Legislature(1997 - 1998)
04/26/1997 10:10 AM House STA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 264 - NEGOTIATED REGULATION MAKING The next order of business to come before the House State Affairs Standing Committee was HB 264, "An Act providing for a negotiated regulation making process; and providing for an effective date." Number 2425 WALTER WILCOX, Legislative Assistant to Representative Jeannette James, explained HB 264 took the request of citizens for a change in the regulation making process seriously. Currently, the regulations were written first then taken to the public. TAPE 97-51, SIDE B Number 0001 MR. WILCOX explained a negotiated regulation system (neg/reg) was being used by the federal government, Montana and Nebraska. They found it to be cheaper because it eliminated litigation at the end of the process; the people had their say up front. The bill outlined a way to convene a committee by the agency and interested parties, as-well-as, a mediator to create regulations that everybody could live with. The package of information provided to the committee members included the following: sponsor statement, negotiated regulation/rule making, Alaska regulation adoption process, Montana's neg/reg act, Nebraska's neg/reg act, the neg/reg U.S. code, and the neg/reg Nebraska administrative code. He further announced Bob Knight was in the audience today as an expert witness. He had worked with the neg/reg process at the federal level. Number 0067 REPRESENTATIVE DYSON asked Mr. Wilcox how the Administration had responded to this and did the environmental lobby committee know what was being done? Number 0086 MR. WILCOX replied the Administration appeared to be heading in the same direction as the bill. Deborah Behr, Department of Law, was here to testify as well. Number 0128 REPRESENTATIVE VEZEY wondered how the committee managed to hear the bill today when it was just read across the floor of the House of Representatives. MR. WILCOX replied because we were good. Number 0138 CHAIR JAMES explained her quest in the legislature had been to try to simplify the regulatory process. The bill was a good answer even though it cost more up front. She asked the House State Affairs Standing Committee members to give this bill a thorough review. The bill would probably not be moved out of the committee this year. Number 0184 REPRESENTATIVE BERKOWITZ explained The Yukon Pacific Corporation brought everybody on board up front including the environmental organizations which reduced contentiousness that normally accompanied the permitting process. He asked Chair James if that was what she was aiming for? Number 0211 CHAIR JAMES replied, "Correct." Generally people did not like surprises. Number 0247 DEBORAH BEHR, Assistant Attorney General, Legislation and Regulations Section, Department of Law, was the next person to testify in Juneau. She had not been able to call all of the agencies because she just got the bill yesterday at 2:30 p.m. The Administration had been very interested in neg/reg. Three departments had come to her already to explore neg/reg over the summer - Department of Revenue (DOR), Department of Environmental Conservation (DEC), and Department of Natural Resources (DNR). MS. BEHR explained that the Administrative Procedure Act (APA) had not been updated since the 1980's. Work shops were appropriate and some agencies were starting to conduct work shops on the larger regulation projects. She cited the Department of Environmental Conservation held work shops on the water quality regulations. MS. BEHR stated she liked the model in the bill because it was an up-front process not raising a lot of constitutional problems. It set up a board to help plan for the regulation process so that everybody would have an opportunity for comment. MS. BEHR explained this summer we would need to look at adjusting the bill for the boards and commissions. She did not know how to negotiate with a board or commission. She was concerned about the boards that had to act quickly such as the Board of Fisheries. She was concerned about the open records provision because most industries did not mind being candid with an agency but they did not want their records to be public. She stated the bill had many layers and suggested cutting a few to save money. She cited the provision for a salary to sit on the board. (THE TESTIMONY OF MS. BEHR IS NOT COMPLETE DUE TO THE TELECONFERENCE NETWORK BEING SHUT OFF. SHE WAS ASKED TO RESTATE HER CONCERNS LATER IN THE HEARING) Number 0628 REPRESENTATIVE ELTON asked Ms. Behr to comment on the provision of no judicial review. What problems would it solve or could occur without a judicial review? Number 0648 MS. BEHR replied the decision of the commissioner was non- reviewable. She did not have a legal problem with it. The regulation