Legislature(2003 - 2004)

02/05/2003 08:38 AM House ARR

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
      JOINT COMMITTEE ON ADMINISTRATIVE REGULATION REVIEW                                                                     
                        February 5, 2003                                                                                        
                           8:38 a.m.                                                                                            
                                                                                                                                
TAPE(S) 03-1                                                                                                                    
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Gene Therriault, Chair                                                                                                  
Senator Lyda Green                                                                                                              
Senator Hollis French                                                                                                           
                                                                                                                                
Representative Bruce Weyhrauch, Vice Chair                                                                                      
Representative Tom Anderson                                                                                                     
Representative Les Gara                                                                                                         
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
^Introductory Organizational Meeting                                                                                            
                                                                                                                              
WITNESS REGISTER                                                                                                              
                                                                                                                                
Ms. Deborah Behr                                                                                                                
Assistant Attorney General                                                                                                      
Department of Law                                                                                                               
PO Box 110300                                                                                                                   
Juneau, AK  99811-0300                                                                                                          
POSITION STATEMENT:  Reviewed the procedure for adopting                                                                      
regulations under the Administrative Procedures Act                                                                             
                                                                                                                                
Mr. Robert Pearson                                                                                                              
Office of the Lieutenant Governor                                                                                               
PO Box 110015                                                                                                                   
Juneau, AK 99811-0015                                                                                                           
POSITION STATEMENT:  Discussed the role of the Lt. Governor's                                                                 
Office in adopting regulations                                                                                                  
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 03-1, SIDE A                                                                                                             
                                                                                                                                
                                                                                                                                
CHAIR  GENE  THERRIAULT   called  the  Administrative  Regulation                                                             
Review Committee (ARRC)  meeting to order at 8:38  a.m.  Senators                                                               
Green,  French, Representative  Gara, and  Chair Therriault  were                                                               
present.  Chair Therriault  welcomed  members  and informed  them                                                               
that the  committee would  be meeting on  an as-needed  basis. He                                                               
noted that Deborah  Behr and Steve Weaver from  the Department of                                                               
Law and Robert Pearson from the  Office of the Lt. Governor would                                                               
explain the regulation process to members today.                                                                                
                                                                                                                                
MS. DEBORAH BEHR,  regulations attorney for the  State of Alaska,                                                               
told members she has worked in  her current position for about 11                                                               
years.   She  introduced   Dave  Marcus,   the  legislation   and                                                               
regulations  coordinator  for  the   Department  of  Law,  Steven                                                               
Weaver, assistant  regulations attorney, and Robert  Pearson, the                                                               
new  administrative   coordinator  in  the  Office   of  the  Lt.                                                               
Governor.  Ms. Behr  said  she would  begin  her presentation  by                                                               
giving  an   overview  of  the  Department   of  Law's  statutory                                                               
obligations on regulations.                                                                                                     
                                                                                                                                
MS. BEHR  said Alaska  is unique  in that  the Department  of Law                                                               
reviews regulations for legal sufficiency  before they impact the                                                               
public.  Regulation  standards  are  contained  in  statute,  the                                                               
Constitution  and  case law.  The  department  must sign  a  memo                                                               
verifying  that  each  regulation   meets  legal  standards.  She                                                               
provides regulation training to state  agency personnel and is in                                                               
charge  of  preparing  the  drafting  manual  for  administrative                                                               
regulations.  Ms.  Behr  said  she  has  tried  to  parallel  the                                                               
regulation  manual  to the  legal  drafting  manual used  by  the                                                               
Legislature so that the court has to look at one standard only.                                                                 
                                                                                                                                
MS. BEHR  reviewed a flow chart  detailing the steps used  in the                                                               
regulation adoption  process. She  noted that agencies  draft the                                                               
regulations,  public notices  and  fiscal  notes in  consultation                                                               
with an attorney  at the Department of Law. She  pointed out that                                                               
the  Board  of Barbers  and  Hairdressers  might not  have  ready                                                               
access to an  attorney, while the Division of Oil  and Gas in the                                                               
Department of Revenue would. Each  proposed regulation is given a                                                               
file  number  by  the  Department  of Law.  She  asked  that  any                                                               
legislative  inquiries about  a proposed  regulation contain  its                                                               
file number.                                                                                                                    
                                                                                                                                
MS. BEHR  explained that agencies  publish and  distribute public                                                               
notices, additional  notice information and  proposed regulations                                                               
via  e-mail. All  e-mail notices  contain the  name of  a contact                                                               
person  for   further  information.  When  a   public  notice  is                                                               
published, the public comment period  begins. The public is given                                                               
a chance  to comment on  all proposed regulations. Ms.  Behr said                                                               
some  regulations,  such  as  minor   technical  changes  to  the                                                               
insurance code,  lend themselves  better to written,  rather than                                                               
oral,  comments. After  the public  comments are  considered, the                                                               
agency adopts  the regulation. A  board or commission  must adopt                                                               
regulations  in a  publicly noticed  meeting.  If a  commissioner                                                               
adopts regulations, the commissioner gives  notice that he or she                                                               
adopted them after the fact.                                                                                                    
                                                                                                                                
