Legislature(2023 - 2024)SENATE FINANCE 532

03/12/2024 01:30 PM Senate FINANCE

Note: the audio and video recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.

Download Mp3. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Please Note Time Change --
+ SB 21 STRATEGIC PLANS FOR STATE AGENCIES TELECONFERENCED
Heard & Held
-- Invited & Public Testimony --
-- <Time Limit May Be Set> --
+ Bills Previously Heard/Scheduled: TELECONFERENCED
+= SB 127 TAXATION: VEHICLE RENTALS, SUBPOENAS TELECONFERENCED
Moved CSSB 127(FIN) Out of Committee
                 SENATE FINANCE COMMITTEE                                                                                       
                      March 12, 2024                                                                                            
                         1:35 p.m.                                                                                              
                                                                                                                                
                                                                                                                                
1:35:18 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Olson called the Senate Finance Committee meeting                                                                      
to order at 1:35 p.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Donny Olson, Co-Chair                                                                                                   
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Click Bishop                                                                                                            
Senator Jesse Kiehl                                                                                                             
Senator Kelly Merrick                                                                                                           
Senator David Wilson                                                                                                            
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Lyman Hoffman, Co-Chair                                                                                                 
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Fadil  Limani, Deputy  Commissioner, Department  of Revenue;                                                                    
Brandon Spanos, Acting Tax  Director, Department of Revenue;                                                                    
Senator  Matt  Claman,   Sponsor;  Rob  Carpenter,  Analyst,                                                                    
Legislative   Finance  Division;   Senator  James   Kaufman,                                                                    
Sponsor; Matthew Harvey, Staff, Senator James Kaufman.                                                                          
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Carrigan Grigsby, Deputy Director, Tax Division, Department                                                                     
of Revenue.                                                                                                                     
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 21     STRATEGIC PLANS FOR STATE AGENCIES                                                                                    
                                                                                                                                
          SB 21 was HEARD and HELD in committee for further                                                                     
          consideration.                                                                                                        
                                                                                                                                
SB 127    TAXATION: VEHICLE RENTALS, SUBPOENAS                                                                                  
                                                                                                                                
          SB  127 was  REPORTED OUT  of committee  with four                                                                    
          "no recommendations",  one "amend" recommendation,                                                                    
          one "do  pass" recommendation",  and with  one new                                                                    
          indeterminate fiscal  note from the  Department of                                                                    
          Revenue.                                                                                                              
                                                                                                                                
SENATE BILL NO. 127                                                                                                           
                                                                                                                                
     "An Act relating to vehicle rental taxes; relating to                                                                      
     the issuance of subpoenas related to tax records; and                                                                      
     providing for an effective date."                                                                                          
                                                                                                                                
1:36:06 PM                                                                                                                    
                                                                                                                                
Co-Chair Stedman MOVED to ADOPT Conceptual Amendment 1.                                                                         
                                                                                                                                
Co-Chair Olson OBJECTED for discussion.                                                                                         
                                                                                                                                
1:36:44 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
1:37:06 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  Stedman explained  the amendment.  He stated  that                                                                    
the vehicle rental tax would  be suspended from October 1 to                                                                    
March 31 each year.                                                                                                             
                                                                                                                                
Co-Chair  Olson  queried the  impact  the  amendment to  the                                                                    
state's revenue.                                                                                                                
                                                                                                                                
1:37:46 PM                                                                                                                    
                                                                                                                                
FADIL  LIMANI, DEPUTY  COMMISSIONER, DEPARTMENT  OF REVENUE,                                                                    
(DOR)  explained  that there  was  analysis  of the  revenue                                                                    
impact, and based  on the ten-year trajectory,  there was an                                                                    
estimate  of  a $15.1  million  total  revenue assuming  the                                                                    
existing law.                                                                                                                   
                                                                                                                                
Senator Bishop  wondered whether a refund  would work within                                                                    
the time frame.                                                                                                                 
                                                                                                                                
Mr. Liman deferred to Mr. Spanos.                                                                                               
                                                                                                                                
1:39:52 PM                                                                                                                    
                                                                                                                                
BRANDON SPANOS, ACTING TAX  DIRECTOR, DEPARTMENT OF REVENUE,                                                                    
replied that  there would  need to  be regulations  to allow                                                                    
for the vehicle  renter to assess the tax only  for the time                                                                    
that the tax was due.                                                                                                           
                                                                                                                                
Senator Bishop  surmised that there  was no fiscal  note yet                                                                    
for the amendment.                                                                                                              
                                                                                                                                
Mr. Spanos agreed.                                                                                                              
                                                                                                                                
Senator Bishop wondered whether it  would cost $6 million to                                                                    
upgrade the system to apply the amendment.                                                                                      
                                                                                                                                
Mr.  Spanos replied  in the  negative, and  stated that  the                                                                    
department  would  absorb  the  costs  associated  with  the                                                                    
amendment.                                                                                                                      
                                                                                                                                
