Legislature(2015 - 2016)HOUSE FINANCE 519

03/22/2016 09:30 AM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Please Note Time --
+= HB 268 AIDEA:DIVIDEND TO STATE;INCOME;VALUATION TELECONFERENCED
Moved HB 268 Out of Committee
-- Public Testimony --
+= HB 143 AIDEA BONDS, LOANS, FUND; AEA LOAN TELECONFERENCED
Scheduled but Not Heard
-- Public Testimony --
+= SB 53 ADVANCED PRACTICE REGISTERED NURSES TELECONFERENCED
Moved HCS SB 53(L&C) Out of Committee
-- Public Testimony --
+ HB 351 ADOPTION OF REGS; LIMITATIONS; VOID REGS TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                      March 22, 2016                                                                                            
                         9:33 a.m.                                                                                              
                                                                                                                                
9:33:38 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair  Thompson   called  the  House   Finance  Committee                                                                    
meeting to order at 9:33 a.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Mark Neuman, Co-Chair                                                                                            
Representative Steve Thompson, Co-Chair                                                                                         
Representative Dan Saddler, Vice-Chair                                                                                          
Representative Bryce Edgmon                                                                                                     
Representative Les Gara                                                                                                         
Representative Lynn Gattis                                                                                                      
Representative David Guttenberg                                                                                                 
Representative Scott Kawasaki                                                                                                   
Representative Cathy Munoz                                                                                                      
Representative Lance Pruitt                                                                                                     
Representative Tammie Wilson                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Senator  Cathy  Giessel,  Sponsor; Gene  Therriault,  Deputy                                                                    
Director,  Statewide   Energy  Policy   Development,  Alaska                                                                    
Energy  Authority,  Department  of Commerce,  Community  and                                                                    
Economic Development; Representative  Lance Pruitt, Sponsor;                                                                    
Jenna Crouse, Staff, Representative Pruitt.                                                                                     
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Chris  Logan,   Certified  Registered   Nurses  Association,                                                                    
Anchorage; Carrie  Doyle, Alaska Clinic  Nurses Association,                                                                    
Anchorage;  Julie Gillette,  Chair,  Alaska  State Board  of                                                                    
Nursing;   Al  Tamagni,   Member,  National   Federation  of                                                                    
Independent Businesses.                                                                                                         
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 143    AIDEA BONDS, LOANS, FUND; AEA LOAN                                                                                    
                                                                                                                                
          HB 143 was SCHEDULED but not HEARD.                                                                                   
                                                                                                                                
HB 268    AIDEA: DIVIDEND TO STATE;INCOME;VALUATION                                                                             
                                                                                                                                
          HB 268 was REPORTED out of committee with a "do                                                                       
          pass" recommendation and with one previously                                                                          
          published indeterminate fiscal note: FN 1 (CED).                                                                      
                                                                                                                                
HB 351    ADOPTION OF REGS; LIMITATIONS; VOID REGS                                                                              
                                                                                                                                
          HB 351 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
SB 53     ADVANCED PRACTICE REGISTERED NURSES                                                                                   
                                                                                                                                
          HCS SB 53(L&C) was  REPORTED out of committee with                                                                    
          a  "do  pass"  recommendation  and  with  one  new                                                                    
          fiscal   impact  note   from  the   Department  of                                                                    
          Commerce, Community and Economic Development.                                                                         
                                                                                                                                
Co-Chair Thompson discussed the meeting agenda.                                                                                 
                                                                                                                                
SENATE BILL NO. 53                                                                                                            
                                                                                                                                
     "An Act relating to advanced practice registered                                                                           
     nursing;   relating   to    certified   direct-   entry                                                                    
     midwifery; and providing for an effective date."                                                                           
                                                                                                                                
9:35:12 AM                                                                                                                    
                                                                                                                                
SENATOR CATHY GIESSEL, SPONSOR,  briefly addressed the bill.                                                                    
She  reminded  the  committee that  the  legislation  merely                                                                    
updated the titles for advanced  practice nurses and did not                                                                    
expand the scope of practice.                                                                                                   
                                                                                                                                
CHRIS  LOGAN,   CERTIFIED  REGISTERED   NURSES  ASSOCIATION,                                                                    
ANCHORAGE  (via teleconference),  spoke  in  support of  the                                                                    
bill. She related that she  was a certified registered nurse                                                                    
anesthetist,  previous President  of the  Alaska Association                                                                    
of  Nurse Anesthetist,  and past  Co-Chair  of the  Advanced                                                                    
Practice Registered  Nurse (APRN) Alliance. She  thanked the                                                                    
Senator for her work on the legislation.                                                                                        
                                                                                                                                
CARRIE  DOYLE,  CHAIR,   ALASKA  CLINICAL  NURSE  SPECIALIST                                                                    
ASSOCIATION,  ANCHORAGE  (via teleconference),  favored  the                                                                    
bill  and   thanked  the  Senator   for  her  work   on  the                                                                    
legislation and urged the committee to support SB 53.                                                                           
                                                                                                                                
JULIE GILLETTE,  CHAIR, ALASKA STATE  BOARD OF  NURSING (via                                                                    
teleconference),  supported  of  the bill  and  thanked  the                                                                    
Senator for her work.                                                                                                           
                                                                                                                                
Co-Chair Thompson CLOSED public testimony.                                                                                      
                                                                                                                                
Vice-Chair Saddler  addressed the  fiscal note.  He reported                                                                    
that  a new  fiscal  note for  the  Department of  Commerce,                                                                    
Community and  Economic Development appropriated  the amount                                                                    
of $7.5 thousand from receipt services.                                                                                         
                                                                                                                                
