Legislature(2015 - 2016)HOUSE FINANCE 519

02/04/2015 01:30 PM House FINANCE

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Audio Topic
01:35:17 PM Start
01:38:45 PM HB72 || HB73
01:38:48 PM Fy 16 Budget Overview: Department of Labor and Workforce Development
02:27:00 PM Fy 16 Budget Overview: Department of Law
03:20:17 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
Heard & Held
- FY16 Dept. of Labor & Workforce Development
- FY16 Dept. of Law
HOUSE BILL NO. 72                                                                                                             
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain    programs,    capitalizing   funds,    making                                                                    
     reappropriations, and making  appropriations under art.                                                                    
     IX, sec.  17(c), Constitution of  the State  of Alaska,                                                                    
     from  the  constitutional   budget  reserve  fund;  and                                                                    
     providing for an effective date."                                                                                          
HOUSE BILL NO. 73                                                                                                             
     "An  Act making  appropriations for  the operating  and                                                                    
     capital    expenses   of    the   state's    integrated                                                                    
     comprehensive mental health  program; and providing for                                                                    
     an effective date."                                                                                                        
1:38:45 PM                                                                                                                    
^FY 16  BUDGET OVERVIEW:  DEPARTMENT OF LABOR  AND WORKFORCE                                                                  
1:38:48 PM                                                                                                                    
HEIDI   DRYGAS,  COMMISSIONER,   DEPARTMENT  OF   LABOR  AND                                                                    
WORKFORCE DEVELOPMENT,  introduced her staff and  provided a                                                                    
synopsis  of  her   professional  background  including  her                                                                    
experience  as  general  counsel   to  the  Alaska  District                                                                    
Council  of Laborers  for  ten years.  In  her position  she                                                                    
handled  negotiations,  contract  administration,  grievance                                                                    
adjudication, arbitration, hearings  before the Alaska Labor                                                                    
Relations Agency, and the National Labor Relations Board.                                                                       
Commissioner Drygas began  the PowerPoint presentation "FY16                                                                    
Budget   Overview:  Department   of   Labor  and   Workforce                                                                    
development  (copy   on  file).  She  turned   to  slide  1:                                                                    
"Department Overview."                                                                                                          
        · Provide safe and legal working conditions and                                                                         
          advance opportunities for employment.                                                                                 
     KEY PROGRAM PRIORITIES:                                                                                                    
        · Protect Alaska's workers through statutory and                                                                        
          regulatory assistance and enforcement.                                                                                
        · Workforce development to support Alaska hire and                                                                      
          economic development.                                                                                                 
        · Income replacement for injured, unemployed, and                                                                       
          permanently disabled workers.                                                                                         
Commissioner  Drygas  advanced  to   slide  2:  "Offices  by                                                                    
Location."  She   reported  that  the   department  provided                                                                    
services to Alaskans across the  state. She relayed that the                                                                    
red dots on the map  indicated the Alaska Job Center network                                                                    
through  which   the  department  provided   staff  assisted                                                                    
employment and  training services.  The  blue dots indicated                                                                    
the  locations  of  the  vocational  rehabilitation  offices                                                                    
where  employment and  training  services  were provided  to                                                                    
disabled  Alaskans. The  Alaska Vocational  Technical Center                                                                    
(AVTEC) located  in Seward  was indicated  by a  purple dot.                                                                    
She continued  that the other  programs in green on  the map                                                                    
included   unemployment  insurance,   labor  standards   and                                                                    
safety, worker's compensation, and other programs.                                                                              
Commissioner   Drygas   reviewed    slide   3:   "Department                                                                    
Organizational  Chart."  She  relayed  that  the  chart  was                                                                    
organized  by key  priority programs.  Two of  the divisions                                                                    
had  sections that  had cross  priority  program lines;  the                                                                    
Employment    Security   Division    and   the    Vocational                                                                    
Rehabilitation Division.  She  reported that there were some                                                                    
lines of distinction that were  slightly unclear. She stated                                                                    
that the Worker's Compensation Division  had some cross over                                                                    
in  the "Protect  Workers" priority  because of  the efforts                                                                    
made   to  ensure   employers   had  worker's   compensation                                                                    
insurance for their  employees. Historically, the department                                                                    
had  placed them  in the  "Income Replacement"  area because                                                                    
they primarily insured benefit  payments to Alaska's injured                                                                    
Commissioner Drygas  turned to  slide 5:  "Protect Workers."                                                                    
She reported that  the state saw a  significant reduction in                                                                    
the workplace  lost time illnesses  and injury rate  per 100                                                                    
employees  from 1.13  in FY13  to a  record low  of 0.61  in                                                                    
FY14.  The decrease was a  direct result of the Divisions of                                                                    
Labor   Standards   and    Safety   developing   a   10-hour                                                                    
Occupational Safety and  Health Administration (OSHA) course                                                                    
used to  improve safety  in the  target industry  of seafood                                                                    
processing. She  was happy  to report  that the  majority of                                                                    
the decrease happened in the seafood industry.                                                                                  
Commissioner   Drygas  advanced   to  slide   6:  "Workforce                                                                    
Development."    She    reported   that    the    Vocational                                                                    
Rehabilitation Program  performance had remained  strong. In                                                                    
FY 2014  the program had  employed 607 upon exit  from their                                                                    
individualized plan,  which reflected  an increase  from 598                                                                    
in FY 2013. The average  wage exiting the program was $14.31                                                                    
increased from $13.84 in FY 2013.                                                                                               
Vice-Chair  Saddler  asked  whether  the chart  on  slide  5                                                                    
depicted continued  hires or new hires.  Commissioner Drygas                                                                    
answered that the figure represented the newly employed.                                                                        
1:42:10 PM                                                                                                                    
Commissioner   Drygas   pointed    to   slide   7:   "Income                                                                    
Replacement." She declared that  the Department of Labor and                                                                    
Workforce  Development  (DLWD)  improved the  timeliness  of                                                                    
Fisherman's Fund  claims from  an average of  60 days  in FY                                                                    
2013  to an  average of  47  days in  FY 2014  due to  newly                                                                    
implemented  follow-up  protocol  and  existing  public  and                                                                    
private partnerships reviewed in the following two slides.                                                                      
Commissioner    Drygas   highlighted    slide   8:    "State                                                                    
     Work Readiness Assessments                                                                                                 
        · Alaska Military Youth Academy                                                                                         
        · Department of Corrections                                                                                             
        · Department of Education and Early Development                                                                         
     Economic and Demographic Data, and Training and                                                                            
     Education Program Outcomes                                                                                                 
        · Department of Health and Social Services                                                                              
        · Department of Commerce, Community and Economic                                                                        
        · Department of Education and Early Development                                                                         
        · University of Alaska                                                                                                  
        · Commission on Postsecondary Education                                                                                 
     Apprenticeship, Training and Employment Services                                                                           
        · Department of Corrections                                                                                             
        · Division of Juvenile Justice                                                                                          
Commissioner Drygas  reviewed slide 8:  "Private/ non-Profit                                                                    
     Apprenticeship, Training and Employment Services                                                                           