1:40:54 PM                                                                                                                    
                                                                                                                                
Senator  Kiehl asked  about the  impact on  residents versus                                                                    
nonresidents.                                                                                                                   
                                                                                                                                
Mr. Spanos replied that he did  not have that insight on the                                                                    
breakdown of that  issue, but believed that  the majority of                                                                    
the revenue would be from the tourism industry.                                                                                 
                                                                                                                                
1:41:45 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
1:42:43 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
1:42:50 PM                                                                                                                    
                                                                                                                                
SENATOR MATT CLAMAN, SPONSOR, replied  that replied that the                                                                    
summer season had about 30  percent instate rentals, and the                                                                    
winter season  saw about 45 percent instate rentals.                                                                            
                                                                                                                                
1:43:26 PM                                                                                                                    
                                                                                                                                
CARRIGAN GRIGSBY, DEPUTY  DIRECTOR, TAX DIVISION, DEPARTMENT                                                                    
OF  REVENUE (via  teleconference),  stated  that the  fiscal                                                                    
note for the bill was  previously indeterminate, and did not                                                                    
have  the  data   to  apply  revenue  for   the  rental  car                                                                    
platforms.                                                                                                                      
                                                                                                                                
Co-Chair Olson queried the exact result of the amendment.                                                                       
                                                                                                                                
Mr. Limani replied that there  was not enough information to                                                                    
incorporate the  committee substitute, but believed  that it                                                                    
would be a net revenue positive.                                                                                                
                                                                                                                                
Co-Chair  Stedman surmised  that it  was possible  of having                                                                    
more revenue than FY 23.                                                                                                        
                                                                                                                                
Mr. Limani replied  that he could not  reply with provision,                                                                    
but felt that the revenue would still be in the negative.                                                                       
                                                                                                                                
Mr. Spanos deferred to Mr. Limani.                                                                                              
                                                                                                                                
1:47:50 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
1:48:53 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
1:48:59 PM                                                                                                                    
                                                                                                                                
Senator Merrick felt that the  amendment was contrary to the                                                                    
spirit of  the bill,  and felt that  the vehicle  rental tax                                                                    
would not be replaced with other state funds.                                                                                   
                                                                                                                                
1:50:10 PM                                                                                                                    
                                                                                                                                
ROB  CARPENTER,   ANALYST,  LEGISLATIVE   FINANCE  DIVISION,                                                                    
(LFD), replied  that the receipts  would be related  to road                                                                    
maintenance.                                                                                                                    
                                                                                                                                
1:50:55 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
1:51:50 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Olson  asked about the  impact of the  amendment to                                                                    
the legislation.                                                                                                                
                                                                                                                                
Mr. Carpenter  responded that the amendment  would delay tax                                                                    
collection from October through March,  or 25 percent of the                                                                    
annual collections.                                                                                                             
                                                                                                                                
1:53:06 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
1:56:52 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
1:56:56 PM                                                                                                                    
                                                                                                                                
Senator Bishop  spoke to  safety of the  public. He  did not                                                                    
support the amendment.                                                                                                          
                                                                                                                                
Senator Bishop MOVED to REPORT  SB 127 out of committee with                                                                    
individual recommendations and attached fiscal note.                                                                            
                                                                                                                                
Senator Kiehl                                                                                                                   
                                                                                                                                
There being NO further OBJECTION it was so ordered.                                                                             
                                                                                                                                
2:04:05 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:06:39 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
SB  127  was  REPORTED  OUT   of  committee  with  four  "no                                                                    
recommendations", one "amend"  recommendation, one "do pass"                                                                    
recommendation", and with one  new indeterminate fiscal note                                                                    
from the Department of Revenue.                                                                                                 
                                                                                                                                
SENATE BILL NO. 21                                                                                                            
                                                                                                                                
     "An Act relating to the  Executive Budget Act; relating                                                                    
     to  strategic  plans, mission  statements,  performance                                                                    
     plans,  and   financial  plans  for   executive  branch                                                                    
     agencies; and providing for an effective date."                                                                            
                                                                                                                                
2:07:05 PM                                                                                                                    
                                                                                                                                
SENATOR JAMES KAUFMAN, SPONSOR, introduced the bill.                                                                            
                                                                                                                                
Co-Chair Stedman queried the definition of "strategic."                                                                         
                                                                                                                                
Senator  Kaufman replied  that  the strategic  plan was  the                                                                    
highest  level  vision  of  how   the  key  goals  would  be                                                                    
attained, rather than  "kicking the can down  the road" with                                                                    
an annual process.                                                                                                              
                                                                                                                                
2:10:38 PM                                                                                                                    
                                                                                                                                
MATTHEW HARVEY, STAFF, SENATOR JAMES KAUFMAN, discussed the                                                                     
Sectional Analysis (copy on file):                                                                                              
                                                                                                                                
     Section 1:                                                                                                                 
     Revises an  existing Executive Budget Act  reference in                                                                    
     AS  16.05.110(b) to  the  newly  created AS  37.07.085,                                                                    
     "Performance   and  Financial   Plans",   due  to   the                                                                    
    reference to budget request supporting information.                                                                         
                                                                                                                                
