Legislature(2017 - 2018)BUTROVICH 205
02/27/2018 03:30 PM Senate STATE AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| SCR17 | |
| SB204 | |
| SB192 | |
| SB207 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SCR 17 | TELECONFERENCED | |
| *+ | SB 204 | TELECONFERENCED | |
| *+ | SB 192 | TELECONFERENCED | |
| *+ | SB 207 | TELECONFERENCED | |
SB 207-TRANSFER DUTIES FROM DCCED
4:37:28 PM
CHAIR MEYER called the committee back to order. He announced the
consideration of SB 207.
4:37:51 PM
SENATOR MIA COSTELLO, Alaska State Legislature, Juneau, Alaska,
sponsor of SB 207, explained that the bill deletes a department.
She noted that the concept for the bill has been years in the
making. She emphasized that economic development is one of her
priorities as a legislator and noted that most of her
legislation has been to promote that. She referenced her
legislative history with governors Hickel and Murkowski. She
detailed her experiences with two administrations that included
departmental consolidation as well as her involvement in trade
missions to Asia to promote Alaska. She remarked that she
questioned whether the departmental consolidation currently
works and noted that as one reason why she introduced the bill.
SENATOR COSTELLO disclosed that during her time as a
representative in the House she oversaw a working group that
addressed how to diversify the state's economy. She disclosed
that one of the questions the working group asked pertained to
identifying a state that was doing a good job and Texas was
identified. She said the Texas website is a "one stop shop" for
easily connecting inquires with the people and resources needed
to start a business in the state.
She noted that she constantly asks the question as to how the
state can elevate its economic development and disclosed that
her answer is to get rid of the Alaska Department of Commerce,
Community, and Economic Development (DCCED) and put the
commissioner and some divisions in the governor's office to
elevate the position. She said DCCED spans a tremendous range of
topics and emphasized that her proposed change is not meant to
diminish the work that is done at the department, but to elevate
it.
She explained that the commissioner for DCCED sits on 23 boards,
a time-consuming job where most of the responsibilities will go
to other departments, including the Department of Revenue and
the Department of Natural Resources. She detailed some of her
proposed changes as follows:
• The Minerals Commission and the forest products in that
department will go into the Department of Natural
Resources.
• The Alaska Film Office, no longer in existence, will be
"removed from the books."
• Remove the commissioner's office in the Division of
Administrative Services:
o The commissioner would be housed in the governor's
office and work directly with the governor and staff
members.
She noted that many of the departments used to be separate and
were ultimately combined; however, she said the state has never
asked if combining the departments is working. She asserted that
it is a worthy discussion when considering Alaska's fiscal
challenges. She added that she thinks the state should be
marketed and encouraged the administration and legislature to
market Alaska whenever possible.
4:44:19 PM
JOSHUA WALTON, Staff, Senator Costello, Alaska State
Legislature, Juneau, Alaska, noted that the bill has 127
sections due to departmental-separation components. He
referenced the proposed division/office/program relocation as
follows:
• Dissolved:
o Commissioner's Office,
o Division of Administrative Services,
o Alaska Film Office.
• Office of the Governor:
o Alaska Seafood Marketing Institute,
o Alaska Tourism Marketing Board,
o Division of Economic Development:
square4 Development Section,
o Note:
square4 Includes all marketing programs,
square4 Includes all non-lending programs.
• Department of Revenue:
o Division of Banking and Securities,
o Division of Community and Regional Affairs,
o Division of Corporations, Business and Professional
Licensing (DCCED-CBPL),
o Division of Economic Development:
square4 Investments Section,
o Division of Insurance,
o Alaska Energy Authority,
o AIDEA,
o Alaska Gasline Development Corporation,
o Alaska Railroad Corporation,
o Alcoholic Beverage Control Board,
o Marijuana Control Board,
o Regulatory Commission of Alaska,
o Note:
square4 Includes all revolving loan fund programs,
square4 Includes all independent and quasi-judicial
agencies.
• Department of Natural Resources:
o Alaska Minerals Commission,
o Alaska Forest Products.
He pointed out that a committee substitute would be required to
carry out all the bill's objectives.
4:48:06 PM
SENATOR WILSON asked Senator Costello to address the referenced
memo for SB 207 from the Division of Legal and Research
Services, item 10 regarding the constitutionality of moving some
of the items into the Office of the Governor and referenced the
section as follows:
Moving duties and programs to the Office of the
Governor. As requested, the bill moves the film
production promotion program, the Alaska product
preference program, the Made in Alaska labeling
program, and tourism duties and grants from DCCED to
the Office of the Governor. However, moving these
duties and programs out of a principal department and
into the Office of the Governor raises an issue under
the Constitution of the State of Alaska.
Article III; sections 22, 25, 26; Constitution of the
State of Alaska; provide that the Legislature is
required to allocate powers to the principal
departments in the executive branch and that the head
of a principal department is subject to legislative
confirmation. The Legislature exercises its oversight
of these departments by confirming the single
executive or members of the commission or board that
head the department.
