Legislature(1999 - 2000)
04/15/1999 02:05 PM House FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
April 15, 1999
2:05 P.M.
TAPE HFC 99 - 81, Side 1
TAPE HFC 99 - 81, Side 2
CALL TO ORDER
Co-Chair Therriault called the House Finance Committee
meeting to order at 2:05 p.m.
PRESENT
Co-Chair Therriault Representative Grussendorf
Vice-Chair Bunde Representative Kohring
Representative Austerman Representative Moses
Representative J. Davies Representative Williams
Representative G. Davis
Co-Chair Mulder and Representative Foster were absent from
the meeting.
ALSO PRESENT
Annalee McConnell, Director, Office of Management and
Budget, Office of the Governor;
TESTIFIED VIA THE TELECONFERENCE NETWORK
Mike Andrews, Human Resource Investment Council, Anchorage.
SUMMARY
HB 40 "An Act combining parts of the Department of
Commerce and Economic Development and parts of the
Department of Community and Regional Affairs by
transferring some of their duties to a new
Department of Commerce and Rural Development;
transferring some of the duties of the Department
of Commerce and Economic Development and the
Department of Community and Regional Affairs to
other existing agencies; eliminating the
Department of Commerce and Economic Development
and the Department of Community and Regional
Affairs; relating to the Department of Commerce
and Rural Development and the commissioner of
commerce and rural development; adjusting the
membership of certain multi- member bodies to
reflect the transfer of duties among departments
and the elimination of departments; creating the
office of international trade and relating to its
duties; and providing for an effective date."
HB 40 was placed in a subcommittee chaired by
Representative Therriault, and consisting of
Representative Austerman, Representative Kohring
and Representative J. Davies.
HOUSE BILL NO. 40
"An Act combining parts of the Department of Commerce
and Economic Development and parts of the Department of
Community and Regional Affairs by transferring some of
their duties to a new Department of Commerce and Rural
Development; transferring some of the duties of the
Department of Commerce and Economic Development and the
Department of Community and Regional Affairs to other
existing agencies; eliminating the Department of
Commerce and Economic Development and the Department of
Community and Regional Affairs; relating to the
Department of Commerce and Rural Development and the
commissioner of commerce and rural development;
adjusting the membership of certain multi- member
bodies to reflect the transfer of duties among
departments and the elimination of departments;
creating the office of international trade and relating
to its duties; and providing for an effective date."
House Bill 40 was placed in a subcommittee consisting of Co-
Chair Therriault as chair, Representative Austerman,
Representative Kohring, and Representative J. Davies on
3/26/99. The subcommittee offered a proposed committee
substitute, # 1-LS0056\H, dated 4/14/99. Co-Chair Therriault
also provided members with a spreadsheet detailing the
proposed restructuring (copy on file). Functions were
divided into three new departments: Labor and Workforce
Development, Community and Economic Development and
Education and Child Development.
ANNALEE MCCONNELL, DIRECTOR, OFFICE OF MANAGEMENT AND
BUDGET, OFFICE OF THE GOVERNOR observed that consolidation
has been part of the discussions regarding a long range
balanced budget solution. She stressed that consolidation
would also bring new focus to priorities such as child
development, workforce development, marketing Alaska and
provide a stronger focus on rural Alaska. She observed that
the Governor views the consolidation as a way to bring
emphasis to these priorities and to provide better service
at a lower cost to the public. She emphasized that
consolidation goals need to be identified. The Governor's
goals are:
? A strong focus on child development and early
learning;
? Strong economic development (especially in high
unemployment areas;
? Consolidated workforce development;
? A strong voice for marketing Alaska;
? Improved quality of and access to services;
? A strong voice and access for rural communities to
services and policies of the state; and
? A secure long-term strategy for rural energy
(including funding for Power Cost Equalization).
Ms. McConnell noted that the Governor feels that a long-term
solution to Power Cost Equalization (PCE) is a vital element
of the discussions. She added that state government should
be modernized to gain efficiencies and cost savings.
Ms. McConnell observed that there is a lot of work to be
done to assure that there is as little disruption to
employees and programs as possible. She stated that there is
no way that every question can be resolved during the rest
of the legislative session. Issues relating to the federal
government will need to be resolved. She emphasized the need
for flexibility.
Co-Chair Therriault observed that it would be difficult to
anticipate the fiscal cost in the out years. He stated that
subcommittee chairmen of the new departments would have to
look at ways to obtain additional savings or efficiencies.
