Legislature(2005 - 2006)HOUSE FINANCE 519

04/15/2005 01:30 PM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 147 INSURANCE TELECONFERENCED
Moved CSHB 147(FIN) Out of Committee
+ HB 144 ADVISORY VOTE ON COMMUNITY DIVIDEND TELECONFERENCED
<Bill Hearing Canceled>
Bills Previously Heard/Scheduled
+ HB 33 EFFECT OF REGULATIONS ON SMALL BUSINESSES TELECONFERENCED
Moved CSHB 33(FIN) Out of Committee
+= HB 71 AK PENINSULA OIL & GAS LEASE SALE; TAXES TELECONFERENCED
Moved CSHB 71(FIN) Out of Committee
HOUSE BILL NO. 33                                                                                                             
                                                                                                                                
     "An Act relating to the effect of regulations on small                                                                     
     businesses; and providing for an effective date."                                                                          
                                                                                                                                
Co-Chair Meyer  gave a brief  history of  the bill.   In 1980                                                                   
Congress passed  the Regulatory Flexibility Act  (RFA), which                                                                   
mandated  that   agencies  consider   the  impact   of  their                                                                   
regulations  on small businesses.   Based  on the success  of                                                                   
that  federal program,  the Office  of  Advocacy has  drafted                                                                   
legislation for states to follow.   Over 37 states have found                                                                   
success with  this program.   This  bill would require  state                                                                   
regulatory agencies  to consider the impact  of regulation on                                                                   
small businesses and have the  freedom to examine alternative                                                                   
methods.  More expense would not be added to the agencies.                                                                      
                                                                                                                                
2:11:00 PM                                                                                                                    
                                                                                                                                
MIKE PAWLOWSKI,  STAFF,  CO-CHAIR MEYER,  referred to  a flow                                                                   
chart "Steps in the Regulation  Adoption Process Under HB 33"                                                                   
(copy on file.)   He proceeded to inform the  committee about                                                                   
the various  steps  that would  be taken under  this bill  to                                                                   
change the  regulatory process.   He  related the history  of                                                                   
regulation, including checks and balances.                                                                                      
                                                                                                                                
Co-Chair Meyer  noted that  most of the  other 37  states did                                                                   
not need a fiscal impact note  attached to their legislation.                                                                   
Mr.  Pawlowski concurred.   He  described the  office of  the                                                                   
small business advocate.                                                                                                        
                                                                                                                                
2:16:30 PM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer  asked if  Amendment  1  would zero  out  all                                                                   
fiscal notes.  Mr. Pawlowski replied that it would.                                                                             
                                                                                                                                
2:16:57 PM                                                                                                                    
                                                                                                                                
CONNIE  MARSHALL,   SMALL  BUSINESS   ADVOCACY,  U.S.   SMALL                                                                   
BUSINESS ADMINISTRATION,  (via teleconference)  read portions                                                                   
from her written testimony:                                                                                                     
                                                                                                                                
     As the Regional  Advocate for Region X, my job  is to be                                                                   
     the  direct link  between state  and local  governments,                                                                   
     small  business  groups and  small  business owners  and                                                                   
     employees   and  the  Office   of  Advocacy,   based  in                                                                   
     Washington,  DC.  My chief  concern is to  help identify                                                                   
     regulatory concerns of small  business by monitoring the                                                                   
     impact of  federal and state policies at  the grassroots                                                                   
     level.  It is my goal to  see that programs and policies                                                                   
     that  encourage  fair  regulatory   treatment  of  small                                                                   
     business are developed and  implemented to ensure future                                                                   
     growth and prosperity.   This is why I  am testifying in                                                                   
     support of  proposed legislation, which  will strengthen                                                                   
     small business regulatory flexibility in Alaska.                                                                           
                                                                                                                                