as a result of a decision was subject to a legal challenge, however, because it was under existing provisions in law that were not being repealed. Number 0669 REPRESENTATIVE ELTON referred Ms. Behr to the language on page 9, line 10 and wondered about the requirement before rather than after and the perception of the public process that went along with it. Number 0700 MS. BEHR stated a regulator would have to be careful to not give the appearance of special deals with the regulated industry while the regulation was out for public comment. Number 0719 REPRESENTATIVE ELTON stated he liked the idea of bringing people to the table to try to work towards the middle. He wondered if the petition process would create a heavy work load. Number 0754 MS. BEHR stated there was an existing petition process in the current APA. The bill was asking for a different type of petition; a petition to call for a review committee. She was not sure of the impact. The petition process for the APA had not caused a lot of problems. Number 0795 CHAIR JAMES explained there were two triggers to regulation writing: new legislation or a rewrite of existing regulations. A petition to request the use of neg/reg would come when there was controversy over new legislation for example. An agency would also choose that process to get the concerns out of the way. In the case of existing regulations that needed to be rewritten someone would want the neg/reg process because too often regs were written that did not work in the field. Number 0882 REPRESENTATIVE ELTON asked Ms. Behr if there should be a provision to keep people from petitioning for a regulation change if there were administrative appeals that had yet to be exhausted? He cited the Permanent Fund Dividend (PFD) process as an example. Number 0914 MS. BEHR stated someone should not be able to file one petition after another either. Number 0924 REPRESENTATIVE DYSON asked Ms. Behr if she had been in contact with Nebraska or Montana? MS. BEHR replied, "Not yet." Number 0938 REPRESENTATIVE BERKOWITZ stated this was clearly the product of earlier industrial/organizational theorists. He asked Mr. Wilcox what sort of theorists or scholars had looked into this? Number 0959 MR. WILCOX replied in the bill package there was a document summarizing the responses of the individuals in the various states on how it worked. Number 1010 MR. WILCOX explained that neg/reg would probably only be used less than six times per year according to Ms. Behr. We were looking at very expensive or very controversial types of regulations. The example of the PFD by Representative Elton would not apply because the commissioner would summarily dismiss it. Number 1036 CHAIR JAMES added it would also require more than one person. Number 1042 REPRESENTATIVE ELTON stated what was important to him was not necessarily important to the commissioner. He asked Mr. Wilcox what discretion an agency had to reject a petition? Number 1060 MR. WILCOX replied a convener was appointed by the agency who did background research on the issue, impact, and cost. The convener then reported back to the commissioner with the recommendation to either form a committee or not. Number 1077 REPRESENTATIVE ELTON stated, therefore, it might not be an issue of magnitude but of cost. Number 1103 MR. WILCOX stated somebody would have to address the issue. If it had gotten to the point of a petition the department would have investigated it already. Number 1143 MS. BEHR stated she could see the neg/reg process being used by more than resource agencies. There had been very controversial day care regulations addressed in the past. Number 1181 CHAIR JAMES explained she got the idea for neg/reg when she was working with the assisted living regulations. The Division of Family and Youth Services included a consumer and a day care provider when drafting the regulations. The Department of Transportation and Public Facilities worked with the trucking industry on trucking regulations. The Department of Revenue worked with the industry on oil tax regulations. Number 1204 MS. BEHR stated some could be done without the bill. CHAIR JAMES replied, "You're right." An outline of how it would work was needed, however. Number 1293 ROBERT HUNTINGTON KNIGHT, Jr. was the next person to testify in Juneau. He explained he was involved with setting up the Environmental Protection Agency (EPA) as a member of the founding task force. He worked for the first two administrators as an aide, and was at the Department of Interior in water pollution before the EPA. The idea was to begin to control and regulate the discharges to improve the quality of the environment throughout the nation. No one was sure how to do it except through the regulatory process either in a hostile fashion or by talking to the polluters. We assumed