SENATE BILL NO. 76 "An Act relating to long-term plans of certain state agencies and recommendations regarding elimination of duplication in state agency functions." Co-Chair Therriault provided members with Amendment 1 at the request of the Office of Management and Budget (copy on file). Page 1, Line 9: Change: "issue" To: "adopt" Page 1, Line 11: Change: "issue" To: "adopt" Page 1, Line 12: Delete: "should represent the priorities of the majority of state residents and" Page 3, Line 12: Change: "issued" To: "adopted" Page 3, Line 12: Change: "the guide" To: "a guide" Page 3, Line 13: After the word "law", insert: "unless contrary to law " Page 3, Lines 13 - 14: Delete: "The governor shall assure that each agency complies with the mission statement and achieves the desired results identified by the legislature." Page 4, Line 14: Replace: "each agency shall, on a quarterly basis, identify" With: " each agency shall report periodically on" Page 4, Line 16: Change: "issued" To: "adopted" Page 4, Line 19: Replace: ".legislative finance division. The information must" With: ".legislative finance division; this information must" Page 4, Line 29: Change: "issued" To: "adopted" Page 5, Line 3: Change: "issued" To: "adopted" Page 5, Lines 23 - 25: Delete: All of subsection (12); i.e., lines 23 - 25, inclusive. Page 6, Line 16: Change: "issued" To: "adopted" Page 6, Line 24: Change: "issued" To: "adopted" Page 6: Insert new section, to read as follows: * Sec. 10 Transition. (a) To provide for an orderly implementation of the process envisioned in sections 1-9, sections 1-9 shall apply to: (1) two departments of the executive branch, to be selected jointly by the legislature and the governor, in the preparation of their fiscal year 2000 operating budgets, and (2) all departments and agencies of the executive branch in the preparation of their operating budgets for fiscal year 2001 and afterwards. (b) Mission statements, desired results, performance measures, and the frequency of performance reporting for departments under (a)(1) shall be issued by the legislature through a concurrent resolution. (c) The finance committees of the legislature and the office of management and budget shall jointly formulate procedures and timetables for applying the provisions of sections 1-9 under (a)(1) and under (a)(2). Procedures shall address, at a minimum, how agency missions may be issued or established, and modified; how aspects of agency performance should be selected for measurement; how performance-related information should be collected and reported, including the frequency of reporting; how performance assessment activity should be incorporated into the executive branch and legislative branch budget processes; and how costs associated with the adoption of performance assessment should be identified. (d) The finance committees of the legislature and the office of management and budget shall publish the results of their efforts and their recommendations under (c) no later than October 1, 1998. Recommendations shall include the identification of issues or problems, which have not been resolved, and options for resolving them. (e) In its fiscal year 2000 operating budget instructions to departments, after consultation with the legislature, the office of management and budget shall include as much or as many of the procedures and timetables published under (d) as it deems practicable. Upon issuance of the instructions, the office of management and budget shall identify in writing to the finance committees the procedures or timetables published under (d) which it has chosen not to include, and its reasons for not including them. (f) No later than January 15, 1999, the office of management and budget shall submit to the finance committees in writing: (1) its findings regarding the adequacy of the procedures and timetables adopted under (e), (2) its findings regarding cost impacts experienced by departments under (a)(1), (3) its recommendations regarding application of the provisions of sections 1-9 under (a)(2), and (4) Any proposals for clarifying amendments or legislation, which it may consider, appropriate. Representative Grussendorf MOVED to ADOPT New Amendment 1. JACK FARGNOLI, SENIOR POLICY ANALYST, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR discussed New Amendment 1. He explained that the amendment has two pieces. One piece is the transition section. The other part conforms to the transition section. He explained that the transition section would describe a transition period and a set of activities. During the next budget cycle two departments would implement mission statements and performance measures. The two departments would be selected jointly by the legislature and the governor. This would be for preparation of their fiscal year 2000 operating budgets. Mission statements and performance measures would be included for all departments and agencies for the fiscal year 2001 and every year thereafter. The mission statements and performance measures would be included in a concurrent resolution. This would avoid intent language in the operating budget. He maintained that a concurrent resolution would be the simplest form to put the principles