Legislature(1999 - 2000)

01/28/1999 03:29 PM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
            SENATE STATE AFFAIRS COMMITTEE                                                                                      
                   January 28, 1999                                                                                             
                     3:29 p.m.                                                                                                  
MEMBERS PRESENT                                                                                                                 
Senator Jerry Ward, Chairman                                                                                                    
Senator Jerry Mackie                                                                                                            
Senator Randy Phillips                                                                                                          
Senator Kim Elton                                                                                                               
MEMBERS ABSENT                                                                                                                  
Senator Lyda Green                                                                                                              
COMMITTEE CALENDAR                                                                                                              
SENATE BILL NO. 33                                                                                                              
"An Act relating to the Task Force on Privatization; and providing                                                              
for an effective date."                                                                                                         
          -MOVED SB 33 OUT OF COMMITTEE                                                                                         
SENATE BILL NO. 36                                                                                                              
"An Act relating to state procurement of certain computer-related                                                               
          -HEARD AND HELD                                                                                                       
SENATE JOINT RESOLUTION NO. 3                                                                                                   
Proposing an amendment to the Constitution of the State of Alaska                                                               
relating to the repeal of regulations by the legislature.                                                                       
          -MOVED SJR 3 OUT OF COMMITTEE                                                                                         
PREVIOUS SENATE COMMITTEE ACTION                                                                                                
SB 33 - No previous Senate action.                                                                                              
SB 36 - No previous Senate action.                                                                                              
SJR 3 - No previous Senate action.                                                                                              
WITNESS REGISTER                                                                                                                
Mark Hodgins, Committee Aide                                                                                                    
Senate State Affairs Committee                                                                                                  
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Presented SB 33 and SB 36                                                                                  
Kathleen Strasbaugh                                                                                                             
Department of Law                                                                                                               
PO Box 110300                                                                                                                   
Juneau, AK  99811-0300                                                                                                          
POSITION STATEMENT:  Opposed to SB 33                                                                                           
Don Etheridge                                                                                                                   
Local 71                                                                                                                        
710 W 9th St.                                                                                                                   
Juneau, AK  99801                                                                                                               
POSITION STATEMENT:  Commented on SB 33                                                                                         
David Koivuniemi                                                                                                                
Assistant Commissioner                                                                                                          
Department of Administration                                                                                                    
PO Box 110200                                                                                                                   
Juneau, AK  99811-0200                                                                                                          
POSITION STATEMENT:  Commented on SB 33                                                                                         
Senator Robin Taylor                                                                                                            
Alaska State Capitol                                                                                                            
Juneau, Alaska  99801-1182                                                                                                      
POSITION STATEMENT:  Sponsor of SJR 3                                                                                           
Pam Labolle, President                                                                                                          
Alaska State Chamber of Commerce                                                                                                
217 Second St.                                                                                                                  
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Supports SJR 3                                                                                             
ACTION NARRATIVE                                                                                                                
TAPE 99-1, SIDE A                                                                                                               
Number 001                                                                                                                      
CHAIRMAN WARD called the Senate State Affairs Committee to order at                                                             
3:28 p.m.  Present were Senators Ward, Phillips and Elton.  The                                                                 
first order of business to come before the committee was SB 33.                                                                 
                SB  33-TASK FORCE ON PRIVATIZATION                                                                              
MARK HODGINS, aide to the Senate State Affairs Committee, presented                                                             
SB 33 for the sponsor, Senator Ward.  SB 33 was introduced to                                                                   
establish a task force to review functions of state government that                                                             
could be easily transferred to the private sector.  The task force                                                              
will be comprised of members from the public and the legislative                                                                
and executive branches.  The task force will take the first all-                                                                
encompassing look at privatization of governmental services in                                                                  
Alaska.  Some form of privatization of governmental services has                                                                
taken place in 48 other states.  When enacted, SB 33 will evaluate                                                              
which services can be provided more efficiently by the private                                                                  
sector, as well as highlight those services that are better                                                                     
provided by the government.  The report should provide a road map                                                               
for reducing the size and cost of state government without reducing                                                             
