SB 9-ALASKA SUNSET COMMISSION  4:44:56 PM CHAIR KAWASAKI reconvened the meeting and announced the consideration of SENATE BILL NO. 9 "An Act establishing a violation for hindering the Alaska Sunset Commission; relating to the Legislative Budget and Audit Committee; relating to the duties of the legislature; relating to the legislative audit division and the legislative finance division; 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." He stated this was the first hearing and the intention was to hear the introduction, take invited and public testimony, and hold the bill for future consideration. 4:45:28 PM SENATOR SHELLEY HUGHES, District M, Alaska State Legislature, Juneau, Alaska, sponsor of SB 9, introduced the legislation speaking to the following sponsor statement: SB 9 "The Alaska Sunset Commission Act" will help ensure transparency, efficiency, cost effectiveness, statutory adherence, and constitutional alignment in the operation of our state government. The bill establishes the Alaska Sunset Commission as an apolitical, independent, and objective entity charged with reviewing, via detailed and robust audits, each department by division in the state on a rotating schedule. The Commission will make recommendations related to the performance and costs to the legislature. Along with the submission of the audit report to the legislature, the Commission will provide any recommended statutory changes necessary to accomplish the recommendations in the report. To prevent a division from sunsetting and its statutory duties falling to the department's office of the commissioner, the legislature will need take up and act on the audit report. The annual audit reports will also be available to the executive branch for purposes of both performance and structural improvements within departments as well as for the construction of the governor's budget each year. The Commission will be comprised of nine individuals from the private sector with financial, budget analysis, accounting, operations management, and other areas of expertise who are appointed by the governor and confirmed by the legislature. The Commission will serve without compensation but will be entitled to per diem and travel expenses authorized for boards and commissions. The Commission may employ staff as it determines necessary to perform its duties. The size and scope of government can be difficult to grasp and understand, and too often unwieldy and hard to control. Currently, the House and Senate Finance members are asked in a matter of a few months to figure out what is going on in each of the fourteen departments; essentially their window is what the executive branch provides. With this limited information and in short order, legislators are tasked with making decisions each year involving spending billions of public dollars. Access to an extensive audit will help hold future governors accountable to building a responsible budget and will aid legislators in appropriating public dollars wisely. 4:51:21 PM SENATOR HUGHES delivered a PowerPoint titled "Alaska Sunset Commission." She began on slide 2 that consisted of a color coded map of the US that showed that blue states have appointed state auditors and red states have elected state auditors. The color coded US map depicted on slide 3 shows who appoints the state auditors. Alaska is a gold state which indicates the state auditor is appointed by the legislature. Slide 4, "Alaska Would Be In Good Company," is another color coded map of the US that shows the other states that have a sunset commission. SENATOR HUGHES displayed slide 5, "What Would Alaska's Sunset Commission Do?" She summarized that the commission would review each department by division, section, and office; make determinations about modifications or consolidations; and draft the recommended improvements into legislation for the legislature to consider. SENATOR HUGHES advanced to slide 6, "Composition of Commission," and described the proposed nine-member commission. The slide read: Public-member team of nine must have the following combination of credentials • 2 certified public accountants • 1 budget analyst • 1 controller/comptroller • 1 with financial management experience • 2 with experience as business owner, CEO, or COO based in-stat • 2 with experience in finance, investment, or business management 4:52:26 PM SENATOR HUGHES directed attention to slide 7, "Sunset Commission: How It Would Work." She explained that the table describes the analysis and evaluation process the commission follows throughout the year with the end product being the bill that is submitted to the legislature. SENATOR HUGHES displayed slide 8, "Proposed Audit Cycle Re- initiated Every 12 Years. The table shows the audits of executive branch departments start in 2024 and that the legislature would be audited in 2034, the University of Alaska in 2035, and the Alaska Court System and agencies in the judicial branch in 2036. SENATOR HUGHES turned to slide 9, "Impact of Sunset Commission Within the State of Texas Since 1977." She summarized the following outcomes: Streamlining Government  • 42 agencies and programs abolished • 52 agencies and programs abolished and transferred or consolidated Saving Taxpayer Money • $1 billion in state and federal savings and revenue gains • Return of $18 for every $1 appropriated to the Sunset Commission since 1985 Providing Effective Oversight  • $570 reviews of state agencies and programs conducted • 80 percent of Sunset recommendations to the legislature have become state law since 2001 4:53:22 PM SENATOR HUGHES turned to slide 10, "The Impact of a Sunset