Legislature(1999 - 2000)
03/09/1999 09:02 AM Senate FIN
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
March 9, 1999
9:02 AM
TAPES
SFC-99 # 49, Side A & Side B
50, Side A
CALL TO ORDER
Co-Chair John Torgerson convened the meeting at
approximately 9:02 AM 902
PRESENT
Senator John Torgerson, Senator Sean Parnell, Senator Dave
Donley, Senator Loren Leman, Senator Gary Wilken, Senator
Al Adams and Senator Pete Kelly. Senator Lyda Green arrived
shortly thereafter.
Also Attending:
JACK KREINHEDER, Senior Policy Analyst, Office of
Management and Budget, Office of the Governor; DEIGHT
PERKINS, Deputy Commissioner, Department of Labor; AL
DWYER, Director, Division of Labor Standards and Safety,
Department of Labor; DEBORAH BEHR, Assistant Attorney
General, Legislation and Regulation Section, Civil
Division, Department of Law; PAM LABOLLE, President, Alaska
State Chamber of Commerce;
Attending via Teleconference: From Anchorage: MARJORIE
VANDOR, Assistant Attorney General, Governmental Affairs
Section, Civil Division, Department of Law; TERESA
WILLIAMS, Assistant Attorney General, Fair Business
Practices Section, Civil Division, Department of Law.
SUMMARY INFORMATION
SB 33-TASK FORCE ON PRIVATIZATION
The committee considered three amendments and adopted one.
The bill was held in committee.
SB 50-BOILER AND PRESSURE VESSEL INSPECTIONS
Representatives of the Department of Labor testified and
this bill was reported out of committee.
SB 24-REGULATIONS: ADOPTION & JUDICIAL REVIEW
Senator Dave Donley detailed the provisions of this bill.
The committee adopted a CS and Amendment #1 to that CS. A
representative from Department of Law testified. The bill
was held in committee.
SENATE BILL NO. 33
"An Act relating to the Task Force on Privatization;
and providing for an effective date."
This bill was heard in committee once before.
Senator Al Adams returned to the separation of powers
debate from the previous meeting. He thanked the sponsor,
Senator Jerry Ward, for sharing the legal opinion written
by the Legal Services Division. He said the Legislature's
opinion differed from the Department of Law. The two
amendments he was offering would address those issues. One
amendment addressed the selection of members and would
assign selection to the Legislature rather than the
Governor as stated in the bill. The second amendment would
remove the Governor from the selection process and grant
per diem to the public members of the commission.
Senator Al Adams moved for adoption of Amendment #1, which
would remove members appointed by the Governor and the
local boundary commission position. Senator Sean Parnell
objected.
Senator Gary Wilken requested the question be divided to
separate the boundary commission appointment and the
appointments by Governor's office. Co-Chair John Torgerson
granted the request. Amendment #1A would change page 2 line
16 deleting "11" and inserting "8" and delete lines 17 and
18 delete two members selected by the governor. Amendment
position of the local boundary commission member. Amendment
public members of the commission.
Co-Chair John Torgerson repeated the Department of Law's
concerns with the separation of powers issue. The
Legislative Legal Services Division gave the opinion that
because the commission was advisory it was not subject to
separation of powers rules. Co-Chair John Torgerson said he
had no opinion on the amendment but had felt it was
important that the Administration be involved in the
selection of the commission members. Amendment #1A was
adopted without objection.
Senator Gary Wilken commented on Amendment #1B, saying he
felt that representation from the local boundary commission
was important. Senator Al Adams pointed out that the
Governor would also appoint the local boundary commission
position and because the other Governor appointed positions
had been removed, this should be removed also. He suggested
the local boundary commission could be consulted in an
advisory capacity. Amendment #1B failed by a vote of 2-4-3.
Senator Loren Leman and Senator Al Adams cast yea votes.
Senator Pete Kelly, Senator Lyda Green and Senator Randy
Phillips were absent.
Co-Chair John Torgerson asked Senator Al Adams if Amendment
Senator Al Adams affirmed and suggested technical
corrections could be made if necessary. Amendment #1C was
adopted without objection.
Co-Chair John Torgerson noted the conceptual change to page
2 line 16 reflecting that the commission would consist of
nine members.