     Section 2:                                                                                                                 
     Revises AS 37.07.010 to  include reference to strategic                                                                    
     plans,  associated   strategies,  and  the   change  to                                                                    
     multiple planning periods.                                                                                                 
                                                                                                                                
     Section 3:                                                                                                                 
     Revisions to  AS 37.07.014(a): Responsibilities  of the                                                                    
     legislature.                                                                                                               
     •  Changes the  role  of the  legislature from  issuing                                                                    
     mission  statements   for  agencies  and   subunits  to                                                                    
     reviewing   and   analyzing  mission   statements   and                                                                    
     performance  plans  issued  by the  governor  for  each                                                                    
     agency.                                                                                                                    
          o Some  missions are set in  statute and therefore                                                                    
          the  current  method  can still  be  carried  out.                                                                    
          Where  not set  in statute  there is  not a  clear                                                                    
          mechanism  for the  legislature to  change mission                                                                    
          statements  of agencies.  Providing agencies  with                                                                    
          the  ability   to  write  and   communicate  their                                                                    
          mission statements will  allow a higher likelihood                                                                    
          of   progress  in   the  direction   of  statewide                                                                    
          priorities.                                                                                                           
     • Removes the issuance  of desired results and replaces                                                                    
     with reference to the performance plan.                                                                                    
                                                                                                                                
     Section 4:                                                                                                                 
     Revisions to  AS 37.07.014(b): Responsibilities  of the                                                                    
     legislature.                                                                                                               
     • Removes  language directing the legislature  to adopt                                                                    
     a method of measuring results.                                                                                             
          o  There is  not  a clear  way  of adopting  these                                                                    
          'methods  of measuring  results'  so  they do  not                                                                    
          often change.                                                                                                         
       Replaces  the semi-annual reporting  requirement with                                                                    
     a reference to AS 37.07.014(f)                                                                                             
          o  This bill  adds a  requirement for  a quarterly                                                                    
          performance  report  to  be made  available  on  a                                                                    
          public-facing website in subsection (f)                                                                               
     • Adds a reference to a strategic plan.                                                                                    
                                                                                                                                
     Section 5:                                                                                                                 
     Revision  to AS  37.07.014(c): Responsibilities  of the                                                                    
     Legislature                                                                                                                
     •  Replaces 'operating  program'  with strategic  plans                                                                    
     and financial plans.                                                                                                       
                                                                                                                                
     Section 6:                                                                                                                 
     Revision  to AS  37.07.014(d): Responsibilities  of the                                                                    
     Legislature                                                                                                                
     • Adds a reference to strategic planning.                                                                                  
     •  Clarifies   that  the   legislature's  role   is  to                                                                    
     authorize  the  capital  program  and  financial  plans                                                                    
     necessary to implement agency performance plans.                                                                           
     • Reinforces the hierarchy  of planning, from strategic                                                                    
     planning to performance and financial plans.                                                                               
          o Review  and analyze strategic plans  and mission                                                                    
          statements.                                                                                                           
          o  Assess how  annual plans  contribute to  multi-                                                                    
          year plans.                                                                                                           
          o  Review  and   integrate  financial  plans  into                                                                    
          performance plans                                                                                                     
          o  Maintain  all  plans on  a  publicly  available                                                                    
          internet website.                                                                                                     
                                                                                                                                
     Section 7:                                                                                                                 
     Revision  to AS  37.07.014(f): Responsibilities  of the                                                                    
     Legislature                                                                                                                
     • To  help fulfill the  legislature's responsibilities,                                                                    
     each agency shall:                                                                                                         
          o  Allocate  resources   to  implement  multi-year                                                                    
          plans.                                                                                                                
          o Express program results in measurable terms                                                                         
          o  Measure progress  towards multi-year  plans and                                                                    
          other results                                                                                                         
          o  Promote activities  consistent with  multi-year                                                                    
          plans that reduce future costs.                                                                                       
         o Plan for both the short- and long-term                                                                               
          o  Require   accountability  at  all   levels  for                                                                    
          meeting multi-year plans.                                                                                             
         o Adds a reference to strategic planning.                                                                              
          o Requires quarterly reporting  to OMB on progress                                                                    
          towards the performance plan.                                                                                         
                                                                                                                                
     Section 8:                                                                                                                 
     Revision  to AS  37.07.014(g): Responsibilities  of the                                                                    
     Legislature                                                                                                                
    • Removes Boards and Commissions from this section.                                                                         
          o  Boards and  Commissions  are moved  to a  newly                                                                    
          created section (AS 37.07.055)                                                                                        
                                                                                                                                