        · Alaska Employers                                                                                                      
        · Tribal and Community Vocational Rehabilitation                                                                        
        · Construction Education Foundation                                                                                     
        · Alaska Works Partnership                                                                                              
        · Regional Training Centers and Private Training                                                                        
     Private Sector Membership on Boards and Councils                                                                           
        · Workers' Compensation Boards                                                                                          
        · Alaska Safety Advisory Council                                                                                        
        · Alaska Workforce Investment Board                                                                                     
        · Alaska Labor Relations Agency Board                                                                                   
        · Fishermen's Fund Council                                                                                              
Commissioner Drygas  added that an example  of a partnership                                                                    
that  was  not  reflected  on  the  slide  was  the  Seafood                                                                    
Industry Safety program.                                                                                                        
Commissioner  Drygas turned  to  slide  9: "FY2016  Endorsed                                                                    
Budget:   $179,412.8:  Budget   by  Priority   Program"  She                                                                    
indicated  that 53  percent of  the department's  budget was                                                                    
comprised of  federal funds at  $94.4 million.  She detailed                                                                    
that  the  department's  unrestricted  general  funds  (UGF)                                                                    
amounted  to  $29.2  million  and was  a  decrease  of  $4.2                                                                    
million from FY 2015 or  12.8 percent reduction. In order to                                                                    
meet  the  reduction   DLWD  would  redesign  administrative                                                                    
infrastructure  to maintain  maximum  services delivery  and                                                                    
identify efficiencies, however impacts  to services would be                                                                    
Commissioner  Drygas  scrolled   to  slide  10:  "Governor's                                                                    
Endorsed Budget Overview: Operating Budget."                                                                                    
     Operating Budget                                                                                                         
          One-time and Temporary Increment Reversals                                                                            
             · -$1.4 million UGF for the Alaska Youth                                                                           
               First/Compass Alaska program                                                                                     
             · -$150.0 DGF for the Rural Apprenticeship                                                                         
               Outreach program                                                                                                 
             · -$226.8 UGF and -$100.0 DGF for the Alaska                                                                       
               Vocational    Technical     Center    (AVTEC)                                                                    
               Registered Nurse program                                                                                         
     Designated General Fund Increases                                                                                          
             · Additional program receipt authority for the                                                                     
               Alaska Safety Advisory Council ($35.0) and                                                                       
               AVTEC ($110.0)                                                                                                   
             · $429.0    in    additional   Technical    and                                                                    
               Vocational Education Program (TVEP) funding                                                                      
               to regional training centers specified in                                                                        
               Alaska Statute 23.15.835                                                                                         
     Known Federal and Other Funding Reductions                                                                                 
             · -$3.0 million less in federal and other                                                                          
               funding that supports the state's job center                                                                     
Co-Chair   Neuman  clarified   that   the  endorsed   budget                                                                    
reflected  an  8   percent  reduction.  Commissioner  Drygas                                                                    
interjected that a 4.8 percent  reduction was added to the 8                                                                    
percent reduction for a total reduction of 12.8 percent.                                                                        
Commissioner Drygas  elaborated that  in FY 2016  DLWD would                                                                    
lose $1.7  million in  federal funding  for the  Alaska Jobs                                                                    
Center  Network. The  Network  consisted  of field  stations                                                                    
staffed in  20 centers throughout the  state. The department                                                                    
was  examining alternative  solutions  to  avoid job  center                                                                    
closures.  She exemplified  a saving  measure in  the Seward                                                                    
Job Center  where the  staffer was  retiring and  the Alaska                                                                    
Vocational  Technical Center  (AVTEC)  would  take over  job                                                                    
center  operation. She  furthered  that  DLWD would  utilize                                                                    
vacancies and attrition to keep job centers open.                                                                               
1:47:26 PM                                                                                                                    
Representative   Gara  referenced   the  $1.4   million  UGF                                                                    
reduction for the Alaska Youth  First program last year that                                                                    
was restated as a one-time  expenditure.  He stated that the                                                                    
money was  used for  job counseling services.   He  asked if                                                                    
there was  a way  to retain the  most effective  services as                                                                    
opposed to  cutting the entire program.  Commissioner Drygas                                                                    
felt  that  the  program  was  "critically  important."  She                                                                    
suggested  that if  the committee  wanted to  look to  other                                                                    
sources  of funding  she would  welcome keeping  the program                                                                    
but did  not think the  program would survive  the difficult                                                                    
budget  cuts.  Representative  Gara reminded  the  committee                                                                    
that the funding  was a recurring item and was  reduced to a                                                                    
one-time appropriation last year.                                                                                               
Commissioner  Drygas moved  on to  slide 11:  "Technical And                                                                    
Vocational Education Program."                                                                                                  
          FY2014         FY2015         FY2016                                                                                  
          Distribution   Distribution   Distribution                                                                      
     · University of Alaska                                                                                                     
          $ 4,842.0      $ 5,226.9      $ 5,630.0                                                                               
     · University of Alaska Southeast                                                                                           
          $ 538.0        -              -                                                                                       
     · Galena Interior Learning Academy                                                                                         
          $ 430.4        $ 464.6        $ 500.4                                                                                 
     · Alaska Technical Center                                                                                                  
          $ 968.4        $ 1,045.4      $ 1,126.0                                                                               
     · Alaska Vocational Technical Center (AVTEC)                                                                               
          $ 1,829.2      $ 1,974.5      $ 2,126.9                                                                               
     · Northwestern Alaska Career and Technical Center                                                                          
          $ 322.8        $ 348.5        $ 375.3                                                                                 
     · Southwest Alaska Vocational and Education Center                                                                         
          $ 322.8        $ 348.5        $ 375.3                                                                                 
    · Yuut Elitnaurviat, Inc. People's Learning Center                                                                          
          $ 968.4        $ 1,045.4      $ 1,126.0                                                                               
     · Partners for Progress in Delta, Inc.                                                                                     
          $ 322.8        $ 348.5        $ 375.3                                                                                 
     · Amundsen Educational Center                                                                                              
          $ 215.2        $ 232.3        $ 250.2                                                                                 
     · Ilisagvik College                                                                                                        
          -              $ 580.8        $ 625.5                                                                                 
     · TOTAL                                                                                                                    
         $ 10,760.0     $ 11,615.4     $ 12,510.9                                                                               
Commissioner Drygas  mentioned that  the slide  depicted the                                                                    
funding for  the Alaska  Technical and  Vocational Education                                                                    
Program (TVEP) by location.                                                                                                     
Commissioner   Drygas  looked   at  slide   12:  "Governor's                                                                    
Endorsed Budget Overview: Operating Budget Continued."                                                                          
     Operating Budget continued                                                                                               
          $300.0 Unallocated Unrestricted General Fund                                                                          
             · Delete     three    positions     from    the                                                                    
               Commissioner's Office  and the Administrative                                                                    