Senator Al Adams spoke to Amendment #2 and moved for
adoption. He explained that with the removal of the
Governor's appointments to the commission, this amendment
would provide for the appointment of two members of the
public selected from a list of nominees submitted by labor
organizations that represent state employees. Senator Dave
Donley objected. Senator Al Adams believed it was important
for union members were associated with this effort. The
motion failed by a vote of 2-4-3. Senator Gary Wilken and
Senator Al Adams cast yea votes. Senator Pete Kelly,
Senator Lyda Green and Senator Randy Phillips were absent.
Senator Dave Donley moved to rescind action taken on
Amendment #1A. Senator Al Adams objected. Senator Dave
Donley spoke to motion saying he felt the Governor and
subsequently, labor unions, should be involved in this
process and were essential for the effort to be successful.
He didn't think there was a constitutional problem with
separation of powers. Senator Al Adams restated the legal
debate regarding separation of powers. He felt this would
set bad precedent. Agency personnel would participate in
the process and offer their resources, he argued. The
motion to rescind action on Amendment #1A passed by a vote
of 5-2-2. Senator Al Adams and Senator Gary Wilken cast the
nay votes. Senator Pete Kelly and Senator Randy Phillips
were absent.
Senator Dave Donley commented that this was a good way to
get statewide representation of both labor organization and
the Governor on the commission. They were necessary for
the success of the commission. He noted that because this
would be an advisory commission, it was exempt from the
separation of powers restrictions. He asked the sponsor if
this would be similar to the membership system in the bill
from the prior year. Mark Hodgins affirmed. Senator Dave
Donley noted that version passed both the Senate and the
House of Representatives and was then vetoed. Mark Hodgins
made the correction that SB 68 was from several years ago
and vetoed by governor. The privatization bill brought
forward last year did not pass from the House of
Representatives. Senator Dave Donley asked if the prior
bills had a similar membership system. Mark Hodgins said
they did. One of the three reasons given by the Governor
for vetoing SB 68 was the separation of powers issue.
Under this context, separation of powers was not a problem
according to Legal Services' Tam Cook's legal opinion.
Senator Al Adams requested a representative of the
Department of Law to speak on the separation of powers
matter. MARJORIE VANDOR, Assistant Attorney General,
Governmental Affairs Section, Civil Division, Department of
Law, said the department had looked at Tam Cook's analysis
and didn't debate her method of analyzing the Uniform
Rules. However, the different branches of government had
different views on the separation of powers when it came to
advisory committees. Whether a committee was advisory
would not change the underlying analysis according to the
Department of Law. The Administration did not oppose this
task force or its goals Marjorie Vandor stressed. The
problem was that it was a bill and had the force of law and
mandated the Governor to appoint, and who to appoint, which
raised separation of powers concerns. The Governor might
chose to comply and appoint members to the commission, she
said. However, historically this would be considered a
separation of powers problem and would be an infringement
on his normal, and strong, appointment powers. It was
important for the historical record for future Governors
that it not be consider a waiver of appointment on future
task forces, she stated.
Senator Sean Parnell wanted to know if, when the bill that
established the long range financial planning commission
passed, was there a requirement of who the governor would
appoint. Marjorie Vandor was not familiar with that bill,
but offered to check.
Co-Chair John Torgerson clarified that the Department of
Law's main difference of opinion with the Legal Services
Division was that if the commission was under Uniform Rules
there would not be the separation of powers issue. But
because it would be in statute the issue was a problem.
Marjorie Vandor responded that it was a constitutional
issue. She felt that Tam Cook's opinion seemed to be more
geared toward the Uniform Rules but did not address the
constitutional issue, which the department believed was the
major underlying problem. "Any time you mix committees,
its going to be raised", she surmised.
Co-Chair John Torgerson didn't understand the
Administration's objection. Was it because the Legislature
would direct the Governor to appoint a union representative
or was it because the Legislature was directing him to
appoint anybody, he asked. Marjorie Vandor said it was a
combination of both. She suggested that the reason the
commission was being created in the form of a bill was that
the Legislature was afraid the Governor would not appoint a
member. "We're not saying that the Governor may not want to
do it, that he doesn't believe this committee has a good
purpose," she said. She was concerned with the historical
precedence.
