Legislature(1995 - 1996)

03/16/1995 08:10 AM House STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
             HOUSE STATE AFFAIRS STANDING COMMITTEE                            
                         March 16, 1995                                        
                           8:10 a.m.                                           
 MEMBERS PRESENT                                                               
 Representative Jeannette James                                                
 Representative Brian Porter                                                   
 Representative Ivan Ivan                                                      
 Representative Caren Robinson                                                 
 Representative Joe Green                                                      
 MEMBERS ABSENT                                                                
 Representative Ed Willis                                                      
 Representative Scott Ogan                                                     
 COMMITTEE CALENDAR                                                            
  HB 130:  "An Act relating to agency review of public                         
           comment on the adoption, amendment, and repeal of                   
           regulations; relating to the examination of                         
           proposed regulations, amendments of regulations,                    
           and orders repealing regulations by the                             
           Administrative Regulation Review Committee and the                  
           Department of Law; relating to the submission to,                   
           and acceptance by, the lieutenant governor of                       
           proposed regulations, amendments of regulations,                    
           and orders repealing regulations; and requiring                     
           agencies to make certain determinations before                      
           adopting regulations, amendments of regulations,                    
           or orders repealing regulations."                                   
           HEARD AND HELD                                                      
  HB 163:  "An Act requiring an agency to provide compliance                   
           cost estimates for proposed regulations,                            
           amendments, and repeals of regulations under                        
           certain circumstances."                                             
           HEARD AND HELD                                                      
 HSTA - 03/16/95                                                               
 *HB 201:  "An Act relating to prisoner litigation,                            
           post-conviction relief, sentence appeals, amending                  
           Alaska Administrative Rule 10, Alaska Rules of                      
           Appellate Procedure 204, 208, 209, 215, 521, 603,                   
           and 604, and Alaska Rules of Criminal Procedure                     
           11, 33, 35, and 35.1; and providing for an                          
           effective date."                                                    
           SCHEDULED BUT NOT HEARD                                             
 HSTA - 03/16/95                                                               
 *HB 234:  "An Act relating to administrative adjudication                     
           under the Administrative Procedure Act."                            
           SCHEDULED BUT NOT HEARD                                             
 HSTA - 03/16/95                                                               
 *HB 212:  "An Act relating to the management and sale of state                
           timber and relating to the administration of forest land            
           and classification of state land."                                  
           SCHEDULED BUT NOT HEARD                                             
 HSTA - 03/16/95                                                               
 *HB 122:  "An Act authorizing payment of a portion of the motor               
           fuel tax on boats and watercraft as refunds to                      
           municipalities; and providing for an effective date."               
           SCHEDULED BUT NOT HEARD                                             
 (* First public hearing)                                                      
 WITNESS REGISTER                                                              
 BRUCE CAMPBELL, Administrative Assistant                                      
   to Representative Kelly                                                     
 Alaska State Legislature                                                      
 State Capitol, Room 513                                                       
 Juneau, Alaska  99801-1182                                                    
 Telephone:  465-2327                                                          
 POSITION STATEMENT:  Provided sponsor statement for HB 130                    
 MICHELLE O'LEARY, Vice President                                              
 Regional Citizens Advisory Council                                            
 P.O. Box 1052                                                                 
 Cordova, Alaska 99574                                                         
 Telephone:  424-7758                                                          
 POSITION STATEMENT: Opposed HB 130 and HB 163                                 
 JOHN LINDBACK, Chief of Staff                                                 
 Office of the Lieutenant Governor                                             
 P.O. Box 110015                                                               
 Juneau, Alaska  99811-0015                                                    
 Telephone:  465-5400                                                          
 POSITION STATEMENT:  Expressed Lt. Governor Ulmer's concerns with             
                      HB 130                                                   
 PAM NEAL, President                                                           
 Alaska State Chamber of Commerce                                              
 217 2nd Avenue                                                                
 Juneau, Alaska 99801                                                          
 Telephone:  586-2323                                                          
 POSITION STATEMENT:  Supported HB 130 and HB 163                              
 REPRESENTATIVE PETE KELLY                                                     
 Alaska State Legislature                                                      
 State Capitol, Room 513                                                       
 Telephone:  465-2327                                                          
 POSITION STATEMENT:  Sponsor of HB 130                                        
 BONNIE WILLIAMS, Consultant                                                   
 Bonnie Williams Consultant                                                    
 P. O. Box 82812                                                               
 Fairbanks, Alaska  99708                                                      
 Telephone:  455-6652                                                          
 POSITION STATEMENT:  Opposed HB 130                                           
 DEBORAH BEHR, Assistant Attorney General                                      
 Legislation and Regulations Section                                           
 Department of Law                                                             
 P.O. Box 11030                                                                
 Juneau, Alaska 99801-0300                                                     
 Telephone:  465-3600                                                          
 POSITION STATEMENT:  Opposed HB 130                                           
 ROD MOURANT, Administrative Assistant                                         
   to Representative Kott                                                      
 Alaska State Legislature                                                      
 State Capitol, Room 432                                                       
 Juneau, Alaska 99801-1182                                                     
 Telephone:  465-3777                                                          
 POSITION STATEMENT:  Provided sponsor statement for HB 163                    
 JACK KREINHEDER, Senior Policy Analyst                                        
 Office of Management and Budget                                               
 Office of Governor                                                            
 240 Main Street, Suite 800                                                    
 Court Plaza Building                                                          
 Juneau, Alaska 99801-0020                                                     
 Telephone:  465-4676                                                          
 POSITION STATEMENT:  Opposed HB 130 and 163                                   
 PREVIOUS ACTION                                                               
 BILL:  HB 130                                                               
 SPONSOR(S): REPRESENTATIVE(S) KELLY, James                                    
 JRN-DATE     JRN-PG                  ACTION                                   
 01/27/95       157    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/27/95       157    (H)   STA, JUD, FIN                                     
 02/14/95              (H)   STA AT 08:00 AM CAPITOL 519                       
 02/14/95              (H)   MINUTE(STA)                                       
 02/14/95              (H)   ARR AT 12:00 PM BUTROVICH ROOM 205                
 02/15/95       396    (H)   COSPONSOR(S): JAMES                               
 02/21/95              (H)   STA AT 08:00 AM CAPITOL 102                       
 02/21/95              (H)   MINUTE(STA)                                       
 02/21/95              (H)   ARR AT 12:00 PM BUTROVICH ROOM 205                
 02/22/95              (H)   ARR AT 04:00 PM BELTZ ROOM 211                    
 02/22/95              (H)   MINUTE(ARR)                                       
 02/22/95              (S)   MINUTE(ARR)                                       
 02/23/95              (H)   STA AT 08:00 AM CAPITOL 102                       