               Services  Division to  attain the  Governor's                                                                    
               goal     of    redesigning     administrative                                                                    
               infrastructure  to  maintain maximum  program                                                                    
               and services delivery                                                                                            
          8% Unrestricted General Fund ($2.5 million)                                                                           
             · Reduce administrative and support positions,                                                                     
               and streamline services to minimize direct                                                                       
               service impacts (-$1,052.2)                                                                                      
             · Reduce funding available to offset lease                                                                         
               expenses (-$311.4)                                                                                               
             · Closure of the Alaska Vocational Technical                                                                       
               Center's Anchorage Campus , which houses                                                                         
               AVTEC's Allied Health programs (-$478.9)                                                                         
Commissioner  Drygas identified  the three  positions slated                                                                    
for  elimination  in  the   Commissioner's  Office  and  the                                                                    
Administrative Services  Division: administrative assistant,                                                                    
accounting clerk, and micro network technician.                                                                                 
1:51:03 PM                                                                                                                    
Commissioner   Drygas  looked   at  slide   13:  "Governor's                                                                    
Endorsed  Budget Overview:  Operating  Budget Continued  and                                                                    
Capital Budget."                                                                                                                
     Operating Budget continued                                                                                               
          8% Unrestricted General Fund ($2.5 million)                                                                           
          Reduction continued                                                                                                   
             · Reduced Adult Basic Education instructional                                                                      
               hours (-$172.5)                                                                                                  
             · Eliminate a Wage and Hour Investigator (-                                                                        
             · Less funding for pass-through grants in                                                                          
               support of Alaska Construction Academies and                                                                     
               Rural Training Centers (-$367.6)                                                                                 
     Capital Budget                                                                                                           
             · $530.0 unexpended balance of the AVTEC Third                                                                     
               Avenue Dormitory  project to provide  for the                                                                    
               replacement   and    upgrading   of   AVTEC's                                                                    
               information  technology  (IT)  equipment  and                                                                    
Commissioner Drygas  advanced to  slide 14: "Share  Of Total                                                                    
Agency Operations."  She reported  that the next  few slides                                                                    
were historical  budget charts provided  by the  Division of                                                                    
Legislative  Finance (LFD)  which portrayed  changes in  the                                                                    
DLWD budget since 2007. She  emphasized that slide 14 showed                                                                    
the  overall state  agency operations  and the  general fund                                                                    
(GF) budget  as a  percentage of  the total  agency budgets.                                                                    
The department's  general funds had increased  at an average                                                                    
annual growth rate of 3.7  percent. However, the rest of the                                                                    
state had grown at a  faster rate therfore, DLWD represented                                                                    
a  smaller  share  of  the   overall  statewide  budget  and                                                                    
represented six straight years of decline.                                                                                      
Vice-Chair  Saddler asked  whether  the  slide included  UGF                                                                    
funds. Commissioner Drygas responded in the affirmative.                                                                        
Representative  Gara   cited  slide  13  and   requested  an                                                                    
explanation for  the reduction in the  adult basic education                                                                    
instructional  hours  totaling   $172.5  million  and  asked                                                                    
whether there was an alternative for serving the students.                                                                      
PALOMA   HARBOUR,  DIRECTOR,   DIVISION  OF   ADMINISTRATIVE                                                                    
SERVICES,  DEPARTMENT OF  LABOR  AND WORKFORCE  DEVELOPMENT,                                                                    
answered that the total budget  had $2 million remaining for                                                                    
the  Adult  Basic Education  program  and  was currently  $1                                                                    
million over the  required federal match. She  felt that the                                                                    
impacts would be fairly minimal.                                                                                                
Co-Chair Neuman stated that slide  14 compared DLWD to other                                                                    
state agency  budgets. Commissioner  Drygas voiced  that she                                                                    
was required to provide the graph.                                                                                              
1:55:47 PM                                                                                                                    
Vice-Chair Saddler  asked for clarification about  the Adult                                                                    
Basic Education program.  Commissioner Drygas responded that                                                                    
the  program  assisted  adults in  obtaining  their  General                                                                    
Education Diploma  (GED). Vice-Chair Saddler asked  if there                                                                    
were  other  educational resources  available.  Commissioner                                                                    
Drygas  was not  familiar  with  other resources  available.                                                                    
Vice-Chair Saddler  opined that other  educational resources                                                                    
would include the public  school system. Commissioner Drygas                                                                    
replied that  adult education was comprised  of Alaskans who                                                                    
dropped out of high school and wanted to "make a go of it."                                                                     
Representative Guttenberg  asked about  the reason  that the                                                                    
GED program was  under the Department of  Labor. He wondered                                                                    
whether it  was considered a part  of workforce development.                                                                    
Commissioner  Drygas replied  in the  affirmative and  added                                                                    
that  the basic  reason was  that it  served adults  seeking                                                                    
their GED.  Representative Guttenberg  cited the  example of                                                                    
of someone  aged 19 or 20  and asked where she  would go for                                                                    
GED  assistance.  Commissioner  Drygas answered  that  Adult                                                                    
Basic Education served students 16 years old or older.                                                                          
Commissioner  Drygas  explained  the   chart  on  slide  15:                                                                    
"General  Funds By  Appropriation."  She  detailed that  the                                                                    
graph  depicted   the  departments  GF  budget   changes  by                                                                    
appropriation.  She  furthered   that  GF  included  special                                                                    
training  funds such  as the  State Training  and Employment                                                                    
Program (STEP),  and the Technical and  Vocational Education                                                                    
Program  (TVEP), and  program receipts  from fee-for-service                                                                    
type  activities   (i.e.,  student   tuition  and   fees  or                                                                    
mechanical inspection fees).                                                                                                    
Co-Chair Neuman  asked about  the blue  line with  the stars                                                                    
that  indicated  significant growth  in  2008  and 2009  and                                                                    
wondered  why. Commissioner  Drygas  replied  that the  TVEP                                                                    
program increased significantly by statute.                                                                                     
1:59:40 PM                                                                                                                    
Commissioner   Drygas  examined   slide  16:   "Unrestricted                                                                    
General Funds  By Appropriation."  She noted the  decline in                                                                    
growth  in almost  all DLWD  programs and  components in  FY                                                                    
2015 and FY 2016. She  commented that the steeper decline in                                                                    
Business Partnerships was due to  the cut to the Youth First                                                                    
program.  The increase  in the  Labor  Standards and  Safety                                                                    
Division was  accredited to the  projected shortfall  in the                                                                    
Workers Safety  Compensation Administration  Account (WSCAA)                                                                    
that resulted in a fund source change to UGF.                                                                                   
Commissioner   Drygas   reviewed   slide  17:   "Change   In                                                                    
Positions."  She  explained  that the  chart  portrayed  the                                                                    
decrease in positions since 2007.                                                                                               
Co-Chair Neuman  asked about the  average cost  per employee                                                                    
in  FY 2007  versus FY  2016. Commissioner  Drygas responded                                                                    