Representative   Wilson  asked   whether  the   fiscal  note                                                                    
expended  general funds.  Co-Chair Thompson  replied in  the                                                                    
negative.                                                                                                                       
                                                                                                                                
Co-Chair  Neuman  MOVED to  REPORT  HCS  SB 53(L&C)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal  note. There being NO  OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
HCS  SB 53(L&C)  was REPORTED  out of  committee with  a "do                                                                    
pass"  recommendation and  with one  new fiscal  impact note                                                                    
from  the Department  of  Commerce,  Community and  Economic                                                                    
Development.                                                                                                                    
                                                                                                                                
9:39:31 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:41:35 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
HOUSE BILL NO. 268                                                                                                            
                                                                                                                                
     "An  Act  relating to  the  dividends  from the  Alaska                                                                    
     Industrial Development  and Export  Authority; relating                                                                    
     to  the meaning  of 'mark-to-market  fair value,'  'net                                                                    
     income,'  'project or  development,' and  'unrestricted                                                                    
     net  income'  for  purposes of  the  Alaska  Industrial                                                                    
     Development and Export Authority;  and providing for an                                                                    
     effective date."                                                                                                           
                                                                                                                                
9:41:38 AM                                                                                                                    
                                                                                                                                
GENE  THERRIAULT, DEPUTY  DIRECTOR, STATEWIDE  ENERGY POLICY                                                                    
DEVELOPMENT,   ALASKA   ENERGY  AUTHORITY,   DEPARTMENT   OF                                                                    
COMMERCE,  COMMUNITY   AND  ECONOMIC   DEVELOPMENT,  briefly                                                                    
addressed the bill. He recounted  that the legislation would                                                                    
remove  market  value  adjustments  and  various  losses  or                                                                    
write-offs on  projects that utilized sources  of money from                                                                    
outside   Alaska    Industrial   Development    and   Export                                                                    
Authority's (AIDEA)  income stream from the  calculation for                                                                    
the AIDEA  dividend. He elaborated that  the procedure would                                                                    
result  in   a  more  predictable  dividend.   The  dividend                                                                    
normally fluctuated  because the  authority shared 25  to 50                                                                    
percent of the annual net  earnings with the state treasury.                                                                    
The removal  of the accounting adjustments  would reduce the                                                                    
amount of  uncertainty and fluctuations  on a  yearly basis.                                                                    
He mentioned  that AIDEA historically attempted  to share as                                                                    
much net  income with the  state treasury as  possible, with                                                                    
the average  at 46 or 47  percent of the net  earnings while                                                                    
keeping in mind  the bond rating agencies  concerns over the                                                                    
authority's solvency.                                                                                                           
                                                                                                                                
Co-Chair Neuman  pointed to  page 2, lines  9 through  15 of                                                                    
the legislation  relating to  project development.  He asked                                                                    
what was not included in  the bill. Mr. Therriault explained                                                                    
that the accounting  items were being added  to the existing                                                                    
statutory exclusions  and would  be backed  out from  all of                                                                    
the  accounting adjustments  for  all of  AIDEA's funds  and                                                                    
investment tools that produced  the income that the dividend                                                                    
was based on.                                                                                                                   
                                                                                                                                
Representative  Gara  thought  that   the  losses  from  the                                                                    
project were  not counted when calculating  the dividend. He                                                                    
asked for  clarity. Mr. Therriault  clarified that  only the                                                                    
losses on projects utilizing an  outside source of money. He                                                                    
explained  that if  the  project was  not  developed or  had                                                                    
limited or no value AIDEA had  to account for the project as                                                                    
a loss to "get it off  the books." He restated that only the                                                                    
losses that  were funded  from outside  of the  AIDEA income                                                                    
stream would be eliminated.  Representative Gara did not see                                                                    
where the specific language relating  to outside sources was                                                                    
referenced  in the  legislation. Mr.  Therriault pointed  to                                                                    
[page 2],  line 6, the  words, "state and federal  grants or                                                                    
appropriations" that were the  sources of revenue outside of                                                                    
the  AIDEA  income  stream. Representative  Gara  understood                                                                    
that  AIDEA  would not  count  losses  of state  money  when                                                                    
calculating  the dividend  and asked  for verification.  Mr.                                                                    
Therriault answered  that only losses for  project work that                                                                    
was  funded  through  revenue   outside  of  AIDEA's  income                                                                    
stream.                                                                                                                         
                                                                                                                                
Vice-Chair Saddler asked for the  balances for the Revolving                                                                    
Fund,   Sustainable    Energy   Transmission    and   Supply                                                                    
Development  Fund  (SETS),  and  the  Arctic  Infrastructure                                                                    
Fund.  Mr. Therriault  replied that  the question  was asked                                                                    
during the  previous bill  hearing; AIDEA  was working  on a                                                                    
letter  in response  to the  committee that  clearly defined                                                                    
the balances. The accounts net  amount included loans and he                                                                    
wanted to avoid confusion.                                                                                                      
                                                                                                                                
9:47:17 AM                                                                                                                    
                                                                                                                                
Representative  Gattis determined  that  the question  about                                                                    
the  balances of  the funds  had  two parts;  what were  the                                                                    
current   amount  balances   and  what   amount  did   AIDEA                                                                    
anticipate being  repaid on a  yearly basis and the  life of                                                                    
the loans.                                                                                                                      
                                                                                                                                
Co-Chair Neuman  asked if  AIDEA had  ever issued  any loans                                                                    
that had  defaulted. Mr. Therriault responded  that he would                                                                    
follow up but acknowledged that the number was very low.                                                                        
                                                                                                                                