     The   Office  of   Advocacy   enforces  the   Regulatory                                                                   
     Flexibility Act  (RFA) on the federal level  in order to                                                                   
     lessen the  regulatory burden  on small business.   More                                                                   
     than 93 percent  of businesses in every  state are small                                                                   
     businesses.   As  you may  know,  small businesses  with                                                                   
     less  than  20  employees  spend $6,975  each  year  per                                                                   
     employee to  comply with federal regulations-that  is 60                                                                   
     percent  more per  employee than  large firms with  more                                                                   
     than 500 employees spend.   And that is just the cost of                                                                   
     federal  regulations.  Small  business owners  also have                                                                   
     to shoulder the cost of state regulations.                                                                                 
                                                                                                                                
     Under the  RFA, Advocacy has  shown time and  again that                                                                   
     regulations  can  be reduced  and the  economy  improved                                                                   
     without    sacrificing   such    important   goals    as                                                                   
     environmental  quality,  travel  safety,  and  workplace                                                                   
     safety.   By working with federal agencies  to implement                                                                   
     the  RFA, in  2004 the  Office of  Advocacy saved  small                                                                   
     businesses  nationwide  over  $17  billion  in  foregone                                                                   
     regulatory costs  that can now  be used to  create jobs,                                                                   
     buy  equipment  and expand  access  to health  care  for                                                                   
     millions    of    Americans,    or    simply    maintain                                                                   
     competitiveness in the marketplace.                                                                                        
                                                                                                                                
     While  some  states have  state  regulatory  flexibility                                                                   
     legislation  that  mandates  state agencies  to  perform                                                                   
     economic impact  analysis before they regulate,  many do                                                                   
     not.   For that reason, in  December of 2002  the Office                                                                   
     of Advocacy  drafted model  legislation patterned  after                                                                   
     the federal Regulatory Flexibility  Act and presented it                                                                   
     in a report titled, Small  Business Friendly Regulation:                                                                   
     Model Legislation, which  can be found on our website at                                                                   
     www.sba.gov.advo.                                                                                                          
                                                                                                                                
     There  are  five  critical  elements  contained  in  the                                                                   
     Regulatory  Flexibility  Act  model  bill.    Successful                                                                   
     state-level  regulatory  flexibility laws  should  have:                                                                   
     (1)  a  small business  definition  that  includes  most                                                                   
     small businesses, (2) a requirement  that state agencies                                                                   
     perform   an  economic  impact   analysis  before   they                                                                   
     regulate,   (3)  a  requirement   that  state   agencies                                                                   
     consider  less burdensome  alternatives that still  meet                                                                   
     regulatory  goals, (4) judicial  review so that  the law                                                                   
     has teeth,  and (5) a provision for state  government to                                                                   
     periodically  review   all  its  regulations.     To  be                                                                   
     effective, there  should be few, if any  exemptions from                                                                   
     the  law.     Even   the  best  regulatory   flexibility                                                                   
     initiative  has little  value if  the majority  of state                                                                   
     agencies are exempted from  it.  In order for regulatory                                                                   
     flexibility to work, there  is a need for the Governor's                                                                   
     leadership,  trained and  educated  state agencies  that                                                                   
     understand  their  responsibilities, and  the  continued                                                                   
     involvement of the small business community.                                                                               
                                                                                                                                
     During  this time  of tight  state budgets,  you may  be                                                                   
     wondering  how  much  it  costs  a  state  to  implement                                                                   
     regulatory flexibility  for small business.   The answer                                                                   
     is  that implementing  a  regulatory flexibility  system                                                                   
     can  be done  at little  to  no additional  cost to  the                                                                   
     state.  Let me share information  from three states that                                                                   
     have   recently   implemented   regulatory   flexibility                                                                   
     provisions.                                                                                                                
                                                                                                                                
     In  North Dakota,  agencies were  granted no  additional                                                                   
     funds  to  carry out  their  duties  under the  new  RFA                                                                   
     legislation.  The state legislative  review committee is                                                                   
     responsible  for reviewing  the  regulations that  their                                                                   
     state  agencies, using  economic  impact analysis,  have                                                                   
     determined   might  be   overly   burdensome  to   small                                                                   
     business. So  other than additional regulations  for the                                                                   
     committee  to review, North  Dakota has simply  absorbed                                                                   
     the new duties into their already existing system.                                                                         
                                                                                                                                
