Legislature(2023 - 2024)DAVIS 106
01/24/2024 06:00 PM House WAYS & MEANS
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Audio | Topic |
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HB190 | |
Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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= bill was previously heard/scheduled
+= | HB 190 | TELECONFERENCED | |
+= | HB 194 | TELECONFERENCED | |
HB 190-ALASKA SUNSET COMMISSION 6:01:12 PM CHAIR CARPENTER announced that the only order of business would be HOUSE BILL NO. 190, "An Act establishing a violation for hindering the Alaska Sunset Commission; relating to the duties of the legislature; establishing the Alaska Sunset Commission to review and make recommendations on discontinuation of or changes to state entities; relating to the powers and duties of the Alaska Sunset Commission; and providing for an effective date." 6:01:52 PM KENDRA BROUSSARD, Staff, Representative Ben Carpenter, Alaska State Legislature, presented HB 190 on behalf of the House Special Committee on Ways and Means, sponsor, on which Representative Carpenter serves as chair. She spoke from the sponsor statement [included in the committee packet] which read as follows [original punctuation provided]: Alaska spends twice as much as other states on government. There is not enough time or information available to utilize the annual budget process to ensure efficient spending, effective service delivery and continual process improvement in state agencies. The Executive Budget Act requires the Governor and his agencies to use performance and financial data in its budgeting process and to provide such information to the legislature for its budget deliberations. Nonetheless, the Executive Budget Act is not being followed by the executive or the legislature as it should. Data provided by executive departments is insufficient for program evaluation, planning and budgeting. In addition, for the past ten years, the State Auditor has produced performance review audits of state agencies. Again, these resources are not being utilized by state agencies or the legislature, and the statute is sunsetting. HB 190 aims to both provide usable data and impose recourse into the review process. Adding an extensive third-party review, and the real risk that an entity of government will be eliminated by law, may be the external disruption necessary to lead to leaner government. HB 190 "The Alaska Sunset Commission Act" will help ensure adherence to performance requirements and process improvement in the operation of our state government. The bill establishes the Alaska Sunset Commission under the Lieutenant Governor as an independent and objective group charged with reviewing each department by division in the state on a rotating schedule. The Commission will be comprised of seven individuals from the private sector with financial, budget analysis, accounting, operations management, and other areas of expertise who will be appointed by the governor (3), speaker of the house (2) and president of the senate (2). Commissioners will have staggered terms of five years, choose a chair, and will serve without compensation but commissioners will be entitled to per diem and travel expenses authorized for boards and commissions. The Commission may employ staff and hire consultants as it determines necessary to perform its duties. Duties of the commission will be to determine whether there is a public need for the continuation of the entity and to make a recommendation to the legislature to continue, discontinue, restructure, or transfer the duties and programs of the entity to another entity. The Commission will review the entities of one department each year that will include adherence to financial and performance requirements under the Executive Budget Act, utilization of process improvement, efficiency of operations, overlap with other state entities, and the extent to which the entity is making it difficult to do business in Alaska. The Commission will submit a report to the Governor and Legislature within the first 10 days of legislative session that includes a recommendation to continue, discontinue, restructure, or transfer duties to another entity. Along with the submission of the report to the legislature, the Commission will provide any recommended statutory changes necessary to accomplish the recommendations in the report to the Rules Committees with requests to introduce the legislation. If the legislature does not act on the Commission's report, the entity subject of the report will be sunset at the conclusion of the following fiscal year. 6:06:13 PM MS. BROUSSARD provided a sectional analysis of HB 190 [included in the committee packet]. She said Sections 1-5 amend the State Personnel Act to include the Alaska Sunset Commission. Section 1 allows persons who hinder the work of the Alaska Sunset Commission to be fined by those who may hinder the work of the Legislative Budget and Audit Committee. Section 2 provides that a person who has been convicted under Section 1 of this Act cannot be appointed to state services unless a waiver is granted by the commissioner of