Legislature(2013 - 2014)HOUSE FINANCE 519
03/13/2014 08:30 AM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB239 || HB240 || HB241 || HB242 | |
| HB239 | |
| HB240 | |
| HB241 | |
| HB242 | |
| HB140 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 140 | TELECONFERENCED | |
| += | HB 239 | TELECONFERENCED | |
| += | HB 240 | TELECONFERENCED | |
| += | HB 241 | TELECONFERENCED | |
| += | HB 242 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
March 13, 2014
8:36 a.m.
8:36:07 AM
CALL TO ORDER
Co-Chair Stoltze called the House Finance Committee meeting
to order at 8:36 a.m.
MEMBERS PRESENT
Representative Alan Austerman, Co-Chair
Representative Bill Stoltze, Co-Chair
Representative Mark Neuman, Vice-Chair
Representative Mia Costello
Representative Bryce Edgmon
Representative Les Gara
Representative David Guttenberg
Representative Lindsey Holmes
Representative Cathy Munoz
Representative Steve Thompson
Representative Tammie Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Daniel George, Staff, Representative Bill Stoltze;
Representative Lora Reinbold, Sponsor; Don Habeger,
Director, Division of Corporations, Business and
Professional Licensing, Department of Commerce, Community
and Economic Development; Arnold Liebelt, Policy Analyst,
Office of Management and Budget, Office of the Governor;
Kris Curtis, Legislative Auditor, Alaska Division of
Legislative Audit; Steve Weaver, Assistant Attorney
General, Civil Division, Department of Law; Crystal
Koeneman, Staff, Representative Lora Reinbold; Daniel T.
Seamount Jr., Commissioner, Alaska Oil and Gas Conservation
Commission, Department of Administration; Cathy Foerster,
Engineering Commissioner, Alaska Oil and Gas Conservation
Commission, Department of Administration.
SUMMARY
HB 140 NOTICE FOR REGULATION ADOPTION
HB 140 was HEARD and HELD in committee for
further consideration.
HB 239 EXTEND BOARD OF EXAMINERS IN OPTOMETRY
HB 239 was REPORTED out of committee with a "do
pass" recommendation and with one new fiscal
impact note from the House Finance Committee for
the Department of Commerce, Community and
Economic Development.
HB 240 EXTEND BOARD OF CHIROPRACTIC EXAMINERS
HB 240 was REPORTED out of committee with a "do
pass" recommendation and with one new fiscal
impact note from the House Finance Committee for
the Department of Commerce, Community and
Economic Development.
HB 241 EXTEND BOARD OF MARITAL & FAMILY THERAPY
HB 241 was REPORTED out of committee with a "do
pass" recommendation and with one new fiscal
impact note from the House Finance Committee for
the Department of Commerce, Community and
Economic Development.
HB 242 EXTEND PT & OCCUPATIONAL THERAPY BOARD
HB 242 was REPORTED out of committee with a "do
pass" recommendation and with one new fiscal
impact note from the House Finance Committee for
the Department of Commerce, Community and
Economic Development.
Co-Chair Stoltze communicated that the committee would
discuss the four board extensions simultaneously.
HOUSE BILL NO. 239
"An Act extending the termination date of the Board of
Examiners in Optometry; and providing for an effective
date."
HOUSE BILL NO. 240
"An Act extending the termination date of the Board of
Chiropractic Examiners; and providing for an effective
date."
HOUSE BILL NO. 241
"An Act extending the termination date of the Board of
Marital and Family Therapy; and providing for an
effective date."
HOUSE BILL NO. 242
"An Act extending the termination date of the State
Physical Therapy and Occupational Therapy Board; and
providing for an effective date."
8:37:22 AM
DANIEL GEORGE, STAFF, REPRESENTATIVE BILL STOLTZE, referred
to the Department of Commerce, Community and Economic
Development Professional Licensing Program's Annual Report
dated December 2013 (copy on file). He relayed that numbers
in the fiscal notes had been derived from the annual
report. He communicated that there were four replacement
fiscal notes for HB 239, HB 240, HB 241, and HB 242.
Mr. George addressed the fiscal note for HB 239. The
analysis in the first three paragraphs on page 2 remained
the same. New language had been added related to the
extension of the Board of Examiners in Optometry including
a summary of the board's FY 12 through FY 13 biennium data,
revenues, expenditures, biennium surplus/deficit, and
ending cumulative surplus/deficit. The analysis also
included a description of the FY 08 through FY 11
cumulative data and number of licensees. The format was
repeated in the fiscal notes for all four bills. He
communicated that the board's revenues in FY 12/FY 13 were
$74,540 and expenditures were $94,478. There was a biennium
deficit of $19,938 and a cumulative surplus deficit of
$44,755.
8:39:49 AM
Mr. George discussed the fiscal note for HB 240. The second
page of the note reflected the FY 12/FY 13 biennium data
for the extension of the Board of Chiropractic Examiners.
The board's data included revenues of $179,215,
expenditures of $168,800, a surplus of $10,415, and a
cumulative surplus of $80,344.
