28th Legislature(2013-2014)

Bill Text 28th Legislature


00                              HOUSE BILL NO. 30                                                                          
01 "An Act relating to performance reviews, audits, and termination of executive and                                       
02 legislative branch agencies, the University of Alaska, and the Alaska Court System; and                                 
03 providing for an effective date."                                                                                       
04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
05    * Section 1. AS 24.20.231 is amended to read:                                                                      
06            Sec. 24.20.231. Duties. The legislative finance division shall                                             
07                 (1)  analyze the budget and appropriation requests of each department,                                  
08       institution, bureau, board, commission, or other agency of state government;                                      
09                 (2)  analyze the revenue requirements of the state;                                                     
10                 (3)  provide the finance committees of the legislature with                                             
11       comprehensive budget review and fiscal analysis services;                                                         
12                 (4)  cooperate with the office of management and budget in establishing                                 
13       a comprehensive system for state budgeting and financial management as set out in                                 
14       AS 37.07 (Executive Budget Act);                                                                                  
01                 (5)  complete studies and prepare reports, memoranda, or other                                          
02       materials as directed by the Legislative Budget and Audit Committee;                                              
03                 (6)  with the governor's permission, designate the legislative fiscal                                   
04       analyst to serve ex officio on the governor's budget review committee; and                                    
05                 (7)  identify the actual reduction in state expenditures in the first                               
06       fiscal year following a review under AS 44.66.040 resulting from that review, and                             
07       inform the Legislative Budget and Audit Committee of the amount of the                                        
08       reduction.                                                                                                    
09    * Sec. 2. AS 24.20.271 is amended to read:                                                                         
10            Sec. 24.20.271. Powers and duties. The legislative audit division shall                                    
11                 (1)  conduct a performance post-audit of boards and commissions                                         
12       designated in AS 44.66.010 [AND OF THOSE PROGRAMS AND ACTIVITIES OF                                               
13       AGENCIES SUBJECT TO TERMINATION AS DETERMINED IN THE MANNER                                                       
14       SET OUT IN AS 44.66.020 AND 44.66.030,] and make the audit, together with a                                       
15       written report, available to the legislature not later than the first day of the regular                          
16       session of the legislature convening in each year set out with reference to boards and                        
17       [,] commissions [, OR AGENCY PROGRAMS] whose activities are subject to                                            
18       termination as prescribed in AS 44.66; the division shall notify the legislature that the                         
19       audit and report are available;                                                                                   
20                 (2)  conduct a performance review of the agencies listed in                                         
21       AS 44.66.020(a) and make the final review report available to the legislature not                             
22       later than the first day of the regular session convening in the year after the year                          
23       designated for each agency performance review in AS 44.66.020(a);                                             
24                 (3)  audit at least once every three years the books and accounts of all                            
25       custodians of public funds and all disbursing officers of the state;                                              
26                 (4) [(3)]  at the direction of the Legislative Budget and Audit                                     
27       Committee, conduct performance post-audits on any agency of state government;                                     
28                 (5) [(4)]  cooperate with state agencies by offering advice and                                     
29       assistance as requested in establishing or improving the accounting systems used by                               
30       state agencies;                                                                                                   
31                 (6) [(5)]  require the assistance and cooperation of all state officials and                        
01       other state employees in the inspection, examination, and audit of state agency books                             
02       and accounts;                                                                                                     
03                 (7) [(6)]  have access at all times to the books, accounts, reports, or                             
04       other records, whether confidential or not, of every state agency;                                                
05                 (8) [(7)]  ascertain, as necessary for audit verification, the amount of                            
06       agency funds on deposit in any bank as shown on the books of the bank; no bank may                                
07       be held liable for making information required under this paragraph available to the                              
08       legislative audit division;                                                                                       
09                 (9) [(8)]  complete studies and prepare reports, memoranda, or other                                
10       materials as directed by the Legislative Budget and Audit Committee;                                              
11                 (10) [(9)]  have direct access to any information related to the                                    
12       management of the University of Alaska and have the same right of access as exists                                
13       with respect to every other state agency;                                                                         
14                 (11) [(10)]  conduct an audit every two years of information found in                               
15       the annual reports required under AS 42.05.211 and AS 42.06.220 regarding                                         
16       compliance by the Regulatory Commission of Alaska with the requirements of                                        
17       AS 42.05.175(a) - (e) and of the timeline extensions made by the commission under                                 
18       AS 42.05.175(f), and of other performance measures adopted by the commission;                                     
19                 (12) [(11)]  conduct audits of the Alaska film production incentive                                 
20       program (AS 44.25.100 - 44.25.190) and make the audits available to the legislature                               
21       on the first day of the regular session of the legislature in 2015, 2017, and 2021.                               
