Legislature(2021 - 2022)BUTROVICH 205

02/02/2021 03:30 PM STATE AFFAIRS

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Heard & Held
Heard & Held
Heard & Held
              SB  25-STATE GOV'T FINANCES: WEBSITE                                                                          
3:59:47 PM                                                                                                                    
CHAIR SHOWER  announced the consideration  of SENATE BILL  NO. 25                                                               
"An  Act relating  to  the establishment  and  maintenance of  an                                                               
Internet  website  providing   information  on  state  government                                                               
financial transactions and specifying  the information to be made                                                               
available on the website."                                                                                                      
4:00:04 PM                                                                                                                    
SENATOR  BILL  WIELECHOWSKI,  Alaska State  Legislature,  Juneau,                                                               
Alaska, sponsor of  SB 25, stated this legislation  will create a                                                               
publicly  searchable   online  checkbook  for   state  government                                                               
expenditures and revenues. He highlighted  that the Department of                                                               
Administration took down the online  checkbook last spring, which                                                               
made Alaska the only state in the nation that does not have one.                                                                
Before that, the online checkbook  was extremely slow, not easily                                                               
searchable, and not intuitive. That  led to Alaska receiving an F                                                               
from  a  number  of  groups that  monitor  access  to  government                                                               
information.  A  report  in the  supporting  documents  from  the                                                               
United  States  Public  Interest Research  Group  (USPIRG)  rated                                                               
Alaska's financial transparency an F in  five out of the last six                                                               
years. At the  last rating, Alaska was ranked 49th  out of the 50                                                               
states  in  terms  of  public access  to  the  state's  financial                                                               
4:01:58 PM                                                                                                                    
SENATOR  WIELECHOWSKI  said SB  25  would  be easy  to  implement                                                               
because the state already collects  the financial information. It                                                               
is  just a  matter of  somebody  spending a  few hours  to put  a                                                               
publicly  searchable website  together and  regularly update  the                                                               
information. He  noted that a  wide range of people  with diverse                                                               
political ideologies, including Grover  Norquist and Ralph Nader,                                                               
supported nearly  identical bills that he  introduced in previous                                                               
In 2009,  Senate Bill 2 passed  the Senate but died  in the House                                                               
because  the  then  governor  said it  was  not  needed.  Senator                                                               
Wielechowski said he also introduced  Senate Bill 180 in 2020 but                                                               
the  bill did  not pass  because of  a shortened  session due  to                                                               
SENATOR WIELECHOWSKI said  the argument against SB 25  is that it                                                               
would  be expensive.  He pointed  out  that last  year his  staff                                                               
developed an  online checkbook for  the state  in one day  and at                                                               
zero cost. It did not have all  the bells and whistles that an IT                                                               
department  could provide,  but it  shows it  could be  done with                                                               
little cost.                                                                                                                    
SENATOR WIELECHOWSKI  said the second  argument is that  the bill                                                               
is  not needed  because the  state  will construct  and post  the                                                               
website.  However, the  state  has not  had  an online  checkbook                                                               
since last  spring and the previous  one received an F  rating in                                                               
five of the last six years.                                                                                                     
SENATOR  WIELECHOWSKI  said  SB  25 is  a  good  government  bill                                                               
because transparency  in government is not  an ideological issue.                                                               
People  from both  sides of  the aisle  have voiced  support. The                                                               
bill would also  save money by reducing the number  of Freedom of                                                               
Information Act  requests for information  that the  public could                                                               
easily access  if it  were in  the online  checkbook. Contractors                                                               
and the  business community  have said this  would give  them the                                                               
opportunity  to see  what  the  state is  spending  on items  and                                                               
contract,  which would  allow  them  to price  and  come up  with                                                               
better terms to save the state money.                                                                                           
SENATOR WIELECHOWSKI  restated that  SB 25  is a  good government                                                               
bill  that  gives Alaskans  a  better  opportunity to  understand                                                               
where revenues are coming from and expenditures are going.                                                                      
4:05:31 PM                                                                                                                    
SENATOR REINBOLD said she would  probably become a co-sponsor and                                                               
may  offer an  amendment  to add  grading  the administration  on                                                               
freedom of information requests.                                                                                                
CHAIR SHOWER suggested she work it out with the sponsor.                                                                        
SENATOR KAWASAKI,  noting that  the Palin  administration created                                                               
the  online   checkbook  by  executive   order,  asked   if  this                                                               
administration took it offline because of associated costs.                                                                     
SENATOR  WIELECHOWSKI  said  he  could   not  speak  to  why  the                                                               
administration took the website down.                                                                                           