8:40:29 AM
Mr. George pointed to the fiscal note for HB 241. The
second page of the note reflected the FY 12/FY 13 biennium
data for the extension Board of Marital and Family Therapy.
The board's data included revenues of $63,165, expenditures
of $85,197, a deficit of $22,032, and a cumulative surplus
of $112,195.
8:41:11 AM
Mr. George addressed the fiscal note for HB 242. The second
page of the note reflected the FY 12/FY 13 biennium data
for the State Physical Therapy and Occupational Therapy
Board. The board's data included revenues of $250,000,
expenditures of $325,365, a deficit of $75,365, and a
cumulative deficit of $55,238.
Representative Guttenberg noted that the OMB component
number [at the top right of the first page] on each of the
fiscal notes was the same. He wondered how the numbers were
determined. Mr. George deferred the question to the
department.
Co-Chair Stoltze noted that the question would be addressed
later in the meeting. He relayed his intent to address the
bills one at a time, beginning with HB 239. He added that
the bills had been previously heard and public testimony
had been taken.
HOUSE BILL NO. 239
"An Act extending the termination date of the Board of
Examiners in Optometry; and providing for an effective
date."
8:42:49 AM
REPRESENTATIVE LORA REINBOLD, SPONSOR, briefly discussed
the bill.
Co-Chair Stoltze asked about the sponsor's vision for the
legislation. Representative Reinbold wanted to keep the
examiners in optometry in business.
Representative Costello noted that the board was carrying
forward a deficit. She wondered what the legislature would
be communicating by extending a board with a deficit.
8:45:36 AM
Representative Costello reiterated her question.
Additionally, she wondered how the deficit would impact the
department's actions moving forward related to setting
board fees.
DON HABEGER, DIRECTOR, DIVISION OF CORPORATIONS, BUSINESS
AND PROFESSIONAL LICENSING, DEPARTMENT OF COMMERCE,
COMMUNITY AND ECONOMIC DEVELOPMENT, replied that the
division recognized that some boards were in a deficit
position; the information had been communicated in a report
provided to the legislature. The department was cognizant
of the business environment and was working to make
licensing fees less onerous. Some of the programs had seen
100 percent fee increases; the increases represented a
hardship for members. The department was taking some of the
programs into compliance over a couple of cycles.
Representative Costello asked for verification that the
department planned to adjust fees if the legislation
passed. Mr. Habeger believed that the fees for the Board of
Examiners in Optometry had been adjusted 100 percent in the
last cycle to help the board catch up.
Representative Costello asked about efforts to increase
board transparency. She wondered if there was an effort to
share information pertaining to a board's fiscal status
online.
Mr. Habeger replied that the department was working to
increase transparency. He spoke to various actions the
department had taken towards the goal. He required an
executive member of the division staff to present
information to a board at every meeting; many boards met
quarterly. Additionally, the information was discussed 6
months before a board's fee adjustment time. Lastly, the
division posted the information online on a quarterly and
year-end fiscal basis; the data was available to the public
on the division's website.
8:49:02 AM
Representative Guttenberg noted that the OMB component
number on each of the fiscal notes was the same. He asked
what the number indicated. Mr. Habeger deferred the
question.
ARNOLD LIEBELT, POLICY ANALYST, OFFICE OF MANAGEMENT AND
BUDGET, OFFICE OF THE GOVERNOR, answered that the OMB
component number referred to how the funding would flow
through the budget. The boards under discussion were all
within the same OMB component number and would be broken
out into detail within the department's budget.
Representative Guttenberg asked how the debts were handled
at the end of the fiscal year. Mr. Habeger answered that
the operating budget included specific language that
carried forward a negative and positive balance; per
statute, the division tracked and carried the balance as
well.
Representative Gara wondered how shifting to board meetings
by teleconference would impact the state. He noted that
members wanting to travel on their own could choose to do
so. He spoke to the idea as a cost savings measure. Mr.
Habeger answered that boards currently utilized
teleconferences in conjunction with in-person meetings. For
example, the medical board felt that it was necessary to
meet in urban and rural communities to ensure that it was
in touch with its constituency. The division honored the
desire of the board.
Representative Gara wondered if the division would have
power to keep fees down by asking boards to hold meetings
via teleconference. Mr. Habeger replied that he could make
the determination, but did not believe it was always wise.
8:53:21 AM
Representative Gara asked the division to maximize the use
of teleconference meetings when possible. He referred to
boards in deficit and asked if the division had the
discretion to let them catch up over a two to three year
cycle. Mr. Habeger replied in the affirmative. There were
currently several programs catching up over multiple years.
Co-Chair Stoltze remarked that members were volunteers
donating their time. He surmised that they did not enjoy
taking time away from their profession. He believed the
larger cost problem was related to investigations that may
not be as well-rounded. He believed the members were
judicious related to cost.
Representative Thompson noted that most of the boards had
the best intentions to avoid deficits; members raised their
own dues for meeting travel. He stated that most of the
deficits were caused by investigations and law suits. He
did not believe members could be told how to spend their
money.
Representative Gara agreed with statements made by Co-Chair
Stoltze and Representative Thompson related to travel. He
asked if the Department of Law (DOL) conducted the
investigations. Mr. Habeger replied that the division had
its own investigators charged with investigating business
and professional licensing. There were enforcement staff
for Title 8.
