EXCUSED:

EXCUSED:

EXCUSED:

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.

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

EXCUSED:

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.

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.

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.

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
hours.

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
handled.

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.

EXCUSED:

15-0401-0301

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.

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
rules.

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.

59-0103-0302

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.

EXCUSED:

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.

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.

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 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.

EXCUSED:

RS 13860C2

RS 13861C2

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
philosophy.”

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.

RS 13861C2

RS 13860C2

15.04.01 Sec.
025

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.

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.

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.

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.

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.

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.

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
Committee.

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.

EXCUSED:

RS 14048

RS 14075

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
another.

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.

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
employees.

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.

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.

EXCUSED:

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
employees.

Chairman Schaefer said he was comfortable trying this change.

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
them.”

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.

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.

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.

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
time.

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.

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.”

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.

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
pass.

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

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.

EXCUSED:

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.

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
numbers.

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.

MOTION

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

EXCUSED:

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)

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.

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 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
experience.

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. 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.

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.

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.

EXCUSED: