Legislature(2003 - 2004)
04/15/2003 08:02 AM House STA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE STATE AFFAIRS STANDING COMMITTEE
April 15, 2003
8:02 a.m.
MEMBERS PRESENT
Representative Bruce Weyhrauch, Chair
Representative Jim Holm, Vice Chair
Representative Nancy Dahlstrom
Representative Bob Lynn
Representative Paul Seaton
Representative Ethan Berkowitz
Representative Max Gruenberg
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 243
"An Act establishing state agency program performance management
and audit powers in the Office of the Governor for the
evaluation of agency programs; and providing for an effective
date."
- HEARD AND HELD
HOUSE BILL NO. 248
"An Act relating to the annual salary of the chief procurement
officer; and providing for an effective date."
- HEARD AND HELD
HOUSE BILL NO. 134
"An Act authorizing the Department of Corrections to enter into
agreements with municipalities for new or expanded public
correctional facilities in the Fairbanks North Star Borough, the
Matanuska-Susitna Borough, Bethel, and the Municipality of
Anchorage."
- HEARD AND HELD
HOUSE BILL NO. 221
"An Act making it a class C felony to knowingly make a false
statement relating to citizenship or residency on an application
for voter registration or reregistration."
- SCHEDULED BUT NOT HEARD
HOUSE BILL NO. 266
"An Act relating to elections, questioned ballots and questioned
voters, voter registration, training of election officials,
preparation of election materials, voter identification,
absentee voting, counting ballots, and the primary election; and
providing for an effective date."
- BILL HEARING POSTPONED TO 4/17
PREVIOUS ACTION
BILL: HB 243
SHORT TITLE:EVALUATION OF AGENCY PROGRAMS
SPONSOR(S): RLS BY REQUEST OF THE GOVERNOR
Jrn-Date Jrn-Page Action
04/04/03 0769 (H) READ THE FIRST TIME -
REFERRALS
04/04/03 0769 (H) STA, FIN
04/04/03 0770 (H) FN1: ZERO(GOV)
04/04/03 0770 (H) GOVERNOR'S TRANSMITTAL LETTER
04/10/03 (H) FIN AT 1:30 PM HOUSE FINANCE
519
04/10/03 (H) Mtg Postponed Until Adjnmt of
F/Session
04/15/03 (H) STA AT 8:00 AM CAPITOL 102
BILL: HB 248
SHORT TITLE:SALARY OF CHIEF PROCUREMENT OFFICER
SPONSOR(S): RLS BY REQUEST OF THE GOVERNOR
Jrn-Date Jrn-Page Action
04/04/03 0786 (H) READ THE FIRST TIME -
REFERRALS
04/04/03 0786 (H) STA
04/04/03 0786 (H) FN1: ZERO(ADM)
04/04/03 0786 (H) GOVERNOR'S TRANSMITTAL LETTER
04/15/03 (H) STA AT 8:00 AM CAPITOL 102
BILL: HB 134
SHORT TITLE:CORRECTIONAL FACILITY EXPANSION
SPONSOR(S): REPRESENTATIVE(S)STOLTZE
Jrn-Date Jrn-Page Action
02/26/03 0306 (H) READ THE FIRST TIME -
REFERRALS
02/26/03 0306 (H) STA, FIN
03/13/03 (H) STA AT 8:00 AM CAPITOL 102
03/13/03 (H) Scheduled But Not Heard
04/01/03 (H) STA AT 8:00 AM CAPITOL 102
04/01/03 (H) Heard & Held
04/03/03 (H) MINUTE(STA)
04/15/03 0996 (H) COSPONSOR(S): SEATON
04/15/03 (H) STA AT 8:00 AM CAPITOL 102
WITNESS REGISTER
PAT DAVIDSON, Legislative Auditor
Division of Legislative Audit
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified during the hearing on HB 243.
DAN SPENCER, Director
Division of Administrative Services
Department of Administration
Juneau, Alaska
POSITION STATEMENT: Testified during the hearing on HB 248.
JAY HOGAN, Deputy Director
Office of Management & Budget (OMB)
Office of the Governor
Juneau, Alaska
POSITION STATEMENT: Testified on behalf of the administration
to answer questions during the hearing on HB 243.
REPRESENTATIVE BILL STOLTZE
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified as sponsor of HB 134.
MARC ANTRIM, Commissioner
Department of Corrections
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on
HB 134.
JIM LECRONE, Business Agent
Public Safety Employees Association (PSEA)
Anchorage, Alaska
POSITION STATEMENT: Testified on HB 134.
DEE HUBBARD
Sterling, Alaska
POSITION STATEMENT: Testified in support of HB 134.
ACTION NARRATIVE
TAPE 03-40, SIDE A
Number 0001
CHAIR BRUCE WEYHRAUCH called the House State Affairs Standing
Committee meeting to order at 8:02 a.m. Representatives Holm,
Seaton, Dahlstrom, and Weyhrauch were present at the call to
order. Representatives Lynn, Berkowitz, and Gruenberg arrived
as the meeting was in progress.
HB 243-EVALUATION OF AGENCY PROGRAMS
Number 0091
CHAIR WEYHRAUCH announced that the first order of business was
HOUSE BILL NO. 243, "An Act establishing state agency program
performance management and audit powers in the Office of the
Governor for the evaluation of agency programs; and providing
for an effective date."
Number 0103
PAT DAVIDSON, Legislative Auditor, Division of Legislative
Audit, Alaska State Legislature, assisted with the presentation
of HB 243. She said the history of the audit function in the
executive branch has been "a bit spotty." She continued as
follows:
Many of the agencies actually have internal audit
shops in their organization; however, most of that
work is in support of a federal requirement to monitor
"sub-grantees" ... - they're focusing on auditing
externally to the department.