22    * Sec. 3. AS 24.20.301(a) is amended to read:                                                                      
23            (a)  The legislative audit division shall keep a complete file of all audit reports                          
24       and other reports or releases issued by the division, and a complete file of audit work                           
25       papers and other related supportive material. The division shall also keep a complete                             
26       and accurate record of all fiscal transactions involving the division. Audit records are                          
27       confidential and audit reports and performance review reports are confidential                                
28       unless the report has been approved for release under AS 24.20.311.                                               
29    * Sec. 4. AS 24.20.311 is amended by adding a new subsection to read:                                              
30            (b)  The annual report must include the actual and projected reductions in state                             
31       expenditures resulting from reviews conducted under AS 44.66.040.                                                 
01    * Sec. 5. AS 44.66.020 is repealed and reenacted to read:                                                      
02            Sec. 44.66.020. Agency programs. (a) Every year, the legislative audit                                     
03       division shall ensure that the review team conducts a performance review of the                                   
04       appropriate programs of the agencies listed in this subsection. Programs that are                                 
05       administered by more than one agency shall be reviewed with the agency that the                                   
06       Legislative Budget and Audit Committee designates. Reviews may be conducted                                       
07       before the dates set out in this subsection at the discretion of the Legislative Budget                           
08       and Audit Committee. The first review shall occur in the calendar year set out after                              
09       each agency's name, as follows, and subsequent reviews of each agency, or part of an                              
10       agency, shall occur every 10 years:                                                                               
11                 (1)  Department of Corrections, 2014;                                                                   
12                 (2)  Office of the Governor, 2015;                                                                      
13                 (3)  agencies of the legislative branch, 2015;                                                          
14                 (4)  Alaska Court System, 2015;                                                                         
15                 (5)  the Department of Health and Social Services, 2016;                                                
16                 (6)  Department of Education and Early Development, including the                                       
17       foundation formula, 2017;                                                                                         
18                 (7)  University of Alaska, 2018;                                                                        
19                 (8)  Department of Transportation and Public Facilities, 2019;                                          
20                 (9)  Department of Administration, 2020;                                                                
21                 (10)  Department of Commerce, Community, and Economic                                                   
22       Development, 2020;                                                                                                
23                 (11)  Department of Fish and Game, 2021;                                                                
24                 (12)  Department of Environmental Conservation, 2021;                                                   
25                 (13)  Department of Natural Resources, 2021;                                                            
26                 (14)  Department of Revenue, 2022;                                                                      
27                 (15)  Department of Law, 2022;                                                                          
28                 (16)  Department of Public Safety, 2022;                                                                
29                 (17)  Department of Military and Veterans' Affairs, 2023;                                               
30                 (18)  Department of Labor and Workforce Development, 2023.                                              
31            (b)  Subject to appropriation, the legislative audit division shall hire individuals                         
01       and contract with individuals or firms to form a review team or teams to complete the                             
02       reviews under this section.                                                                                       
03            (c)  In the year before the year designated as the year for review in (a) of this                            
04       section, the agency shall provide to the review team, before November 1,                                          
05                 (1)  citations to the agency's authority under the Constitution of the                                  
06       State of Alaska or the Alaska Statutes to administer its programs;                                                
07                 (2)  a list of programs or elements of programs that compose at least 10                                
08       percent of the general funds in the agency's budget appropriated from the general fund                            
09       that could be reduced or eliminated; the agency shall consider first those programs or                            
10       elements of programs that                                                                                         
11                      (A)  do not serve a current need;                                                                  
12                      (B)  are not authorized by the Constitution of the State of                                        
13            Alaska or the Alaska Statutes; or                                                                            
14                      (C)  are not essential;                                                                            
15                 (3)  a list of active encumbrances and an explanation of the continuing                                 
16       need for any encumbrance unsatisfied more than one year after it was incurred;                                    
17                 (4)  all information submitted to the legislature in the agency's most                                  
18       recent submission under AS 37.07.050, including agency proposed programs and                                      
19       financial plans and agency priorities from the most important to the least important.                             