     Similarly,  in   Colorado,  agencies  were   granted  no                                                                   
     additional  funds to  carry out  their duties under  the                                                                   
     new RFA legislation.  The  Office of Policy Research and                                                                   
     Regulatory   Review   in    Colorado's   Department   of                                                                   
     Regulatory   Agencies  was   given  responsibility   for                                                                   
     implementing the new law.   To meet the new obligations,                                                                   
     they  shifted personnel  in their  office and  dedicated                                                                   
     part  of an IT  person to  implement their  e-rulemaking                                                                   
     notification  system.     Like  North  Dakota,  Colorado                                                                   
     simply  absorbed  the new  responsibilities  into  their                                                                   
     current structure.                                                                                                         
                                                                                                                                
     In  Oklahoma, the  fiscal note estimated  that  it would                                                                   
     cost  $ 75,000 per  year to  support the Small  Business                                                                   
     Regulatory  Review   Committee  in  the   Department  of                                                                   
     Commerce  and to  implement  the regulatory  flexibility                                                                   
     law.     Since   implementation  began   in  2002,   the                                                                   
     Department  of Commerce  has not  exceeded the  $ 75,000                                                                   
     budget.   Expenditures have been for  printing marketing                                                                   
     materials, travel compensation  for the review committee                                                                   
     members    and    compensation   for    the    committee                                                                   
     coordinator's time.                                                                                                        
                                                                                                                                
     The benefits  of implementing  a regulatory  flexibility                                                                   
     system  truly outweigh the  costs.  Let  me give  you an                                                                   
     example  of  how  regulatory flexibility  works  from  a                                                                   
     state  that has  had  an active  regulatory  flexibility                                                                   
     program  for nearly  ten years.   In  October 2004,  New                                                                   
     York State  adopted an  emergency regulation  to prevent                                                                   
     prescription fraud  by requiring the use  of an official                                                                   
     State prescription form for  all prescribing done in New                                                                   
     York.  The official prescription  forms utilize security                                                                   
     features  that will  curtail  alterations and  forgeries                                                                   
     that divert  drugs to black market sale  to unsuspecting                                                                   
     patients  and  cost  New  York's  Medicaid  program  and                                                                   
     private  insurers tens of  millions of dollars  annually                                                                   
     in fraudulent claims.                                                                                                      
                                                                                                                                
     Under New York's State Administrative  Procedure Act and                                                                   
     an  Executive  Order  signed  by  Governor  Pataki,  the                                                                   
     Department   of  Health  was   required  to   perform  a                                                                   
     regulatory  flexibility   analysis  for  small  business                                                                   
     (RFASB).   It  was found  that  the proposed  regulation                                                                   
     would  affect small  businesses  such as  practitioners,                                                                   
     pharmacists,  retail pharmacies,  hospitals and  nursing                                                                   
     homes.                                                                                                                     
                                                                                                                                
     Therefore,  in drafting the  regulation, the  Department                                                                   
     of  Health met  with and  considered  comments from  the                                                                   
     affected  small businesses.   By  consulting with  small                                                                   
     business  throughout the rule  writing process,  the New                                                                   
     York  Department   of  Health   was  able  to   craft  a                                                                   
     regulation that  met its goals without  unduly burdening                                                                   
     small entities.   For  example, the regulation  includes                                                                   
     the following flexibilities for small business:                                                                            
    · Establishes a grant administered by the Department of                                                                     
       Health to defray costs for software adjustments faced                                                                    
       by pharmacies;                                                                                                           
                                                                                                                                
    · Eliminates the official prescription fee for                                                                              
       practitioners and institutions; and                                                                                      
                                                                                                                                
    · Allows practitioners, pharmacists, retail pharmacies,                                                                     
       hospitals and nursing homes 18 months to transition                                                                      
       to the new prescription form system.                                                                                     
                                                                                                                                
     As a  result of the  Serialized Official New  York State                                                                   
     Prescription Form  regulation, private insurers  and the                                                                   
     Medicaid  program  are  expected  to  save  millions  of                                                                   
     dollars  by  reducing  fraudulent   prescription  claims                                                                   
     while  at  the  same  time  benefiting  the  state,  its                                                                   
     citizens, and private insurers.                                                                                            
                                                                                                                                
