Legislature(2003 - 2004)

03/03/2004 09:15 AM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                                                                                                                                
     CS FOR SENATE BILL NO. 203(JUD)                                                                                            
     "An  Act  relating  to  administrative   hearings,  to  hearing                                                            
     officers,  and to administrative  law judges; establishing  the                                                            
     office of administrative  hearings and relating to that office;                                                            
     and providing for an effective date."                                                                                      
                                                                                                                                
                                                                                                                                
This  was the third  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair  Wilken  stated  that  this  legislation  would  create  an                                                            
independent administrative  hearing office within  the Department of                                                            
Administration, which would  be supervised by a Chief Administrative                                                            
Law Judge.  Testimony would address  Committee questions  pertaining                                                            
to  whether the  University  of Alaska  would  be included  in  this                                                            
legislation  as well addressing the  cost of producing and  adopting                                                            
of regulations.  Members' packets  also contain a letter  in support                                                            
of this  legislation  from the  National Federation  of Independent                                                             
Businesses (NFIB)  dated March 1, 2004 [copy on file].  In addition,                                                            
discussion would be presented regarding the bill's fiscal notes.                                                                
                                                                                                                                
DAVE STANCLIFF,  Regulatory Review  Committee, Office of  the Senate                                                            
President Senator  Gene Therriault, Judiciary Committee  noted that,                                                            
as reflected  in the memorandum  [copy on  file] dated February  27,                                                            
2004 to Senate  President, Senator  Gene Therriault, from  Tam Cook,                                                            
Director,  Division  of Legal  and Research  Services,  there is  no                                                            
Constitutional  conflict   in regards   to  applying  the  standards                                                            
imposed by this  legislation to both State and University  of Alaska                                                            
hearing officers.  However, by desire  and by an exemption  provided                                                            
in the State's procurement  code, the University of Alaska is exempt                                                            
from the jurisdiction  of the proposed central panel.  He also noted                                                            
that certain  State entities' jurisdictional  issues are  continuing                                                            
negotiations  with  the  bill's  sponsor   and  the  Governor  Frank                                                            
Murkowski  Administration.  The recommendation  in  regard to  these                                                            
negotiations  is that  they be  further  addressed by  the House  of                                                            
Representatives Judiciary Committee, as the bill progresses.                                                                    
                                                                                                                                
ANDY  HEMENWAY,  Hearing Officer,  Procurement  &  Longevity  Bonus,                                                            
Department  of Administration, communicated  that efforts  are being                                                            
undertaken  by the  sponsor to  address jurisdictional  issues  that                                                            
have been presented by  the Division of Insurance and the Department                                                            
of Revenue.                                                                                                                     
                                                                                                                                
Mr. Stancliff  also noted, in response to Senator  Hoffman's concern                                                            
regarding a  possible conflict of  interest that might arise  were a                                                            
full-time  hearing  officer  to  also  practice  law  as  a  private                                                            
citizen,  that  a  law  book  titled  "Judicial   Canon"  [copy  not                                                            
provided] would be distributed  that would properly define how these                                                            
types of issues should  be addressed. He noted that this book is the                                                            
national model  in regards to the conduct of administrative  hearing                                                            
officers,  and, as specified  in the  legislation,  this is the  law                                                            
reference  that must  be adopted  by  the Chief  Administrative  Law                                                            
Judge.  He acknowledged  that the  sponsor "is very  much aware"  of                                                            
this concern.                                                                                                                   
                                                                                                                                
Senator  Dyson asked  for  an overview  of  "the criticisms  or  any                                                            
opposition" to the bill.                                                                                                        
                                                                                                                                
Mr. Stancliff responded  that there has been broad based support and                                                            
input from members  of every committee that has conducted  a hearing                                                            
on this bill.  There is no sense of partisanship.  A conflict arises                                                            
regarding  how to incorporate  the mechanics  of this new model  and                                                            
its jurisdiction  with the  existing process  and the transition  to                                                            
the new model. This transition  process is the concern that has made                                                            
some employees and divisions  "nervous." At this point, the tensions                                                            
have been 98-percent alleviated.                                                                                                
                                                                                                                                
