Legislature(1995 - 1996)

03/07/1996 08:05 AM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
 HB 532 - COSTS OF ADOPTING REGULATIONS                                      
 The first order of business to come before the House State Affairs            
 Committee was HB 532.                                                         
 CHAIR JAMES explained HB 532 was sponsored by the House State                 
 Affairs Committee.  She called it a simple bill so it did not have            
 a sponsor statement.  She did not plan to move it out of the                  
 committee today.  The Administration was concerned about HB 532's             
 direction.  She explained there were other House Bills, HB 105 and            
 HB 267 that also addressed the issue of regulations.  House Bill              
 105 established a special group to write regulations, and HB 267              
 required the legislature to extend regulations every session.  In             
 an attempt to address the issue of regulatory reform, she asked the           
 Administration last year for information from the agencies                    
 regarding the amount of time and effort spent on writing                      
 regulations.  The Administration tried to get the information, but            
 it was hard to go back and recreate the time and effort put forth.            
 Therefore, HB 532 required each agency that reviewed proposed                 
 regulations and changes of another agency to determine the direct             
 and indirect cost of reviewing and writing the proposed changes               
 incurred.  She was interested in the who, the time and the cost of            
 writing regulations for all agencies.  She said the Administration            
 was concerned about the fiscal note.  She commented she expected a            
 $0 fiscal note.  She explained the tracking would be incorporated             
 into the already existing daily activities.  The Administration               
 would probably be interested in this information as well, so she              
 was looking for cooperation.                                                  
 The record reflected the arrival of Representative Caren Robinson             
 at 8:08 a.m.                                                                  
 Number 0388                                                                   
 REPRESENTATIVE JOE GREEN was concerned about the fiscal notes.  He            
 commented he had seen a wide latitude of fiscal notes from the                
 departments, and explained, if a department liked a bill, the                 
 fiscal note would be low; if a department did not like a bill, the            
 fiscal note would be high.  Therefore, he questioned if the                   
 information would be reliable.  He suggested a targeted audit                 
 approach instead.                                                             
 Number 0450                                                                   
 CHAIR JAMES replied an audit was her initial approach.  However,              
 according to the House Legislative Budget and Audit Committee,                
 there was nothing to audit because of the lack of record keeping.             
 House Bill 532 would allow the necessary information to be tracked            
 and kept for future audits.                                                   
 Number 0499                                                                   
 REPRESENTATIVE CAREN ROBINSON called the issue a moving target.               
 She explained a department would expend a lot of time and effort              
 when a regulation was needed producing a "picture in time" result.            
 The results were also directly related to the bills the legislature           
 passed that year.  She reiterated HB 532 would provide a picture in           
 time result rather than an overall expended amount of effort.                 
 Number 0564                                                                   
 CHAIR JAMES replied a time study took into consideration her                  
 concerns.  She agreed there probably were times when more                     
 regulations were being written, however, considering everything               
 there was a way to determine a composite amount of time and effort            
 being spent on regulations.  She reiterated, time and effort data             
 was needed to evaluate a more efficient process.                              
 Number 0657                                                                   
 REPRESENTATIVE ROBINSON asked Chair James what was the goal and               
 purpose of the bill?                                                          
 Number 0662                                                                   
 CHAIR JAMES replied the goal was for true regulation reform in the            
 state of Alaska, which would take approximately four years to                 
 accomplish.  The bill would set aside one year for the information            
 to be collected.  Due to her past experiences and true desires, she           
 believed she could contribute to the solution making process.  She            
 asserted the process must be more efficient, cost less, implement             
 statutes better, cause less distress with the public, and provide             
 Number 0735                                                                   
 REPRESENTATIVE ROBINSON commented that a moratorium was needed on             
 passing bills.  It was necessary to look at how legislation was               
 passed, for a true fix.                                                       
 Number 0765                                                                   
 CHAIR JAMES agreed with Representative Robinson.  She said a lot of           
 the blame laid in the lap of the legislature because of incomplete            
 pieces of legislation.  Therefore, the Administration had to pick-            
 up the pieces causing friction between the public, the                        
 Administration and the legislature.  It was a two-sided coin, and             
 all had to work together towards the same goal.                               
 Number 0845                                                                   
 REPRESENTATIVE GREEN wondered if guidelines would be issued to help           
 the departments determine a direct and indirect cost.  He said it             
 was vague as written and might produce unreliable data.                       
 Number 0852                                                                   
 CHAIR JAMES replied the Office of Management and Budget (OMB) would           
 be the leader of this project.  She was interested in an overall              
 view of the ratio of time and cost related to regulation writing.             