administration. Section 3 makes public information that a state employee has been dismissed or disciplined for a violation of interference or failure to cooperate with the Alaska Sunset Commission. Section 4 allows a state employee to be disciplined or dismissed for failure to give cooperation to the Alaska Sunset Commission. Section 5 makes interference or failure to cooperate with the Alaska Sunset Commission a matter of public concern. Section 6 amends the Public Record Disclosure Act to add the Alaska Sunset Commission to the definition of "public agency." MS. BROUSSARD stated that Section 7 adds a new section of law to establish the Alaska Sunset Commission under the lieutenant governor. The commission consists of seven public members appointed by the governor, speaker, and senate president for staggered five-year terms. It establishes the qualifications of appointed members, selection of a chair, and allows the commission to employ staff and hire consultants. Commissioners will receive per diem and travel expenses. Section 7 provides the power and duties of the commission, including reviewing the activities of each state entity subject to commission review state entities, and make recommendations to the legislature. Prior to the commission's review of an entity, each state entity shall provide to the legislature a report of the entity's evaluation of its adherence to the criteria for the commission's review under this Act. Section 7 provides for a schedule of entities to be reviewed. The entities are each of the entities of a one state agency or the University of Alaska each year for 2024 through 2035. Section 7 provides the criteria for review, including the adherence to performance requirements set under the Executive Budget Act, alternative methods for delivery of services, organizational processes, efficiency with which the entity operates, reorganization potential, and the extent to which statutory changes are necessary for the entity to meet the desired improvements. Section 7 requires the commission to hold public hearings and accept public testimony. It requires a report by the commission following each review of a state entity with a recommendation to the legislature to continue, discontinue, restructure, or transfer the duties and programs of the entity and a recommendation on a winding down period for the entity to conclude its business or provide for a restructuring plan. The commission shall include in the report draft legislation to implement the recommendations of the commission with a request to the rules committees to submit the legislation for introduction. Section 7 provides that if the recommendations of the commission are not implemented by law, the entity subject to review will be sunset on June 30 of the fiscal year following the review. It also provides definitions. MS. BROUSSARD related that Section 8 repeals statute governing the disposition of entities, statutes related to sunsetting performance reviews. Section 9 repeals Performance Review State Law 2013 that is set to sunset July 1, 2023. Section 10 makes Section 9 of this Act immediately effective. 6:10:35 PM MS. BROUSSARD commenced a PowerPoint presentation [hard copy included in the committee packet], titled "HB 190 Alaska Sunset Commission," dated 1/24/24. She reviewed slides 2-5 regarding how the Alaska Sunset Commission will work, which read as follows [original punctuation provided]: [slide 2] The Sunset shines a light on state agencies and programs to see if they are still relevant in a changing world. If the answer is yes, the Sunset recommends improvements to make them more effective and efficient. If the answer is no, the sunset recommends abolishing the agency or transferring its functions to another agency with related functions. [slide 3] The Commission would be administratively housed under the Lt. Governor. Commissioners will be appointed by the Governor, Speaker, and Senate President. The Commission shall be proficient in financial management, business operations, budgeting economics, process improvement or government efficiency. The Commission may hire staff and consultants with similar proficiencies to conduct a review of each entity of a Department. HB 190 would Require the Commission to hold public hearings. The Commission drafts legislation that must be acted upon or the entity will sunset. [slide 4] • Sunset Staff Evaluation o Each year, the Commission will review one state department and each of its entities: divisions and corporations. Sunset staff will perform extensive research and analysis to evaluate the need for, performance for, and improvements to the entity under review. • Sunset Commission Staff o Reviews the agency's self-evaluation report o Receives input from interested parties o Evaluates entity and identifies problems o Develops recommendations o Publishes staff reports • Sunset Commission Deliberation o The Sunset Commission conducts a public hearing to take testimony on the staff report and the agency overall. The Sunset Commission conducts a second meeting to vote on which changes to recommend to the Legislature. [slide 5] • Public Hearings o Sunset