session is much too risky. State
employees realize we have been in financial hard times and have taken on extra work because
of jobs that remained open or were eliminated. She feels that revision of the rules is absolutely
necessary and well worth the Legislature’s time for this session.

Co-Chairman Andreason congratulated her on the quality of her report.

In response to questions, Ms. Heilman said that Idaho code does not use the same indexes
as does the federal government. She added that Idaho code also refers to doing a study on
benefits from time to time, and she feels that this might be a good time to make such a study. In
response to further questions, she said small businesses are not used in making the
comparison because they do not participate in expensive surveys. Small businesses also
employ family members.

In questioning she said that 10% below market rate might be a reasonable goal, considering
the state’s benefits. As to the 13.8% attrition rate and the reason, Ms. Heilman said employees
do not always give accurate reasons for leaving.

In closing, she said that for many years the state benefits’ package was better than what was
offered in the private sector. However the situation seems to be changing.

Alan Winkle, Executive Director of PERSI made his presentation. (See Attachment #2) He
started by commenting that his presentation is more cheerful than it has been in the past years.
He believes the retirement benefits of PERSI are on a par with the national average.

Employer units are growing every year as charter schools, counties, and other political
subdivisions join. They only had one partial withdrawal in the last year. Covered salaries have
grown, which is good, because benefits are based on this.

There was an increase this year of close to 1000 retirees. The average age of retirees is
slightly lower as are the years of service. Annual payroll is growing slightly because of
additional people retiring. He mentioned other demographic changes.

They ended the year with an unfunded liability of 1.2 billion dollars and are funded at 83.8%.
To make the state mandated funded goal of 100%, the rate employees and employers pay will
go up this next year.

In a survey of members, 94% of the employers are satisfied and 65% of the employees are
satisfied. They are going to do further studies to compare with other states, and expect
legislation will be proposed.

There is a mandatory 1% COLA (Cost of Living Adjustment) if the Consumer Price Index
grows over 1%. The Board approved a 2.2% COLA this year, which can be modified by the
Legislature. The numbers looked better in November when 2.2% was agreed to, than they do

When the meeting was called back to order after a break, Pam Ahrens, Director of the
Department of Administration, presented her report. (See Attachment #3) She thanked the
Legislature for the $836 provided for each employee to cover the increase in costs for health
benefits. The actual increase was more than expected, so the employees still had to pay more,
with their salaries frozen.

Ms. Ahrens said the dramatic increases in health insurance is having a definite impact on
employees. She defined a “Trend” as an actuarial term used to describe the expected change
in medical costs from year to year. The current FY 2005 Budget Estimate assumes a 15%
trend. This will result in an additional expense of $820 or $.39 per hour per employee. This is
the third year of double digit trends, and experts indicate there is no end in sight. This is more
than 6 times the rate of inflation.

The population ages as the life expectancy increases. An aging population needs more
medical services, which cost more money.

Other employers are shifting more of the health insurance costs to employees; instituting
limited, tighter networks; using disease management programs; instituting consumer driven
health plans; making insurance carrier changes, and instituting preferred drug lists.

Money comes from the state, employees, and retirees to pay the insurance benefits. They
had to draw from the reserves to pay the premiums this last year.

To keep costs down, they added another category of rating, and moved to only one plan that
had a lower deduction. The out-of-pocket maximum expense was lowered by $500. Retirees
are grouped with the active plan. The active employees subsidize 50% of the retirees’
insurance. Retirees by law can only be provided the same package that active employees
receive. There is duplication of services due to Medicare. Retirees want a drug prescription
program. New programs allow retirees to use unused sickness funds for Medicare supplement

Ms. Ahrens pointed out that the cost per member per month for drugs has increased over
20% every year.

Between 2002 and 2003, there was a reduction in active employees of 1800 persons.

The bids for the health insurance programs just came in the previous day. They first choose
a carrier and then design a plan. Appropriation is the final determining factor. The plan will be
in place by July.

In answer to questions, she said the state is as close to being self-funded as possible.
When the federal drug program goes into effect, the state may be able to take advantage of it.
Uninsured medical costs do impact our state’s cost.

In answer to further questions, Doug Trosky, a consultant stated there is a push to change
the Health Savings Account. Such changes are being suggested as allowing funds to be
carried over from year to year, and allowing the employer to contribute.

Both Co-chairmen thanked Ms. Ahrens for her hard work.

The meeting was then adjourned for the day at 4:30.

Friday Morning, January 9, 2004


MEMBERS: Co-Chairman Schaefer and Andreason, Vice-Chairman McKague,
Representatives Lake, Trail, Crow, Bradford, Bauer, Garrett, Martinez,
Ringo, Naccarato, Senators Cameron, Stegner, Davis, Compton, Noble,
Werk, Malepeai


Senator Goedde and Representative Garrett
GUESTS See Attached sign-in sheet

Senator Andreason called the meeting to order at 8:35.

President Richard Bowen of Idaho State University spoke to the Committee. He said
teaching is the basic function of a university. The development of the students and faculty is
their most important task. Teaching is an individual occupation. ISU over the years has had a
very solid teaching force with low turn over. However, the lack of salary increase these past two
years has eroded the confidence of the faculty in their future with ISU. Upon graduation, some
students gets jobs that pay more than that of their professors.

President Gary Michaels of the University of Idaho spoke. He said there is no “silver bullet”
to solve the problem. The U of I does a lot of research. Washington State University, just 8
miles away, offers about 30% more in pay. They haven’t had a large turn-over so far, but he is
afraid that if the present situation of no raises continues, it will take a toll on the faculty. He said
the faculty is working very hard to do the best they can with what they have.

Newly hired faculty are getting equal or greater pay than people who have been there a long
time. The more experienced a faculty member is, the higher cost of replacing that faculty
member. There is some inequity in the pay system. He said there shouldn’t be a discount to
live in Idaho. If the situation doesn’t improve, they will be losing their brightest and best and
won’t be able to replace them with equally skilled faculty.

Mr. Michaels says there needs to be more investment in Information Technology to make
teaching more efficient. One senior researcher can bring in millions in grant money and also
graduate students who want to work with him. One research professor leaving can have a huge
economic affect on the university and the state.

There is a lot of collaboration between universities in an effort to stretch the education dollar.
President Michaels said he had better luck as a CEO in the private sector by letting those
people on the firing line solve the problems, rather than by specifying every detail.

He said the U of I has more problems than just salary. The University Project has had a
negative effect on morale and will continue to be a financial burden for at least the next three
years. He stated that morale problems should be solved by the individuals themselves.
Blaming others is not productive.

Because of the shortfall, Mr. Michaels has encouraged each college to raise money for
faculty salaries and scholarships. This is easier for some colleges than others.

President Bob Kustra of Boise State University said he is impressed with what we are
doing in Idaho. He said “We don’t intend to sit around and wait for things to get better, we are
going to make things get better.”

The turn over at BSU was 20% last year, 62% of the people left due to better job pay and
opportunities. With the increase in technology firms in the Treasure Valley, there is a need to
improve the programs in the expensive area of technology. He said BSU salaries are 22%
behind in the sciences. Professors feel as if they are the “farm team.” He asked for even a
small raise for salaries this year. He said it is more cost efficient to pay present employees
more, rather than have to replace them at higher salaries.

He said BSU is building a new classroom with extensive technology to take advantage of
interactive learning for more efficient use of resources.

Diana Jansen, Administrator of Health and Welfare spoke regarding Human Resource
issues in her department. (See Attachment #4) She asked first for greater flexibility in
managing resources­recruiting and hiring, as well as rules and regulations. Many states have
already implemented these suggested changes with good results.

She also asked for an increase in compensation for her staff. In certain areas of the state,
salaries are a critical factor in turn over. The Blackfoot hospital had a 40% turn over in 6
months. It can cost $5,000 to recruit a nurse in addition to training. New candidates were
demanding more money than current nurses were being paid. They offered closer to the market
rate, and stopped the exodus.

In the area of clinicians, the turn over rate is about 15%. It is worse in some areas. In
response to questions, Ms Jensen said she would like a dollar amount, and then the authority to
move quickly and efficiently to meet needs.

Monica Young, of the Health & Welfare Department spoke. She is currently at the Idaho
State School and Hospital in Nampa. She gave examples of things they are doing to recognize

In response to questions, Ms. Jensen said H & W nurses mostly work in institutions. She
said employees leave because: 1) better jobs, 2) better salaries, 3) supervision and work load

Richard Jones, Director of the Veterans’ Services, spoke on issues for nurses and others in
his department. (See Attachment #5) He asked for an increase in salaries for all employees in
his division, but especially for the nurses. Sometimes they have to hire temporary nurses–an
extremely costly alternative. He said they are spending more on temporary nurses than they
would spend to increase salaries as requested. The need for nurses nation-wide is going up,
especially in long-term or geriatric care. An additional problem is that nurses in his division
work 24/7. A 28% increase in pay is needed to bring nurses’ salaries into line with the private

Karl J. Dreher, Director of the Department of Water Resources, spoke. (See Attachment
#6) He gave specific examples of how compensation issues have affected his Department and
DEQ (Division of Environmental Quality.) He has 200 employees­permanent and temporary.
Their salaries for scientists and engineers is significantly below market and it is costing the
Department money. Engineer or science-type positions make up almost half of his department.
His department is a leader in bringing technology to the state, but even a 1% increase won’t
really help much.

More than anything else, they want a plan for correcting the inequity in pay. The problem is
not the Hay System, it is that the Hay System hasn’t been funded. When the disparity gets over
25% and there is no plan in place to make amends, employees feel they have to move.

In 2003, the Department’s loss of technical people went up dramatically due to salary
considerations. Replacements have to be offered more money, so they are approaching the
position where they have to leave positions open to generate salary savings to hire new

The bulk of their employees are older, and most likely will stick with the Department because
of the State retirement benefits. However, the younger men won’t stick around, and this will
leave a huge gap in a few years.

He gave several examples. One was of a civil engineer with 8 years experience who audits
the Federal purchase of water rights for the state­a very important position. She makes below
what the State Labor Board says should be the minimum wage of a beginning civil engineer.

Friday Afternoon, January 9, 2004


Col. Dan Charboneau, of the Idaho State Police spoke. (See Attachment #7) He spoke
about the impact of these lean times on the citizens of Idaho and the ISP. He pointed out that
although the trooper is the most visible member of their team, other employees in
communications and the crime lab are also vital to the success of law enforcement. He said his
best people are family orientated and want a permanent position.

ISP does not offer career development enhancements. There is neither the funding, nor the
discretion to deliver this. The discretion to make these decisions is a large problem. Many city
police departments offer incentive programs, high entry salary, and more levels of advancement
and pay.

During 2002, they lost 3 out of 13 scientist in the crime lab due to low pay which is 36%
below the Mountain States. A lack of hope for advancement also contributes to low morale.

Low pay and lack of salary incentives continues to drain state employee talent. He is
concerned for the safety of the citizens of Idaho as the force is becoming younger and lacks
maturity. This year 10 troopers left, 19% of the local force.

He gave an example of a trooper who was leaving the force that day because of finances
and concerns for his family.

There also is a serious concern in keep forensic services people. Sometimes it takes 18
months or longer to train a new employee. Last year they lost both of their forensic firearms
experts and have been unable to provide this service for various agencies in the state.

Col. Charboneau presented his recommendations­more compensation for ISP employees,
more flexibility to administer career development plans, encourage agency innovation and
creativity, and review and update the benefits package for state employees. He fears that the
ISP is becoming a training agency for other police departments and agencies.

Capt. Don Van Cleve, Investigative Captain for Region 3–SW Idaho, spoke. In 1999, the
Criminal Investigative Division was folded into the ISP. They are involved in all crime scene
investigations, except for large cities. They also do drug investigations and assist many small
municipalities. They work behind the scenes, so do not get the press and media coverage.
They have received numerous national awards, but cannot continue to do this job unless they
receive more compensation. Many small agencies will be affected if the ISP loses forensic

Captain Stephen Jones, Patrol Commander for Region 3, South West Idaho, spoke about
the recent drain on his officers. He has lost two, and he knows of six others that have applied to
other agencies. He is allocated 40 patrol officers. If he loses these 6 officers, it will be a 20%
loss and he will be losing his field training officers and his experienced people.

Upon questioning, Captain Jones said they have the same number of officers as they had in
1985, except for four motorcycle officers added a few years ago. He said the main reason
employees are leaving is due to a lack of compensation­both in pay and benefits.

Director Charboneau gave examples of disparity in salary. Patrol officers make $18.25 an
hour, Boise PD pays $22.19, Meridian $19.68, Oregon $22.21, and Washington $25.21.

Co-Chairman Andreason asked about a Career Development Plan. Director Charboneau
said they have one, but the Legislature has never funded it. In answer to what discretion he
wanted, he said beyond a CEC increase, he would like some discretion in FTP. He has to
jockey people around to keep positions open until they can be filled. He suggested “red
shirting” a position and using the saved salary to keep the people they now have in order to
slow down the exodus. There have been suggestions to move Public Safety out of the Hay
Plan. He said that any help will be appreciated.

When asked about the impact on the forensic lab, he said he has gone out on a limb and
tried to find some creative ways to get the people he needed and to stop the exodus. There
have been murders in Idaho, and the Lab could not provide the needed services. They are the
‘one-stop shop” for all of the law enforcement in Idaho.

Vicki Patterson, lobbyist for the Idaho Public Employees Association, spoke. (See
Attachment 8) Officers of that organization were present in the audience. She thanked the
Legislature for their help with the cost of medical insurance, even though it didn’t cover the
entire increase. She asked that the Hay System be funded as it should be. She said a 5%
increase would be 1% of the General Fund–money for those who take care of our state. She
said the increase should come off the top of the General Fund. Her numbers were questioned
by several members.

In response to questions, Ms. Patterson said there are a lot of employees who hold second
jobs, but no one has exact numbers. She said some state employees are on welfare or are
getting food stamps, and promised they will try and get numbers.