Co-Chair Thompson OPENED public testimony.                                                                                      
                                                                                                                                
Co-Chair Thompson CLOSED public testimony.                                                                                      
                                                                                                                                
9:50:07 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:52:47 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
HB  268  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
[Note:  HB  268  was  taken  up later  in  the  meeting  and                                                                    
reported out of committee. See 10:51 a.m.]                                                                                      
                                                                                                                                
HOUSE BILL NO. 351                                                                                                            
                                                                                                                                
     "An Act relating to adoption of regulations; and                                                                           
     providing for an effective date."                                                                                          
                                                                                                                                
REPRESENTATIVE  LANCE PRUITT,  SPONSOR,  explained that  the                                                                    
bill's inception  came from the  idea that  regulations were                                                                    
costly to the state and  private entities. He shared that he                                                                    
was inspired  by Alaskan Senator  Dan Sullivan's  "red tape"                                                                    
legislation  that he  introduced  in  Congress. The  concept                                                                    
capped  regulations by  eliminating  an existing  regulation                                                                    
for every  new regulation adopted.  He attempted to  craft a                                                                    
similar bill on a state level.                                                                                                  
                                                                                                                                
JENNA CROUSE,  STAFF, REPRESENTATIVE  PRUITT, read  from the                                                                    
sectional analysis:                                                                                                             
                                                                                                                                
     Section 1.  (b) Amends  AS 44.62.020, the  authority to                                                                    
     adopt, administer, or enforce regulations.                                                                                 
     A new section  is added that states a  state agency and                                                                    
     the lieutenant  governor may not adopt  new regulations                                                                    
     unless:                                                                                                                    
     · they are part of the initial regulations                                                                                 
     ·  they repeal  one or  more existing  regulations that                                                                    
        are equal to or lesser than the proposed new                                                                            
        regulation                                                                                                              
     · they are adopted as an emergency regulation                                                                              
     ·  they are  implemented following  a state  or federal                                                                    
        law being enacted                                                                                                       
     · the cost is less than or equal to zero                                                                                   
     ·  The lieutenant governor determines the regulation is                                                                    
       narrowly tailored, reasonable, and necessary                                                                             
     (c) Extends this rule  to amending existing regulations                                                                    
     with the following exceptions:                                                                                             
     If the estimated  initial or annual cost of  the set of                                                                    
     regulations is less than or equal to zero                                                                                  
     If  the   regulation  is  amending  certain   fees  for                                                                    
     licensed occupations under AS 08                                                                                           
     (d) Alaska Oil and  Gas Conservation Commission and the                                                                    
     Regulatory  Commission of  Alaska are  exempt from  the                                                                    
     requirements of (c) of this section                                                                                        
                                                                                                                                
     Section 2. Adds  a new subsection to  AS 44.62.040 that                                                                    
     reads the  Lt. Governor  may not accept  regulations if                                                                    
     an  existing  regulation  is   not  repealed.  The  Lt.                                                                    
     Governor can extend the time  for adopting a regulation                                                                    
     for new and amended laws.                                                                                                  
                                                                                                                                
     Section 3. It applies  to regulations adopted after the                                                                    
     effective date of this bill.                                                                                               
                                                                                                                                
     Section 4. The effective date clause.                                                                                      
                                                                                                                                
9:56:38 AM                                                                                                                    
                                                                                                                                
Representative  Pruitt explained  that  the initial  thought                                                                    
process had been  one regulation in and one  out. He learned                                                                    
from the Department of Law  (DOL) that previously, there had                                                                    
never been a definition of  what a new or amended regulation                                                                    
was. The  legislation expanded  on the  initial idea  so the                                                                    
bill contained a provision  applying to amended regulations.                                                                    
In  addition,  the  bill  aimed  to  address  some  concerns                                                                    
brought forth by  the Department of Law,  which allowed fees                                                                    
for businesses  and licensing to  be amended  accordingly to                                                                    
cover the costs. He delineated  that the bill took advantage                                                                    
of HB  140 (Regulations:  Notice, Review,  Comment) [Chapter                                                                    
87 SLA 14 - 07/16/2014]  that was adopted several years ago.                                                                    
The legislation mandated  that the cost of a  new or amended                                                                    
regulation to  the private sector or  municipalities must be                                                                    
"understood" by  the corresponding  department. The  cost of                                                                    
the new  or amended regulation  had to  be equal to  or less                                                                    
than the existing regulation.                                                                                                   
                                                                                                                                
Co-Chair Thompson OPENED public testimony.                                                                                      
                                                                                                                                
AL  TAMAGNI,  MEMBER,  NATIONAL  FEDERATION  OF  INDEPENDENT                                                                    
BUSINESSES  (via teleconference),  testified  in support  of                                                                    
the  legislation.  He believed  that  the  bill would  force                                                                    
departments to review  regulations that were 20  or so years                                                                    
old and were no longer relative today.                                                                                          
                                                                                                                                
Co-Chair  Neuman   observed  that   the  bill   granted  the                                                                    
lieutenant governor  a lot  of authority  and placed  him in                                                                    
the position  of "gate keeper  of regulations."  He wondered                                                                    
why it  gave the position so  much authority. Representative                                                                    
Pruitt answered  that the  way the bill  was proposed  to be                                                                    
enforced  on a  national  level was  to  confiscate Cost  of                                                                    
Living  Allowances (COLA).  The question  of how  to enforce                                                                    
the bill was  also relevant on a state  level. He elaborated                                                                    
that since the Lt. Governor  was the "holder of regulations"                                                                    
and to separate enforcement  from the regulating department,                                                                    
he decided to grant enforcement  authority to the office. If                                                                    
adopted, The  Lt. Governor would  create the initial  set of                                                                    
the legislation's regulations.                                                                                                  
                                                                                                                                