that she would provide the information.                                                                                         
Commissioner Drygas  scrolled to  slide 18: "Vision  For The                                                                    
     · Streamline programs and revamp the workforce                                                                             
        development system to ensure maximum effectiveness                                                                      
        and efficiency within a sustainable budget                                                                              
     · Increase Alaska resident hire in priority industries                                                                     
        and occupations to ensure Alaskans are getting                                                                          
        Alaska's jobs                                                                                                           
     · Ensure economic stability for injured, unemployed                                                                        
        and disabled Alaskans                                                                                                   
Commissioner Drygas  commented on  how committed  the people                                                                    
within  the   department  were.  She  was   struck  by  DLWD                                                                    
employee's  longevity, concern  for people's  wellbeing, and                                                                    
good nature.  She specifically  mentioned the  dedication of                                                                    
the employees working in the  Division of Rehabilitation and                                                                    
commended them for finding  disabled people meaningful work.                                                                    
She revealed  that she was  reviewing a proposal  that would                                                                    
administer   Workforce   Development  Grants   through   the                                                                    
Employment Security Division instead  of a separate Business                                                                    
Partnerships Division,  which could  result in a  savings of                                                                    
approximately  $850 thousand.  In addition,  she noted  that                                                                    
Alaska had  the highest  ratios of resident  to non-resident                                                                    
workers in the  country which impacted the  resident rate of                                                                    
Vice-Chair   Saddler  asked   the  commissioner   to  define                                                                    
priority industries in  Alaska. Commissioner Drygas deferred                                                                    
to Deputy Commissioner Cashen.                                                                                                  
2:05:55 PM                                                                                                                    
GREG CASHEN,  DEPUTY COMMISSIONER,  DEPARTMENT OF  LABOR AND                                                                    
WORKFORCE DEVELOPMENT,  answered that  he had  just finished                                                                    
discussions  with  the  Workforce Investment  Board  on  the                                                                    
topic.  He identified  that the  priority industries  in the                                                                    
state    were   oil    and   gas,    mining,   construction,                                                                    
transportation,   seafood    processing,   healthcare,   and                                                                    
information  technology.  He  reported that  DLWD  would  be                                                                    
implementing   the   new    federal   Workforce   Innovation                                                                    
Opportunity Act.                                                                                                                
Vice-Chair Saddler  referred to the  Commissioners statement                                                                    
that   Alaska  had   the   highest   rate  of   non-resident                                                                    
unemployment  and  wondered whether  that  was  the case  in                                                                    
priority  or  non-priority industries.  Deputy  Commissioner                                                                    
Cashen replied  that non-resident employment was  focused on                                                                    
construction,  oil   and  gas,   mining,  and   the  seafood                                                                    
industry. He offered to provide  the departments recent non-                                                                    
resident hire report.                                                                                                           
Co-Chair Thompson  thought that  the tourism industry  had a                                                                    
lot  of non-resident  hire  and  supported tourism  industry                                                                    
jobs   going  to   Alaskans.   Deputy  Commissioner   Cashen                                                                    
responded that  he inadvertently missed listing  the tourism                                                                    
industry as having a high rate of non-resident hire.                                                                            
Co-Chair Neuman  stated that  recently he  had met  with the                                                                    
Commissioner  to  discuss  the  future  of  Alaska.  He  was                                                                    
concerned about the  lost jobs in communities  due to budget                                                                    
reductions. He  stated the importance  that DLWD  would play                                                                    
in  assisting   Alaskans  in  finding  new   employment.  He                                                                    
commented that  outreach to private industry  was essential.                                                                    
He believed that  the state's role in  training Alaskans for                                                                    
industry jobs would need to  transfer to the private sector.                                                                    
He  asked the  commissioner to  address the  committee about                                                                    
the  role  of the  department  in  the future  with  further                                                                    
budget   reductions  and   the  partnerships   with  private                                                                    
Commissioner  Drygas responded  that  the Governor  directed                                                                    
commissioners  to "dig  into  budgets"  to find  reductions.                                                                    
She believed  the department  had identified  new reductions                                                                    
by "thinking outside the box" and  that DLWD had to "do less                                                                    
with less."  She was very  passionate about  partnering with                                                                    
private  industry   and  increasing   workforce  development                                                                    
opportunities  in the  state.  She shared  that  one of  the                                                                    
things  the  Governor had  emphasized  in  his speeches  was                                                                    
cooperation  among the  Department  of  Education and  Early                                                                    
Development (DEED),  the University  of Alaska, and  DLWD to                                                                    
streamline  and make  workforce development  and career  and                                                                    
technical education  more effective and work  on identifying                                                                    
duplications  and where  the stated  needed  to improve  its                                                                    
training. She  shared that she had  productive meetings with                                                                    
Commissioner  Michael  Hanley, Commissioner,  Department  of                                                                    
Education  and  Early  Development,  and  President  Patrick                                                                    
Gamble, President, University of  Alaska, to discuss ways to                                                                    
advance  the goals  and measure  results. She  discussed her                                                                    
energy and enthusiasm for her job as commissioner.                                                                              
2:15:07 PM                                                                                                                    
Vice-Chair  Saddler  referred  to  slide 11  and  asked  for                                                                    
information  on  which  TVEP   training  centers  were  most                                                                    
effective at  producing jobs and  at what cost  per student.                                                                    
Commissioner Drygas  answered that  a TVEP report  was being                                                                    
published next month.                                                                                                           
2:16:08 PM                                                                                                                    
AT EASE                                                                                                                         
2:25:32 PM                                                                                                                    
^FY 16 BUDGET OVERVIEW: DEPARTMENT OF LAW                                                                                     
CRAIG  RICHARDS,   ATTORNEY  GENERAL,  DEPARTMENT   OF  LAW,                                                                    
introduced   the   PowerPoint  presentation   "FY16   Budget                                                                    
Overview: Department of Law (copy on file).                                                                                     
Attorney General Richards began with slide 2: "Mission."                                                                        
        · The Alaska Department of Law prosecutes crime and                                                                     
          provides legal services to state government for                                                                       
          the protection and benefit of Alaska's citizens.                                                                      
     Core Services                                                                                                              
        · Protecting the safety and financial well-being of                                                                     
        · Fostering conditions for responsible development                                                                      
          of our natural                                                                                                        
        · resources                                                                                                             
        · Protecting the fiscal integrity of the State of                                                                       
        · Promoting good governance                                                                                             
2:27:00 PM                                                                                                                    
Attorney General  Richards moved  to slide  3: "Organization                                                                    
Chart."  He  thought it  would  be  helpful to  include  the                                                                    
organizational chart  for the Department of  Law (DOL) which                                                                    
included   the  Criminal   Division,  Civil   Division,  and                                                                    
Administrative Services.                                                                                                        
Attorney General  Richards pointed  to slide  4: "Protecting                                                                    
Alaskans:   Prosecutions  and   Convictions  in   CY13."  He                                                                    