Senator Marti Calabretta spoke representing the state employees who contacted her in
north Idaho. State retirees have a guaranteed COLA, but state employees do not. Their work
load has increased and the staffing has decreased. The replacement workers drain the existing
workforce when they have to be trained. They asked for help with the increases in the cost of
health insurance, and a push for a healthier life style. Current state employees feel they have a
contract with the state which has not been kept. She asked for an established level of COLA
(Cost of Living Allowances.) When questioned, she suggested cutting programs rather than
failing to give raises to the state employees. She said the budget problems should not fall on
state employees.

Jon Sowers of the Department of Corrections, Deputy Director of Human Resources, spoke.
(See Attachment #9a) He pointed out that their department deals with the most dangerous and
difficult segment of the population. He thanked the Legislature for their help with premiums, but
said wages have been frozen and employees have not been advanced in their careers. He
asked for fair compensation for his employees. He said a problem that lasts for many years
becomes more difficult to correct as more time passes. He said it is much better to maintain
present employees than train new officers. Idaho Correctional Officers are paid the lowest in
this general area of states, with the exception of Montana. It costs almost 2 million dollars a
year to train new employees, which is between 1/3 and ½ of their total officers’ salaries. Four
out of five who leave, leave for higher pay. He urged the Legislature to “invest in employees.”

Selina Carver of the Department of Health and Welfare spoke. (See Attachment #9b) She
is a program manager in the Division of Health. She has salary savings but could not use them.
Her division is federally funded and she gets money for raises, but can’t give them to her
employees. She said the system they are bound to is broken which results in low morale and
high turn over.

Galen Lewis of the Department of Health and Welfare spoke. PERSI retirement salary is
based on the highest 42 months of service. The freeze in salaries has impacted his retirement
salary. Only 16% of state employees are at mid point or above within their grade. He said the
rise in health costs is eroding the advantage in benefits the State used to have as an

Officer Van Waggaman of the Idaho State Police spoke. He was taking his last day of
work to speak to the Committee, rather than spend his time saying good bye to his fellow
workers. He came from a law enforcement family, but knowing he could not provide for his
family, he is leaving the ISP. He said he loves the ISP and the training is excellent. The State
Police has lost too many good officers, and more are leaving than the Director knows about. All
of the officers who want to leave are finding jobs.

Ruth Ann Benjamin of Boise State University spoke. (See Attachment 9c) She took an
early retirement and took a 58% pay cut to work at BSU. She represented the specialized
workers at BSU who work on one-year contracts. They are not part of the Hay System or
PERSI. They need college degrees and sometimes additional certification. Many work over 40
hours a week with no overtime. People are taking sick time because they feel so overloaded.

Bonnie Carlton, President of Classified Employees at BSU, spoke. One-third of the
employees are making less than $10 an hour. Some cannot afford to buy needed food. Over
10% of the Classified workforce at BSU hold at least one extra job. Fifty per cent of the workers
are single income families. In 25% of the dual income families, the spouse also holds a second
job. Their take home pay is going down

Bill London Commissioner of the Idaho Conservation Officers’ Association spoke.
(Attachment #9d) They represent 99 Fish and game officers. Their department receives its
money from hunting and fishing licenses and fees. Only 6% of their officers are at policy. Of
the officers who have served 20 years, only 35% are at midline. For 20 years of service, 20%
are at midline.

Rick Schenfield from the Idaho Liquor Store in Post Falls spoke. He is a liquor clerk.
Washington liquor clerks make a great deal more and have guaranteed increases with good
records. Washington State, just 6 miles down the road has much better benefits.

Alice Tauschiter spoke representing the classified employees from ISU. Their salaries are
lower than the market by 14%. More funding is needed to bring salaries to the market level.
State employees are paying too large a percentage of the Idaho State budget with their reduced

Doug Nilson, Chair of the Faculty Senate of ISU, spoke. At a meeting before Christmas to
get comments for his presentation, he heard that morale has gone down and has adversely
affected the quality of education of ISU. More of the same situation promotes anxiety among
the faculty as the disparity becomes greater. It is difficult and expensive to find replacements
for departing faculty members. Research and families suffer, as professors take consulting jobs
off campus. This diminishes emotional attachment to the University as well as enthusiasm for
the job. A small increase in salary, along with a plan to increase pay in the future, would be
greatly appreciated.

Brenda Smith, Human Resources Director at North Idaho College spoke. She is new to
public education and Idaho. She is concerned about her ability to recruit staff and faculty. Two-thirds of those who are leaving mention salary as the main reason. They are having difficulty
keeping the nursing faculty. The low salaries are affecting the ability of the Colleges and
Universities of Idaho to hire faculty and staff to train its citizens.

Andrew Hanhardt of Services Employees International Union (SEIU) spoke representing
the state’s employee members. He said State employees are working harder than ever with
fewer employees. Although Idaho is not as bad off financially as other surrounding states,
Oregon gave their state employees a raise.

Stewert Edwards of the Idaho State Tax Commission spoke regarding Holiday Pay. He
works a different type of shift, so does not get the regular full holiday pay. He asked that the
state insurance cover dependents whether they are children or parents. He has a mother who
qualifies as his dependent on his tax returns.

Jon Sandoval, Chief of Staff for the Department of Environmental Quality, presented his
written testimony. (See Attachment 10)

Kim Day, First Vice President of the SEIU spoke. She is an employee of the Idaho Industrial
Commission. He said that Legislators rarely come to see the state employees at their work
place, nor does the Governor. He pointed out the difference between meeting with managers,
or meeting with state workers. He said the state managers are getting the benefits, not the
regular state employees.

Ken Miracle, HR officer of the Department of Agriculture, spoke. In the Ag Department, the
turn over rate has been historically low, however it is now at 17%. In the last 18 months, 20
employees have left because of salary. An increasing number of employees in the Department
are aging and reaching retirement. Getting a needed Vet for their program was extremely
difficult. The Federal Government is very attractive for their employees. Their department is
becoming a training ground for employees who then move to other places.

Sergeant Bret Kimmel of the Department of Correction in the Maximum Security Division
spoke. They have over 5000 prisoners. Money is an issue. Officers leave when their taxes
and health insurance goes up. There are officers’ families who are eligible for food stamps and
Medicaid. Their job is very difficult­every day they deal with violence and such things as HIV.

Officer Renea Bevry, of the Department of Corrections, spoke with passion. She gave an
example of the daily weapons confiscations and other details of her job. She said that most of
her officers earn under $12 an hour. She said that a $6 an hour increase would bring her to the
minimum of an Idaho State Trooper.

Shelli Rambo Roberson, Program Manager for the Department of Health and Welfare in
the area of pregnancy prevention, spoke. (See Attachment #11) She is passionate about her
work and feels it is extremely valuable. However she said there is frustration with the inequity in
the system. She said that keeping state employees through additional compensation can prove
financially advantageous to the State.

David Winkler, who works as a teacher in the Department of Juvenile Corrections, spoke.
He asked for both more compensation and medical coverage, even if the amount is small.
Some of the staff positions in his section go unfiled and this can be a dangerous situation. He is
retired military and has his benefits, so he said he was speaking for his employees more than
for himself.

Debbie Coles, of the Idaho Transportation Department, spoke. She is 30% below market
pay and has been with the Department for 20 years. She asked for help for the ISP and
Correctional Officers before herself.

Tim O’Leary from ISP spoke. He said the ISP officer who left the force today walked out the
door with $150,000 worth of training. He said we have to find a way to keep those top people or
the state is going to pay the price in many ways.

Kip Sherry, of the IDOC spoke for himself. He is an IT Systems Director for the Department
of Corrections, and an Idaho native for 7 generations. He would like to stay in Idaho. He gave
examples of a program he instituted that is saving the state $15,000 a month by collecting child
support and other payments from inmates. In a technology position, he is 47% below market
value in Boise. Employees have been giving their best to the State, he asked that the
Legislature give the state employees their best.

Ingrid Bolen, of the Department of Health and Welfare, spoke. She said it is with a heavy
heart that she realizes she cannot grow in her field in the department. The only employees to
make over the mid point have 33 years of service. She said she minds being broke.

Anita Hanks, who works for the Idaho Supreme Court, spoke for herself. Her pay increase
when she came to the State has entirely disappeared during the last four years. Her family has
to live an extremely modest life style. The work load has increased tremendously in the last
year, but they have no new employees.

Robert McCall, of the SEIU, spoke for himself. He has been on the faculty at BSU for 18
years. He said the benefits of his job do not overcome the lack of salary. The Board of
Education can remove entire sections of faculty, so he doesn’t have job security. He said
enrollment is up and some classes are so full, students must bring their own chairs. He asked
for a “living wage.”

Ron Stickland, an IT systems analyst for the Department of Corrections, spoke. He pointed
out that most of the state employees have taken vacation time to appear before the Committee.
He said it is obvious that state employees are not at the mid point within 5 years. Directors can’t
advance employees because they do not have the funds. The State of Idaho is a large
business employer, not a small one. He suggested that the director of an agency should have
more flexibility. He said there isn’t pay for performances­performance evaluations are either
pass or fail, so 95% pass. Because the written notes then become crucial, one needs an
eloquent supervisor, if one is to have a chance for advancement. This isn’t fair.

Ann Heilman, of the Division of Human Resources, spoke in defense of the performance
evaluations. She said that the previous evaluations were inconsistent and everybody was rated
above average. She was instructed to fix this evaluation problem. Each job has performance
expectations and each area is marked pass or fail. She said this new evaluation was presented
to some committees, and is better than the old one.

Dylan McDonald, of the Idaho State Historical Society, spoke. There is a massive backlog
of items that need to be classified. They have waited for five years for a promised building. He
explained his life style is limited by the state budget cuts.

Karen McDonald, Dylan’s wife spoke. (See Attachment #13) She works for Boise State.
With student loans, they cannot afford to buy a house or start a family. She doesn’t feel that
she will be able to stay home should she have a child. She is afraid that she and her husband
may have to face moving out of state. She teaches music lessons in the evening to provide
extra funds.

Eugenia Horne spoke. She is not an employee of the state. She said she has been black
listed by Ann Heilman for four years. She said she has seen people in various departments who
have abused travel funds, but others covered for them. She said she was an internal auditor
and got black listed for what she discovered. She claimed there is a waste of state funds.

Marie Collier, a registered dietitian who works with Central District Health, spoke. She
works with the WIC program. According to the Department of Labor statistics for Boise, she is
paid 26% below what a dietitian should receive in Boise. Some of her employees are receiving
WIC benefits, or other such welfare benefits in order to survive. At her own expense, she must
keep up her license. She has two children in college in Idaho, and expenses are going up.

Tony Ewing, of the Idaho State Tax Commission, spoke. He is a native of Idaho. He has
worked as a firefighter and policeman in Idaho. He has only worked 5 months there and one
co-worker who has worked there since 1997 makes a penny an hour more than he does. He
said the Tax Commission is very cost effective because of the amount they collect. He trusts
the Legislature will do the right thing.

Terry Stephens, with the Idaho Tax Commission spoke. Most of the employees at the
Commission are single mothers. It is very difficult for them to work two jobs. He said the
insurance situation “stinks.” The Commission met their yearly collection revenue amount 4
months early. He feels that the Commission wastes money. He referred to a two and one-half
day meeting held at the Red Lion­a very expensive place.

Kelly Gornik, of the Division of Building Safety, Electrical Bureau, spoke. She does the
licensing of Electricians. She is proud to be an Idaho native. She is single, 48, and her children
are grown. She lives in a single wide mobile home in Melba and commutes to Boise. She listed
her medical problems and gave an example of her budget. She said there are dedicated funds
for employees salaries, but they are not distributed when the money is there.

Billie Havery, an Administrative Assistant at the Department of Finance, spoke. She said
that morning she had to decide between medicine, heat, or housing. She decided to forgo
medicine. She has worked up to three jobs at a time to survive. She makes $13 an hour and
her health insurance has not helped with her medical bills. She has sold her house, and now
has had to sell her car.

Sgt. Floyd Barnes, of the Idaho Department of Corrections, spoke. He said he works with
employees who love their job. They asked him to tell the Committee what they do for a living,
how they try and help the inmates learn the tools to stay outside of prison. He works at Orofino.
Some officers are on public assistance or are working two or three jobs in Orofino where he
works. He asked that Corrections not be considered the “Black Hole of Idaho.” If they can
make a difference on one inmate’s life, an officer can, in effect, pay his or her salary.

Robert L. Amoureux, of the Idaho Transportation Department, Design Section, spoke. He
has been there since 1985. They are facing a problem in that they cannot hire the people they
need because of the competition in salary. He has decided to retire early, in about a year and
open his own business which he feels will earn twice as much as his present salary.

Steven Hughes, who works for the BSU landscaping crew, spoke. He is making $7.41 an
hour. Most of his crew is on welfare or trying to get it. He cannot make it from pay day to pay
day. He asked for a raise.

Aaron Walter, of the Division of Administration and Purchasing, spoke. He is due to retire in
two years. He has been there 12 years and is roughly at the mid point of the salary range. He
had to push to get to the mid point. The cost of health insurance is going to go up due to all the
new drugs, and it will cost the state and the employees more money. He is thankful for the
medical insurance. However, he gets his glasses from his wife’s policy. He gave an example of
how he saved the state money in his job­a multi-state purchasing arrangement for lab salaries,
which saves more than his salary each year.

Robert Gale, who works for the landscaping crew at BSU, spoke. He makes $7.41 an hour.
He rides the bus and his bicycle. He loves the work he does. He is 47 and in good shape. The
BSU campus needs to be brought into the 21st Century. Some of the plumbing is quite
antiquated. The crew hopes to make the campus beautiful, but he can’t make it from pay check
to pay check.

The meeting was adjourned at 5:35 by Co-Chairman Andreason. The next meeting will be
at the call of the Chairs.


