Legislature(1995 - 1996)
04/10/1995 01:18 PM House JUD
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 130 - REGULATION ADOPTION PROCEDURES AND REVIEW Number 710 REPRESENTATIVE PETE KELLY, sponsor of HB 130, introduced the bill. HB 130 has gone through many changes, and if you were in State Affairs Committee, you will hardly recognize this bill. We started out with a very large bill attempting to change the Administrative Procedures Act. Through working with the Administration, particularly Deborah Behr from the Department of Law, we have found ways to lighten it up, and work within the existing Administrative Procedures Act to bring about regulation reform without such a major rewrite of the bill. REPRESENTATIVE GREEN moved to adopt Version H of CSHB 130 as the working draft. Hearing no objection, it was so ordered. REPRESENTATIVE KELLY explained particular sections. Section 1 makes sure that the existing Regulation Review Committee can review proposed regulations, not just final regulations. That has been a problem. This section also brings the Regulation Review Committee into the loop of the regulations writing process so that the legislative intent of the statutes that prompted the regulations can be given more attention. REPRESENTATIVE KELLY said Section 3 lists some of the reasons the Governor can return regulations to the agencies before they are filed. Section 3 also gives the Governor the power to do this. Even though he currently has the power, it is not in statute at all, that the Governor can either delegate the authority to review and return regulations, or to do so himself. One of the reasons the Governor can return regulations to agencies is if the regulations are inconsistent with faithful execution of the laws. The second reason is to give agencies a chance to address the current concerns of the legislature, so the legislature has been brought into the loop before a regulation has been finalized, and they have made comments on the regulation before the Governor returns it to the agency. A 30-day public testimony window exists when the legislature is somehow left out of that loop or cannot participate in that process; now they have the opportunity to get into the process. REPRESENTATIVE KELLY described Section 4. The Regulation Review Committee will receive a copy of proposed regulations. Currently they just receive a notice and a summary of regulations. The effects of Sections 1 - 4 are not revolutionary in regulation reform, but the intent is to stop that old problem where the Administration says they are just carrying out the intent of the legislature, and the legislature says that the Administration has ruined a perfectly good statute by writing a bad regulation on it. REPRESENTATIVE KELLY explained that Section 5 strengthens the public hearing requirement. It requires the agencies to pay particular attention to factual and substantive comment. One problem with public testimony meetings is that they are often overwhelmed with expressive opinions, and the agencies are not required to respond to any testimony. Section 5 directs them to respond to public comments. Later on we will require them to keep track of the written comments and how it was used or not used in designing the regulations that come out of that public testimony. We will also require the agencies to focus on costs of regulations to private enterprise. There have been problems with the fiscal notes attached regarding the cost of compliance for regulations. This is weaker language, but it seems that the only way to get rid of that $500,000 fiscal note, is to put it into statute and direct them to pay attention to cost. REPRESENTATIVE KELLY explained that Section 6 is a new section which requires agencies to record substantive comment they receive in the comment portion of the meetings. This will make sure that they are in tune to the people who are ultimately affected by these regulations, through creating a valuable paper trail. REPRESENTATIVE KELLY explained that Section 10 would put some teeth into the bill, but he would agree to go along with the Department of Law and the Department of Environmental Conservation (DEC), deleting Section 10, and try to figure out a way to put some teeth into the cost of compliance. Representative Green had raised some questions in the State Affairs Committee about economic feasibility. Section 10 deals with economic feasibility, but since we would like to delete Section 10, we will come up with something else to address the issue of economic feasibility. In summary, HB 130 codifies how the legislature and the Administration deal with regulations so that both are held responsible. We have required agencies to compile a lot more information than they have done before, so they can provide this to the legislature. The result will be that the Administration will have ultimate responsibility, and both the Administration and the legislature, who are elected officials, will now be held responsible for regulations. The other result will be that the agencies will be held accountable for paying strict attention to cost. Number 860 REPRESENTATIVE GREEN asked if the questions raised in the State Affairs Committee, ranging from constitutionality to inviting litigation, were taken into consideration in Version H. REPRESENTATIVE KELLY answered they absolutely were. This version was the result of many hours of work with the Department of Administration to come to some kind of agreement where we are not crossing constitutional lines, and yet we can still provide regulation reform. REPRESENTATIVE GREEN expressed concerns about the delegation of authority to the Lieutenant Governor, who has merely a ministerial role, rather than a policy making decision role. Does the delegation of authority that is included in this version pass with that, or is that still a valid concern, that the role of the Lt. Governor is ministerial? REPRESENTATIVE KELLY answered that it is not the intent of this legislation to pass the authority to the Lt. Governor, which is done at the will of the Governor, so the Governor can or cannot pass the authority on. It is his or her responsibility to do so. That is how we address the constitutionality of it. No one is requiring him to do that, but he may. Number 875 REPRESENTATIVE GREEN said Representative Kelly would like Section 10 removed, and the questions brought up in State Affairs about that will be addressed later. Does this mean later on in this bill when it goes to Finance, or in a different bill? REPRESENTATIVE