     Since  December of  2002, my  fellow Regional  Advocates                                                                   
     and I  have been working  with state legislators  across                                                                   
     the  country to  make regulatory  flexibility for  small                                                                   
     business  a  legislative priority.      In 2003,  twelve                                                                   
     states  introduced regulatory  flexibility  legislation.                                                                   
     Governors   in   North  Dakota   and   Colorado   signed                                                                   
     regulatory  flexibility   legislation  into  law,  while                                                                   
     Massachusetts  Governor Mitt  Romney  and West  Virginia                                                                   
     Governor Bob  Wise signed Executive Orders  to implement                                                                   
     regulatory   flexibility.       In   2004,   17   states                                                                   
     (California,  Connecticut,   Georgia,  Idaho,  Illinois,                                                                   
     Kansas,  Kentucky,   Missouri,  Nebraska,   New  Jersey,                                                                   
     Pennsylvania,   Rhode  Island,  South   Carolina,  South                                                                   
     Dakota,    Tennessee,   Washington,    and    Wisconsin)                                                                   
     introduced regulatory flexibility  legislation and seven                                                                   
     states have  signed it into law (Connecticut,  Kentucky,                                                                   
     Missouri,  Rhode Island,  South Carolina, South  Dakota,                                                                   
     and Wisconsin).                                                                                                            
                                                                                                                                
     To  date  in  2005,  eighteen   states  have  introduced                                                                   
     regulatory  flexibility  legislation  (Alaska,  Alabama,                                                                   
     Hawaii, Indiana,  Iowa, Mississippi, Missouri,  Montana,                                                                   
     New Jersey,  New Mexico,  North Carolina, Ohio,  Oregon,                                                                   
     Pennsylvania,    Tennessee,    Utah,    Virginia,    and                                                                   
     Washington).   Virginia  Governor  Mark  Warner and  New                                                                   
     Mexico   Governor   Bill  Richardson   recently   signed                                                                   
     regulatory flexibility legislation  into law.  Also this                                                                   
     year,   Arkansas  Governor   Mike  Huckabee  signed   an                                                                   
     Executive Order to implement regulatory flexibility.                                                                       
                                                                                                                                
     One  of the many  reasons, I  believe, this  legislation                                                                   
     has  been  so successful  over  the  last two  years  is                                                                   
     because policy  makers across the country  are realizing                                                                   
     that   regulatory   flexibility   is  as   an   economic                                                                   
     development  tool.   There are over  23.7 million  small                                                                   
     businesses  in the United  States and  they are  the job                                                                   
     creators: small  firms create between 60  and 80 percent                                                                   
     of the net new jobs in our economy.                                                                                        
                                                                                                                                
     There  is  no  question   that  small  business  is  the                                                                   
     backbone  of the economy  here in Alaska  just as  it is                                                                   
     throughout  the  country.    According  to  the  federal                                                                   
     definition  of small business  (500 employees  or less),                                                                   
     96.9   percent  (15,485)   of  Alaska's  employers   are                                                                   
     considered small and employ  over 59.6 percent (127,757)                                                                   
     of Alaska's non-farm sector employees.                                                                                     
                                                                                                                                
     Sometimes,   because  of   their  size,  the   aggregate                                                                   
     importance  of  small  businesses   to  the  economy  is                                                                   
     overlooked.   Because of this,  it is very easy  to fail                                                                   
     to notice  the negative impact of  regulatory activities                                                                   
     on them.   The intent of HB 33 is to  require regulatory                                                                   
     agencies to  consider small businesses  when regulations                                                                   
     are  developed  and  particularly  to  consider  whether                                                                   
     there are  alternative regulatory solutions  that do not                                                                   
     unduly burden  small business  but still accomplish  the                                                                   
     agency goal.   Giving small  employers a voice  early in                                                                   
     the process is a key to reducing  the negative impact of                                                                   
     regulations  on small businesses,  increasing  the level                                                                   
     of regulatory compliance  and passing on cost savings to                                                                   
     state economies.                                                                                                           
                                                                                                                                