DATE: January 15, 2004
TIME: 1:40
PLACE: Room 416
MEMBERS: Vice Chairman McKague, Representatives Lake, Trail, Bradford, Bauer,
Garrett, Martinez, Ringo, Naccarato


Chairman Schaefer and Representative Crow
GUESTS: Alan Winkle, Dennis Stevenson, Jane Buser
The meeting was called to order at 1:40 by Vice Chairman McKague. The
page Elizabeth Keaton and guests were introduced (See list above).
59-0103-0301 Alan Winkle, of PERSI, presented the Pending Rule 59-0103-0301.
This rule implements the increase in contribution rate by the employer as
put into law last year for firemen and policemen. They have had one
claim for the $100,000 death benefit so far. Mr. Winkle went through the
various categories of firemen and policemen that depended upon whether
they were hired before Oct 1, 1980 when the firefighters and policemen
joined PERSI.
59-0103-0302 Alan Winkle then presented Pending Rule 59-0103-0302 which raises
the rates for employers and employees to match the requirement in law
that PERSI be fully funded. The PERSI Board is required by law, and has
the authority to raise the rates. He submitted a chart showing how the
rates will go up each year from July 1, 2004 through July 1, 2006. (See
Attachment 1).

Rep. Lake said he didn’t realize we were approving a rule for increase in
contributions through 2006. Mr. Winkle said the purpose of this increase
is to meet the Code requirements that the PERSI Fund be fully funded,
plus a reserve. If the rule is disallowed, he does not know what would
happen. The Attorney General would have to rule on this.

In response to further comments from the Committee, Mr. Winkle said that
the rates were indeed temporarily reduced in the past, and then made
permanent. After the market fell in 2000, an unfunded liability occurred.
Mr. Winkle said he does not know if the unfunded liability exists with
recent higher market returns, using data as of that date. He agreed that it
is his understanding that the PERSI Board has the sole authority to set
the rates, but there is no federal law that states the Board has to have this
kind of authority.

Mr. Winkle said the Board knew two years ago that the rates would have
to be increased and informed the public. However, they delayed the hike
for two years, and then have phased in the increases over three years to
make it easier on the employers and employees to plan ahead.

On a different subject Sub rule.114 deals with the situation where a
worker is on Worker’s Compensation and receives benefits from PERSI
besides. The worker is allowed to maintain eligibility in the system, but
the money received from Worker’s Compensation is not counted as salary
to accrue service.

Sub rule .176 covers the only section that did not have a 5 day reporting
requirement. This was an oversight.

Motion Rep. Martinez moved to approve both of the rules-59-0103-0301 and
59-0103-0302. It was seconded by Rep. Naccarato.
Rep. Lake offered a Substitute Motion to approve 59-0103-0301, and
to hold 59-0103-0302 for a time certain of 10 Legislative days
(January 27).
He raised the question whether it was necessary to have
the increase, considering the current market, and also wanted to know
what happens if the rule is disapproved. Is there statutory authority for
the PERSI Board to still set the rates. Rep. McKague seconded.
In discussion some were comfortable that the PERSI Board had given the
best numbers based on what they are allowed to do, and considering their
past history of lowering the rates when possible. Others felt there was no
harm in waiting 10 Legislative days for a ruling, even though this raise has
been discussed for two years. There was also a curiosity expressed to
know what would happen should the Committee vote against the rule.

At the request of Rep. Trail, the two rules were split for voting.

ACTION By a show of hands 6 to 3, the Committee voted to Hold 59-0103-0302 for 10 Legislative Days (January 29).
ACTION By voice vote, 59-0103-0301 was approved.
Rep. Lake raised the issue of a person working for a university in a
program that gets its money from a grant. If the funds run out, they lose
their job, and lose their chance to become vested in PERSI. Jane Buser
from BSU said that with all universities, except the University of Idaho, the
employee is RIFed (Reduction in Force) and does not lose their chance to
be vested if they find another position at the University.


DATE: January 21, 2004
TIME: 1:37
PLACE: Room 416
MEMBERS: Chairman Schaefer, Vice Chairman McKague, Representatives Lake,
Trail, Bradford, Bauer, Garrett, Martinez, Ringo, Naccarato


Representative Crow
GUESTS: See Attached Sheet
MOTION: Rep. Lake moved to approve the minutes of January 15. Rep. Trail
By voice vote, the motion passed
Ann Heilman, Director of the Division of Human Resources, started
with some general comments. The Division of Human Resources and the
Idaho Personnel Commission have rules that define the system.
Changes must be made all the way through the system. There are
12,000 classified employees that may be impacted by these rules. The
50,000 job applications they received last year are also affected. They
tried very hard to have participation.

One highly charged issue is how the state conducts layoffs. These
last two years, 260 employees were laid off by the State. Rules governing
this were made a long time ago. It was done on a point system. Points
were awarded for years of service and performance evaluations. The
System was analyzed in 1966 and again in 1999 when the Division of
Human Resources was created. The system was found to be
dysfunctional. However, attempts to change the system have met with
resistance. Some managers want complete control. State employees
want pure seniority. Requests for rule changes have come from a variety
of sources over the past two years.

Rough drafts were sent out to people involved in state agencies.
There was an informal comment time in July. Then an open letter was
sent to all employees, letting them know that the rules were not set and
asking for input. In their responses, 98% of the employees said they did
not want the system of lay offs to be at the agency discretion. The
Division came up with a set of rules which have been revised several
times. These rules were posted on the web site, published, and hearings
were held around the state.

Ms. Heilman said the pending rules are not perfect, but they are
balanced and fair. There is accountability for supervisors and those who
make decisions, and there are employee rights. They don’t want law
suits. They removed jargon and tried to make the language simple.

They have had good experience with the recent layoffs and tight
budgets. They also need to incorporate new state and federal laws.
There are no monies involved, but the changes are extensive. Most of
the comments received from employees came by e-mail.

Ms. Heilman graciously yielded the floor to the other presenters who
had scheduling conflicts.

09-0130-0301 The pending Rules of the Benefits Bureau of the Department of Labor
were presented by Dwight Johnson. This rule lets claimants file for
unemployment on the Internet. This rule has been in place almost nine
months and they are finding that 30% of the claims are being filed this
way. It is working very well.
MOTION Rep. Garret moved to accept Rule 09-0130-0301. Rep. Trail
seconded. By voice vote the motion passed.
09-0135-0301 These pending Rules of the Employer Accounts Bureau were
presented by Mr. Johnson. He said there are three parts to this rule. The
first one states that late penalties for non-payment of uninsurance taxes
continue to run even after the lien is filed. It is $10 a month or 2% of the
amount owed. It cannot exceed the amount owed.

The second one deals with professional employer organizations. It
used to give them 90 days in which to report changes or transfers. The
rule is being changed to give them whatever time is allowed by law.
Currently it is 180 days. However, should the law change again, the rule
will not need to be revised.

The third change is to help prevent unemployment fraud called
“psudo-dumping.” Employers pay taxes based on their turn-over rate.
Employers transfer employees to another entity with a lower tax rate.
This cost the state $463,000 and billions of dollars nationally. The
Department is also bringing legislation to the Legislature this year to
correct this problem.

MOTION Rep. Trail moved to accept 09-0135-0301. By voice vote, the motion
48-0103-0301 Karl Tueller, of the Department of Commerce presented this rule. The
state has a tax on hotels, motels, and campgrounds. Two per cent of this
tax comes back to the Department of Commerce for tourism promotion.
This amounts to about 5 billion dollars annually. Forty-five per cent of this
money goes into a grant program for local areas.

Renea Nelson, Deputy Director of the Grant Program, answered
questions. She said they have between 2.3 and 2.5 million dollars for
these grants. Most of this money goes to the smaller communities.
These changes have gone through the negotiated rule process. No
comments have been received.

Ms. Nelson then went through changes that were made in the rules
governing the purchase of large items and rental of large items. The
amount of money that requires formal bids has been raised to $5000.

Also, since applications for grants may be sent in electronically,
changes will also be able to be sent electronically.

Line item exchanges are allowed of up to 10% of the grant, but any
monies over $1000 must be approved by the Idaho Travel Council. The
grants do not pay any salary.

48-0103-0302 Ms. Nelson explained this rule changes the way credit is given in radio
ads. It will now be “Visit scenic Idaho,” rather than giving credit to the
Idaho Travel Council.
MOTION Rep. Martinez moved to approve 48-0103-0301 and 48-0103-0302.
It was seconded by Rep. Trail. By voice vote the motion passed.
15-0401-0301 Ann Heilman, Director of the Division of Human Resources, continued
with her presentation.

In answer to a question, Dennis Stevenson, of the Office of
Administrative Rules, stated that what the Department of HR has done
has been correct and in accordance with the law.

Ms. Heilman said she is responsible for the system. The Legislature
set broad directives in some areas, and rather specific directives in
others. She has tried to be very careful to do exactly what the Legislature
specified. She went through the rule changes highlighting those issues on
which she felt the Committee would want more explanation.

001.03 Some new managers feel these are suggestions, not rules, so
a new rule states that it is a misdemeanor to break the rules.

54. Ms. Heilman said that this rule is at the request of the Idaho State
Police. They need promotion levels within a salary grade. This rule allows
an agency to request this promotion authority.

025. This rule deals with nepotism. The previous rule says a person
cannot work under a manager who is close family. This has been
expanded to read a close relative or “significant other” cannot be in the
“chain of command.” If this rule is approved, Ms. Heilman said she will
have to write further explanations for the agencies. In response to
questions, she said she has the ability to waive any rule if it is in the best
interest of the state should special circumstances arise.

The Division attorney, Daniel Steckel, said this rule only applies to
classified employees. Others, such as elected officials, would fall under
the Ethics in Government Act.

In answer to further questions, Ms. Heilman said that agencies usually
make conflict of interests rules specific to their agency. In general they all
start with the law and build from there. These individual policies must be
published within the department.

.05 Salary Protection. The Agency discovered that a section of rules
covering when non-classified employees go to classified service was
illegal, so they made changes to follow the law.

.068 Violations of classification. Ms. Heilman said when a violation
of classification has been found, a 30-day period is allowed to take
remedial action. These types of problems can be very complicated.

In response to questions, she said that there are still issues with state
employees that can only be fixed by legislation. She can only fine tune
the rules.

.070 Compensation is based on the Hay System. They felt this had
to be stated clearly. It also specifies the various labor markets used to
make comparisons in salaries.

A problem exists with how holiday pay is calculated. A bill dealing with
this issue last year passed the House, but not the Senate. They could not
reach a consensus. People work varied schedules and have different
days off. She commented that if there was a furlough program in an
economic down turn, it would soon be decided that a full-time day is 8

075b defines how shift differential compensation is paid when an
employee has to substitute for someone whose schedule varies from
nights, days, and/or swing. They discovered there were differing ideas as
to what the previous rule meant.

.076 deals with alternative work schedules and locations. This came
from employee suggestions. Some agencies did not feel that they had
the ability to allow flexible schedules, job sharing, and telecommuting.

.077 covers bonuses and goes along with the law passed last year. It
repeats the code. When a bonus is paid, a memo is placed in the
employee’s personnel file. If an employee saves the state money, he may
be paid up to $1000 by the agency. Any monies over that have to be
approved by the Board of Examiners. The problem is that bonuses are
paid from salary savings, and there is very little money available from this
source. Smaller agencies with a stable work force are particularly
hampered. Often savings are in the operating budget area, but that
money cannot be used for salary bonuses.

In response to questions, Ms. Heilman said the situation arises where
an employee has to take a sick leave. Some agencies have no money to
hire a replacement employee, but end up using an expensive temporary
employee because they can use other funds to pay for this.

101. covers Eligibility Registers. There used to be a paper list of those
employees laid off who were eligible for re-employment. This list has
been revitalized. These Eligibility Registers list employees who have
been laid off. This rule follows Idaho codes to award points to veterans.

.104 covers the removal of names from the register, and how this is

120 covers Limited Service Appointment. If a person is hired for a
temporary job, they have a much higher chance of being laid off. This is a
“truth in advertising” requirement, and requires employees be clearly told
this when hired. This is to be re-emphasized every two years when the
job comes up for review. Jobs like this are often created by federal
grants. When the funds go away, the job ends.

.124 covers in more detail that a department must rehire those laid off
first, then look at other sources. Sometimes a person is hired for a
temporary job, and then wants to keep that job when it becomes
permanent. Although time has been spent in training that person, they
have to go through the State’s process to qualify. If a person on the top
ten of one of these Eligibility Registers is hired for a temporary job, they
can keep the job when the position becomes permanent.

It was decided to finish the rest of the rules on Tuesday, January 27.
ADJOURN: The meeting was adjourned at 3:45


DATE: January 27, 2004
TIME: 1:38
PLACE: Room 416
MEMBERS: Chairman Schaefer, Vice Chairman McKague, Representatives Lake,
Trail, Bradford, Bauer, Garrett, Martinez, Ringo, Naccarato


Representative Crow
GUESTS: See Attached Sheet


Ann Heilman, Director of the Division of Human Resources, continued
her presentation of the rules covering Layoffs, RIFs (Reduction in Force)
and other situations where employees move within the agency or to
another agency. She covered the major changes in each section. She
said they tried to strike a balance between seniority and management’s
need to control the agency. A manager may appeal a state ordered layoff
if the employee’s job is “mission critical.” She said the mission statement
for the agency should show the importance of the employee’s
contribution. If these rules are approved, she said there would be some
“pretty stern” guidance issued for this situation.

She covered such things as when an employee’s job changes
dramatically due to something like technology taking over the job, and the
solutions provided.

Ms. Heilman said appeals to the Personnel Commission cost the state
at least $1000 each, so they try very hard not to have this happen.

There are minor changes on the Calculation of Retention points to
stress that the content of the performance evaluations are important as
well as the number awarded.

On the subject of performance evaluations, the manager is responsible
to do one each year, however a grace period is granted. If the manager
fails to do the evaluation, it is not to hurt the employee in a layoff.

In response to questions, Ms. Heilman said that they are merging the
old system and the new system, now on computer. In response to
questions, she said the “pass/fail” term is slang and is used because it is
easier to say. It isn’t an accurate description of the process.

