HB 33 - EFFECT OF REGULATIONS ON SMALL BUSINESSES CHAIR McGUIRE announced that the first order of business would be HOUSE BILL NO. 33 "An Act relating to the effect of regulations on small businesses; and providing for an effective date." [Before the committee was CSHB 33(L&C).] [Because of its length, Amendment 1 is included at the end of the minutes for HB 33. The shorter amendments are included in the main text.] 3:09:18 PM REPRESENTATIVE KEVIN MEYER, Alaska State Legislature, sponsor, said he has seen the proposed amendments to HB 33, and they are acceptable to him. CHAIR McGUIRE referred to Amendment 1 [text provided at the end of the minutes for HB 33]. MICHAEL PAWLOWSKI, Staff to Representative Kevin Meyer, House Finance Committee, Alaska State Legislature, sponsor, said he worked with the Department of Law to develop Amendment 1, and relayed that the intent is to remove the natural resource agencies from the requirements of HB 33. CHRISTOPHER KENNEDY, Senior Assistant Attorney General, Environmental Section, Civil Division (Anchorage), Department of Law (DOL), relayed that most of the changes offered via Amendment 1 involve changing "an agency" into "a designated state agency", and this is because the administration decided to go with a short list of agencies that would be covered under HB 33. Those agencies are the Department of Commerce, Community, & Economic Development (DCCED); the Department of Environmental Conservation (DEC); the Department of Health and Social Services (DHSS); and the Department of Labor and Workforce Development (DLWD). He said there are still a few other exceptions, including the regulations from the DEC that relate to resource development. Environmental health, like the food code, will still be included, he stated. MR. KENNEDY said there are also other exclusions, like the Local Boundary Commission and the Alaska Energy Authority. He added that the economic impact analysis will not be required when the change in regulations is required by federal law. The bill previously provided that when an agency proposes a new regulation, the agency would conduct a regulatory flexibility analysis and create an economic effect statement and then notify the DCCED. He said this was confusing because the order of events would happen differently - the agency would first notify the DCCED and [then] get comments. 3:17:45 PM REPRESENTATIVE COGHILL opined that some of the language in Amendment 1 doesn't make sense, specifically that which says: Following "shall": Insert the following new material: "(1) notify the department that the designated state agency intends to adopt the proposed regulation or has received a petition under AS 44.62.220 to adopt the proposed regulation; (2)" MR. PAWLOWSKI said the intent is to put numbers next to the activities that are described; thus, proposed paragraph (1) of subsection (a) requires the designated state agency to notify the department that the designated state agency intends to adopt the proposed regulations or has received a petition under AS 44.62.220. Proposed paragraph (2) of subsection (a) would then require the designated state agency to prepare an economic effect statement. 3:21:09 PM CHAIR McGUIRE made a motion to adopt Amendment 1 [full text provided at the end of the minutes for HB 33]. REPRESENTATIVE GRUENBERG objected. The committee took an at-ease from 3:21 p.m. to 3:22 p.m. REPRESENTATIVE GRUENBERG noted that Amendment 1 eliminates village corporations from the definition of "small business," and said he would be in favor leaving that language in. MR. KENNEDY said some village corporations are equivalent to small businesses and some are quite large. 3:23:09 PM REPRESENTATIVE GRUENBERG acknowledged that point, but noted that the vast majority are small. "So why don't we say village corporations under a certain size," he asked. MR. PAWLOWSKI offered his understanding that a village corporation with fewer than 100 employees would still qualify under the definition used in the bill. REPRESENTATIVE GRUENBERG surmised that in some cases, they are similar to municipalities and might not qualify as business entities. MR. KENNEDY said Representative Gruenberg is correct in that some village corporations are nonprofit entities and so wouldn't be considered business entities; he noted that all other nonprofit entities are potentially outside the scope of the bill. REPRESENTATIVE GRUENBERG suggested amending subparagraph (A), located on page 4 of proposed AS 44.62.218(h)(5), such that a small business entity would include village corporations with fewer than 100 employees. CHAIR McGUIRE indicated a preference for placing such language under subparagraph (B) of proposed AS 44.62.218(h)(5). REPRESENTATIVE GRUENBERG removed his objection to Amendment 1. CHAIR McGUIRE asked whether there were any further objections to Amendment 1. There being none, Amendment 1 was adopted. REPRESENTATIVE GRUENBERG made a motion to adopt Amendment 2, to delete from Amendment 1 the language, "Page 4, lines 8 - 9: Delete all material. Page 4, line 10: Delete '(C)' Insert '(B)'", and to insert on page 4, line 8, after the phrase "a village corporation" and before the semicolon, the words "employing fewer than 100 employees". There being no objection, Amendment 2 was adopted. 