 02/23/95              (H)   MINUTE(STA)                                       
 03/09/95              (H)   STA AT 08:00 AM CAPITOL 102                       
 03/16/95              (H)   STA AT 08:00 AM CAPITOL 102                       
 BILL:  HB 163                                                               
 SPONSOR(S): REPRESENTATIVE(S) KOTT,Toohey,Kelly,MacLean                       
 JRN-DATE     JRN-PG                  ACTION                                   
 02/08/95       272    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 02/08/95       272    (H)   STA, FIN                                          
 02/22/95       456    (H)   COSPONSOR(S): KELLY, MACLEAN                      
 02/28/95              (H)   STA AT 08:00 AM CAPITOL 102                       
 02/28/95              (H)   MINUTE(STA)                                       
 03/09/95              (H)   STA AT 08:00 AM CAPITOL 102                       
 03/16/95              (H)   STA AT 08:00 AM CAPITOL 102                       
 BILL:  HB 201                                                               
 SHORT TITLE: PRISONER LITIGATION AND APPEALS                                  
 SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR                                  
 JRN-DATE     JRN-PG                  ACTION                                   
 02/27/95       488    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 02/27/95       488    (H)   STATE AFFAIRS, JUDICIARY, FINANCE                 
 02/27/95       488    (H)   3 ZERO FISCAL NOTES (LAW, CORR, DPS)              
 02/27/95       488    (H)   2 ZERO FISCAL NOTES (ADM)                         
 02/27/95       488    (H)   GOVERNOR'S TRANSMITTAL LETTER                     
 03/07/95              (H)   STA AT 08:00 AM CAPITOL 102                       
 03/07/95              (H)   MINUTE(STA)                                       
 03/14/95              (H)   STA AT 08:00 AM CAPITOL 102                       
 03/14/95              (H)   MINUTE(STA)                                       
 03/16/95              (H)   STA AT 08:00 AM CAPITOL 102                       
 BILL:  HB 234                                                               
 SHORT TITLE: ADMINISTRATIVE ADJUDICATIONS                                     
 SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR                                  
 JRN-DATE     JRN-PG                  ACTION                                   
 03/06/95       590    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 03/06/95       590    (H)   STATE AFFAIRS, JUDICIARY                          
 03/06/95       591    (H)   14 ZERO FISCAL NOTES (ADM, DEC, F&G)              
 03/06/95       591    (H)   (DHSS, LABOR, LAW, DPS, DOT)                      
 03/06/95       591    (H)   (4-DCED, 2-DOE)                                   
 03/06/95       591    (H)   GOVERNOR'S TRANSMITTAL LETTER                     
 03/08/95       665    (H)   ZERO FISCAL NOTE (DNR) 3/8/95                     
 03/14/95              (H)   STA AT 08:00 AM CAPITOL 102                       
 03/14/95              (H)   MINUTE(STA)                                       
 03/16/95              (H)   STA AT 08:00 AM CAPITOL 102                       
 BILL:  HB 212                                                               
 SHORT TITLE: TIMBER MANAGEMENT                                                
 SPONSOR(S): STATE AFFAIRS                                                     
 JRN-DATE     JRN-PG                  ACTION                                   
 03/01/95       530    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 03/01/95       530    (H)   STATE AFFAIRS, RESOURCES, FINANCE                 
 03/16/95              (H)   STA AT 08:00 AM CAPITOL 102                       
 BILL:  HB 122                                                               
 SHORT TITLE: MARINE MOTOR FUEL TAX                                            
 SPONSOR(S): REPRESENTATIVE(S) MOSES,Grussendorf,Mackie                        
 JRN-DATE     JRN-PG                  ACTION                                   
 01/25/95       132    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/25/95       132    (H)   STATE AFFAIRS, FINANCE                            
 03/16/95              (H)   STA AT 08:00 AM CAPITOL 102                       
 ACTION NARRATIVE                                                              
 TAPE 95-27, SIDE A                                                            
 Number 000                                                                    
 The meeting of the House State Affairs Standing Committee was                 
 called to order by Chair Jeannette James at 8:10 a.m.  Members                
 present at the call to order were Representatives James, Porter,              
 Green, and Robinson.  Representative Ivan arrived at 8:49 a.m.                
 Members absent were Representatives Ogan and Willis.                          
 HSTA - 03/16/95                                                               
 HB 130 - REGULATION ADOPTION PROCEDURES & REVIEW                            
 CHAIR JEANNETTE JAMES announced the first item on the agenda was HB
 130.  She called for Bruce Campbell, Administrative Assistant to              
 Representative Pete Kelly, sponsor of the measure, to come and                
 testify on behalf of Representative Kelly.                                    
 BRUCE CAMPBELL, Administrative Assistant to Representative Pete               
 Kelly, said he was in attendance to ask the committee to adopt                
 proposed draft for HB 130 and to pass the bill out of committee.              
 He said that HB 130 was a small step towards regulation reform,               
 working within the current framework of the regulatory process.               
 Mr. Campbell stated that the bill does two things:  1) Provides for           
 the review of regulations by an elected official; and 2) Gives                
 guidance to those in the administration who must work with the                
 public comment process.  He further added that HB 130 attempts to             
 bring public opinion into the regulatory process.  Mr. Campbell               
 said he would be glad to answer any questions from the committee.             
 REPRESENTATIVE BRIAN PORTER asked what changes were made in the               
 proposed committee substitute for HB 130, from the original bill.             
 Number 062                                                                    
 MR. CAMPBELL said the changes were small modifications arising from           
 questions coming from the Lieutenant Governor's Office and from               
 comments regarding the fiscal notes.  He stated the most                      
 substantive change was in Section 6, AS 44.62.215, which would be             
 a new section added.  Part (b), lines 14, 15, 16, and 17 have been            
 shortened from four items to two.  These state that before an                 
 agency adopts a regulation, they shall make a written estimate of             
 the cost of compliance to private individuals affected by the                 
 proposed regulation and show that there is an economically feasible           
 means of complying with the proposed regulatory action.                       
 Originally, this section had two additional requirements for                  
 showing the economic benefits to and economic impact on the state,            
 which was interpreted by some agencies as meaning they would have             
 to hire additional economists to collect this data.  This was not             
 the intent of the bill.  These two items are still part of the                
 written record provided to the Lt. Governor, and will help give               
 some sense of the requirements of the regulation to those who must            
 comply.  He stated that Section 2, page 3, lines 10, 11, 14, and              
 15, were changed to note the Lt. Governor may return a proposed               
 regulation to the agencies if and when he/she finds that doing so             
 is in the best interests of the state.  He said this helps to                 
 define the reasons the Lt. Governor may return a regulation to an             
 agency for redrafting.  He stated these were the two major changes            
 in the proposed committee substitute for HB 130, and argued the               
 bill still hopes to add light and review to the regulatory process            
 through the Lt. Governor's Office and the legislature's                       
 Administrative Regulation Review Committee prior to regulations               
 being signed into law.  He further stated HB 130 gives guidelines             
 as to how public comment must be considered by the agencies during            
 the drafting of proposed regulations.                                         
 Number 156                                                                    
 REPRESENTATIVE JOE GREEN mentioned that HB 130 had picked up an               
 additional fiscal note, which would cost the state an extra                   
 $300,000 a year.  He asked Mr. Campbell whether he thought the                
 stated objective of this bill was worth the extra expense.  He                
 asked what the state would be getting for the extra cost.                     
 BRUCE CAMPBELL said it was not their intent to have such a large              
 fiscal note, and that they thought the proposed committee                     
 substitute for HB 130 would lower the cost to the state.                      
 REPRESENTATIVE PORTER attempted to summarize his understanding of             
 what HB 130 hoped to accomplish in the regulatory process.  He said           
 that, as he understood it, the agencies would be required to come             
 up with a cost of compliance estimate for new proposed regulations.           
 These draft regulations would then go to the legislatures                     
 Administrative Regulation Review Committee before going to the Lt.            
 Governor's Office for signing into law, where they would receive              
 additional review.                                                            
 Number 193                                                                    
 MR. CAMPBELL responded this bill would require the agencies to                
 prepare a cost of compliance estimate for new regulations, which              
 would be filed by the Lt. Governor as a part of the official                  
 record.  He further stated that HB 130 would assign the Lt.                   