In answer to questions, Don Steckel, of the Attorney General’s Office
said that reclassifications of employees are appealable through the
Personnel Commission.

Ms. Heilman pointed out that the rules prohibit the change of
previously passed-on evaluations, and that war veterans get a preference
of a 3 year credit.

Several times Ms. Heilman reiterated that these rules are a result of an
enormous amount of comments from agencies and employees. These
rules prohibit the use of the layoff process to dismiss a state employee.
When a position opens up again, first choice goes to those laid off, or
those who took a voluntary demotion. The rules were changed to more
accurately reflect the state law. After layoffs, an agency is to rehire their
own people first, then those laid off from other agencies, and lastly, look
at the state applications for employment.

Ms. Heilman graciously yielded the floor to Steve Allred who had to
leave for another meeting.

Steve Allred, Director of the Department of Environmental Quality,
spoke in support of these rules. He said employees can appeal rulings to
him or the Director of HR. He didn’t believe this would be necessary in a
well-run agency.
As Ms. Heilman continued going through the rules, the question was
asked if an employee could have someone with them at these hearings,
such as a union representative.

Tim Davis, Deputy Attorney General, explained that there are rules
that deal with the unauthorized practice of law. A person who is not an
attorney, cannot represent someone where there is adjudication. They
may have someone with them, but that person cannot represent them.

When questioned about the employee having to pay attorney’s fees for
the state if he or she were to lose, Ms. Heilman said that part of the rule
has never been used. They wanted to delete it, but were told it should
stay in.

Ms. Heilman discussed the changes in the sick leave rules. Sick leave
can be granted for the care of foster children. Under new laws,
accommodations must be made for those with disabilities, however, all
jobs require a reasonable level of performance. If a person uses every
day of sick leave earned, a supervisor may ask for a doctor’s certification.
If an employee is sick for more than three days, the supervisor may
request a doctor’s written excuse.

Objections were raise by a couple of Committee members that this
could make the employee incur needless expense, and also raise the cost
of health insurance for the state and the employees.

Ms. Heilman said some agencies have more of a problem with workers
missing due to sickness than other agencies. This is a subject of national
conferences. One rule would not fit all, and it would be unreasonable and
costly to expect all employees to go to a doctor.

A new section has been added to allow for separation when an
employee does not return to work. Sometimes a worker quits and leaves
town. Other times there may be an emergency. The agency has to mail
a letter to the last known address giving them 5 days to contact the
agency. The agency can back away from a dismissal if an emergency did
indeed happen.

Most of these rules are in individual agencies’ rules. Should a new
agency be formed, these rules would apply.

When asked how satisfied employees are with the problem solving
process within the agencies, Ms. Heilman said that the Department of
Human Resources is “out of the loop”, and so she didn’t have figures.
She agreed that the law needs first to be changed in this area, and then
with the Idaho Personnel Commission, her division can “flesh out” the

Andrew Hanhardt, President of the SEIU (Service Employees
International Union), spoke. He said he represents 600 state employees
in various state agencies. He said the division did a great job as a whole
on the rules. However, they object to the entire package that has been
presented. There are too many rules for the committee to give its
attention to. The scope is too broad. Too many of the current rules are
not enforced. He asked for a review of the entire system.
In answer to questions, Ms. Heilman said there was Negotiated Rule
Making. There was enormous public input. More so than had ever been
done before.

Mr. Hanhardt admitted he or his associates had attended several
meetings. When asked for objections to specific rules, he mentioned the
sick leave rule. He said he did not have a presentation prepared, but
offered to present to each Committee member a list of his union’s
concerns the following morning.

Tim O’Leary, Human Relations Manager for the Idaho State Police,
spoke. He was involved in many meetings, some with as many as 60 of
the HR managers from around the state. He said it was a collaborative
effort, and there will be additional changes proposed next year, but huge
strides have been made. The employees of the ISP did participate and
sent many suggestions. He recommended acceptance of this package.
Carolann Zografus, a clerical support person and a member of the
Idaho State Employees Union, spoke. She works for Health and Welfare
in the Division of Medicaid. People in her area were unaware of the
changes. She could not use E-mail to let people know, it could only be
done by word of mouth. She was unhappy with her situation. When
asked, she said most likely her supervisor would have given permission to
send out notification of the rules review to employees. She also agreed it
was her supervisor’s responsibility to notify employees about the
proposed rules changes.
MOTION Rep. Ringo moved that we delay action on this package until our
next meeting. In the meantime, each member of the Committee will
be presented with those items of dispute, with rationale, for
members to consider before taking action.
Discussion followed. Some members felt we had been given enough
time to consider this issue, others wanted to wait to vote.
Rep. Schaefer moved that the rules be voted on today. Rep.
Schaefer commented that representatives have received very few
contacts from employees about this issue. Mr. Hanhardt didn’t have
specifics when asked. We could delay, but there wouldn’t be any
changes. After a year and one half, he couldn’t see any reason to further
delay the process.
ACTION After a brief discussion, in which the majority of the members said they
were willing to wait, Rep. Schaefer pulled his substitute motion.
ACTION The motion to delay action on the package until the next meeting
passed by voice vote.


Alan Winkle, Executive Director for PERSI, presented some further
details (See Attachment). Although the Board of PERSI is not allowed to
use numbers received after the June 30 date, he presented data showing
several scenarios­assuming various Annual Net Returns. (See page 2 of
the attachment.)

Rep. Lake again expressed his concern with the language that the
Board “shall” increase the rate beginning July 1, 2004.

Mr. Winkle assured the Committee that the Board does not intend to
proceed with these rates, irregardless of what happens in the economy. If
the economy changes, the decision to raise the rates could change.

When asked what would happen if the rule regarding the rate were
rejected, he thought the Board might take court action in order to keep the
PERSI system in line with code requirements.

When asked, Mr. Winkle said he saw no problem with the Board
setting the rates for more than one year at a time.

Mr. Winkle encouraged the members of the Committee consult with
the Attorney General themselves regarding their questions. He said the
Board can only change the rate after the actuarial evaluation made on the
market value of the portfolio as of June 30. That number won’t reach the
board until mid September.

When asked why have the rule come before the Committee if the
Committee doesn’t have the power to reject the rule, Mr. Winkle said it is
required by law and it gets the notice out to employers and employees so
they can plan and budget for the change in contributions.

Members of the Committee agreed to not vote on the rule until Rep.
Lake gets an opinion from the Attorney General. The Committee will vote
on it February 5, in a half-hour meeting before the CEC meeting at 2 in
the JFAC Room.


DATE: February 3, 2004
TIME: 1:30
PLACE: Room 416
MEMBERS: Vice Chairman McKague, Representatives Lake, Trail, Bradford, Bauer,
Garrett, Martinez, Ringo, Naccarato


Chairman Schaefer and Representative Crow
GUESTS: See Attached Sheet
Pending Rule
The meeting was called to order at 1:37 by Vice Chairman McKague.
She gave a brief review of the history of Pending Rule 15-0401-0301,
and said that this was the third time this rule had come before the
Committee. She said Committee Members could ask questions, but there
would be no presenters.
In answer to a question, Andrew Hanhardt said one of his objections
was that some jobs comparisons for salaries were only made within the
state, not with Oregon, Washington, or Montana where the jobs pay more.
People may leave the state to move for those better paying jobs.
In answer to questions Ann Heilman said the term “significant other”
in section 025 is not defined. If the rule is approved, she would have to
write significant guidelines. This rule is needed to warn managers to
watch out for relationships within the department that might result in
favoritism. They are trying to make managers responsible under the
Ethics in Government Act.

As to the failure of a performance evaluation being done, she said this
rule came from employee comments. The feeling was that with no
bonuses, some managers did not bother to do them, and the perception
was the employee only had a satisfactory rating. This rule is an effort to
default in favor of the employee if the performance evaluation is not done.
As to the consequences for a supervisor failing to do an evaluation, she
said that it depends upon the attitude of the agency management. In the
new performance evaluation system, doing the evaluations is a core item
for managers. These evaluations are state law.

MOTION Rep. Lake moved to approve Pending Rule 15-0401-0301 with the
exception section 025 on Nepotism, striking the lines that read:
“Similar relationships such as significant others, may also create a
conflict of interest and should be addressed by an agency conflict of
Rep. Martinez presented a substitute motion to reject the rules
and to recommend the establishment of an interim committee to
study these issues.
He said a lot of employee comments have been
received stating they were not allowed access, or weren’t notified about
meetings. He said he did not mean to imply that HR didn’t do a good job,
but employees feel they didn’t have a fair opportunity for input.
Rep. Lake spoke against the substitute motion as did Rep. Bradford.
Reps. Ringo and Trail spoke in favor of the substitute motion.

Rep. Garrett spoke in favor of the original motion. She said not often
do we see negotiated rule making to the extent we have seen it here.
She said in reviewing comments, she is struck most by the perception of
the way it will be administered and a lack of trust in supervisors. She said
we need to work to build a better element of trust with state employees.
There is a perception that supervisors are taking credit for employee
suggestions. Rewriting rules will not change this. The implementation of
the rules, not the rules need work. She said she hated to see all the hard
work thrown out.

By a vote of 5 to 4 the Substitute motion was defeated. Rep.
McKague, Lake, Bradford, Bauer, and Garret voted Nay, and Reps.
Trail, Martinez, Ringo, and Naccarato voted Aye.
ACTION By a vote of 5 to 4, the original Motion passed. (It was to approve
Pending Rule 15-0401-0301 with the exception section 025 on
Nepotism, striking the lines that read: “Similar relationships such as
significant others, may also create a conflict of interest and should
be addressed by an agency conflict of interest policy.”)
McKague, Lake, Bradford, Bauer, and Garret voted Aye, and Reps.
Trail, Martinez, Ringo, and Naccarato voted Nay.
In answer to what happens if the Senate rejects more rules than we
do, Dennis Stevenson said there will be a Substitute Concurrent
Dwight Johnson, of the Department of Labor, made a presentation on
the proposed merger of the Departments of Labor and Commerce. He
presented a packet of information which included the RS that had been
presented at the House State Affairs Committee that day.

The idea of merging the two departments came from the Governor.
They all feel that it makes a great deal of sense, and will maximize the
resources of both agencies. Similar mergers are being considered in
other states. Michigan is the most recent state to make this change.

The two departments have a long-standing relationship. The effective
date would be July 1. A bi-partisan committee will be formed that will also
include past directors to help plan the merge.

There will be no reduction of budget. The Department of Commerce
had their budget cut 17% in the last couple of years. The Department of
Labor receives most of their money from the federal government, and
their funding has been flat. They don’t want to reduce the budget, but use
the money they have been getting to get more done. In spite of these
economic hard times, the Governor’s Blue Ribbon Task Force suggested
over a million more should be given to this area.

They do not plan on relocating the current offices. The Department of
Labor has 24 offices throughout the state. With the merge, the
Department of Commerce will now have local offices. The Department of
Labor deals with the Bureau of Labor Statistics, the Department of
Commerce is Idaho’s “point of contact” for US Census information. In
such areas as business retention and expansion throughout the state, by
joining forces they will be able to get “more bang for the buck.”

In answer to questions from the Committee, Mr. Johnson said they
don’t see any area of conflict between the two departments at this time.

In answer to further questions, Karl Tueller, Deputy Director of the
Department of Commerce, spoke. They are thrilled with the Governor’s
support for an Office of Science and Technology, with $100,000 to get
things started. In 2001, jobs in this field comprised over 25% of Idaho’s
gross state product, and these wages are 92% higher than state average.
The Department of Commerce has moved 3 ½ of their full-time people to
this new office. Some of this $100,000 will be used for travel funds to
meet with other companies.

In the area of bio-tech, some states are spending up to 60 million
dollars to attract companies. Idaho can’t compete with those kinds of
spending, but we have incredible university sources, as well as INEEL,
and we will look for a niche.

In response to questions, Mr. Johnson, said The Department of
Commerce’s code is being folded into the Department of Labor because
their code is more complex, due to federal requirements. The only
position lost will be that one director’s position will be eliminated.


DATE: February 5, 2004
TIME: 1:32
PLACE: Room 416
MEMBERS: Chairman Schaefer, Vice Chairman McKague, Representatives Lake,
Trail, Bauer, Garrett, Martinez, Ringo, Naccarato


Representatives Crow and Bradford
GUESTS: Karl Malott, Alan Winkle, Dennis Stevenson
MINUTES Representative Ringo moved to approve the minutes for Feb 3 as
printed. By voice vote the motion passed.
MOTION Rep. Lake moved for adoption of Rule 59-0103-0301. He commented
we asked for the Attorney General’s opinion. We got it (See Attachment
1) and he is a happy camper. By voice vote the motion passed.
The Chairman commented that rules are a work in process. Changes are
a matter of course from year to year.


DATE: February 5, 2004
TIME: 2:01
MEMBERS: Co-Chairmen Representative Schaefer and Senator Andreason, Co-Vice-Chairmen Representative McKague and Senator Goedde,
Lake, Trail, Crow, Bradford, Bauer, Garrett, Martinez,
Ringo, Naccarato, Senators Cameron, Stegner, Davis, Compton, Noble,
Werk, Malepeai
GUESTS See attached sheet
MINUTES Rep. Lake moved the minutes of January 8 and 9 be approved as
printed. By voice vote the motion passed.
RS 13862

RS 13860C2

RS 13861C2

Jeff Youtz, Supervisor, Budget & Policy Analysis, LSO, gave a brief
review of the three RSs before the Committee. All three of the RSs are
concurrent resolutions providing funding for benefit cost increases, and a
permanent 2% salary increase for state employees.

RS 13862 does only this.

RS 13860C2 provides, in addition, a temporary 1% salary increase
contingent upon revenues exceeding the current year estimates (surplus
eliminator) of 5 million dollars.

RS 13861C2 provides, in addition, a temporary 2% salary increase
contingent upon revenues exceeding the current year estimate (surplus
eliminator) of 5 million dollars (a 1% increase), or up to 2% if the surplus
is up to 10 million dollars.