10:01:49 AM                                                                                                                   
                                                                                                                                
Co-Chair Neuman believed that the  Lt Governor's duties were                                                                    
related  to elections  and ballot  initiatives.  He did  not                                                                    
understand the relationship between  regulations and the Lt.                                                                    
Governor. Representative Pruitt  replied that any regulation                                                                    
had to be filed by the Lt. Governor.                                                                                            
                                                                                                                                
Co-Chair Neuman  cited page 1,  line 8, subparagraph  (2) of                                                                    
the bill and read:                                                                                                              
                                                                                                                                
     (2)   the  agency   repeals   one   or  more   existing                                                                    
     regulations and the cost of  the new regulation is less                                                                    
     than or equal to the cost of the repealed regulation…                                                                      
                                                                                                                                
Co-Chair Neuman  wondered how the  cost of a  regulation was                                                                    
measured.  Representative  Pruitt   responded  that  if  the                                                                    
regulation  added  cost  to  an  agency  or  the  public  as                                                                    
determined through statute  created by HB 140.  He felt that                                                                    
if  a department  was going  to  put forth  a regulation  it                                                                    
should understand and quantify  any additional costs similar                                                                    
to  the process  of drafting  a fiscal  note. He  noted that                                                                    
both the United Kingdom (UK)  and Canada had enacted similar                                                                    
laws   and  that   he   considered   them  "socialist   type                                                                    
countries."  He  voiced  that  "even  countries  that  liked                                                                    
government"  believed  regulations   were  "burdensome."  He                                                                    
surmised that the  implementation of the laws in  the UK and                                                                    
Canada   were  proof   that   costs   of  regulations   were                                                                    
quantifiable.                                                                                                                   
                                                                                                                                
10:05:13 AM                                                                                                                   
                                                                                                                                
Co-Chair  Neuman wondered  whether  there was  a formula  or                                                                    
methodology of how to measure  a regulation. He asked for an                                                                    
example.  He was  trying to  understand how  to measure  the                                                                    
cost.                                                                                                                           
                                                                                                                                
Representative Saddler  referred to  AS 44.62.190 d2  and d3                                                                    
and read the following:                                                                                                         
                                                                                                                                
     (2)   the  initial   cost  to   the  state   agency  of                                                                    
     implementation;                                                                                                            
          (3) the estimated annual costs, based on a good                                                                       
     faith  effort to  estimate the  costs in  the aggregate                                                                    
     for  each   of  the  following  categories   using  the                                                                    
     information available to the state agency, to                                                                              
          (A) private persons to comply with the proposed                                                                       
     action;                                                                                                                    
          (B) the state agency for implementation and to                                                                        
     other state agencies to comply with the proposed                                                                           
     action; and …                                                                                                              
                                                                                                                                
Co-Chair  Neuman maintained  his request  for some  concrete                                                                    
examples.                                                                                                                       
                                                                                                                                
Representative Pruitt thanked  Vice-Chair Saddler for citing                                                                    
the  statute. He  did not  have current  examples but  could                                                                    
provide them.                                                                                                                   
                                                                                                                                
Representative Wilson asked whether  the Board of Game would                                                                    
be  covered  under  the legislation.  Representative  Pruitt                                                                    
answered in  the negative. He  explained that he  spoke with                                                                    
representatives  from the  Board of  Game and  the Board  of                                                                    
Fish  that  supported  the  concept.  Representative  Wilson                                                                    
asked about the cost. She  noted that there was a difference                                                                    
between  the cost  to the  state  versus the  cost to  local                                                                    
governments   or  businesses.   She  wondered   whether  the                                                                    
legislation  weighted and  prioritized  the  impacts of  the                                                                    
costs  for the  affected  entities. For  example, she  asked                                                                    
whether  the  impacts  of costs  to  constituents  would  be                                                                    
prioritized  over costs  to  the department.  Representative                                                                    
Pruitt answered in the negative.  He explained that the goal                                                                    
of the bill  was that the regulation would not  add cost for                                                                    
both.  Some regulations  would impact  one or  both, but  no                                                                    
priority was  given. Representative  Wilson asked  whether a                                                                    
new  regulation added  in one  department  could be  removed                                                                    
from another department in order  to satisfy the "one in and                                                                    
one  out" requirement.  Representative  Pruitt responded  in                                                                    
the  negative  and  added that  the  provision  applied  per                                                                    
agency. Representative Wilson supported the legislation.                                                                        
                                                                                                                                
10:11:05 AM                                                                                                                   
                                                                                                                                
Vice-Chair  Saddler  supported  the  goal  of  reducing  the                                                                    
regulatory  burden on  government  and  individuals. He  had                                                                    
questions   about   the    "presumed   relative   value   of                                                                    
regulations." He asked  about how the costs  of a regulation                                                                    
was determined  and interpreted that the  legislation relied                                                                    
on  a "good  faith effort"  by the  agency to  determine the                                                                    
costs   of   compliance    for   private   individuals   and                                                                    
municipalities. He asked how the  value of a regulation that                                                                    
was  "not financial"  was calculated.  Representative Pruitt                                                                    
answered  that the  cost had  to be  less than  or equal  to                                                                    
zero. He remarked  that the focus of the bill  was on costs.                                                                    
He stated that  most regulations were costly.  The intent of                                                                    
the legislation was to put  a "cap on government." He wanted                                                                    
to ensure  that regulations  were limited  in scope  so they                                                                    
did not  reach beyond  the "initial letter  of the  law" and                                                                    
felt  they were  broadly applied.  He summarized  that if  a                                                                    
regulation did not  have a cost there was  not a limitation,                                                                    
but  if a  regulation carried  a  cost the  "zero sum  game"                                                                    
applied.                                                                                                                        
                                                                                                                                