 Governor to send draft regulations to the Administrative Regulation           
 Review Committee prior to their being filed into law, where they              
 would receive additional review if necessary.                                 
 REPRESENTATIVE PORTER verified that the Lt. Governor was required,            
 by this bill, to delay the filing of new regulations, until                   
 receiving input from the legislature's Administrative Regulation              
 Review Committee.                                                             
 MR. CAMPBELL agreed this was the case for a period of time.                   
 REPRESENTATIVE PORTER asked what would keep this proposal from                
 delaying the regulatory process to the point it was not manageable.           
 MR. CAMPBELL said it would require some legwork and cooperation               
 between the Administration and the legislature's Administrative               
 Regulation Review Committee.  In the case of an emergency                     
 regulation, this bill would not apply.  He suggested that we                  
 currently have a similar situation in the review of regulations by            
 the Department of Law, which has no set time frame.  He said they             
 were trying to give the Administrative Regulation Review Committee            
 a set time period in which to do their review, but if this period             
 were considered too long, it could be negotiated.  He stated this             
 period was currently set at 90 days in the proposed committee                 
 substitute for HB 130.                                                        
 Number 250                                                                    
 REPRESENTATIVE PORTER asked if he thought the cost of compliance              
 review would add time to the regulatory process.                              
 MR. CAMPBELL said no, as he thought the cost of compliance                    
 questions would come up largely in the public hearing comments.               
 REPRESENTATIVE GREEN asked if there was a default mechanism in the            
 review process of the Administrative Regulation Review Committee,             
 if they did not respond within the designated amount of time.                 
 MR. CAMPBELL said this was the case.                                          
 Number 275                                                                    
 REPRESENTATIVE CAREN ROBINSON asked for an explanation of how the             
 sponsor had addressed the concerns of the Department of Law                   
 regarding this bill.  As an example, she said one of their concerns           
 was about the fast pace in which regulations needed to be written,            
 and they were concerned this bill would delay that process.                   
 MR. CAMPBELL responded that the current process was not                       
 instantaneous and takes a certain amount of time.  He stated HB 130           
 would extend this process by a period of time for review of the               
 regulation by the committee, but that this phase could probably be            
 quickened upon request from the public.  Mr. Campbell said they               
 would have to anticipate the amount of time needed for this, just             
 as they need to anticipate the delays in the current process.                 
 REPRESENTATIVE ROBINSON verified that the bill clearly identified             
 it was the legislature's regulation review committee, who would be            
 conducting this review.                                                       
 MR.  CAMPBELL stated it was, and that this committee was called the           
 Administrative Regulation Review Committee.                                   
 REPRESENTATIVE ROBINSON was confused if it was the legislature's              
 committee, why was the word "administrative" included in the title.           
 She said this made it unclear as to whose committee it was.                   
 Number 295                                                                    
 CHAIR JAMES responded that this was the language of the existing              
 statutes and not the language of this particular bill.  She said              
 the reason for this title was that the committee was reviewing                
 administrative regulations.  She said this committee is a joint               
 committee of the House and Senate.                                            
 REPRESENTATIVE ROBINSON stated she was familiar with the committee            
 and knew there were considerations of disbanding it, as it had no             
 function.  She said she supposed this bill was trying to give it a            
 CHAIR JAMES responded the original purpose of the committee,                  
 related to a statute which allowed the legislature to annul a                 
 regulation by a resolution.  This was then deemed unconstitutional            
 by the courts and so the committee has been left without a                    
 REPRESENTATIVE ROBINSON asked why this bill would not then be                 
 considered unconstitutional.                                                  
 Number 334                                                                    
 MR. CAMPBELL replied that this bill does not deal with the                    
 annulment of regulations at all.  That was a much larger issue                
 covered by HB 105 and HJR 1.                                                  
 REPRESENTATIVE ROBINSON continued by stating that another concern             
 of the Department of Law, was that this bill gave authority to the            
 Lt. Governor to return regulations to the agencies, who may not               
 know what the problem is.  She wanted to know how the sponsor                 
 proposed to deal with this problem and how the agencies would know            
 why the regulation was returned.                                              
 MR. CAMPBELL said that he could not believe that this would be the            
 case, as the agencies would be directly involved with the public              
 hearing process and would be exposed to the concerns and                      
 complaints.  He stated the problems which arose in the past, were             
 when a Lieutenant Governor acted on their own discretion without              
 the delegated authority, such as former Lt. Governor Steve                    
 McAlpine.  He said Mr. McAlpine did refuse to sign regulations                
 which he thought had problems.  He added that in the past                     
 Administration, the ability of the Lt. Governor to stop and review            
 regulations was granted by the Governor, which was later taken                
 away.  Therefore, he thought that when the legislature grants this            
 authority, this conflict would be removed and it would become a               
 part of the normal regulatory process to get the regulations signed           
 into law.                                                                     
 Number 375                                                                    
 REPRESENTATIVE ROBINSON stated she thought it was strange to allow            
 the Lt. Governor to send the regulation back without an                       
 explanation.  She thought that maybe this explanation should be in            
 writing and recommended changes.                                              
 MR. CAMPBELL argued that the phrasing "best interest finding" has             
 a certain legal definition, which requires a certain type of                  
 decision making by the Lt. Governor before he/she returns a                   
 regulation to the agency.  He thought that although this may not be           
 as strong of language as the Department of Law would like, there is           
 a particular reason established by this bill, as to why a                     
 regulation may or may not be returned.                                        
 Number 400                                                                    
 REPRESENTATIVE ROBINSON asked why this bill was trying to preclude            
 the agencies from considering public policy concerns arising from             
 public comment, which was the opinion of the Department of Law.               
 She thought that one of the main concerns of the regulatory process           
 was the perceived lack of listening to public concerns by the                 
 MR. CAMPBELL disagreed with the Department of Law's interpretation            
 of HB 130 on this point.  He said they were not trying to preclude            
 the agencies from taking public comment, but that in the                      
 preparation of the draft regulation from public comment, they are             
 asking the agency to create a written record of what comments they            
 evaluate and how the regulation has changed accordingly, but are              
 restricting them to evaluate only factual or substantive comments             
 in the drafting of the regulation and not the preferences of                  
 individuals on the issue.  He argued that the agencies task in                
 writing regulations were to make specific and add details to the              
 laws passed by the legislature and not to be a legislative body of            
 its own.  He said they were not delegated the authority by the                
 legislature to pass judgement on a particular statute, but only the           
 ability to add detail to implement a given statute.  The weighing             
 of public will in developing policy was properly the purview of the           
 legislature and not the agencies.  Thus, HB 130 was an attempt in             
 assisting the agencies in how to deal with public testimony during            
 the regulatory process.                                                       
 Number 455                                                                    
 REPRESENTATIVE GREEN said he was concerned about what would happen            
 if the regulations were given to the Administrative Regulation                
 Review Committee for review during a time when the legislature was            
 not in session, and may not be able to respond in the allowed 30              
 day time period.                                                              
 MR. CAMPBELL stated he thought that for the bulk of regulations               
 that were well written, this would not matter.  He said this                  
 question hinged mainly on whether this committee was to be an                 
 interim committee.  He suspected that if a particular regulation              
 developed enough public concern, the committee would avail itself             
 of the opportunity to offer its suggestions regarding the                     
 CHAIR JAMES invited Representative Kelly to come sit at the                   
 committee table. She added that there was a person wishing to                 
 testify via teleconference from Cordova.                                      