forward. He maintained that there would be no intent language conflicts. The resolution would be for the year 2000. Mr. Fargnoli explained that subsection (c) would provide that the finance committees of the legislature work with the Office of Management and Budget to jointly formulate procedures and timetables. The details of the process would be worked out. Mr. Fargnoli noted that by Oct 1, 1999 the findings and recommendations of the joint effort would be published. Any areas that remain unresolved would be identified. Mr. Fargnoli observed that subsection (f) provides that the Office of Management and Budget include as much of the procedures and timetables published under (d) as it deems practicable. The Office of Management and Budget would identify in writing areas not included, and its reasons for not including them. Mr. Fargnoli explained that Office of Management and Budget would, no later than January 15, 1999, submit to the finance committees in writing: (1) Findings regarding the adequacy of the procedures and timetables adopted under (e), (2) Findings regarding cost impacts experienced by departments under (a)(1), (3) Recommendations regarding application of the provisions of sections 1-9 under (a)(2), and (4) Any proposals for clarifying amendments or legislation, which it may consider, appropriate. Mr. Fargnoli clarified that "adopted" was substituted for "issue" to reflect that a resolution would be adopted. Mr. Fargnoli stated that "unless contrary to law " was added to clarify the separation of powers. SENATOR SEAN PARNELL discussed New Amendment 1. He stated that the amendment fails to recognize that mission statements can already be statutes. Additional mission statements could be implemented through intent language, statute or adoption of a resolution. He maintained that the amendment would restrict mission statements and performance measures. He asserted that the current language is more open. He felt that New Amendment 1 would add unnecessary tonnage. He acknowledged that the process may be going in the direction of the amendment but stressed that it is premature. He maintained that New Amendment 1 would add unnecessary cost. Senator Parnell expressed his willingness to change the reporting requirement to semi annual. He stated that one report can come at the end of the fiscal year and the next report can be submitted with the budget. He supported the change to page 4, line 19: Replace: ".legislative finance division. The information must" With: ".legislative finance division; this information must" Senator Parnell stated that "unless contrary to law" is already assumed. Representative Grussendorf asked if the deletion on page 1, line 12, "should represent the priorities of the majority of state residents and" is also assumed. Senator Parnell acknowledged that if something is enacted into statute that it can be assumed that it represents the majority of the State. Senator Parnell reiterated that the transition section is more complicated than what he thinks is warranted. Representative Davies noted that the legislation provides on page 3, line 20 that the budget must be accompanied by the information required under ASA 37.07.050. He maintained that the legislation requires 100 percent participation and does not allow flexibility. Representative Grussendorf MOVED to divide New Amendment 1. Amendment 1A would begin with the addition of a new section on page 6: Insert new section, to read as follows: * Sec. 10 Transition. (b) To provide for an orderly implementation of the process envisioned in sections 1-9, sections 1-9 shall apply to: (1) two departments of the executive branch, to be selected jointly by the legislature and the governor, in the preparation of their fiscal year 2000 operating budgets, and (3) all departments and agencies of the executive branch in the preparation of their operating budgets for fiscal year 2001 and afterwards. (b) Mission statements, desired results, performance measures, and the frequency of performance reporting for departments under (a)(1) shall be issued by the legislature through a concurrent resolution. (c) The finance committees of the legislature and the office of management and budget shall jointly formulate procedures and timetables for applying the provisions of sections 1-9 under (a)(1) and under (a)(2). Procedures shall address, at a minimum, how agency missions may be issued or established, and modified; how aspects of agency performance should be selected for measurement; how performance-related information should be collected and reported, including the frequency of reporting; how performance assessment activity should be incorporated into the executive branch and legislative branch budget processes; and how costs associated with the adoption of performance assessment should be identified. (d) The finance committees of the legislature and the office of management and budget shall publish the results of their efforts and their recommendations under (c) no later than October 1, 1998. Recommendations shall include the identification of issues or problems, which have not been resolved, and options for resolving them. (f) In its fiscal year 2000 operating budget instructions