8:57:00 AM
Representative Gara pointed to costs charged to boards
resulting from investigations. He noted that DOL sometimes
billed an hourly rate that was much higher than the rate
its employees were paid. He wondered if the boards were
charged the actual cost of the investigator. Mr. Habeger
replied that the board was charged an hourly rate. The
division's investigators positively kept their time; if
they were working for several programs they kept the
information on their time sheets by the half hour as well.
He added that the investigators were only charged for the
time they worked.
Representative Gara asked if the hourly rate was an
accurate reflection of the cost of the investigator. Mr.
Habeger answered that there was no markup charged.
8:58:37 AM
Vice-Chair Neuman MOVED to REPORT HB 239 out of committee
with individual recommendations and the accompanying fiscal
note. There being NO OBJECTION, it was so ordered.
HB 239 was REPORTED out of committee with a "do pass"
recommendation and with one new fiscal impact note from the
House Finance Committee for the Department of Commerce,
Community and Economic Development.
HOUSE BILL NO. 240
"An Act extending the termination date of the Board of
Chiropractic Examiners; and providing for an effective
date."
8:59:15 AM
REPRESENTATIVE LORA REINBOLD, SPONSOR, relayed that HB 240
would extend the termination date of the Board of
Chiropractic Examiners. She spoke to the importance of
keeping high-quality chiropractors in business. She urged
the committee to support the extension of the bill that
would enable the board to continue to license; regulate;
and protect and promote the public health, welfare, and
safety of Alaskans.
Co-Chair Stoltze asked if there were amendments. He relayed
that the committee had discussed the fiscal note earlier in
the meeting.
Vice-Chair Neuman MOVED to REPORT HB 240 out of committee
with individual recommendations and the accompanying fiscal
note.
Co-Chair Stoltze OBJECTED for discussion.
Representative Holmes pointed to the legislative audit
report and believed the board was doing its job.
Co-Chair Stoltze WITHDREW his OBJECTION.
There being NO further OBJECTION, HB 240 was REPORTED out
of committee with a "do pass" recommendation and with one
new fiscal impact note from the House Finance Committee for
the Department of Commerce, Community and Economic
Development.
HOUSE BILL NO. 241
"An Act extending the termination date of the Board of
Marital and Family Therapy; and providing for an
effective date."
9:01:42 AM
REPRESENTATIVE LORA REINBOLD, SPONSOR, thanked the
committee for its questions pertaining to the fiscal notes.
She explained that the bill would extend the termination
date for the Board of Marital and Family Therapy and
providing for an effective date. She communicated that the
professionals provided an important service in communities.
She urged the committee to support the legislation that
would enable the board to continue to effectively license
and regulate marital and family therapists and to protect
and promote the health, welfare, and safety of Alaskans.
Co-Chair Stoltze referred to the audit recommendation to
extend the board. He asked if there were any amendments. He
remarked that the fiscal note had been discussed earlier in
the meeting.
Vice-Chair Neuman MOVED to REPORT HB 241 out of committee
with individual recommendations and the accompanying fiscal
note. There being NO OBJECTION, it was so ordered.
HB 241 was REPORTED out of committee with a "do pass"
recommendation and with one new fiscal impact note from the
House Finance Committee for the Department of Commerce,
Community and Economic Development.
HOUSE BILL NO. 242
"An Act extending the termination date of the State
Physical Therapy and Occupational Therapy Board; and
providing for an effective date."
9:03:22 AM
REPRESENTATIVE LORA REINBOLD, SPONSOR, discussed that HB
242 would extend the termination date of the State Physical
Therapy and Occupational Therapy Board and provide for an
effective date. She relayed that the therapists provided a
tremendous opportunity for Alaskans to be healthy and to
return to work after injury. She spoke to the importance of
the board. The legislation would allow the board to carry
out its duties to effectively license and regulate physical
and occupational therapists and to protect and promote the
health and welfare of Alaskans.
Co-Chair Stoltze noted that the auditor had recommended the
extension.
Representative Guttenberg asked about the recommendation
from audit. He wondered if there was a uniform case
management system across all boards and commissions.
KRIS CURTIS, LEGISLATIVE AUDITOR, ALASKA DIVISION OF
LEGISLATIVE AUDIT, replied that the division's
investigative unit had upgraded its case management system
in 2010. The auditor's findings and recommendations related
to all occupational boards that utilize the investigative
unit to investigate cases. The Division of Legislative
Audit had made the same finding in the past two years that
problems existed with the management system; it recommended
improvements.
Representative Guttenberg asked for verification that the
finding in the audit report was not unique to the State
Physical Therapy and Occupational Therapy Board. Ms. Curtis
agreed. She detailed that the finding had been included in
every occupational board since 2013.
Co-Chair Stoltze commented on his appreciation for the
profession. He asked if there were amendments. He remarked
that the fiscal note had been discussed earlier in the
meeting.
Vice-Chair Neuman MOVED to REPORT HB 242 out of committee
with individual recommendations and the accompanying fiscal
note. There being NO OBJECTION, it was so ordered.