KELLY said he was committed to deal with that by the time it gets to Finance. TAPE 95-44, SIDE A Number 000 REPRESENTATIVE KELLY continued, stating that he had spoken with Len Verrelli from DEC, since they needed a little time to work on it, so he committed to Mr. Verrelli that he would just pull it from this draft and then reintroduce it by the time it gets to Finance, if it should pass from this committee. Then hopefully it will be a new and improved bill, or possibly not. It may just be one of those things that crosses constitutional lines or just does not make sense, but we will certainly explore that within the next week or two. REPRESENTATIVE DAVIS asked Representative Kelly if he was proposing to eliminate Sections 5 and 10. REPRESENTATIVE KELLY clarified that he only intended to eliminate Section 10. The reference he had made to Section 5, is to determine the cost of compliance for regulations which has been producing large fiscal notes. The attempt in this draft was to give the departments a little more latitude when addressing costs so they would not have so many fiscal notes. However, Section 10 essentially says that DEC or any other agency cannot outlaw a lawful endeavor by making the cost of carrying out that endeavor so high, that in dealing with the regulations, they have essentially outlawed that endeavor. There were some problems with placer mining. The costs were so high, in dealing with the regulations, that the DEC has essentially outlawed that endeavor. Placer mining was essentially outlawed by regulation, because of the absurd water quality standards. We were trying to deal with that in Section 10. All we really wanted to deal with in Section 5 was these wild regulations that do not happen very often, but they do happen sometimes, and we wanted to deal with those in Section 10, by just taking, not just the cost of compliance, which was addressed in Section 5, but by taking it, and addressing in this draft the level of the absurd water quality standards up to the tenth power, when dealing with parts per million, and per billion and quadrillion. We are going to try to deal with the department to resolve that problem. CHAIRMAN PORTER said that the first version of Section 5 required departments to determine the cost of compliance, which led to substantial fiscal notes. Now we are just asking that they at least look at it and give it some consideration. REPRESENTATIVE DAVIS made a motion to remove Section 10, which is page 5, lines 13 - 23. REPRESENTATIVE FINKELSTEIN asked if the public testimony was completed. CHAIRMAN PORTER asked if there were any others wishing to testify on HB 130. He announced the amendment would be held in abeyance momentarily. DEBORAH BEHR, Regulations Attorney, Department of Law, said she has worked very closely with the sponsor on this bill, and she is quite pleased with the language changes. She offered her assistance in working further on any parts of the bill. She explained that in Section 3, the sponsor is correct to say the Governor has the authority to delegate authority. All this does is put something in statute that he already has the authority to do. On page 2, line 7, where we are excluding regulatory boards and commissions, that was done at her suggestion because of the problem of changing the relationship of boards that are independent, such as the State Board of Education, with the Governor. The sponsor indicated they did not want to change that relationship. MS. BEHR explained that the words "regulatory boards and commissions", are (indisc.) Constitution. We really should be using phrases like "boards and commissions that have the authority to adopt regulations." She has had several boards call her asking if they are in or out. She spoke with the sponsor and the sponsor's staff, and their goal was to not change the relationship of any of the regulatory boards. That will clear it up. She wanted to take out "regulatory" and put in "except for boards and commissions that are authorized by law to adopt regulations." You would be doing that on page 2, line 7, and on page 4, line 3. She felt that would be consistent with what the sponsor and the sponsor's staff were talking about. MS. BEHR also talked about page 3, lines 28, 29 and 30. We are getting cost information from the people who know it best, the regulated population. She said it troubles her to see departments and agencies trying to guess the cost of a private business. We cannot accurately do that. It would be very hard for us to get that information, and once we got the information, there would be the argument that a competitor could get it, and it is just real problematic. She likes this solution where the regulated public tells us what the problem is and we have an obligation to seriously consider that. MS. BEHR explained page 4, line 4. Right now, state agencies have an obligation under the law to seriously consider public comments they receive. There is no obligation for them to write a report as to whether they did or did not consider your comments. Departments work different ways. For example, some departments have briefing meetings with their commissioner, who makes the decision as to whether the comments are in or out. Other departments pull together a summary sheet of comments without being very specific on who said what. She was concerned that this may have a cost, but maybe for public policy reasons it would be a cost you are willing to bear. The DEC is required to keep a detailed analysis on use of public comments for many of their federal programs. MS. BEHR echoed the sponsor's suggestion to remove Section 10. It is new language, and she would be willing to work with the sponsor to come up with some language that would work for him, and still meet his intent. She felt there was substantial improvement, in the legal sense, from the previous version of the bill. She was willing to work with the committee and the sponsor on it. REPRESENTATIVE TOOHEY said she was thrilled and hoped that on page 3, lines 28, 29 and 30, that you would consider that. We have heard testimony that is against the regulation because it is unreasonable and causes the shutdown of small businesses. Are you really telling me that you were going to listen to that? MS. BEHR answered that each adopting agency, under the law, has an obligation to seriously consider all comments, and if a regulatory industry does not feel they are being treated fairly, they can test it. Most commissioners are very responsive to a lot of public comments