10:14:17 AM                                                                                                                   
                                                                                                                                
Vice-Chair  Saddler stated  that the  value of  a regulation                                                                    
was not  only in  the cost.  He remarked  that there  may be                                                                    
other  costs to  the  state such  as a  lack  of ability  to                                                                    
implement  statue.  He  was concerned  about  the  intrinsic                                                                    
value  of a  regulation.  He wondered  whether a  connection                                                                    
existed  between dropping  one regulation  to make  room for                                                                    
another  one. Representative  Pruitt responded  that it  was                                                                    
left  to the  department's discretion.  He believed  that it                                                                    
was  "difficult"  for  policy  makers  to  think  about  the                                                                    
concept and that  the issue was philosophical.  He felt that                                                                    
if a person  liked large government they  would probably not                                                                    
like the  bill. He argued  that the regulatory issue  was as                                                                    
"important"  as any  budget discussion  due to  the cost  of                                                                    
regulation that was not factored  in. Vice-Chair Saddler did                                                                    
not  believe the  bill  could be  characterized  as a  large                                                                    
versus   small  government   bill.   He   voiced  that   the                                                                    
legislature passed laws that  were implemented by regulation                                                                    
and were worthwhile.  He surmised that the goal  was that if                                                                    
a new  regulation was created  it would repeal  another more                                                                    
expensive  regulation. He  was  not sure  he understood  the                                                                    
concept of  the bill.  He believed  a regulation  could hold                                                                    
value to the public outside its cost.                                                                                           
                                                                                                                                
10:17:55 AM                                                                                                                   
                                                                                                                                
Representative  Gattis  pointed to  the  first  line in  the                                                                    
sponsor  statement   and  read:  "Alaska  has   one  of  the                                                                    
strictest  and most  costly regulatory  environments in  the                                                                    
country." She  believed the statement was  scary and favored                                                                    
a "two for  one policy." She thought  that an administrative                                                                    
regulation review committee  reviewed regulations. She spoke                                                                    
about unfunded  mandates and  state's school  districts that                                                                    
were "mired" in  regulation that did not cost  the state but                                                                    
cost the  districts money. She  wondered how the  bill would                                                                    
handle the  situation. She referenced the  regulation review                                                                    
committee and asked whether that  committee should deal with                                                                    
regulatory issues. She wondered  whether there was currently                                                                    
a  committee that  handled regulatory  issue. Representative                                                                    
Pruitt  replied that  the issue  would  be the  goal of  the                                                                    
administrative   regulation   and   review   committee.   He                                                                    
described  that  the  review  committee  did  not  have  the                                                                    
authority  to veto  regulations.  The  committee could  only                                                                    
recommend  legislation to  remove a  regulation. He  thought                                                                    
that the committee's  role was "vague" and had  not seen any                                                                    
bills  to remove  costly regulations.  He  spoke to  another                                                                    
bill by  Representative Mike Chenault to  abolish the review                                                                    
committee. He noted  that the committee had  been around for                                                                    
a  long   time,  but  regulations  continued   to  grow.  He                                                                    
suggested that  the legislature should  consider how  to put                                                                    
the mechanisms in place to  limit regulatory growth and what                                                                    
the  limit should  be.  He reported  that  the statute  read                                                                    
earlier by Vice-Chair Saddler was  the statute related to HB
140  and  would apply  to  the  regulatory costs  to  school                                                                    
districts. He  agreed that the state  was continually adding                                                                    
burdens  on  school  districts because  the  department  had                                                                    
established unfunded mandates.                                                                                                  
                                                                                                                                
10:22:32 AM                                                                                                                   
                                                                                                                                
Representative Gattis supported the  bill and concurred with                                                                    
the  bill's sponsor  that government  continued to  grow and                                                                    
that the  legislation addressed a philosophical  issue about                                                                    
growing bureaucracy.                                                                                                            
                                                                                                                                
Representative  Edgmon supported  the underlying  concept of                                                                    
the  legislation,  and  felt  that  the  bill  was  "thought                                                                    
provoking." He spoke to the  14 state agencies and the Court                                                                    
System  and  University. He  wondered  about  the number  of                                                                    
regulations in  each department. He stated  that regulations                                                                    
provided interpretation  to statues and pondered  the effect                                                                    
of the legislation on the  Department of Law and regulations                                                                    
for  statutes  that  upheld  the  state's  constitution.  He                                                                    
discussed   the   government   structure   in   Scandinavian                                                                    
countries  and  thought  they were  more  "streamlined."  He                                                                    
mentioned the  Medicaid reform bill  that he  imagined would                                                                    
remove  regulations   and  also  add  regulations   to  make                                                                    
Medicaid more  efficient and less  costly. He  thought there                                                                    
were  an "endless  number of  permutations"  the bill  could                                                                    
take to accomplish its purpose.                                                                                                 
                                                                                                                                
10:26:30 AM                                                                                                                   
                                                                                                                                
Representative  Pruitt  replied  that it  was  necessary  to                                                                    
think about running  government differently and diversifying                                                                    
the state's  economy. He highlighted  that he could  not say                                                                    
that every new  law passed would get rid of  another law. He                                                                    
believed  that  the  legislature should  remain  "cognizant"                                                                    
that every  new law  created a burden  in some  capacity. He                                                                    
suggested considering the repeal  of outdated regulations as                                                                    
well.                                                                                                                           
                                                                                                                                