HB 242 was REPORTED out of committee with a "do pass"
recommendation and with one new fiscal impact note from the
House Finance Committee for the Department of Commerce,
Community and Economic Development.
9:06:52 AM
AT EASE
9:08:19 AM
RECONVENED
HOUSE BILL NO. 140
"An Act relating to the information that must be
included with certain notices provided for the
proposed adoption, amendment, or repeal of a
regulation."
9:08:28 AM
REPRESENTATIVE LORA REINBOLD, SPONSOR, discussed the bill.
She communicated that she had met with small businesses in
her district prior to running for office. She discussed a
restaurateur in her district who had asked for decreased
regulations on business. She remarked that she currently
chaired the House Regulatory Review Committee. The intent
of the bill was to provide increased transparency in the
regulatory process. Additionally, the bill would
incorporate more into the regulatory process to increase
its impact.
Representative Reinbold pointed to Section 1 of the bill,
which amended the law by adding a new section titled the
Regulation Impact Transparency Act. The bill would require
additional information in state agency notices of proposed
regulations specifically to increase transparency of the
proposed fiscal impacts including the private sector. She
detailed that the section would allow materials to become
more transparent.
Representative Reinbold addressed Section 2. Currently
under AS 44.62.190(d) an agency was required to provide a
"reason under the proposed action." She read from the
sectional analysis:
If the reason given is "federal," HB 140 will require
identification of the federal action that is the
reason for the proposed regulation. It also adds a
requirement to estimate compliance costs to private
persons (including private businesses), other state
agencies and municipalities.
Representative Reinbold added that compliance costs would
be estimated in aggregate form for stakeholders. Section 3
added a subsection outlining that a person may not bring a
court action in challenge of regulation if a state agency
inaccurately or insufficiently provides a cost estimate.
Section 4 added a new section requiring an effective date.
She relayed that the bill was not retroactive.
9:12:54 AM
Representative Reinbold expected pushback on the bill from
some agencies.
Co-Chair Stoltze noted that various agencies were available
for questions.
Representative Reinbold pointed to letters of support from
various entities including the Alaska Municipal League,
State Chamber of Commerce, National Federation of
Independent Business, Council of Alaska Producers, and the
Wasilla Area Seniors. She had discussed the bill with House
Finance Committee members prior to the hearing had had
received additional input; subsequently there was work
underway on a CS.
9:14:04 AM
Representative Costello thanked the sponsor for the
legislation. She had also heard from constituents and
businesses about the overregulated society. She encouraged
any effort to increase transparency in the regulatory
process. She asked whether the Department of Law (DOL)
provided instructions to state agencies related to proposed
regulations.
STEVE WEAVER, ASSISTANT ATTORNEY GENERAL, CIVIL DIVISION,
DEPARTMENT OF LAW, replied that the department focused on
the legal review of regulations; it advised agencies and
discussed information about the Administrative Procedure
Act. Specific to public outreach, the act required
newspaper notice and online posting. The agency was
additionally required to provide advanced notice to
requestors or people interested in speaking on the
regulation.
Representative Costello asked if a member of the public
would receive answers if they called an agency with a
question on a proposed regulation. Mr. Weaver replied in
the affirmative. He detailed that the department encouraged
agencies to share its answers with the broader public
online. He elaborated that if the question pertained to
legal interpretation of an existing regulation the agency
would have the ability to consult with their advising DOL
attorney and the assistant attorney general for specific
questions.
9:17:37 AM
Representative Costello wondered if the same courtesy and
transparency was extended to stakeholders who called with
questions about proposed regulations.
Mr. Weaver responded in the affirmative. The department
encouraged agencies to share information when they received
questions on proposed regulations; it also advised agencies
that when answering individual questions about the
interpretation of a regulation that the broader public may
be interested in the information as well. The department
wanted all public to know about regulations and their
meaning. Subsequently, DOL asked agencies to watch out for
making personal commitments to one particular stakeholder.
The objective was a level playing field.
Representative Costello replied that the response was not
in line with previous information she had been given. She
stated that statute referenced in the bill included a
section called "style and form"; the section allowed DOL to
revise (when necessary) a drafting manual for
administrative regulations that prescribed the style and
forms for submitting regulations. She detailed that the
drafting manual pertaining to administrative regulations
was 250 pages. She believed the manual had certain
prohibitions related to answering questions via telephone,
which was considered ex parte communication depending on
the caller. As a lawmaker, she had heard from people about
their inability to get information from departments about
proposed regulations. She took the issue seriously. She
discussed the remoteness of many areas in Alaska and
believed that the state should encourage members of the
public to call with questions on proposed regulations.
9:20:48 AM
Mr. Weaver answered that once the formal notice of proposed
regulations was published one of the frequently asked
questions was about what leeway an agency had for one-on-
one communications with a particular person. If a position
was taken by the department on a regulation over the phone
it was not shared with other stakeholders. He detailed that
DOL and agencies were not trying to limit information to
stakeholders; however, there was an established process
that allowed all stakeholders to submit comments. The
process guaranteed that everyone would have the same access
to the agency decision maker. The problem with public
comments in a one-on-one phone call was that there was no
easy way to make a record of the comment. He noted that the
agency may end up at odds with a commenter if the commenter
believed the agency got the comment wrong. Additionally,
there was no way for the general public to see the
comments. Finally, there may be a sense that regulations
were developed in a backroom. Individuals who did not have
the opportunity to speak one-on-one to an agency decision
maker may feel left out. He explained that a member of the
public may feel that the public notice and comment process
was meaningless.
