Legislature(2023 - 2024)SENATE FINANCE 532
03/12/2024 01:30 PM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB127 | |
| SB21 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 21 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 127 | TELECONFERENCED | |
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 |