We at [the Division of Legislative Audit], for the
most part, have been the main audit shop for the State
of Alaska. We are an external auditor for both the
executive and the judicial branches of government.
Our audit work spans financial audits, performance
audits, and sunset audits.
I don't believe that the creation of this would
minimize our audit to any degree; however, having [an]
ongoing audit group in the executive branch is one of
those internal control items that should be
functioning in a state.
MS. DAVIDSON concluded that in general she supports [HB 243].
In response to questions by Representative Holm, she said the
sunset reviews and the financial audit of the state are mandated
by statute. She noted, "The statute also provides for
individual legislatures, with the approval of the [Joint
Committee on Legislative Budget and Audit, for us to do what we
term 'special' or 'performance' audit."
Number 0343
REPRESENTATIVE HOLM opined that an audit should not be an
internal audit; rather, it should be an external for internal
purposes. He asked if anyone else besides [the Division of
Legislative Audit] does auditing of state administration or
state functions, for example.
Number 0460
MS. DAVIDSON answered as follows:
Typically, when we get into governmental
organizations, the questions that come up have to do
with independence. Being in the legislature, having
the legislature control our budget, is one of the key
functions to ensuring our independence with respect to
the ... executive branch or the judicial branch. If
you look at it in private industry, private industry
CPAs are paid by the agency that they're auditing. In
our case that's not what happens.
What an internal audit function could do for the
executive branch would be to allow the governor's
office to respond to issues that come up within their
own agency's factor. To answer your question about
external auditing: Primarily, the financial
statements of what would be termed "the quasi-
corporations of state government" - the [Alaska
Permanent Fund], ADA, student loans - those typically
have had their financial audits done by private CPA
firms. And a lot of that has to do with [the fact
that] they're also bonding agencies.
Number 0552
CHAIR WEYHRAUCH asked if there is a privilege that attaches to
an audit, between the auditor and the client. In response to a
request for clarification from Ms. Davidson, he said he used the
word privilege in a practical sense, rather than a legal one.
He continued as follows:
If this bill were to become effective and [an] auditor
in the executive branch were to conduct an audit ...
and evaluation of an agency program, and then [the
Division of Legislative Budget and Audit] did an
audit, would the earlier executive branch audit be ...
reviewable by the legislative auditors, or is that
something that would be a privileged document that you
would not be able to see or review?
MS. DAVIDSON responded that the statutes [regarding] the
Division of Budget and Audit allow that entity to review all
confidential information. She stated her understanding that in
the proposed legislation, "They're asking for confidentiality
for their internal audits and their working papers; therefore,
we would be able to review those if we were asked to ... do an
audit." In terms of privilege, she said, the work papers of
[the Division of Legislative Budget and Audit] have been deemed
privileged by a superior court ruling. She added that that
ruling did not come from the supreme court.
CHAIR WEYHRAUCH clarified that he wanted to know whether the
audit function that would be carried out if HB 243 became law
would be something that [the Division of Legislative Budget and
Audit] would be able to review during the course of its audit,
so that it would have a full idea of what had transpired.
MS. DAVIDSON replied, "Mr. Chairman, I would expect that they
would." She added that it would be the same as when the
division gets into audits and reviews files of the ombudsman, or
the Alaska Commission for Human Rights, if they're relevant in
any way, for example. She concluded, "So, I would expect that
these would fall under the same review process."
CHAIR WEYHRAUCH referred to [page 2, lines 4-5, of HB 243],
which read as follows:
Internal audit work papers and other related
supportive material are confidential, and internal
audit reports are confidential until released by the
governor.
CHAIR WEYHRAUCH asked if that means that they are not released
to the public pursuant to "some sort of freedom of information
Act request."
MS. DAVIDSON surmised that that is true; however, she said she
is not the best person to answer the question.
Number 0797
REPRESENTATIVE SEATON commented that the type of audit mentioned
in HB 243 is regarding performance management and agency
programs, for example, which is like comparing apples and
oranges next to financial audits. He asked if the type of audit
in HB 243 is similar to audits that the division performs for
LAA [Legislative Affairs Agency].
MS. DAVIDSON answered that the division does performance audits
at the request of the Joint Committee on Legislative Budget and
Audit. She added, "That's not to say that we don't do financial
auditing as well. We can perform all of those audit functions."
She posited that a question could address why [Governor Frank
Murkowski] feels it's necessary to have an internal audit shop
created so that he has a staff of auditors to do the things on
his priority basis. She pointed out that having [the Division
of Legislative Budget and Audit] try to meet the needs of all
audits is difficult for the executive branch, because it doesn't
control the division's audit workload - the legislature does.
She concluded that the question that the committee is
considering is not whether the division is capable of doing the
audits - because it is; rather, it's whether or not it wants to
create an audit function in the executive branch, as well.
Number 0963
MS. DAVIDSON, in response to a question by Representative
Seaton, said whether it is a performance audit or financial
audit, the people needed as staff are those who have been
trained in a methodical, analytical program and think about
things in an analytical way. She opined that the [issue of] the
funding for the positions are better left to be answered by the
governor's representative.
REPRESENTATIVE SEATON referred to the zero fiscal note and said
he had just been trying to figure out whether the issue at hand
is complicated or simple.
Number 1067
CHAIR WEYHRAUCH noted that no one was present to testify on
behalf of the administration; therefore, he announced that HB
243 would be held over.
[Later in the meeting, a representative of the administration
arrived and so discussion of HB 243 was continued.]
HB 248-SALARY OF CHIEF PROCUREMENT OFFICER
Number 1088
CHAIR WEYHRAUCH announced that the next order of business was
HOUSE BILL NO. 248, "An Act relating to the annual salary of the
chief procurement officer; and providing for an effective date."
