Legislature(1997 - 1998)
02/11/1998 01:45 PM House FIN
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* first hearing in first committee of referral
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HOUSE BILL NO. 264
"An Act providing for a negotiated regulation making
process; and providing for an effective date."
REPRESENTATIVE JEANNETTE JAMES stated that HB 264 would
enable and encourage negotiated regulation (neg/reg) rule
making. Currently, neg/reg is in use by the Federal
government, Montana and Nebraska. She believed that the
citizens of Alaska are clamoring for the Legislature to do
something about the regulation process. The proposed
negotiated regulation would address the issue.
She continued, neg/reg is a voluntary process for drafting
regulations that would bring together those parties
significantly impacted by a regulation including the
government, and would be expected to reach consensus before
the rule is formally published as a proposal. An impartial
mediator is used to facilitate intensive discussions among
the participants who operate as a committee and would be
open to the public. Representative James commented that
regulations drafted using this process tend to be more
technically accurate, clear, specific and less likely to be
challenged in litigation than rules drafted by the agency
alone.
She pointed out that the neg/reg process would cost more
money at the front end than a traditional approach.
However, Representative James thought that the advantages
would outweigh the consideration. Because representation
from all interested parties draft the regulations, the
formal process of public notice and comment becomes smooth
with few comments raised. Lengthy regulation litigation is
generally eliminated and compliance tends to be higher.
Agency costs for litigation of the rules and enforcing of
the standards are reduced.
DEBORAH BEHR, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF
LAW, commented that she had been assisting with work on the
proposed legislation since last year. She believed that
the legislation could be workable and less costly in
creating the neg/reg process.
She pointed out that the process would be volunteer,
although, there will be costs associated with the program.
Participants will decide if they want to use it or not. Ms.
Behr explained in detail the process used in negotiation
and supporting the Open Meetings Act. The commissioner
will have the authority to add members at any time. The
Administration will have one person on the board. The
legislation requires that a commissioner not establish a
board, unless, from the beginning, there is good faith to
use the results of the regulation process.
Ms. Behr added, in regard to the administrative procedure
process, nothing would be changed. It would allow anyone
from the public to testify during the public comment
period. The commissioner remains the confirmed cabinet
officer who makes the final decision on regulations. The
goal is to encourage people to talk up-front to create a
practical reality and exchange valuable information for the
regulations. The current Administrative Procedure Act does
not preclude this. The legislation would establish a
framework. She predicted that if the rules were followed,
there would not be a follow-up court case.
Ms. Behr acknowledged that this is a newly proposed process
with a new view. A check and balance would be with the
Administrative Procedure Act providing essential public
participation. The bill before the Committee contains all
the requested changes of the Administration. She
summarized, the fiscal note would be indeterminate as all
costs are voluntary and some departments will not use it.
The legislation is a way to encourage more up-front public
involvement.
Co-Chair Therriault questioned how utilizing the proposed
process could prevent a court test. The legislation would
not take the place of the regulatory process, but instead
would shift the contention to the beginning. He
anticipated that it would build a framework to invite more
Court challenges.
Ms. Behr acknowledged that any regulation passed would be
subject to Court challenge. Although, the proposed bill
would bring everyone to the table so that concerns could be
addressed in advance.
Co-Chair Therriault pointed out that currently, the
departments do take the time to gather information. He
recommended the balance be shifted through the legislation.
Ms. Behr responded that she could not guarantee that there
would not be a court case, although, only one case has
resulted on negotiated rule making statutes throughout the
United States. That case did not defeat the rule. She
proposed the key is that the notice is printed on the
regulation; anyone can come to testify, after which time,
the Commissioner would make the decision.
Representative J. Davies referenced Page 1, Line 12. He
asked if that point would modify the possibility of
lawsuits. Ms. Behr noted that there is a provision in the
bill addressing the judicial review, Page 5, Line 30 - 31,
Page 6, Lines 1 - 5. That language stipulates how the
commissioner sets up the committee. The committee would
not be subject to judicial review, although, the regulation
itself is given no higher difference.
Representative J. Davies questioned whether the rule could
be properly balanced at the out-set. Ms. Behr stressed
that any regulation released is subject to judicial review.
The process is totally open. The regulation review
committee could hold meetings on it. Any regulation
released under HB 130 is subject to the Lt. Governor's
regulation review. The commissioner's budgets are very
tight and they would not want to implement a process that
would cause more work in the long run. The regulation is
subject to court test and scrutiny. She added, the bill
has a five-year sunset provision; if concerns happen, they
will be addressed. There is no statute requiring
negotiated rule making. To date, none of the committees
have been stacked, because checks and balance exist.
Representative Grussendorf inquired why Representative
Berkowitz, as a sponsor of the bill, voted to amend in the
previous committee of referral. Ms. Behr advised that
Representative Berkowitz had trouble with language used on
Page 7, Lines 17 - 18 and had requested to amend the board
immunity provision. Most model acts do not have immunity.
Representative James pointed out that concern had been
addressed. She added, an additional concern, which was not
amended, was that more public notice be posted in the
beginning of the process.