 The public wanted a reduction in the cost of government operations,           
 but they did not want to cut the education budget, for example.               
 The public wanted to cut the cost of government and this was a way            
 to accomplish that goal. Furthermore, the cost of government                  
 started with the legislature.  She reiterated she agreed with                 
 Representative Robinson that the legislature needed to look at how            
 legislation was passed and to include more accountability.                    
 Moreover, a government crash was eminent, if it was not handled               
 Number 0998                                                                   
 REPRESENTATIVE GREEN said benefits and overhead were part of the              
 direct cost involved, and as long as OMB established guidelines he            
 was more comfortable with the tracking process.  He stated the                
 direct cost was a sizeable amount.                                            
 Number 1015                                                                   
 CHAIR JAMES agreed with Representative Green that the direct cost             
 was a sizeable amount.  She explained it touched every employee in            
 some way.                                                                     
 CHAIR JAMES called on the first witness in Juneau, Jack Kreinheder,           
 Office of Management and Budget.                                              
 Number 1030                                                                   
 JACK KREINHEDER, Senior Policy Analyst, Office of the Director,               
 Office of Management and Budget, Office of the Governor, said the             
 overview of Chair James addressed some of the concerns of the                 
 Administration.  He said the Administration was happy to work with            
 the committee members and the Chair to accomplish the intent of the           
 bill.  The Administration, however, was concerned about the fiscal            
 notes.  The departments indicated they could absorb this as part of           
 the cost of doing business.  The Administration was concerned,                
 however, about the resources necessary to track the data.  The                
 Governor had asked the departments to review their regulations and            
 delete any that were out dated or needed to be revised.  This would           
 take time because legislation passed last year that required                  
 regulations were still being written.  He further said even though            
 the efforts could be absorb, it was not insignificant because of              
 the cumulative efforts over time for each department.  He cited the           
 report at the end of the year would take time.  The Administration            
 agreed the information would be interesting, but believed those               
 resources would be better devoted to working on the regulations               
 directly.  He further addressed Representative Green's concern                
 regarding the direct and indirect cost.  He agreed that OMB would             
 oversee the effort.  He said an amendment would not be necessary to           
 clarify that because the bill left it up to the Administration.  In           
 conclusion, he said, OMB would probably define the terms for the              
 consistent gathering of the information.                                      
 Number 1315                                                                   
 CHAIR JAMES explained there would not be a fiscal impact for the              
 record keeping required, but there would be a fiscal impact to                
 prepare the report at the end of the year.  She stated plenty of              
 time was given in the bill to prepare a report - June 30, 1997 to             
 December 1, 1997.  It was not mandated, but she expected a norm               
 would be established by the Administration.  She reiterated it was            
 an overall picture involved for analysis.  She said the agencies              
 and Mr. Kreinheder had been very cooperative, but there was no                
 parallel thinking yet.  Both sides needed to give a little.                   
 Number 1426                                                                   
 REPRESENTATIVE GREEN lauded the efforts put forth.  A handle on the           
 cost of regulations was needed.  However, based on personal                   
 experience, record keeping was not always reliable.  He was                   
 concerned about the value of the data.  It was time consuming to              
 track data accurately.  He asked if the state had ever done this              
 before, and wondered if Mr. Kreinheder believed the data would be             
 Number 1501                                                                   
 MR. KREINHEDER replied according to the Department of Environmental           
 Conservation (DEC) the effort could be accommodated easily within             
 its existing operations.  Permit costs were paid by the permitees             
 so the departments already tracked that information using a project           
 accounting system.  He shared the concern of Representative Green             
 regarding the value of the data.  He wondered if the cost of the              
 regulation projects in FY 97 were worth the time expended.                    
 Number 1567                                                                   
 REPRESENTATIVE GREEN wondered if there was a way, short of a                  
 computer program, so that at the end of the day the data was                  
 recorded.  He was concerned about data being forgotten if it was              
 collected weekly, for example.                                                
 Number 1596                                                                   
 MR. KREINHEDER said the enforcement of the data collection would be           
 left to department managers and supervisors.  He agreed, for a time           
 keeping system to work it needed to be tracked on a daily basis,              
 otherwise it was only rough estimates.                                        
 Number 1618                                                                   
 REPRESENTATIVE GREEN asked Mr. Kreinheder if he had any suggestions           
 for a method to track the information.  He agreed the information             
 was needed, but he did not know how to get it.                                
