ALASKA SUNSET COMMISSION

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CS FOR SENATE BILL NO. 107(STA)

IN THE LEGISLATURE OF THE STATE OF ALASKA

THIRTY-FOURTH LEGISLATURE - FIRST SESSION

BY THE SENATE STATE AFFAIRS COMMITTEE

Offered: 5/17/25
Referred: Finance

Sponsor(s): SENATORS HUGHES, Yundt, Myers, Kaufman, Cronk, Shower
A BILL

FOR AN ACT ENTITLED

"An Act establishing a violation for hindering the Alaska Sunse t Commission; 1
establishing the Alaska Sunset Commission to review, audit, and m a k e 2
recommendations on discontinuation of or changes to state entit ies and to review and 3
make recommendations on discontinuation of or changes to tax cr edits; and relating to 4
the powers and duties of the Alaska Sunset Commission." 5
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 6
* Section 1. AS 11.56.845 is amended to read: 7
Sec. 11.56.845. Hindering the Legislative Budget and Audit Comm ittee or 8
the Alaska Sunset Commission. (a) A person commits hindering the Legislative 9
Budget and Audit Committee o r t h e A l a s k a S u n s e t C o mmission established in 10
AS 44.99.700 if the person intentionally (1) fails to give, or (2) directs, o r d e r s , 11
threatens, restrains, coerces, fo rces, or prevents another pers on from giving, full 12
cooperation to the legislative auditor, [OR] the legislative fiscal analyst, or a member 13
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or employee of the Alaska Sunset Commission in assembling or furnishing 1
requested information to the committee , [OR] its staff, or the Alaska Sunset 2
Commission, and the person did not reasonably believe that the action or failure to act 3
was legally justified. 4
(b) Hindering the Legislative Budget and Audit Committee o r t h e A l a s k a 5
Sunset Commission is a violation, punishable by a fine of not more than $5,000. 6
* Sec. 2. AS 39.25.020(b) is amended to read: 7
(b) Unless a waiver is granted by the commissioner of administ ration, an 8
appointing authority may not appoint a person to state service if the person has been 9
convicted under AS 11.56.845. Before granting a waiver under th is subsection, the 10
commissioner shall give notice in writing to the Legislative Bu dget and Audit 11
Committee or the Alaska Sunset Commission established in AS 44.99.700, as 12
applicable, of the intent to grant a waiver. 13
* Sec. 3. AS 39.25.080(b) is amended to read: 14
(b) The following information is available for public inspecti on, subject to 15
reasonable regulations on the time and manner of inspection: 16
(1) the names and position titles of all state employees; 17
(2) the position held by a state employee; 18
(3) prior positions held by a state employee; 19
(4) whether a state employee is in the classified, partially e xempt, or 20
exempt service; 21
(5) the dates of appointment and separation of a state employee; 22
(6) the compensation authorized for a state employee; and 23
(7) whether a state employee has been dismissed or disciplined for a 24
violation of AS 39.25.160( l) or (m) [(INTERFERENCE OR FAILURE TO 25
COOPERATE WITH THE LEGISLATIVE BUDGET AND AUDIT 26
COMMITTEE)]. 27
* Sec. 4. AS 39.25.160 is amended by adding a new subsection to read: 28
(m) A state employee may not intentionally fail to give or dir ect, order, 29
threaten, restrain, coerce, for ce, or prevent another person fr om giving, full 30
cooperation to the Alaska Sunset Commission established in AS 4 4.99.700 or its staff 31
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if the person does not reasonably believe that the action or fa ilure to act is legally 1
justified. Violation of this subsection constitutes just cause for dismissal or other 2
appropriate disciplinary action. 3
* Sec. 5. AS 39.90.140(3) is amended to read: 4
(3) "matter of public concern" means 5
(A) a violation of a state, federal, or municipal law, regulat ion, 6
or ordinance; 7
(B) a danger to public health or safety; 8
(C) gross mismanagement, a subs tantial waste of funds, or a 9
clear abuse of authority; 10
(D) a matter accepted for investigation by the office of the 11
ombudsman under AS 24.55.100 or 24.55.320; or 12
(E) interference or any failure to cooperate with an audit or 13
other matter within the authority of Legislative Budget and Aud it Committee 14
or the Alaska Sunset Commission established in AS 44.99.700; 15
* Sec. 6. AS 40.25.220(2) is amended to read: 16
(2) "public agency" means a po litical subdivision, department, 17
institution, board, commission, division, authority, public cor poration, council, 18