Representative  Kawasaki  appreciated the  recognition  that                                                                    
every time a  new law was passed  significant regulation was                                                                    
created. He referenced the myriad  of regulations created by                                                                    
one  word  in  the  oil tax  bill.  He  expressed  confusion                                                                    
regarding  calculating the  cost  of  regulations. He  cited                                                                    
page 2, subsection (c)(1) as follows:                                                                                           
                                                                                                                                
     (c) A state agency may not submit, and the lieutenant                                                                      
     governor may not accept                                                                                                    
     6 for filing, a set of regulations that amend an                                                                           
     existing regulation unless                                                                                                 
     7 (1) at the time the regulation is submitted to the                                                                       
     lieutenant governor,                                                                                                       
     8 the estimated net cost of the set of regulations                                                                         
     adopted by the state agency for each of                                                                                    
     9 the costs under AS 44.62.190(d)(2) and (3) is less                                                                       
     than or equal to zero; or                                                                                                  
                                                                                                                                
Representative  Pruitt answered  that the  provision defined                                                                    
the statute  AS 44.62.190(d)(2)  and (3),  found in  HB 140,                                                                    
Representative  Reinbold's bill  from  a  previous year.  He                                                                    
relayed  that due  to  passage  of HB  140  a  cost must  be                                                                    
determined  for  any amended  or  new  state regulation  and                                                                    
based on  that figure a  comparison can be made  whether any                                                                    
new costs  were generated.  He noted that  the bill  did not                                                                    
mandate calculating the cost  for existing regulations; only                                                                    
new or amended regulations applied to the legislation.                                                                          
                                                                                                                                
10:31:12 AM                                                                                                                   
                                                                                                                                
Representative  Kawasaki  wondered  who  the  estimated  net                                                                    
costs would  be calculated  for and  who they  impacted; the                                                                    
state or private sector.                                                                                                        
Representative Pruitt  answered that  it was both  the state                                                                    
and  private  sector. He  revealed  that  HB 140  authorized                                                                    
calculating a regulations initial  and annual costs based on                                                                    
a good faith effort and  estimated the costs for the private                                                                    
sector, state  agencies, and  municipalities. Representative                                                                    
Kawasaki maintained  his confusion and provided  an example.                                                                    
He  reported  that  SB  21 (Oil  And  Gas  Production  Tax)[                                                                    
Chapter 10  SLA 13 - 05/21/2013]  had created "participating                                                                    
areas" in order to define  what "new oil" was. Subsequent to                                                                    
adoption, the  Department of  Natural Resources  (DNR) wrote                                                                    
regulations  stating  that  the department  would  determine                                                                    
what  a participating  area was  based  on calculations.  He                                                                    
deduced  that  the regulation  would  not  have a  net  zero                                                                    
effect and would  actually cost the state money  to define a                                                                    
participating area  and whether  it was  subject to  the new                                                                    
tax  provisions.  If  the  analysis pointed  to  a  new  oil                                                                    
determination  the  tax  revenue   to  the  state  would  be                                                                    
diminished and the oil company  would benefit and the effect                                                                    
would not  be net  zero. Representative Pruitt  replied that                                                                    
his example  would be a new  law. The provision in  the bill                                                                    
was related to  every new law. He read  under subsection (b)                                                                    
(4):                                                                                                                            
                                                                                                                                
     (4) the regulation implements a state or federal law                                                                       
     enacted, amended, or repealed within 120 days of the                                                                       
     adoption of the regulation,…                                                                                               
                                                                                                                                
Representative Pruitt  explained that  under his bill  a new                                                                    
law would not be required to  have an offset. The time frame                                                                    
was added to  allow consideration of the  new regulation and                                                                    
to enact it.                                                                                                                    
                                                                                                                                
10:35:06 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:38:09 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
Representative  Kawasaki asked  whether  the governor  could                                                                    
essentially veto  any legislation passed by  the legislature                                                                    
by  declaring that  an offset  could  not be  found for  the                                                                    
regulations.   Representative   Pruitt  responded   in   the                                                                    
negative.  He stated  that  because  it was  a  new law  the                                                                    
administration   would  be   required   to   come  up   with                                                                    
regulations  within   120  days.   He  clarified   that  the                                                                    
exemption existed in the bill  that new regulations could be                                                                    
written  without requiring  the offset,  if the  legislature                                                                    
determined that  a bill was  important enough to  adopt. The                                                                    
governor would be required to enforce the new law.                                                                              
                                                                                                                                
Representative Guttenberg  understood that the bill  did not                                                                    
apply to new legislation. He referred  to page 2, line 1 and                                                                    
cited the statue AS 44.62.190(d) (2) and  (3) regarding cost                                                                    
estimation. He  reported that the bill  exempted the federal                                                                    
government and the Board of Fish and Game. He read (3):                                                                         
                                                                                                                                
     "the estimated annual cost based on a good faith                                                                           
     effort."                                                                                                                   
     …estimate the cost in the aggregate for each of the                                                                        
     following using the information available…                                                                                 
                                                                                                                                