staff presents its reports and recommendations o The agency presents its response o The Sunset Commission will hear public testimony and receive written comments o The Sunset Commission will meet again to consider and vote on recommendations o Public Input is published on the website o The Sunset bills will go through the normal legislative process • Legislative Action o The Sunset bill on an entity is drafted and submitted through the Rules Committee o The Legislature will consider the Sunset Commission's recommendations and make its final decisions o The Senate and the House conduct committee hearings and debate/Amend the bill o Bill passes or fails adoption o If the Legislature fails to adopt or act on a bill, the entity sunsets at the end of the following fiscal year. 6:13:32 PM MS. BROUSSARD stated that HB 190 is modeled after the Texas Sunset Commission. She moved to slides 6-8 regarding the model in Texas, which read as follows [original punctuation provided]: [slide 6] The sunset process is a key legislative oversight tool that significantly streamlined and improved Texas government since it was created by the Texas Legislature in 1977. Sunset promotes a culture of continuous improvement in state government by providing objective, nonpartisan public forum for evaluating the need for state agencies and their effectiveness, efficiency, and responsiveness to the public. [slide 7] The Sunset Commission reviewed 21 entities for the 88th Legislative Session in Texas, resulting in 235 recommendations to streamline state government while enhancing services to our citizens. Generally, the recommendations eliminate unnecessary regulations, and improve accountability, align agencies' procedures with best practices, and strengthen effective delivery of services to Texans. [slide 8] The Texas Sunset process has led to major policy changes in almost every area of state government. Sunset recommendations also have eliminated duplication among agencies and programs, increased public participation, helped with government accountability, and improved the quality and efficiency of government services. MS. BROUSSARD turned attention to slide 9, "Sunset's Impact Since 1977," which read as follows [original punctuation provided]: Streamlining Texas Government • 42 entities and programs have been abolished • 52 entities and programs have been abolished and transferred or consolidated Saving Taxpayer money • $1 billion in state and federal savings and revenue gains • Return of $18 for every $1 appropriated to the Sunset Commission since 1985 Providing Effective Oversight • 570 reviews of state agencies and programs conducted • 80 percent of Sunset recommendations to the Legislature have become state law since 2001 MS. BROUSSARD displayed slide 10 which listed State of Alaska department entities as follows [original punctuation provided]: • Department of Administration - 15 • Department of Commerce, Community and Economic Development - 18 • Department of Corrections - 4 • Department of Education and Early Development - 5 • Department of Environmental Conservation - 5 • Department of Family and Community Services - 7 • Department of Fish and Game - 10 • Department of Health - 8 • Department of Labor and Workforce Development - 11 • Department of Law - 8 • Department of Military and Veterans Affairs - 12 • Department of Natural Resources - 13 • Department of Public Safety - 14 • Department of Revenue - 16 • Department of Transportation and Public Facilities - 31 • University of Alaska - 3 Total amount of Entities = 180 MS. BROUSSARD, in conclusion, showed helpful links on slide 11 and offered to answer questions. 6:15:44 PM REPRESENTATIVE GRAY inquired about how the Executive Budget Act is different than HB 190. 6:16:03 PM DONNA ARDUIN, Staff, Representative Ben Carpenter, Alaska State Legislature, replied that the Executive Budget Act, Title 37, requires, among other things, for the legislature to set missions for state agencies, key performance indicators, performance measures, and how those should be measuring everything that the agencies are doing. So, one criterion for the Alaska Sunset Commission is to ensure that the agencies are adhering to the standards set by the legislature. REPRESENTATIVE GRAY asked whether the most critical failure in the Executive Branch and the legislature not following the Executive Budget Act is that the legislature isn't following up. MS. ARDUIN responded that technically it's the legislature that isn't following what is required. The legislature is required to set the missions and performance measures for the agencies. The Executive Branch has kept a schedule of missions and performance indicators. However, those aren't being used in either the budgeting process or the management process of those agencies. REPRESENTATIVE GRAY asked how the Executive Budget Act should be followed by the legislature and why the legislature isn't doing it. He further asked about what an individual legislator should be doing to follow the Act. MS. ARDUIN answered that the Alaska Sunset Commission would, among many other criteria, be reviewing adherence to the Executive Budget Act, whether there is an alternative delivery method for those services and performance requirements, the extent to which the entity is organized in a manner for business process improvement, efficiency within the way the entity operates, and whether there is any overlap of services with other entities. 