4:09:49 PM                                                                                                                    
NATE  GRAHAM,  Staff,  Senator Bill  Wielechowski,  Alaska  State                                                               
Legislature,  Juneau, Alaska,  presented the  following sectional                                                               
analysis  for  SB   25  on  behalf  of   the  sponsor:  [Original                                                               
punctuation provided.]                                                                                                          
                           Section 1                                                                                          
     Names the act "the Alaska Online Checkbook Act."                                                                           
                           Section 2                                                                                          
     Adopts legislative findings and intent:                                                                                    
     Subsection (a)  establishes that this bill  is intended                                                                  
     to  allow people  identify and  discover state  revenue                                                                    
     and expenditures.                                                                                                          
     Subsection (b)  requires that  this act  by interpreted                                                                  
     in favor of disclosure and transparency.                                                                                   
     Subsection   (c)   finds   that   state   revenue   and                                                                  
     expenditures   must  be   accounted   for  and   easily                                                                    
     accessible to  the public in  order to maintain  a fair                                                                    
     and open government.                                                                                                       
     Subsection  (d) adopts  intent  that  the state  should                                                                  
     strive  to create  a user-friendly  website that  gives                                                                    
     the public access to  the state's financial information                                                                    
     in a centralized location.                                                                                                 
                           Section 3                                                                                          
     Requires that the Department  of Administration to make                                                                    
     the financial transactions of the  state and the annual                                                                    
     audit available  electronically for  use in  the public                                                                    
     finance internet website.                                                                                                  
                           Section 4                                                                                          
     Creates a new AS 37.05.215.                                                                                                
     AS  37.05.215   (a)      Requires  the   Department  of                                                                  
     Administration  to  develop   operate  and  maintain  a                                                                    
     searchable, free  to the public, website  that provides                                                                    
     financial  information   available  from   the  central                                                                    
     accounting system or the annual financial report.                                                                          
     AS  37.05.215  (a)  (1)-(3)    Requires  the  following                                                                  
     information  and  transactions  to  be  posted  on  the                                                                    
     online  check book  website  and  monthly state  income                                                                    
        • Receipts or deposits by a state agency into a                                                                         
        fund  or  account  established   within  the  state                                                                     
        • Proceeds from taxes   received,  categorized  by                                                                      
        source  type,  including   compulsory  contributions                                                                    
        imposed by the  state for  the purpose  of financing                                                                    
        • Agency earnings including amounts collected  for                                                                      
        sales or  services, licenses  or permits  issued, or                                                                    
        otherwise received by an agency.                                                                                        
        • Revenue received for the use  of state  money or                                                                      
        property  including  interest  and   lease  payments                                                                    
        gifts, donations  and  federal  receipts  and  other                                                                    
        Expenditures including:                                                                                                 
        • The names and locations of  any persons  to whom                                                                      
        payment was made.                                                                                                       
        • The amounts of the expenditures disbursed.                                                                            
        • The type  of   transaction,  by   account  code,                                                                      
        including the purpose of the expenditure.                                                                               
        • Other information specified by  the  department.                                                                      
     The balance of the following state accounts:                                                                               
        • Statutory Budget Reserve.                                                                                             
        • Constitutional Budget Reserve.                                                                                        
        • Permanent Fund Earnings Reserve Account.                                                                              
4:12:30 PM                                                                                                                    
CHAIR SHOWER asked if that was an all-inclusive list.                                                                           
MR. GRAHAM  replied those accounts are  all one might want  to be                                                               
included but it is not exclusive.                                                                                               
CHAIR  SHOWER asked  if  it would  be a  fair  statement to  say,                                                               
"There could be more they may put  in this or things that are out                                                               
there  now, for  example what  they're working  on that  might be                                                               
rolled in."                                                                                                                     
MR. GRAHAM answered yes.                                                                                                        
SENATOR REINBOLD  voiced support for more  detail, including fund                                                               