 Number 1634                                                                   
 MR. KREINHEDER replied the survey approach used by the Legislative            
 Audit Division was reasonable.                                                
 Number 1690                                                                   
 REPRESENTATIVE BRIAN PORTER wondered if DEC's permitting process              
 would be necessary to track according to HB 532.                              
 Number 1712                                                                   
 MR. KREINHEDER replied, "no."  He said he used DEC as an example              
 because it had a system in place already.                                     
 Number 1726                                                                   
 REPRESENTATIVE ROBINSON again wondered what the information would             
 reveal and how it would be used.  She agreed it would be good                 
 information to know, but she did not understand how it would help             
 the legislature change its way of business.                                   
 Number 1756                                                                   
 CHAIR JAMES responded the question of how the information would be            
 used had yet to be determined.  She explained the basic information           
 collected would be the starting point to analyze the current                  
 Number 1826                                                                   
 REPRESENTATIVE ROBINSON wondered if a piece of legislation was                
 necessary.  She suggested choosing a few pieces of legislation and            
 backtracking the time and effort required to implement the                    
 regulations.  She said it would be faster and it made more sense.             
 Number 1863                                                                   
 CHAIR JAMES replied backtracking would not yield accurate data.               
 She was distressed because the information was not being tracked              
 now.  In the private sector cost accounting was standard procedure.           
 The government never considered evaluating the cost involved                  
 because time keeping was not recorded.  Furthermore, the lack of              
 data affected the continued passage of HB 105 in the system because           
 she could not determine how many people would be necessary to                 
 establish a regulatory writing group.                                         
 Number 2020                                                                   
 REPRESENTATIVE ROBINSON reiterated it was still a moving target               
 because certain divisions within departments would be working on              
 regulations based on legislation at that given time.                          
 Number 2055                                                                   
 CHAIR JAMES replied for every program it was a moving target.                 
 Therefore, a preestablished tracking system was needed.  She                  
 understood the concerns of Representative Robinson, and reiterated            
 a cost analysis was the beginning of making any changes.                      
 Number 2112                                                                   
 MR. KREINHEDER asked the Chair what level of detail she envisioned            
 from the departments?  A grand total?  A breakdown by specific                
 regulatory project?                                                           
 Number 2138                                                                   
 CHAIR JAMES replied she expected the hours by specific regulation             
 or statute.  She also expected the cost incurred relative to time.            
 Everything would be relative to time, she explained.                          
 Number 2193                                                                   
 REPRESENTATIVE PORTER wondered if asking for subjective information           
 was reasonable as well.  He cited explaining a statute that caused            
 the biggest problem while trying to develop a regulation as an                
 The record reflected the arrival of Representative Scott Ogan at              
 8:45 a.m.                                                                     
 Number 2225                                                                   
 CHAIR JAMES replied it would be in the best interest of the                   
 Administration to include as much narration as possible to help               
 reform the system.  She did not want to mandate that in the bill,             
 Number 2253                                                                   
 MR. KREINHEDER responded it did not need to be specified in the               
 bill.  He said there had been some discussion about whether a bill            
 was necessary or a request from the committee would suffice, and              
 that in his personal opinion, a bill would be more effective.                 
 Number 2288                                                                   
 CHAIR JAMES thanked Mr. Kreinheder for his time.  She reiterated              
 she did not plan to move the bill out of the committee today.  She            
 explained she was willing to include a fiscal note to address the             
 tallying of information at the end of the period, however.                    
 CHAIR JAMES called on the first witness via teleconference in                 
 Fairbanks, Scott Calder.                                                      
 Number 2315                                                                   
 SCOTT CALDER said the goal of the 19th Alaska State Legislature               
 should be to help all Alaskans witness the closure of vast fissures           
 between the needs of Alaskans and the activities of the government.           
 He said there was an ongoing and contemporaneous public process to            
 allow action from the people.  The goal should be to restructure              
 the government to act at the people's request.  He said HB 532                
 seemed wasteful on one hand, but it was important the agencies face           
 the true cost and impact of their regulations.                                
 CHAIR JAMES called on the next witness in Juneau, Pam La Bolle.               
 Number 2393                                                                   
 PAM LA BOLLE, President, Alaska State Chamber of Commerce, said the           
 Chamber supported HB 532.  She explained regulatory reform was the            
 Chamber's second priority, and the information HB 532 would provide           
 was something that the Chamber had been trying to acquire.  She               
 explained the business community was not addressing this issue to             
 the dismay of the Chamber.  A handle on the resources applied was             
 necessary in both the private and public sectors.  Furthermore, the           
 information would help in the analysis of several areas.                      

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