Legislature(1999 - 2000)

03/24/1999 06:09 PM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
SENATE FINANCE COMMITTEE                                                                                                        
March 24, 1999                                                                                                                  
6:07 PM                                                                                                                         
SFC-99 # 63, Side A and B                                                                                                       
     64, Side A and B                                                                                                           
CALL TO ORDER                                                                                                                   
Co-Chair John Torgerson convened the meeting at                                                                                 
approximately 6:07 PM                                                                                                           
Senator John Torgerson, Senator Sean Parnell, Senator Randy                                                                     
Phillips, Senator Dave Donley, Senator Gary Wilken, Senator                                                                     
Al Adams, Senator Pete Kelly, Senator Lyda Green and                                                                            
Senator Loren Leman                                                                                                             
Also Attending:                                                                                                                 
DEBORAH BEHR, Assistant Attorney General, Legislation and                                                                       
Regulations Section, Civil Division, Department of Law; JON                                                                     
SHIVELY, Commissioner, Department of Natural Resources;                                                                         
CAROL CARROLL, Director, Division of Support Services,                                                                          
Department of Military and Veterans and Department of                                                                           
Natural Resources; NICO BUS, Administrative Services                                                                            
Manager, Division of Support Services, Department of                                                                            
Military and Veterans Affairs and Department of Natural                                                                         
Attending via Teleconference: From Anchorage: JIM BUTCHART,                                                                     
Division of Emergency Services, Department of Military and                                                                      
Veterans Affairs; MARY GILSON, Assistant Attorney General,                                                                      
Governmental Affairs Section, Civil Division, Department of                                                                     
Law; BOB LOEFFLER, Director, Division of Mining, Department                                                                     
of Natural Resources.                                                                                                           
SUMMARY INFORMATION                                                                                                             
SB 101-DEFINITION OF DISASTER                                                                                                   
SB  24-REGULATIONS: ADOPTION & JUDICIAL REVIEW                                                                                  
SB  33-TASK FORCE ON PRIVATIZATION                                                                                              
Back to order from morning recess.                                                                                              
SENATE BILL NO. 101                                                                                                             
"An Act amending the definition of 'disaster.'"                                                                                 
This was the fourth hearing for this bill.  Co-Chair John                                                                       
Torgerson noted that during the last hearing, the committee                                                                     
adopted CS Version "I" as a Workdraft.                                                                                          
Senator Sean Parnell moved for adoption of Amendment #5.                                                                        
Co-Chair John Torgerson explained that it added an intent                                                                       
section to the bill to alleviate fear that the committee                                                                        
would change the way the Governor could receive federal                                                                         
funds.  He stated that the bill did not do that, but the                                                                        
intent language was proposed to clarify the matter.                                                                             
Without objection, Amendment #5 was adopted.                                                                                    
Senator Al Adams moved for adoption of Amendment #6. Co-                                                                        
Chair John Torgerson objected. Senator Al Adams explained                                                                       
the amendment would add the words, "an event including" to                                                                      
page 4 line 8. The reason for this addition was to ensure                                                                       
that FEMA funds would not be lost.  Co-Chair John Torgerson                                                                     
spoke to objection, saying that there could be other                                                                            
interpretations to the language to suggest the disasters                                                                        
would not be limited to the list, but that others could be                                                                      
Amendment #6 failed to be adopted by a vote of 2-7. Senator                                                                     
Al Adams and Senator Pete Kelly cast the yea votes.                                                                             
There was discussion by the committee to clarify the status                                                                     
of the CS, past actions taken and the amendments proposed.                                                                      
Break 6:15 PM / 6:22 PM                                                                                                         
Senator Dave Donley moved for adoption of Amendment #7.                                                                         
Senator Al Adams objected. Senator Dave Donley explained                                                                        
that the amendment was mostly conforming language to make                                                                       
Section 2 work. It would give the Legislature an option not                                                                     
to convene a special session if the expenditure was over $5                                                                     
million. It set up a method for the presiding officers to                                                                       
poll the members of the Legislature and receive written                                                                         
consent by the majority of the members of each body. It                                                                         
would make the provision of polling of Legislatures                                                                             
acceptable using telephonic facsimile, electronic mail or                                                                       
other means of written communication. Co-Chair John                                                                             
Torgerson referred to page 1 section 1 and noted the                                                                            
language stating that the proclamation of disaster could                                                                        
not last longer than 30 days unless extended by the                                                                             
Legislature by law.  He wondered if there shouldn't be a                                                                        
conforming amendment to that provision also to possible                                                                         
allow for the extension to be made other than with a law or                                                                     
concurrent resolution.  Senator Dave Donley countered that                                                                      
the existing law said a disaster could not last longer than                                                                     
30 days without concurrent resolution. Therefore, the same                                                                      
problem existed under current law.  Co-Chair John Torgerson                                                                     
responded that the current law intended that the                                                                                
Legislature would convene a special session and pass a law                                                                      
for the extension. Senator Dave Donley said the distinction                                                                     
between law and a concurrent resolution wouldn't be                                                                             
impacted by this because, unless it was determined that the                                                                     
current system was flawed and the special session law had                                                                       
been ignored, the CS would become consistent even thought                                                                       
it was inconsistent in current law.  With the adoption of                                                                       
Amendment #7 there was a possibility it could become                                                                            
inconsistent again.  Co-Chair John Torgerson said the bill                                                                      
drafters would be directed to ensure conformity.                                                                                
Senator Al Adams referred to page 2 line 1 of the Amendment                                                                     
explained that if that was done, funding could be approved                                                                      
for a disaster of over $1 million or, $5 million if the                                                                         
federal government declared it. It would also give the                                                                          
option to handle the funding through the legislative                                                                            
process. He asked the sponsor to comment. Senator Dave                                                                          
Donley said that would change the framework of the CS.                                                                          
Senator Al Adams said it would make it simpler to get                                                                           
access to the federal funds and to also implement Senator                                                                       
Dave Donley's polling method.  Senator Dave Donley said the                                                                     
CS was intended to bring more accountability into the                                                                           
system.  By inserting the "or" the Governor would be free                                                                       
to spend money without consulting the Legislature as long                                                                       
as the federal government declared the disaster. Senator Al                                                                     
Adams countered that the legislation shouldn't be made so                                                                       
tight that when there was a disaster, the state would be                                                                        
