00                             HOUSE BILL NO. 166                                                                          
01 "An Act relating to performance reviews and audits of executive branch agencies, the                                    
02 University of Alaska, and the Alaska Court System; and providing for an effective                                       
03 date."                                                                                                                  
04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
05    * Section 1. AS 24.20.271 is amended to read:                                                                      
06            Sec. 24.20.271. Powers and duties. The legislative audit division shall                                    
07                 (1)  conduct a performance post-audit of boards and commissions                                         
08       designated in AS 44.66.010 [AND OF THOSE PROGRAMS AND ACTIVITIES OF                                               
09       AGENCIES] subject to termination as determined in the manner set out in                                           
10       AS 44.66.020 [AND 44.66.030], and make the audit, together with a written report,                                 
11       available to the legislature not later than the first day of the regular session of the                           
12       legislature convening in each year set out with reference to boards and [,]                                   
13       commissions [, OR AGENCY PROGRAMS] whose activities are subject to                                                
14       termination as prescribed in AS 44.66; the division shall notify the legislature that the                         
01       audit and report are available;                                                                                   
02                 (2)  audit at least once every three years the books and accounts of all                                
03       custodians of public funds and all disbursing officers of the state;                                              
04                 (3)  at the direction of the Legislative Budget and Audit Committee,                                    
05       conduct performance post-audits on any agency of state government;                                                
06                 (4)  cooperate with state agencies by offering advice and assistance as                                 
07       requested in establishing or improving the accounting systems used by state agencies;                             
08                 (5)  require the assistance and cooperation of all state officials and                                  
09       other state employees in the inspection, examination, and audit of state agency books                             
10       and accounts;                                                                                                     
11                 (6)  have access at all times to the books, accounts, reports, or other                                 
12       records, whether confidential or not, of every state agency;                                                      
13                 (7)  ascertain, as necessary for audit verification, the amount of agency                               
14       funds on deposit in any bank as shown on the books of the bank; no bank may be held                               
15       liable for making information required under this paragraph available to the legislative                          
16       audit division;                                                                                                   
17                 (8)  complete studies and prepare reports, memoranda, or other                                          
18       materials as directed by the Legislative Budget and Audit Committee;                                              
19                 (9)  have direct access to any information related to the management of                                 
20       the University of Alaska and have the same right of access as exists with respect to                              
21       every other state agency;                                                                                         
22                 (10)  conduct an audit every two years of information found in the                                      
23       annual reports required under AS 42.05.211 and AS 42.06.220 regarding compliance                                  
24       by the Regulatory Commission of Alaska with the requirements of AS 42.05.175(a) -                                 
25       (e) and of the timeline extensions made by the commission under AS 42.05.175(f),                                  
26       and of other performance measures adopted by the commission.                                                      
27    * Sec. 2. AS 44.66.020 is repealed and reenacted to read:                                                      
28            Sec. 44.66.020. Agency programs. (a) Every year, the Legislative Budget and                                
29       Audit Committee shall ensure that the review team conducts a performance review of                                
30       the  appropriate programs of the agencies listed in this subsection. The first review                             
31       shall occur in the calendar year set out after each agency's name, as follows, and                                
01       subsequent reviews of each agency, or part of an agency, shall occur every 10 years:                              
02                 (1)  Department of Corrections, 2012;                                                                   
03                 (2)  Department of Military and Veterans' Affairs, 2013;                                                
04                 (3)  Department of Revenue, 2013;                                                                       
05                 (4)  Alaska Court System, 2013;                                                                         
06                 (5)  the divisions in the Department of Health and Social Services                                      
07       responsible for health care services, 2014;                                                                       
08                 (6)  Department of Health and Social Services, all programs other than                                  
09       those administered by the divisions in the department responsible for health care                                 
10       services, 2015;                                                                                                   
11                 (7)  Department of Education and Early Development, 2016;                                               
12                 (8)  University of Alaska, 2016;                                                                        
13                 (9)  Department of Administration, 2017;                                                                
14                 (10)  Department of Commerce, Community, and Economic                                                   
15       Development, 2017;                                                                                                
16                 (11)  Department of Fish and Game, 2018;                                                                
17                 (12)  Department of Environmental Conservation, 2018;                                                   
18                 (13)  Department of Natural Resources, 2018;                                                            
19                 (14)  Department of Transportation and Public Facilities, 2019;                                         
20                 (15)  Department of Law, 2020;                                                                          
21                 (16)  Department of Public Safety, 2020;                                                                
22                 (17)  Department of Labor and Workforce Development, 2021.                                              
23            (b)  Subject to appropriation, the Legislative Budget and Audit Committee                                    