committee, or other instrumentality of the state or a municipal ity; "public agency" 19
includes the University of Alaska , [AND] the Alaska Railroad Corporation , and the 20
Alaska Sunset Commission established in AS 44.99.700; 21
* Sec. 7. AS 44.99 is amended by adding new sections to read: 22
Article 7. Alaska Sunset Commission. 23
Sec. 44.99.700. Establishment of commission; composition. (a) The Alaska 24
Sunset Commission is established in the executive branch of state government. 25
(b) The commission consists of seven members appointed by the governor and 26
confirmed by the legislature i n joint session. Members shall be qualified in financial 27
management, budgeting, economics, business operations, process improvement, or 28
government efficiency. 29
(c) Members may be reappointed. Members serve staggered terms of five 30
years until reappointed or replaced. 31
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(d) If a member no longer meets the requirements under (b) of this section or 1
if a vacancy exists among those members for any reason other th an the expiration of a 2
member's term, the governor shall, within 30 days after the occurrence of the vacancy, 3
make an appointment for the une xpired portion of the term, effective immediately. An 4
appointment made under this subsection to fill an unexpired ter m must comply with 5
the requirements under (b) of this section. 6
( e ) T h e g o ve r n o r may re mo v e a member of the commission from of fice for 7
cause, including incompetence, neglect of duty, or misconduct i n office. The governor 8
shall give a copy of the charges to a member the governor seeks to remove for cause, 9
provide the member with an opport unity to be publicly heard in person or by counsel 10
in the member's own defense, and provide at least 10 days' noti ce of the proceeding. If 11
the member is removed for cause, the governor shall file with t he lieutenant governor 12
a complete statement of all charges made against the member, to g e t h e r w i t h a 13
complete record of the proceedings. 14
(f) The commission shall select a chair from among its members . Five 15
members of the commission cons titute a quorum. The commission m ay take action 16
upon the affirmative vote of five members of the commission. 17
(g) While an entity employs or is negotiating for employment w ith a member 18
of the commission or the member's immediate family, the member may not participate 19
in deciding whether to review and audit the entity under AS 44. 99.730, in reviewing 20
and auditing the activities and budget of the entity under AS 44.99.730, or in preparing 21
a report on the entity under AS 44.99.750. In this subsection, "immediate family" has 22
the meaning given in AS 24.60.990. 23
(h) The commission may employ staff, and retain consultants as the 24
commission determines necessary, to perform its duties. Staff s hall possess 25
administrative expertise and expertise in financial management, business operations, 26
process improvement, and government efficiency. 27
(i) Members of the commission serve without compensation but are entitled to 28
per diem and travel expenses authorized for boards and commissi ons under 29
AS 39.20.180. The members of the commission shall comply with AS 39.50. 30
Sec. 44.99.710. Powers and duti es of the commission. (a) The commission 31
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shall 1
(1) review and audit the activities and budgets of entities un der 2
AS 44.99.730; 3
(2) consider whether there is a public need for continuation of an entity 4
or for the performance of the functions of an entity reviewed a nd audited under 5
AS 44.99.730 and make a recommendati on to the legislature to co ntinue, discontinue, 6
restructure, or transfer the duties and programs of the entity; 7
(3) prepare a report under AS 44.99.750 for each entity review ed and 8
audited by the commission and, not later than the 10th day of t he legislative session 9
following the calendar year of the review and audit, submit the report to the governor, 10
the senate secretary, and the ch ief clerk of the house of repre sentatives, and notify the 11
legislature that the report is available; and 12
(4) review tax credits availabl e under state law, prepare a re port 13
recommending whether each tax cre dit should be discontinued or changed, and, not 14
later than the 10th day of eac h regular legislative session, su bmit the report to the 15
