Legislature(1995 - 1996)

03/30/1995 08:06 AM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
 HB 267 - REGULATION REVIEW AND EXPIRATION                                   
 Number 265                                                                    
 CHAIR JAMES announced the next bill on the agenda was HB 267.  She            
 called this a simple bill that would provide for all regulations to           
 expire on June 30, unless extended by act of the legislature.                 
 This, she said, would provide a mechanism of oversight by the                 
 legislature and a means of eliminating those regulations not                  
 meeting the intent of the legislature.  She said she had many                 
 conversations with  the Administration on this bill and planned to            
 just take testimony at that meeting.  She would then take the                 
 suggestions from testimony and draft a proposed committee                     
 substitute for consideration by the committee at the next meeting.            
 She asked if there was any questions or comments from the committee           
 before they heard the testimony.  Hearing none, she heard from                
 those testifying on teleconference.                                           
 Number 305                                                                    
 DELORES FIELDS, member of Alaska Independence Party, supported HB
 267.  She thought there were too many regulations, some of which              
 were in conflict with the Constitution, and that they needed to be            
 reviewed by the legislature.                                                  
 ART GRISWOLD, member of the Alaska Independence Party, thought HB
 267 would allow for a regular evaluation of the regulatory process,           
 without extra hassle by the legislature to try and repeal a                   
 regulation it disagrees with.  He thought this bill would allow the           
 legislature some oversight of regulations and grant the Governor              
 the chance to veto, if they choose.  He thought this bill had been            
 developed with considerable thought and hoped it passed through               
 committee without difficulty.  He said this bill had the support of           
 the Interior Region organization of the Alaska Independence Party.            
 Number 342                                                                    
 CHAIR JAMES asked if anyone else on teleconference wished to                  
 testify on HB 267.  Hearing none, she asked who wished to testify             
 from the audience.                                                            
 DALE ANDERSON, Representative of the Alaska Commercial Fisheries              
 Entry Commission, said the commission had been created twenty years           
 ago, to help bring stability to the fishing industry.  He thought             
 HB 267 would be devastating to the agency, as the stability they              
 were striving for would cease to exist.  He could not see why                 
 anyone would invest in a permit, which may expire the next year               
 along with the agencys regulations.  He doubted the state loan                
 agency could justify its investment of over $84 million in permits            
 and fishing vessels under such a system.  He said the commission              
 could understand the need for checks and balances and regulatory              
 reform, but thought such a broad bill was too much.  He said a                
 quasi-judicial commission such as theirs, demands permanence in               
 order to safeguard the adjudicatory process in which they are                 
 involved.  Thus, they asked for an exemption to their commission              
 from the effects of HB 267, to help maintain the integrity and                
 stability found in the limited entry system.                                  
 BOB BARTHOLEMEW, Deputy Director for the Income and Excise Tax                
 Division in the Department of Revenue, thought the greatest impact            
 to their agency would be in sections 5, 6, and 8 of HB 267.  He               
 said currently, the agency has four programs with significant                 
 regulations, the Oil and Gas Tax Division, Corporate Income and               
 Excise Tax Division, Permanent Fund Dividend Program, and the                 
 Charitable Gaming Division.  He said the regulations for those                
 programs had been established with considerable effort and should             
 those regulations go away, they felt the revenue laws would not               
 function and the state would experience a loss of revenue.  He                
 cited the production tax on North Slope Oil as an example.  He                
 thought it was necessary to either have the regulations in place,             
 or move them into statute.  Finally, he thought this would possibly           
 create instability in the business climate of the state.  He urged            
 the committee to consider a way of allowing the legislature to be             
 involved in the drafting process, before they are signed into law.            
 He said the Department of Revenue would like to find a way of                 
 working within the current process, rather than having all                    
 regulations expire annually.                                                  
 CHAIR JAMES thanked Mr. Bartholemew for his comments on having the            
 legislature get involved in the drafting of regulations.  She said            
 this was part of the concept behind HB 105, her comprehensive                 
 overall regulation reform bill.  She explained the motivation                 
 behind HB 267 was that the legislature currently has no authority             
 to change regulations.  They can only make suggestions.  She said             
 there were two ways to change this, HB 267 and HJR 1, which would             
 give the legislature the ability to annul regulations by concurrent           
 resolution.  She did not feel the legislature would expire those              
 regulations having to due with the tax program.  She pointed out,             
 that in those states with this type of law, there was more of an              
 attitude of cooperation between the legislature and the agencies in           
 developing regulations that were more user friendly to the public.            
 She asked if Mr. Bartholemew would feel better if there was a                 
 provision in the bill that would set a deadline as to when the bill           
 had to pass the legislature.                                                  
 MR. BARTHOLEMEW thought the biggest concern of the Department of              
 Revenue was the possibility of all regulations expiring annually.             