services, while providing options for the future.  SB 33 will also                                                              
look into the state's contracting procedures to ensure that                                                                     
Alaskans are getting the most out of their contracting dollars.                                                                 
Number 048                                                                                                                      
SENATOR PHILLIPS asked which two states have not privatized any                                                                 
government services.                                                                                                            
SENATOR WARD answered the States of Massachusetts and New Jersey.                                                               
SENATOR ELTON pointed out the fiscal note refers to last year's                                                                 
bill.  He questioned whether costs will be higher since SB 33                                                                   
requires more task force members.                                                                                               
MR. HODGINS explained he provided the fiscal note from last year's                                                              
bill to use as a reference.  The narrative on that fiscal note                                                                  
suggests that the costs are indeterminate because the Department of                                                             
Administration (DOA) did not know which departments will be                                                                     
Number 073                                                                                                                      
SENATOR ELTON questioned why SB 33 restricts, to some extent, the                                                               
ability of the Senate President and Speaker of the House to select                                                              
the co-chairs of the task force.                                                                                                
SENATOR WARD replied this legislation was copied from a document                                                                
that created a similar task force in the State of Wyoming.                                                                      
Number 111                                                                                                                      
KATHLEEN STRASBAUGH, assistant attorney general, Department of Law                                                              
(DOL), gave the following testimony.  The Administration opposes SB
33 for the same reason it vetoed similar legislation recently                                                                   
passed by the Legislature.  The Administration supports the concept                                                             
of investigating this matter, would provide information,                                                                        
participate, and help the committee in any way it could; however,                                                               
it feels there is a separation of powers issue associated with                                                                  
bringing together the two branches.  It prefers that the                                                                        
Legislature accomplish the same objective by setting up its own                                                                 
committee with a resolution.                                                                                                    
SENATOR MACKIE asked if the Governor would support SB 33 if he did                                                              
not have to appoint any task force members.                                                                                     
MS. STRASBAUGH was unable to describe what type of structure the                                                                
Governor would like to see.  The Administration's position on the                                                               
last bill was that it is more appropriate to accomplish this task                                                               
by committee rather than by statute.                                                                                            
Number 136                                                                                                                      
SENATOR MACKIE asked what the Administration has done in this area                                                              
under its own powers.                                                                                                           
MS. STRASBAUGH replied all contracts are currently up for                                                                       
negotiation, but the state previously negotiated with the union the                                                             
ability to contract out certain kinds of functions if found to be                                                               
appropriate in a feasibility study.  Some litigation has taken                                                                  
place related to that agreement.                                                                                                
SENATOR MACKIE asked Ms. Strasbaugh if the Administration is                                                                    
opposed to the bill because it does not want to participate with                                                                
the Legislature in this type of a task force because it believes                                                                
there are two separate branches of government, regardless of what                                                               
the issue is.                                                                                                                   
MS. STRASBAUGH said that is correct, and repeated that the                                                                      
Legislature can accomplish its objective by passing a resolution to                                                             
form a committee.                                                                                                               
Number 159                                                                                                                      
DON ETHERIDGE, representing Local 71, testified in opposition to SB
33 and expressed concern that certain functions of state government                                                             
have been pre-targeted for contracting.  Local 71 has been trying                                                               
to protect certain jobs within the Department of Transportation and                                                             
Public Facilities (DOTPF).  Local 71 workers have been able to do                                                               
the jobs at a lower cost, but DOTPF has been under political                                                                    
pressure to contract the work out: Local 71 fears SB 33 will add                                                                
additional pressure.  Local 71 has provisions in its contract that                                                              
require the Administration to do feasibility studies. If the                                                                    
Administration can prove the work can be done cheaper through                                                                   
contracts, Local 71 will not litigate.  During this time of budget                                                              
reductions, Local 71 sees no point in funding a task force when a                                                               
process already exists to serve the same purpose.                                                                               
Number 190                                                                                                                      
SENATOR PHILLIPS asked Mr. Etheridge who Local 71 believes is                                                                   
targeting its workers.                                                                                                          
MR. ETHERIDGE replied Local 71's major fear is that it is not sure                                                              
where the threat is coming from.  Contractors have been putting                                                                 
pressure on the Administration and legislators to contract out                                                                  
Local 71's positions, specifically pipeline drillers.  When                                                                     
pipeline construction began, the state did not have any drillers on                                                             
its payroll.  DOTPF eventually put together its own drilling crew,                                                              