Co-Chair John Torgerson surmised that the Governor would
look awful silly vetoing this under those grounds.
Senator Gary Wilken said his support of Amendment #1A was
more practical than legal. He wanted to see this effort to
go through and to have a commission on privatization. Past
problems had been with the Governor's Office so it seemed
to him that removing the Governor from the equation would
remove the roadblock. This was focusing efforts on the
wrong thing, he stressed. If the Governor appointments were
removed, the Legislature could be relatively sure the bill
would become law and the process could begin.
Senator Dave Donley commented that one thing he liked about
the language was that the Governor, sitting statewide,
picked someone from organized labor to sit on the task
force. He thought that was an important element in the
process. If the Governor was removed, he suggested
allowing the labor organization to appoint their own
representative the same as with the Alaska State Chamber of
Commerce member. That would solve part of his concern. He
felt there needed to be some participation from the
Executive Branch.
Senator Gary Wilken agreed with Senator Dave Donley and
thought there should be a representative from organized
labor on the task force. However that was a different
issue than involvement from the governor's office. Senator
Dave Donley said the reason he brought it up was because
the amendment would remove the provision to provide for the
labor representation. Senator Gary Wilken pointed out
another amendment before the committee that would add two
members of organized labor and said that could be taken up
with the Governor's Office.
Co-Chair John Torgerson liked the original language of the
bill but agreed with Senator Dave Donley's concerns. His
intent was that the Governor be a part of the task force.
He didn't think the governor would veto this bill simply on
the premise that he was to appoint a labor union
representative.
Co-Chair John Torgerson noted he just received a copy of
the creation long range planning commission in which the
Governor did not veto and stipulated "two members of the
Executive Branch appointed by the Governor." Co-Chair John
Torgerson pointed out the inconsistency. He hoped the
Administration would work with the Legislature in forming
this task force.
Senator Loren Leman believed the long range planning
commission was formed under a different Governor and
suggested that the committee might not want to rely on that
application.
Senator Lyda Green asked if the bill passed without
Amendment #1A and if the Governor refused to appoint
members, if the Legislature could appoint members. Co-
Chair John Torgerson answered that failure to appoint
wouldn't defunct the committee.
Amendment #1A failed by a vote of 3-5-1. Senator Al Adams,
Senator Gary Wilken and Senator Loren Leman cast yea votes.
Senator Randy Phillips was absent.
Senator Loren Leman moved for adoption of Amendment #3.
Senator Al Adams objected for question. Senator Loren Leman
explained the amendment, which was in two parts. The first
change would insert language to empower the commission to
make government work smarter. The second change would
empower the commission to appoint an advisory council to
give a broader base of opinions and information.
Senator Loren Leman moved to amend Amendment #3 to delete
the language, "composed of representatives from the private
sector of the state economy" (page 1 lines 17 and 18 of the
amendment.) He fully expected all members of this advisory
committee would be representatives of the private sector
but didn't want to limit the commission's ability to
appoint others. His intention was that members of the
advisory council would donate their time and cover expenses
incurred in their duties on this council and provide
specialized expertise. The motion to amend Amendment #3
passed without objection.
Senator Loren Leman explained that this would be an
advisory council to the commission and would serve at the
commission's request in functions such as subcommittee
membership. Senator Gary Wilken asked why the commission
itself wouldn't do those things. Senator Loren Leman
answered saying nine members would not be enough in his
opinion. He wanted the commission to have a broader reach
and to hear further from the communities and pull together
those with expertise. Those people would not be
compensated. Senator Gary Wilken asked if the commission
itself, if they saw a need, could form its own council.
Senator Loren Leman said that was what this amendment would
accomplish. Senator Gary Wilken hated to see the bill fail
from its own weight so he would vote against the amendment.
Co-Chair John Torgerson asked Senator Gary Wilken if he had
a problem with the provisions in the rest of the amendment.
Senator Gary Wilken did not.
Senator Pete Kelly noted Senator Loren Leman's suggestion
that the commission could appoint an advisory council.
However, the language stated "shall". Therefore, it would
be a necessary part of the commission. Senator Loren Leman
responded that was correct, but it did not dictate how the
council would operate and left those decisions up to the
commission. He fully expected the commission would want to
seek others to help with their work.