20    * Sec. 6. AS 44.66 is amended by adding a new section to read:                                                     
21            Sec. 44.66.040. Duties of the review team. (a) During a review year set out in                             
22       AS 44.66.020(a), the legislative audit division shall determine the scope of the                                  
23       performance review subject to approval by the Legislative Budget and Audit                                        
24       Committee, and the review team shall                                                                              
25                 (1)  collaborate with the legislative audit division and the legislative                                
26       finance division to identify any earlier audit findings or budgetary issues for the                               
27       agency;                                                                                                           
28                 (2)  through the Legislative Budget and Audit committee or the senate                                   
29       or house finance committees of the state legislature, schedule public hearings in                                 
30       Juneau, Anchorage, Fairbanks, and other locations as determined by the committees to                              
31       review agency activities and identify problems or concerns;                                                       
01                 (3)  consult with other states and appropriate public policy                                            
02       organizations to establish best practices for the agency;                                                         
03                 (4)  analyze the agency priorities reported to the legislature under                                    
04       AS 37.07.050(a)(13); and                                                                                          
05                 (5)  evaluate the agency process for development of capital projects.                                   
06            (b)  The review team shall analyze materials relevant to the performance of the                              
07       agency, including                                                                                                 
08                 (1)  a 10-year growth history and a 10-year projection of agency                                        
09       expenses by funding source, prepared by the office of management and budget;                                      
10                 (2)  organizational charts, personnel charts by location that show the                                  
11       number of positions and the functions of each position, and a list of transfers of                                
12       personal services funding to or from other line items within the agency during the                                
13       preceding 10 years, prepared by the office of management and budget;                                              
14                 (3)  audit information, including a list of agency audit                                                
15       recommendations, prepared by the legislative audit division;                                                      
16                 (4)  a list of any financial issues relating to the agency's operating or                               
17       capital expenditures, prepared by the legislative finance division;                                               
18                 (5)  an explanation of the function and procedure for dedicated funds or                                
19       any other special funds in the agency, prepared by the legislative finance division;                              
20                 (6)  a 10-year history of any budget ratifications or supplemental                                      
21       budget requests, prepared by the legislative finance division; and                                                
22                 (7)  analysis and summary of confidential information that the review                                   
23       team may request, through the Legislative Budget and Audit Committee, from the                                    
24       legislative audit division, if necessary to complete the team's review.                                           
25            (c)  Before December 16 of the review year set out in AS 44.66.020(a), the                                   
26       review team shall provide a confidential preliminary report to the Legislative Budget                             
27       and Audit Committee.                                                                                              
28            (d)  One week before the first day of the regular session of the legislature in the                          
29       year following the review year set out in AS 44.66.020(a), the review team shall                                  
30       provide to the chairs or cochairs of the senate and house finance committees a final                              
31       report. In the report, the review team may                                                                        
01                 (1)  evaluate the efficiency and effectiveness of the agency's programs;                                
02                 (2)  evaluate the appropriateness of the budget reductions proposed                                     
03       under AS 44.66.020(c);                                                                                            
04                 (3)  determine if the agency acted in good faith to correct problems                                    
05       identified in any previous audit or review;                                                                       
06                 (4)  evaluate the success of the agency in achieving its mission, goals,                                
07       and objectives and recommends appropriate changes to the agency's missions and                                    
08       measures;                                                                                                         
09                 (5)  list agency programs or actions not authorized by statute and                                      
10       identifies other authority for those actions;                                                                     
11                 (6)  identify agency authority to collect fees, conduct inspections,                                    