and now that the pipeline work has slowed down, those drillers may                                                              
be laid off but expected to hang around in case a gas line is                                                                   
SENATOR PHILLIPS asked who will execute the task force's                                                                        
SENATOR WARD replied the recommendations are reported to the                                                                    
Legislature and the Administration, and the power of appropriations                                                             
remains with the Legislature.  He stated he has discussed with Mr.                                                              
Etheridge his concern for two years.  SENATOR WARD stated his                                                                   
intent is to review all departments to determine what services can                                                              
be performed at a reduced cost by contracting, and that it is not                                                               
his intention to remove one state employee.  He does support a                                                                  
hiring freeze, however.                                                                                                         
Number 250                                                                                                                      
SENATOR PHILLIPS maintained members of Local 71 are some of the                                                                 
most important state employees.  He asked Mr. Etheridge why he                                                                  
thought Local 71 employees would be the easiest to target.                                                                      
MR. ETHERIDGE responded all of the highway maintenance was                                                                      
contracted out in British Columbia, without success.                                                                            
SENATOR WARD said he wanted to establish a task force two years ago                                                             
so that it could make thoughtful decisions without the added                                                                    
pressure of a financial crisis.                                                                                                 
Number 265                                                                                                                      
SENATOR MACKIE said last year's discussions revolved around labor                                                               
group representation on the task force.  He noted downsizing could                                                              
occur at anytime.  He stated his intent to support SB 33 because                                                                
the task force report will not list positions that should be cut;                                                               
it will recommend ways to make government more efficient and less                                                               
costly.  The Legislature is now forced to ask the Governor for                                                                  
suggested reductions and to downsize, and many of those decisions                                                               
are made off the cuff.  He asked Mr. Etheridge if he was more                                                                   
comfortable with the new bill, in terms of the composition of the                                                               
task force.                                                                                                                     
MR. ETHERIDGE said yes, and that his concern about the short time                                                               
frame has also been resolved.  He explained Local 71 came out in                                                                
support of the bill when it was first introduced two years ago, but                                                             
in conversations with staff last year, he became nervous.  Local 71                                                             
and the Administration did a job study this past year and                                                                       
reclassified positions in an attempt to reduce costs: 200 positions                                                             
will be downgraded and 16 will be upgraded.                                                                                     
Number 325                                                                                                                      
SENATOR MACKIE assured Mr. Etheridge he has no preconceived notions                                                             
about which jobs should be contracted out.  He thanked Mr.                                                                      
Etheridge for his testimony.                                                                                                    
Number 335                                                                                                                      
DAVID KOIVUNIEMI, Assistant Commissioner of the Department of                                                                   
Administration (DOA), testified that the collective bargaining                                                                  
agreements require that feasibility studies be done if work is to                                                               
be contracted out.  According to the past fiscal note, feasibility                                                              
studies cost $50,000.  DOA is willing to cooperate and provide any                                                              
information it has available to the task force.                                                                                 
SENATOR MACKIE moved SB 33 out with individual recommendations.                                                                 
SENATOR ELTON objected.  The motion carried with Senators Mackie,                                                               
Phillips and Ward voting "Yea," and Senator Elton voting "Nay."                                                                 
             SB  36-YEAR 2000 COMPLIANCE REQUIREMENT                                                                            
MR. HODGINS presented SB 36 for Senator Ward, the sponsor.  SB 36                                                               
will require any new State of Alaska government computer hardware                                                               
or software purchases to be Y2K compatible.  Each product or item                                                               
to be delivered or developed under a state contract must be able to                                                             
interact or accurately process data from, into, during, and between                                                             
the 20th and 21st centuries when used in accordance with the                                                                    
documentation provided by the contractor.                                                                                       
SENATOR ELTON referred to language on line 11, and asked if SB 36                                                               
may have the unintended consequence of affecting existing contracts                                                             
for professional services by requiring those contractors who use                                                                
computer systems to comply and certify that all of their systems                                                                
are Y2K compatible.                                                                                                             
MR. HODGINS replied the intent of the language is that only new                                                                 
purchases and services will be affected.                                                                                        
Number 398                                                                                                                      
SENATOR WARD explained that the language in SB 36 is from the                                                                   
National Conference of State Legislatures but the bill does not                                                                 
include language to hold the state harmless.                                                                                    
SENATOR MACKIE thought Senator Elton was referring to the                                                                       
contractors themselves having to be certified since line 11 refers                                                              
to "each product or service."  He stated the intent should be the                                                               
equipment or the software or hardware programs, not the individuals                                                             