Mr. Weaver provided the Regulatory Commission of Alaska
(RCA) as an example. The RCA worked frequently with the
public comment process. He spoke to the success of the even
playing field the commission's public comment process
provided. The process included a time period that allowed
members of the public to reply to each other's comments. He
understood the concern detailed by Representative Costello.
He continued that there was a right of the public to
communicate with agency decision makers. He stressed that
in the formal regulations process it was important that all
commenters were on the same level playing field. He
reiterated that one party should not have access that other
members of the public did not have. Additionally, a solid
comment record was important in the event of any future
litigation.
9:24:51 AM
Representative Costello remarked that when a person called
with a question the answer was posted online for everyone
to view. She discussed that when a stakeholder called with
a question to understand the regulation and was pushed to
the public comment period, they were put in a situation
where they were commenting on something they did not
understand. She asked whether it was possible for the
departments to post any stakeholder questions and answers
online. She believed a party was disadvantaged when they
called and could not ask a question. She was sure that
legitimate questions arose in response to the volumes of
regulations that were produced.
Mr. Weaver replied that DOL had advice in place to agencies
that anticipated many questions on complicated regulations.
The department encouraged agencies to provide frequent
opportunities to answer questions and to make answers as
public as possible to avoid the impression of backroom
dealing. Workshops were also an acceptable way to provide
information. The department also advised agencies to be
prepared to stand by any statements made to the public
related to regulations.
Representative Costello opined that the process sounded
complicated.
Co-Chair Stoltze appreciated the sponsor's commitment to
the project. He discussed the regulatory process. He
remarked on the ability of the attorney general to back up
regulators with the "stroke of a pen and a pronouncement."
He stated that the issue was larger than it appeared.
9:28:41 AM
Representative Munoz was curious about the review process
related to consistency with statute and statutory authority
for a regulation. She wondered what would happen if DOL
found that something went beyond statutory authority.
Mr. Weaver replied that DOL tried to work with the agency
to reach a point where regulations did not pose a legal
concern. The regulations attorney had the power to
disapprove a regulation that was not consistent with
statutory authority. The department rarely used the power
in the interest of ensuring that agencies performed their
activities in conformance with statutory authority. The
department tried to work with agencies on different
regulations or moving forward on part of a regulation
without disapproval or violation of statutory authority.
Representative Munoz asked if it was common for DOL to send
regulations back to agencies for further work and
clarification. Mr. Weaver replied in the affirmative.
Representative Wilson referred to regulations that had been
proposed by the Department of Environmental Conservation
(DEC) related to air quality in Fairbanks. She asked if DEC
would have been required to inform the public how much it
would cost residents to abide by air quality regulations
the if law had been in place when the regulations had been
proposed.
Representative Reinbold replied in the affirmative. The
intention was to inform on the potential impact of a
regulation on businesses or municipalities in aggregate
form.
Mr. Weaver expounded that as a legal matter he could not
provide an opinion on the hypothetical scenario provided by
Representative Wilson. The legal answer would depend in
part on what the bill meant by "to provide a good faith
estimate," what it meant for the estimate to be in the
aggregate, and what it meant for information to be
available to state agency.
Representative Wilson expressed frustration that when
significant regulation had been proposed in Fairbanks the
community had asked questions that had not been answered.
Subsequently, the community had been expected to comment on
the regulations that were to be included in a state
implementation plan. She did not know what the plan looked
like. She was concerned about impacts to individual
residents, not necessarily municipalities as a government
entity. She wondered how legislators could ensure that
constituents understood what proposed regulations would do.
She reiterated that questions had gone unanswered in
workshops provided by the state. She relayed that public
comment pertaining to the air quality regulations in
Fairbanks had been closed on January 21, 2014. She wondered
what the community was supposed to do.
Mr. Weaver answered that DOL was tasked with enforcement of
the Administrative Procedure Act. The size of a project,
its impact, the length of public comment period, decision
to hold workshops, and to post frequently asked questions
were all determined by agencies. He explained that the
Administrative Procedure Act set a floor, but not a
ceiling; an agency could always do additional outreach. The
agency could provide supplemental public comment periods if
the public requested the opportunity. The principle concern
about answering one-on-one questions was that there was no
record and that one member of the public may get an
advantage that other members of the public did not have.
He stressed that the department did not discourage
outreach.
9:35:43 AM
Representative Wilson believed the message was that it was
okay to give everyone a disadvantage versus giving one
person an advantage. Mr. Weaver replied that it was not a
matter of disadvantaging people. The purpose of public
hearings and workshops was to provide the public with an
opportunity to participate in the process on an even
playing field.
Co-Chair Stoltze noted that the public felt that its
chances to be involved were "slim and none."