conveyed  that  the  prosecutorial  arm for  the  state  was                                                                    
housed in the Criminal Division  within DOL. The data on the                                                                    
chart  showed the  number of  felony  and misdemeanor  cases                                                                    
that were accepted in and  subsequently resolved in the last                                                                    
calendar  year.  He reported  that  the  statistics did  not                                                                    
include the  dismissals that amounted  to 16 percent  of the                                                                    
total prosecuted cases; half resulted in plea agreements.                                                                       
Co-Chair  Neuman  stated  his   concern  with  child  sexual                                                                    
assault.  He  recounted  a  recent  event  in  Wasilla  that                                                                    
resulted  in  a  plea  agreement  with  lessor  charges.  He                                                                    
wondered how a  plea agreement could happen  in child sexual                                                                    
assault  cases. Attorney  General Richards  replied that  he                                                                    
was  not familiar  with the  circumstances of  the case.  He                                                                    
stated  that  major  plea  decisions   were  made  with  the                                                                    
prosecutor and the district attorney.  He offered to provide                                                                    
information regarding  the particular case.  Co-Chair Neuman                                                                    
responded  that his  concern was  not  just that  particular                                                                    
case.  He wondered  how someone  could commit  "a tremendous                                                                    
amount  of crime"  and could  obtain a  plea agreement  with                                                                    
lessor  charges.   Attorney  General  Richards   offered  to                                                                    
provide  statistics   for  the  department   regarding  plea                                                                    
agreements with multiple charges reduced to one charge.                                                                         
Attorney  General Richards  looked at  slide 5:  "Protecting                                                                    
Alaskans: Recent  Statistics." He  explained that  the slide                                                                    
showed  the  number of  violent  felony  crimes reported  in                                                                    
Alaska.  He commented  that reported  crimes related  to the                                                                    
amount of work for the  Criminal Division of the department.                                                                    
He relayed that reported crimes remained relatively flat.                                                                       
Co-Chair  Neuman cited  that  2,672  felonies were  reported                                                                    
[2013] and wondered how many of the crimes were prosecuted.                                                                     
JOHN SKIDMORE, DIRECTOR, CRIMINAL DIVISION, DEPARTMENT OF                                                                       
LAW, indicated he would provide the information.                                                                                
Representative  Guttenberg  asked  how  Alaska  compared  to                                                                    
other  states  in  relation   to  violent  crimes.  Attorney                                                                    
General  Richards  was  not  aware  of  accurate  statistics                                                                    
2:33:06 PM                                                                                                                    
Attorney General Richards highlighted slide 6: "Protecting                                                                      
     Securing safe living conditions for Alaska's children:                                                                     
        · The Alaska Supreme Court resolved 29 appeals in                                                                       
          FY14   relating   to   child   protection   cases,                                                                    
          affirming  the  position taken  by  OCS  in 28  of                                                                    
          those appeals -a 96% success rate.                                                                                    
     Safeguarding Alaska's consumers:                                                                                           
        · The   Commercial   and   Fair   Business   section                                                                    
          participated in  settlement of  6 major  local and                                                                    
          multi-state  consumer protection  cases, resulting                                                                    
          in almost $6 million  to the state. The Regulatory                                                                    
          Affairs  and   Public  Advocacy   section  yielded                                                                    
          approximately   $4.4   million   in   quantifiable                                                                    
          consumer benefits in FY14.                                                                                            
     Prosecuting    criminals    and   shielding    Alaska's                                                                    
     vulnerable adults:                                                                                                         
        · Extraditions, probation revocations, pursuing PFD                                                                     
          and Medicaid  fraud cases,  and a  continued focus                                                                    
         on domestic violence and sexual assault.                                                                               
Attorney General Richards moved to slide 7: "Fostering                                                                          
Economic Development."                                                                                                          
     Ensuring Alaska's Resources are accessible:                                                                                
        · Continued efforts to preserve and enhance access                                                                      
          throughout   the   state,   including   the   U.S.                                                                    
          Secretary  of  the  Interior's denial  of  a  land                                                                    
          exchange to build a road to Cold Bay.                                                                                 
     Defending the Alaska's right to manage its resources:                                                                      
        · Obtained a favorable decision vacating the NMFS                                                                       
          decision, based on projections  100 years into the                                                                    
          future, to list the Beringia population of                                                                            
          bearded seal as threatened.                                                                                           
     Representing the state's interests in resource                                                                             
        · Worked with multiple state agencies to provide                                                                        
          comments on the EPA's proposed rule to enforce a                                                                      
          reduction of CO2 emissions from existing power                                                                        
Attorney General Richards reported  that the state wanted to                                                                    
defend  its  right  to manage  its  resources  and  maintain                                                                    
accessibility to  its resources.  He mentioned that  a whole                                                                    
series  of  cases were  related  to  maintaining the  states                                                                    
interest in  resource development and ability  to manage its                                                                    
Co-Chair  Neuman  commented   that  protecting  the  state's                                                                    
sovereignty was a huge issue  for the state. He informed the                                                                    
committee that  he had requested information  regarding what                                                                    
law  suits were  filed  on  behalf of  the  state that  were                                                                    
attempting to protect the state's  rights and list which law                                                                    
suits were feasible and might proceed with litigation.                                                                          
Representative   Wilson   asked   how  DOL   decided   which                                                                    
Environmental  Protection  Agency   (EPA)  laws  were  worth                                                                    
challenging.  She  exemplified  the air  quality  issues  in                                                                    
Fairbanks. Attorney General Richards  stated that he had not                                                                    
yet made  a decision  regarding state's rights.  He reasoned                                                                    
that he  would first  determine whether the  state disagreed                                                                    
with  a federal  law and  whether or  not the  state "had  a                                                                    
unique voice"  in the issue.  He added that there  were also                                                                    
practical considerations that weighed  in on the decision of                                                                    
whether to sue  or not. He would provide  any information on                                                                    
a "formal  structure on  EPA rule  charges" if  they existed                                                                    
within the department.                                                                                                          
2:38:03 PM                                                                                                                    
Representative Edgmon  asked about Alaska Tribes.  He stated                                                                    
that  he  did   not  see  any  mention  of   tribes  in  the                                                                    
presentation. He  asked whether the department  was going to                                                                    
pursue working with the tribes  in relation to tribal courts                                                                    
and the criminal justice  system and improving relationships                                                                    
with  tribes. Attorney  General  Richards  responded in  the                                                                    
affirmative. He voiced  that he wanted to  find the balanced                                                                    
approach and  work with the  tribes on  offering alternative                                                                    
criminal   justice  remedies   especially  for   non-violent                                                                    
felonies at  the local  level. He  thought that  the biggest                                                                    
challenge  was resources  and spreading  them  out over  230                                                                    
tribes  of varying  demographics. He  thought that  the best                                                                    
approach  would consider  needs on  a case-by-case  basis to                                                                    
see  what  made  sense. Representative  Edgmon  stated  that                                                                    
"Alaska tribes had been the  most litigated than anywhere in                                                                    