The final regulations  are submitted to the Department  of Law at                                                               
adoption. They  go through a  thorough Department of  Law review,                                                               
based on statutory and constitutional  obligations and state law.                                                               
Simultaneously,  the  Governor's Office  conducts  its  "HB   130                                                               
review."  HB    130  gave the  governor  or  lieutenant  governor                                                               
limited review  power over non-board regulations  to determine if                                                               
there was  faithful execution of  the law  or if comments  of the                                                               
ARRC  were   followed.  The  department  has   the  authority  to                                                               
disapprove regulations. That is  usually done when little counsel                                                               
was available  early on and  a regulation is clearly  in conflict                                                               
with case law. In such a  situation, the department tries to work                                                               
with  agency  personnel  to  find  appropriate  language.  Often,                                                               
changing  one or  two words  solves the  problem. The  Lieutenant                                                               
Governor's  Office then  files the  regulations,  which can  take                                                               
effect  in a  minimum of  30 days.  The 30-day  delay period  was                                                               
designed to allow the public  time to challenge the regulation in                                                               
court.                                                                                                                          
                                                                                                                                
MS. BEHR said the Lieutenant  Governor's Office then sends copies                                                               
to  the   ARRC  and   the  regulations   are  published   in  the                                                               
Administrative  Code. In  addition,  the agency  is obligated  to                                                               
post notice on the online public information system.                                                                            
                                                                                                                                
MS. BEHR  then asked  to address the  following questions  she is                                                               
frequently asked by legislators on behalf of constituents:                                                                      
                                                                                                                                
   · How can the public get involved in the regulations process?                                                                
   · What do I do if my comments were not fairly considered?                                                                    
   · Why don't state agencies implement the intent of the                                                                       
     statute?                                                                                                                   
                                                                                                                                
MS. BEHR  explained that people  can have  their names put  on an                                                               
interested  person list.  Statute  requires agencies  to keep  an                                                               
interested person list  on all regulations. If  an e-mail address                                                               
is provided, a  person will receive all  notices about particular                                                               
regulations.                                                                                                                    
                                                                                                                                
Regarding the  second question, MS.  BEHR said she has  found the                                                               
problem is usually that the public  needs to be more precise. She                                                               
gave an analogy of the  legislative committee process and said it                                                               
is not very helpful  for a testifier to say a bill  is bad; it is                                                               
helpful  when  the  person   suggests  specific  amendments.  She                                                               
advised legislators  to let their  constituents know  that public                                                               
comments  are public  record in  the State  of Alaska,  therefore                                                               
people should  be comfortable that  the information  they provide                                                               
will become public.                                                                                                             
                                                                                                                                
MS. BEHR  suggested that  the statutes be  written as  clearly as                                                               
possible so  that their  intent can  be followed.  She said  if a                                                               
statute says "X" and she  reviews a proposed regulation that says                                                               
"Y," it will not leave the department.                                                                                          
                                                                                                                                
MS.  BEHR said  she has  received calls  from people  saying they                                                               
were surprised that a regulation  took effect. She suggested that                                                               
people  be told  to look  at the  State of  Alaska Online  Public                                                               
Notice   system   [http://state.ak.us/pn/pubnotic.nsf].   Another                                                               
question she  is often  asked is  how to  change a  regulation. A                                                               
regulation  can  be  changed  with   a  statutory  change  or  by                                                               
petitioning  under the  Administrative Procedures  Act. She  said                                                               
she sees two or three petitions per year.                                                                                       
                                                                                                                                
MS. BEHR updated  the committee on changes in  regulations in the                                                               
last year.  Two successful  ventures with  negotiated regulations                                                               
making have occurred. She noted  that former Representative James                                                               
put  a tremendous  amount of  effort into  legislation [to  allow                                                               
negotiated  regulations  making].  Negotiated  regulation  making                                                               
involves a committee made up  of stakeholders, state agencies and                                                               
the  public.   The  two  successes   involved  the   cruise  ship                                                               
regulations  for  the  Department of  Environmental  Conservation                                                               
(DEC) and  the charitable  gaming regulations  on accountability.                                                               
Agencies are also  moving forward in the electronic  area and are                                                               
accepting comments  and sending  notices via  e-mail, as  well as                                                               
posting information on the Internet.                                                                                            
                                                                                                                                
8:43 a.m.                                                                                                                       
                                                                                                                                
CHAIR THERRIAULT  referred to the  flow chart and  told committee                                                               
members that  they have two  opportunities for input. In  step 6,                                                               
during  the  public comment  period,  the  committee can  provide                                                               
input.  Later on,  the Lieutenant  Governor will  make sure  that                                                               
input was adequately considered.  He  asked Ms. Behr if a copy of                                                               
the regulation is sent to the  ARRC after the regulation has been                                                               
put in place.                                                                                                                   
                                                                                                                                
MS. BEHR  said that  occurs after  she has signed  off on  it but                                                               
before it  becomes effective. She  added that this  committee has                                                               
held  oversight hearings  in  the past.  She  suggested that  Tam                                                               
Cook, Director  of the Division  of Legal and  Research Services,                                                               
brief the committee on the parameters of its authority.                                                                         
                                                                                                                                
CHAIR THERRIAULT cited a statutory reference and read:                                                                          
                                                                                                                                
     ...standing committee of  the legislature shall furnish                                                                    
     a notice of a proposed  action under AS 44.62.190 shall                                                                    
     review  the   proposed  regulation,  amendment,   or  a                                                                    
     regulation  on appeal  [indisc.]  before  the date  the                                                                    
     regulation  is  scheduled  by   the  department  to  be                                                                    
     adopted.  A standing  committee  conducting the  review                                                                    
     shall   determine  whether   the  regulation   properly                                                                    
     implements the legislative intent.                                                                                         
                                                                                                                                
