Legislature(1999 - 2000)
03/24/1999 06:09 PM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
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
agency".
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
motion.
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
issues.
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
costly.
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
power.
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
project.
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
analysis.
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.
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