HB 190-ALASKA SUNSET COMMISSION  4:06:07 PM CHAIR SHAW announced that the final order of business would be HOUSE BILL NO. 190, "An Act establishing a violation for hindering the Alaska Sunset Commission; relating to the duties of the legislature; establishing the Alaska Sunset Commission to review and make recommendations on discontinuation of or changes to state entities; relating to the powers and duties of the Alaska Sunset Commission; and providing for an effective date." [Before the committee was CSHB 190(W&M).] 4:06:32 PM REPRESENTATIVE BEN CARPENTER, Alaska State Legislature, presented CSHB190(W&M) on behalf of the sponsor, the House Special Committee on Ways and Means, on which he serves as chair. He stated the purpose of HB 190 is to improve state government. Through HB 190, a third-party review would be created under the lieutenant governor called the Sunset Commission, which is modeled after the Texas Sunset Advisory Commission. 4:08:44 PM ERIC BEVERLY, Executive Director, Texas Sunset Advisory Commission, provided information about the commission and how it utilizes objective analysis to improve state government. State agencies in Texas undergo sunset review about every 12 years. Agencies are evaluated to determine if they are achieving statutory objectives, operating efficiently and cost- effectively, and encouraging public participation. MR. BEVERLY explained that since the Texas Sunset Commission began its work in the 1970s, 95 agencies have been abolished, or have transferred some functions to new agencies. The Texas Sunset Advisory Commission has garnered $1 billion dollars; $16 has been gained for every $1 appropriated to the commission since 1985. The sunset process shines a light on an agency to determine if it conforms to best practices. The sunset process has led to major improvements in nearly every area of Texas state government. Unnecessary state agencies and programs have been abolished; state laws have been modernized; state expenditures have been reduced; public participation in government accountability has increased; and duplication among state agencies and programs has been eliminated. 4:12:12 PM MR. BEVERLY discussed the improvements made to the monitoring of highway contracts, strengthened internal controls, and a more integrated and understandable transportation planning process, because of the Texas Sunset Advisory Commission. He described improvements for the Public Utility Commission, environmental regulators, and oil and gas regulators of Texas. He discussed the reorganization and streamlining of the Departments of Health and Human Services of Texas. He said that generally, the Texas Sunset Advisory Commission generates cost-savings; however, occasionally the commission requires a fiscal impact remedy. He further emphasized the importance of public participation in the sun setting process. 4:17:19 PM REPRESENTATIVE CARRICK asked if an agency-wide audit process existed prior to the Texas Sunset Advisory Commission. MR. BEVERLY said in Texas there is a state auditor's office and Legislative Budget Board, which predate the sunset commission. 4:18:05 PM EMILY JOHNSON, Deputy Director for Reviews, Texas Sunset Advisory Commission, explained that the Texas Sunset Advisory Commission was built into the Legislative Budget Board for some time. Currently, the commission is separate. REPRESENTATIVE CARRICK asked if the legislative audit process in Texas involved an agency-wide audit prior to the implementation of the Texas Sunset Advisory Commission. MR. BEVERLY answered that he was unsure. 4:19:20 PM REPRESENTATIVE STORY asked about the makeup of the Texas Sunset Advisory Commission. MR. BEVERLY explained that the lieutenant governor appoints five senators and one public member, and the speaker of the House appoints five state representatives and another public member, for a total of twelve members. The legislative members serve four-year terms, and the public members serve two-year terms. REPRESENTATIVE STORY asked why the commission utilizes state lawmakers as members of the commission. She explained that the proposed legislation calls for the commission to be made up of private industry representatives. MS. JOHNSON explained that there is a piece of legislation that comes out of the sunset process, in Texas, which indicates why legislative members make up the commission. REPRESENTATIVE STORY asked whether the Texas University system is examined by the Texas Sunset Advisory Commission. MR. BEVERLY replied that the commission reviews are limited to executive branch agencies. Universities and courts are exempt from review in Texas. However, the Texas Higher Education Coordinating Board is reviewed. MS. JOHNSON made note of components that are under special review within the higher education system. 