Number 1125
DAN SPENCER, Director, Division of Administrative Services,
Department of Administration (DOA), said the proposed bill is a
simple one that would increase the salary of the chief
procurement officer by "one range." He noted that the reason
[for the increase], as stated in a transmittal letter from
[Governor Murkowski, dated April 3, 2003, included in the
committee packet], is because the chief procurement officer is
currently functioning as the division director. The director
position is being eliminated, while either a deputy director or
administrative manager position will be created. At this point
in time, he said, there is a leasing and facilities manager - a
position which has existed for several years - and the chief
procurement officer. There will be a new administrative
services manager or deputy director, depending upon
classification action.
MR. SPENCER explained that the proposed increase in salary by
one range is to ensure that there is some separation between the
two subordinates and the chief procurement officer, and to
recognize the chief procurement officer's additional
responsibilities in deciding the course of policy issues for the
division.
Number 1200
MR. SPENCER, in response to a question by Chair Weyhrauch,
explained that a division director's salary is a range 26. The
chief procurement officer's salary would be raised to range 24.
He said he thinks the reason that the salary would be only a
range 24 is that, by statute, the chief procurement officer is
in the position for six years and may only be removed "for
cause," which is different from a director's partially exempt
position which "may be removed for just about anything."
Therefore, there is a level of certainty of the employment that
is enjoyed [by the chief procurement officer] that is not
enjoyed by "a normal division director."
MR. SPENCER, in response to a series of follow-up questions by
Chair Weyhrauch, said Vern Jones presently fills the chief
procurement officer position. He stated his belief that Mr.
Jones was just reappointed and, therefore, is in the first of a
six-year term.
Number 1340
REPRESENTATIVE HOLM asked how much [a range 24 pays].
MR. SPENCER replied that he did not bring the salary amount with
him to the meeting.
Number 1348
REPRESENTATIVE BERKOWITZ referred to the two fiscal notes. He
said he finds it incredibly problematic that increased salary
costs aren't available in current appropriations. He said, "If
there's an increased salary cost, I think it's important to note
what it is."
REPRESENTATIVE BERKOWITZ said moving a bill through the
legislature has a cost itself, which, he recalled, is
approximately $5,000 to $10,000 per bill. He said it seems
horribly inefficient to be doing targeted salary increases for
individual members of the administration. He asked, "Is this
going to be some kind of consistent policy?" He suggested, "Or
maybe we can get one sort of omnibus bill effecting members of
the administration, so we will have them all in one fell swoop
and, perhaps, be able to save enough to pay the people the extra
money."
MR. SPENCER answered that he had no idea whether there would be
an omnibus bill. He explained the reason that there is no cost
in [the fiscal note] is because a range 26 F position is being
eliminated to create a range 23 E position. With all the
previously stated position changes, the result will be "a
several thousand dollar savings over the course of the year."
Number 1423
REPRESENTATIVE BERKOWITZ opined that a fiscal note, in order to
be fully transparent, ought to contain that information. He
said the fiscal note [before the committee] only lists zeros,
with [the following] narrative: "Funding for the increased
salary cost is available in the current appropriation."
Representative Berkowitz continued as follows:
I realize this isn't your responsibility, but one of
the few methods I have of communicating with the
administration is when members of the administration
come before committees on which I sit. And, this is a
consistent pattern and a troubling pattern. Zero
fiscal notes mean that there is no cost, not that
there's a change in costs or that one item goes up and
another item goes down; it means there is no cost.
And I think that the fiscal note ought to fairly
reflect what's going on, and then let us make a
determination. This is shell games with money.
REPRESENTATIVE BERKOWITZ told Mr. Spencer that he did not need
to respond to that, because he shouldn't bear the brunt of
concern.
Number 1489
CHAIR WEYHRAUCH asked how many specialized employment categories
there are "like this." He asked if the legislature could
conceivably be "seeing" 20 to 30 of these bills.
MR. SPENCER answered that he does not know. He recalled the
following statutory positions that may only be removed "for
cause": the public defender in DOA, three Alaska Oil & Gas
Conservation commissioners, and the Administrative Law Judge.
Number 1552
REPRESENTATIVE SEATON said he concurred with some of
Representative Berkowitz's concerns [regarding the fiscal note].
He said a zero fiscal note seems to indicate that there's no
change, while the cover letter states that "we're basically
saving money," which is a change that should make the fiscal
note a negative one. He said he would like to see the fiscal
notes addressed and changed [to reflect] the costs that would be
seen.
Number 1582
REPRESENTATIVE HOLM said one of the [considerations] is
different step grades [within each range].
MR. SPENCER clarified that a person gets paid depending on how
long he/she is in the system.
REPRESENTATIVE HOLM said the impact would change, based upon how
long the person has been [an employee].
MR. SPENCER responded that it would change slightly.
REPRESENTATIVE HOLM concluded, "So, I don't know that you could
come up with a direct single-dollar figure."
REPRESENTATIVE SEATON noted the change in salary from a range 23
to a range 24.
REPRESENTATIVE HOLM pointed out that "it changes on the sub
grade." He asked how many sub grades there are.
CHAIR WEYHRAUCH answered, "A through F."
Number 1653
REPRESENTATIVE SEATON opined that [Representative Holm] is
talking about what the particular salary of a person is,
whereas, the purpose of [HB 248] is to change "the entire salary
range for that position." He said he reads the bill as
eliminating a range 26 position and adding a range 24 position.
He said there has to be a fiscal impact [to reflect] those
changes.
CHAIR WEYHRAUCH said he thinks what Representative Holm [is
saying] is "what is the range per step of this employee, too,"
which may have an effect on the fiscal note.
REPRESENTATIVE HOLM said, "That is correct."
