Legislature(2017 - 2018)BUTROVICH 205

02/27/2018 03:30 PM STATE AFFAIRS

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SCR 17 APRIL 2018:SEXUAL ASSAULT AWARENESS MONTH TELECONFERENCED
Moved SCR 17 Out of Committee
-- Public Testimony --
*+ SB 204 DISABLED VET PLATES:CHIROPRACTORS CERTIFY TELECONFERENCED
Moved SB 204 Out of Committee
-- Public Testimony --
*+ SB 192 VOTING: ADDRESS CONFIDENTIALITY; FEES TELECONFERENCED
Heard & Held
-- Public Testimony --
*+ SB 207 TRANSFER DUTIES FROM DCCED TELECONFERENCED
Heard & Held
-- Public Testimony --
Bills Previously Heard/Scheduled
               SB 207-TRANSFER DUTIES FROM DCCED                                                                            
                                                                                                                                
4:37:28 PM                                                                                                                    
CHAIR MEYER called the committee  back to order. He announced the                                                               
consideration of SB 207.                                                                                                        
                                                                                                                                
4:37:51 PM                                                                                                                    
SENATOR MIA  COSTELLO, Alaska State Legislature,  Juneau, Alaska,                                                               
sponsor of SB 207, explained  that the bill deletes a department.                                                               
She noted  that the concept  for the bill  has been years  in the                                                               
making. She  emphasized that economic  development is one  of her                                                               
priorities  as   a  legislator  and   noted  that  most   of  her                                                               
legislation  has  been  to  promote   that.  She  referenced  her                                                               
legislative  history with  governors  Hickel  and Murkowski.  She                                                               
detailed her  experiences with two administrations  that included                                                               
departmental consolidation  as well  as her involvement  in trade                                                               
missions  to  Asia  to  promote Alaska.  She  remarked  that  she                                                               
questioned  whether  the   departmental  consolidation  currently                                                               
works and noted that as one reason why she introduced the bill.                                                                 
                                                                                                                                
SENATOR   COSTELLO  disclosed   that   during  her   time  as   a                                                               
representative  in the  House she  oversaw a  working group  that                                                               
addressed  how to  diversify the  state's economy.  She disclosed                                                               
that one  of the questions  the working group asked  pertained to                                                               
identifying  a state  that was  doing a  good job  and Texas  was                                                               
identified. She said  the Texas website is a "one  stop shop" for                                                               
easily connecting  inquires with the people  and resources needed                                                               
to start a business in the state.                                                                                               
                                                                                                                                
She noted  that she constantly  asks the  question as to  how the                                                               
state  can elevate  its economic  development and  disclosed that                                                               
her answer  is to get rid  of the Alaska Department  of Commerce,                                                               
Community,  and   Economic  Development   (DCCED)  and   put  the                                                               
commissioner  and  some divisions  in  the  governor's office  to                                                               
elevate the position. She said  DCCED spans a tremendous range of                                                               
topics and  emphasized that her  proposed change is not  meant to                                                               
diminish the work that is done  at the department, but to elevate                                                               
it.                                                                                                                             
                                                                                                                                
She explained that the commissioner  for DCCED sits on 23 boards,                                                               
a time-consuming job  where most of the  responsibilities will go                                                               
to  other departments,  including the  Department of  Revenue and                                                               
the Department  of Natural  Resources. She  detailed some  of her                                                               
proposed changes as follows:                                                                                                    
                                                                                                                                
   • The Minerals Commission and the forest products in that                                                                    
     department will go into the Department of Natural                                                                          
     Resources.                                                                                                                 
   • The Alaska Film Office, no longer in existence, will be                                                                    
     "removed from the books."                                                                                                  
   • Remove the commissioner's office in the Division of                                                                        
     Administrative Services:                                                                                                   
        o The commissioner would be housed in the governor's                                                                    
          office and work directly with the governor and staff                                                                  
          members.                                                                                                              
                                                                                                                                
She noted  that many of the  departments used to be  separate and                                                               
were ultimately combined;  however, she said the  state has never                                                               
asked if combining the departments  is working. She asserted that                                                               
it  is  a  worthy  discussion when  considering  Alaska's  fiscal                                                               
challenges.  She  added  that  she thinks  the  state  should  be                                                               
marketed  and encouraged  the administration  and legislature  to                                                               
market Alaska whenever possible.                                                                                                
                                                                                                                                
4:44:19 PM                                                                                                                    
JOSHUA   WALTON,   Staff,    Senator   Costello,   Alaska   State                                                               
Legislature,  Juneau,  Alaska,  noted   that  the  bill  has  127                                                               
sections   due   to    departmental-separation   components.   He                                                               
referenced  the  proposed division/office/program  relocation  as                                                               
follows:                                                                                                                        
                                                                                                                                