3:28:34 PM REPRESENTATIVE COGHILL said he wants to see the federal code that is being incorporated into the proposed statute. REPRESENTATIVE MEYER agreed to provide it. 3:29:50 PM REPRESENTATIVE GARA made a motion to adopt Amendment 3, which read [original punctuation provided]: To page 2 line 3 delete "and an estimate of the number" CHAIR McGUIRE objected for the purpose of discussion. REPRESENTATIVE GARA said Amendment 3 simplifies the state agency study by not requiring an agency to count the number of businesses that will be affected by a regulation. CHAIR McGUIRE removed her objection, and asked whether there were any further objections. There being none, Amendment 3 was adopted. REPRESENTATIVE GARA made a motion to adopt Amendment 4, which read [original punctuation provided]: To page 2 line 18 delete "while accomplishing" insert "without compromising" CHAIR McGUIRE objected [for the purpose of discussion]. REPRESENTATIVE GARA said Amendment 4 makes it clear that the intent is to fully enforce the statute. REPRESENTATIVE MEYER said Amendment 4 was fine with him. CHAIR McGUIRE removed her objection, and asked whether there were any further objections. There being none, Amendment 4 was adopted. 3:31:41 PM REPRESENTATIVE GARA moved to report CSHB 33(L&C), as amended, out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHB 33(JUD) was reported from the House Judiciary Standing Committee. AMENDMENT(S) The following amendment to CSHB 33(L&C) was adopted during the hearing. [The shorter amendments are provided in the main text.] Amendment 1 [original punctuation provided]: Page 1, line 5: Delete "an" Insert "a designated state" Page 1, line 7: Delete "an" Insert "a designated state" Page 1, line 8: Following "businesses, the": Insert "designated state" Following "shall": Insert the following new material: "(1) notify the department that the designated state agency intends to adopt the proposed regulation or has received a petition under AS 44.62.220 to adopt the proposed regulation; (2)" Page 1, line 9, following "section": Delete "," Insert "; and (3)" Page 1, line 10, following "section": Delete ", and notify the department that the agency intends to" Insert "." Page 1, lines 11 - 12: Delete all material. Page 1, line 13: Delete "An" Insert "A designated state" Page 2, line 1, following "of the": Insert "designated state" Page 2, line 15: Delete "an" Insert "a designated state" Page 2, line 23, following "the": Insert "designated state" Page 3, line 3: Delete "agencies" Insert "a designated state agency" Page 3, line 5, following "regulations": Delete "of" Page 3, line 6, following "(1)": Insert "of" Page 3, lines 8-17: Delete all material and insert: "(2) of the Alaska Energy Authority; (3) of the Department of Environmental Conservation that are adopted under the authority of AS 46.03.050 - 46.03.900, AS 46.04, AS 46.08 - AS 46.14, AS 46.35, or AS 46.45; (4) of the Local Boundary Commission; or (5) mandated by federal law as a condition for participating in or implementing a federally subsidized or assisted program, or for obtaining or maintaining state primacy in a federal program." Page 3, line 18: Delete "an" Insert "a designated state" Page 3, following line 25: Insert the following new material: "(2) designated state agency" means the (A) Department of Commerce, Community, and Economic Development; (B) Department of Environmental Conservation; (C) Department of Health and Social Services; and (D) Department of Labor and Workforce Development;" Page 3, line 26: Delete "(2)" Insert "(3)" Page 3, line 30: Delete "(3)" Insert "(4)" Page 4, line 1, following "regulation;": Delete "or" Page 4, line 2: Delete "(4)" Insert "(5)" Page 4, line 4: Delete "(5)" Insert "(6)" Page 4, line 7, following "employees;": Insert "or" Page 4, lines 8 - 9: Delete all material. Page 4, line 10: Delete "(C)" Insert "(B)" Page 4, line 15: Delete "an" Insert "a designated state" Page 4, line 16, following "section,": Insert the following new material: "(1) "designated state agency" has the meaning given in AS 44.62.218, enacted by sec. 1 of this Act; (2)" [End of Amendment 1 - CSHB 33(JUD) was reported from the House Judiciary Standing Committee.]