Legislature(2013 - 2014)HOUSE FINANCE 519

02/11/2013 01:30 PM FINANCE

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01:36:19 PM Start
01:36:28 PM HB30
01:59:46 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                     February 11, 2013                                                                                          
                         1:36 p.m.                                                                                              
1:36:19 PM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair Stoltze called the House Finance Committee meeting                                                                     
to order at 1:36 p.m.                                                                                                           
MEMBERS PRESENT                                                                                                               
Representative Alan Austerman, Co-Chair                                                                                         
Representative Bill Stoltze, Co-Chair                                                                                           
Representative Mark Neuman, Vice-Chair                                                                                          
Representative Bryce Edgmon                                                                                                     
Representative Les Gara                                                                                                         
Representative Lindsey Holmes                                                                                                   
Representative Scott Kawasaki, Alternate                                                                                        
Representative Cathy Munoz                                                                                                      
Representative Steve Thompson                                                                                                   
Representative Tammie Wilson                                                                                                    
MEMBERS ABSENT                                                                                                                
Representative David Guttenberg                                                                                                 
Representative Mia Costello                                                                                                     
ALSO PRESENT                                                                                                                  
Mike Chenault,  Speaker of the House;  Joshua Walton, Staff,                                                                    
Representative Costello;  Kris Curtis,  Legislative Auditor,                                                                    
Legislative Budget  and Audit; Sharon Kelly,  Staff, Speaker                                                                    
HB  30    STATE AGENCY PERFORMANCE AUDITS                                                                                       
          HB 30 was was HEARD and HELD in committee for                                                                         
          further consideration.                                                                                                
HOUSE BILL NO. 30                                                                                                             
     "An Act  relating to  performance reviews,  audits, and                                                                    
     termination   of  executive   and  legislative   branch                                                                    
     agencies,  the University  of  Alaska,  and the  Alaska                                                                    
    Court System; and providing for an effective date."                                                                         
1:36:28 PM                                                                                                                    
Co-Chair Stoltze stated that the quorum was available                                                                           
Co-Chair Stoltze stated that the  subcommittee for HB 30 was                                                                    
chaired by Representative Costello.                                                                                             
Vice-Chair   Neuman  MOVED   to  ADOPT   proposed  committee                                                                    
substitute for  HB 30, Work  Draft 28-LS0180\Y  (FIN). There                                                                    
being NO OBJECTION, it was so ordered.                                                                                          
Co-Chair  Stoltze   invited  the  Speaker  to   discuss  the                                                                    
subcommittee processes.                                                                                                         
MIKE CHENAULT, SPEAKER OF THE HOUSE, discussed the staff.                                                                       
JOSHUA  WALTON,  STAFF, REPRESENTATIVE  COSTELLO,  discussed                                                                    
the CS and the changes  made. He expressed gratitude for the                                                                    
subcommittee members.  He stated  that the  subcommittee met                                                                    
twice  and heard  testimony from  the speaker  and analysts.                                                                    
The  subcommittee  deliberations  led to  the  changes.  The                                                                    
first change on page 4, lines  12 and 14, which replaced all                                                                    
instances  of the  year  2015  with 2017.  Page  4, line  15                                                                    
replaced 2016 with 2015. Page  4, line 16 replaced 2017 with                                                                    
2016.  He  added that agencies were  listed in chronological                                                                    
order. The  effect of the  changes led to a  different order                                                                    
beginning  with  Department  of   Corrections  in  2014  and                                                                    
Department   of  Health   and  Social   Services  in   2015,                                                                    
Department  of  Education  and Early  Development  in  2016,                                                                    
Office of the Governor,  Legislature and Alaska Court System                                                                    
in  2017.  The  agencies  in the  following  years  remained                                                                    
unchanged. The intent  was to allow for  early evaluation of                                                                    
the larger departments for use by the legislature.                                                                              
1:42:31 PM                                                                                                                    
