Legislature(1993 - 1994)
03/23/1993 01:30 PM House ARR
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
JOINT ADMINISTRATIVE
REGULATION REVIEW COMMITTEE
March 23, 1993
1:30 p.m.
MEMBERS PRESENT
Representative Gary Davis, Chairman
Representative Bill Hudson
Representative Tom Brice
Senator Georgianna Lincoln
MEMBERS ABSENT
Senator Loren Leman, Vice Chairman
Senator Mike Miller
COMMITTEE CALENDAR
Presentation of findings and recommendations of the
Governor's Task Force on Regulatory Review by Bonnie
Williams, Chairperson.
WITNESS REGISTER
BONNIE WILLIAMS, Chairperson
Governor's Task Force on Regulatory Review
1335 Sunny Slope Road
Fairbanks, AK 99709
Phone: 474-7469
Position Statement: Gave Presentation
ACTION NARRATIVE
TAPE 93-3, SIDE A
Number 000
The meeting of the Joint Administrative Regulation Review
Committee was called to order by Chairman Gary Davis at 1:37
p.m. Chairman Davis stated that he was looking forward to
receiving some direction for the committee as a result of
the findings of the Governor's Task Force on Regulatory
Review. He then asked Ms. Williams to make her
presentation.
BONNIE WILLIAMS, CHAIR, GOVERNOR'S TASK FORCE ON REGULATORY
REVIEW, stated that the governor was pleased with the
results of the findings, and was going to appoint several
people in his office to help follow up on the task force's
recommendations. Probably an attorney, a staff member, and
possibly the lieutenant governor, she believed.
Number 059
MS. WILLIAMS pointed out that the task force was not asked
to review all regulations, only those hindering private
enterprise. She recommended that the governor appoint more
task forces to review regulations under other categories.
Number 091
MS. WILLIAMS recommended task forces be created for
education and health care. Regulations relating to
unemployment and workers compensation were recommended for
review. General changes mentioned in the report, were
recommended for the Administrative Procedures Act. Ms.
Williams also noted another general finding was that often
Alaska's regulations exceed those of the federal government.
CHAIRMAN DAVIS asked if the task force's recommendations
regarding the Administrative Procedures Act were
prioritized.
MS. WILLIAMS replied in the negative. The first was general
ideas and the sixth is a process, she thought should be in
code.
MS. WILLIAMS stated that studies conducted by a national
institute have indicated that every $1.8 million spent on
regulations could cost one life. She recommended a cost
benefit analysis be required of all regulations.
Number 135
CHAIRMAN DAVIS encouraged committee members to ask
questions.
REPRESENTATIVE BILL HUDSON inquired whether one life meant
one job.
MS. WILLIAMS replied that one life referred to one death.
REPRESENTATIVE HUDSON asked for further explanation.
MS. WILLIAMS stated a connection exists between the loss of
a job due to overregulation. The resulting unemployment can
result in a loss of nutrition and eventually a life. She
added that industry should be given the opportunity to
provide an alternative regulation that costs less -- that is
the one the administration should use.
MS. WILLIAMS touched on various general principles mentioned
in the task force's report. General Principle No. 9
referred to the fact that people that create regulations,
are also the ones to administer and enforce them. Ms.
Williams paralleled this to our judicial system where it
would be like having the judge, jury, and police all rolled
into one.
Number 190
MS. WILLIAMS stated that some people who came to testify
were reluctant to speak. They feared that the people who
write regulations might retaliate.
SENATOR GEORGIANNA LINCOLN thought the statement about fear
and retaliation about testifying were fair statements. She
further inquired into how those particular situations were
handled.
Number 210
MS. WILLIAMS said people that testified had to identify
themselves. Some people mentioned people they knew were
afraid to testify.
SENATOR LINCOLN asked if the task force received letters and
the writers all identified themselves.
MS. WILLIAMS responded that they did receive letters and the
writers all identified themselves, though they all did not
make sense.
CHAIRMAN DAVIS said that he had viewed some of the documents
and shared them with SENATOR LINCOLN.
MS. WILLIAMS said if people wanted their testimony taken
seriously they had to give their name and address as it was
public record.
REPRESENTATIVE HUDSON asked how they advertised in order to
get input.
MS. WILLIAMS replied they did several things. They
advertised in several papers throughout the state. They did
a little media work, and spoke to various groups in the
state. The governor's office in Fairbanks sent out notices
to various business groups telling about the task force, and
giving them dates they could testify.
REPRESENTATIVE TOM BRICE remembered seeing some of those
ads.
Number 308
SENATOR LINCOLN asked what kind of testimony they received
from the rural and Bush areas, and what kind of advertising
there was. She also asked whether any teleconferencing went
on.
MS. WILLIAMS said that when they teleconferenced from the
Legislative Information Office, occasionally they had remote
sites on line. She said that not many people participated
from smaller areas. She didn't think much notice was given
to people in the Bush.