Number 1725
REPRESENTATIVE BERKOWITZ asked what the difference is between a
[range] 23 A and 24 A.
Number 1730
MR. SPENCER responded that he does have the information;
however, he asked to address the issue of the fiscal note first.
Fiscal notes have been done several different ways in the past.
One way, he noted, is a zero fiscal note, like the one before
the committee. Another way is an "information fiscal note,"
where information is provided, while pointing out that no
additional appropriation is needed. He said, "We would be happy
to amend the fiscal note to provide that information; we're not
trying to hide any information here." He offered to have that
ready for the committee in the afternoon.
CHAIR WEYHRAUCH said he thinks the committee needs a revised
fiscal note, [or at least the department] needs to look at it
again and, if it doesn't revise it, tell the committee why it is
"sticking with it."
MR. SPENCER said he thought what [the department] would do is
provide the numbers in an information fiscal note, including [a
message to say] that no appropriation is necessary.
Number 1832
MR. SPENCER, in response to a question by Representative Lynn,
told the committee that the bi-weekly salaries are as follows:
The chief procurement officer, right now, is at a
range 23 K, which would be $3,307.50 ... and ... would
go up to $3,535.00.
CHAIR WEYHRAUCH referred to the salary schedule in AS 39.27.011.
MR. SPENCER reiterated that the chief procure officer is
currently at a step K, which is a "longevity step." In response
to a request for clarification by Chair Weyhrauch, he said,
"There's a methodology in the statute that shows how you compute
the additional steps." He offered to provide that to the
committee as part of the revised fiscal note. He noted that the
schedule before the committee "takes you from step A through F."
He explained that those are annual merit increases [rewarded
for] satisfactory performance and increased value [of the
employee] to the state. Beyond step F, he said, are the
longevity steps, which are addressed in the statute. Basically,
employees stay at step F for two years, then go to step J. He
noted, "This is in the partially-exempt schedule, because some
of the bargaining units have different arrangements." He said
employees stay at step J for four years, then four years at step
K. He said he doesn't know "if it ever caps."
Number 1907
REPRESENTATIVE BERKOWITZ said he knows that the administration
has had a difficult time filling a number of positions, because
the argument is that it's hard getting pay ranges that are high
enough. He asked if moving from a [range] 26 to a [range] 24
wouldn't be "moving in the opposite direction," and what a 26
would be making.
Number 1940
MR. SPENCER answered, "The previous director was making one
dollar, every two weeks, less than the chief procurement officer
would be under this." He explained that the savings would be
because of what is being done with the position. He reiterated
the reason "that this works in this particular situation," is
because the chief procurement officer is a statutorily
designated position that can only be removed for cause.
Number 2007
REPRESENTATIVE BERKOWITZ suggested that there is an internal
problem within the administration. He said, "This all could be
obviated if we just had the chief procurement officer ... become
the ... director of the division." He mentioned there would
still [be] a promotion, and added, "And then you wouldn't have
the cause issue." He asked if that offer had been made.
MR. SPENCER said not that he is aware of. He said [the
department] would still need a chief procurement officer. In
response to a question by Representative Berkowitz, he explained
that the position cannot be left vacant because it is the head
of all the procurement functions in the state and sets policy
for procurement, as well as plays a role in appeals processes,
for example.
Number 2070
REPRESENTATIVE LYNN asked if the previously mentioned
"longevity" is part of what the governor wants to eliminate.
MR. SPENCER answered no.
Number 2085
CHAIR WEYHRAUCH announced that HB 248 was heard and held.
HB 243-EVALUATION OF AGENCY PROGRAMS
Number 2125
CHAIR WEYHRAUCH returned attention to HOUSE BILL NO. 243, "An
Act establishing state agency program performance management and
audit powers in the Office of the Governor for the evaluation of
agency programs; and providing for an effective date."
Number 2133
JAY HOGAN, Deputy Director, Office of Management & Budget (OMB),
Office of the Governor, said that although he was not present
during the previous discussion of HB 243 earlier in the meeting,
he has talked with the legislative auditor regarding the concept
of "reactivating this function."
CHAIR WEYHRAUCH asked why a statute is necessary to reactivate a
function.
MR. HOGAN noted that there has been an internal audit function
"off and on" for as long as he has worked for the state.
Originally, he said, that function was in the Department of
Administration and was moved over to OMB in 1983 when that
office originated. He continued as follows:
When we came to deal with the issue of confidentiality
of audit records - which was a recommendation to us
from the attorney general - we discovered that there
never had been a statutory provision granting anyone
in the executive branch the authority to conduct
internal audits, even though they had been going on
... probably since statehood.
Then in the mid-1990s, the function was scoped down to
basically a records-keeping function which exists
today in OMB. That is why we put in the authorization
to do audits. And we broadened the definition to
align with the governor's concept of more focus on
management and performance of agencies and programs.
Number 2245
MR. HOGAN said that when Governor Murkowski took office, he
instructed the various departments of state government to
perform internal audits on themselves, for purposes of
preparation of the budget. He noted that some agencies - for
example, the Department of Health and Social Services (DHSS) and
the Department of Transportation (DOT&PF) - have internal audit
functions because of federal requirements based on the federal
funding those agencies receive. He added that the Department of
Labor has one or two internal auditors, as well.
MR. HOGAN said it is not the governor's intention to duplicate,
replace, or combine those functions; rather, it's simply to have
a small management audit team to go where the governor feels
there may be a problem. [The team] would in some cases use
techniques of internal auditing, and in other cases would use
management analysis techniques.
Number 2330
CHAIR WEYHRAUCH referred to Section 3, which he said would amend
AS 44.19. He noted that [AS 44.19] is basically the OMB
statutes; therefore, [OMB] would have the management authority
over the administration because of the addition to the statute.