governor, the senate secretary, and the chief clerk of the hous e of representatives and 16
notify the legislature that the report is available. 17
(b) The commission may require a ll state officials and agencie s of the state to 18
give full cooperation to the co mmission and its staff in assemb ling and furnishing the 19
information necessary to prepar e a report under (a) of this sec tion, including allowing 20
the commission to interview staff relating to work duties, processes, and products. 21
(c) In carrying out its functions under AS 44.99.700 - 44.99.7 59, the 22
commission or designated staff may attend any meetings and proc eedings of any 23
entity, including any meeting or proceeding of a governing body of an entity that is 24
closed to the public, and may inspect the books, accounts, repo rts, or other records, 25
whether confidential or not, of any entity. 26
(d) The commission has the power to hold public hearings, admi nister oaths, 27
issue subpoenas, compel the atte ndance of witnesses and product ion of papers, books, 28
accounts, documents, and testimony , and have the deposition of witnesses taken in a 29
manner prescribed by court rule or law for taking depositions in civil actions. 30
Sec. 44.99.720. State entity's report to the commission. ( a ) N o t l a t e r t h a n 31
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September 1 of the calendar year before the year in which an en tity subject to 1
AS 44.99.700 - 44.99.759 is scheduled for review and audit unde r AS 44.99.730, the 2
entity shall report to the commission 3
(1) the extent to which the entity has met the criteria in AS 44.99.740; 4
(2) a list of each report that the entity is required by law t o prepare and 5
an evaluation of the need for each report based on whether fact ors or conditions have 6
changed since the date the requirement to prepare the report was enacted; and 7
(3) any other information that the entity considers appropriate or that is 8
requested by the commission. 9
(b) The entity shall submit the report in electronic format, a s required by the 10
commission. 11
(c) An entity that provides the commission with access to a pr ivileged or 12
confidential communication, recor d, document, or file for purpo ses of a review or 13
audit under AS 44.99.700 - 44.99.759 does not waive the attorne y-client privilege, or 14
any other privilege or confidentiality with respect to the comm unication, record, 15
document, or file provided to the commission. For purposes of t his subsection, a 16
communication includes a discussion that occurs at a meeting or proceeding of the 17
entity that is closed to the public. 18
Sec. 44.99.730. Review and audit of state entities. (a) The commission shall 19
review and audit at least one entity each year. The commission shall provide notice of 20
its decision to perform a revie w and audit under this subsectio n in the calendar year 21
before the review and audit is scheduled to be completed and wi th sufficient time for 22
the entity to prepare the report required under AS 44.99.720(a). 23
(b) The review and audit under (a ) of this section must includ e a review and 24
audit of any 25
(1) instrumentality of the state that is established within the entity; and 26
(2) committee, task force, or other group that is established to advise or 27
assist the entity by law or by the department in which the entity is established. 28
Sec. 44.99.740. Criteria for review and audit. (a) In considering whether 29
t h e r e i s a p u b l i c n e e d f o r t h e continuation or restructuring of an entity or for the 30
performance of the functions of an entity reviewed and audited under AS 44.99.730, 31
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the commission shall consider the following criteria: 1
(1) the extent to which the missions established under AS 37.0 7.014 of 2
the entity have been carried out; 3
(2) whether the performance m easurements set out in AS 37.07 a re 4
appropriately set and are being met by supporting data; 5
(3) whether there is a method to better provide the entity's services and 6
provide the entity's services at a lower cost; 7
(4) the extent to which the entity has entered into activities not 8
mandated by statute, the extent to which there is a public need served by those 9
activities, and the extent to which those activities have been successfully performed; 10
(5) the extent to which process improvement could benefit the entity 11
and the public; 12
(6) the cost-effectiveness and efficiency with which the entity operates, 13