   • Dissolved:                                                                                                                 
        o Commissioner's Office,                                                                                                
        o Division of Administrative Services,                                                                                  
        o Alaska Film Office.                                                                                                   
   • Office of the Governor:                                                                                                    
        o Alaska Seafood Marketing Institute,                                                                                   
        o Alaska Tourism Marketing Board,                                                                                       
        o Division of Economic Development:                                                                                     
             square4 Development Section,                                                                                       
        o Note:                                                                                                                 
             square4 Includes all marketing programs,                                                                           
             square4 Includes all non-lending programs.                                                                         
   • Department of Revenue:                                                                                                     
        o Division of Banking and Securities,                                                                                   
        o Division of Community and Regional Affairs,                                                                           
        o Division of Corporations, Business and Professional                                                                   
          Licensing (DCCED-CBPL),                                                                                               
        o Division of Economic Development:                                                                                     
             square4 Investments Section,                                                                                       
        o Division of Insurance,                                                                                                
        o Alaska Energy Authority,                                                                                              
        o AIDEA,                                                                                                                
        o Alaska Gasline Development Corporation,                                                                               
        o Alaska Railroad Corporation,                                                                                          
        o Alcoholic Beverage Control Board,                                                                                     
        o Marijuana Control Board,                                                                                              
        o Regulatory Commission of Alaska,                                                                                      
        o Note:                                                                                                                 
             square4 Includes all revolving loan fund programs,                                                                 
             square4 Includes all independent and quasi-judicial                                                                
               agencies.                                                                                                        
   • Department of Natural Resources:                                                                                           
        o Alaska Minerals Commission,                                                                                           
        o Alaska Forest Products.                                                                                               
                                                                                                                                
He pointed out that a committee substitute would be required to                                                                 
carry out all the bill's objectives.                                                                                            
                                                                                                                                
4:48:06 PM                                                                                                                    
SENATOR WILSON  asked Senator Costello to  address the referenced                                                               
memo  for  SB  207  from  the  Division  of  Legal  and  Research                                                               
Services, item 10 regarding the  constitutionality of moving some                                                               
of the items  into the Office of the Governor  and referenced the                                                               
section as follows:                                                                                                             
                                                                                                                                
     Moving  duties  and  programs  to  the  Office  of  the                                                                    
     Governor.  As  requested,  the   bill  moves  the  film                                                                    
     production  promotion   program,  the   Alaska  product                                                                    
     preference  program,   the  Made  in   Alaska  labeling                                                                    
     program, and  tourism duties and  grants from  DCCED to                                                                    
     the  Office  of  the Governor.  However,  moving  these                                                                    
     duties and  programs out of a  principal department and                                                                    
     into the Office  of the Governor raises  an issue under                                                                    
     the Constitution of the State of Alaska.                                                                                   
                                                                                                                                
     Article III;  sections 22, 25, 26;  Constitution of the                                                                    
     State  of  Alaska;  provide  that  the  Legislature  is                                                                    
     required   to   allocate   powers  to   the   principal                                                                    
     departments in  the executive branch and  that the head                                                                    
     of  a principal  department is  subject to  legislative                                                                    
     confirmation. The  Legislature exercises  its oversight                                                                    
     of   these  departments   by   confirming  the   single                                                                    
     executive or  members of the  commission or  board that                                                                    
     head the department.                                                                                                       
                                                                                                                                
     The Alaska Supreme Court has  not addressed whether the                                                                    
     governor's office  is a principal  department; however,                                                                    
     the Legislature may not confirm  the head of the Office                                                                    
     of the Governor (the governor),  and it does not appear                                                                    
     that the Office  of the Governor would  be considered a                                                                    
     principal   department    as   contemplated    by   the                                                                    
     constitution.                                                                                                              
                                                                                                                                
     Moving duties and programs  from a principal department                                                                    
     into the Office of the  Governor appears to violate the                                                                    
     constitutional   requirement   that   the   Legislature                                                                    
     allocate  powers, etc.,  to the  principal departments.                                                                    
     In addition,  transferring duties  and programs  to the                                                                    
     Office  of  the   Governor  removes  the  Legislature's                                                                    
     oversight  (by  its   confirmation  authority)  of  the                                                                    
     execution  and  implementation   of  these  transferred                                                                    
     duties and programs once they  are in the Office of the                                                                    
     Governor.                                                                                                                  
                                                                                                                                
          1. Under Article III,  section 22, the Legislature                                                                    
          has the  authority to allocate  functions, powers,                                                                    
          and  duties to  departments  within the  executive                                                                    
          branch, with the limitation that  there be no more                                                                    
          than  20   principal  departments.   Article  III,                                                                    
          section   24,   further  provides   that   "[e]ach                                                                    
          principal   department   shall    be   under   the                                                                    
          supervision of the governor."                                                                                         
                                                                                                                                