unable to respond.  Senator Al Adams conceded that if the                                                                       
sponsor did not agree with the proposed amendment to                                                                            
Amendment #7, he would not offer it. Senator Dave Donley                                                                        
thanked him and declined the amendment.                                                                                         
Without objection, Amendment #7 was adopted.                                                                                    
Amendment #8 was brought before the committee. Co-Chair                                                                         
John Torgerson noted that page 2 lines 6-15 of the CS was                                                                       
deleted by Amendment #7 thus affecting the proposed changes                                                                     
in Amendment #8 to page 2 line 9 of the CS.                                                                                     
ANNETTE KREITZER, staff to Senator Loren Leman, spoke to                                                                        
Amendment #8.  She testified that no changes from Amendment                                                                     
Amendment #8.  She told the committee that proposed                                                                             
deletions of, "26.23.300(c) and (d)" and insert of,                                                                             
"26.23.300(b) and (c)" in Amendment #9 was simply a                                                                             
function of what would happen on page 2 lines 22-26 of the                                                                      
She quantified that this amendment was drafted as a result                                                                      
of committee discussions about how to go through the                                                                            
process.  This would remove the $500,000 limit and provide                                                                      
specific expenditures of up to $1 million from the disaster                                                                     
relief fund. The qualifications would be, "to save lives,                                                                       
protect property and public health and safety or lessen or                                                                      
avert the threat of a disaster that posed a direct and                                                                          
imminent threat of sufficient severity and magnitude to                                                                         
justify state action."  This language was taken from FEMA's                                                                     
definition of emergency.                                                                                                        
The next significant change was to page 3 line 7 of the CS,                                                                     
the limiting section of specific types of disasters                                                                             
allowable. It added "mitigate environmental damage" to the                                                                      
release of oil or hazardous substances.                                                                                         
The next proposed change was to reduce the spending cap                                                                         
from $5 million to $3 million on page 3 line 8. She                                                                             
indicated that was a policy call for the committee to                                                                           
decide what figure it chose to use.                                                                                             
Co-Chair John Torgerson interrupted asking that the                                                                             
amendment be divided. There was discussion as to where the                                                                      
division would occur.                                                                                                           
Co-Chair John Torgerson asked for clarification that the                                                                        
first portion of the amendment would delete the half                                                                            
million-dollar provision for smaller disasters and increase                                                                     
it to $1 million.  Annette Kreitzer affirmed explaining                                                                         
that the reason for that change related to the definition                                                                       
of disaster and the committee's action to separate out                                                                          
certain disasters on page 3 lines 4-9 for specific                                                                              
treatment by the Legislature.  Co-Chair John Torgerson                                                                          
noted that the $500,000 trigger was liberal and the                                                                             
definition was very broad so that it could encompass the                                                                        
smaller disasters. It had seemed an appropriate amount of                                                                       
money to fund the smaller events and this change would                                                                          
raise that amount and tighten the definition.                                                                                   
Annette Kreitzer said that was correct and that it was a                                                                        
policy call for the committee. She noted the various                                                                            
discussions relating to the bill. Co-Chair John Torgerson                                                                       
asked if the $500,000 was in existing language. Annette                                                                         
Kreitzer answered that the $1 million limit was the                                                                             
existing language.  Co-Chair John Torgerson thought the                                                                         
$500,000 limit was also in current statute.                                                                                     
Co-Chair John Torgerson entertained a motion to divide the                                                                      
Senator Loren Leman moved for adoption of Amendment #8A.                                                                        
This consisted of all of page 1 and page 2 lines 1-10                                                                           
excluding lines 3-5 of Amendment #8.                                                                                            
Annette Kreitzer recommended including page 3 lines 21 and                                                                      
22 of Amendment #8 noting that it was parallel language.                                                                        
Senator Loren Leman amended his motion to include that in                                                                       
Amendment #8A.                                                                                                                  
Senator Al Adams said it was difficult to understand the                                                                        
amendment because it set different flooring levels relating                                                                     
to the $500,000 and $1 million limits. It also was                                                                              
difficult to understand what authority the governor would                                                                       
have at different flooring levels.  He suggested a change                                                                       
of the word "possesses" to "poses". He then spoke to the                                                                        
concerns of only allowing relief for one flood per                                                                              
community. What would happen if there was a second flood                                                                        
and the state wanted to save lives and protect property and                                                                     
health?  He then noted that the cost of most disasters was                                                                      
above $3 million for Alaska and he felt the $5 million                                                                          
limit should not be lowered. He complained about the                                                                            
definitions of the disasters asking why the list did not                                                                        
include disasters more likely to occur in Alaska. He would                                                                      
vote no on the amendment.                                                                                                       
Senator Lyda Green discussed the definition of disaster.                                                                        
She referred to current statute and its reference it made                                                                       
to US code.  The definition included in the current                                                                             
amendment was nearly identical to the current statute.                                                                          
Therefore, this amendment would not depart from the                                                                             
definition, it just hadn't been followed in the past.                                                                           
Senator Al Adams rebutted that if that were the case, he                                                                        
would ask where was the definition of severe winter storms                                                                      
in the amended definition.                                                                                                      
Senator Sean Parnell read the amendment differently. As he                                                                      
understood, it would allow the Governor, without additional                                                                     
Legislative authorization, to expend funds for the purposes                                                                     
of saving lives, protecting property, etc. All this                                                                             
amendment would do was bring to light the immediacy of the                                                                      
impact to the people affected and give the Governor the                                                                         
ability to fund those disasters. It did not set dollar                                                                          
limits. Senator Loren Leman said Senator Sean Parnell was                                                                       
Senator Loren Leman made technical amendment to the amended                                                                     
Amendment #8A to change "possesses" to "poses" on page 1                                                                        
line 12 and page 2 line 8.                                                                                                      
Senator Al Adams still questioned what would happen in the                                                                      
case of a second flood. Was it the intent of the sponsor to                                                                     
prevent the state and federal government from assisting in                                                                      
the protection of lives and property. Co-Chair John                                                                             
Torgerson informed him there was another amendment that                                                                         
addressed the flood provision. It was not his intent to not                                                                     
allow assistance. He noted the two triggers of $5 million                                                                       
for the first flood and $1 million for the next flood. He                                                                       