 Number 490                                                                    
 MICHELLE O'LEARY, Vice President of the Prince William Sound                  
 Regional Citizens Advisory Committee, said she wanted to commend              
 the legislature's effort to insure that regulations are clearly               
 written and to provide a user friendly mechanism for consistently             
 implementing state law through the regulatory process.  She agreed            
 that laws should be written to minimize the burden of regulations,            
 while maximizing the public welfare.  She added that both HB 130              
 and HB 163 contain provisions, which require the private costs                
 imposed by regulations to be analyzed and agencies stipulate in               
 writing that there is an economically feasible means of complying             
 with the regulation.  She said she questioned whether agencies                
 would be able to make this determination.  She thought that one of            
 the results of recent environmental regulations, was the large and            
 thriving environmental compliance industry.  Ms. O'Leary said the             
 technological growth of this industry was astounding, and the                 
 result of and not the cause of environmental laws and regulations.            
 She stated that when a new law is written, there is often a                   
 significant time lag before regulations are written and compliance            
 is required.  During this time, the highly competitive                        
 environmental compliance industry researches ways to bring the                
 regulated industry into compliance.  She said it was not uncommon             
 to have the compliance dated postponed to meet the requirements of            
 stringent environmental laws.  Ms. O'Leary thought that in most               
 cases the agencies would have no means of knowing what compliance             
 technologies would be developed or what technologies would be                 
 selected by the regulated industry.  She was also disturbed that              
 both HB 130 and HB 163 require a cost of compliance by private                
 parties only, and not a cost-benefit analysis for the general                 
 public.  Ms. O'Leary thought it was generally agreed that it was              
 the role of government to restrict private actions only if the cost           
 of these private actions are excessive or pose a risk to the                  
 general public.  She thought that if laws were passed only if their           
 was a public risk, then it made little sense to measure only the              
 private cost of compliance.  Ms. O'Leary further argued that a                
 subjective analysis of these costs should be calculated before a              
 law is passed and should not totally be the burden of the                     
 regulatory process.  Speaking specifically about HB 163, she wanted           
 to note that agencies were required, when providing public notice             
 to provide the reason for the proposed regulation, the initial cost           
 to the state agency for implementation, the annual cost to the                
 state agency for implementation, and the cost of compliance to                
 private parties.  She believed that the annual cost to the agency             
 for implementation should be included in the fiscal notes passed              
 with the enabling legislation.  She added that HB 163, requires the           
 agencies to calculate the initial cost of compliance to private               
 individuals, if the proposed regulation will increase compliance              
 costs.  Ms. O'Leary again argued that it was wrong to calculate               
 only the costs of compliance and not the cost-benefit ratio for the           
 general public.  Speaking about HB 130, she was concerned that this           
 bill set up the Lt. Governor's Office as a vehicle for the return             
 of regulations by the legislature.  She thought that maybe this               
 would be making the legislature a judiciary body, and whether it              
 should have this right.  She was also concerned that nothing in HB
 130, required the Lt. Governor to take public testimony after a               
 draft regulation was returned with suggestions from the                       
 Administrative Regulation Review Committee.  She was concerned this           
 would set up a system whereby the public could testify on a                   
 proposed regulation, only to have it modified with no apparent                
 recourse for the public.  Again, with HB 130 as with HB 163, she              
 was concerned that the bill required only a private cost of                   
 compliance estimate and not a cost-benefit ratio for the general              
 public.  Finally, Ms. O'Leary was concerned with the provision of             
 HB 130, which would require that an agency consider only testimony            
 that was substantive and factual, and not an expression of personal           
 preference.  She was concerned this would limit the ability of the            
 public to participate in the legislative and regulatory process.              
 CHAIR JAMES asked if anyone in the audience wished to testify on HB
 Number 600                                                                    
 JOHN LINDBACK, Chief of Staff for Lt. Governor Fran Ulmer, stated             
 that Lt. Governor Ulmer felt pretty ambivalent towards HB 130 and             
 would like all of the regulation reform bills to be a topic of                
 discussion over the interim, as is the case with HB 105.  Lt.                 
 Governor Ulmer feels that this will help to create a coordinated              
 approach towards regulation reform, and will build a consensus                
 between the Administration and the legislature.  In a letter to the           
 bill sponsor, Lt. Governor Ulmer expressed her concerns over the              
 lack of specificity in HB 130, as to why the Lt. Governor should              
 return a regulation to the agencies.  She would like to see more              
 specific reasons listed in the bill, and would be more than willing           
 to work with the legislature to develop this language.  He said the           
 Lt. Governor is also concerned with the legal issues brought up by            
 the Department of Law, regarding HB 130, and would like to see them           
 thoroughly researched by the various committees hearing this bill.            
 Number 628                                                                    
 CHAIR JAMES asked if anyone else would like to testify on this                
 PAM NEAL, President, Alaska State Chamber of Commerce, stated that            
 the Chamber of Commerce was generally supportive of HB 130.  She              
 said they are particularly supportive of the requirement that the             
 agencies speak to public comment and how it was dealt with.  She              
 added that one of their concerns, over the current regulatory                 
 process, was that the business community was not always aware of              
 whether they were heard by the agencies, and if not, why not.  They           
 also agreed that elected officials should be the ones responsible             
 for regulations.  Finally, the chamber believes very strongly that            
 regulations should reflect the intent of the legislature.                     
 REPRESENTATIVE ROBINSON asked what the chamber's view would be                
 towards putting all of the proposed regulatory bills into a                   
 subcommittee for review and public hearings over the interim.                 
 MS. NEAL said that the chamber was concerned that if they were to             
 put all of the bills into a subcommittee to address the overall               
 concern, that the problem was so large, there would be no steps               
 towards reform.  Thus, they would rather take the approach of                 
 taking small steps and whittling away at the problem, while the               
 overall solution was addressed and developed.  They did not see               
 where HB 130 would negate any of the other proposals towards                  
 regulatory reform, and so were satisfied with pushing it forward              
 while the overall solution were developed.                                    
 Number 694                                                                    
 REPRESENTATIVE ROBINSON asked if the chamber had looked at the                
 concerns of the Attorney General's Office or those of the Lt.                 
 Governor's Office, and whether they thought it was wise to push an            
 incomplete bill through the legislative process, which may end up             
 getting vetoed in the end.                                                    
 PAM NEAL replied that they had not gotten to look at the Attorney             
 General's letter, but added that they were strongly in favor of HJR
 1, which would call for a constitutional amendment to annul                   
 regulations.  Their main focus was to develop a regulatory process,           
 which was user friendly and developed regulations which met                   
 legislative intent and only those that were necessary.                        
 TAPE 95-27, SIDE B                                                            
 Number 000                                                                    
 REPRESENTATIVE ROBINSON asked Representative Pete Kelly, the bill             
 sponsor, about the concerns that HB 130 would limit public                    
 testimony in the regulatory process.                                          
 REPRESENTATIVE PETE KELLY responded that there were two processes             
 occurring.  The agencies would weigh the factual and scientific               
 merits of the enabling legislation in developing new regulations,             
 leaving the weighing of public will to the legislature, through the           
 Administrative Regulation Review Committee.  He felt that it was in           
 this committee, that it would be the proper place to review both              
 public will and the scientific merits of the regulation.  He felt             
 that this was the proper way to weigh public testimony, as the                
 employees of the agencies are not elected officials.                          