     This legislation  is good  for small business  in Alaska                                                                   
     and  the Office of  Advocacy commends  you for  bringing                                                                   
     House Bill 33 forward.                                                                                                     
                                                                                                                                
2:23:39 PM                                                                                                                    
                                                                                                                                
WAYNE STEVENS,  PRESIDENT, ALASKA STATE CHAMBER  OF COMMERCE,                                                                   
testified in support  of HB 33.  He asked the  legislature to                                                                   
create  and  maintain  an  efficient,   expedient  regulatory                                                                   
environment, which  is supportive of business  investment and                                                                   
development, and encourages businesses  to locate and grow in                                                                   
Alaska.  He  spoke in favor of having an  effective oversight                                                                   
mechanism,  simplified   regulations,  and  a   reduction  in                                                                   
administrative costs.                                                                                                           
                                                                                                                                
2:24:59 PM                                                                                                                    
                                                                                                                                
KRISTIN  RYAN, DIRECTOR,  DIVISION  OF ENVIRONMENTAL  HEALTH,                                                                   
DEPARTMENT OF ENVIRONMENTAL CONSERVATION,  suggested that the                                                                   
fiscal note for the department be zeroed out.                                                                                   
                                                                                                                                
Representative Kelly requested  that exceptions to the law be                                                                   
addressed.                                                                                                                      
                                                                                                                                
2:27:18 PM                                                                                                                    
                                                                                                                                
Mr. Pawlowski replied  that the bill has gone  through a long                                                                   
process.   He  shared  some of  the reasons  for  going to  a                                                                   
limited  application.   Some  troubling  issues were  raised.                                                                   
Questions about  the Natural Resources sector  and allocation                                                                   
decisions by the  Boards of Fish and Game were  taken off the                                                                   
table.                                                                                                                          
                                                                                                                                
Representative Kelly  asked, of the  37 states, how  many did                                                                   
the  same thing.   Mr.  Pawlowski replied  that several  did,                                                                   
especially  those  with  heavy   resource  development.    He                                                                   
referred  to  a map  showing  the  states that  have  adopted                                                                   
regulatory  flexibility  (copy on  file.)    It varies  among                                                                   
states,  but most  have exceptions.   He  offered to  provide                                                                   
more details.                                                                                                                   
                                                                                                                                
2:30:08 PM                                                                                                                    
                                                                                                                                
Representative  Kelly   asked  if  this  bill   captures  "90                                                                   
percent".  Co-Chair Meyer replied yes.                                                                                          
                                                                                                                                
2:30:31 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer MOVED to ADOPT Amendment 1:                                                                                      
                                                                                                                                
     Page 1, line 14:                                                                                                           
     Delete "(c)"                                                                                                               
     Insert "(d)"                                                                                                               
                                                                                                                                
     Page 2, line 2:                                                                                                            
     Delete "(e)"                                                                                                               
     Insert "(f)"                                                                                                               
                                                                                                                                
     Page 2, line 4:                                                                                                            
     Delete "The economic effect"                                                                                               
                                                                                                                                
     Page 2, line 5:                                                                                                            
     Delete "statement must provide"                                                                                            
     Insert  "(c)  The economic effect statement  required by                                                                   
     (a)  of this  section must  provide,  if available  from                                                                   
     information gathered under (b) of this section,"                                                                           
                                                                                                                                
     Page 2, line 18:                                                                                                           
     Delete "(c)"                                                                                                               
     Insert "(d)"                                                                                                               
                                                                                                                                
     Page 2, line 25:                                                                                                           
     Delete "(d)"                                                                                                               
     Insert "(e)"                                                                                                               
     Delete "(c)"                                                                                                               
     Insert  "(d)"                                                                                                              
                                                                                                                                
     Page 3, line 6:                                                                                                            
     Delete "(e)"                                                                                                               
     Insert "(f)"                                                                                                               
                                                                                                                                
     Page 3, line 8:                                                                                                            
     Delete "(f)"                                                                                                               
     Insert "(g)"                                                                                                               
                                                                                                                                
     Page 3, line 15:                                                                                                           
     Delete "or"                                                                                                                
                                                                                                                                
     Page 3, line 18:                                                                                                           
     Delete "."                                                                                                                 
     Insert ";"                                                                                                                 
                                                                                                                                