detailed the provision.                                                                                                         
Co-Chair John Torgerson asked Annette to read the language                                                                      
with the amended Amendment #8A incorporated.  She read into                                                                     
the record portions of the CS Version "I" as it would be                                                                        
Senator Sean Parnell asked why, as a policy matter, did the                                                                     
committee want to get rid of the $500,000 provision.                                                                            
Annette subsection b the 500,000 . Annette Kreitzer                                                                             
responded that this amendment was drafted in the initial                                                                        
stages of the bill to reflect the feelings of the committee                                                                     
at that time. She realized that the feelings might have                                                                         
changed.  Senator Sean Parnell liked the language but                                                                           
questioned the deletion of the $500,000.  Co-Chair John                                                                         
Torgerson agreed saying it essentially raised the amount                                                                        
that the governor could expend and that it had worked fine                                                                      
in the past.                                                                                                                    
Senator Sean Parnell asked if an amendment to delete page 1                                                                     
lines 4 and 5 of Amendment #8 would affect the provisions                                                                       
on page 2 starting with line 22 of the CS Version "I".                                                                          
Annette Kreitzer suggested a conceptional amendment to                                                                          
direct the Division of Legal Services to conform the                                                                            
language to include the saving lives and property provision                                                                     
and retain the $500,000 provision. She gave detail.                                                                             
Senator Sean Parnell moved to conceptually amend the                                                                            
amended Amendment #8A. This would delete page 1 lines 4 and                                                                     
5 of Amendment #8, and essentially retain the language on                                                                       
page 2 lines 22-26 of the CS Version "I" and leave the                                                                          
$500,000 trigger in the bill.                                                                                                   
Senator Al Adams asked if that would affect the change to                                                                       
renumber AS 26.23.300 as proposed on page 1 lines 1-3 of                                                                        
Amendment #8 and also addressed in Amendment #7. Annette                                                                        
commented that she saw it as a technical amendment to                                                                           
conform to the bill. Senator Sean Parnell stated his intent                                                                     
to have the bill drafters incorporate the necessary                                                                             
technical changes.  The intent of his motion was to retain                                                                      
the language regarding the $500,000 provision.                                                                                  
Without objection, the amended Amendment #8A was again                                                                          
Senator Lyda Green moved to conceptually amend Amendment                                                                        
delete all of lines 24-26 of the CS Version "I" and be                                                                          
replaced with the language from page 1 lines 11-13 of                                                                           
Amendment #8. She read the proposed language into the                                                                           
Senator Sean Parnell questioned why the committee would do                                                                      
that with the $500,000 trigger when it was included with                                                                        
the $1 million trigger. He noted Senator Al Adams's point                                                                       
that there were other smaller events that the state may                                                                         
want to respond to. Senator Lyda Green responded that when                                                                      
declaring disasters, the standard must be consistent or                                                                         
there would be a risk of starting to assist in a disaster                                                                       
and the cost running above the $500,000.                                                                                        
Senator Dave Donley understood this, if there was a small                                                                       
disaster and the cost rose above the $500,000 it would be                                                                       
pushed into the higher category and the additional                                                                              
restrains would be imposed. Senator Lyda Green commented.                                                                       
Tape: SFC - 99 #63, Side B    7:03 PM                                                                                           
Co-Chair John Torgerson asked if the language should be                                                                         
inserted were intended by Amendment #8 rather than as                                                                           
proposed in the amendment to the amended Amendment #8A.                                                                         
Senator Dave Donley said that while there was a good                                                                            
argument for accountability, there was an outweighed                                                                            
argument for flexibility when the cost was below $500,000.                                                                      
By allowing that flexibility, the Legislature did not give                                                                      
up the greater accountability for the larger disasters.                                                                         
Senator Lyda Green asked for clarification of the                                                                               
restrictions between the $500,000 and $1 million dollar                                                                         
expenditures. There was discussion on the subsections                                                                           
Co-Chair John Torgerson restated the amendment into the                                                                         
record.  Senator Randy Phillips objected to the motion.                                                                         
Senator Loren Leman felt the committee should roll back and                                                                     
start over. He thought the committee had gotten off track                                                                       
with this amendment.                                                                                                            
Senator Lyda Green withdrew her motion to amend the amended                                                                     
Amendment #8A.                                                                                                                  
Co-Chair John Torgerson noted that brought the committee                                                                        
back to Amendment #8A as amended. Senator Al Adams                                                                              
maintained his objection. He restated his earlier comments                                                                      
that the amendment was difficult to understand and the                                                                          
delegation of powers was also difficult to ascertain. He                                                                        
noted that this bill could not be amended to adequately                                                                         
satisfy all the member of the committee.                                                                                        
Amendment #8A as amended was adopted by a vote of 8-1.                                                                          
Senator Al Adams cast the nay vote.                                                                                             
Senator Loren Leman stated that he would not offer                                                                              
Amendment #8B. This consisted of page 2 lines 3-5 and lines                                                                     
11-25 of Amendment #8.                                                                                                          
Senator Loren Leman moved for adoption of Amendment #8C.                                                                        
This consisted of page 3 lines 1-20 and the deletion of                                                                         
page 2 lines 3-5 and lines 11-25 of Amendment #8. Senator                                                                       
Lyda Green objected. Annette Kreitzer explained that the                                                                        
portion remaining (page 3 lines 1-20) spoke to the                                                                              
definition of disaster. This amendment would change the                                                                         
definition to make it similar to the FEMA definition of                                                                         
major disaster.  She read the definition into the record.                                                                       
She added that she had checked with the National Weather                                                                        
Service to see how they defined prolonged cold                                                                                  
temperatures.  She learned that they defined a short period                                                                     
of cold a "cold snap" and a longer period of cold a "cold                                                                       
spell". The term, "prolonged extreme cold" came from the                                                                        
FEMA's reference to prolonged extreme heat.                                                                                     
Co-Chair John Torgerson asked for clarification of the                                                                          
intent of the amendment.  Annette Kreitzer responded that                                                                       
it was difficult for her to understand and that she was                                                                         
only able to determine the new language rather than what                                                                        
was deleted. She continued to detail the amendment.  Co-                                                                        
Chair John Torgerson noted that it would actually delete                                                                        
the language down through line 8 of page 3 of the CS and                                                                        
replace the entire definition.                                                                                                  
Senator Gary Wilken asked for the rationale behind the                                                                          