6:18:55 PM CHAIR CARPENTER addressed Representative Gray's question about what the legislature should be doing to follow the Executive Budget Act. He outlined the long list of what legislators do each day throughout a legislative session and stated that the process of doing a deep dive into evaluating management of all 180 entities is therefore beyond the scope of what legislators can do. But the Executive Budget Act says the legislature is supposed to provide the guidance for mission, goals, and performance measures to the executive branch for all 180 entities to ensure that the government is being managed appropriately. Given the legislature isn't going to get to it with business as normal within a legislative session, the intent of HB 190 in creating the Sunset Commission is to complement the responsibilities of both the Executive Branch and the legislature in providing public input as to how the government of the people for the people is supposed to be run. 6:20:39 PM REPRESENTATIVE GRAY remarked that it sounds like [the Executive Budget Act] had unrealistic expectations of how the legislature could possibly do what the Act asks it to do for 180 entities. CHAIR CARPENTER replied that he can't say it was unrealistic at the time it was written. But, he continued, he knows that in his own everyday business being able to review the missions and measures for each department is outside the scope of his available time unless he were to pare down what he is trying to do within the legislative session. REPRESENTATIVE GRAY stated that doing these deep dives into 180 entities seems like a big job for [seven] people to do who are not compensated. CHAIR CARPENTER answered that the fiscal note is just over $1 million because the commission is empowered to hire staff to do most of that work daily. The commissioners would give guidance to and supervise the trained staff and would meet periodically to review and publish recommendations to the legislature and the Executive Branch. 6:22:34 PM REPRESENTATIVE TILTON, to give an idea of the time involved, recounted that in 2012 or 2013 the "finance committee" on which she was staff conducted a deep dive on every division within the Department of Health and Social Services. While not as extensive as is proposed in HB 190, she said, it took a full interim to review each division's mission, measures, what the public thought the division did well, and what the division thought it did well. CHAIR CARPENTER commented that legislators are looking at this from a legislative perspective but when looking at it from a bureaucracy's perspective, [an agency] is busy doing day to day functions, and to add on a review of how it is doing business becomes a big burden. So, help must be asked from somebody to do a review periodically of whether things are headed in the right direction. REPRESENTATIVE TILTON concurred with asking the administration to do this kind of review, especially during session, since it was difficult even during the interim given the department was carrying on with its business. 6:25:24 PM REPRESENTATIVE MCCABE proffered it would take 16 years to go through all 16 departments. He asked whether the assumption being used here is based on Texas making $18 per $1 from its commission. CHAIR CARPENTER responded that past performance doesn't predict future returns. He said he doesn't know that Alaska can achieve the same rate of improvement as Texas as he hasn't attempted to quantify that. Regarding the length of time, he stated the process might be quicker based on some departments being made up of only a few entities. 6:27:27 PM REPRESENTATIVE GROH stated it is clear and undisputed that the governor and legislature could do this now, though it hasn't occurred. He inquired about the accountability and transparency of non-elected commissioners doing this work versus elected constitutional officers of the legislature and the governor. CHAIR CARPENTER answered that he isn't too concerned with the commissioners not being duly elected because the recommendation that they make is going to the duly elected representatives. That is in the same vein as non-elected staff or consultants hired by the legislature to provide advice, and the legislature then chooses whether to act on that advice. The bill is drafted to force the legislature to take seriously what those commissioners have said and act upon it in some form. REPRESENTATIVE GROH commended Chair Carpenter for bringing forward the recommendations of the fiscal policy working group, one of those recommendations being for budget reductions over time. He said he is interested in efficiencies and finding the right reductions to make is a good thing for the state in combination with other steps to resolve the state's deficit. He said he would like to learn more about the actual experience of Texas and how exactly it worked. CHAIR CARPENTER drew attention to the links provided on slide 11, one of which is for the Texas Sunset Advisory Commission. He encouraged members to do their due diligence, learn about what Texas has done, and come back for discussion. 