including 14
(A) the appropriateness of the entity's budget and the need fo r 15
items allocated for in the entity's budget, including costs for staff and office 16
space; and 17
(B) when considering the needs of the entity, the 18
appropriateness of 19
(i) the number of staff in the entity; 20
(ii) the positions and salaries held by staff in the entity; 21
(iii) staff travel costs incurred by the entity; and 22
(iv) the entity's opera ting hours, organizational 23
structure, and office size, location, and functionality; 24
(7) if there is overlap of services with other entities, the e xtent to 25
which there is potential for reorganization; 26
(8) the extent to which the entity is making it difficult for persons to do 27
business with the state; 28
(9) the extent to which changes are necessary in the enabling statutes 29
of the entity so that the entity can comply with or meet the de sired results established 30
by the legislature under AS 37.07.014; 31
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(10) other standards established by the commission. 1
(b) By September 1 of the year an entity is reviewed and audit ed, the 2
commission shall provide notice of and hold one or more public hearings on the 3
interconnected state road system concerning the application of the criteria listed in (a) 4
of this section to each entity being reviewed and audited by th e commission. At a 5
public hearing, the commission shall accept testimony from the public and from a 6
person involved in the administration of the entity subject to the review and audit. 7
Sec. 44.99.750. Review and audit report. (a) Following the review and audit 8
of an entity under AS 44.99.730, the commission shall prepare a report on the results 9
of the review and audit of the e ntity, a summary of comments re ceived at the public 10
hearing on the entity, and a recommendation to the legislature to continue, 11
discontinue, restructure, or tran sfer the duties and programs o f the entity. The report 12
must be based on the criteria listed in AS 44.99.740 and other factors the commission 13
considers appropriate. Unless confidentiality is expressly waiv ed by the entity, the 14
report may not contain any confidential information obtained by the commission under 15
AS 44.99.710(c). The report must be delivered to the governor, the president of the 16
senate, the speaker of the house of representatives, the chief clerk, and the senate 17
secretary within the first 10 days of a legislative session following the calendar year of 18
the review and audit. A copy of t he report must be delivered to every member of the 19
legislature. The commission shall include in the report draft l egislation to implement 20
the recommendations of the commission. Draft legislation must b e submitted to the 21
rules committee of each house with a request to introduce the l egislation to implement 22
the recommendations of the commission. 23
(b) If the commission recommends the discontinuation of an ent ity, the report 24
must include a recommendation on the length of a winding-down p eriod for the entity 25
to conclude its business and pr oposed procedures for transferri ng the entity's records. 26
If the commission recommends the restructuring of an entity, the report must include a 27
recommended restructuring plan. 28
(c) A committee of reference of each house, which shall be the standing 29
committee of legislative jurisdiction as provided in the Unifor m Rules of the Alaska 30
State Legislature, shall hold at least one hearing on the recom mendations of the 31
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commission under (a) of this section. Notwithstanding AS 08.03. 010(c) and 1
AS 44.66.010(a), if a bill to implement the recommendations of the commission is not 2
introduced, an entity reviewed and audited under AS 44.99.730(a ) will expire on 3
June 30 of the fiscal year followi ng the review and audit of th e entity by the 4
commission. The duties of an entity expiring under this subsect ion are transferred to 5
the department in which the entity is established. 6
Sec. 44.99.759. Definitions. In AS 44.99.700 - 44.99.759, 7
(1) "commission" means the Alaska Sunset Commission; 8
(2) "entity" includes a divisi on, board, authority, corporatio n, or other 9
unit in the executive branch of state government, but does not include an agency in the 10
judicial or legislative branch of state government or the University of Alaska. 11
* Sec. 8. AS 08.03.020(b) and AS 44.66.050 are repealed. 12