Co-Chair  Wilken   noted  that  15   fiscal  notes  accompany   this                                                            
legislation.                                                                                                                    
                                                                                                                                
ERIC  SWANSON,  Administrative  Services   Director,  Department  of                                                            
Administration,  summarized the Department's fiscal  notes regarding                                                            
the incorporation  of the new centralized  office of administrative                                                             
hearings into the Department:  ten positions would be transferred to                                                            
the Department  and $500,000 would be required to  establish the new                                                            
office  during  the  first  year with  some  of  the  funding  being                                                            
transferred from other  agencies as interagency funding. However, he                                                            
noted  that some  agencies  funding  sources are  not transferable.                                                             
$50,000  of new general  fund funding  would be  required the  first                                                            
year  to  fund  the  new  Chief  Administrative   Law  Judge  (CALJ)                                                            
position. He  noted that, other than  the CALJ, the majority  of the                                                            
hearing officer  positions  would not be  transferred to the  office                                                            
until on or after January first 2005.                                                                                           
                                                                                                                                
Co-Chair Wilken asked regarding the net total expected expenses.                                                                
                                                                                                                                
Mr. Swanson responded  that the net total increase  would be $52,000                                                            
in the  first year.  In addition,  the Division  of Insurance  would                                                            
experience  an  increase  in  receipt  supported  service  expenses.                                                            
Therefore  the net  total  increase  would amount  to approximately                                                             
$80,000 the  first year. There would  be a reduction in expenses  as                                                            
other funding sources transfer over in January 2005.                                                                            
                                                                                                                                
Co-Chair  Green  moved  to  report  the  committee  substitute  from                                                            
Committee with  individual recommendations  and accompanying  fiscal                                                            
notes.                                                                                                                          
                                                                                                                                
There  being  no  objection,  CS SB  203  (FIN)  was  REPORTED  from                                                            
Committee with  $500,600 fiscal note  #6, dated March 2,  2004, from                                                            
the Department of Administration;  negative $113,600 fiscal note #7,                                                            
dated March  2, 2004, from  the Department  of Administration;  zero                                                            
fiscal  note #8, dated  February 27,  2004, from  the Department  of                                                            
Labor and  Workforce Development;  negative  $5,000 fiscal  note #9,                                                            
dated February 27, 2004,  from the Department of Public Safety; zero                                                            
fiscal note  #10, dated February  25, 2004,  from the Department  of                                                            
Health and Social Services;  negative $22,500 fiscal note #11, dated                                                            
February 27,  2004, from the Office  of the Governor; indeterminate                                                             
fiscal note  #12, dated February  27, 2004,  from the Department  of                                                            
Community  and Economic  Development;  zero fiscal  note #13,  dated                                                            
March  1,  2004,   from  the  Department  of  Education   and  Early                                                            
Development;  zero fiscal  note #14, dated  February 24, 2004,  from                                                            
the Department  of Environmental Conservation;  $38,300 fiscal  note                                                            
#15, dated  March 1,  2004, 7from  the Department  of Community  and                                                            
Economic  Development;  zero fiscal  note  #16, dated  February  27,                                                            
2004, from  the Department  of Community  and Economic Development;                                                             
indeterminate  fiscal note  #17, dated February  12, 2004,  from the                                                            
Department  of Law; indeterminate  fiscal note  #18, dated  March 1,                                                            
2004,  from  the Department  of  Education  and  Early Development;                                                             
negative  $203,600 fiscal note  #19, dated  March 2, 2004,  from the                                                            
Department of  Revenue; and negative $52,400 fiscal  note #20, dated                                                            
March 2, 2004 from the Department of Revenue.                                                                                   
                                                                                                                                

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