          2. Art.  III, section  25, requires that  the head                                                                    
          of each  principal department be appointed  by the                                                                    
         governor, subject to legislative confirmation.                                                                         
                                                                                                                                
          3.  Art.  III,  section   26,  requires  that  the                                                                    
          members  of a  board  or commission  that heads  a                                                                    
          principal  department  or   regulatory  or  quasi-                                                                    
         judicial agency be appointed by the governor.                                                                          
                                                                                                                                
SENATOR COSTELLO  explained that the bill  moves the commissioner                                                               
of DCCED  to the governor's  office. She specified that  the bill                                                               
does  not move  the  "commissioner of  the  department," but  the                                                               
"commissioner" is  being moved.  She said  she believes  that for                                                               
clarity it  is possible to have  language in the bill  that says,                                                               
"For  the purposes  of this  section  the commissioner  is not  a                                                               
commissioner of a department."                                                                                                  
                                                                                                                                
4:49:14 PM                                                                                                                    
SENATOR GIESSEL  addressed the  memo from  the Division  of Legal                                                               
and Research Services as follows:                                                                                               
                                                                                                                                
     A  follow up  on  Senator Wilson's  question. What  the                                                                    
     memo calls out is  moving these individuals, whether it                                                                    
     is the commissioner or any  of these divisions and most                                                                    
     prevalently the Division  of Corporations, Business and                                                                    
     Professional  Licensing  (DCCED-CBPL); these  personnel                                                                    
     are  subject to  legislative  confirmation  and as  the                                                                    
     memo points out that moving  duties and programs to the                                                                    
     Office  of   the  Governor   appears  to   violate  the                                                                    
     constitutional   requirement   that   the   legislature                                                                    
     allocate  powers  to  principal  departments  and  have                                                                    
     oversite related to confirmation.                                                                                          
                                                                                                                                
She  asked  Senator   Costello  how  she  would   deal  with  the                                                               
constitutional issue referenced in the memo.                                                                                    
                                                                                                                                
SENATOR COSTELLO  reiterated that  she believes  that there  is a                                                               
work-around  with  the issue  that  Senators  Wilson and  Giessel                                                               
referenced. She  said she is willing  to work with anyone  who is                                                               
interested in pursuing the noted constitutional issue.                                                                          
                                                                                                                                
SENATOR  GIESSEL specified  that  her main  familiarity with  the                                                               
entire DCCED has to do with  DCCED-CBPL. She pointed out that the                                                               
division  staff   provides  substantial  staff  support   to  the                                                               
multiple  boards and  questioned the  substantial staff  movement                                                               
into  the  Department  of  Revenue. She  said  her  second  issue                                                               
focuses  on  the  mission  conflict  between  the  Department  of                                                               
Revenue's task  in collecting money versus  the mission statement                                                               
for  DCCED-CBPL.   She  opined  that  DCCED-CBPL   has  a  quasi-                                                               
adjudicatory regulatory  mission or  charge that  seems to  be in                                                               
conflict  in terms  of  the Department  of  Revenue's purpose  of                                                               
collecting money.                                                                                                               
                                                                                                                                
4:51:40 PM                                                                                                                    
SENATOR  WILSON   thanked  Senator   Costello  for   looking  for                                                               
efficiencies by  combining governmental services. He  said he was                                                               
willing to work with her to  try and find more suitable places to                                                               
put some  of the departments.  He conceded that he  questioned if                                                               
DCCED could be  fully eradicated but opined that  some pieces may                                                               
be moved around to shrink the size of the department.                                                                           
                                                                                                                                
SENATOR COGHILL  remarked that  SB 207 is  a big  undertaking. He                                                               
opined  that  Senator  Costello's  focus   may  be  on  what  the                                                               
government can  do to  be nimbler  in its  business opportunities                                                               
versus the idea  of efficiency. He said the legislation  is a big                                                               
shake-up where  core responsibilities are blended.  He questioned                                                               
whether the focus on core responsibilities would be retained.                                                                   
                                                                                                                                