Representative  Guttenberg   summarized  that   the  statute                                                                    
applied  to  a   private  person,  a  state   agency,  or  a                                                                    
municipality.  He  discerned that  no  attempt  was made  to                                                                    
balance importance or costs, and  the determination was left                                                                    
for  the agency  to decide.  He  felt that  the process  was                                                                    
"subjective." He asked  what the sponsor's idea  was for the                                                                    
cost calculation and how he  planned to balance the process.                                                                    
Representative Pruitt needed  clarification on the question.                                                                    
He surmised  that his concern  was ensuring that  the agency                                                                    
was not  just protecting  its own  interests. Representative                                                                    
Guttenberg  wondered  how  the  cost  calculation  would  be                                                                    
balanced  between   the  department,  private   person,  and                                                                    
municipality.  Representative Pruitt  perceived that  if the                                                                    
cost to  a state agency  was $100  the offset would  be $100                                                                    
and if the regulation cost  a private entity $100 the agency                                                                    
would find  another way  to offset the  $100 to  the private                                                                    
sector  in  another   place.  He  understood  Representative                                                                    
Guttenberg's concern but felt  that some discretion was left                                                                    
to  the   agency  to   avoid  "tying   the  hands"   of  the                                                                    
departments.  He stated  that  granting  the department  the                                                                    
authority to  determine the entire  costs of  the regulation                                                                    
would ultimately be a policy call.                                                                                              
                                                                                                                                
10:43:27 AM                                                                                                                   
                                                                                                                                
Representative Guttenberg  stated that his concern  was that                                                                    
it  could  be easy  to  "not  intentionally" circumvent  the                                                                    
intent of  the statute and  subscribe all of the  costs onto                                                                    
the  private entity.  He  contended that  the  bill was  not                                                                    
"simple."                                                                                                                       
                                                                                                                                
Representative Gara  noted that there were  regulations that                                                                    
he did not  like, but shared his concern that  the bill gave                                                                    
the  administration   the  power  to  decide   what  a  good                                                                    
regulation was and to remove  good regulations for bad ones.                                                                    
He asked  if the sponsor shared  his concern. Representative                                                                    
Pruitt  answered in  the negative.  He thought  that if  the                                                                    
legislature  mistrusted  the  agencies  writing  regulations                                                                    
legislation  would continually  be introduced  that reversed                                                                    
regulations.  Currently,  the  sole  authority  for  writing                                                                    
regulations   resided  with   the   administration  and   no                                                                    
limitation  existed.  He  furthered  that  technically,  the                                                                    
regulation had  to remain within  the framework of  the law,                                                                    
and some agencies  had not remained within the  scope of the                                                                    
law.  He felt  that  his bill  placed  limits on  government                                                                    
expansion  and  that  currently broad  regulatory  authority                                                                    
existed within the administration. He  did not know a way to                                                                    
statutorily  say that  good regulations  could not  be taken                                                                    
off   the  books   and  thought   any   attempts  would   be                                                                    
"subjective."                                                                                                                   
                                                                                                                                
10:47:21 AM                                                                                                                   
                                                                                                                                
Representative Gara  was still  concerned that  the governor                                                                    
may cancel  good regulations to  replace them with  bad ones                                                                    
in order to  comply with the bill. He stated  that the power                                                                    
to rescind  bad regulations  existed in the  legislature and                                                                    
he wondered how  his legislation was any  different than the                                                                    
current process.  Representative Pruitt discovered  that DOL                                                                    
did not have a definition for  what a new regulation was. He                                                                    
believed that there has been  no control over the regulatory                                                                    
process and  that currently the  administration can  write a                                                                    
bad regulation.  He stated that the  legislature had enabled                                                                    
unelected individuals  to expand  greatly upon  statute. The                                                                    
legislative  possibility for  reversing statute  existed but                                                                    
there  was  nothing  limiting  the  growth  of  regulations.                                                                    
Representative Gara  voiced that the administration  did not                                                                    
have the  power to  just adopt  a regulation;  it had  to be                                                                    
consistent with  statute or was deemed  unconstitutional. He                                                                    
added    that   regulations    were   frequently    declared                                                                    
unconstitutional. He believed  that, without sideboards, the                                                                    
bill  just  let the  administration  decide  and handed  the                                                                    
administration   more   power   than   it   currently   had.                                                                    
Representative  Pruitt  felt the  concept  of  the bill  was                                                                    
"great" and wanted it to move forward.                                                                                          
                                                                                                                                
HB  351  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
HOUSE BILL NO. 268                                                                                                            
                                                                                                                                
     "An  Act  relating to  the  dividends  from the  Alaska                                                                    
     Industrial Development  and Export  Authority; relating                                                                    
     to  the meaning  of 'mark-to-market  fair value,'  'net                                                                    
     income,'  'project or  development,' and  'unrestricted                                                                    
     net  income'  for  purposes of  the  Alaska  Industrial                                                                    
     Development and Export Authority; and providing for an                                                                     
     effective date."                                                                                                           
                                                                                                                                
10:51:12 AM                                                                                                                   
                                                                                                                                
GENE  THERRIAULT, DEPUTY  DIRECTOR, STATEWIDE  ENERGY POLICY                                                                    
DEVELOPMENT,   ALASKA   ENERGY  AUTHORITY,   DEPARTMENT   OF                                                                    
COMMERCE, COMMUNITY  AND ECONOMIC DEVELOPMENT,  responded to                                                                    
a question  asked earlier during  the meeting  regarding the                                                                    
default  rate on  AIDEA's loan  portfolio.  He had  obtained                                                                    
answers    from   Mr.    Springsteen,   John    Springsteen,                                                                    
CEO/Executive  Director, AIDEA,  and  AIDEA accountants.  He                                                                    
informed  the committee  that the  default  rate on  AIDEA's                                                                    
loan portfolio was .49 percent  as of September 30, 2015 and                                                                    
as of  February 2016  it was .41  percent. He  reported that                                                                    
the cumulative  default rate for  all of Alaska's  banks was                                                                    
0.7 percent.                                                                                                                    
                                                                                                                                