He  noted  if the  legislature  wanted  to encourage  a  standing                                                               
committee to look at a  proposed regulation and determine whether                                                               
the legislative intent  was followed, it should be  done early on                                                               
in the process.                                                                                                                 
                                                                                                                                
MS.  BEHR said  it should  be done  early on  if the  legislature                                                               
wants to influence  the shaping of regulations. She  said she has                                                               
seen that  happen infrequently.  It makes sense  to do  that with                                                               
complicated regulations, such as  those designed to implement the                                                               
Forest Practices Act.                                                                                                           
                                                                                                                                
CHAIR THERRIAULT  pointed out that the  Administrative Regulation                                                               
Review Committee  can ask  that a  proposed regulation  be frozen                                                               
during the interim until the legislature is in session.                                                                         
                                                                                                                                
MS. BEHR suggested asking Ms. Cook  for an opinion on that matter                                                               
because of constitutional problems.                                                                                             
                                                                                                                                
CHAIR THERRIAULT referred  to the State of Alaska  v. ALIVE court                                                               
case,   in  which   the   court  ruled   that   activity  to   be                                                               
unconstitutional.                                                                                                               
                                                                                                                                
MS. BEHR  said that in her  experience, a letter from  ARRC has a                                                               
tremendous  amount of  influence.  She felt  the  timing of  that                                                               
influence is important.                                                                                                         
                                                                                                                                
CHAIR  THERRIAULT  asked Ms.  Behr  to  review the  timeline  for                                                               
petitioning a proposed regulation.                                                                                              
                                                                                                                                
MS. BEHR  told members  that anyone can  petition a  state agency                                                               
for a regulation  change at any time. The  petitioner must follow                                                               
the Administrative Procedures Act  (APA) standards and the agency                                                               
has a responsibility  to respond. She noted it is  an area of the                                                               
statutes that  could benefit from  some fine tuning  because, for                                                               
example, a petition  must be acted on within 30  days yet some of                                                               
the  boards  meet  only  once  per year.  In  such  a  case,  the                                                               
Department  of  Law has  applied  that  to  mean the  board  must                                                               
address the petition at its first meeting of the year.                                                                          
                                                                                                                                
REPRESENTATIVE BRUCE  WEYHRAUCH noted  that action on  a petition                                                               
by an agency is discretionary.                                                                                                  
                                                                                                                                
MS. BEHR agreed that an agency is not bound to act.                                                                             
                                                                                                                                
REPRESENTATIVE WEYHRAUCH asked  if she has any data  on how often                                                               
agencies respond to petitions.                                                                                                  
                                                                                                                                
MS. BEHR  said that  petitions are rare.  She said  two petitions                                                               
were filed recently, one in  the Department of Transportation and                                                               
Public  Facilities  (DOTPF). She  believes  that  DOTPF plans  to                                                               
respond positively to that petition.  She noted that she receives                                                               
about two per  year and that the procedure does  not work as well                                                               
when a commissioner makes the decision.                                                                                         
                                                                                                                                
REPRESENTATIVE WEYHRAUCH  asked if an agency  is petitioned under                                                               
the APA, and the agency chooses  not to address the petition, the                                                               
petitioner is left with two options  - to bring the matter to the                                                               
legislature or sue the agency in court.                                                                                         
                                                                                                                                
MS. BEHR  said that is correct  but she has never  seen a lawsuit                                                               
and she  doubts one would  be successful because it  is difficult                                                               
to  compel  someone  to  take   an  action.  She  felt  the  more                                                               
convincing route is to make a case before the legislature.                                                                      
                                                                                                                                
REPRESENTATIVE LES  GARA asked if  legislators receive  notice of                                                               
all proposed regulations via e-mail  or only the regulations that                                                               
have been adopted.                                                                                                              
                                                                                                                                
MS. BEHR said that because state  agencies did not have public e-                                                               
mail addresses  for new legislators  during the  interim, notices                                                               
of  proposed  regulations  were mailed.  Legislators  should  now                                                               
receive them via e-mail.                                                                                                        
                                                                                                                                
REPRESENTATIVE GARA  noted the public notice  rules are effective                                                               
but, as an  attorney, he feels that most  regulations are written                                                               
so that a person has to analyze  the text to know what they mean.                                                               
He  felt a  brief summary  would  be useful  and asked  if it  is                                                               
possible to receive a lay, non-binding summary with each notice.                                                                
                                                                                                                                
MS. BEHR said  she wishes a non-binding summary  could exist. She                                                               
said that most of the  agencies write "Dear Alaskan" letters that                                                               
contain an  explanation. They  also have  web pages  that contain                                                               
information.  She pointed  out that  agencies, because  of budget                                                               
constraints, have asked her what  the minimum notice requirements                                                               
are. She said that a lot of  material is made available but it is                                                               
a  balancing act  for the  agencies.  She noted  she can  provide                                                               
legislators with additional materials when requested.                                                                           
                                                                                                                                
REPRESENTATIVE  GARA  asked  if  legislators  receive  notice  of                                                               
proposed regulations through Ms. Behr's office.                                                                                 
                                                                                                                                
MS.  BEHR said  each department  is obligated  to send  notice to                                                               
legislators.  Her office  acts  like the  "traffic  cop." If  the                                                               
information is not there, she will make the department send it.                                                                 
                                                                                                                                