Representative Wilson stated that during the public comment
period some of the community's questions had been answered
and others had not. She stressed that commenting on
regulations that were not understood did not make sense.
She wondered about the average person in Fairbanks that may
not be able to continue to afford living in the community
due to the new regulations. She emphasized that the
prevention of one-on-one conversations between the public
and agencies disadvantaged everyone if the department chose
to limit the opportunity for comment. She wondered whether
suing a department was the only recourse.
9:38:11 AM
Mr. Weaver replied that there was always judicial review of
regulations if a problem arose related to noncompliance
with the Administrative Procedure Act. He surmised that
there may be confusion about one-on-one conversation. He
explained that DOL wanted transparency and a level playing
field, which was the point of a public hearing process. He
relayed that an agency may be able to provide an answer if
it had not conducted sufficient outreach and the
regulations were not understood by the public. He noted
that environmental law would be before the resources
committee. He furthered that DOL's concern was that
comments were on the record in the event that a regulation
was challenged in the future. He stressed that a phone call
did not provide a record that could be reviewed; it could
be a source of confusion particularly if the commenter
believed the agency misunderstood the comment. He discussed
a hypothetical scenario involving oil companies as
stakeholders. He elaborated that if one oil company had a
one-on-one conversation with a department, the other oil
companies could be at a disadvantage. The other oil
companies or environmental groups could contend that
regulations had been developed in a backroom.
9:41:12 AM
Mr. Weaver relayed that he did not have intimate knowledge
about DEC regulations Representative Wilson was referring
to. He noted that the regulations were not formally in
front of DOL for review. He deferred further questions on
the topic to DEC.
Representative Wilson discussed that the process kept
members of the public at a disadvantage. She surmised that
DEC could not be sued given that it had provided public
comment and numerous meetings. She believed community
members in Fairbanks were equally disadvantaged because no
one understood the regulatory plan. She emphasized the
importance of involving the public in the process. She
mentioned that the borough or city was a government entity,
but the impact of converting from wood to gas or oil would
be significant on the public.
Representative Reinbold pointed to page 2, line 6 of the
bill. She stressed that private persons were listed first
to indicate their priority. The impacts of a proposed
action were to be provided in aggregate form to the private
sector and individuals to prevent situations where people
could not afford to live in the state.
She commented that people calling agencies with questions
on regulations were not given answers. She stated that it
was time consuming for businesspersons to attend workshops
to understand regulations. She remarked that it was much
easier for people to ask questions over the phone. She
believed it was unfair to the public to ask them to make a
formal comment on a regulation they did not understand.
9:44:42 AM
Representative Guttenberg referred to a fiscal note related
to the Department of Fish and Game and up to 400 proposals
annually. He asked if changes in the state medical
AlaskaCare insurance were considered a regulation change.
Mr. Weaver answered that there were numerous personnel
board regulations that addressed items such as insurance
for state employees. He was unable to answer questions
specifically related to AlaskaCare. He relayed that the
vast majority of personnel regulations were matters of
internal management (part of the employer/employee
relationship) and did not affect the public. He detailed
that most personnel regulations and regulations relating to
insurance were outside of the Administrative Procedure Act.
The legislature had established different procedures for
the personnel board. He used the Alaska Industrial
Development and Export Authority as an example and relayed
that the vast majority of its regulations were not subject
to the Administrative Procedure Act because it behaved as a
market participant; the entity also had its own
administrative procedures set in statute.
9:46:56 AM
Co-Chair Stoltze assumed that the Alaska Railroad
Corporation was exempt from almost everything.
Representative Guttenberg asked if retirees fell under the
same category. Mr. Weaver deferred the question to a DOL
retirement law attorney. He added that the legislature had
established that most personnel and insurance regulations
fell outside the Administrative Procedure Act.
Representative Guttenberg wondered whether he could have a
conversation with a state agency related to pending
regulation without it being considered ex parte.
Mr. Weaver replied that legislators were allowed to have
discussions with entities about pending regulations in the
process of public comment. He emphasized that concerns
about ex parte communications came into play once the
formal public comment period commenced. He stated that
there was significantly more latitude for discussions over
the phone about the meaning of an implemented regulation or
prior to the formal public notice period. The department
advised agencies to be prepared to live by information
provided to the public; DOL also encouraged agencies to
provide as much outreach as possible related to pending
regulations. He stressed that agencies could receive calls
related to regulations; citizens had the right to ask
questions. The department got concerned when a person
believed a regulation was a done deal prior to the public
notice or if someone tried to have a one-on-one
conversation with an agency about what a regulation should
look like during the formal public comment period. The
purpose of the formal public comment period was to obtain
information and comments on regulations. The department
advised agencies to conduct scoping in advance of the
public comment period for complicated regulations. He
stressed that scoping and outreach were always good. The
department urged agencies to avoid the appearance that
regulations were drafted in a backroom and to ensure that
public comment was not meaningless.
9:50:52 AM
Co-Chair Stoltze commented on the legislature losing a
public relations battle when voters trusted other branches
of government more. He remarked that the annulment of
regulations had a poor track record at the ballot box. He
noted the paradox of government.