12       enforce state law, or impose penalties;                                                                           
13                 (7)  recommend improvements to agency practices and procedures,                                         
14       including means to decrease regulatory burdens or restrictions without decreasing                                 
15       public service and safety;                                                                                        
16                 (8)  identify areas in which programs and jurisdiction of agencies                                      
17       overlap and assesses the quality of interagency cooperation in those areas;                                       
18                 (9)  evaluate whether the agency promptly and effectively addresses                                     
19       complaints;                                                                                                       
20                 (10)  evaluate to what extent the agency encourages and uses public                                     
21       participation in rulemaking and other decision making;                                                            
22                 (11)  evaluate the agency's process for implementing technology and                                     
23       recommends new types or uses of technology to improve agency efficiency and                                       
24       effectiveness;                                                                                                    
25                 (12)  identify programs and functions duplicated by another                                             
26       government agency or private entity and recommends a single entity to perform those                               
27       programs and functions;                                                                                           
28                 (13)  evaluate whether the agency priorities reported to the legislature                                
29       under AS 37.07.050(a)(13), and the list of programs or elements of programs provided                              
30       under AS 44.66.020(c)(2) are consistent with the results of the performance review;                               
31                 (14)  identify agencies that could be terminated or consolidated,                                       
01       reductions in costs, and potential program or cost reductions based on policy changes;                            
02                 (15)  identify reductions recommended as a result of a review                                           
03       conducted under this section;                                                                                     
04                 (16)  identify the extent to which statutory, regulatory, budgetary, or                                 
05       other changes are necessary to enable the agency to better serve the interests of the                             
06       public and to correct problems identified during the review;                                                      
07                 (17)  analyze how the review team's recommendation to terminate the                                     
08       agency or to terminate any program within the agency would affect federal funding or                              
09       instigate federal intervention;                                                                                   
10                 (18)  include draft legislation to correct problems identified in the                                   
11       report that shall be introduced by the senate and house finance committees of the state                           
12       legislature during the current legislative session;                                                               
13                 (19)  identify areas that need in-depth review in order to provide                                      
14       complete information to the Legislative Budget and Audit Committee for                                            
15       consideration in the audit process; and                                                                           
16                 (20)  identify any other elements appropriate to a performance                                          
17       management review.                                                                                                
18            (e)  The Legislative Budget and Audit Committee shall, based on the amount                                   
19       of the actual reduction in state expenditures reported by the legislative finance division                        
20       under AS 24.20.231(7) increased by an appropriate inflationary factor to be                                       
21       determined by the Legislative Budget and Audit Committee, estimate the anticipated                                
22       savings for the second through fifth fiscal years following the review. The Legislative                           
23       Budget and Audit Committee shall include the amount of the actual reduction and the                               
24       anticipated future savings in its annual report under AS 24.20.311 for the second fiscal                          
25       year following the review and each of the subsequent four reports.                                                
26            (f)  The senate and house finance committee chairs, cochairs, and                                            
27       subcommittees may incorporate the recommendations of a report submitted under (d)                                 
28       of this section into the budget for the fiscal year following the report.                                         
29    * Sec. 7. AS 44.66.050 is amended to read:                                                                         
30            Sec. 44.66.050. Legislative oversight. (a) Before the termination, dissolution,                            
31       continuation, or reestablishment of a board or commission under AS 08.03.010 or                                   
01       AS 44.66.010, [OR OF AN AGENCY PROGRAM UNDER AS 44.66.020 AND                                                     
02       44.66.030,] a committee of reference of each house, which shall be the standing                                   
03       committee of legislative jurisdiction as provided in the Uniform Rules of the                                     