 Number 018                                                                    
 REPRESENTATIVE ROBINSON stated that she was still confused about              
 the section that would preclude the agencies from weighing public             
 comment that was not factual.                                                 
 REPRESENTATIVE KELLY argued that she was in charge, as a                      
 legislator, of public policy.  He said an employee of an agency is            
 not.  Their job is to take the public policy of the legislature,              
 with the approval of the governor, and to draft a regulation for              
 implementing this policy based on the facts.  Furthermore, he added           
 there was nothing in statute currently that directed the agencies             
 as to how to deal with public testimony and comments.  This bill,             
 would give guidelines to the agencies as to how to take public                
 testimony, and to leave a paper trail of how they responded to this           
 testimony.  It provided guidelines as to what was the purview of              
 the legislature and that of the agencies.                                     
 Number 070                                                                    
 CHAIR JAMES said she wanted to clarify why two of the regulatory              
 reform bills were out of the subcommittee and back before the House           
 State Affairs Committee.  She said the decision of the subcommittee           
 was to take one of the three bills, HB 105, and hold it over the              
 interim to try and work out a comprehensive reform of the                     
 regulatory process with the public and the Administration.  They              
 decided to take HB 130 and HB 163 and forward them through the                
 legislative process on their own merits.  Chair James said of that            
 day, she would be filing a fourth regulatory reform bill, which               
 would establish the sunset provisions and legislative oversight of            
 regulations as discussed in committee.                                        
 REPRESENTATIVE PORTER wanted to clarify that part of the review of            
 the Administrative Regulation Review Committee would include making           
 sure that the proposed regulation met the intent of the legislature           
 with the enabling statute.                                                    
 REPRESENTATIVE KELLY responded this was absolutely true.                      
 CHAIR JAMES wanted to recognize the arrival of Representative Ivan            
 to the committee and added that Bonnie Williams was on                        
 teleconference to testify.                                                    
 Number 125                                                                    
 BONNIE WILLIAMS, political consultant and former Chair of Governor            
 Hickel's Task Force on Regulatory Reform, stated she was not sure             
 how this bill would reform the regulatory process.  She thought the           
 bill would extend the current process by adding another layer.  She           
 further was concerned that the cost analysis and statement of                 
 economic feasibility occurred after the public comment, which made            
 them simply assertions of the agency and not valid estimates.  This           
 she felt limited public comment or correction of the calculations.            
 She further pointed out there was no cost-benefit analysis                    
 required.  She also commented that she saw nothing in HB 130, which           
 met any of the recommendations of the regulation reform task force.           
 She said she was particularly concerned that if this bill passed,             
 the legislature would believe they had accomplished regulation                
 reform, and nothing further will occur.  She again stated she could           
 not accept HB 130 as regulatory reform.                                       
 Number 166                                                                    
 REPRESENTATIVE KELLY said he wanted to clarify the cost analysis              
 was a part of the regulatory process, and the intent was to have              
 them completed before the draft regulation goes to the Lt.                    
 Governor, so that they and the Administrative Regulation Review               
 Committee can be better informed regarding the costs of the                   
 regulation.  He did not feel that the cost of compliance analysis             
 was done necessarily after the public comment period, but he would            
 check this point out and try and address it in the bill.                      
 CHAIR JAMES asked if there was any other comments or anyone else              
 wishing to testify.                                                           
 REPRESENTATIVE ROBINSON stated that Deborah Behr was present from             
 the Attorney General's Office and that she would like the                     
 opportunity to ask Ms. Behr some questions.                                   
 CHAIR JAMES called for a brief at ease.                                       
 Number 183                                                                    
 CHAIR JAMES called the meeting back to order.                                 
 REPRESENTATIVE ROBINSON commented that she too wanted appropriate             
 regulation reform, and when she looked at the surface of the bill             
 it sounded good.  Her concerns were raised when exploring the legal           
 issues raised by the Attorney General's Office, as well as the                
 level of public comment allowed by this bill.  Thus, she would like           
 to address some of these concerns with Deborah Behr of the Attorney           
 General's Office.                                                             
 Number 200                                                                    
 DEBORAH BEHR, Assistant Attorney General, Department of Law, and              
 the Executive Branch, said she was pleased to be able to offer                
 comments before the committee on HB 130.  She said she was                    
 concerned about the constitutional issue of separation of powers.             
 She stated that in the original version of HB 130, it read that the           
 Administrative Regulation Review Committee had 30 days in which to            
 review a draft regulation and could apply to the Lt. Governor for             
 additional time if needed.  She was concerned that this could be              
 interpreted legally as a "pocket veto" of the regulatory process.             
 In the proposed committee substitute, she noted there was an                  
 attempt to address this concern on page 3, lines 7, 8, and 9, by              
 saying after the 30 days were over, if the committee needed more              
 than 90 days to provide its comment on a proposed regulation, it              
 must provide the Lt. Governor with a date of when this comment                
 would be ready.  She said this was an improvement, but she was not            
 sure this would withstand a constitutional challenge under ALIVE              
 Voluntary.  She was also concerned about the bill's delegation of             
 legislative powers to a subcommittee of the legislature in the form           
 of the Administrative Regulation Review Committee.  Ms. Behr said             
 a few members of the committee cannot possibly represent the views            
 of all 60 members of the legislature.  She said this again would              
 not withstand constitutional challenge in the courts, because it              
 was an impermissible delegation of legislative power to a committee           
 of the legislature.                                                           
 Number 280                                                                    
 REPRESENTATIVE PORTER asked to verify what she meant by setting out           
 parameters for what.                                                          
 MS. BEHR said she meant that an agency can go no farther in                   
 drafting a regulation than the parameters set out by the                      
 legislature in a statute.  She offered an example of a law                    
 regarding the maximum speed limit allowed in the state.  If the               
 legislature wanted the maximum speed limit to be 65 miles per hour,           
 they would put this in a statute and the agencies would be limited            
 by it.  However, the statute said the Executive Branch may set a              
 maximum speed limit of 65 miles per hour, they could exceed this              
 limit if they chose to do so.  Thus, tighter statutes limit the               
 ability of the Executive Branch to go beyond the wishes of the                
 REPRESENTATIVE ROBINSON pointed out that under HB 130, even the               
 sponsor of the bill may not have the opportunity to express their             
 intent, which may be different than that of the Administrative                
 Regulation Review Committee.                                                  
 MS. BEHR agreed, saying that even the sponsor's intent may change             
 as the bill goes through the legislative process, and so the courts           
 say they look at the record as a whole to interpret legislative               
 intent.  She said that she would like to echo that this bill should           
 be a project of the interim and she would be willing to work with             
 anyone over the summer on the regulation reform issue.  She said              
 she was also concerned about the ability this bill gives to the Lt.           