     Section 9:                                                                                                                 
     Revision to  AS 37.07.016: Governor's use  of strategic                                                                    
     plans, mission statements, and performance plans                                                                           
     •  Adds reference  to strategic  plans and  performance                                                                    
     plans in title of section.                                                                                                 
     •  Directs the  Governor's to  review strategic  plans,                                                                    
     mission statements, and performance plans.                                                                                 
     • After review, the  Governor shall approve, or require                                                                    
     OMB   to   revise,   the   strategic   plans,   mission                                                                    
     statements, and performance plans.                                                                                         
     • Strategic plans and mission  statements shall be used                                                                    
     to implement and execute the law.                                                                                          
     •  Performance  plans  shall be  used  to  achieve  the                                                                    
     desired  results of  the  strategic  plans and  mission                                                                    
     statements.                                                                                                                
                                                                                                                                
     Section 10:                                                                                                                
     Revision  to  AS  37.07.020:  Responsibilities  of  the                                                                    
     Governor                                                                                                                   
     • Adds reference to two new sections.                                                                                      
          o  The additional  references  ensure that  agency                                                                    
          strategic,  performance,  and financial  plans  as                                                                    
          well  as  boards  and commissions  operations  and                                                                    
          financial plans  will be submitted along  with the                                                                    
          budget.                                                                                                               
                                                                                                                                
     Section 11:                                                                                                                
     Revision  to AS  37.07.040:  Office  of Management  and                                                                    
     Budget                                                                                                                     
     • Adds  new plan names  to the  list of plans  in which                                                                    
     OMB    must   assist    in   coordination,    analysis,                                                                    
     development, and updates.                                                                                                  
     • Removes  OMB's responsibility for  the administration                                                                    
     of  a  state   agency  program  performance  management                                                                    
     system.                                                                                                                    
     • Adds  three new subsections which  clarify OMB's role                                                                    
     in the hierarchy of planning and reporting.                                                                                
          o (12)  Compile strategic plans and  submit to the                                                                    
          governor                                                                                                              
          o  (13) Compile  performance plans  and submit  to                                                                    
          the governor                                                                                                          
          o  (14) Compile  quarterly reports  and submit  to                                                                    
          the legislature                                                                                                       
                                                                                                                                
     Section 12:                                                                                                                
     Repeals and Reenacts AS 37.07.050: Agency Strategic                                                                        
     Plans; Mission statements                                                                                                  
     • Each agency shall develop 4-year strategic plans                                                                         
     that are consistent with authority and the governor's                                                                      
     statewide priorities.                                                                                                      
     • Plans must be updated and submitted to OMB at the                                                                        
     beginning of each gubernatorial term and at least once                                                                     
     every two years.                                                                                                           
     • Strategic plan must include:                                                                                             
          o  Description  of   strategic  plan  and  mission                                                                    
          statement                                                                                                             
               ? Mission Statement must:                                                                                      
               •  state the  public  purpose  of agency  and                                                                    
               programs.                                                                                                        
               • describe  services provided  and activities                                                                    
               conducted.                                                                                                       
               •  include explanation  of why  and for  whom                                                                    
               services  and  activities   are  provided  or                                                                    
               conducted.                                                                                                       
          o Identify three  six goals for the agency.                                                                           
               ?  Sec 20:  "goal"  means  a broad  statement                                                                  
               generally  describing a  desired outcome  for                                                                    
               an agency or a program of the agency.                                                                            
          o  Identify specific,  measurable, realistic,  and                                                                    
          timely objectives related to each goal.                                                                               
               ? Must contribute to progress towards goals.                                                                   
               ?  Must   be  based  on   recommendations  of                                                                  
               division directors of the agency.                                                                                
          o  Describe   methods  of  gathering   user  group                                                                    
          opinions                                                                                                              
          o  Describe population  served by  the agency  and                                                                    
          trends affecting that population.                                                                                     
          o Identify key external  factors that could affect                                                                    
          progress.                                                                                                             
          o  Identify  legislation  and  regulatory  changes                                                                    
          required.                                                                                                             
     • OMB's role in development of the hierarchy of plans                                                                      
          o  Review the  strategic plan.  Ensure consistency                                                                    
          with statewide priorities and other provisions.                                                                       
          o  Approve  or  require  agencies  to  revise  the                                                                    
          strategic plans.                                                                                                      
          o   Review    each   performance    plan.   Ensure                                                                    
          consistency   with    statewide   priorities   and                                                                    
          strategic plans.                                                                                                      
          o Approve or require agencies to revise the                                                                           
          performance plans.                                                                                                    
     • OMB may prepare strategic plans if a state agency                                                                        
     fails to transmit information by a date specified by                                                                       
     OMB.                                                                                                                       
     • All documents submitted to the office under this                                                                         
     section are public information.                                                                                            
    • Removes boards and commissions from this section.                                                                         
                                                                                                                                