Representative Munoz pointed to the bill's inclusion of a
standard of good faith to be used by agencies to determine
economic impact costs to individuals. She asked if DOL was
comfortable that the language provided enough clarity for
agencies.
Mr. Weaver answered that bill structure spoke to inaccuracy
of a good faith estimate. The department believed in the
importance of transparency in the regulation process. The
department appreciated the sponsor's and committee's
interest in the subject. When DOL looked at language it did
not take a policy position. He noted that the Office of the
Governor and individual agencies could take policy
positions. The department looked at the possibility for
litigation; it was interested in whether the current shield
of curtailing litigation based on inaccuracy, foreclosed a
lawsuit. He provided an example of a mixing zone proposed
by DEC; mixing zones were bodies of water where mines or
other received permits to dump pollutants. The idea was
that pollutants would disperse due to the water current. He
detailed that DEC had implemented mixing zone regulations
in the interest of promoting development. He provided a
scenario about a disgruntled environmental group,
representative of the tourist industry, or commercial
fishermen related to a mixing zone. He questioned whether
it was good faith to put out a number that represented only
the cost to the mine. If a litigant was unhappy with a
decision they would look for places in statute to find a
way to sue related to whether an agency acted in good
faith. He stated that DOL would defend against a suit to
the best of its ability.
9:55:39 AM
Co-Chair Stoltze appreciated Mr. Weaver's candor and
testimony.
Representative Reinbold remarked that the legislature had
given much of its power away to boards in its ability to
write regulation. She shared that a regulation on a
controversial issue had come before the House Regulatory
Review Committee during the interim. She had found a
regulation was in clear violation of statute. She had asked
the Board of Personnel to wait on the regulation until she
had a chance to meet with colleagues during session to
discuss the intent of the law. She relayed that the
Department of Administration had provided her letter of
concern to the media. She stated that the board had chosen
to disregard her concerns. She expounded that a court case
existed, but the statute had not been entered into the
court case. She explained that subsequently regulations had
been written based on a court case. She was very concerned
about the issue. She believed a regulation had to be a
statute.
Co-Chair Stoltze noted that the sponsor had introduced the
bill prior to the issue she was describing. Representative
Reinbold replied in the affirmative. She detailed that the
occurrence had reinforced the importance of public comment
on regulations. She noted that the CS required entities
such as the personnel board to increase accountability.
10:00:08 AM
Representative Wilson asked if part of the issue was about
the need to change or clarify the minimum requirements for
departments related to public outreach regarding
regulations.
Representative Reinbold deferred the question to her staff.
CRYSTAL KOENEMAN, STAFF, REPRESENTATIVE LORA REINBOLD,
replied that some of the language in the CS did not
necessarily raise the minimum requirements; it did not call
for increased public hearings or other.
Representative Wilson was working to address the two issues
that had been discussed.
10:02:05 AM
DANIEL T. SEAMOUNT JR., COMMISSIONER, ALASKA OIL AND GAS
CONSERVATION COMMISSION, DEPARTMENT OF ADMINISTRATION,
introduced himself.
CATHY FOERSTER, ENGINEERING COMMISSIONER, ALASKA OIL AND
GAS CONSERVATION COMMISSION, DEPARTMENT OF ADMINISTRATION,
relayed that the commission currently considered cost to
stakeholders and affected parties as part of its hearing
process. Additionally, the commission had a process for any
interested party to ask questions and receive answers. She
relayed that the commission was very careful not to enter
into ex parte communications. She furthered that their
executive assistant could take questions from the public to
the commissioners for clarity; other staff members could
also answer questions. She added that the commission was an
independent agency that did not work through the governor;
it was asked to adjudicate on oil and gas issues that may
pit the Department of Natural Resources against an operator
or land owner. The commission often had multiple hearings.
Co-Chair Stoltze noted that the legislation cast a wide
net. He surmised that the topic impacted the commission,
but was more applicable to other agencies.
Ms. Foerster agreed. She reiterated that the commission had
a process in place. She stated that other agencies could do
the same. The commission would hold another hearing if it
was obvious that there were additional questions or that
uncertainty existed. She relayed that the commission had
just completed three or four hearings on hydraulic
fracturing regulations.
Co-Chair Stoltze asked if the commission had significant
public participation.
Ms. Foerster replied that the commission did have a wide
variety of public participation. The agency reached out
through the media in public forums. The agency did include
cost as part of its considerations. She relayed that the
agency had a small and specialized staff; it did not have
cost estimators or people who were current on industry,
environmental, or public costs. However, as part of the
hearing process the agency encouraged people to bring cost
impacts to its attention; the information was considered in
the regulations. The commission heard many valid concerns
about why the legislation was under consideration; however,
there were impacts resulting from the legislation that
would be highly negative on the agency. She stated that if
the agency was required to estimate the cost impacts to
anyone impacted by its proposed regulations it would not be
qualified to do a good job at the estimate. Additionally,
whatever the agency put into its public notice may become a
subject of debate in its hearing. The purpose of the
regulation hearings was to understand whether the
regulation was right. She noted that the agency's
regulations tended to pertain to physics.
