01/20/1998 03:30 PM Senate STA

              SB 209 - TASK FORCE ON PRIVATIZATION                             
                                                                               
                                                                               
SENATOR WARD, prime sponsor of SB 209, explained that this was the             
exact same bill that appeared before the legislature last year,                
just with the time frame reduced by one year. He said the Governor             
had vetoed the bill and everyone had heard the same sponsor                    
statement and bill last year.                                                  
                                                                               
MR. MIKE MCMULLEN, representing the Department of Administration,              
Division of Personnel, agreed that the concept of the new bill was             
the same and so was the position of the division. They still have              
concerns regarding the requirements of the state collective                    
bargaining agreements. He said the agreements contain requirements             
for formal feasibility studies before any layoffs of bargaining                
unit members. He quoted a projected cost of $20,000 - $50,000 per              
study and said they take some time to conduct. He said the bill's              
time line would make the affected agencies lag behind legislative              
changes. He said the task force findings and the feasibility                   
studies might not agree and it would be particularly problematic if            
the legislative changes precede the findings of the feasibility                
studies. He hoped the committee would perhaps take another approach            
and quoted the Governor's veto message saying, "the Administration             
stands ready to cooperate and provide available information to any             
committee or task force legislative leadership may appoint to                  
review possible privatization opportunities."                                  
                                                                               
PAM LABOLLE, President of the Alaska State Chamber of Commerce said            
the Chamber supports the bill as one of their top priorities. She              
feels business supports the state and the state should support                 
business. She said they believe there are many opportunities within            
government for many new ways of doing business. She informed the               
committee that Mr. Craig Holt, nationally recognized speaker on                
"right sizing" government was going to be available later in the               
week. She said the Chamber has worked with Mr. Holt in the past and            
he educated them about privatization opportunities. She listed some            
advantages of competition, including reduced cost and high quality             
goods and services.                                                            
                                                                               
SENATOR DUNCAN asked if after the seminars and training the State              
Chamber had, she thought it would be an easy job to determine which            
areas might be privatized.                                                     
                                                                               
MS. LABOLLE responded that it would not be easy but some difficult             
jobs are the ones worth doing. She said it is a good piece of                  
legislation which identifies a few departments in order to take an             
initial look at the possible opportunities.                                    
                                                                               
SENATOR DUNCAN asked if she had looked at this year's bill.                    
                                                                               
MS. LABOLLE admitted she had not.                                              
                                                                               
SENATOR DUNCAN explained he asked because he believes this to be a             
complex issue where it will be difficult to determine which                    
departments might lend themselves to privatization and review the              
procedures involved. He said this bill does not look at a few                  
departments, this bill indicates all departments will be reviewed              
and they will be reviewed by November 15th, 1998. He said he is not            
speaking against the legislation but, in his opinion, this seems to            
be too much too soon. He asked Ms. LaBolle if it seemed possible to            
meet this deadline and do a good job.                                          
                                                                               
MS. LABOLLE replied that the task force could identify objectives,             
much like was done by the Long Range Financial Planning Task Force             
in three or four months.                                                       
                                                                               
TAPE 98-2 SIDE A                                                               
Number 001                                                                     
                                                                               
SENATOR DUNCAN asked how much of that was adopted. He went on to               
say he thinks this may be more complex than what was tackled by the            
Long Range Planning Task Force. He believes there may be legal                 
constraints due to contractual agreements with unions and                      
competitive bidding. He asked her opinion on whether it could be               
done in a four month period.                                                   
                                                                               
MS. LABOLLE said it was unfortunate that the bill was vetoed last              
year or they would have had an additional year to do this. She said            
it must start somewhere as it is so important. She said state                  
government is growing while the private sector shrinks and business            
supports the state and must increase.                                          
                                                                               
SENATOR DUNCAN did not disagree with supporting the private sector             
but took exception to the statement that the government has grown              
while the private sector has been shrinking. He said the government            
has also been shrinking and there were figures to back that up. He             
added he did not think Senator Miller and others with their five               
year plan would be happy with her saying government has grown                  
during their leadership. He stated perhaps the legislation should              
be pared down so it could be done right. He thinks this may be                 
biting off more than anyone can chew and perhaps it was meant for              
failure. He said if the sponsor really wanted to get something                 
done, maybe a smaller start would be better.                                   
                                                                               
SENATOR WARD moved the bill out of committee with individual                   
recommendations and accompanying fiscal notes.                                 
                                                                               
SENATOR DUNCAN objected. Roll was called and the bill passed out               
with a three to one vote.