4:22:10 PM REPRESENTATIVE STORY asked why the commission is made up of members outside the government. REPRESENTATIVE CARPENTER said he thought it was important to keep the commission apolitical for continuity between election cycles. He emphasized his preference for members with subject- matter expertise to examine budgets, accounting, and the management of various government agencies. REPRESENTATIVE STORY asked about the intent to include the University of Alaska (UA) system in the list of agencies the Alaska Sunset Commission would examine. REPRESENTATIVE CARPENTER opined that UA should stand on its own and rely less on state government. Because they are currently funded like any another department within state government, he stated the intention to utilize the proposed Alaska Sunset Commission to ensure that the universities operate as efficiently as possible with respect to the state's budget. REPRESENTATIVE STORY noted the legal privileges and potential power to commissioners and whether Representative Carpenter foresees any legal liabilities. REPRESENTATIVE CARPENTER answered, no. He said that CSHB 190(W&M) creates statute for commissioner authority. If there are concerns, the bill could be amended, which would reduce the authority of the Alaska Sunset Commission. The goal of the bill is to grant subject matter experts the opportunity to help improve state government. 4:26:23 PM DONNA ARDUIN, Staff, Representative Ben Carpenter, explained that the only authority the Alaska Sunset Commission would have would be to provide a report and draft legislation to the legislature regarding agency sunsets. REPRESENTATIVE CARPENTER expressed that his intent in bringing HB 190 forward is not to abolish departments, but to create a method to increase government efficiency by requiring government action and attention to the commission's findings. REPRESENTATIVE STORY referenced page 5, lines 3-7, of CSHB 190(W&M), which read as follows: (c) In carrying out its functions under AS 44.99.700 - 44.99.759, the commission or designated staff may attend any meetings and proceedings of any entity of the state, including any meeting or proceeding of a governing body of a state entity that is closed to the public, and may inspect the records, documents, and files of any entity of the state, including any record, document, or file that is REPRESENTATIVE STORY made note that the broad access granted to the commission for the inspection of government entities gives her pause. REPRESENTATIVE CARPENTER commented that legislative auditors and staff have a similar level of authority regarding state audits. REPRESENTATIVE STORY pointed to the great expense in the fiscal note involved with investing in the Alaska Sunset Commission. She asked if improvements could be made to the state auditing process as an alternative. REPRESENTATIVE CARPENTER said that he sees the creation of the Alaska Sunset Commission as an improvement not a replacement to the state auditor. He explained that the Alaska Sunset Commission would do a "deep dive" on state agencies, while the state auditor has other responsibilities. REPRESENTATIVE STORY emphasized the importance of the current auditing process. REPRESENTATIVE CARPENTER expressed his frustration that audits have little to no impact on the effectiveness of state agencies. MS. ARDUIN said that the state auditor conducts financial audits. Since 2013, in statute, auditors could contract out for performance review audits. That legislation sunset last year due to underutilization. The Alaska Sunset Commission was proposed in response. 4:31:15 PM REPRESENTATIVE CARRICK moved to adopt Amendment 1 to CSHB 190(W&M), labeled 33-LS0685\S.1, Wallace, 3/20/24, which read as follows: Page 4, line 29: Delete "and draft legislation" Page 7, lines 13 - 16: Delete "The commission shall include in the report draft legislation to implement the recommendations of the commission. Draft legislation must be submitted to the rules committee of each house with a request to introduce the legislation to implement the recommendations of the commission." REPRESENTATIVE WRIGHT objected for the purpose of discussion. REPRESENTATIVE CARRICK noted that she appreciated the bill discussion. She commented that performance review audits are a valuable resource. The data collection that would be achieved by the Alaska Sunset Commission would be largely similar to the legislative audit findings if performance review measures were included. She explained that the amendment deletes references to drafting legislation. A report would be prepared in lieu of legislation. She emphasized that legislative audit findings should be taken seriously. 4:34:06 PM REPRESENTATIVE WRIGHT asked to hear from the bill sponsor regarding Amendment 1. REPRESENTATIVE CARPENTER reiterated that the purpose of creating the Alaska Sunset Commission would be to hire subject matter experts to take a close look at state agencies to find improvements to state government. He opined that generating recommended bill language through the commission would be an efficient way to act on commission recommendations. 4:35:58 PM REPRESENTATIVE STORY commented that she finds it unrealistic to expect industry representatives to draft legislation. She offered her support of Amendment 1. REPRESENTATIVE CARPENTER said that the individuals with subject matter expertise would have staff to help with report writing to draft legislation. 4:37:07 PM REPRESENTATIVE WRIGHT maintained his objection. 4:37:20 PM The committee took an at-ease from 4:37 p.m. to 4:38 p.m. 4:38:22 PM A roll call vote was taken. Representatives Carrick and Story voted in favor of Amendment 1 to CSHB 190(W&M). Representatives Carpenter, Wright, and Shaw voted against it. Therefore, Amendment 2 failed to be adopted by a vote of 2-3. 