REPRESENTATIVE GARA  expressed concern that legally,  agencies do                                                               
not have to send out  a summary explaining the regulatory action,                                                               
but the  result is that for  most people, notice of  a regulatory                                                               
change  is  not  readily  ascertainable. He  requested  that  the                                                               
agencies  be advised  that  at no  additional  expense, they  can                                                               
attach a cover letter in the e-mail message.                                                                                    
                                                                                                                                
MS.  BEHR  thanked Representative  Gara  for  the suggestion  and                                                               
informed members that Administrative  Order 157 contains training                                                               
information and standards  on how notices are to  be drafted. She                                                               
said she cannot  verify that all agencies  follow those standards                                                               
to the letter.                                                                                                                  
                                                                                                                                
REPRESENTATIVE  WEYHRAUCH asked  if a  superior court  declares a                                                               
regulation  to  be unconstitutional,  and  that  decision is  not                                                               
appealed by the  state, at what point in  the regulation adoption                                                               
process the Department  of Law would give notice  and revisit the                                                               
regulation.                                                                                                                     
                                                                                                                                
MS.  BEHR  said  that  when   a  regulation  is  challenged,  the                                                               
Department of  Law is usually  a party to  the case in  some way.                                                               
The agency  attorney assigned to  that area  of law will  talk to                                                               
the commissioner of that department  about a possible remedy. Her                                                               
office  cannot  take a  regulation  off  of  the books  like  the                                                               
revisor of  statutes can  do with statutes  because she  does not                                                               
know how  [the legislature] wants  it to be repaired.  Instead, a                                                               
note is  attached citing the  court decision that declared  it to                                                               
be   unconstitutional.  It   is  possible,   however,  that   the                                                               
commissioner  can  change  one   word  and  make  the  regulation                                                               
constitutional so that approach is taken first.                                                                                 
                                                                                                                                
9:07 a.m.                                                                                                                       
                                                                                                                                
CHAIR  THERRIAULT   asked  if  a   person  would   challenge  the                                                               
underlying  statutory  authority  for a  regulation  through  the                                                               
petition process.                                                                                                               
                                                                                                                                
MS. BEHR  said that  must be  challenged in  court. She  said the                                                               
Department of  Law assumes the statutes  are constitutional until                                                               
successfully challenged in court.                                                                                               
                                                                                                                                
CHAIR THERRIAULT  said he  was talking  about a  case in  which a                                                               
challenge  occurs because  there is  no statutory  basis for  the                                                               
regulation,  not because  the constitutionality  of a  statute is                                                               
questioned.                                                                                                                     
                                                                                                                                
MS. BEHR said the APA requires  her to determine whether there is                                                               
statutory authority for the regulation.  She repeated that if the                                                               
statute  is clear  and says  "X," the  regulation cannot  do "Y."                                                               
However, what  usually happens is  the statute is unclear  so she                                                               
looks at the  legislative history and other  considerations. If a                                                               
gray  area exists,  a person  may decide  to test  the matter  in                                                               
court. If the  statute is broadly written, it  is often difficult                                                               
for the  court to  determine whether  the regulation  follows the                                                               
intent of  the statute. Alaska does  not have the same  amount of                                                               
documentation  that   Congress  has  regarding  the   history  of                                                               
legislation.                                                                                                                    
                                                                                                                                
CHAIR THERRIAULT  asked Ms.  Behr if  she is  the sole  person to                                                               
make that  determination or whether  it gets farmed out  to other                                                               
people in the agency.                                                                                                           
                                                                                                                                
MS. BEHR said  she makes the determination for  the Department of                                                               
Law. She  noted that she has  sat down with the  Attorney General                                                               
who  has made  the  call  on some  very  close  issues. She  told                                                               
members:                                                                                                                        
                                                                                                                                
     At   the  lower   levels,  for   example,  Barber   and                                                                    
     Hairdresser regs,  an agency attorney assigned  to that                                                                    
     committee can  look at  it and  say you  can't restrict                                                                    
     selling  barber   licenses  to  only  people   who  are                                                                    
     residents of  the State of  Alaska - you can't  do that                                                                    
     and   they'll   advise   them  of   that   and   that's                                                                    
     appropriate. And then they'll check  in with me if it's                                                                    
     something that  maybe they haven't seen  before because                                                                    
     the  Department  of Law  has  frankly  a lot  of  young                                                                    
     attorneys and  we turn  over pretty  fast in  the lower                                                                    
     levels. So yes, people check in  with me and I check in                                                                    
     with  the attorney  general and  get guidance  if there                                                                    
     isn't a clear case decision here.                                                                                          
                                                                                                                                
CHAIR  THERRIAULT  asked if  Attorney  General  Botelho made  the                                                               
determination on the soft money regulations.                                                                                    
                                                                                                                                
MS. BEHR said that is correct.                                                                                                  
                                                                                                                                
CHAIR  THERRIAULT  asked  if she  agreed  with  Attorney  General                                                               
Botelho's determination.                                                                                                        
                                                                                                                                
MS. BEHR  said the  Attorney General signed  the document  and he                                                               
speaks for the Department of Law.                                                                                               
                                                                                                                                
CHAIR  THERRIAULT said  that  legislative  counsel believe  those                                                               
regulations   have   absolutely   no  statutory   authority   but                                                               
unfortunately  the state  now has  to expend  funds in  the court                                                               
system  over regulations  that will  probably be  thrown out.  He                                                               
asked  if the  Department of  Law can  re-examine that  issue and                                                               
save the state that expense.                                                                                                    
                                                                                                                                