good faith in the polluter and created a committee setting where there was room for exchanges of views. Work sessions were held as well to prevent the leakage of proprietary secrets. MR. KNIGHT, Jr. further stated that he did not see anything in HB 264 to prohibit or restrain boards and commissions from making emergency regulations. If the emergency became a long problem then the neg/reg would be a good route to follow but it might not be necessary. MR. KNIGHT, Jr. further stated the federal agencies found neg/reg to be a very exciting process because input at a formative stage allowed for the identification of issues that might not have appeared until a regulation was promulgated. It sped up the process, cut costs, and reduced litigation. Number 1657 CHAIR JAMES asked Mr. Knight, Jr. how long had Montana and Nebraska used neg/reg? MR. KNIGHT, Jr. replied he did not know about Montana and Nebraska. The federal government started using this type of process in the 1960's. MR. WILCOX explained Montana started in 1993, Nebraska in 1994, and the federal government in 1990. Number 1681 MR. KNIGHT, Jr. stated the process had been around a long time. The idea that a statue was needed was new. Number 1690 CHAIR JAMES explained she was turned on to the idea of neg/reg because some agencies were using it while other were not. Something was needed in statute so that the option was considered. Number 1712 REPRESENTATIVE BERKOWITZ wondered if anyone opposed neg/reg. He could not think of a reason why. Number 1721 MR. KNIGHT, Jr. stated some opposed it because there was the potential to add another layer of bureaucracy that could impede the regulatory decision making process. Number 1801 REPRESENTATIVE BERKOWITZ explained he characterized the situation where the interested parties were brought in prior to the development of any conflict. MR. KNIGHT, Jr. stated there could already be conflict. He cited, in regards to oil spills, prior to the task force the agencies were blaming each other. It took only four months to get an interagency agreement between the players. However, 20 years later the agencies spent 10 hours discussing who was in charge after the Exxon Valdez oil spill. The agreements had to be revisited. Number 1942 REPRESENTATIVE ELTON explained, when he first looked at this issue, cost and time were of concern to him because both were frustrating to agencies. However, upon review, neg/reg would save on cost and time because it would occur prior to the current public process. He asked Mr. Knight, Jr. if his notion was correct? Number 2020 MR. KNIGHT, Jr. replied, "Yes." It was a public meeting, not a private meeting, for anyone interested. It was a way to get the parties together to talk things out ahead of time. The savings was not necessarily in the process itself; but, in time, effort, litigation, and cooperation. MR. WILCOX asked that Ms. Behr repeat her testimony for the record. Number 2161 MS. BEHR reiterated she had not been able to talk to all of the agencies because she just got the bill yesterday afternoon. The agencies that had expressed an interest in neg/reg were DEC, DOR and DNR. The DEC participated in the process now with its water quality work shops which were successful. She liked the bill because it called for a process before the start of the regulatory process, therefore, it did not raise constitutional problems. In addition, it was an advisory process so the commissioner was not bound to the recommendation. The Department of Law would be willing to work this summer on the issues. MS. BEHR explained she was concerned about the commissions and boards and how to negotiate with one member when that member did not speak for the whole. She was concerned about the Board of Fisheries and the Board of Game and their excelerated time lines. They might need to be exempted, for example. She was concerned about open records. Private businesses were reluctant to give proprietor records to the state for fear of it becoming a public document. She was concerned about providing a salary for the members. She was concerned about the 30 day time frame to set up a committee being too long. She was concerned about ethics. She was concerned about the definition of unanimous consent. TAPE 97-52, SIDE A Number 0001 MS. BEHR further stated she was concerned about immunity. More would probably be willing to service if there was some kind of immunity. She was concerned about the agencies receiving gifts to set up the committee. She would prefer that it went to the state rather than the committee itself to remove any appearance of influence. Number 0085 CHAIR JAMES announced she would like to hear HB 264 one more time before the end of session in order to hear from the Administration and industry members.
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