the  country" and  increasing efficacy  at  the local  level                                                                    
could  bring cost  savings to  the  state. Attorney  General                                                                    
Richards added that federal funds  could become available if                                                                    
the  department  could  "get  some  of  the  tribes  up  and                                                                    
Vice-Chair Saddler  referenced the legal  challenges against                                                                    
the  Department of  the Interior  regarding  its refusal  to                                                                    
allow  3-D  seismic  testing  in  Arctic  National  Wildlife                                                                    
Refuge  (ANWR) and  whether the  state was  going to  pursue                                                                    
legal action.  In addition, he asked  whether the department                                                                    
would  continue  to  challenge the  refusal  to  redraw  the                                                                    
western border of the 10-02 area  of ANWR. He hoped that the                                                                    
department would  "vigorously push  back against"  that type                                                                    
of issues  and would  resist in  concert with  other western                                                                    
states  as  well.  Attorney  General  Richards  agreed  with                                                                    
working collectively with other  western states. He detailed                                                                    
that as  a member  of the  National Association  of Attorney                                                                    
Generals he  was involved  in a  subgroup of  western states                                                                    
that worked collaboratively on federal land issues.                                                                             
2:42:33 PM                                                                                                                    
Representative  Pruitt requested  that when  the information                                                                    
on  the law  suits  related to  state's  rights against  the                                                                    
federal government  was available  the information  would be                                                                    
provided to the committee as  a presentation by the attorney                                                                    
general. Attorney  General Richards  agreed and  warned that                                                                    
he  would  have  to  proceed  with  caution  when  providing                                                                    
information on  litigation strategy in a  public setting and                                                                    
would need to find a  balance in presenting the information.                                                                    
Representative  Pruitt  understood  and   did  not  want  to                                                                    
jeopardize the state's position.                                                                                                
Representative  Munoz wanted  Attorney  General Richards  to                                                                    
comment  on  the  Ketchikan  educational  lawsuit.  Attorney                                                                    
General Richards reported that  currently the Superior Court                                                                    
found that the local  contribution portion of school funding                                                                    
was in  violation of  the dedicated  funds provision  of the                                                                    
Alaska Constitution but did not  violate other provisions of                                                                    
the constitution  regarding educational  funding provisions.                                                                    
He  elaborated  that  Ketchikan   moved  to  reconsider  the                                                                    
decisions it  lost but reconsideration was  not granted. The                                                                    
final judgement was entered and  the state requested a stay.                                                                    
However,    the   judge    would   not    accept   expedited                                                                    
consideration.  Presently,  the  department  petitioned  the                                                                    
state Supreme  Court for an  expedited stay of  the decision                                                                    
and regardless of  a granted stay the state  will appeal the                                                                    
Attorney  General  Richards  examined slide  8:  "Protecting                                                                    
Fiscal Integrity." He explained  that the chart depicted the                                                                    
amount of money  DOL brought into the  state through various                                                                    
collections actions  and litigation. He revealed  that DOL's                                                                    
budget was approximately $100 million  annually and that the                                                                    
department brought  in $400  million in  FY 2013.  He deuced                                                                    
that the department was a revenue driver.                                                                                       
Co-Chair   Neuman   asked   what   happened   in   FY   2014                                                                    
[$23,428,000].  Attorney General  Richards  stated that  the                                                                    
larger sums had  to do with oil and gas  cases that happened                                                                    
to be settled in a  particular fiscal year. He surmised that                                                                    
there was not a large settlement in FY 2014.                                                                                    
2:47:34 PM                                                                                                                    
Attorney General  Richards advanced to slide  9: "Protecting                                                                    
Fiscal Integrity."                                                                                                              
     Providing legal support in the development of a                                                                            
        · Continued to furnish legal guidance to develop a                                                                      
          gas line  to transport  Alaska North Slope  gas to                                                                    
          markets in and outside  of Alaska. The development                                                                    
          of  this   resource  is  vital   to  strengthening                                                                    
          Alaska's economic future.                                                                                             
     Collecting on monies owed to the state:                                                                                    
        · Represented the Department of Revenue (DOR) in                                                                        
          tax disputes.                                                                                                         
     Securing an equitable share to Alaska for its                                                                              
        · Monitoring and participating, where appropriate,                                                                      
          in  state  and  federal  regulatory  oversight  of                                                                    
          tariffs on common carrier  pipelines in the state.                                                                    
          This  vigilance can  earn  the  state millions  of                                                                    
          dollars  in royalties  and  production taxes  each                                                                    
Attorney   General   Richards  discussed   additional   core                                                                    
functions of the  Department of Law in  slide 10: "Promoting                                                                    
Good Governance."                                                                                                               
     Defending the state's elections process:                                                                                   
        · Advised the Office of the Lieutenant Governor                                                                         
          regarding  certification of  four ballot  measures                                                                    
          and a referendum.                                                                                                     
     Upholding   the   public   interest   in   programmatic                                                                    
        · On behalf of DHSS, brought an administrative                                                                          
          claim  against  Xerox  State Healthcare,  for  the                                                                    
          company's   failure   to  provide   a   functional                                                                    
          Medicaid     Management    Information     System.                                                                    
          Proceedings will commence in 2015.                                                                                    
     Providing consistent legal opinions:                                                                                       
        · The department plays an integral role in the                                                                          
          success  of  many  state programs  and  operations                                                                    
          that  are   under  the   purview  of   our  sister                                                                    
Attorney  General  Richards  highlighted that  DOL  provided                                                                    
baseline legal services, defended and sued for the state.                                                                       
Co-Chair Neuman  asked for clarification regarding  the role                                                                    
of the attorney general on  behalf of the governor. Attorney                                                                    
General Richards  responded that  he acted as  legal advisor                                                                    
to the governor and lieutenant governor.                                                                                        
Representative Wilson  asked who the legislature  would turn                                                                    
to  if  they  disagreed  with a  decision  by  the  attorney                                                                    
general.   Attorney   General    Richards   explained   that                                                                    
Legislative   Legal  Services   acted  on   behalf  of   the                                                                    
legislature and  could provide  legal advice  independent of                                                                    
DOL or any other state entity.                                                                                                  
Representative  Wilson asked  for information  regarding the                                                                    
attorney general's  decision on a case  involving the Alaska                                                                    
Industrial Development  and Export  Authority (AIDEA)  and a                                                                    
private entity. Attorney General  Richards indicated that he                                                                    
had  not  made  any   decisions  regarding  AIDEA.  Attorney                                                                    
General Richards conveyed that  he could provide information                                                                    
regarding  the   role  of  the  attorney   general  and  the                                                                    
decisions  in  the  rate  cases related  to  Hill  Corp.  He                                                                    