     Section 13:                                                                                                                
     Adds a new section AS 37.07.055: Boards and                                                                                
     commissions: programs; operations and financial plans.                                                                     
     • Financial Plans                                                                                                          
     o Boards and commissions shall submit a financial plan                                                                     
     by December 15th to OMB, Legislative Finance, and the                                                                      
     legislature.                                                                                                               
     o Plan must include:                                                                                                       
          ? Budget information                                                                                                
               • Budget requested for next fiscal year.                                                                         
               •  Expenditures made  during previous  fiscal                                                                    
               year.                                                                                                            
               • Expenditures authorized  for current fiscal                                                                    
               year.                                                                                                            
               •  Expenditures  proposed   for  next  fiscal                                                                    
               year.                                                                                                            
               •   Explanation   of   services,   need   for                                                                    
              services, and cost of services.                                                                                   
               •  Number  of  total  positions  employed  or                                                                    
               under   contract,   including   for   capital                                                                    
               improvements.                                                                                                    
               • Other information required by OMB.                                                                             
          ? Receipts information                                                                                              
               • Receipts for previous fiscal year                                                                              
               •  Estimate of  receipts  for current  fiscal                                                                    
               year                                                                                                             
                 Estimate of receipts for next fiscal year                                                                      
          ? Identification of legislation required to                                                                         
          implement financial plan.                                                                                             
     • Operations plans.                                                                                                        
          o Boards and commissions shall submit an annual                                                                       
          operations plan by a date prescribed by OMB.                                                                          
          o OMB shall:                                                                                                          
               ? Review each operations plan for alignment                                                                    
               with  statewide  priorities,  appropriations,                                                                    
               planning methods, and legislative authority.                                                                     
               ?   Approve  or   require  revision   of  the                                                                  
               operations plan.                                                                                                 
     • OMB shall assist in preparation of financial plan.                                                                       
     • OMB may  prepare financial, or operations  plans if a                                                                    
     board or  commission fails to  transmit either  plan by                                                                    
     an OMB specified date.                                                                                                     
     • OMB shall compile and  submit a summary of boards and                                                                    
     commissions  financial  plans  by December  15th  to  a                                                                    
     governor elect.                                                                                                            
     • All information from a  board or commission to OMB is                                                                    
     public information.                                                                                                        
     • Appropriations requests                                                                                                  
          o  Identification of  objectives intended  for the                                                                    
          program and  problem or need  that the  program is                                                                    
          intended to address.                                                                                                  
          o  An   assessment  of  achievement   of  original                                                                    
          objectives of the program                                                                                             
          o   A  statement   of   costs,  performance,   and                                                                    
          accomplishments in each of last four fiscal years                                                                     
          o  A  statement of  number  and  types of  persons                                                                    
          affected by the program.                                                                                              
          o A  summary statement of  the number and  cost of                                                                    
          personnel  employed  or  under contract  over  the                                                                    
          last three completed fiscal years.                                                                                    
          o An  assessment of the  effect of the  program on                                                                    
          the economy of the state                                                                                              
          o An assessment  of the how the  policies meet the                                                                    
          objective of the legislature.                                                                                         
          o   An  analysis   of  services   and  performance                                                                    
          estimated  to be  achieved over  the  life of  the                                                                    
          agency.                                                                                                               
          o A  prioritized list of the  activities the board                                                                    
          or commission would expect to  perform if the life                                                                    
          of the agency were to be continued.                                                                                   
     •  Boards and  commissions  shall  develop methods  for                                                                    
     measuring agency results.                                                                                                  
     •  OMB  shall  report  quarterly to  the  governor  and                                                                    
     legislature   on   operations   of   the   boards   and                                                                    
     commissions.                                                                                                               
                                                                                                                                
     Section 14:                                                                                                                
     Revision to AS 37.07.060(a): Governor's Recommendation                                                                     
     •  Requires  the governor  to  identify  three to  five                                                                    
     statewide  priorities  to  guide strategic  and  annual                                                                    
     planning.                                                                                                                  
     • Adds reference to the new planning statutes.                                                                             
     • Adds reference to new plan structure.                                                                                    
     • Removes reference to the  previously used mission and                                                                    
     desired results.                                                                                                           
                                                                                                                                
     Section 15:                                                                                                                
     Adds  a   new  section  to  AS   37.07.060:  Governor's                                                                    
     Recommendation                                                                                                             
     • Requires the governor  to present the strategic plans                                                                    
     and mission statements  in a joint session  at the same                                                                    
     time as the governor's budget message.                                                                                     
                                                                                                                                
     Section 16:                                                                                                                
     Amends section AS 37.07.070: Legislative Review                                                                            
     • Adds the  new, cohesive structure of  planning to the                                                                    
     legislative review list.                                                                                                   
                                                                                                                                
     Section 17:                                                                                                                
     Amends section AS 37.07.080(a): Program Execution                                                                          
     • Adds a reference to strategic plans.                                                                                     
     •  Removes  desired  results as  an  exception  to  the                                                                    
     agencies' authority to execute their programs.                                                                             
                                                                                                                                
     Section 18:                                                                                                                
     Amends section AS 37.07.080(d): Program Execution                                                                          
     •   Clarifies  that   salary  increases   must  be   in                                                                    
     accordance  with  strategic  and performance  plans  as                                                                    
     well as any annual operations plan.                                                                                        
                                                                                                                                