     Page 3, following line 18:                                                                                                 
     Insert the following new material:                                                                                         
               "(6) that address standards, requirements, or                                                                    
     conditions  for reimbursement  by  the designated  state                                                                   
     agency  for services  to be  rendered on  behalf of  the                                                                   
     designated state  agency, that address amounts  or rates                                                                   
     of that reimbursement,  or that adjust those  amounts or                                                                   
     rates   to   contain   costs  within   the   amount   of                                                                   
     appropriations from  the legislature for a  state fiscal                                                                   
     year; or                                                                                                                   
               (7) that establish standards, requirements,                                                                      
     or conditions  for the eligibility of an  individual for                                                                   
     assistance  under AS  18  or AS  47,  or that  establish                                                                   
     standards for determining  the amount of assistance that                                                                   
     an eligible person is entitled to receive."                                                                                
                                                                                                                                
     Page 3, line 19:                                                                                                           
     Delete "(g)"                                                                                                               
     Insert "(h)"                                                                                                               
                                                                                                                                
     Page 3, line 24:                                                                                                           
     Delete "(h)"                                                                                                               
     Insert "(i)"                                                                                                               
                                                                                                                                
Co-Chair Chenault OBJECTED.                                                                                                     
                                                                                                                                
Mr. Pawlowski noted that most  of the amendment is conforming                                                                   
language.    The  primary  purpose  of  the  amendment  is  a                                                                   
clarification in  Section 1 of the proposed  legislation.  It                                                                   
brings the  economic effect statement  out of  subsection (b)                                                                   
to subsection  (c), a clarification which gives  the agencies                                                                   
better  direction.   The second  major change  is on page  3,                                                                   
following  line  18.    This   addresses  Health  and  Social                                                                   
Services regulation such as reimbursement,  cost containment,                                                                   
and eligibility  standards.  He  explained that  this section                                                                   
clarifies that cost reimbursement is off the table.                                                                             
                                                                                                                                
2:33:24 PM                                                                                                                    
                                                                                                                                
CHRIS  KENNEDY,  ASSISTANT ATTORNEY  GENERAL,  DEPARTMENT  OF                                                                   
LAW, (via  teleconference)  explained that  he does  not have                                                                   
more to add to  the discussion of Amendment 1.   The solution                                                                   
is satisfactory to everyone concerned.   He offered to answer                                                                   
questions.                                                                                                                      
                                                                                                                                
2:34:30 PM                                                                                                                    
                                                                                                                                
Representative  Croft  related that  the  first  part of  the                                                                   
amendment makes  a lot of  sense by not requiring  businesses                                                                   
to seek extra,  independent analysis.  He spoke  of a concern                                                                   
on the second  page of the amendment  regarding reimbursement                                                                   
rates for services provided by  small businesses.  The effect                                                                   
on small  businesses by the  Department of Health  and Social                                                                   
Services is so pervasive that  it would take too much time to                                                                   
consider.   It  goes  from being  a  burden  to defining  the                                                                   
business.   He opined that  it seems  to be vital  and should                                                                   
not be shied away from.                                                                                                         
                                                                                                                                
Co-Chair  Meyer  noted  that  this  was  discussed  with  the                                                                   
Commissioner.                                                                                                                   
                                                                                                                                
2:37:08 PM                                                                                                                    
                                                                                                                                
Representative  Hawker related that  the Commissioner  was in                                                                   
agreement with the amendment.   He referred to Representative                                                                   
Croft's comment  and opined that  there is a  differentiation                                                                   
between  a   small,  private   business  and  outsourcing   a                                                                   
necessary state service.   He spoke in strong  support of the                                                                   
amendment.                                                                                                                      
                                                                                                                                
2:39:01 PM                                                                                                                    
                                                                                                                                
Mr. Pawlowski  added that regulations  have to be  drafted to                                                                   
achieve  cost containment.   Policy  calls  need to  consider                                                                   
whether  this is  an  effective use  of  state resources  and                                                                   
whether  there is  a  benefit  to the  private  sector.   The                                                                   
application to  this from a  public policy statement  is that                                                                   
consideration needs  to be done  at the finance  level during                                                                   
the  approval  of   the  budget,  and  perhaps   not  in  the                                                                   
implementation  of   the  regulations.  It  happens   at  the                                                                   
regulatory   review  committee   level  and  during   finance                                                                   
committee meetings.                                                                                                             
                                                                                                                                