 Governor to return a regulation that the Governor and their staff             
 may want, as the Governor is constitutionally the chief executive             
 of the state.  She thought that this could arguably be considered             
 unconstitutional.  She thought that maybe a way around this was to            
 give this authority to the governor who could then delegate it to             
 the Lt. Governor and revoke it if a problem arose.  She added she             
 was also concerned about the bill's changing the position of boards           
 and commissions, as she thought most people valued the time and               
 input of these citizen groups.  Currently, the regulations                    
 promulgated by many of these groups are final, and cannot be sent             
 back by the Governor or the Lt. Governor.  Thus, any limiting of              
 the abilities of the citizen groups to promulgate regulations ought           
 to be something that the legislature did intentionally and not as             
 an accidental oversight, as she suspected was happening with HB
 130.  Finally, she wanted to express her concern about limiting the           
 ability of the agencies to consider public policy while drafting              
 new regulations.  Also, Ms. Behr indicated was concerned about                
 additional steps in the regulatory process that may open the state            
 up for litigation.  As an example, she suggested that a problem               
 with HB 130 was the cost of compliance requirement, which did not             
 define cost.  The question she had was how far down the line the              
 agency should go in determining costs.  Do you look to the cost to            
 the private business or do you go to the cost to the consumer who             
 buys that product?  She said she would be willing to answer any               
 Number 367                                                                    
 REPRESENTATIVE GREEN shared his concern over whether there was a              
 default mechanism that would limit how long the Administrative                
 Regulation Review Committee may review a proposed regulation.  He             
 stated that he had thought from the testimony of the bill sponsor's           
 aid, that this time was limited, but that Ms. Behr had concluded              
 that this time could be extended indefinitely.  Thus, he had some             
 reservations about that part of this bill.                                    
 MS. BEHR commented she wanted to make sure there was no confusion,            
 that the proposed committee substitute for HB 130 did set a firm              
 date of when this review would be completed, but that it could go             
 on for an extended period of time such as two to three years.                 
 Thus, she thought this section was still problematic and would not            
 withstand a court test.                                                       
 CHAIR JAMES asked if there were anyone else who wished to testify             
 on this bill.  Hearing none, she asked what the committees                    
 intention was regarding the passage of this bill to the next                  
 committee of referral.                                                        
 Number 387                                                                    
 REPRESENTATIVE PORTER moved to adopt the proposed committee                   
 substitute for HB 130, version M,  as the working document for                
 consideration by the committee.                                               
 CHAIR JAMES asked if there were any objections.  Hearing none, the            
 committee substitute was adopted for consideration.  She added                
 although she would like for only good, cleaned up bills to leave              
 this committee, that some of the legal problems of HB 130 might               
 better be considered in the Judiciary Committee, which was the next           
 committee of referral.  She stated she did not want to impose any             
 of her views on the committee, and so would like the committee as             
 a whole to make that decision.                                                
 Number 407                                                                    
 REPRESENTATIVE IVAN IVAN apologized for missing the testimony of              
 Deborah Behr from the Attorney General's Office, as he had some               
 questions for her.  He said he could give her a call later.                   
 CHAIR JAMES mentioned that this bill had two more committees of               
 referral, and so maybe some of their questions could be answered in           
 those committees.  She stated she felt a little uneasy in sending             
 a problematic bill forward to the next committee, but had done so             
 in the past and so had unfortunately set the precedent already.               
 REPRESENTATIVE ROBINSON wanted to say she felt very strongly that             
 we should keep all bills dealing with regulation reform in this               
 committee as an interim project to try and come up with an overall            
 solution towards regulation reform.  She felt that Chair James had            
 made the right decision in holding her own regulation reform bill,            
 HB 105, as an interim project and urged the committee to do so with           
 this bill as well.                                                            
 REPRESENTATIVE IVAN commented that he was perfectly willing to have           
 his question answered at the next committee of referral.                      
 Number 442                                                                    
 REPRESENTATIVE PORTER stated he did not have any problem with                 
 addressing the legal issues raised by HB 130 in the judiciary                 
 committee, but that he felt there were some issues, such as further           
 refinement of the definition "best interest of the state" and the             
 issue of defining cost of compliance, that he thought would be                
 better answered in this committee.                                            
 REPRESENTATIVE ROBINSON agreed, further arguing that an additional            
 concern of this committee was the proper role of the Lt. Governor.            
 CHAIR JAMES asked what the committee would like to do regarding               
 passage of this bill to the next committee.                                   
 Number 471                                                                    
 REPRESENTATIVE IVAN moved to pass this CSHB 130(STA), with attached           
 fiscal notes, to the next committee of referral.                              
 CHAIR JAMES asked if there were any objections.  Representative               
 Robinson objected, and so Chair James asked for a roll call vote.             
 During the vote, Representative Green had some further questions he           
 would like to have answered before voting.  The vote was                      
 interrupted to answer these questions.  His concern was whether the           
 Judiciary Committee would consider all of the concerns raised in              
 this committee or just those of a legal nature.                               
 CHAIR JAMES asked for Representative Porter to answer this question           
 as the chair of the Judiciary Committee.                                      
 REPRESENTATIVE PORTER responded that knowing the scheduling of the            
 Finance Committee, he would hope that all of the concerns raised              
 here would be settled either in Judiciary or this committee.                  
 REPRESENTATIVE KELLY replied that he would gladly offer a committee           
 substitute for responding to most of the concerns raised, as he               
 thought they were legitimate concerns that needed to be dealt with.           
 REPRESENTATIVE IVAN offered to withdraw his motion to pass this               
 bill out of committee, if there were concerns over issues that                
 should be dealt with in this committee.  He said he did not mean to           
 put forward a divisive motion to the committee.                               
 Number 538                                                                    
 CHAIR JAMES tried to summarize the concerns raised in this                    
 committee, as a combination of judicial and policy issues.  She               
 wanted to verify that it was not just the judicial issues that were           
 of concern to the committee, but policy issues as well.                       
 REPRESENTATIVE IVAN also asked for this verification of the                   
 CHAIR JAMES called for verification of these concerns of the                  
 REPRESENTATIVE IVAN thought that he was hearing that the concerns             
 were over policy issues as well as judicial concerns, and stated he           
 would like policy concerns settled in the State Affairs Committee.            
 Thus, he wanted to withdraw his motion to pass the bill on to the             
 next committee of referral.                                                   
 REPRESENTATIVE PORTER thought that keeping the bill in this the               
 State Affairs Committee would not amount to a substantial delay in            
 moving this bill through the legislative process, as those concerns           
 would have to be dealt with in any committee.  He felt that policy            
 issues would be better dealt with in this committee, as it seemed             
 to be the focal point of the regulation reform issue.  He thought             
 that many of the concerns could be fixed rather easily.                       
 CHAIR JAMES asked bill sponsor, Representative Kelly, how much time           
 he felt it would take him to try and fix some of the concerns of              
 the committee, so that it could be rescheduled for consideration.             
 She wondered whether it could be scheduled for the next committee             
 meeting on Saturday.                                                          
 REPRESENTATIVES PORTER and KELLY stated that they would both be               
 tied up in the Finance Committee on Saturday.                                 
 REPRESENTATIVE ROBINSON thought that maybe it could be held until             
 the Tuesday meeting, and that the bill sponsor could try and                  
 address as many of the concerns as possible before that meeting.              
 She thought that getting the bill as refined as possible before               
 passage from the State Affairs Committee, would help it to move               
 through future committees faster as well.                                     
 REPRESENTATIVE PORTER wanted to clarify that he was not concerned             
 about dealing with the legal issues in the Judiciary Committee, but           
 thought that the policy issues were best handled in this committee.           
 Number 593                                                                    
 REPRESENTATIVE IVAN stated he wished to withdraw his former motion            
 to pass this bill to the next committee.                                      
