Legislature(2013 - 2014)HOUSE FINANCE 519

03/13/2014 08:30 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 140 NOTICE FOR REGULATION ADOPTION TELECONFERENCED
Heard & Held
+= HB 239 EXTEND BOARD OF EXAMINERS IN OPTOMETRY TELECONFERENCED
Moved Out of Committee
+= HB 240 EXTEND BOARD OF CHIROPRACTIC EXAMINERS TELECONFERENCED
Moved Out of Committee
+= HB 241 EXTEND BOARD OF MARITAL & FAMILY THERAPY TELECONFERENCED
Moved Out of Committee
+= HB 242 EXTEND PT & OCCUPATIONAL THERAPY BOARD TELECONFERENCED
Moved Out of Committee
+ Bills Previously Heard/Scheduled 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