Co-Chair Hanley referenced Page 2, Line 8. He asked if a
written finding would be required. Ms, Behr reiterated
that the process would be totally voluntary. All the model
acts generally lay it out, which the commissioner would use
when deciding whether or not to use negotiated rule making.
Co-Chair Hanley reiterated to insert "shall" on Page 2,
Line 8. Ms. Behr noted that she would be more comfortable
using "may", as it is a totally voluntary process.
Co-Chair Therriault asked if the determination would be an
appeal vote. Ms. Behr reiterated that the commissioner
would make that decision. In order to establish an appeal,
the act must contain those procedures.
DOUGLAS MERTZ, ATTORNEY REPRESENTING PRINCE WILLIAM SOUND
REGIONAL CITIZENS' ADVISORY COUNCIL (RCAC), JUNEAU, noted
that RCAC is an independent non-profit corporation whose
mission it is to promote environmentally safe operations of
the Valdez Marine Terminal and associated tankers.
Membership is compromised of organizations within the
communities and regions affected by the 1989 Exxon Valdez
oil spill, as well as commercial fishing, aquaculture,
native recreation, tourism and environmental groups.
Mr. Mertz continued, while RCAC favors the early
involvement of stakeholders in any rule-making process,
they believe that HB 264 contains serious flaws that could
permit an administrative agency to abuse the authority
granted under the bill by biasing the process in favor of
selected special interests. The problems could be remedied
by a few simple changes without alternating the intent of
the bill.
The bill provides for notice of committee meetings but does
not provide notice that a committee is being formed. An
interested party could find that a committee was formed
without knowledge of the process. He suggested that there
should be a notice provision added to the bill in order
that interested parties could request to be a part of the
committee.
Mr. Mertz added, nothing in the bill requires that a
committee's makeup be fair and representative of the broad
spectrum of interests. The choice of members could be
totally arbitrary and biased. RCAC recommends a simple
requirement in that the committee makeup is fair and
representative of all interested viewpoints.
Nothing in the bill gives members of the public any right
to participate in meetings or to make their views known.
The bill makes a committee meeting subject to the Open
Meetings Act, but it does not create a right to
participate. The bill should guarantee that non-members
might speak at and participate in any meetings and submit
materials to the committee.
Mr. Mertz pointed out that the bill states that committee
members serve at the pleasure of the agency. That means
any committee members who voice opposition to the viewpoint
of the agency may be booted off the committee, with no
reason given. RCAC recommends limiting the causes for
terminating a member to non-attendance.
Mr. Mertz noted that there is a technical question whether
the provision at Sec. 44.62.750(f), making the Open
Meetings Act applicable to the committee, is effective,
since the terms of the Open Meetings Act do not apply to
committee meetings of a non-decisional body within an
agency.
(Tape Change HFC 98- 28, Side 1).
Co-Chair Therriault echoed concern that there is material
in the proposed legislation which could be challenged and
open to court review. Mr. Mertz agreed. He pointed out
another concern of immunity from judicial review, an issue
that should be addressed when applying a standard at the
front-end. The proposed bill has no standards.
Co-Chair Hanley interjected that if there were a biased
commissioner, the same result would occur using the current
system or the proposed legislation. He voiced concern that
the legislation could create an additional process, which
could then bog down the system even more. Representative
J. Davies commented that in the proposed legislation, the
process could not be reviewed. Co-Chair Therriault
understood that the current process litgitimized the
stakeholders process.
Representative J. Davies asked if adding language to
balance would help in a judicial review. Mr. Mertz replied
that would provide one more moral constraint on the
commissioner.
Representative J. Davies voiced concern with the members
paying their own expenses, Page 5, Line 10. He pointed out
that often times, people representing citizen's viewpoints
have limited means; the people who represent the corporate
viewpoint have the corporation paying their expenses. To
ask a person to certify that they do not have the means is
not appropriate or to require the person to participate by
telephone would put them at a disadvantage. He believed
that in a negotiated process, some of the meetings need to
have all members present.
Representative James explained the intent of the language
was that people pay their own way if they could. She
anticipated that there would be people from the rural areas
who would not be able to participate without financial
support. A decision would be made in determining whether
or not the person would be able to participate and pay for
their way. The purpose is to provide legislation without a
fiscal note associated. Agencies will need to redirect
funds or reevaluate the department's financial position in
order to make the program work.
Co-Chair Therriault commented on how the State would budget
for the payment process. Co-Chair Hanley asked in a normal
regulatory process, would a department cover any expense of
a person wanting to testify. Ms. Behr replied that when
the Department of Environmental Conservation (DEC)
establishes a negotiation in a rural committee, they
specify up front and in advance that the Department is not
budgeted to provide funds for any representatives to the
meeting. The current process does not provide funding.
There is concern that people of little means will have a
difficult time participating in the regulation decisions.
The goal is to help those that truly can not pay.
Co-Chair Hanley voiced concern in establishing a public
process and then determining a public need that the State
pays the participant's portion. He concluded that gifts
and grants create complications.
Co-Chair Therriault placed HB 264 in Subcomittee with
Representative Kelly as Chair and with members
Representative J. Davies and Representative Martin. HB 264
was HELD in Committee for further consideration.
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