Legislature(2003 - 2004)

04/15/2003 08:02 AM STA

Audio Topic
* first hearing in first committee of referral
+ 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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