04       Legislature, shall hold one or more hearings to receive testimony from the public, the                            
05       commissioner of the department having administrative responsibility for each named                                
06       board or [,] commission, [OR AGENCY PROGRAM,] and the members of the board                                    
07       or commission involved. The hearings may be joint hearings. The committee shall also                              
08       consider the proposed budget of the board or [,] commission [, OR AGENCY                                      
09       PROGRAM,] prepared in accordance with AS 37.07.050(f) [,] and the performance                                     
10       audit of the activities of the board or [,] commission [, OR AGENCY PROGRAM,]                                 
11       prepared by the legislative audit division as prescribed in AS 24.20.271(1). The                                  
12       committee may consider any other report of the activities of the board or [,]                                 
13       commission [OR PROGRAM], including [BUT NOT LIMITED TO] annual reports,                                           
14       summaries prepared by the Legislative Affairs Agency, and any evaluation or general                               
15       report of the manner of conduct of activities of the board or [,] commission [, OR                            
16       AGENCY PROGRAM] prepared by the office of the ombudsman.                                                          
17            (b)  During a public hearing, the board or [,] commission [OR AGENCY] shall                              
18       have the burden of demonstrating a public need for its continued existence or the                                 
19       continuation of the program, and the extent to which any change in the manner of                                  
20       exercise of its functions or activities may increase efficiency of administration or                              
21       operation consistent with the public interest.                                                                    
22            (c)  A determination as to whether a board or commission [OR AGENCY                                          
23       PROGRAM] has demonstrated a public need for its continued existence must take into                                
24       consideration the following factors:                                                                              
25                 (1)  the extent to which the board or [,] commission [, OR PROGRAM]                                 
26       has operated in the public interest;                                                                              
27                 (2)  the extent to which the operation of the board or [,] commission [,                            
28       OR AGENCY PROGRAM] has been impeded or enhanced by existing statutes,                                             
29       procedures, and practices that it has adopted, and any other matter, including                                    
30       budgetary, resource, and personnel matters;                                                                       
31                 (3)  the extent to which the board or [,] commission [, OR AGENCY]                                  
01       has recommended statutory changes that are generally of benefit to the public interest;                           
02                 (4)  the extent to which the board or [,] commission [, OR AGENCY]                                  
03       has encouraged interested persons to report to it concerning the effect of its regulations                        
04       and decisions on the effectiveness of service, economy of service, and availability of                            
05       service that it has provided;                                                                                     
06                 (5)  the extent to which the board or [,] commission [, OR AGENCY]                                  
07       has encouraged public participation in the making of its regulations and decisions;                               
08                 (6)  the efficiency with which public inquiries or complaints regarding                                 
09       the activities of the board or [,] commission [, OR AGENCY] filed with it, with the                           
10       department to which a board or commission is administratively assigned, or with the                               
11       office of victims' rights or the office of the ombudsman have been processed and                                  
12       resolved;                                                                                                         
13                 (7)  the extent to which a board or commission that regulates entry into                                
14       an occupation or profession has presented qualified applicants to serve the public;                               
15                 (8)  the extent to which state personnel practices, including affirmative                               
16       action requirements, have been complied with by the board or [,] commission in [, OR                      
17       AGENCY TO] its own activities and in the area of activity or interest;                                        
18                 (9)  the extent to which statutory, regulatory, budgetary                                           
19       [BUDGETING], or other changes are necessary to enable the [AGENCY,] board [,] or                                  
20       commission to better serve the interests of the public and to comply with the factors                             
21       enumerated in this subsection;                                                                                    
22                 (10)  the extent to which the board or [,] commission [, OR AGENCY]                                 
23       has effectively attained its objectives and purposes and the efficiency with which the                            
24       board or [,] commission [, OR AGENCY] has operated; and                                                       
25                 (11)  the extent to which the board or [,] commission [, OR AGENCY]                                 
26       duplicates the activities of another governmental agency or the private sector.                                   