selling the programs.                                                                                                           
SENATOR WARD announced he would hold SB 36 in committee to check                                                                
with the legal drafter about the intent of the language on line 11                                                              
on page 1.                                                                                                                      
           SJR  3-REPEAL OF REGULATIONS BY LEGISLATURE                                                                          
SENATOR ROBIN TAYLOR, sponsor of SJR 3, stated SJR 3 is not a new                                                               
concept; it has been voted on by the people of Alaska three times.                                                              
The separation of powers established in the Constitution has,                                                                   
unfortunately, created a turf battle between the Governor's Office                                                              
and the Legislature. The executive branch writes regulations to                                                                 
carry out the law, however the Legislature sees some of those                                                                   
regulations as a distortion of the law.  The Legislature's only                                                                 
recourse in such situations is to change the enabling statute                                                                   
itself.  The Alaska Administrative Code is a very complex network                                                               
of rules of law, and the public is frustrated that state government                                                             
is involving itself in all aspects of people's lives.  SJR 3 allows                                                             
the public to amend the Constitution so that the Legislature can                                                                
pass a simple resolution requiring a majority vote of each house to                                                             
repeal regulations that are inconsistent with its enabling statute.                                                             
SENATOR MACKIE questioned what will happen to a particular program,                                                             
or whatever is being regulated, when the Legislature repeals the                                                                
regulations it operates by.  He asked whether the program will be                                                               
suspended until the Administration writes new regulations, and what                                                             
will happen if the Legislature disagrees with the new regulations.                                                              
Number 516                                                                                                                      
SENATOR PHILLIPS recalled that the Department of Environmental                                                                  
Conservation (DEC) adopted a regulation dealing with water quality                                                              
control in the early 1980's.  Former Senator Ziegler introduced a                                                               
resolution regarding those regulations which DEC promptly changed.                                                              
He suggested that the mere introduction of the resolution will                                                                  
prompt similar action.                                                                                                          
SENATOR MACKIE repeated his concern about what will happen to a                                                                 
program after regulations are repealed.                                                                                         
SENATOR TAYLOR responded departments can impose emergency                                                                       
regulations and do so frequently.  He noted the Department of Fish                                                              
and Game opens and closes most fisheries by emergency regulation.                                                               
He thought debate about the impact that a repeal of regulations                                                                 
would have could be healthy.  He assumed each resolution would                                                                  
contain language suggesting how the problem could be corrected.                                                                 
Number 548                                                                                                                      
SENATOR PHILLIPS said he has seen the introduction of resolutions                                                               
prompt changes in regulations over a dozen times.                                                                               
SENATOR MACKIE asked why the Legislature no longer has the ability                                                              
to repeal regulations.                                                                                                          
SENATOR PHILLIPS explained the Supreme Court decided in the Lie                                                                 
(ph) case that the Legislature can only change regulations through                                                              
a bill that has three readings, not through a resolution.                                                                       
SENATOR MACKIE asked if that is why a constitutional amendment is                                                               
SENATOR PHILLIPS said that is correct.  He noted that although he                                                               
intends to support SJR 3, he does not believe the public                                                                        
understands its impact, as it has been voted down three times.                                                                  
Number 561                                                                                                                      
SENATOR ELTON discussed three concerns he has with the legislation.                                                             
He felt the process to repeal a regulation will be much less                                                                    
rigorous than the process it takes to adopt a regulation which                                                                  
involves all segments of Alaskans.  He expressed concern that SJR
3 could create instability for a person starting a business who                                                                 
must rely on stable regulations to develop a business plan.                                                                     
Additionally, the regulatory web is complex, therefore repeal of                                                                
one regulation could have a ripple effect on others.  Finally, he                                                               
expressed concern that SJR 3 does not require the Legislature to                                                                
outline the problems with the repealed regulation so that it can be                                                             
rewritten satisfactorily.                                                                                                       
TAPE 98-1, SIDE B                                                                                                               
Number 000                                                                                                                      
SENATOR TAYLOR responded the only choice the Legislature has at                                                                 
this point is to change the statute on which many regulations are                                                               
based, even though 90 percent of the regulations are satisfactory.                                                              
He felt that action would be very disruptive to a department's                                                                  
operations and the Legislature has seldom acted to change                                                                       
regulations for that reason.                                                                                                    
SENATOR TAYLOR did not believe passage of SJR 3 would cause                                                                     
instability for new businesses, because a problem regulation is                                                                 
usually only in place for one or two years before the public                                                                    
becomes aware of its impact.  He added the rigorous public process                                                              
that is in place to adopt a regulation is "a joke."  The                                                                        