Representative Croft  related that when Department  of Health                                                                   
and Social Services establishes  a new Medicaid rate, if that                                                                   
rate is  lowered, it is  viewed as cost  containment.   If by                                                                   
lowering  that  rate,  more services  are  provided  to  more                                                                   
people, it  is viewed as a  benefit.  What is  not adequately                                                                   
considered is the effect on the  people trying to provide the                                                                   
services.   This needs to  be looked  in terms of  impacts on                                                                   
small businesses and alternative means sought.                                                                                  
                                                                                                                                
2:43:23 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer  said the argument  is that it should  be done                                                                   
when the budget is set, rather than by regulation.                                                                              
                                                                                                                                
Mr. Pawlowski  offered  a point of  clarification about  cost                                                                   
containment  and  reimbursement   in  eligibility  regulation                                                                   
exemptions.   He  referred to  the Department  of Health  and                                                                   
Social  Services proposed  regulations  to  Title VII,  which                                                                   
govern the conduct of small business.                                                                                           
                                                                                                                                
Representative  Croft commented that  it does not  make sense                                                                   
to not discuss how daily rates  affect small businesses.  Co-                                                                   
Chair  Meyer argued  that the  daily rate  is set  up by  the                                                                   
budget process rather than by regulation.                                                                                       
                                                                                                                                
2:45:49 PM                                                                                                                    
                                                                                                                                
JOEL GILBERTSON, COMMISSIONER,  DEPARTMENT OF HEALTH & SOCIAL                                                                   
SERVICES,  related that  the  department  has concerns  about                                                                   
regulations  causing  reductions to  programs.    He gave  an                                                                   
example  of a  Medicaid  program appropriation  reduction  of                                                                   
services.     The  concern   is  if   there  are  delays   in                                                                   
implementing  regulations because  every day  of delay  costs                                                                   
the  state.   The department  requested Amendment  1 to  deal                                                                   
with  reimbursement  regulations.   Other  regulations  would                                                                   
remain under this legislation.                                                                                                  
                                                                                                                                
2:49:13 PM                                                                                                                    
                                                                                                                                
Representative  Croft  inquired  about  rate  reductions  and                                                                   
changes  in  the  methods of  reimbursements  to  lessen  the                                                                   
effects  on  providers.   Commissioner  Gilbertson  responded                                                                   
that it is  a continuous balancing act regarding  that issue.                                                                   
He offered the  Medicaid program as an example.   Federal law                                                                   
does not allow for different payment policies.                                                                                  
                                                                                                                                
2:52:13 PM                                                                                                                    
                                                                                                                                
Mr. Pawlowski  added that if  benefits and costs  are reduced                                                                   
on the  "govern the  conduct side",  the amount required  for                                                                   
reimbursement goes  down.  He  implied that there is  still a                                                                   
benefit to the business by addressing  other regulations that                                                                   
are not exempt.                                                                                                                 
                                                                                                                                
Co-Chair Chenault WITHDREW his OBJECTION.                                                                                       
                                                                                                                                
There being NO OBJECTION, Amendment 1 was adopted.                                                                              
                                                                                                                                
2:53:32 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer MOVED to ADOPT Conceptual Amendment 2:                                                                           
                                                                                                                                
     Page 1, lines 1-2 [Delete all material]                                                                                    
     Page 1, line 1 - Insert:                                                                                                   
     "An  Act  relating  to  requiring  notification  to  the                                                                   
     Department   of   Commerce,   Community   and   Economic                                                                   
     Development,  economic  effect   statements,  regulatory                                                                   
     flexibility   analyses;  a   private  cause  of   action                                                                   
     relating to  the required economic effect  statements or                                                                   
     regulatory  flexibility analyses;  and providing  for an                                                                   
     effective date."                                                                                                           
                                                                                                                                