elimination of "or clothing". Annette said clothing was                                                                         
considered property and was not listed separately under                                                                         
FEMA language.                                                                                                                  
Co-Chair John Torgerson pointed out that the new definition                                                                     
would also eliminate avalanche. Annette responded that it                                                                       
was the intent of the amendment to stay within the FEMA                                                                         
language.  However, she said the severe extreme cold                                                                            
provision was added and the committee could chose to add a                                                                      
provision for avalanche also.                                                                                                   
Senator Loren Leman moved to amend Amendment #8C to insert                                                                      
"avalanche" to page 3 line 12 after "mudslide" in Amendment                                                                     
Senator Lyda Green asked if other parts of the statute                                                                          
referred to the US code that defined natural disaster. She                                                                      
read the definition into the record. She felt the statute                                                                       
had to either conform to the federal code or eliminate any                                                                      
reference to it. Co-Chair John Torgerson said he would                                                                          
entertain an amendment to do so.                                                                                                
Senator Al Adams asked if the statute reflected the US                                                                          
code, would that make it easier to get federal funding.                                                                         
Senator Dave Donley didn't think so.                                                                                            
Senator Al Adams wanted to know what events might happen in                                                                     
Alaska that was not included in the definition. He had                                                                          
concerns about the elimination of potential events that                                                                         
might happen in the future. Co-Chair John Torgerson                                                                             
explained that the Governor could still spend up to                                                                             
$500,000 on them. If the Governor chose to declare the                                                                          
event a disaster, he could spend up to $1 million. Any                                                                          
amount more than that would then trigger the legislative                                                                        
special session component.                                                                                                      
Senator Lyda Green felt it should be called a "major"                                                                           
Break 7:24 PM / 7:40 PM                                                                                                         
Senator Lyda Green moved to amend Amendment #8C as amended.                                                                     
This would delete language on page 3 of the CS beginning                                                                        
with "resulting" on line 4 and ending with "damage," on                                                                         
line 7 and replace with different language, which she read                                                                      
into the record.  Co-Chair John Torgerson offered a                                                                             
friendly amendment to the amendment to replace the language                                                                     
to be inserted with, "as defined in AS 26.23.900(2)".                                                                           
Senator Lyda Green accepted the friendly amendment.                                                                             
Co-Chair John Torgerson noted that this amendment would                                                                         
remove from the list of allowable disasters, epidemic,                                                                          
explosion and riot.  If this was the will of the committee,                                                                     
he felt it should be noted in the record. Senator Lyda                                                                          
Green stated that was her intent.                                                                                               
Without objection, the amendment to amend Amendment #8C as                                                                      
amended was adopted.                                                                                                            
Without objection, Amendment #8C as amended was adopted.                                                                        
Senator Randy Phillips moved for adoption of Amendment #9.                                                                      
Senator Al Adams asked how it compared to the changes made                                                                      
with Amendment #8. Co-Chair John Torgerson explained that                                                                       
this amendment would change the provisions regarding floods                                                                     
to pay $5 million once. If costs exceeded $5 million, the                                                                       
Legislature must approve expenditures using the polling                                                                         
method. If a second flood occurred in the same geographical                                                                     
area, the maximum amount allowed would be $1 million                                                                            
without Legislative approval.                                                                                                   
Senator Al Adams removed his objection. Without objection,                                                                      
Amendment #9 was adopted.                                                                                                       
JOHN SHIVELY, Commissioner, Department of Natural Resources                                                                     
testified. He said his office delivered a letter to the                                                                         
Senate Finance Committee that outlined the department's                                                                         
concerns about the affect of the bill, which he didn't                                                                          
think the committee intended. However, because of the                                                                           
funding procedure, he thought there would be consequences                                                                       
to the wildlife fire fighting services. In the past, the                                                                        
program was funded from the disaster funds with the                                                                             
department coming to the Legislature the next session with                                                                      
a supplemental request to replenish the fund. Under this                                                                        
bill, it would be necessary to declare a disaster and to                                                                        
request additional funds from the Legislature before they                                                                       
could be expended.  Fire fighting costs over the last                                                                           
several years averaged over $11 million. Because the new                                                                        
bill set a $5 million limit, a special session would need                                                                       
to be called each fire season.                                                                                                  
He suggested a couple solutions.  One was to pre-fund the                                                                       
fire fighting program. He felt that could be problematic                                                                        
for a number of reasons. Another solution would be for the                                                                      
Legislature to exempt some wild land fire fighting. That                                                                        
would allow the status quo by having the Legislative                                                                            
leadership approve the funds as needed. Another solution                                                                        
was to incorporate the polling of the Legislature to                                                                            
convene a special session.                                                                                                      
Co-Chair John Torgerson asked what was the current limit                                                                        
for spending on wildfires.  Jon Shively responded that the                                                                      
initial limit was whatever the Legislature appropriated.                                                                        
Last year that amount was $3.5 million. When more was                                                                           
expended, the department requested money from the disaster                                                                      
relief fund.  That fund usually was not sufficient, and a                                                                       
request was made to the Governor. The Governor then                                                                             
notified the Legislative leadership for approval for more                                                                       
funds to continue to fight the fires. He stressed that the                                                                      
costs constantly went over the initial appropriation.                                                                           
There was no limit for fire fighting as such other than the                                                                     
Legislative leadership deciding to refuse the request.                                                                          
Co-Chair John Torgerson corrected him saying that the                                                                           
Legislative leadership didn't approve additional funds,                                                                         
only declining to convene a special session, thus allowing                                                                      
the Governor to expend funds. Under the proposed bill, the                                                                      
limit would be raised to $5 million. Jon Shively countered                                                                      
that he did not interpret it that way. The spending limit                                                                       
was not the problem; it was the fact that there was no                                                                          
money in the fund. There was further discussion between Co-                                                                     
Chair John Torgerson and Jon Shively on the matter.                                                                             
Senator Al Adams asked if the Legislature would appropriate                                                                     
more money to the disaster relief fund. Co-Chair John                                                                           
Torgerson answered that chances were there would not be                                                                         