MS.  BEHR  said   at  this  point,  the   Alaska  Public  Offices                                                               
Commission (APOC) would have to  review the regulation and repeal                                                               
it.                                                                                                                             
                                                                                                                                
CHAIR THERRIAULT asked how APOC would begin the repeal process.                                                                 
                                                                                                                                
MS. BEHR  said APOC could hold  a meeting to give  public notice.                                                               
She explained that  the same process used to put  a regulation on                                                               
the books would be used to take one off of the books.                                                                           
                                                                                                                                
REPRESENTATIVE  TOM ANDERSON  asked if  the online  public notice                                                               
system  contains  a  database  of  all  proposed  regulations  or                                                               
whether the regulations are posted at the end of the process.                                                                   
                                                                                                                                
MS. BEHR  referred to Exhibit  3 and replied that  state agencies                                                               
should  be giving  notice  of all  proposed  regulations on  that                                                               
system. She  deferred to Mr.  Pearson for further  information on                                                               
the technical aspects of that system.                                                                                           
                                                                                                                                
REPRESENTATIVE  ANDERSON asked  if the  proposed regulations  are                                                               
categorized by industry so that  a constituent could keep up with                                                               
the ones that might affect his or her business.                                                                                 
                                                                                                                                
MS.  BEHR said  if a  person was  starting a  small business  and                                                               
wanted to  know the regulations  that might have an  effect, that                                                               
person should go  to the Department of Law's home  page where all                                                               
of its  regulations are listed.  A person  should also go  to the                                                               
other state department home pages.  She explained that the online                                                               
web page  contains regulations that  are in the process  of being                                                               
adopted. It  is not an  effective place to research  the statutes                                                               
and regulations that might affect a business.                                                                                   
                                                                                                                                
There being no  further questions for Ms.  Behr, CHAIR THERRIAULT                                                               
called Mr. Pearson to testify.                                                                                                  
                                                                                                                                
9:12 a.m.                                                                                                                       
                                                                                                                                
MR. ROBERT PEARSON, Special Assistant  to the Lieutenant Governor                                                               
for Regulations,  distributed copies of adopted  regulations that                                                               
were submitted to  the Department of Law for  review and approval                                                               
and a checklist  of procedures for members'  information. He told                                                               
members  when the  Lieutenant Governor  signs and  date stamps  a                                                               
regulation,  it is  considered filed.  The Lieutenant  Governor's                                                               
chief  of  staff  is  delegated   to  sign  regulations  but  the                                                               
Lieutenant Governor  is considering appointing more  delegates to                                                               
sign emergency regulations in his absence.                                                                                      
                                                                                                                                
MR. PEARSON  reviewed a  handout he  referred to as  the HB   130                                                               
review packet.  HB   130 was  enacted in 1995  to grant  the ARRC                                                               
more authority  to review regulations  and to give  the executive                                                               
branch more  power to independently  evaluate regulations  and to                                                               
return  a regulation  unfiled in  the  rare chance  a problem  is                                                               
found.  He pointed  out  that  HB   130  requires regulations  be                                                               
evaluated  for their  impact on  private citizens  and to  have a                                                               
fiscal note. He told members  the vast majority of regulations do                                                               
not have  a fiscal  impact. Most regulation  packets come  to the                                                               
Lieutenant Governor about one to two weeks before filing.                                                                       
                                                                                                                                
SENATOR HOLLIS  FRENCH referred  to the  example provided  by Mr.                                                               
Pearson  and noted  it  was signed  by  Commissioner Flanagan  in                                                               
April of 2002. He asked why  it was transmitted to the Lieutenant                                                               
Governor's office  on February  4, 2003  and asked  if that  is a                                                               
normal timeframe.                                                                                                               
                                                                                                                                
MR. PEARSON  said the timeframe  varies a great deal.  He thought                                                               
that particular timeframe  was slower than average.  He said some                                                               
regulations  take   more  time  than  others   depending  on  the                                                               
complexity of the regulation and other factors.                                                                                 
                                                                                                                                
CHAIR THERRIAULT  thanked Mr. Pearson  and informed  members that                                                               
he  would like  to take  up  the concept  of a  central panel  of                                                               
hearing  officers. He  told members  that Mr.  Stancliff wrote  a                                                               
report  on this  issue for  Senator  Ogan several  years ago.  He                                                               
asked Mr. Stancliff to address the committee.                                                                                   
                                                                                                                                
MR. DAVE STANCLIFF, ARRC aide,  provided members with copies of a                                                               
brief he  prepared entitled "Independent  Administrative Hearings                                                               
Through A Central Panel." The  options contained in the brief are                                                               
based on  what other states  have already accomplished.  To date,                                                               
26  states and  several  municipal  governments have  established                                                               
central panels. Mr. Stancliff gave the following overview:                                                                      
                                                                                                                                
     The origin and evolution  of central panels follows the                                                                    
     origin and evolution of  high volumes of administrative                                                                    
     law  and the  administrative procedures  acts put  into                                                                    
     place to direct bureaucracies.                                                                                             
                                                                                                                                
     As administrative  law became more and  more prevalent,                                                                    
     there  arose objections  by the  public to  how it  was                                                                    
     being conducted.                                                                                                           
                                                                                                                                
     Legislatures including  Alaska's have  become concerned                                                                    
     with  agencies  and  Boards  and  Commissions  pursuing                                                                    
     agendas  of  regulation  beyond either  the  intent  or                                                                    
     authority for such action in statute.                                                                                      
                                                                                                                                