bureaucracy  writes the regulation, gives public notice, and those                                                              
who have the time and inclination to follow the process write or                                                                
testify at a public hearing, yet the adopted regulation does not                                                                
reflect any of the testimony provided.                                                                                          
SENATOR PHILLIPS asked if the type of resolution should be                                                                      
specified on page 1, line 8.                                                                                                    
SENATOR TAYLOR replied it was left as a simple resolution so that                                                               
each house could introduce and pass them separately.                                                                            
Number 535                                                                                                                      
SENATOR PHILLIPS expressed concern that opponents of this measure                                                               
will look for a legal technicality to keep this measure off the                                                                 
SENATOR TAYLOR stated that language difference is the only change                                                               
from previous bills that have passed.  He said his intent was to                                                                
make it as easy as possible for the state's policy-making body to                                                               
establish what the policy is.  He added he had no objection to                                                                  
specifying what type of resolution is required.                                                                                 
SENATOR PHILLIPS said under the existing system, the Governor can                                                               
veto a bill that repeals regulations and he would most likely be                                                                
advised to do so by his department heads.                                                                                       
Number 497                                                                                                                      
SENATOR TAYLOR informed committee members the Independent                                                                       
Businesses of Alaska did a poll of its 3,000+ membership asking                                                                 
whether the Legislature should be given authority to repeal                                                                     
regulations found to be improper or inconsistent with the law.                                                                  
Survey results reported 73 percent were in favor, 15 percent were                                                               
opposed, and 12 percent were undecided.  Regulation review and                                                                  
change is a top priority of the Alaska Chamber of Commerce.                                                                     
SENATOR ELTON expressed concern that on line 6, the process used to                                                             
make the finding is not defined.  He thought it was misleading and                                                              
that simply saying the Legislature can repeal regulations with a                                                                
finding would be adequate.                                                                                                      
SENATOR MACKIE disagreed that the language is misleading because                                                                
the Legislature will have to hold hearings to make the finding.                                                                 
SENATOR TAYLOR said his concern with that provision was that the                                                                
finding should be embodied within the resolution.                                                                               
Number 454                                                                                                                      
PAM LABOLLE, President of the Alaska State Chamber of Commerce,                                                                 
stated regulatory reform is the Chamber's second priority, second                                                               
only to fiscal planning.   The Chamber has supported the concept of                                                             
SJR 3 for several years now.  The body that makes the laws should                                                               
have the authority to repeal regulations that do not carry out the                                                              
legislative intent.  This ballot issue failed to pass because of                                                                
the way it was put forth and because of confusion over the                                                                      
separation of powers.  The Chamber is committed to informing the                                                                
public if SJR 3 is on the ballot again.                                                                                         
SENATOR MACKIE moved SJR 3 from committee with individual                                                                       
recommendations and then withdrew his motion.                                                                                   
SENATOR ELTON offered an amendment to page 1, line 9, to insert a                                                               
new sentence to read:                                                                                                           
     The resolution shall explain why the Legislature finds the                                                                 
     regulation inconsistent with its enabling statute.                                                                         
Number 381                                                                                                                      
SENATOR TAYLOR opposed the amendment because he believed it was                                                                 
SENATOR ELTON stated it is often difficult to determine legislative                                                             
intent from committee hearings because all sides of an issue might                                                              
be presented.  If the resolution states why the Legislature                                                                     
believes the regulation is inconsistent, the agency that has to                                                                 
redraft it will understand the problem.                                                                                         
SENATOR MACKIE added that statutes do not contain intent language,                                                              
and that most resolutions contain a findings section.                                                                           
SENATOR TAYLOR repeated the Legislature can only repeal a                                                                       
regulation after finding that it is inconsistent with its enabling                                                              
statute, therefore the resolution will have to contain a findings                                                               
provision stating the reasons for the inconsistency.                                                                            
SENATOR ELTON withdrew his amendment.                                                                                           
Number 362                                                                                                                      
SENATOR PHILLIPS suggested changing line 6 to read, "The                                                                        
Legislature may, after a stated finding that a...."                                                                             
After further discussion, SENATOR ELTON offered to work with the                                                                
SENATOR MACKIE moved SJR 3 from committee with individual                                                                       
recommendations.  SENATOR ELTON objected.  The motion carried with                                                              
Senators Mackie, Phillips, and Ward voting "Yea," and Senator Elton                                                             
voting "Nay."                                                                                                                   
There being no further business to come before the committee,                                                                   
CHAIRMAN WARD adjourned the meeting at 4:40 p.m.                                                                                

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