24       shall hire or contract with individuals to form a review team or teams to complete the                            
25       reviews under this section.                                                                                       
26            (c)  In the year designated as the year for review in (a) of this section, the                               
27       agency shall,                                                                                                     
28                 (1)  before February 1, provide to the review team citations to the                                     
29       agency's authority under the Constitution of the State of Alaska or the Alaska Statutes                           
30       to administer its programs;                                                                                       
31                 (2)  before April 1, provide to the review team a list of programs or                                   
01       elements of programs, comprising at least 10 percent of the general funds in the                                  
02       agency's budget appropriated from the general fund that                                                           
03                      (A)  do not serve a current need;                                                                  
04                      (B)  are not authorized by the Constitution of the State of                                        
05            Alaska or the Alaska Statutes; or                                                                            
06                      (C)  are not essential;                                                                            
07                 (3)  before April 1, provide to the review team a list of active                                        
08       encumbrances and an explanation of the continuing need for any encumbrance                                        
09       unsatisfied more than four years after it was incurred.                                                           
10    * Sec. 3. AS 44.66 is amended by adding a new section to read:                                                     
11            Sec. 44.66.040. Duties of the review team. (a) During a review year set out in                             
12       AS 44.66.020(a), the review team shall                                                                            
13                 (1)  collaborate with the legislative audit division and the legislative                                
14       finance division to identify any earlier audit findings or budgetary issues for the                               
15       agency;                                                                                                           
16                 (2)  schedule public hearings in Juneau, Anchorage, and Fairbanks to                                    
17       review agency activities and identify problems or concerns; and                                                   
18                 (3)  consult with other states and appropriate public policy                                            
19       organizations to establish best practices for the agency.                                                         
20            (b)  The review team shall analyze all materials relevant to the performance of                              
21       the agency, including                                                                                             
22                 (1)  a 10-year growth history and a 10-year projection of agency                                        
23       expenses by funding source, prepared by the office of management and budget;                                      
24                 (2)  organizational charts, personnel charts by location that show the                                  
25       number of positions and the functions of each position, and a list of transfers of                                
26       personal services funding to or from other line items within the agency during the                                
27       preceding 10 years, prepared by the office of management and budget;                                              
28                 (3)  audit information, including a list of agency audit                                                
29       recommendations, prepared by the legislative audit division;                                                      
30                 (4)  a list of any financial issues relating to the agency's operating or                               
31       capital expenditures, prepared by the legislative finance division;                                               
01                 (5)  an explanation of the function and procedure for dedicated funds or                                
02       any other special funds in the agency, prepared by the legislative finance division;                              
03                 (6)  a 10-year history of any budget ratifications or supplemental                                      
04       budget requests, prepared by the legislative finance division; and                                                
05                 (7)  analysis and summary of confidential information that the review                                   
06       team may request, through the Legislative Budget and Audit Committee, from the                                    
07       legislative audit division, if necessary to complete the team's review.                                           
08            (c)  Before December 16 of the review year set out in AS 44.66.020(a), the                                   
09       review team shall provide a confidential preliminary report to the Legislative Budget                             
10       and Audit Committee.                                                                                              
11            (d)  Before January 6 of the year following the review year set out in                                       
12       AS 44.66.020(a), the review team shall provide to the chairs or cochairs of the senate                            
13       and house finance committees a final report that                                                                  
14                 (1)  evaluates the efficiency and effectiveness of the agency's programs;                               
15                 (2)  evaluates the appropriateness of the budget reductions proposed                                    
16       under AS 44.66.020(c);                                                                                            
17                 (3)  determines if the agency acted in good faith to correct problems                                   
18       identified in any previous audit or review;                                                                       
19                 (4)  evaluates the success of the agency in achieving its mission, goals,                               
20       and objectives;                                                                                                   
21                 (5)  lists agency programs or actions not authorized by statute and                                     
22       identifies other authority for those actions;                                                                     
23                 (6)  identifies agency authority to collect fees, conduct inspections,                                  
24       enforce state law, or impose penalties;                                                                           
25                 (7)  recommends improvements to agency practices and procedures,                                        
26       including means to decrease regulatory burdens or restrictions without decreasing                                 
27       public service and safety;                                                                                        
28                 (8)  identifies areas in which programs and jurisdiction of agencies                                    
29       overlap and assesses the quality of interagency cooperation in those areas;                                       