Number 320
SENATOR LINCOLN asked if Ms. Williams felt she got a fair
representation of testimony from across Alaska.
MS. WILLIAMS believed it was incomplete. She felt there was
fairly complete testimony from several areas such as
agriculture and mining. They did pretty well on underground
storage tanks. Other than that she felt it was kind of hit
and miss. Public awareness was unsatisfactory, and there
was reluctance on the media's part as well.
Number 350
MS. WILLIAMS then touched on some of the specific
regulations that did not make sense. A person has to pay a
$50 fee to put a beehive on state land. That immediately
makes it unprofitable. People are going to sneak their
beehives onto state land, she alleged. Many things found
under mining in the task force's report will be replicated
in the Alaska Mineral Commission's report, she believed.
Number 360
MS. WILLIAMS pointed out that many of the same conclusions
were arrived at independently by the task force. One
conclusion is that Alaska shot itself in the foot on water
back in 1972, relating to the mining industry. She believed
the proposed changes the Department of Environmental
Conservation (DEC) has before them will address a lot of the
problems. All the streams are currently classified as
drinking water. She stated that a mining operation has to
clean their water back up to drinking water standards even
if they never were in the first place.
Number 380
REPRESENTATIVE BRICE asked about specific recommendations.
He noted that he introduced HB 132 and co-sponsored HB 213,
which dealt with these problems, and asked if the task force
would be available to write a letter of recommendation.
MS. WILLIAMS stated that Charlie Boddy was the member of the
task force that would be most suited to write that letter.
CHAIRMAN DAVIS acknowledged the presence of Senator Leman at
2:05 p.m.
MS. WILLIAMS said many types of businesses contacted them
about underground storage tanks. There is a problem
regarding these tanks. The state has a fund through which
they collect money for clean up. There does not seem to be
an understanding by the tank owners, big and small, why they
pay this fee. Another problem involves the procedure for
getting final closure on an underground storage tank.
Apparently someone will jump through the hoops and go
through the process to get their tank closed. However,
instead of closing the tank it will be put on inactive
status, which results in a cloud on the property's
marketability.
REPRESENTATIVE HUDSON asked why that was.
MS. WILLIAMS did not know why. She said that agency
officials did not testify at the hearings. She also said
that it did not make any sense to expend the time and money
to solve the problem, if it never gets resolved.
CHAIRMAN DAVIS commented that the committee would
investigate this problem.
SENATOR LINCOLN asked if any agencies testified or were
invited to testify. She wanted to know if it was the task
force's choice not to have agency people at the hearings.
MS. WILLIAMS stated that was not the intent. She said that
the time restraints and the governor's approach, allowed the
task force to go directly to the affected parties and review
their testimony and then draft recommendations. She said
that the agencies may not have had invitations to the
hearings, but they had the opportunity to show up.
MS. WILLIAMS mentioned that there were some recommendations
that would catch the eye of environmental groups. And that
they showed up at some of the hearings with copies of the
drafts of regulations.
SENATOR LINCOLN asked if the agencies knew they had the
opportunity to testify.
MS. WILLIAMS said they may or may not have known.
SENATOR LOREN LEMAN said they were not invited or excluded.
SENATOR LINCOLN asked it the task force considered above
ground storage tanks as well as those underground.
MS. WILLIAMS was not sure if some of the regulations applied
to above and underground storage tanks.
REPRESENTATIVE HUDSON commented that the Federal EPA UST
(Environmental Protection Agency, Underground Storage Tank)
program applies to underground storage tanks, while Alaska's
LUST (Leaking Underground Storage Tank) program applies to
underground storage tanks. Our LUST program was put into
place to comply with federal law so the state would not lose
federal money, he said.
SENATOR LINCOLN mentioned that since the task force was
focusing on economic opportunity, they should consider above
ground storage tanks. Approximately 95% of the storage
tanks in rural Alaska are above ground. The Coast Guard has
threatened to close all the tanks down this year, she noted.
MS. WILLIAMS pointed out Specific Industry Recommendation
No. 8, which suggests eliminating the DEC's requirement of
an annual fee for an underground storage tank. Owners of
large numbers of tanks are being charged thousands of
dollars a year in annual fees. This has a serious negative
impact and is basically a hidden tax, she stated.
REPRESENTATIVE BRICE asked where the fee went.
MS. WILLIAMS said the fee is supposed to cover registering
the tank. There is some rather extensive paperwork involved
to register an underground tank. However, she questioned
the necessity to re-register next year. There is a process
already mentioned for digging up a tank, but if the same
tank is still underground in the same place, she wondered
why it should be re-registered. "The agency is looking for
additional revenue. Call it a tax. It is an unfair and
unnecessary tax," she said. She commented that these
underground tanks have already closed down many small
businesses.