Co-Chair Stoltze wondered if the commission had to engage
in a study when it answered a question from the public.
Ms. Foerster replied that it depended on the question. For
example, a member of the public may call to ask why the
commission would allow hydraulic fracturing in Alaska. The
answer had been that hydraulic fracturing had been
occurring for approximately 50 years in Alaska and 25
percent of its wells had been hydraulically fractured; the
state had rules in place that made the process safe. The
agency welcomed the public to come in to discuss its rules.
She stated that questions were sincere, but sometimes came
from a low level of understanding. One of the entity's
goals was to have an informed public, which allowed the
process to run more smoothly. She did not want the agency's
hearings to turn into a debate about how much regulations
would cost affected parties. She stated that the
requirement would derail the agency's efforts to do its
intended work. She relayed that the agency would do a poor
job at providing estimates. Additionally, it could depend
on the regulated industry to determine the costs; however,
she had examples of the industry's cost estimates that were
far above actual costs. She did not want the agency to
devolve to a conversation about costs when its ultimate
purpose related to a conversation about physics. She had
heard many valid concerns and thought they may be addressed
more effectively if other agencies had an improved process.
10:09:31 AM
Co-Chair Stoltze asked hypothetically if the agency could
easily answer a question from the public about whether it
would approve an adequate gas supply for a proposed
pipeline deal. Ms. Foerster answered that the agency did
not currently have many hearings about the issue. She
replied that her answer to the question would be as
frustrating to the public as it was to the legislature. She
would answer that when the operators came to the agency
with a plan for how to market North Slope gas the plan
would need several technical details including what had
been done to accelerate oil production in the meantime,
what would be done to mitigate oil losses when the gas was
sold, when and how much gas would be sold, and how the sale
of Prudhoe Bay gas would affect the synergies with the use
of gas to get oil out of the ground in other places across
the North Slope. She continued that the agency would
approve a plan if the plan demonstrated that alternatives
had been considered and that the alternative proposed would
promote greater ultimate hydrocarbon recovery for the
state.
Co-Chair Stoltze referred to the desire for increased
transparency and improvement in the regulatory process. He
assumed the agency was testifying because it may have a
difficult time with the bill requirements. He asked the
commission to communicate with his office related to
providing a solution without an unrealistic expectation. He
noted that most of the concerns were related to issues like
food safety regulations. He pointed to the complexity of
the work done by the commission. He pointed to support
around the table for the broader goal of increased
transparency.
Ms. Foerster relayed that the commission held the
legislature in high regard and intended to respect and
abide by any legislation that was passed. She was not
aiming to criticize the legislation, but to share concerns.
Co-Chair Stoltze took the commission's presence in the
spirit of working to ensure that legislation would not have
unintended consequences. He assumed the sponsor had been
talking with small businesses and not oil producers when
she decided to introduce the legislation.
Representative Costello referred to bill language "a good
faith effort." She believed the language had been included
to allow for flexibility in terms of costs of providing
estimates. She would be interested to know whether the term
appeared elsewhere in statute and about its definition.
Representative Reinbold thanked the committee for its time.
She stressed that the bill pertained to something that
weighed heavily on many people and municipalities. She
believed that one exemption would have a domino effect. She
hoped to work with the committee on the CS.
Co-Chair Stoltze expressed dislike for exemptions; however,
the committee would entertain the idea if a valid public
policy reason existed. He mentioned unintended
consequences.
HB 140 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
10:15:48 AM
The meeting was adjourned at 10:15 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 140 Explanation of Changes.pdf |
HFIN 3/13/2014 8:30:00 AM |
HB 140 |
| HB 140 Letters of Support.pdf |
HFIN 3/13/2014 8:30:00 AM |
HB 140 |
| HB 140 Sectional Analysis.pdf |
HFIN 3/13/2014 8:30:00 AM |
HB 140 |
| HB 140 Sponsor Statement.pdf |
HFIN 3/13/2014 8:30:00 AM |
HB 140 |
| HB FN-140CS-GOV-OMB-3-10-2014.pdf |
HFIN 3/13/2014 8:30:00 AM |
HB 140 |
| HB 140 Administrative Orders 266.pdf |
HFIN 3/13/2014 8:30:00 AM |
HB 140 |
| HB 239 Prof. Lic. Programs Annual Report DCCED.pdf |
HFIN 3/13/2014 8:30:00 AM |
HB 239 |
| HB 239 CBPL Prof Licensing Historical Summary.pdf |
HFIN 3/13/2014 8:30:00 AM |
HB 239 HB 240 HB 241 HB 242 |
| HB 240 Prof. Lic. Programs Annual Report DCCED.pdf |
HFIN 3/13/2014 8:30:00 AM |
HB 240 |
| HB 241 Prof. Lic. Programs Annual Report DCCED.pdf |
HFIN 3/13/2014 8:30:00 AM |
HB 241 |
| HB 242 Prof. Lic. Programs Annual Report DCCED.pdf |
HFIN 3/13/2014 8:30:00 AM |
HB 242 |
| HB 75 DOR PCG Pledges vs Contributions by Year and Org.pdf |
HFIN 3/13/2014 8:30:00 AM |
HB 75 |