to departments, after consultation with the legislature, the office of management and budget shall include as much or as many of the procedures and timetables published under (d) as it deems practicable. Upon issuance of the instructions, the office of management and budget shall identify in writing to the finance committees the procedures or timetables published under (d) which it has chosen not to include, and its reasons for not including them. (f) No later than January 15, 1999, the office of management and budget shall submit to the finance committees in writing: (1) its findings regarding the adequacy of the procedures and timetables adopted under (e), (2) its findings regarding cost impacts experienced by departments under (a)(1), (3) its recommendations regarding application of the provisions of sections 1-9 under (a)(2), and (4) Any proposals for clarifying amendments or legislation, which it may consider, appropriate. Co-Chair Hanley referred to subsection 1(a)(1) and (2). He spoke in support of doing a smaller subset of the entire process on the first year. RICHARD VITALE, STAFF, SENATOR SEAN PARNELL observed that all of the agencies are currently submitting mission statements. He pointed out that adoption of subsection 1(a)(1) and (2) would reverse the current process. He acknowledged that the intent was that the process be on a deeper level for two agencies. Representative Davies acknowledged that the agencies have been issuing mission statements. He emphasized that the difference is that the Legislature and the Administration are now having a discussion and are reaching a consensus about the mission statements. He maintained that the joint discussion process should be limited. Mr. Vitale agreed with Representative Davies' assessment, but pointed out that subsection 1(a)(1) and (2) by themselves do not mandate joint discussion. The legislation would begin joint discussions during the session. Senator Parnell agreed that collaboration and coordination is needed between the legislative and executive branches. He observed that the effort has been present during the current year. The legislation's intent is to codify the process. In response to a question by Co-Chair Hanley, Representative Davies noted that agencies are required to submit their mission statements on page 3, line 20 and on page 5, lines 27. Senator Parnell added that existing law under AS 37.07.050 says that each state agency on the date and in the form prescribed by the Office of Management and Budget shall prepare the goals and objectives of the agency's programs and the proposed plans to implement goals and objectives. Representative Grussendorf MOVED to amend Amendment 1A by deleting subsections (b) through (g). Representative Davies stressed that the difference between Amendment 1A and current statute is that the amendment directs a joint effort of the Legislature and the Administration to focus on two departments. Senator Parnell felt that the amendment would short-circuit the joint process that has taken place during the 1998 session. Representative Grussendorf pointed out that a new administration may not be as cooperative. There being NO OBJECTION, Amendment 1A was amended. Insert new section, to read as follows: * Sec. 10 Transition. (a) To provide for an orderly implementation of the process envisioned in sections 1- 9, sections 1-9 shall apply to: (1) Two departments of the executive branch, to be selected jointly by the legislature and the governor, in the preparation of their fiscal year 2000 operating budgets. (2) All departments and agencies of the executive branch in the preparation of their operating budgets for fiscal year 2001 and afterwards. Representative Davis spoke in support of Amendment 1A. He expressed concern that the full process would be required during the first year under the legislation. Senator Parnell emphasized that the agencies already engage in the process. Representative Davies stressed that the process during the 1998 session has been different that previous years. Time was spent in committees and subcommittees working jointly with the legislature and the executive branch. Results Based Government was focuses on coming to consensus about the mission statements. He pointed out that mission statements have been issued in previous years, but were not discussed. A lot of the difficult discussion centered on measuring success. He felt that the legislation was a little premature. He spoke in support of a measured approach to phase in the process and allow flexibility. Co-Chair Hanley referred to section one of CSSB 76 (RLS). He asked how the Legislature would issue a mission statement. Senator Parnell envisioned mission statements as taking the form of intent language in the operating budget. He stated that he wants to encourage coordination and cooperation between the legislative and executive branches. Mission statements by the Legislature could also be put into statute or adopted in a resolution. Co-Chair Hanley pointed out that the House and Senate may not always agree on the mission statement. Senator Parnell stated that whatever is enacted into law would represent the majority of the legislators. Co-Chair Therriault