SENATOR LEMAN commented that he wasn't trying to justify the
program, but rather providing some names of people with whom
to follow up.
CHAIRMAN DAVIS mentioned that he planned on adjourning the
meeting around 2:30 p.m.
MS. WILLIAMS referred committee members to page 14, Specific
Industry Recommendation No. 9. The man that brought it to
the task force's attention is the man who would be able to
produce the oil and create the jobs, she said. One of the
products out of a refinery is heavy bunker oil. In 1972, a
set of taxes was imposed on refinery products. A tax of
$2.10 per barrel was imposed on bunker oil. This priced
Alaska's heavy bunker oil right out of the market, she
alleged. Bunker oil is a low grade oil that doesn't create
much of a price, she explained. No heavy bunker oil has
been sold in Alaska since, and no tax has been collected.
MS. WILLIAMS claimed Princess Tours has considered
purchasing heavy bunker oil from the Kenai refinery, but
only if the price is lowered by lowering the tax to become
competitive with the price of bunker oil from British
Columbia. Ms. Williams also mentioned that taxes are rising
in British Columbia and that it may not be very difficult to
create a simple little industry in Alaska by reducing or
deleting the tax.
CHAIRMAN DAVIS mentioned that bunker oil is a byproduct of
the North Slope oil that Tesoro refines and it is a
residual. There is nothing they can do with it. It gets
hauled out of the state, he added.
MS. WILLIAMS said it is getting sold out of state so Alaska
is not collecting any tax on it either.
REPRESENTATIVE BRICE commented that many of the regulations
were good legislation ideas. He was concerned that there
were no recommendations addressing procurement practices.
During the campaign he was told by many people about
problems with state procurement procedures, which are
generally not favorable to small businesses. They can be
difficult to compete with and he cited [the Department of]
Corrections as an example.
MS. WILLIAMS stated that several people testified on
procurement, especially relating to the graphic services of
the University of Alaska Fairbanks and other general
comments about [the Department of] Corrections. She
recalled concluding that the University was at fault in its
procurement practices, though it was not included in the
task force's recommendations. Apparently the problem is not
with the regulations, but how they are being carried out,
she declared.
REPRESENTATIVE BRICE said procurement laws are written so
that there is generally a tendency to help bigger and larger
out of state businesses.
MS. WILLIAMS said she went to a presentation of the Alaska
Manufacturers Association, where one of the individuals was
complaining about competition under procurement. He claimed
that they weren't getting a preference. She said that, in
fact, the state is underwriting a lot of Alaska businesses
with its bidder preferences.
REPRESENTATIVE HUDSON suggested that in many cases a law is
enacted that gets passed from the governor to a
commissioner, then a director, and so on. Unfortunately,
the legislature does not follow up on the laws to see that
the intent is being met. He said, "We need to make sure
what we are doing is serving the public's interest." The
task force has maybe touched the tip of the iceberg in its
initial investigations. He was interested in suggestions of
how to get the big picture in sifting through these
regulations. Governor Lamm of Colorado put out a very good
paper that suggested society is constantly confronted with
affordable risks, he said.
REPRESENTATIVE HUDSON claimed we take a risk walking across
the street. If the government is going to implement laws
and regulations, they should be because the public can't
afford the risk of not doing so. Unfortunately, they keep
costing and costing even though the public can afford the
risk. Basically there needs to be a much more thorough
analysis of the cost benefit ratio, he concluded.
MS. WILLIAMS mentioned HJR 11, allowing the legislature to
repeal regulations. She mentioned that it was not in the
report because the task force would not support it.
However, she supported it personally. She commented that it
may be difficult to get that past the voters. It may be
worth investigating the Administrative Procedures Act, she
concluded.
CHAIRMAN DAVIS commended the task force on their report. He
mentioned that the committee has a budget and would be
interested in investigating regulations further. He also
mentioned the committee's support of HJR 11.
SENATOR LINCOLN wondered if there are or were other task
forces created to look into regulations.
MS. WILLIAMS stated that Governor Hickel has no other
regulatory review task force. Also, to the best of her
knowledge there were no others by previous governors.
SENATOR LINCOLN commented that their findings are most
helpful and interesting and that there should be more task
forces to investigate other areas. She commented further
that this task force had a narrow focus, and wondered if it
would be possible to create another task force that would be
able to investigate a broad focus.
MS. WILLIAMS said that the task force would need at least a
year, as well as more money.
SENATOR LINCOLN said she would like the committee to
consider recommending to the governor that another task
force be created and given a year or so to go much more in
depth.
CHAIRMAN DAVIS stated that he would like the committee to
spell out exactly what it would be looking for.
MS. WILLIAMS mentioned that all the articles referenced in
the report were attached to the back of report.
ADJOURNMENT
CHAIRMAN DAVIS adjourned the meeting at 2:35 p.m.
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