Co-Chair Chenault OBJECTED for discussion purposes.                                                                             
                                                                                                                                
Co-Chair Chenault withdrew his  OBJECTION to adopt Conceptual                                                                   
Amendment 2.  There being NO OBJECTION,  Conceptual Amendment                                                                   
2 was adopted.                                                                                                                  
                                                                                                                                
2:55:20 PM                                                                                                                    
                                                                                                                                
GUY   BELL,    ASSISTANT   COMMISSIONER,   OFFICE    OF   THE                                                                   
COMMISSIONER, DEPARTMENT OF LABOR  AND WORKFORCE DEVELOPMENT,                                                                   
reported that he  is relieved at the relative  lack of burden                                                                   
to  the department.    He  noted  that the  department  would                                                                   
review  this  legislation and  is  not  bound by  a  positive                                                                   
fiscal note.                                                                                                                    
                                                                                                                                
2:56:12 PM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer   noted  Department  of  Health   and  Social                                                                   
Services is  ok with a new  zero fiscal note.  The Department                                                                   
of Environmental  Conservation agrees with a  new zero fiscal                                                                   
note.   The  Department of  Law has  an indeterminate  fiscal                                                                   
note.   The  Department of  Labor  and Workforce  Development                                                                   
will  have  a zero  fiscal  note.   Department  of  Commerce,                                                                   
Community and  Economic Development would like  assistance in                                                                   
developing a new fiscal note.                                                                                                   
                                                                                                                                
2:58:01 PM                                                                                                                    
                                                                                                                                
Representative Weyhrauch asked  if boards and commissions are                                                                   
subject to this bill.  Mr. Pawlowski  replied that boards and                                                                   
commissions  confirmed by  the legislature  are subject  to a                                                                   
public   confirmation   process,   and   are   made   up   of                                                                   
representatives from  the industry that are  already aware of                                                                   
the  needs of  the industry.    When a  board or  commissions                                                                   
promulgates  a  regulation, the  costs  of that  process  are                                                                   
borne  by  fees,  which are  returned  to  small  businesses.                                                                   
Representative  Weyhrauch asked if  that applies to  Fish and                                                                   
Game.   Mr.  Pawlowski  replied  that  was a  separate  issue                                                                   
regarding  emergency allocations.   Representative  Weyhrauch                                                                   
asked what  happens if the agency  does not comply  with this                                                                   
statute.   Mr. Pawlowski  said that  the judicial review  was                                                                   
discussed  in the House  Judiciary Committee.   He  explained                                                                   
the history of the judicial review.                                                                                             
                                                                                                                                
3:00:44 PM                                                                                                                    
                                                                                                                                
Representative  Weyhrauch related a  problem he has  with the                                                                   
bill.    Representative  Weyhrauch   expressed  his  concerns                                                                   
regarding federal regulations  and small businesses having no                                                                   
power to affect  regulation.   Mr. Pawlowski  agreed that was                                                                   
a  valid  concern.    He  explained  that  the  agency  would                                                                   
consider  public commentary  and the  review committee  could                                                                   
discuss the regulation.                                                                                                         
                                                                                                                                
3:02:26 PM                                                                                                                    
                                                                                                                                
Representative  Foster  MOVED   to  report  CSHB  33  out  of                                                                   
Committee   with    individual   recommendations    and   the                                                                   
accompanying   revised  fiscal   notes.     There  being   NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
CSHB  33 (FIN)  was  REPORTED  out of  Committee  with a  "no                                                                   
recommendation"  recommendation  and with  the following  new                                                                   
fiscal impact notes: an indeterminate  note by the Department                                                                   
of Law, a zero  note prepared by the House  Finance Committee                                                                   
for the  Department of  Environmental Conservation,  a fiscal                                                                   
note by  the Department of  Commerce, Community  and Economic                                                                   
Development,  a  zero  note prepared  by  the  House  Finance                                                                   
Committee for  the Department of Health and  Social Services,                                                                   
and  zero  note by  the  Department  of Labor  and  Workforce                                                                   
Development.                                                                                                                    
                                                                                                                                
3:03:09 PM                                                                                                                    
                                                                                                                                

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