Amendment #3 as amended, failed by a vote of 4-4-1. Senator
Dave Donley, Senator Loren Leman, Senator Sean Parnell and
Senator John Torgerson cast yea votes. Senator Randy
Phillips was absent.
Co-Chair John Torgerson said he was having another
amendment drafted that would return the word
"privatization" at the request of the sponsor. Senator
Gary Wilken asked that another amendment be drafted to
include the consolidation and efficiency language from
Amendment #3.
Senator Al Adams requested another day to look at both
amendments in writing.
Co-Chair John Torgerson ordered the bill held in committee.
SENATE BILL NO. 50
"An Act relating to certain boiler and pressure vessel
inspections and inspectors; and providing for an
effective date."
DWIGHT PERKINS, Deputy Commissioner, Department of Labor
testified in support of the bill, which the department
requested. He told the committee that the department was
backlogged in its inspection of boilers and pressure
vessels. Of the 6000 vessels that were overdue, over one-
half were cast iron boilers and domestic hot water heaters.
This legislation would allow the commissioner to identify
certain state employees as approved inspectors for the
purpose of performing routine annual inspections on this
type of vessel. He pointed out that the state plumbing
inspectors were journeyman plumbers trained to install and
service this type of equipment and could, with minimum
amount of training from a board certified boiler inspector,
be able to perform annual inspections of this type. It
would better help the department utilize existing employees
within the department and help bring down the backlog of
inspections. He noted a positive fiscal note accompanied
the bill.
Senator Lyda Green asked what was the current status of the
inspectors and if they were on contract or employees of the
state. She wanted to know if they were certified
inspectors. Dwight Perkins said they currently had
certified boiler inspectors that did a wide range of
inspections. This bill would allow plumbing inspectors,
with minimal amount of training to do the inspections for
low-pressure boilers. The department did not plan on
hiring additional staff to perform these inspections.
Senator Lyda Green asked if there was any reason to go
outside of the department to contract others to do the
inspections. She referred to rural areas. Dwight Perkins
responded that the intent was not to hire new employees but
to better use the staff already.
Senator Lyda Green asked if there was reason to contract
the inspections outside the Department of Labor. She
suggested staff from Department of Transportation and
Public Utilities or an individual in a remote area that
could do the inspections could be hired on a contract
basis. Dwight Perkins replied that the intent was not to
hire new people. The department had staff available for
this. Senator Lyda Green asked what was the examination
taken to qualify for certification. Dwight Perkins answered
that examination was for the full-fledged boiler inspection
certification and was intense and encompassing.
Senator Gary Wilken asked if this would expand the duties
of the inspectors. He wondered what were the current
duties and if they inspected home hot water heaters. Dwight
Perkins responded that hot water heaters were inspected.
Senator Gary Wilken asked if this legislation would expand
the duties the department currently performed. Dwight
Perkins said this would help reduce the backlog of existing
services provided.
Tape: SFC - 99 #49, Side B 9:49 AM
AL DWYER, Director, Division of Labor Standards and Safety,
Department of Labor, explained that inspections were done
for new construction and larger, commercial facilities,
such as for an apartment building. This would not expand
the duties, but would allow the department to utilize their
plumbers for the inspections. Inspections of domestic hot
water heaters were currently in the department's code, he
stated.
Senator Sean Parnell understood Senator Lyda Green's
concerns and read language from page one of the bill
regarding the special inspector: "The Commissioner of the
Department of Labor may appoint an employee of the
Department of Labor as an approved inspector." He then
referred to language from page two that dictated
certification as a special inspector, a person must have
passed an examination, or hold a certificate. He wanted to
know if the special inspector was different than the
approved inspector of the first section. Al Dwyer responded
that there was a difference. He explained that half of the
boilers and pressure vessels were inspected by insurance
company inspectors and were commissioned by the
Commissioner. It only used large companies, such as oil
companies that had experts who had passed the national
board test. To do the remaining half of the inspections,
the department had a difficult time retaining qualified
boiler inspectors who would go into the private sector
positions. The department hoped that by using the plumbing
inspectors, the backlog could be reduced. Senator Sean
Parnell wanted to know if these inspectors were trained
workers that could only be found in the department. Al
Dwyer explained the inspectors were highly trained and must
work with the commissioner, who was ultimately responsible
for the inspections. Conflict of interest concerns were
also a consideration with plumbers inspecting the same
system they installed.