     Section 19:                                                                                                                
     Adds a  new section AS 37.07.085:  Performance Plan and                                                                    
     Financial Plan                                                                                                             
     •  Each agency  shall  develop  annual performance  and                                                                    
     financial consistent with the strategic plan.                                                                              
     • Plans  must be submitted to  Legislative Finance, the                                                                    
     Senate, and the House by December 15th of each year.                                                                       
     • The Performance plan must include:                                                                                       
          o Description of the agency's program structure                                                                       
          and any proposed changes                                                                                              
          o Identification of each program                                                                                      
               ? Constitutional and/or statutory authority                                                                    
               ?   A   program   purpose   statement   which                                                                  
               describes   the    services   provided,   the                                                                    
               customers served by the program, the benefit                                                                     
               or intended outcome of the program.                                                                              
          o Identify  performance measures  which contribute                                                                    
          to progress towards the agency's strategic plan.                                                                      
               ? Identify goals and objectives that each                                                                      
               performance measure corresponds to                                                                               
          o  Identify results  for each  performance measure                                                                    
          over the past four fiscal years.                                                                                      
          o   Identify   performance    targets   for   each                                                                    
          performance  measure  for  the  succeeding  fiscal                                                                    
          year.                                                                                                                 
     • The financial plan must include:                                                                                         
          o Revenue  and expenditures  for each  program for                                                                    
          the prior four fiscal years                                                                                           
          o Breakdowns of revenue  and expenditures for each                                                                    
          program: Amounts  received by each  revenue source                                                                    
          and amounts expended on each type of expenditure.                                                                     
          o  Estimates  of   revenue  and  expenditures  for                                                                    
          current and next fiscal year                                                                                          
          o Budget requested to carry  out proposed plans of                                                                    
          the agency in succeeding fiscal year.                                                                                 
          o  Expenditures  authorized   for  current  fiscal                                                                    
          year.                                                                                                                 
          o  Expenditures  proposed  for  succeeding  fiscal                                                                    
          year.                                                                                                                 
          o Number or positions employed or under contract.                                                                     
          o Cost of services provided by each program.                                                                          
          o Report  of receipts  of agency  for expenditures                                                                    
          made  during  prior  year,  estimate  for  current                                                                    
          year, and estimate for next year.                                                                                     
          o  Identification   of  legislation   required  to                                                                    
          implement the proposed financial plan.                                                                                
          o Other information as necessary                                                                                      
     • OMB shall assist in preparation of performance and                                                                       
     financial plans.                                                                                                           
     • If any state agency fails to submit these plans, the                                                                     
     plans may be prepared by OMB.                                                                                              
     • Once each calendar quarter, each agency must prepare                                                                     
     and present a performance report.                                                                                          
          o  Identification  of   performance  measures  and                                                                    
          related goals and objectives                                                                                          
          o  Results   for  each  performance   measure  and                                                                    
          progress towards target                                                                                               
     • All performance and financial plan documents and                                                                         
     reports are public information once forwarded to OMB.                                                                      
     • All plans and reports must be published on a                                                                             
     publicly available internet website.                                                                                       
     •  Performance plans  must be  developed with  employee                                                                    
     participation.                                                                                                             
                                                                                                                                
     Section 20:                                                                                                                
     Adds new paragraphs to AS 37.07.120: Definitions                                                                           
     •  Goal:  A  broad  statement  generally  describing  a                                                                    
     desired  outcome for  an  agency or  a  program of  the                                                                    
     agency                                                                                                                     
     •  Objective: A  measurable target  that describes  the                                                                    
     end result  that a  service or  program is  expected to                                                                    
     accomplish in a given amount of time                                                                                       
     •  Performance  Measure:  A quantifiable  and  enduring                                                                    
     measure   of  an   outcome,   output,  efficiency,   or                                                                    
     effectiveness                                                                                                              
     • Strategic  plan: A strategic plan  developed under AS                                                                    
     37.07.050                                                                                                                  
                                                                                                                                
     Section 21:                                                                                                                
     Amends Section AS 44.66.020(c): Agency Programs                                                                            
     • Removes  reference to previous method  of mission and                                                                    
     measures.                                                                                                                  
                                                                                                                                
     Section 22:                                                                                                                
     Amends Section AS 44.66.020(d): Agency Programs                                                                            
     •  Removes  reference  to  previous  method  of  agency                                                                    
     priorities.                                                                                                                
                                                                                                                                
     Section 23:                                                                                                                
     Amends Section AS 44.66.050(a): Legislative Oversight                                                                      
     • Updates  the new  reference to  the budget  of boards                                                                    
     and commissions.                                                                                                           
                                                                                                                                
2:21:32 PM                                                                                                                    
                                                                                                                                
Co-Chair Olson wondered whether the administration had a                                                                        
position on the bill.                                                                                                           
                                                                                                                                
Mr. Harvey responded that there was no official position.                                                                       
                                                                                                                                
Senator Kaufman furthered that there was consultation with                                                                      
the Office of Management and Budget (OMB).                                                                                      
                                                                                                                                
Co-Chair Olson wondered whether OMB had stated whether they                                                                     
were in favor of the bill.                                                                                                      
                                                                                                                                