Mr. Walton  discussed agency  information for  review teams.                                                                    
He began  with page 5,  line 14, which replaced  paragraph C                                                                    
"are not  essential" with "are  not essential to  the agency                                                                    
mission  or  delivery of  the  agency's  core services.  The                                                                    
intent was to  clarify the meaning of  the word "essential."                                                                    
He pointed out  that the changes were relocated  on lines 14                                                                    
and 15  of page 5 of  the CS. Page  5, line 17 -  19 deleted                                                                    
"all material"  and replace with "all  information submitted                                                                    
to the  legislature in the  agency's most  recent submission                                                                    
under  Alaska statutes  37.07.050 including  agency mission,                                                                    
results based measures, prioritization  of core services and                                                                    
all  programs  within  the  core   services  from  the  most                                                                    
important to the least important."  The changes were located                                                                    
on  lines  18  -  21  of the  CS.  The  statutory  reference                                                                    
referred  to  agency's  financial  plans  including  mission                                                                    
statements, measures  and ten-year plans. The  intent of the                                                                    
change  was to  include results-based  measuring within  the                                                                    
information required from agencies for the review team.                                                                         
1:43:13 PM                                                                                                                    
Mr. Walton discussed page 6, line  10 of the CS, where a new                                                                    
paragraph  1 was  inserted  stating  "all material  provided                                                                    
under  Alaska statutes  44.66.020 section  c, paragraph  4."                                                                    
The  change would  direct  the review  team  to analyze  the                                                                    
previously specified material as part of their analysis.                                                                        
1:45:10 PM                                                                                                                    
Mr.  Walton discussed  the report  generated  by the  review                                                                    
team. The first  change deleted paragraph 1, page  7, line 4                                                                    
"evaluate  the  efficiency  and  the  effectiveness  of  the                                                                    
agency's program"  and insert "evaluate  the success  of the                                                                    
agency in  achieving its mission  through the  effective and                                                                    
efficient  delivery of  its core  services, goals,  programs                                                                    
and  objectives." Insert  paragraph two,  "determine whether                                                                    
the   agency's   results-based  measures   demonstrate   the                                                                    
effectiveness and efficiency of  the agency's core services,                                                                    
goals,  programs and  objectives  and  recommend changes  if                                                                    
necessary." Insert  paragraph three, "determine  whether the                                                                    
results-based measures  were useful  in conducting  a review                                                                    
and  recommend changes  if necessary."  He  stated that  the                                                                    
original  bill  evaluated  the   review  team's  report  for                                                                    
program effectiveness  and efficiency  and the  success that                                                                    
the agency had in meeting  its mission. The changes resulted                                                                    
in  the review  team's report  containing evaluation  of the                                                                    
agency's success via program effectiveness and efficiency.                                                                      
Mr.  Walton  pointed  out  page  7,  lines  6  -  8:  delete                                                                    
paragraph  4, which  was replaced  as  part of  the first  3                                                                    
paragraphs. Paragraphs  1 and 2 were  removed and reinserted                                                                    
with an additional focus on the results-based measures.                                                                         
1:47:06 PM                                                                                                                    
Mr. Walton highlighted the next  three changes found on page                                                                    
7, line  10. Page 7, lines  17 and 23 were  grammar repairs.                                                                    
He mentioned  a change to  page 7,  lines 25 -  27; deleting                                                                    
"all  material" and  replacing with  paragraph 13  "identify                                                                    
services provided  by programs  and functions  duplicated by                                                                    
another government  agency or  private entity  and recommend                                                                    
the  most  effective  and efficient  way  to  perform  those                                                                    
services." The change was relocated to  page 8, lines 1 - 3.                                                                    
The  intent behind  the amendment  was to  identify programs                                                                    
and functions, but the subcommittee prioritized services.                                                                       
Mr. Walton discussed  page 8, line 2, insert  the words "and                                                                    