additional funds. Senator Al Adams stated that he felt more                                                                     
money should be appropriated. Co-Chair John Torgerson                                                                           
understood but noted that this bill would allow the                                                                             
Governor to use other funds for disasters without                                                                               
legislative authority. He stressed that prior to this bill,                                                                     
the Governor only had authority to expend up to $1 million.                                                                     
This bill would allow him to spend up to $5 million.                                                                            
Co-Chair John Torgerson noted that his office hadn't                                                                            
received the aforementioned letter from the Department of                                                                       
Natural Resources.                                                                                                              
It was determined there was no one present wishing to                                                                           
testify on the bill.                                                                                                            
Co-Chair John Torgerson announced he did not intend to move                                                                     
the bill from committee at this meeting. He would have a                                                                        
new CS drafted for the committee to review.  He ordered the                                                                     
bill held in committee.                                                                                                         
CS FOR SENATE BILL NO. 24(JUD)                                                                                                  
"An Act relating to regulations; relating to                                                                                    
administrative adjudications; amending Rule 65, Alaska                                                                          
Rules of Civil Procedure; and providing for an                                                                                  
effective date."                                                                                                                
This was the third hearing for this bill.                                                                                       
Co-Chair John Torgerson noted the new CS Version "W" before                                                                     
the committee did not incorporate the removal of Section 8                                                                      
from CS Version "V", as amended by the committee in it's                                                                        
previous hearing.                                                                                                               
Senator Dave Donley, as sponsor of that amendment,                                                                              
understood the difficulty in removing the section and had                                                                       
no objection to it remaining in the bill. He moved for                                                                          
adoption of CS SB 24 Version "W" as a Workdraft.  Without                                                                       
objection, it was adopted.                                                                                                      
It was noted that earlier Amendments 2, 3 and 4 were                                                                            
redrafted and renumbered Amendments 5, 6 and 7 to conform                                                                       
to CS Version "W".                                                                                                              
Senator Sean Parnell moved for adoption of Amendment #5.                                                                        
Co-Chair John Torgerson explained the amendment a technical                                                                     
recommendation from the Department of Law. It would delete                                                                      
"the division of habitat and restoration of" and insert                                                                         
"for habitat and restoration programs". The division was                                                                        
not created by statute but by regulation. Therefore there                                                                       
was no official division and this amendment would conform                                                                       
the bill to law.  The amendment would also delete,                                                                              
"designated state entity" and insert, "designated state                                                                         
Senator Randy Phillips asked for clarification that the                                                                         
habitat and restoration division in the Department of Fish                                                                      
and Game was not created by statute. Co-Chair John                                                                              
Torgerson said it was created by Executive Order and then                                                                       
regulations were adopted to operate the programs.                                                                               
Amendment #5 was adopted without objection.                                                                                     
Senator Al Adams moved for adoption of Amendment #6.                                                                            
Senator Dave Donley objected. Senator Al Adams explained                                                                        
that this would limit the use of supplemental notices for                                                                       
Department of Environmental Conservation regulations                                                                            
relating to domestic wastewater disposal, food service                                                                          
programs and the solid waste management program. He said                                                                        
these regulations were most likely to affect citizens who                                                                       
were unfamiliar with the regulation process and would not                                                                       
benefit from the additional notices.  This would be cheaper                                                                     
to operate and make regulation adoption easier.                                                                                 
DEBORAH BEHR, Assistant Attorney General, Legislation and                                                                       
Regulations Section, Civil Division, Department of Law,                                                                         
came to the table at the request of Senator Al Adams. The                                                                       
amendment would create a pilot project out of the programs                                                                      
of the Department of Environmental Conservation. These                                                                          
programs were selected because it was felt they affected                                                                        
citizens who did not regularly deal with regulations and                                                                        
therefore would have smaller fiscal notes.                                                                                      
Senator Dave Donley commented that the bill as it was                                                                           
included the programs mentioned plus others from Department                                                                     
of Environmental Conservation. He said that the bill was                                                                        
narrowed to only include the Department of Environmental                                                                        
Conservation, Department of Natural Resources, and the                                                                          
Department of Fish and Game, habitat and restoration                                                                            
programs. Therefore, it was already focused to the most                                                                         
problematic programs.                                                                                                           
Senator Gary Wilken asked if this amendment would narrow                                                                        
the bill down further.  Senator Dave Donley answered it                                                                         
would. Co-Chair John Torgerson added that it would exclude                                                                      
all the other programs listed in the current CS.                                                                                
Amendment #6 failed to be adopted by a vote of 1-8. Senator                                                                     
Al Adams cast the yea vote.                                                                                                     
Senator Al Adams moved for adoption of Amendment #7.                                                                            
Senator Dave Donley objected. Senator Al Adams spoke to the                                                                     
Tape: SFC - 99 #63, Side A    8:07 PM                                                                                           
Senator Al Adams continued to speak saying the amendment                                                                        
would reduce the number of public notices needing to be                                                                         
sent.  It would also make an efficient use of the Internet                                                                      
and allow for a shorter turn around time for comments on                                                                        
proposed regulations. It would make the process more                                                                            
predictable for business and eliminate reoccurring cycles                                                                       
of revisions and comment periods.                                                                                               
Deborah Behr commented that this amendment addressed the                                                                        
most problematic sections of the bill. She explained the                                                                        
process for adopting regulations required under the current                                                                     
bill regarding timber sales. There was no end to the number                                                                     
of times required for a proposed regulation to be sent out                                                                      
for public comment. She spoke of concerns about missed                                                                          
construction seasons and missed timber sales. This                                                                              
amendment would reduce costs by limiting to provisions to                                                                       
pilot programs.                                                                                                                 
Senator Randy Phillips asked when was the last time the                                                                         
state had a timber sale.  Deborah Behr did not know and                                                                         
said she would have to ask Department of Natural Resources.                                                                     
However, this provision would also apply to air quality                                                                         
Senator Dave Donley asked what was different between this                                                                       
amendment from what the departments currently did.  Deborah                                                                     