and also letters from legislators. REPRESENTATIVE TOOHEY asked if there was any correlation between the federal and state regulations, if this came down as a mandate by the federal government, then their hands would be tied. Is that correct? MS. BEHR answered that when something is a mandate for the federal government, we, as a state, sometimes have a decision whether or not we want to participate in the program. That is fine. We do not take the federal money, and we do not take the strings attached. A lot of the federal laws are not designed for a small state with small businesses and do not match well for Alaska. REPRESENTATIVE FINKELSTEIN asked about the change in the Lt. Governor's role. MS. BEHR answered that initially the way the bill was drafted, the Lt. Governor could return regulations back to a state agency for any reason. She has concerns on two fronts. One is that our Constitution puts the Governor at the head of the Executive Branch, and so we could have the Governor and the cabinet all thinking that regulation was very good for the state, and if the Lt. Governor disagreed with that, he/she could send that back and thwart our Constitution. REPRESENTATIVE FINKELSTEIN asked what the change was here in the Lt. Governor's powers. He asked if she was just referring to a previous version of the bill. It was confusing as to whether or not the bill itself would change the powers of the Lt. Governor. MS. BEHR said the changes she was talking about were just from the previous version. REPRESENTATIVE FINKELSTEIN mentioned he had not seen the previous version, that is where he had gotten lost. He said apparently some regulations go to the Governor, and some do not. MS. BEHR said that in practice now, when there is a regulation project that is controversial, they will discuss it with the Governor at a cabinet meeting. He may set up mini-cabinets between the various departments affected, and she does not see very many regulations going back under this section. The policy will be set up-front, as it is now. As for enabling the agencies to respond to specific issues raised by the Regulation Review Committee, she hoped the Regulation Review Committee would be right there in the beginning telling us what the problems were. REPRESENTATIVE FINKELSTEIN asked if someone can file an appeal, saying the regulation cannot go into effect because the public process was not followed properly, or because it was not reviewed by the Governor. MS. BEHR was concerned about this record section. She could see somebody challenging an environmental regulation because an agency did not keep an adequate record, and under the Administrative Procedures Act, you can get an injunction and set it aside if there is not an adequate record. But the court right now requires that there be somewhere in the state agencies, some documentation of their decision making. This is going to formalize it more. That is a public policy call whether or not you believe the benefits from formalizing this in a record are worth the potential that a regulation could be set aside. JOHN LINDBACK, Chief of Staff for Lieutenant Governor Ulmer, thanked the staff for working closely with the Administration on this bill. The draft committee substitute incorporates a number of the changes suggested by the Administration so far. The Administration is very interested in regulatory reform, and is encouraging all of the bill sponsors on bills dealing with regulations to pursue a consensus approach, and work with the Administration during the interim on a comprehensive approach to regulatory reform. In regards specifically to HB 130, the Administration is neutral on the bill. With regards to the major focus of the bill, we must at least ask the question about the necessity of it. The Governor right now can stop regulations if he wants to. All it takes is a phone call or a conversation with the appropriate commissioner. This bill adds one more step to the regulatory process. After the department is done, it must go back to the Governor's office, or to the Lt. Governor's office, if it is delegated in that direction, for one more review. That is not necessarily bad; we only question whether or not it is necessary since the Governor is at the front end of this process and can stop regulations any time he wants to. He said the original version of the bill would require one new position that would be responsible for reviewing regulations. The Governor's office would need to look at this committee substitute version of the bill to determine whether or not they would still need such a position. Number 425 REPRESENTATIVE GREEN said there is a significant outcry from the public that we are being strangled by regulations. If the Governor was amenable to do something, you would think that process would have already started, and he did not see that happening. That seems to be the reason for the bill, either to light the fire, or to make it happen. PAM NEAL, President, Alaska State Chamber of Commerce, said they were very supportive of CSHB 130. They have been working with the sponsor and following this legislation from conception to the present form. It essentially addresses the concerns of the business community of the state. Too often our comments and our involvement in the regulatory process seem to fall upon deaf ears. We never see the results of any comments we have made, and feel this bill would help that. We have also had trouble figuring out where to point the finger if things are not going well. Where do you go to make it happen, to make sure you are at least heard? We feel this would open up the process and provide some accountability. We are very supportive of this piece of legislation. CHAIRMAN PORTER entertained the motion to the change on pages 2 and 4, as suggested by the Department of Law, and call it Amendment No. 1. This will be on page 2, line 7, and on page 4, line 3, to delete the word "regulatory", and then after the term "boards and commissions", add "or authorize by law to adopt regulations". REPRESENTATIVE TOOHEY made a motion to move amendment No. 1, as described. Seeing no objection, it was so ordered. REPRESENTATIVE TOOHEY made a motion to move Amendment No. 2, deleting on page 5, Section 10, lines 13 - 23. Seeing no objection, Amendment No. 2 passed. REPRESENTATIVE TOOHEY made a motion to move CSHB 130(JUD), version H out of committee with individual recommendations and attached fiscal notes. Seeing no objection, it was so ordered.
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