Commission Within the State of Alaska," and spoke to the potential outcomes: • Higher level of government accountability and performance • Dissolved state entities that are redundant, ineffective, or inefficient • Improved policies and procedures for public services • Millions of dollars in savings that can be reallocated toward other budget areas where needed • Targeted revenue resources to ensure efficient and effective government services • Encourage greater participation and public input SENATOR HUGHES acknowledged that the bill needed some work but she had worked with Legislative Legal Services to resolve potential constitutional issues. She noted that the commission would reside within the executive branch but the governor would not have oversight. The members would serve on a rotating five- year schedule to avoid the politics associated with a four-year cycle. 4:55:05 PM CHAIR KAWASAKI turned to invited testimony. 4:55:21 PM BRIAN FRANCIS, Executive Director for the Texas Sunset Advisory Commission (TSAC), Austin, Texas, stated that he was neutral on SB 9. He described TSAC as a nonpartisan legislative agency created in 1977 whose goal is to objectively analyze and improve state government. He spoke enthusiastically about the importance of accountability in public service. MR. FRANCIS described the three phases of the sunset process. Evaluation Phase Commission staff gathers information from the agency being reviewed, the stakeholders, and the public. This information is used to generate a staff report that includes findings and recommendations. Deliberation Phase The staff report goes to the Commission for evaluation and additional stakeholder and public input. The commission will approve, deny, or modify each recommendation. Based on the input, additional recommendations may also be added in this phase. The two types of recommendations are for statutory changes or management actions. The latter can be done within the existing authority of the agency. Recommendations for statutory changes advance to the Action Phase. Action Phase Sunset bills are generated and will go through the normal legislative process. MR. FRANCIS stated that there is no doubt that the Commission has streamlined and improved the government in Texas. He recounted the streamlining and revenue-saving data that the sponsor presented in slide 9 of the PowerPoint for SB 9. He also spoke about the improvements that have been initiated in Texas as a result of the Commission's process. He cited recommendations related to juvenile justice and the public utility commission. He continued that a key element in the sunset process is including the sunset date in the enabling statute for each agency. It creates a sense of urgency for action by both the agency and the legislature. 5:04:59 PM STEVEN OGLE, Deputy Director & General Counsel for the Texas Sunset Advisory Commission (TSAC), Austin, Texas, stated he was neutral on SB 9. He said he was available as a resource; he'd been with TSAC for 16 years and had reviewed nearly every facet of state government. He relayed that the Texas Legislature meets for 140 days every two years, so it has to be efficient. He continued that when a bill comes to the legislature from the Sunset Commission, members know that agency has undergone a year and one-half of thorough review and analysis. Each agency goes through this process every 12 years so it is routinely improved. The result is that the people of Texas get better service. When the legislature doesn't meet fulltime, the process only works because the Sunset Commission is a dedicated agency whose staff works fulltime. 5:07:20 PM MEAD TREADWELL, former Lieutenant Governor, Anchorage, Alaska, stated that he had worked for a long time to have appropriate, limited government in Alaska. He is president of Alaskans for Tax Reform and has worked with other organizations to improve transparency and efficiency in state government. He said none of these organizations have taken a position on SB 9, but they believe it's important for the legislature to consider measures like this. He opined that the need for government is perpetual but not every government program. He spoke about the impact of changing technologies and recalled his first sunset exercise in the Alaska Legislature. He opined that what stands out as different in SB 9 is that it sets out a regular schedule for agency reviews in a more public process. He recommended the committee give serious consideration to both SB 9 and Senator Kaufman's bill on strategic planning. 5:11:09 PM CHAIR KAWASAKI opened public testimony on SB 9. 5:11:23 PM PAMELA SAMASH, representing self, Nenana, Alaska, testified in support of SB 9. She mentioned inflation and offered her perspective that anything that saves money for the state and the people has merit. She opined that SB 9 will save money for everyone and create an honest environment. 5:12:54 PM CHAIR KAWASAKI closed public testimony on SB 9. He asked the sponsor if she had final comments. SENATOR HUGHES reminded the committee that the performance audits that the legislative auditor has been conducting since 2013 will end July 1 of this year. She suggested the members think about whether those audits were used to their full potential. The difference that SB 9 offers is that the result of the analysis and review would come before the legislature in the form of legislation. She opined that it would help the administration and the legislature. She expressed hope that the committee would seriously consider SB 9 and Senator Kaufman's bill on strategic planning. 5:14:35 PM CHAIR KAWASAKI held SB 9 in committee.