MR. HOGAN confirmed that statement.
CHAIR WEYHRAUCH asked Mr. Hogan if it is his intent, as
representative of the administration, to have the papers that
are referred to in [Section 3] be confidential from the public
and not available to the public under public records of request.
MR. HOGAN replied that the purpose of [Section 3] is to emulate
the language that applies from legislation to the legislative
auditor. He said there is a tradition in auditing of keeping
work papers - details and names, for example - confidential for
a number of reasons that he said the legislative auditor is
better versed in than he is. He continued as follows:
But what we attempted to do was to use that very same
language, except, rather than clearance from the
budget and audit committee, our clearance would come
from the governor. So, that's the only significant
change we made in that. And ... we're recommending it
for exactly the same reason that the legislative
auditor has that in the audit statutes today.
Number 2427
CHAIR WEYHRAUCH asked if the [Division of Legislative Budget and
Audit] would have access to the records and analyses that would
be performed [by OMB] under Section 3 of HB 243.
MR. HOGAN stated his assumption that the division would [have
that access]. He added that [OMB] would want to advise the
governor of the division's interest. He noted that [OMB] found,
in doing its limited audits in January [2003], that it got
"tremendous unofficial help" from the legislative auditor. He
said, "We would assume we would be able to return the same
courtesy."
Number 2469
CHAIR WEYHRAUCH said he wants the committee to study the fiscal
note, because it seems it would add a level of work.
Furthermore, he indicated wanting to have [the language of
Section 3] analyzed by [Legislative Legal and Research
Services]. He opined that anticipating [and alleviating] any
possible tension or dispute between the legislative and
executive branch would serve everyone.
Number 2504
REPRESENTATIVE SEATON said he doesn't have any problem with the
internal [audit] work papers, for example, being confidential;
however, the [audit] reports being confidential "until released
by the governor" may set up the scenario where they might not be
released by the governor, and he said he sees that as a
potential problem.
CHAIR WEYHRAUCH said, "We'll have to get some analysis on that
point." He commented that the fiscal note does not contemplate
the hiring of any new "audit-type folks."
Number 2550
MR. HOGAN responded that [the administration] agonized over that
fiscal note. He noted that the governor has moved other
functions from his office to departments, and in the process,
some money was saved, as well as three positions that would be
vacated as a result of the movement of those agencies. He told
the committee that that money - approximately $300,000 - and
those positions are dedicated to OMB should the legislature
appropriate the governor's requested budget.
Number 2596
REPRESENTATIVE HOLM referred to Mr. Hogan's previous mention of
an [audit] team and commented that that would require new duties
that aren't within the scope of the current funding. He said he
would appreciate a [more comprehensive] fiscal note.
MR. HOGAN said, "All right, sir."
Number 2654
REPRESENTATIVE BERKOWITZ noted that the last two lines of
Section 3 are distinct from the language contained in
Administrative Order 202. He said he finds that difference to
be substantial, and he is curious to know why it has become more
restrictive in law, as opposed to the administrative order.
Number 2680
MR. HOGAN explained as follows:
The administrative order cannot enhance the law; so,
we were bound in the administrative order to not
attempt to write a statute. In the Act - including
the release, which [Chair Weyhrauch] asked about -
again, we copied that statute of the [Joint Committee
on Legislative Budget and Audit and the Division of
Legislative Audit]. Currently - and ever since the
committee was formed - the [Joint Committee on
Legislative Budget and Audit] must approve for release
any audit conducted by [the Division of] Legislative
Audit.
They do it in two stages: [first, a] confidential
review document; and then later, after that period has
expired, a final report. So, we attempted to rewrite
that provision to apply on the executive side. And,
rather than have the [Joint Committee on Legislative
Budget and Audit] do the release, the governor would
do the release. So that's sort of the history behind
why we chose to do it that way.
Number 2787
CHAIR WEYHRAUCH said the committee would be getting some legal
analysis of [Section 3] before the next hearing on HB 243.
[HB 243 was heard and held.]
HB 134-CORRECTIONAL FACILITY EXPANSION
[Contains discussion of SB 65 and HB 55.]
Number 2790
CHAIR WEYHRAUCH announced that the next order of business was
HOUSE BILL NO. 134, "An Act authorizing the Department of
Corrections to enter into agreements with municipalities for new
or expanded public correctional facilities in the Fairbanks
North Star Borough, the Matanuska-Susitna Borough, Bethel, and
the Municipality of Anchorage."
Number 2799
The committee took a brief at-ease.
Number 2800
REPRESENTATIVE SEATON moved to adopt the proposed committee
substitute (CS) for HB 134, Version 23-LS0563\D, Luckhaupt,
3/31/03, as a work draft. There being no objection, Version D
was before the committee.
Number 2821
REPRESENTATIVE BILL STOLTZE, Alaska State Legislature, as
sponsor of HB 134, noted that on page 2, line 19, there is a
numerical error. The number should read "$11,000", not
"$14,600", he pointed out.
Number 2844
CHAIR WEYHRAUCH asked if there was any objection to [Amendment
1] changing "$14,600" to "$11,000" on page 2, line 19 of Version
D. There being none, Amendment 1 was adopted.
Number 2860
REPRESENTATIVE STOLTZE referred to a handout [available in the
committee packet] entitled, "DOC Responses To HB 134 Questions
Raised By Committee Members In HSTA Hearing - 04/01/03." He
referred to another handout [also available in the committee
packet] entitled, "Department of Corrections FY 2008 Prison Bed
Cost Comparison," which shows the cost comparison between
[current use of] the Arizona facility, building a private prison
[as proposed in HB 55], and a public prison detail [as proposed
in HB 134].