 He thought there would be considerable discussion on the bill as it           
 went through the committee process and debate as to which                     
 regulation should be included and which one left out.  Thus, the              
 agency would still be concerned about the possibility of all                  
 regulations expiring.                                                         
 CHAIR JAMES mentioned there were other states doing this already              
 and it was working fine.  She said that with regards to whether               
 this would be a deterrent to industry, this had not been the case             
 in Colorado and Utah, who had this law.  She said in discussions              
 with officials in Utah, they viewed this law as a business                    
 incentive.  She pointed out that Salt Lake City and Denver were               
 thriving business hubs of the West Coast.  Thus, she did not see              
 this bill as a deterrent to business.                                         
 ELMER LINDSTROM, Special Assistant, Office of the Commissioner,               
 Department of Health and Social Services, said he would not take              
 much time testifying, as he had testified before the committee on             
 earlier regulation reform bills and their concerns on this bill               
 were largely the same.  He stated their biggest concern was that              
 the department participated in many federal programs and federally            
 funded programs, and should their regulations expire, the                     
 department would face the risk of losing these funds.  Another area           
 of concern was there licensing programs, which would possibly be              
 problematic if they could not readopt these regulations in                    
 substantially the same form.  He felt an underlying theme of this             
 bill was that the majority of regulations are bad and in need of              
 review.  He thought this was not the case, that it was only a very            
 few.  He suggested there be an exemption to regulations mandated by           
 the federal government.                                                       
 Number 579                                                                    
 CHAIR JAMES said she thought he had made her point, in that many of           
 the regulations were not problematic and would not be expired by              
 the legislature.  She thought he was in error in suggesting the               
 legislature would not be as sensitive as the Administration in                
 their oversight of regulations.  She thought they would be more               
 sensitive, in that they were responsible for lawmaking and the                
 budget of the state.  Thus, she did not feel it was a fair estimate           
 to think the legislature was incompetent to deal with these issues.           
 She pointed out the other option was HJR 1, allowing the                      
 legislature to annul regulations by resolution, which passed the 34           
 to 4 on the House floor.  She felt there could only be meaningful             
 oversight of regulations by the legislature if they had some form             
 of a hammer to hold over the agencies.  HB 267 was meant to provide           
 a hammer for the legislature to allow for meaningful oversight of             
 the regulatory process.  She thought there had to be a system set             
 up to allow for the legislature, agencies, and public to have                 
 meaningful input into the regulatory process.                                 
 Number 594                                                                    
 WILLIS KIRKPATRICK, Director, Division of Banking, Securities, and            
 Corporations, Department of Commerce and Economic Development, said           
 his testimony would reflect the regulatory process and concerns of            
 all of the agencies of the department.  He mentioned the department           
 decided, two years ago, that it was time to recodify the banking              
 regulations of the state.  During this process, it became quite               
 evident, that banking is a rapidly changing industry.  Thus, they             
 decided to forego the legislative process in writing statutes and             
 incorporate most of the changes in regulation.  As an example, the            
 legal investment list of where banks may invest funds is constantly           
 changing and these changes are incorporated into regulations.  As             
 he became aware of HB 267, he also became aware that other states             
 already had this law.  One of these was Utah, which like Alaska has           
 a system of state chartered banks and a bank holding company,                 
 Keycorp.  This system requires state chartered banks to be                    
 consistent and uniform in their procedures.  Being concerned about            
 his regulations expiring annually, he called banking officials in             
 Utah to see how the system worked for them.  He said it was their             
 understanding that the legislature introduced a bill specifying               
 those regulations scheduled to sunset.  This would relieve his                
 concern about all of his regulations being up for possible sunset.            
 He cited examples of how the Department of Commerce measures which            
 state is the easiest state to do business in.  He said their                  
 findings were that states with a consistent business climate are              
 easier to do business in those that are constantly changing.  Thus,           
 he was concerned we could be hurting our business climate with this           
 bill.  He was also concerned about the provision of the bill that             
 allows an agency to readopt a regulation, but not in substantially            
 the same form.                                                                
 TAPE  95-38,  SIDE B                                                          
 Number 000                                                                    
 CHAIR JAMES responded the law in Utah extended all regulations                
 except those listed for sunset.  She did not feel the banking and             
 commerce laws were ever likely to be on the sunset list.  She added           
 that Utah had a further provision, that allowed the Governor to               
 extend the life of a regulation the agency has scheduled for                  
 sunset, should the agencies justify the need for this regulation to           
 them.  She thought the legislature having the ability to do this,             
 would lead to an environment of increased cooperation between the             
 agencies and the legislature and most of these problems would be              
 fixed before a regulation was scheduled for sunset by the                     
 legislature.  She said this bill just provided the legislature with           
 some oversight of the regulatory process they have delegated to the           
 Administration.  She saw this bill as a slight deviation from                 
 current process to give the legislature some meaningful input into            
 the regulatory process.  She pointed out that most of the                     
 regulations Mr. Kirkpatrick was referring to were already supported           
 by statutory authority of the legislature.  She said this bill was            
 not meant to be a picking of individual philosophy, as much as it             
 was meant to allow the legislature to verify regulations were                 
 meeting the intent of the legislature.  Thus, she felt there would            
 be very few regulations being sunsetted by the legislature under              
 this criteria.                                                                
 Number 074                                                                    
 DEBORAH BEHR, Regulations Attorney, Department of Law, said she was           
 pleased to offer comments on HB 267.  She urged the committee to              
 hold this bill over until the interim.  She said her first concern            
 about this bill was the number of regulations there were in state             
 law.  She mentioned there were about 10,000 pages of regulations in           
 law currently.  She was not sure how much work the Administrative             
 Regulation Review Committee could accomplish over the interim in              
 reviewing regulations.  She said she had been told by by the                  
 sponsor that the committee would be reviewing those problematic               
 regulations brought to its attention.  If this was the case, she              
 wondered why put a cloud over all regulations to deal with the few.           