Behr detailed the steps of the current process. So long as                                                                      
the proposed regulation fit the scope of the public notice,                                                                     
the commissioner had the discretion to adopt the change                                                                         
without further public comments.  This amendment would                                                                          
remove that discretion, but only for one round of public                                                                        
comments. Senator Dave Donley responded that while this was                                                                     
a step toward the original intent of the bill, it did not                                                                       
go far enough. It should not be limited to one round. If a                                                                      
person agreed with the first regulation proposal and chose                                                                      
not to comment, he or she would then not be notified of the                                                                     
next proposed change, which may be significantly different.                                                                     
Senator Pete Kelly asked Deborah Behr to comment on Senator                                                                     
Dave Donley's statement. She said Senator Dave Donley                                                                           
raised a point. How do people who didn't comment the first                                                                      
round have an opportunity to be noticed of subsequent                                                                           
changes? She suggested that those interested would follow                                                                       
the process on the Internet.                                                                                                    
Amendment #7 failed to be adopted by a vote of 1-8. Senator                                                                     
Al Adams cast the yea vote.                                                                                                     
Senator Al Adams moved for adoption of Amendment #8. Co-                                                                        
Chair John Torgerson objected. Senator Al Adams explained                                                                       
the amendment would remove Section 4, requirement for a                                                                         
cost benefit analysis for new regulations, which would be                                                                       
Deborah Behr further explained the problems the                                                                                 
Administration had with Section 4 of the bill because of                                                                        
its vagueness. It did not define the costs to benefit the                                                                       
public requirement. She spoke of the difficulty to decipher                                                                     
when there were competing interests to the public about a                                                                       
proposed regulation such as with timber sales, saying it                                                                        
would be difficult to figure what was appropriate.                                                                              
Determining the cultural impact to the community into the                                                                       
cost of development.  There would be many court challenges                                                                      
based on this point. She also referred to small business                                                                        
waivers and the need to determine if there was a public                                                                         
cost benefit under the requirement of the bill.                                                                                 
She continued saying this amendment was an expansion of                                                                         
Senator Pete Kelly's suggestions for serious consideration                                                                      
of costs. The Department of Law felt this solution would be                                                                     
workable and would have no fiscal impact to the state.                                                                          
Co-Chair John Torgerson noted he added the cost benefit                                                                         
analysis to the section of the CS after a sidebar with                                                                          
Senator Dave Donley. Senator Dave Donley commented that the                                                                     
added language was only to a portion of the section. This                                                                       
amendment would remove the entire section. He spoke to the                                                                      
rest of the section. First, the Senate Judiciary Committee                                                                      
had adopted many provisions to soften the effects of the                                                                        
cost benefit. He detailed those provisions noting the added                                                                     
flexibility and safeguards.                                                                                                     
Co-Chair John Torgerson commented that the greatest                                                                             
flexibility his CS added to the bill was to page 2 lines                                                                        
24-28, which dictated that a cost benefit was not necessary                                                                     
if the cost to implement the regulation was identified in                                                                       
the fiscal note. He said the intention was to stop the                                                                          
Administration from adopting regulations that went beyond                                                                       
the scope of the enabling or authorizing legislation. If it                                                                     
would, the agency would have to return to the Legislature                                                                       
with a request to change the statute to conform to their                                                                        
proposal. The intent was to lessen the impact on the fiscal                                                                     
notes of this bill.                                                                                                             
Senator Dave Donley pointed out a further ultimate                                                                              
safeguard. Although the Legislature hoped that the                                                                              
Administration would follow the intent of the limited                                                                           
application of the legislation, if something did go wrong,                                                                      
there would be this savings clause dictating that the                                                                           
regulation may not be adopted because the agency failed to                                                                      
comply with the section. This would prevent lawsuits,                                                                           
according to Senator Dave Donley.                                                                                               
Co-Chair John Torgerson added that there was also                                                                               
conforming section on page 5 lines 11-16. It clearly stated                                                                     
that if a copy of the fiscal note identified in the front                                                                       
section were available from the designated state agency                                                                         
then the cost benefit analysis would not be required.  He                                                                       
felt that showed the clear intent of the Legislature.                                                                           
Amendment #8 failed to be adopted by a vote of 1-8. Senator                                                                     
Al Adams cast the yea vote.                                                                                                     
Senator Dave Donley spoke to Amendment #9. He noted the                                                                         
Senate Judiciary Committee version of the bill, which had                                                                       
applied to most of state government rather than the 3                                                                           
departments currently, there was a general provision that                                                                       
addressed problematic question of agency heads not                                                                              
accepting the findings of hearing officers. Under their                                                                         
existing powers of the Administrative Procedures Act, the                                                                       
commissioners would remand the decisions back to the                                                                            
hearing officers because they didn't agree with the                                                                             
findings. There was no standard in existing law dictating                                                                       
when a commissioner could remand a decision back for more                                                                       
facts. He felt there needed to be some sort of standard                                                                         
inserted. This amendment contained the language drafted in                                                                      
the Senate Judiciary Committee hearings. He said there had                                                                      
been discussion about another vehicle to do this. One was                                                                       
the proposed constitutional amendment recently introduced                                                                       
by the Senate Judiciary Committee providing that a separate                                                                     
department conduct regulation hearings. He felt that the                                                                        
odds of the constitutional amendment being adopted were                                                                         
slim and suggested this amendment would help the situation.                                                                     
He also felt a change to the Administrative Procedures Act                                                                      
would also be helpful.                                                                                                          
He wished for these provisions to apply to all departments,                                                                     
not just the three left in the bill. He wanted a general                                                                        
across the board provision. He welcomed any suggestions to                                                                      
accomplish the goal of preventing the commissioners from                                                                        
remanding hearing officer decisions without valid grounds.                                                                      
Senator Dave Donley moved for adoption of Amendment #9.                                                                         
Senator Al Adams objected.                                                                                                      
Deborah Behr was invited to comment on the amendment.  She                                                                      
pointed out that hearing officers were not confirmed                                                                            