REPRESENTATIVE STOLTZE said he is still purporting that HB 134
and its companion bill in the Senate, SB 65, are the best
options for Alaska; HB 134 is fiscally competitive and has some
advantages, notwithstanding the advantages of the increase in
employment through construction, for example. He said, "Our
corrections model has shown that we have a professionally manned
and safe model of public safety for corrections." He stated his
hope that the committee would advance [the model offered in
HB 134].
Number 2939
MARC ANTRIM, Commissioner, Department of Corrections (DOC), in
response to a question by Chair Weyhrauch, confirmed that the
previously cited handout regarding the DOC's answers to HB 134
questions is two pages, and attached to the back of it are two
other pages that are not numbered sequentially, which offer an
"Alaska Construction Cost Comparison."
CHAIR WEYHRAUCH referred to the previously cited handout
regarding the prison bed cost comparison and asked why FY 08 was
chosen.
COMMISSIONER ANTRIM explained that FY 08 is when the other
projects [for the proposed private prison and the proposed
public prison] would "come on line."
TAPE 03-40, SIDE B
Number 2965
COMMISSIONER ANTRIM, in response to a question by Chair
Weyhrauch regarding whether this analysis is an updating of
preexisting data, said he thinks that the proposals in the past
have been so different that it would be safe to say that a
comparison of this type has not been done. That, he added, is
one of the reasons that the debate has gotten "so muddied up."
Number 2935
CHAIR WEYHRAUCH remarked that he has never seen an accurate
estimate on construction costs in Alaska.
COMMISSIONER ANTRIM responded by referring to the second page of
the ["Alaska Construction Cost Comparison"]. He pointed out
that the "Anchorage Jail," at $264 a square foot, is
highlighted. One of the committee members, he said, had asked
at the April 1 hearing on HB 134 for a comparison between per-
foot prison construction costs and other construction costs in
the state. He commented that the square-foot cost of the jail
in Anchorage is [within the range] of the other public
construction costs listed.
Number 2877
CHAIR WEYHRAUCH recalled that at a previous hearing, perhaps
regarding HB 55, a testifier had revealed that the construction
in the Anchorage jail facility would be primarily for detainees
of INS [Immigration and Naturalization Service, now replaced by
agencies under the U.S. Department of Homeland Security]. He
said the expansion of that facility was, he thought, 100-percent
reimbursable from federal money available for the INS detainees.
He asked Commissioner Antrim if that is his understanding.
Number 2864
COMMISSIONER ANTRIM answered, "That is correct." He said the
U.S. Marshall service requested that project and brought it to
[the DOC] to pursue. He said INS activities and activities of
the offices of the U.S. Marshall in Anchorage and Juneau are
expected to increase.
CHAIR WEYHRAUCH asked if the legislature needs to do anything in
order for the state to obtain those federal funds to begin the
expansion of the Anchorage facility for the INS detainees.
COMMISSIONER ANTRIM stated his understanding that simply passing
[HB 134] will give "us" the federal receipt authority to accept
those funds from the federal government, once they are allocated
by Congress.
CHAIR WEYHRAUCH asked, "Is that contemplated by HB 134?" He
clarified, "That proposal would go forward if [HB] 134 becomes
law."
COMMISSIONER ANTRIM responded yes.
CHAIR WEYHRAUCH asked, "Is the expansion of the Anchorage
facility and obtaining the federal funds for those INS detainees
- is that something that should be settled, in case something
... untoward [should] happen to ... these bills through the
process, to ensure that that one actually does come into
effect?"
COMMISSIONER ANTRIM suggested that Representative Stoltze may be
better suited to answer that question. Notwithstanding that, he
said he would recommend that "we just keep involved in one
package." He added, "We feel fairly confident that money is
going to come our way."
CHAIR WEYHRAUCH interjected, "But only if [HB] 134 passes in its
present shape. Is that correct?"
COMMISSIONER ANTRIM said he thinks that the federal funding
would be received anyway. He added, "Really, this is whether we
can receive it and present it to the legislature for
authorization for construction."
CHAIR WEYHRAUCH said, "So, you mean that the State of Alaska
will get the federal funds for construction of the INS jail
expansion of Anchorage, whether we pass a law or not?"
COMMISSIONER ANTRIM clarified that it is [DOC's] anticipation
that the two separate bodies [the U.S. Congress and the Alaska
State Legislature] will be doing their work and working toward a
common purpose.
REPRESENTATIVE BERKOWITZ, regarding the subject of those
individuals who are going to be detained, stated his
understanding that the current practice is to ship them out
pretty quickly, primarily to Portland. He asked, "Are we going
to be holding them longer in state?" He indicated that there
are "attorney access issues" he must raise.
COMMISSIONER ANTRIM reiterated that the U.S. Marshals predict
increased activity, and he noted that the anticipation is that
those held in the Anchorage area will be there longer. Most
detainees go to the detention center in Seattle, and then on to
Portland. Currently, he noted that there is a contract to hold
50 prisoners statewide. At any given time, he said, there is an
average of 80-90 in the system - currently that number is 110,
which exceeds the contract by over double. He opined that the
project [proposal for] 200 beds is reasonable.
REPRESENTATIVE BERKOWITZ asked, regarding those individuals
[being detained], if [the state] is paid a nightly cost by the
feds, and is "making money on it."
COMMISSIONER ANTRIM answered yes. He said that is essentially
how the cost of staffing the expansion will be covered.
Number 2635
REPRESENTATIVE SEATON moved to adopt [Conceptual Amendment 2], a
set of four written amendments that had been presented on one
page, with three handwritten changes. With the handwritten
changes, Conceptual Amendment 2 read as follows [original
punctuation provided, but some text formatting changed]:
Amendment #1:
HB 134 is amended on Page 2, line 5, to read:
(b) The Department of Corrections, not later than
July 1, 2008, may enter into an agreement with the
Municipality of Seward for expansion of an existing
facility by up to 400 beds.