     Our  state constitution,  like  most others,  prohibits                                                                    
     legislative    manipulation   of    administrative   or                                                                    
     executive functions.  Framers obviously  envisioned the                                                                    
     need   for  those   who   carry   out  the   day-to-day                                                                    
     administrative duties  under statute to be  free of the                                                                    
     extended  influence   of  legislators  in   the  normal                                                                    
     performance of those duties.                                                                                               
                                                                                                                                
     Our  courts have  also ruled  that the  legislature may                                                                    
     not annul regulations.                                                                                                     
                                                                                                                                
     That has  left lawmakers here in  Alaska and throughout                                                                    
     the country searching for ways  to balance the long arm                                                                    
     of the executive with some action by the legislature.                                                                      
                                                                                                                                
     One of  the most profound and  effective tools employed                                                                    
     to some degree or another  by these 26 states and other                                                                    
     municipal  governments is  the  creation  of a  central                                                                    
     panel.                                                                                                                     
                                                                                                                                
     Legislatures have  found that when they  require higher                                                                    
     standards  of adjudication  of  regulations, fueled  by                                                                    
     the  goal of  serving public  due process,  and removed                                                                    
     from the influence and pressure  of state agencies, the                                                                    
     writing  of regulations  improves, the  promulgation of                                                                    
     regulations   improved,   and    the   enforcement   of                                                                    
     regulations improved.                                                                                                      
                                                                                                                                
     The reason is  as old as the  Constitution itself. When                                                                    
     an arm of government is  held accountable in a fair and                                                                    
     impartial  way,  the  temptation   to  abuse  power  is                                                                    
     diminished.                                                                                                                
                                                                                                                                
     In  Alaska,  most  hearing officers  work  for  various                                                                    
     agencies  throughout the  state and  they work  for the                                                                    
     agencies  that are  actually  being challenged  through                                                                    
     appeals.   No  person being  brought before  a tribunal                                                                    
     where the  judge works for the  entity being challenged                                                                    
     is going to believe they will... [end of tape].                                                                            
                                                                                                                                
TAPE 03-1, SIDE B                                                                                                               
                                                                                                                                
MR. STANCLIFF continued:                                                                                                        
                                                                                                                                
     ...just don't  feel like they  are going to get  a fair                                                                    
     shot.  That  is  why  our judges  are  held  to  strict                                                                    
     standards of conduct called canon.                                                                                         
                                                                                                                                
     Traditionally  government  agencies  have  enjoyed  the                                                                    
     confidence  and the  protection  that in-house  hearing                                                                    
     officers  have provided.  Their employees,  grounded in                                                                    
     their  agenda and  filled  with  their expertise,  have                                                                    
     loomed as serious barriers to  the citizen who feels he                                                                    
     has been wronged  by an agency through  a regulation or                                                                    
     action.                                                                                                                    
                                                                                                                                
     Added to  the possibility of  real agency bias  and the                                                                    
     reality of  perceived bias  by citizen  complainants is                                                                    
     the  lack  of  professional qualifications  of  hearing                                                                    
     officers,  standards,  oversight,  and  training.  With                                                                    
     each arm of government  in many locations using hearing                                                                    
     officers of  many varieties  and qualifications,  it is                                                                    
     no   wonder  that   inefficiencies  and   questions  of                                                                    
     fairness have arisen.                                                                                                      
                                                                                                                                
     These challenges of  in-house institutionalized hearing                                                                    
     officers  are  not unique  to  Alaska.   The  solutions                                                                    
     contained  in  the  materials  the  committee  will  be                                                                    
     receiving based on the reform  measures of other states                                                                    
     is not unique either.                                                                                                      
                                                                                                                                
     The current administration  is looking for efficiencies                                                                    
     and a  government more customer friendly  and sensitive                                                                    
     to  the  rights of  its  citizens.  The legislature  is                                                                    
     looking  for  ways  to  reduce  spending  and  increase                                                                    
     efficiencies.  Citizens are  expecting and  deserve the                                                                    
     highest  levels  of  due  process  when  they  ask  for                                                                    
     adjudication.                                                                                                              
                                                                                                                                
     All  these  goals and  more  are  achieved through  the                                                                    
     establishment  of  central   panels.  Logjams  impeding                                                                    
     entrepreneurial ventures and  survivability of projects                                                                    
     in  vulnerable phases  of  development  hinge on  fair,                                                                    
     timely, and professionally conducted adjudication.                                                                         
                                                                                                                                
     Even so,  such sweeping changes should  be accomplished                                                                    
     with  smooth  transitions  and with  a  sensitivity  to                                                                    
     those hearing officers  currently working for agencies.                                                                    
     This can be done as it  has in other states by allowing                                                                    
     time for  transition while  steadily working  toward an                                                                    
     overall  goal  of   truly  independent  hearings,  well                                                                    
     trained, cross trained  hearing officers, protected and                                                                    
     held  to  high  standards of  performance  through  two                                                                    
     things:   administrative   oversight  and   incremental                                                                    
     budgeting.                                                                                                                 
                                                                                                                                
     At  this point,  the legislature  has no  idea what  is                                                                    
     spent on  hearing officers in  the State. They  have no                                                                    
     way  of  knowing  the performance  because  it  is  not                                                                    
     quantified.  And they  have no  way of  controlling the                                                                    
     cost.                                                                                                                      
                                                                                                                                
     There is  no way  to calculate  the cost  that in-house                                                                    
     hearings have  placed on citizens and  businesses. When                                                                    
     we  have regulations  that  continue  to stand  because                                                                    
     adjudications are not fair, it is costly to Alaska.                                                                        
                                                                                                                                