There was discussion on the requirements of inspectors of
the smaller cast iron boilers and the training and testing
required.
Senator Gary Wilken made a motion to move SB 50 from
committee with individual recommendations and the negative
fiscal note. Without objection, Co-Chair John Torgerson so
ordered.
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."
Senator Dave Donley, sponsor of the bill, testified on its
behalf. This was part of a decades long effort that
stemmed from the general frustration heard in the
Legislature from the public as to how regulations were
adopted and what was contained in regulations. Most people
didn't understand that the Administration wrote the
regulations as delegated by the Legislature, he stated.
Once a regulation went through the procedure laid out in
the Administrative Procedures Act and was adopted the
Legislature could not repeal it but only pass a statute
that made the regulation inconsistent. He detailed the
regulation process, pointing out the differences with the
legislative process.
SB 24 would provide that when the Executive Branch proposed
a regulation change, they would be required to notify the
public of the substance of the change, rather than simply
the intent to make a change, and allow for public comment.
He noted that this would be a change from the normal
operations of the Administration. However, he didn't feel
this would cause as large a conflict as feared.
He testified that SB 24 was an effort to try to increase
public input into the regulatory process.
Senator Dave Donley noted the bill had grown as it traveled
the legislative process. He spoke to some of the changes.
Page 1 dealt with the core of the relationship between the
Legislature, the Executive Branch and the regulatory
process.
Section 2 was the existing law that guided how regulations
were adopted in the State Of Alaska. It dictated there was
to be a consistency between regulation and statute.
However, it was written in an open manner in saying a
regulation was not valid if it wasn't reasonably necessary
to carry out the purpose of the statute. He felt it gave
the Executive Branch very broad ranging powers to adopt
regulations.
Senator Al Adams asked if the sponsor was reading from the
Judiciary version of the bill or the proposed finance
committee substitute. Senator Dave Donley clarified Version
M, CS SB 24 (JUD) was the version he was speaking to.
The proposal from the Senate Judiciary Committee would make
a significant change in this area by replacing the word,
"reasonably" with "clearly". He anticipated arguments from
the Attorney General claiming that the Administration knew
what "reasonable" meant and had 20 years of case law to
guide them but had no understanding of "clearly". Another
argument would be that there would be litigation and
regulators would be unable to perform their duties as in
the past because of this language.
Section 3 set out new, specific language providing that a
new regulation should follow the intent of the statute it
was implementing. Because of concerns raised by the
Attorney General's office regarding litigation, the burden
of proof on a regulation challenged under this section,
would be on the challenger rather that the state to show
that it was the intent. This section was a concession to
the Executive Branch to make regulations easier to defend,
Senator Dave Donley told the committee.
A clause was inserted preventing anyone from obtaining a
temporary restraining order, preliminary or permanent
injunction on the regulation based on failure to comply
with the intent of the Legislature. He said that was
because many interest groups had used the regulatory
process to block economic development and other aspects of
changes to the society that the majority of the people
would support. The Senate Judiciary Committee wanted the
Executive Branch to follow the intent of the Legislature
and the intent of the statute, not provide an inappropriate
tool to people who just wanted to be obstructionists toward
progress. Therefore, this would place the burden on the
challenger if they wanted to contest a regulation. At the
same time, it provided additional guidance to the Executive
Branch, in his opinion.
Section 4 dealt with the idea that the federal government
had already incorporated into its regulatory process. That
was to have a cost benefit requirement for regulations.
Senator Pete Kelly interrupted asking about the cost
benefits section, which he said he liked. He spoke to a
bill last year that allowed adoption of "regulations by
reference" for non-substance changes. He gave an example
of Department of Health and Social Services and their
dealings with pages of Medicaid code changes. Before the
passage of the law, those changes had to go through the
entire regulatory process for adoption. He wanted to know
if this bill made allowances for those kinds of regulation
changes.