Amendment #2:
HB 134 is amended on Page 2, line 6, to read:
(c) The authorizations given by (a) and (b) of
this section are subject to the following conditions:
Amendment #3:
HB 134 is amended on Page 2, line 21, to read:
...$14,600 a bed for the Fairbanks, Anchorage,
and Seward facilities, with an adjustment for
inflation for the Seward costs.
Amendment #4:
HB 134 is amended on Page 2, line 22, to read:
(4) Expansion of the existing facility in Seward
is conditional upon the Municipality of Seward doing
the following to the satisfaction of the Department of
Corrections: making land available for housing
development. Expansion of the existing facility in
Seward is also conditional upon the Alaska Vocational
Technical Center developing a corrections training
program.
Number 2593
REPRESENTATIVE BERKOWITZ objected for purposes of discussion.
He asked if there is a reason why HB 134 is limited to
designated geographic areas, rather than giving the department
the authority to expand facilities that exist throughout the
state. For example, he said he noticed that the Lemon Creek
Correctional Facility is not listed.
Number 2579
REPRESENTATIVE STOLTZE responded that [the designated geographic
areas were chosen] based upon the greatest need and "the most
economic prisons."
Number 2559
COMMISSIONER ANTRIM mentioned studying where the most at-
capacity, at-risk facilities were, and which facilities serve as
regional gathering centers for prisoners from outlying small
communities. He said, "And clearly, we've got major problems at
Bethel and Fairbanks, which is why those two were put on [a]
priority list." He reiterated that [the proposal to expand the
facility in] Anchorage is based on the federal government's
needs. In response to a question by Representative Berkowitz,
he said yes, initially the Spring Creek Correctional Facility
was excluded for a reason and [Conceptual Amendment 2] speaks to
that. He explained, "We felt the priority at this time was to
put beds in the Anchorage area, where the prisoners originate
from, rather than doing a major expansion [in] an outlying
area." He mentioned future years, but then returned attention
to [Conceptual Amendment 2].
Number 2485
REPRESENTATIVE LYNN asked whether "Amendment #3" of Conceptual
[Amendment 2] should read $14,600 or should read $11,000 [to
reflect Amendment 1].
REPRESENTATIVE SEATON answered, "No, that's also back to
$11,000."
REPRESENTATIVE STOLTZE stated, "That should stay at $14,600.
These are ... smaller expansions, and they don't have the
economy of the 1,200-bed facility, so that needs to stay at that
higher number, unfortunately."
Number 2449
REPRESENTATIVE BERKOWITZ recollected that at one point there had
been an intention to expand the Spring Creek Correctional
Facility.
Number 2438
COMMISSIONER ANTRIM said that is correct. He said that
essentially, all of the "dirt work" has been done in the area,
as well as much of the supporting infrastructure, for example,
sewer and water, so many of the expenses normally associated
with a project like that have been taken care of.
Number 2422
REPRESENTATIVE SEATON, speaking to [Conceptual Amendment 2] as
it relates to the Spring Creek Correctional Facility, expounded
upon Commissioner Antrim's answer by listing additional parts of
the facility that are already in place. He said the facility
was designed with three modules on one side and is ready for
another three adjacent to them.
REPRESENTATIVE SEATON noted that the Spring Creek Correctional
Facility has had a problem retaining correctional officers,
which he said brings up the question of whether there may be
enough people who want to live in an area that is not highly
populated. He noted that [Conceptual Amendment 2] would make
expansion of existing facility in Seward conditional upon making
land available for housing development. He mentioned that the
Alaska Vocational Technical Center (AVTEC) in Seward is starting
a pre-training program for correctional officers and homeland
security [agents], and those who train there from other smaller
communities may become familiar with Seward during that pre-
training [and may want to remain there].
Number 2242
REPRESENTATIVE GRUENBERG said he thinks [Conceptual Amendment 2]
is a good idea. Regarding the amendment, he asked why there is
only an adjustment for inflation in the Seward facility, but not
in the other facilities.
REPRESENTATIVE STOLTZE replied that that's because there is a
delayed date; [the expansion of the existing facility in Seward]
is conditional upon the city developing some of the
infrastructure. He said he would love to see a facility on the
[Kenai] Peninsula employ the residents there.
REPRESENTATIVE GRUENBERG referred to the last sentence [of
Conceptual Amendment 2], which states that the expansion of the
Seward facility would also be conditional upon developing a
correctional training program. He said, "I'd hate to see this
stymied because they refuse to or couldn't do something like
that."
Number 2140
REPRESENTATIVE SEATON reiterated that Seward is developing a
program for training homeland security agents, for example. He
said the city is working with the DOC in this effort. He said
he thinks [Conceptual Amendment 2] encourages Seward to proceed
with that program. He opined that the pre-training program is
needed to remedy a statewide problem in retaining correctional
officers.
Number 2088
COMMISSIONER ANTRIM said he thinks the point of the training
program is to get people to consider being a correctional
officer as a career move.
REPRESENTATIVE GRUENBERG said he understands that. He said
there would probably be some kind of a fiscal note regarding
this issue, and he said he is just wondering if some kind of
direction [from the legislature] requesting [Seward] to do this
is necessary.
Number 2048
REPRESENTATIVE STOLTZE responded that he is not sure that there
would be a fiscal note, because the facility trains people for
jobs and would be training people to work in jobs that pay
pretty well and that actually exist right in town.