reported  that  the  previous attorney  general  decided  to                                                                    
proceed  with  a  Regulatory  Affairs  and  Public  Advocacy                                                                    
(RAPA)  section lawsuit  with the  Regulatory Commission  of                                                                    
Alaska  (Regulatory  Commission  of Alaska).  He  delineated                                                                    
that a  determination had been  made that  Fairbanks natural                                                                    
gas  should   be  rate  regulated.   A  concern   about  the                                                                    
possibility of a "spin off"  of the Pt. McKenzie facility in                                                                    
order to  avoid any rate  regulation at the facility  or all                                                                    
the  way along  the  value chain  prompted additional  legal                                                                    
action to avoid  the scenario that the  only rate regulation                                                                    
would  occur at  the distribution  point. He  continued that                                                                    
RAPA  challenged   whether  the  facility  should   be  rate                                                                    
regulated and whether  the facility could be  sold should be                                                                    
delayed until the rate regulation decision was made.                                                                            
Co-Chair Neuman  refocused members' attention to  the budget                                                                    
Attorney General  Richards scrolled to slide  11: "Status of                                                                    
FY15   Increments."   He   explained  that   typically   the                                                                    
legislature  appropriated   large  oil  and  gas   funds  as                                                                    
increments  rather than  GF dollars.  The  slide showed  the                                                                    
increments  for  FY  2015  that  totaled  $3.8  million  for                                                                    
litigation and $1.5 million for gasline efforts.                                                                                
2:53:57 PM                                                                                                                    
Attorney General Richards explained  slide 12: "Facing Tough                                                                    
        · We plan to continue to meet our core functions                                                                        
        · The department is committed to delivering the                                                                         
          same level of excellent service                                                                                       
        · We can't define the details for all operations in                                                                     
          a reduction environment at this time                                                                                  
        · Maintain current flexibility in our budget allows                                                                     
          movement to respond to the state's priorities                                                                         
Attorney  General  Richards   indicated  that  the  governor                                                                    
directed  the  agencies  to  find 5  percent  to  8  percent                                                                    
reductions and  that the department identified  an 8 percent                                                                    
Attorney  General  Richards  looked at  slide  13:  "Current                                                                    
Budget is not all GF."                                                                                                          
     Operating reductions by sister agencies may impact                                                                         
        · 34% of the Department's budget is funded from                                                                         
          sources  other  than  undesignated  general  fund.                                                                    
          Substantially all  of those  funds are  from other                                                                    
        · As other departments draw down or eliminate                                                                           
          programs,  the amount  of  legal support  required                                                                    
          may   be   reduced.   However,   past   experience                                                                    
          indicates that  program elimination  or downsizing                                                                    
          generally  has a  short-term  uptick  in level  of                                                                    
          legal work that is necessary.                                                                                         
        · Legal efforts required by other agencies are not                                                                      
          predictably  parallel to  reductions  -an area  of                                                                    
          concern is that sister  agencies may "cut corners"                                                                    
          when seeking Law's  expertise, potentially leading                                                                    
          to greater legal trouble in the future.                                                                               
2:58:47 PM                                                                                                                    
Attorney  General  Richards  explained  slide  14:  "Current                                                                    
     · Working with the Alaska Court System (48-hour notice                                                                     
        on arraignments) to eliminate Fairbanks and                                                                             
        Anchorage overtime                                                                                                      
     · Reviewing current cases to determine if there are                                                                        
        any that shouldn't be pursued                                                                                           
     · Establishing a protocol to fill positions as they                                                                        
        become vacant                                                                                                           
     · Reviewing existing structure at Law -does it make                                                                        
        sense to look at a re-organization                                                                                      
     · Restructure of Anchorage criminal cases (potentially                                                                     
       eliminate the pre-indictment hearing process)                                                                            
Attorney General  Richards revealed that the  Anchorage pre-                                                                    
indictment  hearing process  was costly  and the  department                                                                    
was considering sending cases directly  to the Grand Jury as                                                                    
a cost saving measure.                                                                                                          
Vice-Chair   Saddler    asked   whether   there    was   any                                                                    
restructuring  within DOL  due to  passage of  the Marijuana                                                                    
referendum   and  whether   the  department   would  realize                                                                    
additional expenses  or net savings  due to  the referendum.                                                                    
Attorney   General  Richards   deduced   that  the   general                                                                    
consensus was  that there would  be a net increase  in costs                                                                    
due to  driving under the  influence (DUI) scenarios  but he                                                                    
had not seen any data.                                                                                                          
Attorney General  Richards discussed slide 15:  "FY16 Budget                                                                    
- Key  Personnel Statistics."  He pointed  out that  DOL had                                                                    
300 employees  in the  Civil Division,  232 in  the Criminal                                                                    
Division, and  23 in Administrative Services.  He summarized                                                                    
that the reductions in personnel  would be even between both                                                                    
divisions and even among attorney and support staff.                                                                            
Representative Munoz asked where  the reduced positions were                                                                    
located. Attorney  General Richards  did not know  where the                                                                    
positions would be specifically located at this time.                                                                           
Vice-Chair  Saddler wondered  whether  the department  could                                                                    
experience  more  cost  savings by  employing  more  support                                                                    
staff   and  less   attorneys.  Attorney   General  Richards                                                                    
reported  that he  had asked  the  same question.  He was  a                                                                    
proponent of  shifting more work  to paralegals  if possible                                                                    
to realize cost savings.                                                                                                        
Co-Chair Neuman  suggested that  DOL take  a harder  look at                                                                    
making more  personnel reductions which was  currently under                                                                    
2 percent. Attorney General Richards  indicated that DOL was                                                                    
examining more reductions in the event more were necessary.                                                                     
3:04:54 PM                                                                                                                    
Attorney  General  Richards  turned  to  slide  16:  "FY  16                                                                    
Governor's  Budget (in  thousands)." He  mentioned that  the                                                                    
slide  depicted  the  relative  expense  between  the  Civil                                                                    
Division at $52 million versus  the Criminal Division at $32                                                                    
million. He noted  that the Civil Division  received a large                                                                    
share of funds from other revenue sources besides GF.                                                                           
Attorney  General  Richards  moved   to  slide  17:  "FY  15                                                                    
Management  Plan  to  FY 16  Governor's  Request  Line  Item                                                                    
Detail - All Funds."                                                                                                            
Representative Munoz  asked about the travel  line which had                                                                    
increased  from  FY  2015  to   FY  2016.  Attorney  General                                                                    
Richards stated  that he was  uncertain about  the increase.                                                                    
He  believed that  downsizing  was not  only  a function  of                                                                    
reducing  travel  but  also   reducing  personnel  and  core                                                                    
services.   Therefore,  he   did  not   focus  on   specific                                                                    
