02/28/1995 08:06 AM House STA

 HSTA - 02/28/95                                                               
 Number 191                                                                    
                                                                               
 HB 163 - COMPLIANCE ESTIMATE COST REQUIREMENTS                              
                                                                               
 ROD MOURANT, Administrative Assistant to Representative Pete Kott,            
 came before the committee to present HB 163.  This legislation                
 would require an agency, when they are proposing new regulations,             
 to present a cost compliance estimate with those regulations.                 
 Currently, when regulations are drafted, an agency completes a                
 fiscal note on the cost of the regulation process, but no cost                
 compliance estimate is prepared for a private sector impact.  The             
 committee member's packets includes a letter from the National                
 Federation of Independent Businesses (NFIB) supporting this                   
 concept.  Eighty-three percent of their members support the                   
 concept.  The original concept of this legislation was included in            
 the 1995 Alaska Minerals Commission Report, as recommendation                 
 number four.  The mining industry experiences the frustration of              
 regulation without consideration of cost to the industry.  Mr.                
 Mourant said they have fiscal notes from all except for five                  
 agencies.  The fiscal notes vary from zero to $178,000, the latter            
 being from the Department of Environmental Conservation.  This is             
 for merely preparing the cost estimate for compliance with any                
 regulation, not for compliance with regulation.                               
                                                                               
 REPRESENTATIVE GREEN liked the concept, but wondered if it would be           
 possible for an individual to get a meaningful or accurate cost               
 estimate regarding whatever regulation was being proposed.                    
                                                                               
 Number 261                                                                    
                                                                               
 MR. MOURANT answered that when an agency drafts regulations based             
 on statute adopted by legislation signed into law, they determine             
 who the constituency is first.  Then they fashion the regulation to           
 comply with the statute they are interpreting.  At that time they             
 should have an estimated idea of what the cost will be, for                   
 instance, the filing of a new tax forms, or the requirement to                
 build a new ramp of access for handicapped persons.  This, of                 
 course, only deals with the adoption of regulations, or the repeal            
 of regulations.                                                               
                                                                               
 Number 274                                                                    
                                                                               
 REPRESENTATIVE PORTER followed up by saying he presumed this would            
 force the agency to contact the affected people and get their                 
 estimate of these costs.                                                      
                                                                               
 MR. MOURANT agreed that it would certainly urge the agencies to               
 talk with the affected constituency about the impact of the                   
 proposed legislation, or how the private industry interprets the              
 proposed legislation.                                                         
                                                                               
 Number 280                                                                    
                                                                               
 CHAIR JAMES said she thought that evaluating the cost to our                  
 economy would be valuable, and also measuring what the cost benefit           
 will be.  They should be sure that what they do is worth the cost.            
 Chair James wondered how specific they needed to be, because every            
 time someone does "a finding," or does a report that backs up what            
 they do, they must also create evidence for a lawsuit, in case                
 someone doesn't like it.  She liked the concept, but thought they             
 should avoid being too specific and, thereby, try to do the                   
 lawyer's job for them.  She said they also need to get a negative             
 fiscal note on this bill.                                                     
                                                                               
 REPRESENTATIVE WILLIS wondered if this was in place in Florida and            
 if Mr. Mourant heard any feedback.                                            
                                                                               
 CHAIR JAMES referred him to a research report from Florida,                   
 provided to them by the sponsor.  A point made in the report was              
 that they determined they needed that legislation, and they went so           
 far as to require an Environmental Impact Statement (EIS), which is           
 very costly.                                                                  
                                                                               
 CHAIR JAMES noted, for the record, that Representative Ivan was               
 present.                                                                      
                                                                               
 Number 340                                                                    
                                                                               
 ELMER LINDSTROM, Special Assistant to the Commissioner, Department            
 of Health and Social Services, said he was not at the meeting to              
 speak for the Administration, but he had some conversations with              
 colleagues in other departments and said his agency is one that               
 submitted a zero fiscal note.  They viewed it in relationship with            
 other regulation bills on the table, specifically HB 130.  It                 
 required an economic or detailed analysis, which they regarded as             
 something that would require additional expertise and costs in                
 their department, so, consequently, they viewed HB 163 as less                
 costly.  Some agencies looked at HB 163 and did not see the phrase            
 "cost estimate" as self-defining, and thus regard it as being                 
 similar to the language in HB 130 that would require an economic              
 analysis.  The Executive Branch would need some guidance from the             
 committee about what the intent of this is, and about the meaning             
 of "cost estimate."                                                           
                                                                               
 Number 361                                                                    
                                                                               
 CHAIR JAMES mentioned receiving a package pertaining to regulations           
 on subsistence living, and legislation that they passed last year.            
 It was the Department of Administration and the Department of                 
 Health and Social Services regulations that covers both.  She                 
 wanted to do an evaluation of those regulations and the statute to            
 see how much duplication there is from the regulation to the                  
 statute.  She is still looking for ways to streamline the process.            
 Chair James feels if they saw the regulations before the they                 
 passed a statute, they might take another look at whether to do it.           
 They need to think more thoroughly about what they are creating               
 when they create these bills, and "take the blame" for the cost of            
 implementing them.                                                            
                                                                               
 Number 395                                                                    
                                                                               
 MR. LINDSTROM said he also read the regulations and he recalled               
 that there were about 50 pages.  Most of the verbiage relates to              
 licensing of homes and so forth.  When you get into licensing, it             
 is tricky.                                                                    
                                                                               
 Number 401                                                                    
                                                                               
 REPRESENTATIVE PORTER asked what the cost of the regulation would             
 be to the person who wants to be in a certain businesses.                     
                                                                               
 CHAIR JAMES said each agency has its own uniqueness in the kind of            
 regulations they have.  The Florida research report shows that the            
 legislature made various levels of regulations, and refined it to             
 say that some didn't need it, and some needed it more extensively.            
 The decision had to be made about whether or not it was even                  
 necessary.  Some regulations didn't apply.  She thinks they should            
 determine just how much policy should be in regulations.  Her idea            
 is that they ought to slim down the policy in the regulations.  It            
 is easier to change or slim down policy than to change or slim down           
 regulations.                                                                  
                                                                               
 CHAIR JAMES said if there were no more questions or comments they             
 would put HB 163 with the other bills in the Regulation Review                
 Committee.  She stated that the committee has cleaned up all the              
 bills, except for HB 81 on preventative maintenance.  However, next           
 Thursday she said we will use the next meeting time for the                   
 subcommittee on regulation reform.