SENATOR COSTELLO  asserted that  SB 207 is  transformational. She                                                               
pointed out  that the  proposed departmental  change in  the bill                                                               
also occurred  in the 1990s  when three departments  were merged.                                                               
She  said   there  is  a   need  to  break  down   silos  between                                                               
departments;  for   example,  there  might  be   advantages  with                                                               
Community  and  Regional  Affairs  being housed  in  a  different                                                               
department,  whether the  Department of  Revenue or  another one.                                                               
She  noted  that  when  the   merger  occurred,  DCCED  became  a                                                               
department  that spanned  a  huge range  of  issues ranging  from                                                               
aerospace  to rural  bulk fuel  loans.  She disclosed  that at  a                                                               
recent  Aviation  Advisory Council  meeting  she  learned that  a                                                               
community was eligible for federal funds  but was not aware of it                                                               
because  "that's  a  DOT  issue."   She  opined  that  there  are                                                               
opportunities  for  increased  collaboration  and  asserted  that                                                               
asking the question is worthwhile  to enhance some of the things.                                                               
She  reiterated that  the commissioners  spend a  third of  their                                                               
time  sitting on  boards  and the  question  addressing the  time                                                               
issue  is posed  in the  bill. She  noted that  there is  a House                                                               
version of SB 207 as well.                                                                                                      
                                                                                                                                
4:55:42 PM                                                                                                                    
CHAIR  MEYER said  he appreciated  Senator Costello  for bringing                                                               
the legislation forward. He agreed  with previous statements that                                                               
SB  207  is  big  bill  and  noted  that  the  legislation  needs                                                               
additional  work, pointing  out that  the fiscal  notes have  not                                                               
been able to keep up. He  asked Senator Costello if her intent is                                                               
to save the state money.                                                                                                        
                                                                                                                                
SENATOR  COSTELLO explained  that  saving money  is  not why  she                                                               
introduced the bill but saving money  would be a benefit from the                                                               
legislation.                                                                                                                    
                                                                                                                                
CHAIR MEYER commented  that he likes the idea  of, "breaking down                                                               
the silos."  He noted that  Senator Costello gave the  example of                                                               
how  everything  was  centralized   to  reduce  staff  and  share                                                               
services, a  concept he  likes and will  address with  the deputy                                                               
commissioner. He suggested  that work continue with  the bill and                                                               
noted that  Senator Wilson  offered his  assistance. He  said the                                                               
bill will be brought back for public testimony at a later date.                                                                 
                                                                                                                                
4:57:17 PM                                                                                                                    
CHAIR MEYER held SB 207 in committee.                                                                                           

Document Name Date/Time Subjects
SCR 17 Sponsor Statement.pdf SSTA 2/27/2018 3:30:00 PM
SCR 17
SCR 17 Version A.PDF SSTA 2/27/2018 3:30:00 PM
SCR 17
SCR 17 Fiscal Note.pdf SSTA 2/27/2018 3:30:00 PM
SCR 17
SCR 17 Support Materials News Article 11.20.2016.pdf SSTA 2/27/2018 3:30:00 PM
SCR 17
SB 204 Version A.PDF SSTA 2/27/2018 3:30:00 PM
SB 204
SB 204 Fiscal Note DMV.pdf SSTA 2/27/2018 3:30:00 PM
SB 204
SB 192 Version A.PDF SSTA 2/27/2018 3:30:00 PM
SB 192
SB 192 Sponsor Statement.pdf SSTA 2/27/2018 3:30:00 PM
SB 192
SB 192 Fiscal Note.pdf SSTA 2/27/2018 3:30:00 PM
SB 192
SB 207 Version A.PDF SSTA 2/27/2018 3:30:00 PM
SB 207
SB 207 - Sponsor Statement.pdf SSTA 2/27/2018 3:30:00 PM
SB 207
SB 207 - Supporting Materials - Chart of Proposed Component Relocation.pdf SSTA 2/27/2018 3:30:00 PM
SB 207
SB 207 - Additional Materials - 2.26.18 DCCED Letter to Senator Costello re SB 207.pdf SSTA 2/27/2018 3:30:00 PM
SB 207
SB 207 - Additional Materials - Leg. Legal Memo re HB 63 (related legislation).pdf SSTA 2/27/2018 3:30:00 PM
HB 63
SB 207
SB 204 Sponsor Statement.pdf SSTA 2/27/2018 3:30:00 PM
SB 204
SB 204 Support.pdf SSTA 2/27/2018 3:30:00 PM
SB 204
SB 192 Sectional Analysis.pdf SSTA 2/27/2018 3:30:00 PM
SB 192
SCR 17 Support CDVSA 2015 Victimization Survey.pdf SSTA 2/27/2018 3:30:00 PM
SCR 17
SCR 17 Support Materials 2018 Theme.pdf SSTA 2/27/2018 3:30:00 PM
SCR 17
SCR 17 Support Materials CDC National Intimate Partner and Sexual Violence Survey.pdf SSTA 2/27/2018 3:30:00 PM
SCR 17
SB 192 Legislative Research Voter Information Privacy.pdf SSTA 2/27/2018 3:30:00 PM
SB 192
SCR 17 Support Ltr Women.pdf SSTA 2/27/2018 3:30:00 PM
SCR 17