Co-Chair Thompson CLOSED public testimony.                                                                                      
                                                                                                                                
Vice-Chair Saddler  addressed the  fiscal note.  He reported                                                                    
that  the Department  of  Commerce,  Community and  Economic                                                                    
Development   (DCCED)  fiscal   note   (FN   1  (CED))   was                                                                    
indeterminate.                                                                                                                  
                                                                                                                                
Representative Wilson referred to the  analysis on page 2 of                                                                    
the  fiscal note  that contained  a chart  and asked  for an                                                                    
explanation.   Mr.  Therriault   replied   that  the   chart                                                                    
portrayed  the historic  effect that  the Implementation  of                                                                    
the   Governmental   Accounting   Standards   Board   (GASB)                                                                    
Statement 31,  mark-to-market rule had overtime.  The impact                                                                    
on  the dividend  was depicted  in the  second column  which                                                                    
showed a  reduction of almost  $7 million [in 2006]  and $11                                                                    
million  in  2013.  He   detailed  that  the  mark-to-market                                                                    
adjustments had  created volatility  in AIDEA's  dividend to                                                                    
the  state and  that  the authority  believed  it should  be                                                                    
backed out before the dividend was calculated.                                                                                  
                                                                                                                                
Representative Wilson  wanted a better understanding  of the                                                                    
fiscal note. She requested a  comparison between the present                                                                    
accounting impacts and the accounting  impacts with the GASB                                                                    
rule  31 items  excluded.  Mr. Therriault  replied that  the                                                                    
chart showed the  total impact that the GASB rule  31 had on                                                                    
AIDEA's  net income  in the  first column  and half  of that                                                                    
amount was the effect the  rule had on the dividend depicted                                                                    
in the second column. He  reiterated that AIDEA shared up to                                                                    
50  percent  of  its  net   income  with  the  dividend.  He                                                                    
explained that  the charts demonstrated the  volatility that                                                                    
the  GASB  rule  31  accounting  had  on  the  dividend.  He                                                                    
delineated  that the  rule either  artificially inflated  or                                                                    
reduced the  dividend and  overtime would  cancel the  up or                                                                    
down  effect   out.  However,   the  rule   intensified  the                                                                    
uncertainty  of the  dividend each  year. He  furthered that                                                                    
new rules  were coming that  would add to the  volatility of                                                                    
the  dividend and  deepen the  seesaw effect.  The provision                                                                    
eliminated the uncertainty in the dividend.                                                                                     
                                                                                                                                
10:56:43 AM                                                                                                                   
                                                                                                                                
Co-Chair  Neuman MOVED  to REPORT  HB 268  out of  committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
note. There being NO OBJECTION, it was so ordered.                                                                              
                                                                                                                                
HB  268 was  REPORTED  out  of committee  with  a "do  pass"                                                                    
recommendation   and    with   one    previously   published                                                                    
indeterminate fiscal note: FN 1 (CED).                                                                                          
                                                                                                                                
HOUSE BILL NO. 143                                                                                                            
                                                                                                                                
     "An Act  authorizing the Alaska  Industrial Development                                                                    
     and  Export Authority  to issue  bonds  to finance  the                                                                    
     infrastructure   and   construction    costs   of   the                                                                    
     Sweetheart Lake hydroelectric  project; and relating to                                                                    
     legislative approval for a loan  from the power project                                                                    
     fund to the Lynn Canal Transmission Corporation."                                                                          
                                                                                                                                
HB 143 was SCHEDULED but not HEARD.                                                                                             
                                                                                                                                
Co-Chair  Thompson discussed  the agenda  for the  afternoon                                                                    
meeting.                                                                                                                        
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
10:57:43 AM                                                                                                                   
                                                                                                                                
The meeting was adjourned at 10:57 a.m.                                                                                         

Document Name Date/Time Subjects
HB 351 Supporting Documents - Letter from the AK Chamber.pdf HFIN 3/22/2016 9:30:00 AM
HB 351
HB 351 Supporting Documents - Letter from NFIB.pdf HFIN 3/22/2016 9:30:00 AM
HB 351
CSHB 351(STA) Summary of Changes Ver W to Ver N.pdf HFIN 3/22/2016 9:30:00 AM
HB 351
CSHB 351(STA) Sectional Analysis Version N.pdf HFIN 3/22/2016 9:30:00 AM
HB 351
CSHB 351 Sponsor Statement Version N.pdf HFIN 3/22/2016 9:30:00 AM
HB 351
HB 143 NEW FN DCCED AIDEA 3-18-16.pdf HFIN 3/22/2016 9:30:00 AM
HB 143
HB 143 NEW FN DCCED AEA 3-18-16.pdf HFIN 3/22/2016 9:30:00 AM
HB 143
HB143 Operating Engineers Support Letter.pdf HFIN 3/22/2016 9:30:00 AM
SNRG 3/31/2016 3:30:00 PM
HB 143
HB143 Kensington Update Support Letter January 2016.pdf HFIN 3/22/2016 9:30:00 AM
HB 143
HB143 AIDEA Springsteen.pdf HFIN 3/22/2016 9:30:00 AM
HB 143
HB 143(FIN) Sponsor Statement(OO4).pdf HFIN 3/22/2016 9:30:00 AM
HB 143
HB 143 ADIEA Decision Making.pdf HFIN 3/22/2016 9:30:00 AM
HB 143
HB 143 J. Hydro Presentation.pdf HFIN 3/22/2016 9:30:00 AM
HB 143
HB 351 NEW FN GOV 3-20-16.pdf HFIN 3/22/2016 9:30:00 AM
HB 351