Mr. Youtz pointed out the wording on each RS, state “It is the policy of
the State of Idaho to provide a total compensation system that attracts,
retains, and recognizes state employees for their valuable service. The
foundation of this system is to pay competitive job market average
salaries and to reward performance with a merit based compensation

Mr. Youtz pointed out that non-general fund agencies will receive the
same increases as the general fund agencies.

He said that language states that salary savings are to be used for the
people in the agency before operational items. It also states clearly that
on-going salary savings should be used for a bonus, or one-time merit
awards. Agencies are not to get themselves into budget traps by using
temporary salary savings for permanent job expenditures.

If an agency finds a better way to do the work and the savings result in
permanent savings, the monies saved can be used for permanent
salaries. There are some job classifications that are way behind salaries
in the market place. This is not a one-size fits all solution, but it is the
best they could do.

Mr. Youtz continued that the Director of Human Resources and the
Division of Financial Management are to insure that all state agencies and
institutions are following the same rules and make decisions based on the
intent of this bill. The effective date is July 1, 2005­that is the date
employees would actually start receiving the additional money.

He further clarified that RS 13860C2 doesn’t speak to specifics as to
whether the money will be paid as a bonus or a one-time merit increase.
The 1% temporary increase only kicks in if there is a 5 million surplus.
With RS 13861C2, if there is 5 million the 1% kicks in. Anything over that
is pro-rated up to 2% or 10 million dollars. The money would come from
the current year surplus revenues after the bills are paid.
In response to questions, Mr. Youtz said that each percentage point of
our general fund budget is about 20 million. Ten million would be .5%, 5
million would be .25% of the budget. He couldn’t predict how the money
will turn out. He also said there is no plan to use the surplus funds for any
other reason.
MOTION Rep. Bauer moved that we recommend RS 13862 be introduced
for printing. Rep. Martinez seconded the motion.
Rep. Garrett moved that we recommend RS 13860C2 be
introduced for printing. Rep. Lake seconded the motion.
Garrett said as a state employee for 21 years she understands the value
of state employees to the state. She also understands from personal
experience and perspective what it is like during tough budget times. She
said our state employees’ efforts need to be recognized. Constituents in
our districts have lost their jobs, but our state employees are our
employees as well as constituents. Year after year we have heard how
our employees lag significantly behind market. It is time we make an
effort to make up that lag.
Sen. Andreason moved that we recommend RS 13861C2 be
introduced for printing. Rep. Naccarato seconded the motion.
Andreason said that the Division of Human Resources estimates the state
employees lag by 14.6 percent. Only 16% are at or above policy point. It
takes a state employee an average of 19 years to achieve policy point. In
the last two years, the Consumer Price Index has increased 6%, but state
employees’ salaries have not increased at all. Federal, counties, and
cities have given salary increases, but not the state. Leadership has
strongly advised us not to do anything to jeopardize the budget. This RS
will not stop the sunset clause on the sales tax increase from cutting in.
Our state employees have been loyal and this is our opportunity to show
them our approval without a risk to the budget.
In response to questions, Mr. Youtz said that JFAC (Joint Finance
Appropriations Committee) will design the bill following the intent of this
resolution if it passes. It wasn’t practical to put all the proposed details
into these RSs. He said this is an advisory tool, and it can be amended or
changed in the House and Senate respective committees if they so wish.
He said that JFAC cannot undermine the direction of this resolution.
Sen. Cameron, Co-chair of JFAC, said everybody appreciates the
level of commitment of state employees in these last two years. He and
his Co-Chair Representative Bell are grateful for employees across the
state who gave them suggestions for saving money. Every motion is a
positive vote for state employees. We all wish it could be more. We want
to attract and keep employees. He was concerned with RS 13861C2. At
this point in time, the sales tax increase goes off automatically. The
numbers for 2003 “are not pretty.” The State needs a substantial carry-over in reserve because of the sales tax increase sunsetting. “We need
every dime to balance the budget in 2006.” Because of this he said he
would support RS 13860C2.
Sen. Davis also spoke in support of RS 13860C2. He said that it is
most responsible to keep our eye focused on strong and healthy budget
practices. RS 13861C2 is more than Idaho can support.
Sen Andreason spoke again in support of RS 13861C2. He said in
order to get state employees up to a level agreed upon in statute would
require a 6.8% increase each year over a five-year period. Some
employees have received salary increases due to salary savings in their
agency; and others, whose agency had no money, received nothing. This
is not fair. He closed by saying this is our chance to put our money where
our heart is in relation to our state employees.
Rep. McKague said that the people of the state who pay all of our
salaries have been left out of this equation. Many of them have lost their
jobs with the down-turn in the economy. She said we have all suffered.
She said she didn’t think this was the time to raise state employees
salaries on a fairness issue.

RS 13861C2

On a Roll-call Vote, Amended Substitute Motion RS 13861C2 was
Voting Aye Were Senators Andreason, Werk, and Malepeai,
Representatives Trail, Martinez, Ringo, and Naccarato. Voting Nay were
Senators Goedde, Cameron, Stegner, Davis, Compton, and Noble,
Representatives Schaefer, McKague, Lake, Crow, Bradford, Bauer, and

RS 13860C2

On a Roll-call Vote, Substitute Motion RS 13860C2 was passed.
Voting Aye were Senators Andreason, Goedde, Cameron, Stegner,
Davis, Compton, Werk and Malepeai, Representatives Schaefer, Lake,
Trail, Bradford, Garrett, Martinez, Ringo, and Naccarato. Voting Nay were
Senator Noble, Representatives McKague, Crow, and Bauer.
Co-Chairman Schaefer commented that “we will go forward from
Co Chairman Andreason thanked everyone who has taken a part in
this whole process.
Co-Chairman Schaefer said we are not “out of the woods” yet. The
Legislature has tried to help with the rise in insurance costs. Some
employees have seen raises, others have not. This is a difficult balancing
act in an attempt to be fair to all employees. The action taken today is an
extremely good effort on the part of this body. He appreciated those who
had come, the state employees, the budget employees who have carried
the ball, and the Committee.
Co-Chairman Andreason closed with the comment that salary savings
are good for those who get it, but in his opinion it is the worst possible
criteria for agencies to give raises.


DATE: February 9, 2004
TIME: Representative Schaefer called the meeting to order at 1:35
PLACE: Room 416
MEMBERS: Chairman Schaefer, Vice Chairman McKague, Representatives Lake,
Trail, Crow, Bradford, Bauer, Garrett, Martinez, Ringo, Naccarato
GUESTS: See attached sheet
MINUTES Rep. Bradford moved to accept the minutes of Feb. 5 as written.
By voice vote the motion passed
Pending Rule

15.04.01 Sec.

Rep. Lake moved to reject Pending Rule 15.04.01, Section 25.
Rep. Bradford seconded. By voice vote the motion passed.
RS 13953 Rep. Lake presented RS 13953. This specifies that holiday pay is 8
hours exemption from work for which pay is received. In Committee
hearings, it was discovered that holiday pay was not consistent
throughout the state. The purpose is to treat everyone equally.
MOTION Rep. Crow moved to introduce RS 13953. By voice vote the
motion passed
RS 13952 Rep. Lake presented RS 13952. Ths bill provides for an annual
benefit survey. In Committee hearings, it was learned that benefit surveys
are only done when the Legislature requests it. This also moves the due
date of the salary survey to Dec 1, as well as setting the due date for the
benefit survey. Rep. Lake said the Department of Human Resources’s
report won’t be “hanging out there” for two months.
MOTION Rep. McKague moved to introduce RS 13952. By voice vote the
motion passed.
HB 545 Rep. Langford presented this bill which is the result of a tragic
incident August 23, 2001 on a road construction project on Interstate 15
near Malad and the Idaho border. A water trailer, improperly secured,
came loose and struck 8 employees, killing two. Several of the survivors
are permanently crippled and disabled. A large truck, with no place for
attaching a safety chain, was pulling the water trailer. Pictures presented
to the Committee showed equipment and connections that was corroded
and covered with cement. The employer, Multiple Concrete Enterprises,
is an out-of-state employer. As a result of the accident, OSHA issued a
number of “Serious” citations and one “Willful” citation, and fined the
company $98,000. The Idaho State Patrol also issued 16 citations.
Under Idaho law, that employer cannot be held responsible for monetary
damages by the employees. (See attachment 1)
Sen. Ingram spoke in support of this bill. This bill is for those
employers who repeatedly violate the rules. Safety pays in a business, he
has seen this from personal experience. This bill says that if the employer
is irresponsible, the employee can sue the employer. The state is
“picking up the tab” for these irresponsible employers.

In response to questions, Sen. Ingram said that “gross negligence” is
defined in code and the law is pretty tight. He said they did not meet with
the Insurance Commission, but will do so if necessary and are open to
amendments to make the bill better. He also said this bill is not talking
about a felony, but a “pocket book” issue.

Bill Von Tagen, of the Attorney General’s office spoke. He said his
office takes no position on this bill. He said “gross negligence” is not
defined in statute as far as he knows, but rather in court. It is a fairly high
standard. Gross negligence falls between willful negligence and ordinary
negligence. When asked for an example, he said closing your fist and
hitting someone was willful negligence­one intended to do the action.
When asked if “gross negligence’ should be defined in law, he said he
didn’t know if the legislature could do a better job of defining it than the
courts have done.
Speaker Newcomb spoke in support of the bill. He said the employer
was grossly negligent and that whole families have been damaged by the
injury or death of one member. He thought this incident was beyond
criminal negligence. He said the law should have been changed before
Former Senator Ipson spoke in support of the bill. One of those killed
was his nephew. He mentioned that the benefits for the widow are 45%
of the average state wage, and an additional 5% for each child for 9 ½
years only, even if the child is not grown.
Jedd Jones, representing his father, Myron Jones, a former
representative spoke. For medical reasons his father couldn’t come. He
read a statement from his father. (Attachment 2). The statement urged
the Committee to support the proposed amendment to Idaho Code
section 72-209. Myron Jones personally knows many of the people
involved in this situation and hopes to prevent others from suffering the
“mourning and financial stress this terrible tragedy has caused.” He also
believed that by removing the “shield of virtual immunity, employers will
be motivated to increase efforts to improve and provide safer working
conditions.” He felt this would not create an unreasonable burden or duty
on employers.
John Greenfield, a labor lawyer, spoke. He said the concept looks
good at “first blush.” However, the 1971 Idaho Workman’s Compensation
Act was a carefully constructed no-fault system. It was born of necessity
in industrialized nations. It was called the great compromise. It was
difficult for workers to prove employer’s fault. Labor and industry got
together and decided this bill. Labor wanted immediate medical care for
the injured worker, industry wanted injured workers taken care of without
bankrupting the company. Labor gave up “pain and suffering” and full
economic loss. Industry gave up finding out who was at fault. With gross
negligence, one is asking a jury to award for pain and suffering. One must
look at this from beyond one case. “Exclusive remedy” is an important,
fundamental part of Workman’s Compensation. The system we have in
place now, on the whole, shouldn’t be tampered with. He is sorry that this
Utah employer is allowed to operate in Idaho.

In questioning, he agreed with Bill Von Tagen that a jury has to decide
whether the act is so negligent that it rises to the level of gross
negligence. He said the idea of Worker’s Compensation was to take
negligence out of the equation. He said he hasn’t found similar laws in
any other state.

Mike Williams, who was disabled by the accident, spoke. He said this
company cannot work in Oregon and Washington because they can’t
pass inspections. He said this company sends their new equipment into
California, and uses their old equipment in Idaho. He gave examples of
individuals driving trucks for this company who did not have a Commercial
Driver’s License.

In response to questions, he said that other states have higher
equipment standards. OSHA told him at the time they would take action,
but didn’t. He gave examples of unsafe conditions on the site a year later.
He said the company has nothing to lose by continuing to act this way,
they have no accountability. He said the standards for safety are much
lower in Idaho. He was employed by Multiple Concrete, he is now
disabled and unemployed. He said IDOT (Idaho Department of
Transportation) was inspecting the quality of work.

Chairman Schaefer, commented that the issue is the no-fault system.
This law is attempting to change the system. The Committee has been
educated in the past on this subject. OSHA isn’t a lot of help in these
cases. They are good at fining people, but not much else.
Mark Balzer, a health physicist from Oneida County spoke in support
of the bill. He has been involved in industry for 25 years, and industrial
safety for 8 years. As it is today, an employer “has to hold a gun to an
employee’s head and pull the trigger before he is held liable.” There were
many safety issues in this case. The vehicles and equipment did not
have the required safety equipment to perform the job. There was no
place to attach a safety chain to the truck. The chains on the trailer, lights
and brake controls were corroded and non-functional. He referred to the
pictures and packet of information. (See attachment 1) Also attached are
31 OSHA violations. ISP found 16 violations. OSHA’s report shows no
attempt to train employees or maintain equipment. Considering the
actions of the employer, this was not an accident. If nothing is done, this
type of behavior will continue. Gross negligence is a very high standard.

In questioning, Mr. Balzer said he appreciates the dilemma of
changing the no-fault law. In response to the comment that the issue is
safety, not workman’s compensation, Mr. Balzer said either the employer,
or the State of Idaho was negligent. The employees were the victims of
one or the other.

In response to further questions, he said the employer was “playing the
odds.” The employer knew the state was lax in enforcement.