     No  Commissioner  or  Attorney General  would  want  to                                                                    
     plead their case in Superior  Court before a judge that                                                                    
     works  for their  adversary and  yet many  in the  past                                                                    
     have vigorously defended the  rights of their employees                                                                    
     to hear  and adjudicate  matters of public  interest in                                                                    
     their  own house,  among their  own  employees, and  in                                                                    
     less than a judicial setting.                                                                                              
                                                                                                                                
     Ironically,  in other  states the  very administrations                                                                    
     that  oppose  losing  their  in-house  hearing  officer                                                                    
     functions  later reverse  their  opinions  and come  to                                                                    
     appreciate  central  panels  very highly.  High  public                                                                    
     confidence  and satisfaction,  better regulations,  and                                                                    
     being able  to administrate clear of  shadows of biased                                                                    
     appearances   actually  improves   the  atmosphere   of                                                                    
     commissioners and central regulators.                                                                                      
                                                                                                                                
     To  close, legislatures  can  expect special  interests                                                                    
     well  served   by  government  to   oppose  independent                                                                    
     hearings. They  can also expect  the executive  to want                                                                    
     to  move carefully  and have  the  option of  reforming                                                                    
     through success  and positive motivation. To  that end,                                                                    
     some legislatures  have allowed the Governor  to exempt                                                                    
     certain  hearing functions  from being  centralized, or                                                                    
     have  given generous  time limits  in which  to achieve                                                                    
     the transition.                                                                                                            
                                                                                                                                
     This legislature  and this administration will  have to                                                                    
     determine  how  to proceed  with  this  reform if  they                                                                    
     choose to  undertake it.  The legal  premise supporting                                                                    
     it  is  sound. The  public  interest  to be  served  is                                                                    
     substantial. It  has proven to  be a  non-partisan good                                                                    
     government reform  in other states  and none  have gone                                                                    
     back once the independent system is in place.                                                                              
                                                                                                                                
     I   think    the   research   will   bear    out   that                                                                    
     administrations  of  both political  party  persuasions                                                                    
     and  legislatures of  both political  party persuasions                                                                    
     find good reasons and have enacted central panels.                                                                         
                                                                                                                                
     It is rare when a House,  a Senate and an executive are                                                                    
     afforded an  opportunity to reform and  correct a major                                                                    
     source  of public  and administrative  frustration. The                                                                    
     time and ability may indeed exist now in Alaska.                                                                           
                                                                                                                                
     The information  available on this issue  is voluminous                                                                    
     and  convincing  in both  theory  and  result, but  the                                                                    
     deciding  factor  will  ultimately   be  based  on  the                                                                    
     efforts of you, the  policy makers, and the visionaries                                                                    
     if  Alaska  is   independent  and  centralized  hearing                                                                    
     functions are to take place.                                                                                               
                                                                                                                                
     Contained, Mr. Chairman,  in the packet is  a very fine                                                                    
     example  from the  State of  Maryland. This  system was                                                                    
     instituted and  the results  are in,  both here  and in                                                                    
     Colorado, on  how much money  the states have  saved in                                                                    
     administrative   hearings,   how  much   more   quickly                                                                    
     workers' comp and some of  the more difficult decisions                                                                    
     are made, how fewer  employees are eventually needed to                                                                    
     perform  and,   what's  most  outstanding   about  this                                                                    
     particular  piece of  information  and the  information                                                                    
     that  Colorado  provides,  is that  these  states  have                                                                    
     decided that the public should  rate what their hearing                                                                    
     officers  are  doing.  They  actually  ask  for  public                                                                    
     comment and surveys to see  how satisfied people are in                                                                    
     terms of  getting a fair  hearing, a fast  hearing, and                                                                    
     good justice in terms of the ultimate resolution.                                                                          
                                                                                                                                
MR. STANCLIFF  encouraged members  to contact Judge  Edwin Felter                                                               
from Colorado  for more information  as he  is an expert  in this                                                               
field. In addition,  he has asked Mr. Bob Boener  of the National                                                               
Council  of State  Legislatures  to brief  the  committee in  two                                                               
weeks at  the request of the  Chair. Mr. Ed Hein,  a former legal                                                               
drafter  for  the  Alaska  Legislature,  is  now  an  independent                                                               
hearing officer  for the National  Marine Fisheries and  has also                                                               
offered to discuss this topic with members.                                                                                     
                                                                                                                                
9:32 a.m.                                                                                                                       
                                                                                                                                
CHAIR   THERRIAULT  said   the   ARRC   has  specific   statutory                                                               
obligations  regarding  reviewing  regulations and  bringing  the                                                               
legislature into  the process. The  central panel concept  is one                                                               
that he would like  to committee to take a look  at. He said that                                                               
because  the ARRC  is  a  joint House  and  Senate committee,  he                                                               
believes it  is the  proper forum  to look  at what  other states                                                               
have done to  deliver better service to  constituents and realize                                                               
cost savings.  He noted  that when this  topic was  considered in                                                               
the  past, there  was  a  lot of  suspicion  that  the costs  put                                                               
forward by the Administration were  not credible. He told members                                                               
he is  not asking members to  take such a proposal  back to their                                                               
caucuses at this point, he  would merely like members to consider                                                               
whether they feel it is worth going in this direction.                                                                          
                                                                                                                                