The Alaska Supreme Court has not addressed whether the
governor's office is a principal department; however,
the Legislature may not confirm the head of the Office
of the Governor (the governor), and it does not appear
that the Office of the Governor would be considered a
principal department as contemplated by the
constitution.
Moving duties and programs from a principal department
into the Office of the Governor appears to violate the
constitutional requirement that the Legislature
allocate powers, etc., to the principal departments.
In addition, transferring duties and programs to the
Office of the Governor removes the Legislature's
oversight (by its confirmation authority) of the
execution and implementation of these transferred
duties and programs once they are in the Office of the
Governor.
1. Under Article III, section 22, the Legislature
has the authority to allocate functions, powers,
and duties to departments within the executive
branch, with the limitation that there be no more
than 20 principal departments. Article III,
section 24, further provides that "[e]ach
principal department shall be under the
supervision of the governor."
2. Art. III, section 25, requires that the head
of each principal department be appointed by the
governor, subject to legislative confirmation.
3. Art. III, section 26, requires that the
members of a board or commission that heads a
principal department or regulatory or quasi-
judicial agency be appointed by the governor.
SENATOR COSTELLO explained that the bill moves the commissioner
of DCCED to the governor's office. She specified that the bill
does not move the "commissioner of the department," but the
"commissioner" is being moved. She said she believes that for
clarity it is possible to have language in the bill that says,
"For the purposes of this section the commissioner is not a
commissioner of a department."
4:49:14 PM
SENATOR GIESSEL addressed the memo from the Division of Legal
and Research Services as follows:
A follow up on Senator Wilson's question. What the
memo calls out is moving these individuals, whether it
is the commissioner or any of these divisions and most
prevalently the Division of Corporations, Business and
Professional Licensing (DCCED-CBPL); these personnel
are subject to legislative confirmation and as the
memo points out that moving duties and programs to the
Office of the Governor appears to violate the
constitutional requirement that the legislature
allocate powers to principal departments and have
oversite related to confirmation.
She asked Senator Costello how she would deal with the
constitutional issue referenced in the memo.
SENATOR COSTELLO reiterated that she believes that there is a
work-around with the issue that Senators Wilson and Giessel
referenced. She said she is willing to work with anyone who is
interested in pursuing the noted constitutional issue.
SENATOR GIESSEL specified that her main familiarity with the
entire DCCED has to do with DCCED-CBPL. She pointed out that the
division staff provides substantial staff support to the
multiple boards and questioned the substantial staff movement
into the Department of Revenue. She said her second issue
focuses on the mission conflict between the Department of
Revenue's task in collecting money versus the mission statement
for DCCED-CBPL. She opined that DCCED-CBPL has a quasi-
adjudicatory regulatory mission or charge that seems to be in
conflict in terms of the Department of Revenue's purpose of
collecting money.
4:51:40 PM
SENATOR WILSON thanked Senator Costello for looking for
efficiencies by combining governmental services. He said he was
willing to work with her to try and find more suitable places to
put some of the departments. He conceded that he questioned if
DCCED could be fully eradicated but opined that some pieces may
be moved around to shrink the size of the department.
SENATOR COGHILL remarked that SB 207 is a big undertaking. He
opined that Senator Costello's focus may be on what the
government can do to be nimbler in its business opportunities
versus the idea of efficiency. He said the legislation is a big
shake-up where core responsibilities are blended. He questioned
whether the focus on core responsibilities would be retained.
SENATOR COSTELLO asserted that SB 207 is transformational. She
pointed out that the proposed departmental change in the bill
also occurred in the 1990s when three departments were merged.
She said there is a need to break down silos between
departments; for example, there might be advantages with
Community and Regional Affairs being housed in a different
department, whether the Department of Revenue or another one.
She noted that when the merger occurred, DCCED became a
department that spanned a huge range of issues ranging from
aerospace to rural bulk fuel loans. She disclosed that at a
recent Aviation Advisory Council meeting she learned that a
community was eligible for federal funds but was not aware of it
because "that's a DOT issue." She opined that there are
opportunities for increased collaboration and asserted that
asking the question is worthwhile to enhance some of the things.
She reiterated that the commissioners spend a third of their
time sitting on boards and the question addressing the time
issue is posed in the bill. She noted that there is a House
version of SB 207 as well.
4:55:42 PM
CHAIR MEYER said he appreciated Senator Costello for bringing
the legislation forward. He agreed with previous statements that
SB 207 is big bill and noted that the legislation needs
additional work, pointing out that the fiscal notes have not
been able to keep up. He asked Senator Costello if her intent is
to save the state money.
SENATOR COSTELLO explained that saving money is not why she
introduced the bill but saving money would be a benefit from the
legislation.
CHAIR MEYER commented that he likes the idea of, "breaking down
the silos." He noted that Senator Costello gave the example of
how everything was centralized to reduce staff and share
services, a concept he likes and will address with the deputy
commissioner. He suggested that work continue with the bill and
noted that Senator Wilson offered his assistance. He said the
bill will be brought back for public testimony at a later date.
4:57:17 PM
CHAIR MEYER held SB 207 in committee.