cabinet officers and never came before the Legislature for                                                                      
confirmation. Therefore, this amendment would allow an                                                                          
unconfirmed cabinet officer, generally a private attorney,                                                                      
to trump the decision of a confirmed cabinet officer.  Most                                                                     
regulations were adopted by boards or commissions made up                                                                       
of lay people appointed by the Governor and confirmed by                                                                        
the Legislature. There could be a hearing officer who was                                                                       
not a licensed doctor issuing a decision that went against                                                                      
medical practice, because the attorney had no knowledge. If                                                                     
the agency could not find a substantial factual question                                                                        
would be in court over what that the substantial question                                                                       
was. Even with that, the Lieutenant Governor would have to                                                                      
grant approval.  She felt this would change the balance of                                                                      
Senator Dave Donley asked if Deborah Behr had any                                                                               
suggestions for additional language to the Administrative                                                                       
Procedures Act. Deborah Behr offered to work with sponsor                                                                       
to find one.                                                                                                                    
Senator Dave Donley offered to withdraw his motion.                                                                             
Co-Chair John Torgerson said they could go back to the                                                                          
original language from an earlier workdraft. Senator Dave                                                                       
Donley said multiple hearings were held in the Senate                                                                           
Judiciary Committee and this was an ongoing discussion. He                                                                      
welcomed assistance in setting standards but thought there                                                                      
ought to be standards.                                                                                                          
Deborah Behr restated her offer of assistance in detail.                                                                        
Co-Chair John Torgerson told Deborah Behr this language was                                                                     
included in another version. Senator Dave Donley was                                                                            
willing to give them one more chance to come up with                                                                            
something smoother. He said he could address the matter on                                                                      
the Senate floor.                                                                                                               
Senator Dave Donley withdrew his motion to adopt Amendment                                                                      
Co-Chair John Torgerson turned the discussion to the fiscal                                                                     
notes. He noted that some of the department's fiscal notes                                                                      
went up. He commented the committee could take several                                                                          
approaches to reduce the amounts. The departments could                                                                         
testify to the reason the funding was needed.                                                                                   
Deborah Behr mentioned that the fiscal notes were drafted                                                                       
against the "V" version. The fiscal notes to the "W"                                                                            
version would go down. Co-Chair John Torgerson noted that                                                                       
the CS Version "V" was substantially less restrictive than                                                                      
the versions before.                                                                                                            
BOB LOEFFLER, Director, Division of Mining, Department of                                                                       
Natural Resources testified via teleconference from                                                                             
Anchorage.  He addressed the division's concerns with the                                                                       
cost benefit analysis requirement and its potential affects                                                                     
to the mining industry. He felt the cost benefit analysis                                                                       
might have the unintended consequence providing a                                                                               
significant legal handle that could unavoidably delay a                                                                         
number of important mining projects.                                                                                            
Senator Dave Donley interrupted asking if the director was                                                                      
familiar with page 3 lines 12-14 of the bill. Bob Loeffler                                                                      
believed it said a regulation may not be voided but it                                                                          
didn't address temporary restraining orders or other court                                                                      
actions to remand for further analysis that would delay a                                                                       
Senator Dave Donley noted there was another section on page                                                                     
2 lines 10-12 that could address the concerns regarding                                                                         
restraining orders.  He offered the committee could                                                                             
incorporate that provision.  Bob Loeffler replied that                                                                          
would alleviate his concerns.                                                                                                   
Bob continued his testimony saying that because a number of                                                                     
mining projects required a specific regulation to                                                                               
Department of Environmental Conservation's water quality                                                                        
standards, a cost benefit analysis would have to be done                                                                        
before a mine could be approved. He gave examples of the                                                                        
Kensington Mine that required site-specific criteria and a                                                                      
stream reclassification for the Red Dog Mine. He speculated                                                                     
that a company that designed their project to maintain                                                                          
clean water would have to jump another hurdle before                                                                            
getting approval.  That would be to prove their total                                                                           
benefits were greater than the total costs.  He didn't know                                                                     
if that was the intention of the legislation, but it was                                                                        
how he interpreted it.                                                                                                          
He asked how good did an economic analysis have to be in                                                                        
order to pass that hurdle. His answer was that it would                                                                         
have to be better than that of any well-funded opposition.                                                                      
For a large industrial mine, that could be substantial.                                                                         
Co-Chair John Torgerson asked if the division intended to                                                                       
adopt new regulations every time a mine opened. Bob                                                                             
Loeffler did not, but noted that no but certain mines                                                                           
needed regulations for water quality reasons.                                                                                   
Senator Dave Donley said the Senate Judiciary Committee had                                                                     
been given a memo issued by Governor Knowles directing                                                                          
state agencies to do a cost benefit analysis before                                                                             
adopting regulations. He asked how the division implemented                                                                     
that order. Bob Loeffler responded that the regulations                                                                         
were typically done by Department of Environmental                                                                              
Conservation.  He had not done a cost benefit analysis of                                                                       
the scope called for in the proposed bill. Senator Dave                                                                         
Donley queried, "So you didn't comply with the Governor's                                                                       
directive to all the members of the bureaucracy?" Bob                                                                           
Loeffler said that before his division wrote new                                                                                
regulations, it analyzed the cost and benefits, but in a                                                                        
general manner rather than in the detail called for if a                                                                        
major industrial facility effect a significant portion of                                                                       
the population.                                                                                                                 
Senator Dave Donley moved for adoption of Amendment #10.                                                                        
This would copy the language from page 2 lines 9-12, "A                                                                         
person may not obtain a temporary restraining order.based                                                                       
on a failure to comply with this subsection" and insert on                                                                      
page 3 after line 14. Without objection it was adopted.                                                                         
The discussion returned to the fiscal notes. Senator Dave                                                                       
Donley suggested the committee direct departments do new                                                                        
fiscal notes based on Version "W" and justify any increases                                                                     
Senator Al Adams commented that with the addition of                                                                            
Section 4 the cost benefit analysis added costs to the                                                                          
departments. Co-Chair John Torgerson retorted that the cost                                                                     