CHAIR THERRIAULT  then asked  members to let  him know  about any                                                               
other  ideas  they  would  like   to  address  in  the  realm  of                                                               
regulations.                                                                                                                    
                                                                                                                                
REPRESENTATIVE ANDERSON  asked if committee members  agreed to go                                                               
with a  central panel system,  whether the changes would  have to                                                               
be made in statute.                                                                                                             
                                                                                                                                
CHAIR  THERRIAULT  said  they  would. He  pointed  out  that  the                                                               
existing hearing officer positions would  have to be removed from                                                               
the individual departments and placed in a new, central entity.                                                                 
                                                                                                                                
REPRESENTATIVE GARA said  he had a series of questions  to ask to                                                               
better  understand the  motivation behind  this change.  He noted                                                               
Mr. Stancliff mentioned that the  central panel system will solve                                                               
several  problems,   one  being   that  lawmakers   cannot  annul                                                               
regulations.  He  questioned  what   Mr.  Stancliff  meant  since                                                               
lawmakers can  annul a regulation  by passing a law  to supersede                                                               
it.                                                                                                                             
                                                                                                                                
MR.  STANCLIFF  said a  court  decision  says the  separation  of                                                               
powers prevents  the legislature from  simply saying it  does not                                                               
like a  regulation and annulling  it. The legislature  has always                                                               
had  the  authority through  statute  and  policy to  change  and                                                               
affect a regulation.  He pointed out that some  states have given                                                               
emergency regulation  appeal and promulgation authority  to their                                                               
legislatures.  Alaska   law  has  granted   emergency  regulation                                                               
promulgation authority but not repeal authority.                                                                                
                                                                                                                                
REPRESENTATIVE GARA  noted that Mr. Stancliff's  report says that                                                               
one problem is that many  regulations are poorly written. He said                                                               
this  proposal  would change  the  hearing  officer system  after                                                               
regulations are  adopted. He  asked how  that will  effect poorly                                                               
written regulations.                                                                                                            
                                                                                                                                
MR.  STANCLIFF  said that  an  interesting  aside that  has  been                                                               
discovered in  the establishment of  central panels is  that when                                                               
people are  held to  high standards  at the  end of  the process,                                                               
they  develop  high  standards  early   in  the  process  in  the                                                               
development  of regulations.  The  quality of  the entire  system                                                               
tends to improve, including enforcement of the regulation.                                                                      
                                                                                                                                
REPRESENTATIVE GARA  asked if the  hearing officers  would review                                                               
the application of regulations after they have been adopted.                                                                    
                                                                                                                                
MR.  STANCLIFF  said  the  central  panel  concept  is  one  that                                                               
establishes central  oversight, better  training, and  insists on                                                               
due process of  the standard for adjudication  of regulations. He                                                               
felt Representative  Gara's question brings  up a good  point and                                                               
said  that usually,  soon after  central panels  are established,                                                               
the legislature starts to get  suggestions from the central panel                                                               
and  amendments   to  the  Administrative  Procedures   Act  that                                                               
facilitate the promulgation of better administrative law.                                                                       
                                                                                                                                
REPRESENTATIVE GARA  asked if  a hearing officer  can toss  out a                                                               
regulation.                                                                                                                     
                                                                                                                                
MR. STANCLIFF said a hearing officer cannot.                                                                                    
                                                                                                                                
REPRESENTATIVE  GARA   said  if   the  agencies  are   no  longer                                                               
responsible  for  appointing   hearing  officers  who  administer                                                               
regulations  from  the  executive   branch,  someone  within  the                                                               
executive branch would  have to do the appointments.  He asked if                                                               
the governor would appoint the central panel hearing officers.                                                                  
                                                                                                                                
MR.  STANCLIFF said  that is  the  central focus  of most  policy                                                               
debate  as  central panels  are  put  into place.  Normally,  the                                                               
department of  administration in other states  houses the central                                                               
office.  A chief  administrator oversees  the adjudicators.  They                                                               
are protected  from any negative consequences  of their decisions                                                               
but  they still  operate on  behalf of  the administration.  Some                                                               
legislatures  have  chosen  to   give  these  adjudicators  final                                                               
decision   making   authority.   Others    have   given   it   to                                                               
commissioners, but  they must seriously consider  the opinions of                                                               
the hearing officers.  Other states have added one  more layer by                                                               
requiring the court to consider the hearing officers' input.                                                                    
                                                                                                                                
CHAIR  THERRIAULT  repeated that  the  appeal  of this  issue  is                                                               
looking at different methods of  service delivery at a lower cost                                                               
but he is not sure this is the best method.                                                                                     
                                                                                                                                
REPRESENTATIVE WEYHRAUCH  felt this  is a reasonable  approach to                                                               
an old problem.                                                                                                                 
                                                                                                                                
CHAIR  THERRIAULT  told  members   that  Mr.  Stancliff  will  be                                                               
reviewing the  proposed regulations. He asked  members to contact                                                               
him  about  any  proposed  regulations they  feel  the  committee                                                               
should look into.                                                                                                               
                                                                                                                                
MR. STANCLIFF asked each member to  assign a staff person to look                                                               
at  the  proposed regulations  because  he  cannot possibly  know                                                               
which regulations are of interest to each member.                                                                               
                                                                                                                                
There being  no further  business to  come before  the committee,                                                               
CHAIR THERRIAULT  announced the next  ARRC meeting would  be held                                                               
on February 19 at 8:30 a.m.  in the Fahrenkamp Room and adjourned                                                               
the meeting.                                                                                                                    

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