Mr. Kaufman replied that there was not a stance on the bill                                                                     
from the administration.                                                                                                        
                                                                                                                                
Co-Chair Stedman queried the impact of ignoring the                                                                             
requirements.                                                                                                                   
                                                                                                                                
Senator Kaufman replied that the better the framework                                                                           
created, the harder it was to ignore.                                                                                           
                                                                                                                                
2:27:50 PM                                                                                                                    
                                                                                                                                
Mr. Harvey discussed the presentation, "SB 21: Strategic                                                                        
Plans" (copy on file).                                                                                                          
                                                                                                                                
2:28:10 PM                                                                                                                    
                                                                                                                                
Mr. Harvey addressed slide 2, "Overview":                                                                                       
                                                                                                                                
     Problem Statement                                                                                                          
     Current State                                                                                                              
         AS 37.07: The Executive Budget Act (EBA)                                                                               
     Proposed Future State: SB 21                                                                                               
     Structural Changes to AS 37.07                                                                                             
     Benefits                                                                                                                   
     Examples                                                                                                                   
                                                                                                                                
Mr. Harvey highlighted slide 3, "Problem Statement":                                                                            
                                                                                                                                
     Alaska's management  of programs  and projects  has not                                                                    
     been  as  strong as  many  citizens  expect from  their                                                                    
     government                                                                                                                 
                                                                                                                                
     Alaska consistently  scores lower than other  states in                                                                    
     key metrics                                                                                                                
          e.g. 45 overall in US News' best states                                                                               
          https://www.usnews.com/news/best-states/alaska                                                                        
          e.g. Received a C- Report Card for Infrastructure                                                                     
          by ASCE                                                                                                               
          https://infrastructurereportcard.org/state-                                                                           
          item/alaska/                                                                                                          
                                                                                                                                
     Alaska  has  fragments  of an  appropriate  enterprise-                                                                    
     scale  management   system,  but  not   something  that                                                                    
     cohesively blends                                                                                                          
     operational,  performance, and  quality management  How                                                                    
     can we  start to  drive a  higher level  of performance                                                                    
     while successfully  improving our  overall cost/benefit                                                                    
     ratio?                                                                                                                     
                                                                                                                                
Senator Bishop wondered how the strategic plan would help                                                                       
with the criticism around spending too much money.                                                                              
                                                                                                                                
Senator Kaufman replied that a slide would address the                                                                          
question.                                                                                                                       
                                                                                                                                
2:30:58 PM                                                                                                                    
                                                                                                                                
Mr. Harvey discussed slide 4, "Current Executive Budget                                                                         
Act":                                                                                                                           
                                                                                                                                
     Title 37: Public Finance                                                                                                   
     Chapter 07: Executive Budget Act                                                                                           
     SB 21: Executive Budget Act                                                                                                
                                                                                                                                
     Describes the role of the legislature, OMB, and the                                                                        
     governor in the budgeting and program execution                                                                            
     process                                                                                                                    
                                                                                                                                
     Includes two sections which focus on planning and                                                                          
     performance                                                                                                                
          37.07.050 Agency program and financial plans;                                                                         
          mission statements                                                                                                    
          37.07.080 Program Execution                                                                                           
                                                                                                                                
Mr. Harvey looked at slide 5, "Proposed Future State: SB
21":                                                                                                                            
                                                                                                                                
     Responsibility   Change    (Measures/targets   set   by                                                                    
     executive branch)                                                                                                          
                                                                                                                                
     Planning Hierarchy and increased organization                                                                              
          Statewide Priorities (3-6 long-term priorities                                                                        
          set by governor)                                                                                                      
          Strategic Plans (4-year plan, updated at least                                                                        
          every two years)                                                                                                      
               Mission, goals, and objectives for each                                                                          
               department                                                                                                       
          Performance Plans (Annual Plan)                                                                                       
               Program     structure     and     performance                                                                    
               history/targets                                                                                                  
          Financial Plans (Annual Plan)                                                                                         
               Financial History and Budget information                                                                         
                                                                                                                                
     Transparency and Reporting                                                                                                 
          Quarterly Performance Reports: Progress towards                                                                       
          targets                                                                                                               
          All plans and reports are posted on a single,                                                                         
          public website                                                                                                        
                                                                                                                                
Mr. Harvey looked at slide 6.                                                                                                   
                                                                                                                                
Mr. Harvey discussed slide 7, "Structural Changes to AS                                                                         
37.07":                                                                                                                         
                                                                                                                                
     Title  Change  of  AS   37.07.016:  Governor's  use  of                                                                    
     strategic  plans, mission  statements, and  performance                                                                    
     plans                                                                                                                      
                                                                                                                                
     Title Change  of AS 37.07.050: Agency  strategic plans;                                                                    
     mission statements                                                                                                         
          Refocuses this section on strategic plans and                                                                         
          changes title due to moving performance and                                                                           
          financial information                                                                                                 
                                                                                                                                