CHAIR  SHOWER  said  he  leans   toward  more  rather  than  less                                                               
SENATOR  WIELECHOWSKI  said  his  preference is  to  make  it  as                                                               
specific and  thus transparent as  possible without  triggering a                                                               
large fiscal note.                                                                                                              
4:15:27 PM                                                                                                                    
MR. GRAHAM continued the sectional analysis.                                                                                    
     AS  37.05.215  (a)  (4)-(7)    Requires  the  following                                                                  
     information be posted on the  online check book website                                                                    
     and updated monthly:                                                                                                       
     The amount  deposited into the Permanent  Fund from all                                                                    
     mineral   lease   rentals,  royalties,   royalty   sale                                                                    
     proceeds,  federal  mineral revenue  sharing  payments,                                                                    
     and bonuses received by the state.                                                                                         
     State revenue and expenditures, summarized by:                                                                             
     General fund  revenue sources categorized  by function,                                                                    
     department,  and  account.  Total general  fund  income                                                                    
     compared to expenditures.                                                                                                  
     Total assets compared to liabilities  at the end of the                                                                    
     fiscal  year. For  the preceding  10  years, by  fiscal                                                                    
     year the following:                                                                                                        
        • The number of state employees by department.                                                                          
        • The number of independent contractors engaged by                                                                      
        the state by department.                                                                                                
        • The total long-term debt owed by the state.                                                                           
        • Total general fund expenditures.                                                                                      
        • All general fund payroll by department.                                                                               
     AS   37.05.215   (b)        Describes   the   reporting                                                                  
     requirements for the previous subsection.                                                                                  
     AS 37.05.215  (c)(1)   Requires  that the  website have                                                                  
     reference   materials   to   assist   the   public   in                                                                    
     understanding the  financial [information]  provided on                                                                    
     the website.                                                                                                               
     AS 37.05.215  (c)(2)   Requires  the website to  have a                                                                  
     feature that allows users to  search for information on                                                                    
     the website by keyword and recipient.                                                                                      
     AS 37.05.215 (c)(3)   Requires  the site to have a link                                                                  
     to the  website of the Legislative  Audit Division. The                                                                    
     site   must   also   include   electronic   copies   of                                                                    
     information  related   to  state   service  procurement                                                                    
     contracts, including  compensation and  contract length                                                                    
     and of  information related to  independent contractors                                                                    
     engaged  by  the  state,  by  state  agency,  including                                                                    
     compensation and contract length.                                                                                          
     AS 37.05.215  (d)   Requires the  Department of Revenue                                                                  
     and  other   state  agencies   that  use   the  central                                                                    
     accounting  system   to  provide  information   to  the                                                                    
     Department  of  Administration  that  is  necessary  to                                                                    
     comply with this act.                                                                                                      
     AS 37.05.215  (e)   Clarifies  that this bill  will not                                                                  
     require   the  disclosure   of   information  that   is                                                                    
     confidential under  state or  federal law  and requires                                                                    
     that  aggregated information  be  disclosed  if it  can                                                                    
     properly protect confidentiality.                                                                                          
    AS 37.05.215 (f) Defines "expenditure," "searchable                                                                       
    Internet website," and "state agency."                                                                                      
                           Section 5                                                                                          
     Requires the website to be operating on or before October                                                                  
     1, 2022.                                                                                                                   
                               Section 6                                                                                      
     Requires information from the previous fiscal year be on                                                                   
     the website by October 1, 2023 and requires site to be                                                                     
4:17:54 PM                                                                                                                    
SENATOR REINBOLD stated that October 2022 is not acceptable.                                                                    
SENATOR   WIELECHOWSKI   said  he   was   trying   to  give   the                                                               
administration  as much  time as  necessary,  but his  preference                                                               
would be to have it effective tomorrow if that were possible.                                                                   
SENATOR  KAWASAKI  asked  if  the  university  and  court  system                                                               
already account for this information.                                                                                           
MR. GRAHAM  answered yes, but not  in an online checkbook.  SB 25                                                               
would require  both the  university and the  court to  make their                                                               