4:38:56 PM REPRESENTATIVE CARRICK moved to adopt Amendment 2 to CSHB 190(W&M), labeled 33-LS0685\S.2, Wallace 3/20/24, which read as follows: Page 3, line 27: Delete "and" Page 3, line 28, following "representatives": Insert ", and four members appointed by the commissioner of the department being reviewed under AS 44.99.730 or the president of the University of Alaska if the University of Alaska is being reviewed under AS 44.99.730. Members appointed by the commissioner or president of the University of Alaska under this subsection must be employees of the department or the University of Alaska that is under review under AS 44.99.730" Page 3, following line 31: Insert a new paragraph to read: "(1) by the governor, the president of the senate, or the speaker of the house of representatives" Page 4, line 1: Delete "(1)" Insert "(A)" Page 4, line 3: Delete "(2)" Insert "(B)" Page 4, line 3, following "reappointed": Insert "; and (2) by the commissioner or president of the University of Alaska serve until the review of that department or the University of Alaska is complete under AS 44.99.730" REPRESENTATIVE WRIGHT objected for the purpose of discussion. REPRESENTATIVE CARRICK provided an example of how employees of agencies are fit to report serious inefficiency issues, challenges, and needs. She explained that Amendment 2 adds four additional seats on the commission for department or agency representatives to create an inside perspective on the operations of each department. 4:41:14 PM REPRESENTATIVE WRIGHT asked to hear from bill sponsor. REPRESENTATIVE CARPENTER explained that the legislative auditor can complete their audits without input from the administration. He commented that Amendment 2 would create complications. MS. ARDUIN added that the agency under review can create a report for the commission. By starting with self-reporting, problems can be highlighted early in the auditing process. REPRESENTATIVE CARPENTER commented that the intent of the proposed Alaska Sunset Commission is to be interactive with departments. He highlighted that department workers are aware of what is broken but lack the ability to fix issues due to time, personnel, and budget constraints. Department input is essential to the process, and the bill includes the solicitation of that input at the start of the agency audit. He commented that he is not in favor of Amendment 2. REPRESENTATIVE STORY emphasized the importance of Amendment 2. She compared the proposed commission to the Texas Sunset Advisory Commission and made note of departmental involvement. REPRESENTATIVE CARRICK said that Amendment 2 ensures that departmental involvement is represented throughout the entire process and not just in the initial report. She emphasized the importance of including departmental representatives in providing efficiency recommendations. 4:44:03 PM REPRESENTATIVE WRIGHT maintained his objection. 4:44:08 PM A roll call vote was taken. Representatives Carrick and Story voted in favor of Amendment 2 to CSHB 190(W&M). Representatives Wright, Carpenter, and Shaw voted against it. Therefore, Amendment 2 failed to be adopted by a vote of 2-3. 4:44:39 PM REPRESENTATIVE CARRICK moved to adopt Amendment 3 to CSHB 190(W&M), labeled 33-LS0685\S.3, Wallace, 3/20/24, which read as follows: Page 5, lines 30 - 31: Delete "at least" Page 6, line 1: Delete "each" Insert "every other year" Page 7, line 11: Delete "a" Insert "the first regular" REPRESENTATIVE WRIGHT objected. REPRESENTATIVE CARRICK explained that Amendment 3 changes the frequency of agency review to every other year to allow more time for the legislature to act on recommendations. She offered that by changing the frequency, the potential for politicization would be reduced. She made note of the complexity of auditing large departments, which may involve significant changes to act upon and lengthy policy discussions. 4:46:59 PM REPRESENTATIVE WRIGHT commented that Amendment 3 takes away from the spirit of the bill. He asked to hear from the bill sponsor. REPRESENTATIVE CARPENTER commented that the legislature "has the time and lacks the will." He argued that reducing the frequency of agency review prolongs difficult conversations that are necessary to increase government efficiency. With a focused team, 12 months is plenty of time to provide recommendations to the legislature, he opined. MS. ARDUIN commented that the Texas Sunset Advisory Commission reviews one department every year, and therefore every 12 years a given agency is reviewed. If Amendment 3 was adopted, the time between agency reviews would double. She commented that HB 190 was amended by House Special Committee on Ways and Means to change the bill language to include the words "at least" to allow for the possibility that multiple smaller agencies could be reviewed in the same year. REPRESENTATIVE CARRICK commented that regarding board and commission sunsets, adequate consideration of audits by the legislature has not been practiced. She explained that Amendment 3 would help to provide more time for the legislature to address recommendations that come forth. REPRESENTATIVE WRIGHT maintained his objection. 4:51:15 PM A roll call vote was taken. Representatives Story and Carrick voted in favor of Amendment 3 to CSHB 190(W&M). Representatives Wright, Carpenter, Carrick, and Shaw voted against it. Therefore, Amendment 3 190 failed to be adopted by a vote of 2- 3. 4:51:48 PM CHAIR SHAW opened public testimony on HB 190. After ascertaining that no one wished to testify, he closed public testimony. 4:51:57 PM CHAIR SHAW announced that CSHB 190(W&M) was held over.