27            (d)  As to each board or [,] commission [, OR AGENCY PROGRAM]                                            
28       assigned to it for purposes of review, the committee of reference shall, not later than                           
29       the 60th day of the legislative session, submit a report to the presiding officer of the                          
30       house. The report must contain a summary of the findings of the committee as to the                               
31       compliance of the board or [,] commission [, OR PROGRAM] with the factors                                     
01       enumerated in (c) of this section, together with a summary or recommendations of the                              
02       committee as to each of the following:                                                                            
03                 (1)  an identification of the problems or the needs that the programs and                               
04       activities of the board or [,] commission [, OR AGENCY] are intended to address;                              
05                 (2)  a statement, to the extent practicable, of the objectives of the                                   
06       program of the board or [,] commission [, OR AGENCY PROGRAM,] and its                                         
07       anticipated accomplishments;                                                                                      
08                 (3)  an identification of any other programs having similar, conflicting,                               
09       or duplicate objectives;                                                                                          
10                 (4)  an assessment of alternative methods of achieving the purposes of                                  
11       the program;                                                                                                      
12                 (5)  an assessment of the consequences of eliminating the board or [,]                              
13       commission [, OR PROGRAM] and consolidating its activities with another program,                                  
14       or of funding it at a lower level;                                                                                
15                 (6)  a justification for the recommended continuation or extension of                                   
16       the board or [,] commission [, OR PROGRAM,] and an explanation of the manner in                               
17       which it avoids duplication of or conflict with other efforts; and                                                
18                 (7)  any other information that, in the opinion of the committee, would                                 
19       improve the performance of the board or [,] commission [, OR AGENCY] with                                     
20       respect to its representation of and responsiveness to the public interest.                                       
21            (e)  The committee of reference may introduce a bill providing for the                                       
22       reorganization or continuation of the board or [,] commission. Not [, OR AGENCY                           
23       PROGRAM. NO] more than one board or [,] commission [, OR AGENCY                                               
24       PROGRAM] may be continued or reestablished in any legislative bill, and the board                                 
25       or [,] commission [, OR AGENCY PROGRAM] must be mentioned in the title of the                                 
26       bill.                                                                                                             
27    * Sec. 8. AS 44.66.060 is amended to read:                                                                         
28            Sec. 44.66.060. Existing claims. This chapter does not cause the termination                               
29       or dismissal of a claim or right of a citizen against a board, commission, or program of                          
30       an agency terminated by legislative action or under this chapter that is subject to                           
31       litigation. Claims and rights shall be assumed by the department to which the board or                            
01       commission terminated under this chapter was attached for administrative purposes.                                
02    * Sec. 9. AS 44.66 is amended by adding a new section to read:                                                     
03            Sec. 44.66.070. Definitions. In this chapter,                                                              
04                 (1)  "agency" means a state department or agency, whether in the                                        
05       legislative, judicial, or executive branch, and includes the University of Alaska;                                
06                 (2)  "review team" means appropriate professionals hired by or under                                    
07       contract with the legislative audit division to complete a performance review under                               
08       AS 44.66.020 - 44.66.040.                                                                                         
09    * Sec. 10. AS 44.66.030 is repealed.                                                                               
10    * Sec. 11. AS 24.20.231(7), 24.20.271(2), 24.20.311(b); AS 44.66.020, and 44.66.040 are                            
11 repealed July 1, 2023.                                                                                                  
12    * Sec. 12. This Act takes effect July 1, 2013.                                                                     
New Text Underlined     [DELETED TEXT BRACKETED]