 CHAIR JAMES asked if there was any objections.  Hearing none, the             
 motion was withdrawn.  She asked Representative Kelly how soon he             
 thought he could come back to the committee with corrections to his           
 REPRESENTATIVE KELLY expressed his concern that the Department of             
 Law had waited until now to share their concerns with HB 130, as              
 they have had copies of the bill and have been corresponding with             
 his office for a couple of months.  He thought that maybe it was              
 not in their best interest to support a bill, which might limit               
 their power in the regulatory process.  He stated he would gladly             
 draft amendments to try and address the concerns of the Department            
 of Law, but wondered how long it would take them to respond.  He              
 argued the legislature could be forced to study regulation reform             
 indefinitely, if it continued to try and get approval from the                
 administration and the agencies.  He thought that maybe these                 
 concerns should be pushed through the committee process and force             
 the administration and the agencies to respond on the legislatures            
 time frame.  Thus, he urged the committee to make a decision on the           
 bill, whether it meant voting in favor or opposition.  Otherwise,             
 he feared the Administration could drag its feet indefinitely.  He            
 stated he could offer a committee substitute very quickly, but did            
 not know whether it would be to the administrations liking.                   
 Number 629                                                                    
 REPRESENTATIVE ROBINSON disagreed, saying she had not had bad luck            
 in dealing with the Department of Law.  She did not feel that there           
 was such strong opposition from the Department of Law in dealing              
 with these concerns.  She said that did not mean they would agree             
 with the committee's decision, but that they would work with the              
 bill sponsor and the committee.                                               
 REPRESENTATIVE KELLY said he would try and address the concerns by            
 Saturday's meeting.                                                           
 CHAIR JAMES thought this was a good idea to hold the bill until               
 Saturday, so that these concerns could be addressed.  She felt that           
 should the vote be called now, the bill would probably die, if                
 these concerns were not addressed.  Thus, she was glad to hold the            
 bill over until the Saturday meeting.  She asked if there was any             
 objections from the committee.  Hearing none, the bill was held               
 HSTA - 03/16/95                                                               
 HB 163 - COMPLIANCE COST ESTIMATES REQUIRED                                 
 CHAIR JAMES announced the next bill on the agenda was HB 163.                 
 Number 650                                                                    
 ROD MOURANT, Administrative Assistant to Representative Pete Kott,            
 expressed that apologies of Representative Kott for being unable to           
 attend the meeting himself.  He said that HB 163 takes the                    
 recommendations of the Alaska Mineral Commission, the National                
 Federation of Independent Business, and excerpts from the                     
 Department of Law's drafting manual of 1993, and puts into statute            
 the requirement that an agency prepare a cost of compliance                   
 estimate, when publishing notice to adopt or repeal a regulation.             
 He added that the fiscal notes for the bill range from zero to                
 $178,000, which seemed to be differing understandings from the                
 agencies of what the bill required.  He pointed out that the                  
 Department of Health and Social Services, who adopts an enormous              
 amount of regulations and works closely with their constituencies,            
 gave a fiscal note of zero, while the Department of Environmental             
 Conservation estimated a fiscal impact of $178,700 with the hiring            
 of three more full time employees.  He stated the Department of               
 Revenue cited reasons that precluded them from calculating a cost             
 of compliance estimate, and felt that the legislature should pay              
 this cost anyhow.  He offered to answer any questions.                        
 Number 673                                                                    
 REPRESENTATIVE ROBINSON asked if he had seen the letter from                  
 Michelle O'Leary and whether he had any comments on it.                       
 MR. MOURANT informed her that he had seen the letter just recently            
 and had heard her testimony on teleconference.  He argued that most           
 of her concerns about HB 163 were already present in existing law.            
 He stated the only thing that this bill will do, is take the                  
 suggestion of the 1993 Department of Law drafting manual for                  
 regulations and put it into statute as a requirement.  He commented           
 that with regard to her second concern, regarding the additional              
 cost to the agency for doing this calculation, is essentially a               
 mute point.  This is because the agencies should have no additional           
 cost for complying with this bill, if they are following the                  
 suggestion in the drafting manual from the Department of Law.                 
 TAPE 95-28, SIDE A                                                            
 Number 000                                                                    
 CHAIR JAMES inquired whether Bonnie Williams wanted to testify on             
 HB 163 via teleconference from Fairbanks.                                     
 BONNIE WILLIAMS stated she had one comment regarding HB 163.                  
 Unlike HB 130, this bill clearly specifies that the cost of                   
 compliance happen before the public hearing.  She thought the cost            
 of compliance definition in this bill could also be interpreted to            
 be a cost-benefit analysis as well, and said she had no problem               
 with this bill.                                                               
 CHAIR JAMES asked if anyone else wished to testify on this bill.              
 JACK KREINHEDER, Senior Policy Analyst, Office of Management and              
 Budget, thought this bill raised some of the same concerns as HB
 130.  He said that simple changes that had a lot of common sense              
 appeal, deserved to be well thought out.  He reiterated the                   
 concerns of the Department of Law, that regulations lacking cost              
 estimates or with insufficient cost estimates will be a substantial           
 source of future litigation.  He thought that even if a department            
 makes a good faith effort to comply with calculating a cost of                
 compliance analysis, they could still be challenged in court.  He             
 remarked the Administration had no problem with the concept of                
 considering the impact of regulations on the public.  He thought              
 this was the intent of the language in the drafting manual, that              
 wherever possible, the agencies should try to minimize those costs            
 of compliance.  He thought the problem with HB 163, as it is                  
 currently written, is that it creates an extra expense for the                
 agencies in doing this calculation and can be exploited by anyone             
 opposed to regulations.                                                       
 Number 110                                                                    
 CHAIR JAMES stated she was trying to visualize what happens now               
 when a regulation is drafted and is interested in the                         
 recommendation for doing a cost of compliance analysis in the                 
 Department of Law's drafting manual.  She thought the advantage of            
 HB 163, in making that recommendation a requirement, is that this             
 information would then be a matter of public record.  This would              
 then give the public the opportunity to dispute the calculations of           
 the agency during the public hearing.  She said she could                     
 understand the concern that this could lead to future litigation,             
 as every time you add a layer to the process and further definition           
 to the regulation, you give greater latitude and cause for a                  
 lawsuit.  She thought that by leaving the regulation more open, you           
 give less cause for lawsuit.  She thought the fact still remained             
 though, that under the current system, we are not providing any               
 standard of how it should be done, just recommending that a                   
 calculation of cost compliance be done.                                       
 Number 152                                                                    
 REPRESENTATIVE PORTER commented that he thought this bill just                
 needed a provision that said if an agency makes a good faith effort           
 at establishing the cost of compliance, they will not be held                 
 liable short of gross negligence for the results of that effort.              
 This would take care of any concern of future litigation caused by            
 this bill.                                                                    
 MR. KREINHEDER stated he thought this was a good suggestion, but he           
 would like to consult with the Department of Law.  He thought there           
 could be a problem with a statute that puts something off limits to           
 legal challenge.                                                              
 REPRESENTATIVE PORTER pointed out that this would not put it off              
 limits to legal challenge, but just set up parameters that would              
 have to be met in any legal challenge.  To challenge in court, an             
 individual would simply have to establish gross negligence in their           
 MR. KREINHEDER thought this might solve the legal issues, but would           
 not solve the issue of additional cost to the agency.  He found it            
 impractical to assume the agencies could do a proper cost analysis            
 for everyone who could possibly be affected by a regulation.  He              
 cited an example given by the Department of Fish and Game, where              
 they could propose a regulation setting the size of fishing gill              
 nets, and for them to follow the letter of the law, they would have           
 to survey the fishermen to determine who owned that size net and              
 who would have to purchase one, the total number of fishing                   
 vessels, etc.  Thus, he was concerned that even with the allowance            
 of a good faith effort by the agency, that the legislature not pass           
 a law that would simply be a charade, or which agencies would have            
 no choice but to give lip service to.  He thought there were                  
 numerous examples to document that agencies could not possibly no             
 all of the people, who would be affected by a given regulation.               
