Chairman Drake questioned the need for an upgrade in the computer system. Mr. Asher replied that they are still working with five year old software and hardware and it is not capable of handling Internet applications. Mr. Asher also stated that using Internet applications will free up staff time.

Chairman Drake questioned the need for more staff if the Internet would free up time for current staff. Mr. Asher replied that with more information being available the staff is receiving more questions.

Mr. Asher continued with the budget. He said that they were no longer requesting the total amount of the budget initially proposed, but $60,000 less.

The gavel was passed to Representative Derby at 8:35 AM.

Representative Derby requested that Annie Mertz, LRC Staff, explain the budget sheets provided to the Sub-Committee Members.

Senator Dennert questioned Mr. Asher on the increase in investment revenue over the three year period. Mr. Wylie said the figures Senator Dennert was referring to were compiled in September of 2000. At that time, market conditions were much more favorable. The actual return on investments will increase in demand by the recipients and that their investment return is just level.
Representative Clark questioned the increase in benefits if the fund balance is reduced. Mr. Asher replied that SDRS does not give increases until the money is in the fund.

8:45 Chairman Drake resumes the gavel.

Representative Derby questions Mr. Asher about the Minnesota retirement systemr. Mr. Asher replied that South Dakota will not make that same mistake because they do not give benefit increases before guaranteeing the money.

Mr. Asher stated he had no further testimony. Chairman Drake excused the committee members to reconvene at 10:00AM.

Senate Appropriations Subcommittee #2 was recessed at 9:00AM

Chairman Drake called the meeting to order.

Bureau of Information and Telecommunications

Otto Doll, Commissioner was introduced as well as the introductions of his staff members who were present.

Mr. Doll explained the processes of the Bureau of Information and Telecommunications. He followed the scenarios drawn out in Document #3. He explained the growth in usage of the Information Systems in place and their need for further growth in each area.

Senator Dennert questioned the trouble tickets vs. scheduled tickets and what the possibilities would have been if they would not have reconciled at some point in time and why it took 4 years for them to reconcile. Mr. Doll explained that they just organized the BIT in 1996 and Governor Janklow's request were then made to them. They had to stabilize, organize, and standardize all of the hardware and software and it took 4 years to do so.

Representative Pummel asked if the courthouses were included in the standardization and the linking of state agencies. Mr. Doll replied that if the individual courthouses have state represented offices within them then they have been linked.

Senator Kleven questioned how the Department of Transportation and the Bureau of Information and Telecommunications was linked. Mr. Doll answered that the BIT has people in different agencies that represent the BIT but work with the individual agencies as well.

Representative Derby questioned whether there were state policies set-up by BIT regulating the Internet access by state employees from their work station PC's. Mr. Doll stated that the use policies are in place and state that when an employee of the state uses Internet while at work they must use it only for work purposes. State policies also states that the agencies can take action against an employee using the Internet from work for personal reasons up to and including termination. He stated that the BIT had nothing to do with the policies and regulations but was there to assist the agencies in obtaining information on the sites accessed from any state owned PC..

Senator Kleven questioned if there were a history file contained in the individual P.C.'s. Mr. Doll related that the history file is unreliable and contains information from 30 days prior.

Representative Derby questioned why the BIT actual personal services was above the projected $150,000 in FY2002. Mr. Doll answered that the budget contained in FY2002 Document #2 did not include State Radio and Public Broadcasting and the chart in Document #3 does.

Senator Drake questioned whether the teachers were trained for the proposed index of information they could access on the web contained in Document #3. Mr. Doll answered that the information obtained would be quite remedial as well as interactive for course material selections and coordination.

Senator Drake posed the question if this Index would assist smaller school districts have access to course material they do not have access to now. Mr. Doll said that BIT was responsible for establishing the Index and that DECA would regulate it and provide explanation to schools.

Representative Clark asked how many employees would be needed to create the Index. Mr. Doll replied with the answer of one employee needed.

Representative Derby posed to Mr. Doll that he found it hard to comprehend that with the immensity of the Internet that this Index was not already created somewhere. Mr. Doll explained that it may be somewhat created, but by users who refer sites and it is not regulated what is on the sites included in their indexes; neither is it created by South Dakota education standards.

Senator Drake asked if the E-Government Benefits in Document #3 would increase efficiency, would it also eliminate need for staff. Mr. Doll replied that it would eliminate workload in those certain areas and rather than deleting staff would reinvent the staff's role by redirecting their energies.

Representative Burg replied that all which they were seeing was great in theory, but would we be gaining anything when we must replace equipment and suffer other costs. Mr. Doll said that Information Technology was an ongoing cost to everyone that must be maintained and upgraded. He also referred to the fact that we are unable to live without it within our state agencies and that our benefits may be in other areas besides commerce. He went on to say that we must be competitive with others states and that the federal government was going to require each state to be accessible within E-Government.

Senator Drake asked if there would be a decrease in employees when E-Government was established. Mr. Doll responded that at some point the answer would be yes. After the E-Government system is established and up and running and more than 7% of the world is Internet available we would then see a decrease in the amount of staff needed.

Senator Drake questioned Mr. Doll for the total cost to each state agency to participate in the E- Government plan. Mr. Doll said he would provide it at a later date.

Representative Clark asked to reconfirm that the proposed projects would require a total of 7 FTE. Mr. Doll responded that BIT would get the authority to charge out the costs.

Representative Clark asked for a better explanation on fraud prevention, for example fishing licencing through the Internet. Mr. Doll answered that the check & balances may not be at the point of sale, but rather at a later date and that it will mimic what is done presently today on a case by case basis.

Representative Pummel asked Mr. Doll's opinion on Internet voting. Mr. Doll replied that it was Information Technology viable, but that extreme measures of security that would be costly to the states would have to be in place.

Senator Kleven questioned if wiring the schools is part of the BIT projects and if the local smaller schools are having problems in their budget for wiring etc. Mr. Doll stated that the BIT and DECA work together to establish it and that DECA surveys the schools every May and that he didn't think budget was included in that survey.

Representative Derby asked about the increase in rates for individual state agencies. Mr. Doll replied that the major changed are to structure of the rates and how they are calculated so it may seem that some agencies are charged more when it is a structure change in actuality.

Representative Burg questioned why people are paying more for State Radio and new radios. Mr. Doll said that with the new radio tower, they will make it universal so that others will not have to update their individual radios.

Senator Kleven questioned why the Digital Dakota Network was no longer in the budget and what would that mean to DDN. Mr. Doll answered that they were requesting federal grant monies to aid DDN.

LeAnn Allstot