Senator Dave Donley responded that this legislation had
specific exceptions for regulations that were necessary to
meet federal requirements. He suggested it might be
appropriate to add this situation to the section. Because
of concerns raised by the Executive Branch on the cost
benefits requirements, a provision was added that would
allow department heads to make a finding that a particular
item was not appropriate for a cost benefit analysis. A
cost benefit requirement was currently in Policy, but the
Administration was concerned that by having a cost benefit
requirement in statute, it would be an item that could be
litigated. Therefore, this legislation allowed for
flexibility to give exceptions. Specific exemptions listed
were the Board of Fisheries, the Board of Game and the
Commercial Fisheries Entry Commission, since it would be
particularly difficult to do cost benefit analysis for
their functions. He suggested other departments could be
added as exemptions to avoid challenges.
Senator Al Adams referred to page 2 lines 17-20 in Section
4 regarding the cost benefit analysis. He read, ".most
state agencies may not adopt a regulation covered by this
section unless the benefit to the public outweighed the
cost to the public." His concern was what would happen to
public safety or the health of the constituents if the cost
outweighed that in regulations. Senator Dave Donley
responded that specific provisions were made to allow cost
benefit analysis to consider non-tangible elements as well
as specific tangible elements. In the public safety area,
the purpose of public safety was to protect the public
safety of the communities across the state and if a cost
benefit analysis determined there was a more efficient way
to deliver a service, that system of delivery should be
considered. A more non-specific method of measurement could
be used in public safety areas, he suggested. Line 15
allowed for that in stating that issues were non-
quantifiable.
Senator Dave Donley continued with Section 5 saying it
continued with the changes from Section 4 requiring the
notices posted on the Internet if the department had the
technology.
Section 6 would add to the proposed public notices
regarding regulation changes, a statement saying that a
cost-benefit analysis was available if one were prepared.
Section 7 was a technical provision necessary to implement
Section 8.
Section 8 addressed the supplemental public notices when
substantial changes were made to the content of a proposed
regulation. It would set out a system by which, if an
agency provided the initial notice and after public
comment, decided to significantly change the proposed
regulation, the agency would issue another public notice
detailing the changes. This was with the exception of
federal requirements, emergency regulations and the Board
of Game, Board of Fisheries and the Commercial Fisheries
Entry Commission.
Section 9 was another technical provision to implement some
of the other sections.
Section 10 expanded on the emergency regulations making
exceptions for them.
Section 11 was not mentioned.
Section 12 was added because of public testimony heard in
the Senate Judiciary Committee complaining about delays in
the time it took to adopt some regulations to carry out new
statutes. He gave an example of the ignition interlock
legislation that took a lawsuit to compel the state to
finally adopt regulations. He surmised that this method was
a way for the Executive Branch to essentially veto
statutory provisions by simply not adopting necessary
regulations. Therefore, the Senate Judiciary committee
inserted a two-year maximum deadline for a department to
adopt regulations pertaining to a particular statute.
Senator Dave Donley said agencies voiced concerns about
what would happen if after the two-year time period, no
regulations were adopted. Would that then prevent them
from ever writing regulations? Senator Dave Donley said
that was not the intent. The intent was to encourage
agencies to get them done. To do so without stopping the
regulatory process, the provision stipulated that if an
agency failed to adopt regulations within two years, they
would need to file a written report containing the reasons
for the failure and submit it to the Legislature.
Senator Al Adams asked if there was a provision to allow
for the public and their initiatives. Was there a time
period for them to challenge a statute? He suggested that
the deadline should allow an agency to delay implementing
regulations until the initiative process was completed.
Senator Dave Donley felt the best place for that would be
with the court. He repeated the option agencies would have
in filing a report listing the legitimate reasons for
delays.
Section 13 dealt with the issues involving what grounds of
invalidity could be used for overturning a regulation. He
wanted to adopt the concept that regulations accomplish
their goals in the least intrusive way to individual and
property rights. He noted that this was part of the
Governor's regulation policy. Although sometimes the common
good had to override the individual rights and property
rights, but they should be considered wherever feasible,
Senator Dave Donley stressed. Another intent of this
section was to prevent people from taking advantage of the
situation and cause unnecessary delay of regulation
implementation. Under the provision, if a court reviewed
the validity of a regulation it must consider the least
intrusive method for people affected by the regulation. If
another method other than the least obtrusive was chosen,
it could be shown that a substantial state interest was
required. This would serve as a safety valve. There were
also special provisions that placed prohibitions on the
court from stopping necessary regulations based on lawsuits
on this issue of least intrusive method. The intent was
that the regulations would proceed and this argument could
not be used as a tool to stop regulations. He suggested
this would be important for natural resource development
projects.