efficiencies"  following  the words  "identify  reductions."                                                                    
The CS  shows the  changes on paragraph  16 with  the intent                                                                    
that  efficiencies  and  reductions were  addressed  in  the                                                                    
report.   The   final   change   renumbered   the   sections                                                                    
1:48:59 PM                                                                                                                    
Speaker  Chenault  complimented  the subcommittee  on  their                                                                    
work eliminating some of the members' issues.                                                                                   
Co-Chair Stoltze  closed public testimony. He  discussed the                                                                    
fiscal notes.                                                                                                                   
1:50:45 PM                                                                                                                    
Representative   Kawasaki   asked  about   the   contractual                                                                    
consultant costs  detailed on the  fiscal note.  He wondered                                                                    
if  LB&A could  use internal  staff as  opposed to  hiring a                                                                    
KRIS  CURTIS, LEGISLATIVE  AUDITOR,  LEGISLATIVE BUDGET  AND                                                                    
AUDIT, explained that the amounts  listed in the fiscal note                                                                    
compiled  costs  for  contractual entities.  She  understood                                                                    
that the  issue was discussed  at length in  previous years.                                                                    
The work included performance reviews  as opposed to audits.                                                                    
She   mentioned  that   the   contractual  consultants   had                                                                    
expertise  that the  division  did not  have  on staff.  She                                                                    
stated  that  the  experts would  have  knowledge  of  other                                                                    
states' processes.                                                                                                              
1:53:18 PM                                                                                                                    
Representative  Kawasaki  commented   that  the  performance                                                                    
reviews  might  be  valuable  in  the  future  and  in-house                                                                    
employees might be available for future work.                                                                                   
Co-Chair  Stoltze  asked if  a  person  doing a  performance                                                                    
review in  one agency  would employ  the same  expertise for                                                                    
another agency's review. Was the skill transferable?                                                                            
Ms.  Curtis  did  not  know.   She  clarified  that  support                                                                    
positions would be  added at LB&A to  serve the consultants.                                                                    
The support team would allow  the transfer of expertise from                                                                    
the contracted consultants following the review.                                                                                
Representative  Munoz stated  that  two  people hired  first                                                                    
with  a third  person  hired  later. She  asked  if the  new                                                                    
employees would work for LB&A.                                                                                                  
Ms. Curtis affirmed that the  employees would work for LB&A.                                                                    
The employees would not function  as auditors. The employees                                                                    
will  procure  the  consultants,  draft  contracts,  monitor                                                                    
contracts   and  facilitating   the   report  process.   The                                                                    
positions  will  be  full  time  and  focus  on  performance                                                                    
1:55:47 PM                                                                                                                    
Representative  Munoz  asked  why personnel  cost  increases                                                                    
were not reflected in the fiscal note.                                                                                          
Ms. Curtis stated that the annual increases were not known.                                                                     
1:56:26 PM                                                                                                                    
Representative Gara wondered if  the reason for the proposed                                                                    
cuts were clear  to the reader of the  legislation. He asked                                                                    
about a  requirement that the  reader understand  the reason                                                                    
for a cut.                                                                                                                      
SHARON  KELLY,  STAFF,  SPEAKER  CHENAULT,  stated  that  an                                                                    
agency  employee would  seek out  the information  regarding                                                                    
reasons for the cuts.                                                                                                           
Representative Gara  agreed with Ms. Kelly,  but recommended                                                                    
amending the bill to clarify the issue.                                                                                         
1:59:46 PM                                                                                                                    
HB 30 was HEARD and HELD in committee for further                                                                               
The meeting was adjourned at 2:01 p.m.                                                                                          

Document Name Date/Time Subjects
CS WORK DRAFT HB 30-Y version.pdf HFIN 2/11/2013 1:30:00 PM
HB 30
HB 30 Subcommittee Report to House Finance.pdf HFIN 2/11/2013 1:30:00 PM
HB 30
HB30-FN-LegAudit2a-2-11-13 v2.pdf HFIN 2/11/2013 1:30:00 PM
HB 30