Teresa Molitor, Vice President of Resources for IACI (Idaho
Association of Commerce and Industry) spoke in opposition to the bill.
She presented a letter to the Committee. (See attachment 3). She said
in general, HB 545 is opposed by IACI because “it would turn Workers’
Compensation on its head.” Discussing safety issues is “muddying the
Lynn Isaacson, of Weiser, spoke in support of the bill. One of the
victims was his nephew. He was in construction for 34 years and
understands the dilemma. Some contractors think safety decreases the
profits. Some are unscrupulous. Idaho State hasn’t done anything about
contractors like the one discussed, so the courts must provide some
remedy. Some of these people will never work again. 9 ½ years of
compensation is not enough. What will these victims in their 20s do? He
said the situation is heart wrenching.
John Barrett, an attorney, spoke in opposition to the bill. Several
years ago, he presented a history of Worker’s Compensation to the
Committee. He started practicing in 1959 and has worked in personal
injury and workers’ compensation. He gave a brief history of Workers’
Compensation which started in Germany, and then moved to England,
and the US. He is aware of no place that has any provision for gross
negligence. He said the benefits go up depending upon the average state
wage, and the benefits are set by the Legislature.

Mr. Barrett said there are three exceptions to the current no-fault
system. 1) If the injury or death is the direct action of the employer. 2) If
the employee’s injury was caused by himself or his intention to hurt
others. 3) If the employee was intoxicated, he gets medical, but not
financial benefits.

Mr. Barrett said from 1971 to 1998, there was a statute that provided if
an employee did not follow the safety rules or use the provided safety
equipment, his compensation was forfeited. After a case, he proposed
this section be repealed and it was. He said if this legislation passes,
then there will also be legislation that if the employee is grossly negligent,
he will receive no benefits. It will be only fair. There will be a flood of civil
suits. Also in this case, maybe the insurance carrier could sue the
employer for the benefits it had to pay.

In closing he said he has sympathy for the families and individuals who
suffered, but this bill is not the solution. The solution is to find a way to
police these contractors before they come into Idaho. We need to review
the safety issues in place in this state.

In response to questions. Mr. Barrett said death benefits are 45% of
the state average wage for 9 ½ years for the surviving spouse. For each
additional child, a 10% benefit is added up to 65% of state average wage.
If the spouse remarries before the 9 ½ years are up, there is a lump sum
payment. At the end of 500 weeks, if there are children who haven’t
reached the age of 18 the benefits will continue. In the case of personal
disability, the income and medical benefits last for a life time.

In response to questions, Mr. Barrett said that damages awarded
would fall under last year’s tort reform. He said the Exclusive Remedy
feature only covers an employer. Third parties could be sued, even the
State of Idaho, if it was at fault. He said Idaho’s system is one of the
simplest and most effective in the United States.

Kirk Corbridge, of Malad, Idaho spoke in support of the bill. He had
family and friends involved in the accident. They had a very difficult time
getting a lawyer to take the case. He said 12 other states who have faced
the same problems have redefined the criteria. The community of Malad
felt there had been some serious violations of safety and that the system
had failed. This accident has produced a mind set­”It’s not my fault, I am
not accountable.”

OSHA rushed into investigate, and promised action. Six months after
the accident, the earliest records became public, he called OSHA and
was told it wasn’t in “their jurisdiction.”

In questioning, he said he did not have the information on the other 12
states, with him, but promised to get it to the Committee.

Rula Thomas, who lost her son in the incident, was unable to
complete her testimony, but submitted written testimony. (See
Attachment 3) In it she stated that she believes the accident would never
have happened if current regulations had been enforced. She also said
nothing can undo the past, but she would hope this bill would prevent this
tragedy from being repeated in other groups of families and friends.
Phil Barber, an attorney, spoke against the bill. In one period of time,
he did a lot of appeals using gross negligence. He said it is very difficult
to define or prove. One can find court cases on either side.

He also said that Exclusive Remedy is a fundamental premise nation-wide. If we move to open it up, both sides will use an accusation or
defense of gross negligence. It will become hard or expensive to
underwrite. If there are problems with OSHA or IDT, they need to be
addressed. “This is like a hand grenade in the wrong place.”

In questioning, he promised to do more research and get back to the

Alan Gardner, a Worker’s Compensation attorney for 36 years, spoke
against the bill. He also serves on the Workers Compensation Committee
with Mr. Greenfield and Mr. Barrett. He said it is admirable that a
community has rallied around these individuals. However, he feels it is
wrong to make a decision to throw out a system because of one tragic
event. He said there are a lot of employers that do not have coverage. He
said the solution is to look into why this employer was allowed to operate
under these circumstances.

He expressed a concern if we interject negligence into this issue, the
result will be much more litigation. A plaintiff’s attorney would have to
sue, or he would be derelict in his duties. Currently, the “delivery system”
of benefits is much quicker. If there is contested liability, there is a time
lag, which could put the delivery system on hold. If there is gross
negligence, the state wouldn’t be liable, so they might wait for settlement
of a lawsuit. “Sure and certain delivery of benefits” would not happen.

MOTION: Rep. Lake moved to hold HB 545 to time certain two weeks from
today. Rep. Trail seconded. By voice vote the motion passed.


DATE: February 13, 2004
TIME: The meeting was called to order at 12:08 by Chairman Schaefer
PLACE: Room 416
MEMBERS: Chairman Schaefer, Vice Chairman McKague, Representatives Trail,
Crow, Bradford, Bauer, Garrett, Martinez, Ringo, Naccarato


Rep. Lake
GUESTS: Rep. Bayer
MINUTES Rep. Garrett moved to approve the minutes of February 9, 2004 as
written. By voice vote the motion passed.
RS 14061C1

RS 14048

RS 14075

Rep. Bradford moved to introduce RS 14061C1, RS 14048, and RS
14075 for printing. By voice vote the motion passed.
ADJOURN: 12:15


DATE: February 17, 2004
TIME: Chairman Schaefer called the meeting to order at 2:21.
PLACE: Room 416
MEMBERS: Chairman Schaefer, Vice Chairman McKague, Representatives Lake,
Trail, Crow, Bradford, Bauer, Garrett, Martinez, Ringo, Naccarato
MINUTES Rep. Crow moved to approve the Committee Minutes of Feb. 13 and
the CEC (Change in Employee Compensation) Committee Minutes of
. 9. By voice vote the motion passed.
GUESTS: See Attached Sheet
HB 638 Rep. Lake presented HB 638 which requires an annual benefit survey
in addition to the already required annual salary survey. The due date for
this survey report to the Governor is moved from October 1 to December
This also gives the Department of Human Resources a chance to provide
the Legislature with more “up-to-date” information.
MOTION: Rep. Crow moved to send HB 638 to the floor with a do pass.
Ann Heilman, Director of the Division of Human Resources answered
questions. She said they will be able to accomplish the benefit survey
with their current resources since they know about the benefit survey “up
front.” She believes the “product” will be helpful. If something more
detailed were to be requested, it might cost more. An additional
advantage to the Dec. 1 due date is there is a salary survey of other
states that isn’t finished until mid October. Now they will be able to
include that information in the annual report.
ACTION By voice vote HB 638 was sent to the floor with a do pass.
HB 639 Rep. Lake presented HB 639. He said basically this is a three word
change stating that holiday pay is 8 hours exemption from work for which
pay is received. The Department of Labor has suggested this may cause
a problem with part-time employees. He is agreeable to an amendment
to correct that possible problem.

He said there is a problem in that different agencies handle holiday
pay in different ways. Some get paid for 8 hours, some get paid for 10
hours. This is an attempt to bring uniformity to the way state employees
are treated. It is not right to treat one class of employees different from

Lynn Evanson, the Human Resource Employee Relations Manager at
the Department of Corrections in Boise spoke, representing himself. (He
said the Department of Corrections maintains a neutral policy on this bill.)
He said he believes there is fairness now, and this bill would create
unfairness. He said that those who work four-ten hour shifts only get 10
days of paid vacation a year, because vacation is earned 8 hours per
month (under five years of service). (Eight-hour a day employees get 12
days of vacation leave a year). Receiving ten hours of pay for a holiday,
helps to make up for the two less vacation days earned a year.

If someone working a ten-hour shift only received eight hours of pay,
those missing two hours would need to be made up to get the same pay
check, but it is almost impossible to schedule someone in for two hours.
This is especially true in the Department of Corrections. He said this law
favors those who work eight-hour shifts over those who work ten-hour
shifts. He pointed out that most of the ten-hour shifts are at the direction
of the agency, not at the choice of the employee.

Reference was made to a letter received by Dan Charboneau,
Director of the Idaho State Police (ISP) opposing the bill. In his letter he
said that defining a paid holiday in terms of eight hours would be
detrimental to ISP Troopers and others working ten-hour shifts. He said
some employees take two hours of vacation to make up for the missing
two hours of pay. He said that this bill will adversely affect Trooper
morale and cause serious scheduling difficulties.
Ann Heilman, Director of the Division of Human Resources,
responded to a request for background and information from the
Committee. She said there is “pretty significant inequity” in holiday pay
among state employees. Attempts have been made to address this issue,
but a consensus cannot be reached, so the proposed rule has been
withdrawn before presentation to the Legislature several times. She has
looked at other states’ laws and has not found a good solution. She
therefore supports the eight hour holiday pay.

She said that permission is given in code for people who work ten-hour
days to be given ten hours of holiday pay if all members of the agency
work ten hour days. However another section of code states that all state
employees with the same job classification must receive the same
benefits. An administrative assistant at ISP can’t legally receive ten hours
of vacation pay while an administrative assistant at another agency
receives only eight hours of pay for a holiday.

Part-time employees are usually covered by rules, not code, she said,
so she doesn’t see a need for an amendment covering part-time

She also said that taking two hours of vacation to fill out to the ten
hours of pay is done. Troopers could receive 10 hours of pay for a
holiday as they are in a classification by themselves, but not the
administrative assistants who work at ISP.

Bob Wells, representing the Idaho State Police Association, spoke.
He presented a proposed amendment to the bill. In response to
questions, he agreed that with his amendment, those working four-ten
hour shifts would get 100 hours of holiday pay a year, and those working
eight hour days would receive 80 hours of holiday pay.
MOTION Rep. Naccarato moved to hold HB 639 for two Legislative Days,
until Thursday, February 19, 2004.
Steve Kenyon, an attorney for the State Controller’s office spoke. He
said they need a solution in code. What is happening now does not work.
They did a survey of all the state employees. Vacation pay varied from 80
to 144 hours of holiday pay a year. Some employees are scheduled to
work 18 hours, so they receive 18 hours of pay. All employees must be
treated the same. The Controller’s Office won’t take a position whether
holiday pay is 8 hours or the scheduled shift. The Connecticut Supreme
Court ruled on a similar issue a few weeks ago. Because it wasn’t in
code, the court said that whatever was scheduled during the 24-hour
period of the holiday was the number of hours the employee should be
paid for. Only holiday pay is counted by the day. Vacation and sick leave
is accrued by the hour. Making holiday pay a number of hours, will make
it consistent across the board for all state employees. He closed by
saying this bill “needs to be done.”

When questioned, he said the holiday pay currently varies from state
agency to state agency for the same job classification. State employees
are unhappy that some are getting 120 hours, or more, paid holiday time
a year, while other get only 80. They prefer the language stating the
“regularly scheduled shift” or “8 hours.” The term that they be paid “as if
they actually planned to work” is not good enough. The problem is that
some agencies work varying shifts, so what would have been the actually
scheduled shift that day is an unknown.

ACTION By voice vote the motion passed to hold HB 639 for two Legislative
ADJOURN: The meeting was adjourned at 3:27


DATE: February 19, 2004
TIME: Chairman Schaefer called the meeting to order at 1:32.
PLACE: Room 416
MEMBERS: Chairman Schaefer, Vice Chairman McKague, Representatives Lake,
Trail, Crow, Bradford, Garrett, Martinez, Ringo, Naccarato


Representative Bauer
GUESTS: See attached sheet
Chairman Schaefer introduced our page for the second part of the
session, Arielle Gorin. She is from Eagle and is home schooled.
MINUTES Rep. Ringo moved to approve the minutes as printed. By voice
vote, the motion passed.
HB 639 Rep. Lake presented HB 639. (It had been held for a time certain until
today.) This bill defines holiday pay as 8 hours of pay. The amendment
proposed at the last meeting was rejected. The Department of Labor and
Ann Heilman said part-time employees can be handled in rules as has
been done in the past.

Ann Heilman, Director of the Department of Human Resources
confirmed that indeed rules can handle part-time employees, and that
other sections of code have been clarified by rule that dealt with part-time

MOTION Rep. Bradford moved to send HB 639 to the floor with a do pass.
Rep. Naccarato said he has struggled with this issue and is still
Rep. Ringo offered a substitute motion to hold the bill for further
Rep. Lake said we have struggled with this issue for three years. We
are a policy-making body, and it is time to “cross the bridge.” There is no
justification for treating employees differently, regardless of the type of
work they do, or the hours they work.

Chairman Schaefer said he was comfortable trying this change.

ACTION By voice vote, the substitute motion failed.
ACTION By a roll call vote of 6 to 4, HB 639 was sent to the floor with a do
pass. Those voting Aye were Reps. Schaefer, McKague, Lake, Crow,
Bradford, and Garrett. Those voting Nay were Reps. Trail, Martinez,
Ringo, and Naccarato.
HCR 46 Rep. Lake moved that we send HCR 46 to the floor with a do pass.
He commented that we have dealt with this issue a number of times and
he saw no reason for further discussion.
ACTION By voice vote, the Committee voted to send HCR 46 to the floor
with a do pass.
HCR 47 Rep. Garrett presented HCR 47. She said this is the legislation to
implement the CEC (Change in Employee Compensation) Committee’s
recommendation that we voted on a few weeks ago.

Rep. Garrett stated that she was a state employee for 21 years in
another state. She saw the good times and the bad times, as all states
have them. From her experience she understands the value of state
employees in carrying out our state missions. She said that she
understands that in tough times benefits are diminished and work load
increases. She said our state employees have been with us every step of
the way.

The CEC Committee felt, in addition to the 2% Governor’s pay
increase, the state employees should be granted a 1% increase,
dependent upon sufficient revenues being received. Although others in
our state have had a difficult time financially, Rep. Garrett said that state
employees are “our employees” and “we need to do the best we can for

Rep. Garrett pointed out that page 2 of the resolution gives direction
as to how the Legislature would like to see the agencies carry out their
salary savings. One time salary savings should be used for one-time
bonuses. Long term savings should be applied to those groups with
significant market pay lag. She said the Committee hopes to work
towards making up some areas where current pay lags considerably
behind the market.