Senator Al Adams pointed out certain exemptions listed in
the bill. Senator Dave Donley said they were put in
specifically to avoid the holdup with court proceedings.
The new language could otherwise be used as a tool to block
necessary regulations for the Department of Corrections and
Department of Natural Resources. Therefore, they were
specifically excluded. Another exception was added base on
comments received from the Attorney General's Office.
Because the board or commission regulation process involved
greater public participation, they were also exempted.
Senator Dave Donley wanted to note a reoccurring theme, if
members felt there was a particular area that this would
cause a problem, that area could be exempted. He said this
process was a tremendous and complicated step and if there
were areas of concern, they could be exempted. He felt it
might be appropriate to exempt the Department of Natural
Resources. He also suggested this could be turned into an
experimental bill and only target some problematic
departments.
Section 14 imposed time limits on departments to handle the
challenge to regulations. Part of the regulatory process
was not just producing new regulations, but to make
decisions based on those regulations, he argued. Before
going to court, a challenger to a regulation had to get a
final administrative adjudication. If that was delayed,
justice was delayed. In response to public testimony, the
Senate Judiciary Committee added a method to ensure that
the departments made the decisions in a reasonable and
timely manner. A deadline required hearing officers to
close the record with a final administrative order within a
timely manner or two years after the statement of issue.
Other complaints were with once a hearing officer issued a
final order, there was no standard for the exception to
allow the Commissioners to overrule the decision and
request additional facts on the issue, which put the
process back at the beginning. Therefore standards were
added to provide when an agency could order a record
reopened for additional factual findings. The Commissioner
would have to get permission from the Lieutenant Governor
as an outside party. The intent was to give some avenue for
finality if the department was unresponsive.
Section 15 addressed applicability issues and gave an
effective date of July 30, 2000.
Senator Dave Donley suggested that the different sections
of the bill were each strong enough to stand as a separate
bill. The bill had grown much larger than he anticipated
and he offered to break it down into areas the committee
wished to address. He supported a flexible approach.
Senator Al Adams suggested looking at the functions of the
Regulation Review Committee and their workload. He pointed
out the high cost of implementing this statute. He also
suggested a pilot program for some agencies that could be
worked within their budgets. He offered working on a
subcommittee.
TERESA WILLIAMS, Assistant Attorney General, Fair Business
Practices Section, Civil Division, Department of Law,
testified via teleconference from Anchorage. She addressed
Section 14, the time limits provision on Version M of the
bill. It provided for a final decision within 60 days of
the closing of the hearing record.
Tape: SFC - 99 #50, Side A
During that timeframe, if parties wished to submit briefs,
that would come out of the time frame. The hearing officer
would have to prepare a proposed decision. The final
decision maker must review the decision and if there were a
determination to review the record, the record would need
to be prepared and reviewed within that time period. There
were complex and controversial cases that came before
hearing officers and agencies for determination and this
deadline could not be met in those kinds of cases, she
stressed. She gave an example of a recent Medicaid rape
case where an attorney for the private party indicated that
the transcript was 1500 pages long and had taken about four
and a half weeks to prepare. That person wanted to have
more than a month to prepare the brief that would be filed
after the record had been closed so the hearing officer
would be able to benefit from the analysis by the party.
Clearly, that process could not be allowed within a sixty-
day window between the close of the record and a proposed
decision. That was a concern for the interest of the
parties as well as whether the administrative hearing
process could even work.
Teresa Williams continued with the other deadline requiring
the hearing to be concluded within two years. Again, there
were complex proceedings in which both parties agreed that
there was a need to develop testimony, talk to experts,
find out what the facts were before the actual hearing, and
do briefing. Sometimes there was a parallel criminal
proceeding, which much conclude before the administrative
proceeding could start. Other times there was a parallel
civil proceeding that also must conclude first. To require
both proceedings to go on simultaneously would double the
cost for the party, she advised. If a stay were requested
there was no provision under the bill to provide that any
request for an extension would stop the clock. The
administrative hearing would be cancelled.