30                 (9)  evaluates whether the agency promptly and effectively addresses                                    
31       complaints;                                                                                                       
01                 (10)  evaluates to what extent the agency encourages and uses public                                    
02       participation in rulemaking and other decision making;                                                            
03                 (11)  analyzes how the review team's recommendation to terminate the                                    
04       agency or to terminate any program within the agency would affect federal funding or                              
05       instigate federal intervention;                                                                                   
06                 (12)  evaluates the agency's process for implementing technology and                                    
07       recommends new types or uses of technology to improve agency efficiency and                                       
08       effectiveness;                                                                                                    
09                 (13)  identifies programs and functions duplicated by another                                           
10       government agency or private entity and recommends a single entity to perform those                               
11       programs and functions;                                                                                           
12                 (14)  recommends a reduction in appropriations for the agency based on                                  
13       the review under this section and the agency's participation in the review process,                               
14       including the agency's responses to requests for information and the agency's timely                              
15       implementation of previous recommendations;                                                                       
16                 (15)  identifies reductions recommended as a result of a review                                         
17       conducted under this section;                                                                                     
18                 (16)  identifies the extent to which statutory, regulatory, budgetary, or                               
19       other changes are necessary to enable the agency to better serve the interests of the                             
20       public and to correct problems identified during the review;                                                      
21                 (17)  identifies areas that need in-depth review in order to provide                                    
22       complete information to the Legislative Budget and Audit Committee for                                            
23       consideration in the audit process; and                                                                           
24                 (18)  identifies any other elements appropriate to a performance                                        
25       management review.                                                                                                
26            (e)  The Legislative Budget and Audit Committee shall track annually and                                     
27       publish in its annual report under AS 24.20.311 actual reductions in state expenditures                           
28       as a result of a review conducted under this section.                                                             
29            (f)  The senate and house finance committee chairs, cochairs, and                                            
30       subcommittees may incorporate the recommendations of a report submitted under (d)                                 
31       of this section into the budget for the fiscal year following the report.                                         
01    * Sec. 4. AS 44.66.050 is amended to read:                                                                         
02            Sec. 44.66.050. Legislative oversight. (a) Before the termination, dissolution,                            
03       continuation, or reestablishment of a board or commission under AS 08.03.010 or                                   
04       AS 44.66.010 [, OR OF AN AGENCY PROGRAM UNDER AS 44.66.020 AND                                                    
05       44.66.030,] a committee of reference of each house, which shall be the standing                                   
06       committee of legislative jurisdiction as provided in the Uniform Rules of the                                     
07       Legislature, shall hold one or more hearings to receive testimony from the public, the                            
08       commissioner of the department having administrative responsibility for each named                                
09       board or [,] commission [, OR AGENCY PROGRAM,] and the members of the board                                   
10       or commission involved. The hearings may be joint hearings. The committee shall also                              
11       consider the proposed budget of the board or [,] commission, [OR AGENCY                                       
12       PROGRAM,] prepared in accordance with AS 37.07.050(f) [,] and the performance                                     
13       audit of the activities of the board or [,] commission, [OR AGENCY PROGRAM,]                                  
14       prepared by the legislative audit division as prescribed in AS 24.20.271(1). The                                  
15       committee may consider any other report of the activities of the board or [,]                                 
16       commission [OR PROGRAM], including [BUT NOT LIMITED TO] annual reports,                                           
17       summaries prepared by the Legislative Affairs Agency, and any evaluation or general                               
18       report of the manner of conduct of activities of the board or [,] commission [, OR                            
19       AGENCY PROGRAM] prepared by the office of the ombudsman.                                                          
20            (b)  During a public hearing, the board or [,] commission [OR AGENCY] shall                              
21       have the burden of demonstrating a public need for its continued existence or the                                 
22       continuation of the program, and the extent to which any change in the manner of                                  
23       exercise of its functions or activities may increase efficiency of administration or                              
24       operation consistent with the public interest.                                                                    
25            (c)  A determination as to whether a board or commission [OR AGENCY                                          
26       PROGRAM] has demonstrated a public need for its continued existence must take into                                
27       consideration the following factors:                                                                              
28                 (1)  the extent to which the board or [,] commission [, OR PROGRAM]                                 
29       has operated in the public interest;                                                                              
30                 (2)  the extent to which the operation of the board or [,] commission [,                            
31       OR AGENCY PROGRAM] has been impeded or enhanced by existing statutes,                                             
01       procedures, and practices that it has adopted, and any other matter, including                                    
02       budgetary, resource, and personnel matters;                                                                       
03                 (3)  the extent to which the board or [,] commission [, OR AGENCY]                                  
04       has recommended statutory changes that are generally of benefit to the public interest;                           
05                 (4)  the extent to which the board or [,] commission [, OR AGENCY]                                  
