Legislature(1999 - 2000)
01/28/1999 03:29 PM Senate STA
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* first hearing in first committee of referral
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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
contracts."
-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
affected.
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
built.
SENATOR PHILLIPS asked who will execute the task force's
recommendations.
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
required.
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
ballot.
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
redundant.
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
sponsor.
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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