He stressed the difficulty of projecting the five-year
savings. He pointed out that some relocation costs could be
observed within the scheduled move of state employees to the
Bank of America building in Anchorage.
Co-Chair Therriault discussed programs under the proposed
Department of Labor and Workforce Development. The Human
Resource Investment Council (HRIC) was placed under this
function. He observed that there is some concern with the
placement of the Human Resource Investment Council.
Ms. McConnell acknowledged that HRIC would work closely with
the Department of Labor and Workforce Development. She
stated that the Administration has not resolved the issue of
whether HRIC should remain within the Office of the Governor
or be transferred to the new department. She clarified that,
while there are similarities, the Governor's plan and the
proposed committee substitute are not identical.
MIKE ANDREWS, HUMAN RESOURCE INVESTMENT COUNCIL, OFFICE OF
THE GOVERNOR explained that the Council is allowed 26
members, but that there are 22 active members. He noted that
there are opportunities to reduce the number of council
members. He stated that shifting to another department would
not cause too many technical problems. He noted that there
is a mandated 51 percent private sector majority on the
Council. He reviewed some of the Council's seats. There are
five commissioners, the lieutenant governor, four
representatives from organized labor, a member of the Alaska
Native Coalition for Employment and Training, a
representative of the University of Alaska and several
businesses and industry representatives on the Council. It
was created in 1995 and began operation in 1996. The
Governor's Council on Vocational Education, the State Job
Training Council and the Alaska Employment Securities
Council were merged to form the Human Resource Investment
Council. There were 39 members on the three councils
previous to the merger. The Council is supportive of the
proposed legislation, but would like more time for review.
Vice-Chair Bunde stated that he would like to hear the
Governor's long-term solution for funding PCE.
In response to a question by Representative Austerman, Ms.
McConnell pointed out that the Governor's proposal would
retain vocational education responsibilities and the Alaska
Career Information System in the new Department of Education
and Child Development. The proposed committee substitute
would place them under the new Department of Labor and
Workforce Development. She emphasized that more attention
needs to go into the issue of vocational education. She
recommended that it remain with education and child
development.
Co-Chair Therriault explained that he viewed vocational
education as preparation for entering the workforce. Ms.
McConnell acknowledged that there should be a relationship
between the two. She stated that she would outline some
reasons why vocational education should remain under
education.
Co-Chair Therriault noted that more discussion is needed on
the placement of HRIC, vocational technical education and
the Alaska Career Information System.
Representative G. Davis stated that he would also flag the
Adult Basic Education program. Co-Chair Therriault stated
that there needs to be an understanding of who the program
is serving. He questioned if the program is serving
individuals in high school or those that are being retrained
as the job market shifts.
Representative J. Davies asked where the Governor would
place the School to Work program. Ms. McConnell noted that
it was retained under education.
Co-Chair Therriault referred to the proposed Department of
Education and Child Development. He observed that there have
been problems with the transition of clients between Day
Care Pass I in the Department of Health and Social Services
and programs in the Department of Community and Regional
Affairs. Head Start and Childcare Assistance would be
aligned with Day Care Pass I, II, and III. Ms. McConnell
stressed that there would still need to be an enormous
amount of coordination between the Department of Health and
Social Services and the new Department of Education and
Child Development. She suggested that Childcare Licensing
also be included under education. She noted that there is
already preschool licensing in the Department of Education.
She also proposed that research on child development and
nutrition programs affecting early childhood development be
included under education because of their close relationship
with preschool and childcare.
Co-Chair Therriault stated that he is leery of moving health
and nutrition issues into education and daycare assistance.
He questioned where the break would be made.
Representative J. Davies asked for information on the Early
Learning Program. Ms. McConnell clarified that it is a
function not a program. Part of the mission of the
Department of Education and Child Development would be early
learning.
In response to a question by Representative J. Davies, Ms.
McConnell emphasized that there have been efforts to improve
the quality of childcare as opposed to warehousing children
in childcare centers. The intent is for one area to have
clear responsibility for being up to date on issues
surrounding childcare so that they can be translated into
ideas for improvement.
Ms. McConnell explained that consolidation was looked at
from a client's perspective. The intent is to simplify and
minimize the number of places a client would have to visit
or interact with.