nonconfidential information public.                                                                                             
SENATOR KAWASAKI referenced the $400,000  in capital costs in the                                                               
Department of Administration's fiscal  note and asked Mr. Zigmund                                                               
to elaborate  on what  the money  is for,  given that  a previous                                                               
administration implemented  the checkbook by executive  order and                                                               
the cost was zero.                                                                                                              
4:20:21 PM                                                                                                                    
HANS  ZIGMUND,  Director,  Division  of  Finance,  Department  of                                                               
Administration,   Juneau,   Alaska,    stated   that   increasing                                                               
transparency in public finance is  a worthy goal. He advised that                                                               
the Department  of Administration traditionally has  provided the                                                               
state's  online  checkbook  with  reports from  the  Alaska  Data                                                               
Enterprise  Reporting  System  (ALDER) that  provide  transparent                                                               
reporting  of nonconfidential  state expenditures.  The checkbook                                                               
reported  on what  the state  purchased, from  whom, and  what it                                                               
cost, but it was not the full state balance sheet.                                                                              
MR.  ZIGMUND  explained  that  in April  2020,  the  Division  of                                                               
Finance took  the state  checkbook offline after  a report  of an                                                               
unusually  large  expenditure to  a  legislator  that raised  red                                                               
flags. Investigation showed that  fields were misaligned and data                                                               
was not translating correctly.                                                                                                  
MR. ZIGMUND  said the  expectation is  that the  online checkbook                                                               
will be back  online on February 5. The solution  was to create a                                                               
new  ALDER report  that assembles  end-product  data without  any                                                               
human  intervention or  manipulation. The  division currently  is                                                               
analyzing  the data  to ensure  that the  checkbook data  matches                                                               
expected  results and  complies  with  statutes and  regulations.                                                               
This   includes  not   sharing   inappropriate  or   confidential                                                               
information like child welfare payments and victim restitution.                                                                 
MR.  ZIGMUND reported  that it  took  about eight  months to  fix                                                               
problems  associated with  the implementation  of the  CARES Act,                                                               
prepare the  annual comprehensive financial report,  and plan for                                                               
the  beginning  of  the Integrated  Resource  Information  System                                                               
(IRIS) upgrade.  The initial root  cause analysis took  about 300                                                               
staff hours to get to the point of republishing the checkbook.                                                                  
MR. ZIGMUND  advised that the  online checkbook  is substantially                                                               
different  from the  one outlined  in  SB 25.  The bill  includes                                                               
reporting  of  liabilities,  revenues,  long-term  debt  for  the                                                               
state, and  information that is  published internally but  not in                                                               
the  online  checkbook.  The  bill  requires  revenues  from  the                                                               
preceding  month,  balances from  the  preceding  month from  the                                                               
statutory  budget  reserve,  constitutional budget  reserve,  and                                                               
permanent fund earnings reserve  account. It requires information                                                               
on  full time,  part time,  and temporary  employees, independent                                                               
contractors,  general revenues  and  expenditures categorized  by                                                               
function,  agency,   and  account.  Reporting   requirements  are                                                               
expanded to include public corporations and the universities.                                                                   
He explained  that the  fiscal note estimates  that it  will take                                                               
about eight months  and $400,000 to implement  the new checkbook.                                                               
It would be a capital  expenditure to employ contractors to build                                                               
the  new  website. Should  the  bill  pass, implementation  could                                                               
occur once the IRIS upgrade  is completed, starting in April 2022                                                               
and the go-live date would be October 2023.                                                                                     
MR.  ZIGMUND stated  that  the division  and  department have  no                                                               
position  on  the  bill but  would  implement  the  legislature's                                                               
policy decision.  He explained that  the estimated time  and cost                                                               
to implement  the bill  stem from  conversations with  the vendor                                                               
for IRIS.                                                                                                                       
CHAIR SHOWER  commented that  it takes  a lot  of time  and money                                                               
when  government  doesn't  want  to  do  something,  but  it  can                                                               
accomplish amazing  feats when it  wants to. He pointed  out that                                                               
in August  of 1990,  during Desert Storm  and Desert  Shield, the                                                               
government moved the  equivalent of every part of  a medium sized                                                               
Midwest town  halfway around the world  and back again, all  in a                                                               
couple  months. He  said  he doesn't  believe  the department  is                                                               
stonewalling but he  agrees with other committee  members that it                                                               
can move faster if there is a will.                                                                                             
CHAIR SHOWER  asked, aside  from the  confidentiality protections                                                               
and  university reporting  that  Mr. Graham  mentioned, if  there                                                               