In response to questions, Rep. Garret said that by statute, pay raises
must be based on merit. Not all positions lag behind market as
significantly as others. Some employees have to quit to get rehired at a
higher salary. By law, the Division of Human Resources and Financial
Management has oversight as to how the money is disbursed.

In response to other comments, Chairman Schaefer said that he and
Rep. Garrett were concerned that the pay increases would go mostly to
the top levels of management. In order to prevent this, direction has been
given to the Division of Human Resources to insure this doesn’t happen.

In response to further comments, Rep. Garrett said that it was the
general consensus that this was the most state employees could be given
in a bill that still had a chance to pass.

MOTION Rep. Trail moved to send HCR 47 to the floor with a do pass.
Chairman Schaefer commented that the two terms to describe this
legislation are “doable” and “consensus.”
ACTION By voice vote, the Committee voted to send HCR 47 to the floor
with a do pass. Rep. McKague voted Nay.
HB 699 Rep. Bayer presented HB 699. This bill allows people working in the
research field for a university, college, community college or professional-technical center in a research position funded by federal or private grant
funds to be fully vested in PERSI at 5 months of service. Elected officials
are vested after five months. He said employees under these grants
sometimes have to participate in PERSI while working, but they aren’t
around long enough to become vested. Some people have to leave their
chosen fields in order to get vested. The matching contributions for the
employers part go into PERSI and stay there. When the employee’s job
ends, he or she only gets the money personally contributed, not the
matching funds. Federal and private grant monies are then funding

In questioning, Rep. Bayer said that the main problem is with the
University of Idaho. Employees are “classified” and so their involvement
in PERSI is mandated. Some colleges and universities in the state give
this type of employee the opportunity to use an ORP (Optional Retirement
Plan), like a 401K.

In further questioning, Rep. Bayer said that the original plan was to
take these employees out of PERSI, but it was going to take too long to
get the consensus necessary to pass a bill this year. He hopes that will
be done in the future, but this bill will help those currently being paid by
grants and in PERSI.

Alan Winkle, Director of PERSI, spoke. He said the Legislature is the
“plan sponsor” of the PERSI plan. Those who can be vested in 5 months
under current law are elected officials and those working for elected
officials. These people are not classified or on the merit system for pay
raises. As it is now, some of these people on grants could be in a
classified position or on the merit system.

Secondly, Mr. Winkle said that vesting does not improve the value of
the benefit; it simply gives individuals the benefit of a life-time annuity
once they reach the minimum age. He said if people invested the money
returned to them by PERSI, they could very well get a higher return. If
they are rehired, they can return the money and buy back the years of
service. Continuity is provided that way.

Mr. Winkle gave the example of someone having $2,000 in the system
and being vested. At age 65, this person would receive a monthly check
of about $6.56 as long as one lived.

If people quit or are “cashed out”, they only get what they put in, plus
interest. They do not get the employer’s part of the contribution.

Rep. Bayer responded to questions as to how many individuals might
be affected. He said the number is very small, “only a handful.”

When asked to respond to the same questions, Alan Winkle said he
doesn’t know. That is part of the problem. There is no classification for
grant money researchers. It would take a case by case study to decide if
an employee was vested. This is “uncharted ground” as far as he knows.
He said PERSI knows who contributes, but not who pays the salaries­the
grant or the university.

Mr. Winkle also said that there are people at Health & Welfare and the
Labor Department who are paid from federal funds. They would not be
covered under this bill. He said this bill could be a “slippery slope” at this

Jane Buser, Human Resources Director for BSU, spoke. She said
that at Boise State, research assistants and those like them are in an
optional program.

Ms. Buser said she was also speaking for her colleague who is the
Human Resources Director at the U of I. Their employees are not under
the Department of Human Resources control. She said there are 150
employees this bill might affect. It would take a great amount of research
to determine who is vested and who isn’t. They do not have the highly
skilled and complicated system that would be required to figure this out.
Records are not kept after three years, so this adds to the problem.

Ms. Buser said it would be better to handle this situation
administratively rather than through legislation.

MOTION Rep Trail moved that we send HR 699 to the floor with a do pass.
Rep. Lake offered a substitute motion to hold HB 699 in
ACTION By voice vote, the substitute motion to hold HB 699 in Committee
ADJOURN: The meeting was adjourned at 2:37


DATE: February 23, 2004
TIME: Chairman Schaefer called the meeting to order at 3:04.
PLACE: Room 416.
MEMBERS: Chairman Schaefer, Vice Chairman McKague, Representatives Lake,
Trail, Crow, Bradford, Bauer, Garrett, Martinez, Ringo, Naccarato
GUESTS: See attached sheet
MINUTES Rep. Ringo moved to approve the minutes of February 19. By
voice vote the motion passed
Chairman Schaefer referred to a letter he had written to Ann Heilman,
Director of the Division of Human Resources requesting information for
next year. He said it should help the Committee do its job. Copies were
given to each representative. (See Attachment A)
S 1226 Dwight Johnson, Administrator of Public Affairs Division, of the Idaho
Department of Labor, presented S 1226. This bill came from an interim
committee made up of members from industry, labor, and the Legislature,
among others. He explained that the first three sections were
housekeeping items, putting back an inadvertent deletion that had
occurred in 1998, adding wording to distinguish between Idaho and
federal trust funds, and clarifying details about federal appropriations.
(See Attachment B)

The main point issue of this legislation is SUTA (State Unemployment
Tax Act) Dumping. An employer’s “experience rating” determines his
unemployment insurance rate tax. If an employer has paid more taxes to
the Unemployment Fund than has been drawn by former employees, he
has a positive number. If he has paid less than has been drawn, he has a
negative number.

In order to get a better rate, businesses are transferring employees
from one entity with a bad rate to another with a better rate. Under
current law, this is legal in Idaho and in most states. Four cases in Idaho
have cost the trust fund over $400,000. It is costing billions of dollars
nationally. Federal legislation is pending to outlaw this, but the federal
government wants the states to stop this practice now. There is an
emergency clause to put it into effect as soon as possible.

To answer questions, Mark Whitworth, Employer Account
Specialists, spoke. He said the last paragraph of the bill is new language
to “pull all of this together.”

MOTION Rep. Trail moved to send S 1226 to the floor with a do pass. By
voice vote, the motion passed.
HB 545 HB 545 was held from February 9 for time certain February 23.

Chairman Schaefer asked Rep. Lake if he had received certain
information since February 9. Rep. Lake said no.

not received any information that convinced him other states had allowed
for this type of action.

Rep. Langford presented her closing comments. To give a clear
definition of gross negligence, she presented a handout from the Deputy
Attorney General giving examples of gross negligence as defined in Idaho
Supreme Court decisions. (See Attachment 1)

To show there have been other such incidents in Idaho, she presented
handouts and mentioned accidents in Inkham and Soda Springs where
there were fatalities. (See Attachment 2a & 2b) There were serious
OSHA violations and Idaho violations at each site. She mentioned one
other where an employee suffered brain damage when he was asked to
clean a tank with cyanide gas in it.

Rep. Langford stated that the accident in Malad was unique in that two
died and six were injured.

Her third handout (See Attachment 3a and 3b) gave examples in which
employees were allowed to recover damages from the employer.
Although the term “gross negligence” wasn’t used in these particular
cases, except for the one in Texas, she said the Idaho Supreme Court
definition of “gross negligence” would fit in these cases. Attachment 3a,
from the Idaho Attorney General, was a listing of the out-of-state cases
and did not contain an opinion. However, Rep. Langford said that the
case in Texas was the best example of the use of the term “gross
negligence”. Details of the case in New Mexico were presented in
Attachment 3c.

Rep. Langford asked if Idaho needed more strict rules. To answer,
she presented a handout of an Idaho Transportation Document
concerning the contract with Multiple Concrete Enterprises, the firm
responsible for the incident in Malad. She said this demonstrates, that the
rules are there, but are not enforced. (See Attachment 4)

She closed with statement that current rules encourage some firms to
be lax in safety issues as they know they can’t be sued. She said that
only those would vote against the bill who were comfortable leaving a
widow with two children to raise on only $1000 a month for the next ten
years, or an employee so ill he was unable to stay until his turn to testify
February 9, or one left with one leg shorter than the other. She said both
injured employees who testified will live with the terrible consequences of
their injuries the rest of their lives.

Rep. Langford said adding “gross negligence won’t lead to a flood of
law suits. She asked the Committee to send HB 545 to the floor with a do

In answer to questions from the Committee, Rep. Langford said that
when there isn’t adequate money, there aren’t adequate inspections.

MOTION Rep. Trail moved to send HB 545 to the floor with a do pass.
Rep. Lake said he was reluctant to turn three-fourths of a century of
workers compensation law upside down. Rep. Lake moved to hold HB
545 in Committee.
ACTION By voice vote, the Substitute Motion to hold HB 545 in Committee
passed, with Reps. Trail and Bradford voting nay.
Chairman Schaefer said he was very disappointed in the telephone
response he received from the Idaho Department of Transportation. The
Department only claimed responsibility for inspecting large items, not
small things such as checking that the safety chain was attached every
time a truck pulled a trailer.
HB 726 Rep. Harwood presented HB 726. He referred to a situation that
came up in his district. Both the husband and wife were employed in
Idaho schools and retired with a pension. At the time of retirement, the
spouse was made the contingent annuitant of the policy for both of them.
Subsequently, they divorced. Although the court decreed as part of its
settlement that they each take their own retirement, they discovered this
was impossible. At the time of retirement, the contingent annuitant is “set
it stone.”

Rep. Harwood said this bill allows the rights to be waived during a
divorce with a court decree only if specific requirements are met, including
specific directions in a court decree, and proper identification of those
involved, along with a signed waiver.

There was one mistake in the bill. On page 5, Line 18, “under option
4” was inadvertently crossed out. An amendment restoring that phrase
needs to be added to this bill.

In response to questions, Rep. Harwood guessed this might have
affected 40 couples in the past. How many this would affect in the future
is unknown, but probably only a few.

Allan Winkle, Director of Idaho PERSI, answered questions. In the
case of a retiree who gets divorced, this bill allows the spouse–if he or
she is the contingent annuitant­to waive his or her rights. This will affect
the amount the retiree receives, in that the payment goes to the amount of
the regular retirement pay once the spouse is no longer the contingent
annuitant. Should the retiree remarry, a new contingent annuitant may be
added, and the monthly payments would be recalculated.

MOTION Rep. Martinez moved to send HB 726 to the Amending Order to
correct the cross-out. By voice vote the motion passed.
SCR 124 Sen. Goedde presented SCR 124. The Senate Commerce and
Human Resources Committee rejected all the rules from the Division of
Human Resources. This resolution is the result of that vote.
MOTION Rep Garrett moved to hold SCR 124 in Committee. She said much
work had been done by the Division of Human Resources. With the letter
written by Chairman Schaefer to help monitor the process, she felt this bill
was unnecessary.
ACTION By voice vote the motion to hold SCR 124 in Committee passed,
with Reps. Trail, Naccarato, Ringo and Martinez voting nay.
ADJOURN: The meeting was adjourned at 4:20


DATE: February 25, 2004
TIME: 2:53
PLACE: Room 416
MEMBERS: Chairman Schaefer, Vice Chairman McKague, Representatives Lake,
Crow, Bradford, Bauer, Garrett, Martinez, Ringo, Naccarato


Representative Trail
GUESTS: Diana Jansen, Dona VanTrease, Amanda Brown, & Vicki Patterson
MINUTES: Rep. Crow moved to approve the minutes of February 23 as
printed. By voice vote, the motion passed.
S 1276: Rep. Crow moved to send S 1276 to the Business Committee. By
voice vote, the motion passed.
H 595 Rep. Ringo presented H 595. She said this legislation deals with the
Rules from the Division of Human Resources, which our Committee
approved and the Senate Committee rejected. Rep. Ringo said that this
bill provides an opportunity for direct communication between employees
and employers throughout the various agencies of the state. She
commended the efforts of Ms. Heilman in writing the rules this year.
However, she said a consensus is needed. A number of employees and
supervisors have concerns they felt were not addressed. Some were not
given a reasonable opportunity for input.

Rep. Ringo was asked why there is no fiscal impact to the general
fund. She said the people taking part in this new committee would be
donating their time. In response to further comments, she said it is not
her intent to redo the entire set of rules, but to continue a process
enabling Ms. Heilman and her representatives to hear from public
employees as to how the rules are working out and the further changes
that need to be made.

Amanda Brown, of the SEIU (Service Employees International
Union), spoke in favor of the bill. She said her union represents 800 city,
county and state employees. There were 55 pages of rules, a huge
amount, and enough time was not given to these rules. She said
Legislative Services expressed concern over some of these rules. She
didn’t know if this information was widely distributed.

In response to questions, Ms. Brown said the vast majority of the
union’s members are state employees. She said more responded by e-mail than attended hearings on the rules, but she didn’t have the

Vicki Patterson, representing the Idaho Public Employees Association
(IPEA), spoke in favor of the bill. She said she had the same concerns as
Ms. Brown. A lot of the employees couldn’t get to the hearings. Some
attended the hearings, but nothing changed in the rules. Many problems
were still unresolved. She felt that the committee to be created by this bill
could do a better job of following-up. She said she believed that there
were other individuals who, although not listed in the bill, should be part of
the new committee. She said these rules affected every one of the state’s
19,000 employees. She said this is, in effect, a problem solving
committee for the problems that arise from these rules. She closed with
the statement that these are people and individuals, not an industry.
At Chairman Schaefer’s request, Ann Heilman, Director of the
Division of Human Resources, spoke. She gave a review of the thorough
process her Division used in formulating the rules. In June, a rough draft
was sent to 220 individuals. On July 14, an open letter was sent to all
agency directors describing the informal comment period that followed.
IDPA and SEIU were asked to notify their members. On September 10, a
summary showing the changes in a question and answer format was put
on the web. October 1, the rules went into the formal process. The
Division then held 24 hearings, 17 of which were open to the public.
(Some were held in a specific agency.) Meetings were rather sparsely
attended, which did give those that attended the opportunity for a lot of
dialogue and explanation. These sessions qualified as negotiated rule
making. Meeting were held at various times of the day, including two in
the evening.