06       has encouraged interested persons to report to it concerning the effect of its regulations                        
07       and decisions on the effectiveness of service, economy of service, and availability of                            
08       service that it has provided;                                                                                     
09                 (5)  the extent to which the board or [,] commission [, OR AGENCY]                                  
10       has encouraged public participation in the making of its regulations and decisions;                               
11                 (6)  the efficiency with which public inquiries or complaints regarding                                 
12       the activities of the board or [,] commission [, OR AGENCY] filed with it, with the                           
13       department to which a board or commission is administratively assigned, or with the                               
14       office of victims' rights or the office of the ombudsman have been processed and                                  
15       resolved;                                                                                                         
16                 (7)  the extent to which a board or commission that regulates entry into                                
17       an occupation or profession has presented qualified applicants to serve the public;                               
18                 (8)  the extent to which state personnel practices, including affirmative                               
19       action requirements, have been complied with by the board or [,] commission in [, OR                      
20       AGENCY TO] its own activities and in the area of activity or interest;                                        
21                 (9)  the extent to which statutory, regulatory, budgetary                                           
22       [BUDGETING], or other changes are necessary to enable the [AGENCY,] board or [,]                              
23       or commission to better serve the interests of the public and to comply with the factors                          
24       enumerated in this subsection;                                                                                    
25                 (10)  the extent to which the board or [,] commission [, OR AGENCY]                                 
26       has effectively attained its objectives and purposes and the efficiency with which the                            
27       board or [,] commission [, OR AGENCY] has operated; and                                                       
28                 (11)  the extent to which the board or [,] commission [, OR AGENCY]                                 
29       duplicates the activities of another governmental agency or the private sector.                                   
30            (d)  As to each board or [,] commission [, OR AGENCY PROGRAM]                                            
31       assigned to it for purposes of review, the committee of reference shall, not later than                           
01       the 60th day of the legislative session, submit a report to the presiding officer of the                          
02       house. The report must contain a summary of the findings of the committee as to the                               
03       compliance of the board or [,] commission [, OR PROGRAM] with the factors                                     
04       enumerated in (c) of this section, together with a summary or recommendations of the                              
05       committee as to each of the following:                                                                            
06                 (1)  an identification of the problems or the needs that the programs and                               
07       activities of the board or [,] commission [, OR AGENCY] are intended to address;                              
08                 (2)  a statement, to the extent practicable, of the objectives of the                                   
09       program of the board or [,] commission [, OR AGENCY PROGRAM,] and its                                         
10       anticipated accomplishments;                                                                                      
11                 (3)  an identification of any other programs having similar, conflicting,                               
12       or duplicate objectives;                                                                                          
13                 (4)  an assessment of alternative methods of achieving the purposes of                                  
14       the program;                                                                                                      
15                 (5)  an assessment of the consequences of eliminating the board or [,]                              
16       commission [, OR PROGRAM] and consolidating its activities with another program,                                  
17       or of funding it at a lower level;                                                                                
18                 (6)  a justification for the recommended continuation or extension of                                   
19       the board or [,] commission [, OR PROGRAM,] and an explanation of the manner in                               
20       which it avoids duplication of or conflict with other efforts; and                                                
21                 (7)  any other information that, in the opinion of the committee, would                                 
22       improve the performance of the board or [,] commission [, OR AGENCY] with                                     
23       respect to its representation of and responsiveness to the public interest.                                       
24            (e)  The committee of reference may introduce a bill providing for the                                       
25       reorganization or continuation of the board or [,] commission. Not [, OR AGENCY                           
26       PROGRAM. NO] more than one board or [,] commission [, OR AGENCY                                               
27       PROGRAM] may be continued or reestablished in any legislative bill, and the board                                 
28       or [,] commission [, OR AGENCY PROGRAM] must be mentioned in the title of the                                 
29       bill.                                                                                                             
30    * Sec. 5. AS 44.66.060 is amended to read:                                                                         
31            Sec. 44.66.060. Existing claims. This chapter does not cause the termination                               
01       or dismissal of a claim or right of a citizen against a board, commission, or program of                          
02       an agency terminated by legislative action or under this chapter that is subject to                           
03       litigation. Claims and rights shall be assumed by the department to which the board or                            
04       commission terminated under this chapter was attached for administrative purposes.                                
05    * Sec. 6. AS 44.66 is amended by adding a new section to read:                                                     
06            Sec. 44.66.070. Definitions. In this chapter,                                                              
07                 (1)  "agency" means a state department or agency, whether in the                                        
08       legislative, judicial, or executive branch, and includes the University of Alaska;                                
09                 (2)  "review team" means appropriate professionals hired by or under                                    
10       contract with the Legislative Budget and Audit Committee to complete a performance                                
11       review under AS 44.66.020 - 44.66.040.                                                                            
12    * Sec. 7. AS 44.66.030 is repealed.                                                                                
13    * Sec. 8. This Act takes effect July 1, 2011.