were  any  legal  requirements  or obstacles  with  the  bill  as                                                               
MR.  ZIGMUND  replied  he would  defer  any  questions  regarding                                                               
confidentiality and  reporting of  revenues to the  Department of                                                               
Revenue. With  respect to university and  public corporations, he                                                               
said their  information is not in  IRIS so DOA would  not be able                                                               
to  include   that  information   in  reports  and   provide  the                                                               
information in the online checkbook.                                                                                            
CHAIR SHOWER asked how finishing  the IRIS update was relevant to                                                               
constructing and posting the online checkbook outlined in SB 25.                                                                
4:28:49 PM                                                                                                                    
MR. ZIGMUND  explained that IRIS  is the  financial, procurement,                                                               
payroll,  and  human resource  management  system  where all  the                                                               
state's accounting  takes place. ALDER  is a reporting  tool that                                                               
pulls  from  the data  warehouse  where  all the  information  is                                                               
stored  from  the  transactions  that take  place  in  IRIS.  The                                                               
request to delay  implementation until after the  IRIS upgrade is                                                               
based   on   resource   constraints  because   the   department's                                                               
programmers,  business  analysists, and  database  administrators                                                               
will be  working round the  clock for  the next year  to complete                                                               
the IRIS  upgrade. He emphasized  the need for the  department to                                                               
finish  the IRIS  upgrade so  the foundation  of the  information                                                               
that  rolls into  the online  checkbook is  complete and  correct                                                               
4:31:14 PM                                                                                                                    
SENATOR WIELECHOWSKI  agreed with the  chair that if DOA  put its                                                               
mind to it, they could get  it done. He noted that the department                                                               
used the same argument against  the original legislation in 2008-                                                               
2009.  He questioned  the reason  DOA sees  the need  to hire  an                                                               
outside  contractor to  develop an  online checkbook  and why  it                                                               
would take  so long.  "I'm deeply skeptical  Mr. Chairman  of the                                                               
comments and statements I'm hearing."                                                                                           
SENATOR REINBOLD said she too  questions the need to hire outside                                                               
contractors. She  asked if  fund source  codes would  be included                                                               
when DOA reposts the online checkbook on February 5.                                                                            
MR. ZIGMUND answered no; that  enhancement would not be available                                                               
February  5.  DOA's  intention  on  the 5th  is  to  restore  the                                                               
information that the Division of  Finance previously provided. He                                                               
said adding fund  source codes could be a  future enhancemen.t He                                                               
said he  imagines she  is looking at  linking funding  sources to                                                               
the  source  of   the  expenditure,  which  should   not  be  too                                                               
difficult. He  said he  would consult  with programing  staff and                                                               
follow up if that was incorrect.                                                                                                
SENATOR   REINBOLD  said   fund  source   codes  are   elementary                                                               
bookkeeping and not having them  in the online checkbook makes it                                                               
difficult  to do  budget subcommittee  work. She  said she  would                                                               
like  to work  with the  sponsor and  the administration  on this                                                               
SENATOR KAWASAKI  asked if the fiscal  note would be zero  if the                                                               
online  checkbook   did  not  have  the   enhancements  mentioned                                                               
earlier. Rather,  it would include  general fund  revenue sources                                                               
categorized  by function,  state  agency, and  account, and  then                                                               
general fund revenue versus expenditure.                                                                                        
MR. ZIGMUND confirmed  that reducing the technical  work makes it                                                               
an easier lift for the department and reduces the cost.                                                                         
SENATOR KAWASAKI said he would like  to tease out the analysis of                                                               
the fiscal note  to understand what is driving  the $400,000 cost                                                               
estimate  and  eight-month  timeline.   He  offered  to  do  this                                                               
MR. ZIGMUND said he would be happy to have those discussions.                                                                   
CHAIR SHOWER asked  the members to submit their  questions to his                                                               
office  so  they could  be  answered  before  the bill  moves  to                                                               
Finance.  He restated  his belief  that a  tighter timeline  made                                                               
4:40:05 PM                                                                                                                    
CHAIR SHOWER held SB 25 in committee.                                                                                           

Document Name Date/Time Subjects
SB 43 Sectional Analysis.pdf SSTA 2/2/2021 3:30:00 PM
SB 43
3 SB 25 Sponsor Statement.pdf SFIN 4/20/2021 9:00:00 AM
SSTA 2/2/2021 3:30:00 PM
SB 25
4 SB 25 Sectional.pdf SSTA 2/2/2021 3:30:00 PM
SB 25
5 SB 25 Supporting Doc 1 Follow the Money 2018 Report.pdf SFIN 4/20/2021 9:00:00 AM
SSTA 2/2/2021 3:30:00 PM
SB 25
6 SB 25 Supporting Doc 2 Historical 10-19 Reports Follow The Money.pdf SFIN 4/20/2021 9:00:00 AM
SSTA 2/2/2021 3:30:00 PM
SB 25
7 SB 25 Supporting Doc 3 Online Checkbook Examples.pdf SFIN 4/20/2021 9:00:00 AM
SSTA 2/2/2021 3:30:00 PM
SB 25
2 SB 25 Ver.A.PDF SSTA 2/2/2021 3:30:00 PM
SB 25
ppt Presentation to Sen State Affairs Committee.pdf SSTA 2/2/2021 3:30:00 PM
SB 25
Agenda SSTA 2.1.2021.pdf SSTA 2/2/2021 3:30:00 PM
SB 43 Explanation of Changes from Version B to I.pdf SSTA 2/2/2021 3:30:00 PM
SB 43
SB 43 CS Bill.pdf SSTA 2/2/2021 3:30:00 PM
SB 43
SB 43 Fiscal Note 70.pdf SSTA 2/2/2021 3:30:00 PM
SB 43
SB 43 Research Ballot Measure 2.pdf SSTA 2/2/2021 3:30:00 PM
SB 43