stated that negotiated intent language is the easiest route. Representative Grussendorf emphasized that a lot of time would be spent on letters of intent. He stressed that there would be nothing to stop letters of intent by individual legislators that are parochial in nature. He questioned if the conference committee would want to struggle over mission statements. Representative Grussendorf spoke in support of Amendment 1A. A roll call vote was taken on the motion. IN FAVOR: Davies, Grussendorf OPPOSED: Mulder, Davis, Kelly, Therriault, Hanley Representatives Kohring, Martin, Moses and Foster were absent from the vote. The MOTION FAILED (2-5). Representative Grussendorf did not move Amendment 1B. Representative Grussendorf questioned if language on page 5, lines 23 - 25 should be deleted: "include an evaluation of the advantages and disadvantages of specific alternatives to existing or proposed agency activities or administrative methods. Senator Parnell emphasized that the language is in current law. Mr. Fargnoli spoke in support of the deletion. Representative Grussendorf MOVED to ADOPT Amendment 2, delete on page 5, lines 23 - 25. Senator Parnell spoke against the amendment. He emphasized that it is helpful to have evaluation of the advantages and disadvantages of specific alternatives. He questioned if existing law is being followed. Representative Davis spoke in favor of the amendment. Co-Chair Hanley suspected that the Division is not fulfilling the requirement of the language. A roll call vote was taken on the motion. IN FAVOR: Davies, Davis, Grussendorf OPPOSED: Mulder, Foster, Kelly, Hanley, Therriault Representatives Martin, Moses and Kohring were absent from the vote. The MOTION FAILED (3-5). Representative Grussendorf MOVED to ADOPT Amendment 3, to change "quarterly" to "semi annually". There being NO OBJECTION, it was so ordered. Representative Grussendorf MOVED to ADOPT Amendment 4, on page 4, line 19: Replace: ".legislative finance division. The information must" With: ".legislative finance division; this information must" Representative Grussendorf MOVED to ADOPT Amendment 5, on page 3, lines 13 and 14, Delete: "The governor shall assure that each agency complies with the mission statement and achieves the desired results identified by the legislature." Mr. Vitale observed that Senator Parnell does not support the deletion. Representative Davies MOVED to AMEND the amendment, to add "The governor shall assure that each agency complies with the mission statement and strives to achieve the desired results identified by the legislature." Mr. Vitale thought that the sponsor would accept the amendment to the amendment. Representative Kelly questioned if "good faith effort" would be preferable. He pointed out that "good faith effort" is defined in law. A roll call vote was taken on the motion to amend Amendment 5. IN FAVOR: Davies, Grussendorf, Hanley OPPOSED: Davis, Foster, Kelly, Mulder, Therriault Representatives Kohring, Moses and Martin were absent from the vote. The MOTION FAILED (3-5). A roll call vote was taken on the motion to adopt Amendment 5. IN FAVOR: Davies, Grussendorf, Hanley OPPOSED: Davis, Foster, Kelly, Mulder, Therriault Representatives Kohring, Moses and Martin were absent from the vote. The MOTION FAILED (3-5). Representative Davis MOVED to ADOPT Amendment 6, on page 1, line 12 Delete: "should represent the priorities of the majority of state residents and." Co-Chair Hanley spoke in support of the amendment. There being NO OBJECTION, it was so ordered. Representative Davies MOVED to ADOPT Amendment 7, on page 3, line 12, change "the guide" to "a guide." Mr. Vitale stated that the only guides that the governor should have are the statutes. Co-Chair Hanley questioned if mission statements are defined as statutes. He spoke in support of the amendment. He maintained that the governor should consider intent language passed by the legislature as a statement of the legislature. Representative Davies pointed out that statues for the Department of Natural Resources exist in several titles. He questioned which is the mission statement. Senator Parnell pointed out that it depends on which division is being looked at. If the mission statement is not clearly defined in statute than they may be found in intent language passed by the legislature. Representative Davies maintained that what constitutes a mission statement for an agency is ambiguous. Representative Davis spoke in support of the amendment. Senator Parnell stated that he did not object to the amendment. There being NO OBJECTION, Amendment 7 was adopted. Representative Davies referred to Article II, Section 13 of the Alaska State Constitution. The Constitution states that "bills for appropriation shall be confined to appropriations." He cautioned that mission statements that have the effect of statute should not be in an appropriation bill. Representative Grussendorf spoke in support of changing "issue" to "adopt". Representative Mulder MOVED to report HCS CSSB 76 (FIN) out of Committee with the accompanying fiscal note. HCS CSSB was REPORTED out of Committee with a "do pass" recommendation and with zero fiscal note by the Senator Finance Committee, 3/20/98.