     New  Section AS  37.07.055:  Specific requirements  for                                                                    
     Boards/Commissions                                                                                                         
                                                                                                                                
     New  Section AS  37.07.085:  Performance and  Financial                                                                    
     Plan section                                                                                                               
                                                                                                                                
Mr. Harvey addressed slide 8, "Benefits":                                                                                       
                                                                                                                                
     Align the  strategy of all  agencies with  a governor's                                                                    
     statewide priorities                                                                                                       
                                                                                                                                
     Link   short   term   tactics/funding   to   mid-range,                                                                    
     department-level strategy                                                                                                  
                                                                                                                                
     Push responsibility  for defining measures  and targets                                                                    
     to  the executive  branch. The  people  closest to  the                                                                    
     customers of services                                                                                                      
                                                                                                                                
     Reduce  duplication   of  goal-setting   and  financial                                                                    
     information at a program or component level                                                                                
                                                                                                                                
     Increase   the  level   of  detail   regarding  program                                                                    
     structure and program definition                                                                                           
                                                                                                                                
Mr. Harvey pointed to slide 9, "Examples":                                                                                      
                                                                                                                                
     Federal Government (GPRAMA)                                                                                                
     https://www.gao.gov/leading-practices-managing-                                                                            
     results-government                                                                                                         
                                                                                                                                
     AZ Strategic Plans: https://azospb.gov/                                                                                    
                                                                                                                                
     North Carolina:                                                                                                            
     https://www.osbm.nc.gov/operational-                                                                                       
     excellence/strategic-planning/strategicplanning-guide                                                                      
                                                                                                                                
     New Mexico: Accountability in Government Act                                                                               
     https://www.nmlegis.gov/entity/lfc/Documents/Accountab                                                                     
     ility_In_Goverment_Act/                                                                                                    
     Legislating%20For%20Results.pdf                                                                                            
                                                                                                                                
     Other Guides                                                                                                               
    https://www.osc.state.ny.us/files/localgovernment/                                                                          
     publications/pdf/strategic_planning.pdf                                                                                    
     https://www.urban.org/sites/default/files/publication/                                                                     
     62616/410067-State-                                                                                                        
     Approaches-to-Governing-For-Results-and-                                                                                   
     Accountability.PDF                                                                                                         
                                                                                                                                
Mr. Harvey discussed slide 10.                                                                                                  
                                                                                                                                
2:35:21 PM                                                                                                                    
                                                                                                                                
Senator Kaufman remarked that the graphic showed the                                                                            
history of the actions.                                                                                                         
                                                                                                                                
Senator Merrick queried the implementation of the strategy                                                                      
without binding future legislatures.                                                                                            
                                                                                                                                
Senator Kaufman responded that the legislature had its                                                                          
functions, and supported the improved vision.                                                                                   
                                                                                                                                
2:40:46 PM                                                                                                                    
                                                                                                                                
2:41:09 PM                                                                                                                    
                                                                                                                                
Co-Chair Stedman noted that there was a current budget with                                                                     
an almost $1 billion deficit, and felt that there was                                                                           
politics that may be different than a framework.                                                                                
                                                                                                                                
Senator Kaufman replied that he was not proposing the                                                                           
concept for challenging accounting.                                                                                             
                                                                                                                                
Mr. Harvey highlighted slides 11 and 12.                                                                                        
                                                                                                                                
2:44:30 PM                                                                                                                    
                                                                                                                                
Senator Kiehl mentioned OMB staff, and considered that                                                                          
overseeing plans such as proposed in the bill. He asked the                                                                     
sponsor about his vision.                                                                                                       
                                                                                                                                
Senator Kaufman considered that the plan was for a                                                                              
realignment of the work that was currently being done.                                                                          
                                                                                                                                
2:49:35 PM                                                                                                                    
                                                                                                                                
Senator Kiehl remarked that there was not training on a                                                                         
unified framework.                                                                                                              
                                                                                                                                
Senator Kaufman stated that building the framework would                                                                        
result in positive results.                                                                                                     
                                                                                                                                
Mr. Harvey finished the presentation.                                                                                           
                                                                                                                                
Co-Chair Olson noted the statement                                                                                              
                                                                                                                                
Co-Chair Olson OPENED and CLOSED public testimony.                                                                              
                                                                                                                                
SB 21 was HEARD and HELD in committee for further                                                                               
consideration.                                                                                                                  
                                                                                                                                
ADJOURNMENT                                                                                                                   
2:57:13 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 2:57 p.m.                                                                                          
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects
SB 21 Sponsor Statement Version A 1.25.23.pdf SFIN 3/12/2024 1:30:00 PM
SSTA 3/14/2023 3:30:00 PM
SB 21
SB 21 Sectional Analysis version A 1.25.23.pdf SFIN 3/12/2024 1:30:00 PM
SB 21
SB 21 Statement of Zero Fiscal Impact.pdf SFIN 3/12/2024 1:30:00 PM
SB 21
SB 21 3.11.24 EBA Presentation UPDATED.pdf SFIN 3/12/2024 1:30:00 PM
SB 21