priorities   in   finding   reductions.  He   thought   that                                                                    
reductions in travel could  inhibit the department's ability                                                                    
to prosecute criminal cases.                                                                                                    
Co-Chair   Neuman  pointed   out  the   travel  figure   was                                                                    
mistakenly  depicted as  a decrement  on the  slide and  was                                                                    
actually an increase.                                                                                                           
Representative  Wilson  asked  about the  potential  use  of                                                                    
video for the department as  a cost saving measure. Attorney                                                                    
General  Richards responded  that DOL  was exploring  having                                                                    
more  flexibility  using   video  under  the  constitutional                                                                    
constraint   of   the    criminal   defendant's   right   to                                                                    
confrontation  which presented  a challenge.  Representative                                                                    
Wilson thought  that it could  possibly be used  in pretrial                                                                    
instances.  Attorney   General  Richards  agreed   with  her                                                                    
Co-Chair  Neuman mentioned  legislation  from  a prior  year                                                                    
that looked  at the  costs to  the state  from organizations                                                                    
that  sue the  state. He  thought that  the legislation  was                                                                    
meant to reduce costs for DOL.  He was not familiar with the                                                                    
details of  the bill but  wondered whether it had  an effect                                                                    
on   the  department's   budget.   He   believed  that   the                                                                    
legislation was important.                                                                                                      
3:09:36 PM                                                                                                                    
JOHN  SKIDMORE, DIRECTOR,  CRIMINAL DIVISION,  DEPARTMENT OF                                                                    
LAW, reported  that he had  a recollection of the  issue but                                                                    
did not  remember specifics and  was unaware of  any effects                                                                    
so far.                                                                                                                         
Co-Chair  Neuman requested  information  regarding the  bill                                                                    
and its effects  on the department and  asked that regarding                                                                    
any  legislation  meant  to  reduce   costs  he  would  like                                                                    
information about  the agencies implementation  and results.                                                                    
Attorney   General   Richards    agreed   to   provide   the                                                                    
Attorney  General  Richards  continued  with  slide  17.  He                                                                    
summarized that the department's  budget was "largely people                                                                    
driven" from Personnel Services.                                                                                                
Attorney   General  Richards   discussed  slide   18:  "FY16                                                                    
Reductions  (in thousands)"  and noted  that it  highlighted                                                                    
the   department's   strategy   to  achieve   the   targeted                                                                    
reductions  of  $6.2  million.   He  spoke  to  the  largest                                                                    
reductions  that were:  reduced use  of outside  council and                                                                    
staff  reductions.  He  detailed  that the  use  of  outside                                                                    
council  was cyclical  and  mostly related  to  oil and  gas                                                                    
cases.  He  pointed  to  the   $916  thousand  reduction  in                                                                    
personnel  achieved  through  realignment  of  attorneys  in                                                                    
rural offices. He reported that  the roughly $2.5 million in                                                                    
staff reductions would be achieved  through attrition due to                                                                    
the 10 percent turnover rate within the department.                                                                             
Vice-Chair  Saddler asked  for  clarification regarding  the                                                                    
reduced  use of  outside  council and  wondered whether  the                                                                    
appropriation  would be  increased by  any new  oil and  gas                                                                    
cases in  the future.  Attorney General  Richards delineated                                                                    
that  there were  3 reductions  related to  outside council:                                                                    
$800 thousand  for oil, gas,  and mining; $800  thousand for                                                                    
the gasline;  and $300 thousand  for the  Endangered Species                                                                    
Act.  He elaborated  that regarding  the Endangered  Species                                                                    
Act  the   reduction  was  due   to  development   of  "very                                                                    
sophisticated  in-house expertise."  He  added that  gasline                                                                    
demand for DOL assistance was  less than anticipated and oil                                                                    
and gas  litigation was  low due to  the cyclical  nature of                                                                    
oil  and gas  cases.  Vice-Chair Saddler  asked whether  the                                                                    
reductions  were "structural"  in  nature. Attorney  General                                                                    
Richards answered  that the oil,  gas, and  mining reduction                                                                    
in outside council was not structural.                                                                                          
3:15:20 PM                                                                                                                    
Attorney General Richards advanced  to slide 19: "Department                                                                    
of Law  Salary Adjustment  Increases and  Personnel Services                                                                    
Costs  (All Funds)  ($ Thousands)."  He  indicated that  the                                                                    
chart  depicted a  $24.1 million  increase  in the  personal                                                                    
services  budget,   which  $18.9  million  was   "driven  by                                                                    
contractual and  statutory increases  in wages  or burdens,"                                                                    
and was essentially due to  inflation. He mentioned the $5.2                                                                    
million  growth  directly  related to  staff  increases.  He                                                                    
surmised that  most of  the department's  growth was  due to                                                                    
inflation  and  that  staff reductions  would  generate  the                                                                    
largest budget reductions.                                                                                                      
Attorney General Richards revealed  slide 20: "Department of                                                                    
Law  Share   of  Total  Agency   Operations  (GF   Only)  ($                                                                    
Thousands)."    He    remarked   that    the    department's                                                                    
approximately  $100 million  budget represented  1.1 percent                                                                    
to  1.5   percent  of  total   agency  operations   and  was                                                                    
relatively flat.                                                                                                                
Attorney    General   Richards    turned   to    slide   21:                                                                    
"Appropriations within  the Department  of Law (GF  Only) ($                                                                    
Thousands)." He highlighted that a  large part of the growth                                                                    
in  the  department's budget  over  the  last 10  years  was                                                                    
driven by inflation, particularly in the Criminal Division.                                                                     
Attorney General Richards  skipped slide 22: "Appropriations                                                                    
within the Department of Law (All Funds) ($ Thousands)."                                                                        
Attorney General Richards turned  to the remaining slide 23:                                                                    
" Appropriations  within the Department of  Law (UGF Only)($                                                                    
Thousands)."  He  relayed that  the  last  slide showed  the                                                                    
amount  of UGF  for DOL  and noted  that a  small amount  of                                                                    
designated   funds  for   consumer  protection,   RAPA,  and                                                                    
Department  of  Environmental  Conservation  (DEC)  clean-up                                                                    
were appropriated to the department.                                                                                            
3:18:59 PM                                                                                                                    
Vice-Chair Saddler  cited the following language  from slide                                                                    
9,  "…securing   an  equitable  share  to   Alaska  for  its                                                                    
resources."  He asked  whether  DOL  interpreted the  Alaska                                                                    
Constitution   regarding  resources   in  the   manner  that                                                                    
resources  should be  developed for  the maximum  benefit of                                                                    
the  people  of  Alaska  and  what  the  attorney  general's                                                                    
definition of  maximum value was. Attorney  General Richards                                                                    
stated  that he  was unaware  of any  definition within  the                                                                    
department  and thought  that the  interpretation was  "very                                                                    
issue  specific."  Vice-Chair  Saddler  asked  whether  "the                                                                    
maximum  value was  not necessarily  the maximum  tax rate."                                                                    
Attorney General Richards replied  that the maximum tax rate                                                                    
was "certainly" not the maximum benefit.                                                                                        
Co-Chair Neuman discussed the following day's agenda.                                                                           

Document Name Date/Time Subjects
House Finance DOLWD Overview 2-4-2015.pdf HFIN 2/4/2015 1:30:00 PM
LAW_FY16_HFIN-Full_AG_Dept_Overview_2-4-15.pdf HFIN 2/4/2015 1:30:00 PM
DOL 07-128 HFC Overview Response.pdf HFIN 2/4/2015 1:30:00 PM