6:31:32 PM REPRESENTATIVE GRAY asked whether anything about HB 190 is changed in the context of the governor having 13 executive orders (EOs) to eliminate some boards and commissions and consolidate. He further asked whether the governor would still be able to do this same thing if HB 190 were in effect. CHAIR CARPENTER offered his belief that nothing in HB 190 addresses the governor's authority to restructure the government per the constitutional and statutory that he has now. The bill should be thought of as an addition to both the governor's and the legislature's authorities because the legislature can also restructure. The bill provides a level of detail through a consistent study methodology that gives better data and better information. REPRESENTATIVE GRAY agreed. 6:33:08 PM MS. ARDUIN returned to Representative McCabe's point. She clarified that in HB 190 there is a one year and an order for the entities to review. She suggested members look at that provision and determine whether they would like some flexibility in that or a timeframe change. She further clarified that the entities being reviewed under the departments include the divisions as well as the corporations, boards, and commissions underneath the department. Corporations, she advised, have not had the kind of review or oversight that some of the agencies and divisions have had. REPRESENTATIVE MCCABE posed a scenario in which the legislature receives a report that says to shut down an entity but the legislator in whose district the entity is located doesn't want it shut down, causing it to become a political football. He asked whether there is a way to make the language take it away from the legislature, so it isn't so political and is more economic driven. MS. ARDUIN responded that while the legislature has had failures in the past to follow through on any type of recommendations, there is a lot of teeth in this. The commission can submit any bill it would like through the rules committee and if the legislature doesn't take up the bill or pass the bill the legislature can amend the bill that entity will automatically be sunset at the end of the next year. 6:35:34 PM REPRESENTATIVE GRAY surmised that the commission could find that something should be eliminated, the legislature takes it up and decides to eliminate it, but the governor vetoes the bill and therefore it isn't eliminated. MS. ARDUIN confirmed that that is correct. REPRESENTATIVE GRAY presumed this would always be reported to the legislature, not a situation where the commission recommends elimination, and the governor decides to eliminate it. He noted the large number of EOs and postulated that this would just be a different avenue for the legislature to eliminate boards and commissions or change boards and commissions. MS. ARDUIN responded that the governor's EO reorganization abilities are simply to reorganize, not to remove any of the powers and duties of any entity or change the management structures; anything on statute under those boards would now fall to somebody else. The Sunset Commission could recommend those things, but HB 190 goes far beyond the ability to reorganize as in the governor's executive orders. The bill allows for changes in programs, changes in the way programs are delivered, and changing the management of those programs. 6:37:18 PM CHAIR CARPENTER stated he will look for case studies from Texas and bring them forward as examples of how they worked in Texas. REPRESENTATIVE GRAY stated that he likes HB 190. MS. ARDUIN related that the Texas Sunset Commission is proud of having implemented more responsiveness to the public, which is not done when audits are conducted of departments in Alaska. 6:38:04 PM REPRESENTATIVE MCCABE noted that there are DOTPF roads and city roads within the Municipality of Anchorage that are snowplowed. He asked how a snowplowing recommendation from the Sunset Commission would be handled when there are cross agency or cross governmental entities involved. MS. ARDUIN replied that when the Sunset Commission reviews an entity, that entity and all its subdivisions must submit a report to the commission, so the entity is the first reporter to say it has issues. Then as the commission continues its work, it involves the public, which in this scenario would involve folks from Anchorage. The commission would hold public hearings and then come up with its recommendations. CHAIR CARPENTER stated that in addition to employees of the commission who are subject matter experts, the commission is empowered to bring in expertise to help in solving a problem. If there were issues with the Municipality of Anchorage or any jurisdiction, there would be an opportunity for collaboration and public involvement to provide understanding and recommendations, which currently isn't being done so it would force the legislature and the executive. In addition to statutory change, [HB 190] provides for changes to regulation, which wouldn't require action on the legislature's part, only action on the Executive Branch's part. MS. ARDUIN added that HB 190 also gives the commission's staff and consultants the ability to attend any meeting of the department and have access to any information that the department has available, something that is much more difficult for legislators to do on a daily basis. 