benefit analysis was only required if the regulations went                                                                      
outside the scope of the enabling statute's fiscal note.                                                                        
Therein lay the policy call.                                                                                                    
Senator Dave Donley stated that it was surprising to him                                                                        
that the Administration was opposed to the cost benefit                                                                         
analysis. He detailed the arguments in favor of the                                                                             
Senator Al Adams asked if the sponsor wanted to start the                                                                       
regulation process with the cost benefit analysis after a                                                                       
new law was passed or from ground zero. Senator Dave Donley                                                                     
clarified to limit the applicability to regulations adopted                                                                     
for new statutes.  He said that would be another                                                                                
possibility but it didn't seem that radical. He noted that                                                                      
the federal government already did it and it would be                                                                           
reasonable to require state government as well.                                                                                 
Senator Randy Phillips requested the departments be given a                                                                     
time limit for submitting the new fiscal notes.  Co-Chair                                                                       
John Torgerson said his office would request them in a                                                                          
timely manner.                                                                                                                  
Co-Chair John Torgerson ordered the bill held in committee.                                                                     
SENATE BILL NO. 33                                                                                                              
"An Act relating to the Task Force on Privatization;                                                                            
and providing for an effective date."                                                                                           
This was the forth hearing for this bill.                                                                                       
Senator Randy Phillips moved for adoption of CS SB 33                                                                           
Version "N" as a Workdraft. Senator Al Adams objected. Co-                                                                      
Chair John Torgerson explained a new subsection was added                                                                       
to page 2 under the title, "Items not subject to                                                                                
bargaining" to add an ability for the state to hire out                                                                         
services previously performed by state employees.  Section                                                                      
3 was added and provided that if the state intended to                                                                          
enter into contract with a private entity to perform                                                                            
services the labor organization representing the affected                                                                       
employees may submit a response to demonstrate that the                                                                         
state would not reduce costs. The state would consider the                                                                      
statement but would not provide a preference when making                                                                        
the final decision.                                                                                                             
Senator Al Adams removed his objection and Version "N" was                                                                      
adopted without objection.                                                                                                      
Senator Loren Leman moved for adoption of Amendment #4.                                                                         
Senator Al Adams objected for explanation. Senator Loren                                                                        
Leman explained the change would be to page 2 line 3 adding                                                                     
a provision noting there may be state functions that should                                                                     
be consolidated or otherwise performed more efficiently. He                                                                     
did not want to limit the task force to only consider the                                                                       
privatization or consolidation of services if there were                                                                        
other options.                                                                                                                  
Senator Al Adams removed his objection and Amendment #4 was                                                                     
adopted without objection.                                                                                                      
Senator Loren Leman moved for adoption of Amendment #5. Co-                                                                     
Chair John Torgerson objected. Senator Loren Leman                                                                              
explained that this amendment would allow the commissioner                                                                      
to appoint an advisory council to assist with specific                                                                          
topics. The members would be volunteers and incur no                                                                            
additional expenses. They would not have a vote in the                                                                          
final proceedings. He shared that in his experiences                                                                            
serving on commissions, this had been helpful. Senator Lyda                                                                     
Green asked if Senator Loren Leman had talked about this                                                                        
with the sponsor. Senator Loren Leman had not.                                                                                  
Co-Chair John Torgerson removed his objection. Senator Lyda                                                                     
Green objected.                                                                                                                 
Amendment #5 was adopted by a vote of 8-1. Senator Lyda                                                                         
Green cast the nay vote.                                                                                                        
Co-Chair John Torgerson ordered the bill held in committee.                                                                     
Tape: SFC - 99 #63, Side B    8:53 PM                                                                                           
Senator Dave Donley spoke to judgement and claims forms for                                                                     
the Department of Law. He asked that the committee adopt                                                                        
the forms.                                                                                                                      
Senator Sean Parnell said he had reviewed the forms and                                                                         
felt Senator Dave Donley was onto something. He questioned                                                                      
whether the Department of Law should be responsible for                                                                         
answering the questions about prevention against future                                                                         
incidents taken by the affected departments. Senator Dave                                                                       
Donley responded that he thought the Department of Law did                                                                      
take some corrective actions. He then noted a separate form                                                                     
required of the affected agency asking their response to                                                                        
the same question.                                                                                                              
Senator Sean Parnell asked if the Department of Law had                                                                         
commented on the forms. Senator Dave Donley said he spoke                                                                       
with them before and they said they would work on                                                                               
incorporating most into their own forms. The exception was                                                                      
with question five asking who was responsible for the                                                                           
incident, which resulted in the state's financial costs.                                                                        
Senator Al Adams asked about question seven wanting to know                                                                     
if that information would be used only after all                                                                                
settlements had been made. Senator Dave Donley answered                                                                         
yes. Senator Al Adams was concerned that litigants could                                                                        
not use that information for their benefit.  Senator Dave                                                                       
Donley clarified that the Department of Law wouldn't bring                                                                      
anything to the Legislature until it was final.  Offers for                                                                     
settlement would not be brought before the committee before                                                                     
they were final.  Co-Chair John Torgerson agreed.                                                                               
Co-Chair John Torgerson this matter should be handled as                                                                        
part of the operating budget. Senator Sean Parnell said it                                                                      
should be sent to Department of Law for comment before the                                                                      
committee took final action. Senator Dave Donley there                                                                          
could be settlements submitted before the next budget                                                                           
Co-Chair John Torgerson ordered the judgements and claims                                                                       
forms matter held in committee while Co-Chair Sean Parnell                                                                      
sent a letter to the Department of Law asking for their                                                                         
comments and suggestions.                                                                                                       
Co-Chair John Torgerson announced the schedule for balanced                                                                     
budget presentations 9:00 AM Friday. Monday's schedule                                                                          
would be announced the next day. Bills would be next taken                                                                      
up the following week.                                                                                                          
Senator Torgerson adjourned the meeting at 9:02 PM.                                                                             
SFC-99 (23) 3/24/99                                                                                                             

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