Another concern was that the preparation of the transcript
took time. The final decision-maker could not change the
proposed decision made by the attorney how acted as the
hearing officer without reviewing the record. Some
agencies did that by listening to the tape. For instance
the Human Rights Commission listened to the tapes and it
sometimes took weeks.
In Teresa William's opinion, the bill needed to be drafted
I such a way to recognize that respondents sometimes
legitimately request delays and other times cause the delay
by not being cooperative, not meeting deadlines, etc. They
could manipulate the process and move it to the Superior
Court. Any of that time should be excluded from the clock.
The remedy provided in the bill was extreme. Currently,
parties had the power to petition the Superior Court to
request the agency to act if it was felt the agency was
acting unreasonably. Under the provision in the bill, the
process would have to start over in the Superior Court. As
a result, the agency's cost and the respondent's costs
incurred in the proceedings would be lost when the process
started over in state court, which was more expensive.
Another concern Teresa Williams voiced was with the role of
the Lieutenant Governor that had been injected in a couple
stages in the proceedings. That would open administrative
adjudication to the political process with political
pressure. That may not be the public interest and would be
an unknown quantity since there was no provision stating
the standards the elected official must exercise. There
also was no preclusion of ex partay contact.
Co-Chair John Torgerson requested her comments in writing.
Senator Dave Donley said his proposed committee substitute
addressed some of the testifier's concerns. He asked that
the committee adopt the CS so future public comments could
be addressed to that version.
Senator Al Adams said he had no objection and asked about
the sectional analysis between the two versions.
Senator Dave Donley spoke to the changes made in the CS.
Section 2 tried to reach a middle ground by replacing the
word "clearly" with "reasonable". The new language would
say that the reasonable approach was clearly within the
intent of the statute. The bill drafters suggested the new
language.
Section 12 was the adoption time limit section. The CS made
a specific exception indicating that when a regulation did
not get adopted within the two-year deadline, the court
would not hold the regulation invalid. This was to
encourage agencies to adopt regulation, not to give a
reason to hold a regulation invalid.
Section 13 was rewritten to reverse the presumption from
the Judiciary CS that the regulation was automatically
invalid if it did not meet the specified criteria. The new
language stated that the regulation was valid and the
challenger had the burden of proof to show the specific
criteria were not met.
Section 14 replaced the term "final administrative order"
with the term "proposed administrative order". It also
added an additional 30 days to the 60-day period by which
time a final administrative order would be provided. He
felt this should alleviate some of the witness's concerns.
He referred to a proposed Amendment #1 and said his motion
to adopt the CS would include the changes listed in
Amendment #1.
The amendment added a specific exemption for situations
with a simultaneous criminal case to wait until the
criminal case was resolved. The amendment also added a
provision to allow a period of time until the next
regularly scheduled board meeting, plus an additional 30
days after the board meeting, for regulations written by a
board or commission.
He felt these changes tried to address specific issues
worked on since the adoption of the Judiciary CS. There
was nothing radical, but changes that tempered the effect
of the legislation.
Senator Dave Donley moved to adopt the Version "N"
committee substitute incorporating Amendment #1. Senator
Al Adams objected for question. He wanted to know if, with
the two differences to Sections 12,13 and 14, did any of
those changes alter the numerous fiscal notes accompanying
the bill. Senator Dave Donley said all the departments had
their own positions on the fiscal notes and he couldn't
speak for the departments. He noted that the changes would
give them more time and mitigate the impacts of the bill,
so they would not increase the fiscal notes. Senator Al
Adams removed his objection.
The committee adopted CS SB 24 Version "N" incorporating
Amendment #1, without objection.
Co-Chair John Torgerson ordered the bill held in committee.
He reminded the committee that amendments to the FY99
Supplemental Budget bills were due by 11:00 AM.
ADJOURNED
Senator Torgerson adjourned the meeting at 10:52 AM
SFC-99 (20) 3/9/99
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