6:41:25 PM REPRESENTATIVE GRAY stated that Anchorage taking over all the snowplowing would be a very complicated. He asked whether the Executive Budget Act should be repealed if HB 190 is passed given the Act isn't serving its purpose and isn't being done. CHAIR CARPENTER answered that he has another bill that rewrites the Executive Budget Act to draw the legislature's attention and help the legislature better follow the Executive Budget Act. The Sunset Commission would be a second tool that helps both branches achieve a leaner government that isn't tied into the Executive Budget Act. REPRESENTATIVE GRAY said his research of the Texas Sunset Act found an example of an environmental agency that was not enforcing regulations. [The Texas Sunset Commission] forced the agency to start doing its job rather than eliminating the agency. So, it's about making an agency do its work as well as about making it leaner. CHAIR CARPENTER concurred that a review by either the legislature or the commission could result in a recommendation regarding an inefficiency or a recommendation regarding work that isn't being done. 6:44:14 PM REPRESENTATIVE TILTON noted she understands that there is a cost benefit but inquired about the commission's [proposed] budget given that staff and consultants come at a high price. CHAIR CARPENTER invited the Office of the Lieutenant Governor to review the fiscal note that it drafted for HB 190. 6:45:26 PM KELLY HOWEL, Chief of Staff, Office of the Lieutenant Governor, explained that the bill's fiscal note for the first year is $1,150,000, which includes startup costs, and then about $10,000 less through the out years. She pointed out that HB 190 gives the commission the discretion to hire staff, the number of staff, and qualifications of those staff, so assumptions had to be made when estimating the fiscal note. The assumption made for staff was a minimum of five, which would include administrative support, an accountant, auditors, and, as the Texas Sunset Advisory [Commission] has done, an attorney to provide legal advice. Travel costs are estimated at about $23,000 a year for the commission to meet and for staff travel to do audits. Contractual services for setup costs, office space and leasing costs, and consultant costs are estimated at $200,000 per year. Commodities are supplies that are seen in the startup year but not the out years. 6:48:10 PM REPRESENTATIVE TILTON recommended that the Alaska Sunset Commission be stationed on the road system so the public can attend and participate in the transparency. 6:48:34 PM REPRESENTATIVE GRAY stated that Section 1 of HB 190 puts in some teeth by providing that someone who refuses to cooperate with the Legislative Budget and Audit Committee can be fined $5,000. He surmised this is being added to something that already exists if someone doesn't cooperate with the committee. CHAIR CARPENTER confirmed that that is correct. REPRESENTATIVE GRAY asked whether people don't cooperate with the Legislative Budget and Audit Committee and whether those people are fined. He said he wants to know that there are teeth and an enforcement mechanism when somebody refuses to cooperate. CHAIR CARPENTER responded that he has only been chair of the Legislative Budget and Audit Committee for a year, so he doesn't have an historical answer. However, to his knowledge, the Legislative Budget and Audit Committee has never fined anyone for not providing information, and to his knowledge, there has never been a problem over the last year with information not being presented to the committee on ask. He noted that the Legislative Budget and Audit Committee includes the Legislative Finance Division and the Legislative Audit Division. 6:50:25 PM CHAIR CARPENTER announced that HB 190 was held over.
Document Name | Date/Time | Subjects |
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HB 190 v.B.PDF |
HW&M 5/9/2023 6:00:00 PM HW&M 1/24/2024 6:00:00 PM HW&M 1/31/2024 6:00:00 PM HW&M 2/14/2024 6:00:00 PM |
HB 190 |
HB 190 - Sponsor Statement.pdf |
HW&M 5/9/2023 6:00:00 PM HW&M 1/24/2024 6:00:00 PM HW&M 1/31/2024 6:00:00 PM HW&M 2/14/2024 6:00:00 PM |
HB 190 |
HB 190 - Sectional Analysis.pdf |
HW&M 5/9/2023 6:00:00 PM HW&M 1/24/2024 6:00:00 PM HW&M 1/31/2024 6:00:00 PM HW&M 2/14/2024 6:00:00 PM |
HB 190 |
HB190 Alaska Sunset Commission Presentation.pdf |
HW&M 1/24/2024 6:00:00 PM HW&M 1/31/2024 6:00:00 PM HW&M 2/14/2024 6:00:00 PM |
HB 190 |
HB 190 List of Divisions and Corporations Under Each Department (for presentation).pdf |
HW&M 1/24/2024 6:00:00 PM HW&M 1/31/2024 6:00:00 PM HW&M 2/14/2024 6:00:00 PM |
HB 190 |
HB 190-OOG-LTG-01-11-24 Fiscal Note.pdf |
HW&M 1/24/2024 6:00:00 PM HW&M 1/31/2024 6:00:00 PM HW&M 2/14/2024 6:00:00 PM |
HB 190 |