COMMISSIONER ANTRIM, in response to a question by Representative
Gruenberg, said AVTEC is always looking for new direction, so he
thinks that it will "grasp this pretty quickly." He referred to
wording that had been deleted by the handwritten changes to
Conceptual Amendment 2 before it was presented to the committee:
"developing economic opportunities in the Municipality for
spousal employment of facility staff." He said that would be a
tough thing to ask of the city, but said he hopes Seward will
work diligently to develop economic opportunities for people [so
they will want to remain in that community].
Number 1988
REPRESENTATIVE SEATON said the city would be happy to develop
any kind of employment base, but the foregoing wording that was
omitted was "just going too far."
REPRESENTATIVE SEATON noted that [because that wording had
already been crossed out] the word "and" should be added and the
"e" in "Expansion" should be lower case; therefore, ["Amendment
#4" of Conceptual Amendment 2] would read as follows:
Amendment #4
HB 134 is amended on Page 2, line 22, to read:
(4) Expansion of the existing facility in Seward
is conditional upon the Municipality of Seward doing
the following to the satisfaction of the Department of
Corrections: making land available for housing
development and expansion of the existing facility in
Seward is also conditional upon the Alaska Vocational
Technical Center developing a corrections training
program.
[There was no motion to adopt the foregoing amendment to
Conceptual Amendment 2, but it was treated as adopted.]
Number 1930
CHAIR WEYHRAUCH indicated that there would be changes to the
fiscal note if [Conceptual Amendment 2, as amended] were
adopted.
REPRESENTATIVE SEATON referred to page 2, [beginning on] line 24
[of HB 134], which read as follows:
payments under the lease may not exceed $16,700 a bed
for the Bethel facility and $14,600 a bed for the
Fairbanks and Anchorage facilities;
REPRESENTATIVE SEATON said the $14,600 is the same number as for
the Fairbanks facility, because of the size of the facility. He
explained that [Conceptual Amendment 2, as amended] would be to
"add Seward to Fairbanks and Anchorage."
CHAIR WEYHRAUCH said, "By adding Seward, you're changing the
fiscal note."
REPRESENTATIVE SEATON said, "I guess we are, because what we're
doing is adding the number of beds." He added that it's
conditional.
REPRESENTATIVE STOLTZE indicated that because much of this does
not take place until FY 08, he doesn't expect it to change the
accuracy of the first part of the fiscal note, although it may
change the second part of the fiscal note.
Number 1823
CHAIR WEYHRAUCH asked if there were any other questions or
comments about [Conceptual Amendment 2, as amended].
REPRESENTATIVE BERKOWITZ withdrew his objection.
Number 1815
CHAIR WEYHRAUCH announced that the motion to adopt Conceptual
Amendment 2 [as amended] was approved without objection.
Number 1783
JIM LECRONE, Business Agent, Public Safety Employees Association
(PSEA), a retired correctional officer, said it is rewarding to
hear the committee discussing the fiscal responsibility of a
public prison, and he offered some comments. He related his
belief that incarcerating criminals is a function of government,
not the private sector. He noted that in June 2002, Thomas Kane
[Assistant Director for Information, Policy and Public Affairs
for the U.S. Department of Justice Federal Bureau of Prisons]
told U.S. Senator Don Nickles that the federal bureau had
concerns regarding [the ability of] private prisons to confine
and manage medium- and high-security inmates.
MR. LECRONE said there are many statistics regarding the higher
number of assaults in private prisons, both on staff and on
inmates. He noted that there are fiscal repercussions
associated with a higher assault rate. Generally, he said, when
there is an assault in a prison, local law enforcement [becomes
involved] and charges are filed. The cost of investigation,
prosecution, court fees, appointed attorney fees, appeals, and
future incarceration fall to the State of Alaska, whether it's a
private or public prison; therefore, he said, it behooves
everyone to keep assault rates down. "Obviously," he added,
"experience proves we do it better in public facilities."
MR. LECRONE noted that a six-year study done in California
showed that the public [prison] sector had 11 escapes, while the
private [prison] sector had 200 escapes, although it managed
40,000 less inmates. Mr. Lecrone said he hopes the committee
will keep the security factors in mind while looking at the cost
factors. He said he appreciates [HB 134].
Number 1600
CHAIR WEYHRAUCH informed the committee that Lieutenant Dan
Lowden, from the Department of Public Safety, was available to
answer questions.
Number 1510
DEE HUBBARD testified that she is a resident of Sterling,
Alaska, on the Kenai Peninsula. She said she supports HB 134,
which she said is fiscally competitive. She emphasized that she
is comfortable knowing that [the proposal] would be under state
control. She told the committee that she has many concerns
about privatization [of prisons]. Primarily, she noted, there
are many statutes governing the operation of public prisons, but
none governing the operation of private prisons.
MS. HUBBARD told Representative Seaton that she likes
[Conceptual Amendment 2]. She said the Kenai Peninsula is
always looking eagerly for any kind of economic development, and
[HB 134] is a great idea.
MS. HUBBARD said the pre-trial beds are desperately needed now.
She added that the transportation costs are enormous, and [HB
134] will cut down on those costs. She concluded by saying that
other testifiers have done a better job of expressing her
feelings.
Number 1400
REPRESENTATIVE GRUENBERG stated his appreciation of Ms. Hubbard
traveling to Juneau to testify.
CHAIR WEYHRAUCH noted that the committee had also received
emails from Ms. Hubbard, and he complimented her on her job as a
citizen who keeps her eye on the legislature.
Number 1361
REPRESENTATIVE SEATON said he appreciates the analysis that Ms.
Hubbard provided the committee.
Number 1333
CHAIR WEYHRAUCH announced that HB 134 was heard and held.
ADJOURNMENT
Number 1322
There being no further business before the committee, the House
State Affairs Standing Committee meeting was adjourned at 9:23
a.m.
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