 Additionally, many regulations do not prescribe what steps an                 
 individual must follow to be in compliance with the regulation.               
 Number 229                                                                    
 CHAIR JAMES commented she had a different interpretation about what           
 this cost of compliance analysis really meant.  She felt that, to             
 use his example of the fisherman's gill net, the agency would                 
 calculate the cost of a new gill net for the fisherman who needed             
 to purchase one, and then any savings the fisherman would                     
 experience.  In summary, she felt a cost of compliance calculation            
 was the cost to an individual involved in a particular industry,              
 not the cost to the industry as a whole.  Thinking in terms of a              
 cost benefit analysis, the cost of compliance to the individual               
 would be weighed against the benefit to the state as a whole, which           
 would give direction to the state as to how to act in a given                 
 situation.  She said it was the measurement of the cost of                    
 compliance verses the benefit to the state, and whether we were               
 willing to accept that cost for that benefit.                                 
 REPRESENTATIVE PORTER said he was of the opinion that the                     
 Administrative Procedures Act had acted properly and withstood                
 challenge with regards to notice and putting those that will be               
 affected on notice about a proposed regulation.  Thus, he did not             
 feel there would be the type of problem where the agency would have           
 to ask every fisherman whether they had a particular size of gill             
 net.  He argued the agency would have to make the same type of                
 notification that was required now, and with a good faith effort to           
 listen to the testimony and then use logic to determine the cost of           
 implementation or compliance.  He did not think it was that hard.             
 He thought that an agency listening to public testimony was good              
 for everyone.  If everyone tried to make it work, there is a way to           
 do it.                                                                        
 Number 295                                                                    
 REPRESENTATIVE IVAN  questioned whether these regulations could be            
 made flexible to allow the small businesses adjust to the costs of            
 the first year of implementation.                                             
 MR. KREINHEDER explained that he was reading the language of the              
 bill differently, as implying that the agency would have to                   
 calculate the cost of compliance for the whole industry, not just             
 for an individual involved in that industry.                                  
 CHAIR JAMES agreed, saying she thought this was the cost of                   
 compliance for the individual, and she felt the language was                  
 prohibitive for anyone to interpret it differently, except as an              
 individual person who will be regulated by the proposed regulation.           
 That is the relative cost to determining whether a regulation will            
 put a person out of business or not.  She asked if anyone else                
 would like to testify.                                                        
 Number 336                                                                    
 PAM NEAL, President of the Alaska State Chamber of Commerce, stated           
 the chamber was very much in support of the legislation.  It was a            
 prime concern of the chamber and they felt quite basic.  No                   
 business decision is made without a cost-benefit analysis.  She               
 added that no one questioned the benefit of proposed legislation              
 being accompanied by a fiscal note, before being voted upon.  It              
 seemed very basic that an agency proposing a new regulation should            
 do an analysis of the cost of compliance.  Thus, they were very               
 much in support of HB 163.                                                    
 REPRESENTATIVE ROBINSON asked how this bill would help her as a               
 business person in Alaska.  She argued that even if she knew the              
 cost of a particular regulation, she would still have to comply.              
 Therefore, she failed to see the benefit of this bill.                        
 Number 370                                                                    
 REPRESENTATIVE PORTER thought the benefit of this bill would be in            
 the agency having to justify the cost of their regulation showing             
 there would not be a more efficient way to comply.                            
 CHAIR JAMES agreed, saying that by making this calculation a                  
 requirement, it would allow the public the opportunity to comment             
 if the they feel the cost benefit ratio is out of sync.  She felt             
 the agencies should give the public all of the information                    
 available to be able to make a decision of whether they supported             
 the regulation or not.                                                        
 MS. NEAL concurred, saying if the cost were not known to the                  
 business community, they could not adequately make a decision about           
 a particular regulation.  She felt this bill was extremely basic,             
 and failed to see why it had not been done before.                            
 Number 414                                                                    
 REPRESENTATIVE PORTER agreed with the intent of this bill, but felt           
 the reason this has not been done before is the concern over                  
 litigation.  He thought this could be fixed easily, and requests              
 the sponsor to amend HB 163 with the previously suggested wording             
 regarding gross negligence.                                                   
 CHAIR JAMES asked the bill sponsor if they would be willing to                
 draft an amendment to HB 163, as suggested, and bring the amended             
 draft to the committee for consideration in a future meeting.                 
 Number 429                                                                    
 MR. MOURANT said the sponsor would have no problem with drafting an           
 amendment, but would prefer the committee not hold the bill from              
 passing to the next committee.                                                
 REPRESENTATIVE PORTER thought that in fairness, because the                   
 committee had held HB 130, they should also hold HB 163 as they               
 dealt with similar issues.                                                    
 MR. MOURANT thought he should reiterate the complaint of the                  
 previous bill sponsor, that there had been former committee                   
 meetings and a work session, where these bills were discussed and             
 no one from the Department of Law had expressed their concerns.               
 Thus, he to felt this could be intended to stall the passage of               
 these bills, and so was not sure how much cooperation he would                
 receive in getting this information from the Department of Law.               
 Additionally, he argued that no one from the Department of Law and            
 the Office of Management and Budget had contacted Representative              
 Kott or his office to express their concerns in advance.  Thus, he            
 stated that bureaucrats have a way of holding up and killing any              
 bill that they desire.                                                        
 REPRESENTATIVE ROBINSON thought they had testified earlier at a               
 former committee meeting about their concerns.                                
 CHAIR JAMES said she did not recall if they had or not.  She would            
 have to review the record.                                                    
 REPRESENTATIVE ROBINSON stated she would like to see not just a               
 calculation of the costs of compliance, but some type of relief for           
 extraordinarily large costs.  She could understand if this bill               
 were not the proper vehicle for achieving this, but she would like            
 to see it accomplished.                                                       
 MR. MOURANT agreed this bill does not provide relief by itself, but           
 said it does provide the opportunity for the private sector to                
 express their concerns while the regulation is still being drafted.           
 Number 482                                                                    
 REPRESENTATIVE PORTER thought that maybe the committee could work             
 to adopt wording in this bill, that would insure that it was                  
 understood the agencies were not required contact everyone who                
 could be possibly regulated, but just a sample cross section of               
 those effected.                                                               
 CHAIR JAMES asked how the committee wished to handle this bill.               
 REPRESENTATIVE PORTER suggested the committee hold this bill until            
 corrected, as they had previously done with HB 130.                           
 CHAIR JAMES agreed, and asked Representative Porter if he would be            
 willing to assist in drafting the suggested language.                         
 REPRESENTATIVE PORTER said he would help to draft the needed                  
 Number 498                                                                    
 CHAIR JAMES asked if there were any other comments from the                   
 committee.  She mentioned she was concerned about the large fiscal            
 notes on this bill.  She did not think the fiscal notes were a                
 proper reflection of the costs of this bill.                                  
 REPRESENTATIVE PORTER thought the fiscal notes could be a result of           
 the agencies misunderstanding what the bill required of them.                 
 Maybe by clarifying the language of bill, they could get fiscal               
 notes that more properly reflected the costs of the bill.                     
 CHAIR JAMES adjourned the meeting at 10:23 a.m.                               

Document Name Date/Time Subjects