When asked about the next step, Ms. Heilman said that her Division
will make temporary rules to take care of any laws passed during this
session. The rules are a reflection of a continuing process. She has a
task force to study performance evaluations, and do a random check to
see if the system is working.

She said this process was very expensive in money and time. The
Division of Human Resources tried to get the employees involved, but
some agencies and managers did not encourage participation. She said
she doesn’t know if she would do this again because of the cost, and the
complaints that surfaced afterwards.

Chairman Schaefer said he was impressed by the lengths to which
Ms. Heilman went. He said he had never encountered this degree of
effort by an agency before.
MOTION Rep. Martinez moved to send H 595 to the floor with a do pass.
He said Ms. Heilman did a great deal of work, but some agencies did
block the access for their employees. He said he felt it would be difficult
for this new committee, but good would come out of it over the years.


Rep. Crow made a substitute motion to hold H 595 in Committee.
She said every effort was made for access. She said “one can micro-manage to the end of time, and not every single soul will feel heard.” She
said Ms. Heilman went the extra mile, yet some are still unhappy.
Rep. Ringo thanked the Committee and the Chairman for hearing the
bill and giving her and employee representatives a chance to discuss it.
She said she was not here to criticize the process. She said this new

committee would make the rules a work-in-process and allow for a follow-up.

ACTION By roll call vote, the substitute motion to hold H 595 in Committee
passed. Reps. Schaefer, McKague, Lake, Crow, Bradford, Bauer,
and Garrett voted Aye. Reps. Martinez, Ringo, and Naccarato voted
Chairman Schaefer commented that he does not feel it is appropriate
to sit on a bill. He thinks we are the Committee to hear the rules and
doesn’t want to turn this over to someone else. He said he was
impressed by the lengths the Human Resources Director has taken to
involve the state employees.
ADJOURN: The meeting was adjourned at 3:25


DATE: March 1, 2004
TIME: Chairman Schaefer called the meeting to order at 2:47
PLACE: Room 416
MEMBERS: Chairman Schaefer, Vice Chairman McKague, Representatives Lake,
Bradford, Bauer, Garrett, Martinez, Ringo, Naccarato
. Representative
Bennett (substituting for Representative Trail)


Representative Crow
GUESTS: See attached Sheet
Chairman Schaefer called the meeting to order at 2:47. He
introduced Dr. Bennett, former Dean of the College of Mines, and then
College of Science at U of I. Dr. Bennett said he was the State Geologist
for many years. He will be taking Representative Trail’s place for a few
Stephanie Camarillo, Head of International Trade for the Department
of Commerce, introduced Roger Madsen, the Director of the newly
combined Departments of Commerce and Labor. She also introduced the
four speakers as they made their presentations.

Director Madsen spoke briefly about the important service performed
for Idaho by the trade offices in other countries. He said there are cultural
barriers as well as language barriers, and these offices help various Idaho
parties communicate with their Chinese counterparts. (See Attachment A)

Eddie Yen, of the Idaho-Asia Trade Office in Taipei, Taiwan, said last
year was successful, in spite of the serious SARS “incident” last spring.
He said that he had been asked about television reports showing
problems in Taiwan, but he assured the Committee that this is just the
election process, and things will go back to normal once the election is

Mr. Yen spoke about various Idaho products that are being exported
to Taiwan. He said Idaho wines from Ste Chapelle and Sawtooth wineries
have been successfully exported to Taiwan. His office produced a book
on Idaho wines in simple Chinese, and then printed an English version.
“Fries,” made of corn by Simplot, have also sold well in his country. He
said a lot of peaches, cherries and apples are shipped to Taiwan from
Idaho. Boise Cascade is also exporting building supplies to Taiwan and
China. (See Attachment 1 for more details)

Mr. Yen said that in a fire, more people are killed by smoke than by the
actual fire. A company in Idaho is one of the few in the world with a
process that reduces smoke. This Idaho company has sold its product to
Japan and Australia.

Mr. Yen’s office worked with a local Chinese/English radio station to
do a one week promotion of Idaho. The program featured a live 20
minute interview with someone from a different sector of Idaho on each
day. He played a recording of a promotion ad that had played before the
“Idaho Week.”

In closing, he said that Taiwan is Idaho’s fifth largest trading partner.

Armando Orellana, of the Idaho-Mexico Trade Office in Guadalajara,
Mexico, spoke. He said that not as much was exported to Mexico last
year because of the general down turn in the economy. He said that
Governor Kempthorne’s trade mission to Mexico was very successful.
The Governor took 60 people representing 20 organizations, as well
government officials. As a result of this mission, AMX International has
potential sales of $80 million in software and services, Magic Miles of
Meridian estimates new orders of about $500,000 with 10-15 new
potential jobs, and wheat sales were $2.3 million (600,000 bushels).

His office is working to sell Idaho’s superior bean seed to Mexico so
farmers can have better yields on this staple food item. There is also a
potential market for Idaho’s agriculture machinery in Mexico. (See
Attachment 2 for more details.)

The Trade Office continued to assist all major Idaho Colleges and
Universities to enhance student awareness of the international market. In
addition, there were two interns working in Mr. Orellana’s office for 3
months, who were a great deal of help.

As a result of Governor Kempthorne’s mission, the Governor of Jalisco
said he is interested in a return visit to Idaho.

Mr. Orellana said his office assisted 84 Idaho companies last year in a
variety of ways­market intelligence, translation, etc. They have produced
a brochure on Idaho tourism written in Spanish which has been very well
received. Many other states do not have literature translated into Spanish
for tourism and commerce.

General Woo-Joo Chang, of the Idaho-Korea Representative Office
in Seoul, Korea, spoke. He works part-time in this position. He said Korea
is sending more students to Idaho universities. He said Idaho makes the
best honey in the world, but it is difficult to export to Korea because of the
high tariff. Now they make it into a powder so it is easier to export. He is
happy to see the free trade agreement between Chile and Korea that was
signed last month. He said that many Korean economic commentators
believe that type of agreement is coming between the US and Korea.

General Chang said that as Korea is becoming more industrialized,
there is more competition between the two countries. He mentioned
Micron as an example. He introduced a gentlemen on his team who had
worked for Samsung for 25 years.

General Chang said the US Department of Commerce gave him a
citation last year for 15 years of supporting Idaho commerce in Korea. He
said he will continue to help Idaho business in the future. He introduced
Mr, Lee, whom he referred to as “young blood,” and whom he has hired to
help in this mission. He said Mr. Lee speaks excellent English and has a
degree in mechanical engineering and management as well as financial

General Chang’s office promotes Idaho where ever they can. He
mentioned ads promoting Idaho industries that are posted in a long
corridor in the Korea World Trade Center which is visited by 200,000
people every day.

Dr. Cao Guoli, of the Idaho-Shanghai Representative Office in
Shanghai, China, spoke. He said he was excited to be here and report on
the general Chinese market, and in particular the market in Shanghai. He
said that China’s economy had a “big jump” last year. The Gross National
Product was $1.4 trillion. The GDP increase was 9.1%­the highest since
1997. China is the third largest trade country in the world. Last year,
China was seriously impacted by SARS, and was also impacted by the
Iraq war to some extent. Despite this, China produced $3.9 billion worth
of goods for the US last year, a 32.3% increase. The US is its third
largest trading partner. (See Attachment 3 for more details.)

Dr. Guoli said that more and more Idaho companies are doing
business in China. His office helps identify the most promising areas. He
said Micron and Simplot are expanding their facilities in China. He said a
2003 promotion for Idaho products in China went very well. They want to
help small and medium sized Idaho companies to do business in China.
They are also helping Idaho’s environmental and high tech companies do
business in China.

When asked how much China buys from the US, Dr. Guoli said there
is a $60 billion trade deficit between the US and China. He said China
makes low-tech products. This helps improve the quality of life for
Americans on limited budgets. He said the profit from a lot of these items
comes to the US. He referred to a computer mouse made by Logitech
that sells for $40 in the US. Only $3 is left in China, the remaining $37 is
divided among American companies.

Roger Madsen thanked the Committee members for their time, and
promised to be back next year with another good report.


DATE: March 9, 2004
TIME: 2:45
PLACE: Room 416
MEMBERS: Chairman Schaefer, Vice Chairman McKague, Representatives Lake,
Trail, Crow, Bradford, Bauer, Garrett, Martinez, Ringo, Naccarato
GUESTS: See attached sheet
MINUTES Rep. Crow moved to accept the minutes of March 25. By voice
vote, the motion passed.
MINUTES Rep. Bauer moved to accept the minutes of March 1. By voice
vote, the motion passed.
S 1282 Steve Kenyon, from the State Controller’s Office, presented S 1282.
This bill allows the head of an agency, division, or bureau to accumulate
comp time up to 240 hours. Employees in this class are not allowed to
work overtime. If they report more than 40 hours in a two-week period,
those hours are dropped when it comes to figuring pay. If they work less
than 40 hours in the next two week period, they have to take vacation
time to get full pay. In reality, these executives keep a time sheet or
ledger on the side. This bill will promote accurate time reporting by these
employees and allow the Controller’s Office to know the actual hours
these executives are working. This lack of provision for comp time is the
only section of Idaho code that deviates from the Fair Labor Standards

In response to questions, Mr. Kenyon said that all employees
accumulate vacation and sick leave on an hourly basis. Vacation time is
capped, depending upon the time worked for the state. Sick leave has an
unlimited accumulation.

In response to further questions, Mr. Kenyon said the Controller’s
Office has received only positive comments about this change, which may
affect 1000 employees state wide. He also said that no one covered by
this bill qualifies for overtime pay, so no one is losing overtime pay.

MOTION Rep. Lake moved to send S 1282 to the floor with a do pass. By
voice vote, the motion passed. Rep. Edmunson will carry the bill.
S 1256 Alan Winkle, Executive Director of PERSI, presented S 1256. Some
employees qualify under two state retirement programs as they work two
jobs. Some colleges and universities have their own program
(OPR­Optional Retirement Programs), and employees may qualify under
both OPRs and PERSI. This bill amends the PERSI section of code to
clarify that those covered under an OPR cannot add their time under that
program to their PERSI time. This bill separates retirement programs and
lets the employee chose which retirement program they will use.
MOTION Rep. Martinez moved to send S 1256 to the floor with a do pass.
By voice vote, the motion passed. Rep. Martinez will carry the bill.
S 1257 Alan Winkle, Executive Director of PERSI, presented S 1257.
Ocassionally, PERSI has had cases where an unmarried individual retires
and lists, for instance, a sibling as beneficiary. If the retiree marries, but
neglects to change the beneficiary listing, the one receiving the benefits
may choose to waive the benefit so the spouse may have it. This bill says
that if the death benefit is waived by the beneficiary, the same process for
descent and distribution is used as if there were no beneficiary named.
This situation arises only every 3 or 4 years, but is very contentious when
it does happen.
MOTION Rep. Lake moved to send S 1257 to the floor with a do pass. By
voice vote, the motion passed. Rep. Bauer will carry the bill.
S1258 Alan Winkle, Executive Director of PERSI, presented S 1258. Since
1980, new firefighters have joined PERSI. Those employed before that
date stayed in the Firefighters Retirement Fund (FRF), while the new
employees joined PERSI. It has been difficult to determine the benefits
for FRF, as instructions are to use the salary paid current firefighters as
the basis for benefits, rather than the salary earned. Pay periods vary;
some are every two weeks, some are twice a month, some may be
monthly. Some pay is delayed two weeks, some half a month, and some
a month. This bill changes the basis to salary earned, which is tied to the
number of hours worked in that time period. This will simplify the
calculations. In addition, the calculations will be based on the July 1 to
June 30 year, the state’s financial year, rather than the current September
1 to August 31 year. There is a clause on the last page of the bill that
allows an adaptation of figures for the cross-over year.

In response to questions, Mr. Winkle said that there will be no change
in benefits for the retirees. He also commented that many firefighters are
still working even though their benefits have been capped at 25 years.

MOTION Rep. Naccarato moved to send S 1258 to the floor with a do pass.
By voice vote, the motion passed. Rep. Naccarato will carry the bill.
S 1259 Alan Winkle, Executive Director of PERSI, presented S 1259. This bill
deals with the reporting of Social Security numbers. New federal
legislation limits the use of Social Security numbers in an effort to protect
citizens’ information, because of the rise in identity theft. This bill
removes the requirement that Social Security numbers be provided in
public divorce proceedings.
MOTION Rep. Bauer moved to send S 1259 to the floor with a do pass. By
voice vote, the motion passed. Rep. Trail will carry the bill.


DATE: March 19, 2004
TIME: 11:56
PLACE: Room 416
MEMBERS: Chairman Schaefer, Vice Chairman McKague, Representatives Lake,
Bradford, Garrett, Martinez, Ringo,


Representatives Trail, Crow, Bauer, Naccarato
GUESTS: Alan Winkle
MINUTES Rep. Ringo moved to approve the minutes of March 9. By voice
vote, the motion passed.
S 1156: Alan Winkle presented S 1146. At the Governor’s request, an
examination of the PERSI rules was done checking the application to
National Guard members serving overseas. It was discovered that to
qualify for PERSI, a member had to have active membership before and
after duty. Should a soldier be killed, active membership after service
would not be possible. Therefore, death benefits would not be paid to the
family. S 1446 resolves this iinequity.
MOTION: Rep. Martinez moved to send S 1146 to the floor with a do pass.
By voice vote, the motion passed. Chairman Schaefer will carry the
Chairman Schaefer thanked the members for their work, and said this
would be the last meeting of the session.
ADJOURN: The meeting was adjourned at 12:00