Co-Chair Therriault looked at the proposed Department of
Community and Economic Development. He stated that the
intent is to keep functions of economic development tied
together. He acknowledged that there are a lot of items
under the proposed department, but emphasized that many are
self-contained. He pointed out that the Alaska Seafood
Marketing Institute (ASMI) is largely self-contained. The
Alaska Tourism Marketing Council and tourism would be rolled
together. The marketing function would be outside of the
state. He stressed that the Banking, Securities and
Corporations component would not take a lot of daily
supervision from the commissioner or deputy commissioners
that oversee it.
Ms. McConnell stated that the Governor's proposal would
place Power Cost Equalization (PCE) under the Alaska
Industrial Development and Export Authority (AIDEA). She
referred to recommendations from the Blue Ribbon Commission
on Power Cost Equalization. The Governor also recommends
that processing of the Capital Matching Grants program for
the incorporated communities, which is currently in the
Department of Administration, be transferred to the new
Department of Community and Economic Development. He also
recommends that the Low Income Home Energy Assistance
program be transferred from the Department of Health and
Social Services.
Representative J. Davies expressed concern that many of the
items are not tied to economic development and are not of a
rural flavor. He stated that it would make more sense to
shift some of these items to a new department of commerce
and revenue. He provided members with a list of items that
could be shifted to a new department of commerce and revenue
(copy on file).
Co-Chair Therriault observed that discussions have occurred
about placing Banking, Securities and Corporations and the
Division of Insurance with Occupational Licensing.
Representative J. Davies recommended that they be moved as a
block into the Department of Revenue. He pointed out that
most are relatively independent operators and only need an
administrative home. He stressed that there should be a
focus on community and rural development.
Co-Chair Therriault noted that there have been discussions
with the Department of Commerce and Economic Development
regarding the move of these functions to the Department of
Revenue. He observed that there were some concerns with the
proposal. Ms. McConnell emphasized the importance of
articulating goals and how they would be approached. The
attitude of how the organization is approached is very
important in providing positive relationships with
customers.
Co-Chair Therriault emphasized that he does not agree that a
line must be drawn between fostering economic development
for the state or for rural areas of the state.
(Tape Change, HFC 99 - 81, Side 2)
Ms. McConnell observed that the perception of how the issues
are approached is emotional. She stated that people are
appropriately concerned that the result be better for them.
She noted that in aggregate there are far more jobs in small
businesses, which employ 25 or less, than in large
businesses. She pointed out that there are a large number of
people living in small villages. She emphasized that there
are other vehicles for economic development in urban areas
that serve functions for larger areas that are not available
in rural Alaska. She stressed that more jobs in rural Alaska
would benefit the entire state.
Co-Chair Therriault clarified that Representative J. Davies'
proposal would place tourism under the Department of
Commerce and Revenue. He observed that there is a component
for planning and development of tourism in rural Alaska. He
pointed out that there would be a division between rural and
urban tourism. Representative J. Davies stated that the
major marketing effort is to attract tourism to all parts of
the state. He stressed that it is impossible to make one
link to every function. He stressed that the focus on rural
Alaska is needed because of Alaska's unique formation and
structure. Co-Chair Therriault pointed out that there would
be a rural advocate at the cabinet level to make sure that
rural needs would be met.
Vice-Chair Bunde maintained that the less parochial and more
statewide the service the more support would be generated.
Representative Grussendorf spoke in support of placing Adult
Basic Education and the Alaska Career Information System
under the Department of Education and Child Development. He
emphasized that the goal is to allow students to look at
careers while in high school. Co-Chair Therriault observed
that his intent was to group mandatory education and
preschool functions. Representative Grussendorf observed
that junior and seniors look at opportunities that are
available in college and alternatives to college while in
high school. He observed that vocational technical education
could be left under the labor portion.
Representative Kohring emphasized that the legislation would
keep current programs intact, provide a rural advocate and
bring programs together for easier access. He maintained
that the emphasis has been to make sure that the legislation
helps and does not hurt rural Alaska.
Co-Chair Therriault noted that it might be years down the
road before things settle and efficiencies are identified.
Vice-Chair Bunde stressed that the needs and interests of
rural Alaska are not monolithic. He observed that there is
as much variety in rural Alaska as in urban Alaska.
Representative J. Davies acknowledged that an attempt is
being made to improve the delivery of services to rural
Alaska, but suggested that the Committee listen to rural
Alaskans to see if the new structure meets their needs.
HB 40 was HELD in Committee for further consideration.
ADJOURNMENT
The meeting adjourned at 3:10 p.m.
House Finance Committee 8 4/15/99
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