 After receiving this bill, she did some research on which of the              
 states currently had this law in effect.  She found there were four           
 states, Colorado, Utah, Tennessee and Ohio.  She was curious of the           
 staffing this bill required to implement and said she found the               
 state of Colorado told her they had 15 attorneys on staff who                 
 worked on this part-time.  Utah had two full-time attorneys on                
 staff to deal with regulations.  She thought there would also be              
 some additional costs to the Administration.  One area of concern             
 to her was Section 8 of the bill, that required the agencies to               
 submit certain documentation to the committee after adopting,                 
 repealing, or amending a regulation.  She thought this was                    
 unnecessary paperwork, which would add cost to the administration.            
 On page 4, lines 25-27, there was a requirement that the agency               
 identify persons who opposed or supported the regulation.  She                
 thought this was sometimes unable to be determined.  She offered an           
 example from her review of the regulations on abortion.  She was              
 also concerned about page 4, lines 28-30 require the identification           
 of any Attorney Generals opinion or judicial decisions relevant to            
 the regulation change.  She thought again, the amount of paperwork            
 for this requirement could be overwhelming and a cost to the                  
 Administration.  She also saw a potential cost in the possibility             
 of boards and commissions having to meet to provide information to            
 the committee or to redraft a regulation that has been sunsetted.             
 She was also concerned about the legal issues involved with this              
 bill.  She mentioned she had called the four states with this law             
 to see if any of them had had a court challenge and none of them              
 had.  She was also concerned about whether doing an omnibus bill              
 would violate the single-subject rule of legislation.  She was                
 aware of the fact that legislative legal counsel did not see a                
 problem, but thought this was still an area of uncertainty.  She              
 thought this could create an unstable regulatory climate for                  
 business.  She thought this bill could also violate the ALIVE v.             
 Alaska case of 1980, in that she thought it removed the veto                 
 authority of the Governor.  She thought, at best, these legal                 
 issues were unresolved.  She thought there was a better method,               
 where the Administrative Regulation Review Committee could review             
 regulations and draft a statute to repeal those individual                    
 regulations.  She thought the Governor would be unlikely to veto              
 such a bill.  She claimed this could give the legislature a more              
 active oversight of regulations.  She also expressed concern about            
 the date of June 30 for the annual sunset of regulations.  She                
 offered to work with the committee over the interim on regulation             
 reform.  She also was concerned about the language in the bill,               
 that prohibited the agency from readopting a regulation in                    
 substantially the same form.  She offered to answer any questions             
 of the committee.                                                             
 Number 316                                                                    
 CHAIR JAMES commented she did not see those kinds of disaster                 
 situations happening that Ms. Behr described, as she had more                 
 confidence in the legislatures ability to make decisions.  She                
 thought they would be just as prudent as the Administration if not            
 more so.  She said her past experience had been the legislature               
 does not make those kinds of decisions that cause the kinds of                
 disasters described.                                                          
 REPRESENTATIVE BRIAN PORTER thought there was a valid concern over            
 the legislatures sunset of regulations without the Governors                  
 ability to veto.  He thought there was a possible answer in                   
 borrowing Utahs provision of allowing the Governor to extend a                
 regulation the legislature has scheduled for sunset, or by a                  
 provision that would sunset a regulation with a date set by the               
 legislature for its expiration.                                               
 MS. BEHR thought there was some merit in the idea of sunsetting a             
 regulation on a date determined by the legislature, as done with              
 various commissions, but said she could only address the bill as it           
 was currently written.  She was concerned about the provision of              
 Utah, allowing the governor some input, that there was some legal             
 problems with allowing the Governor to extend a sunset without                
 having to go through the same committee hearing process the                   
 legislature has to do.  She also failed to understand why, if this            
 were a good idea, only four states have adopted similar laws to               
 Number 361                                                                    
 REPRESENTATIVE JOE GREEN asked if any of the four states with this            
 law had similar constitutional problems to ours with this bill.               
 MS. BEHR said she asked them and was told there had never been a              
 court challenge.  She said she specifically addressed the                     
 single-subject rule and got mixed results.  Some Attorney Generals            
 didnt think there was a legal problem and others were unsure.                 
 None of them had experienced a legal challenge to the laws in their           
 states.  Ms. Behr thought this was an open legal question and that            
 there would be legal opinions on both sides.                                  
 CHAIR JAMES agreed and stated there was a memo in the committee               
 packets from Legislative Legal Services, who did not feel there was           
 a legal problem with the single-subject rule.  They felt this was             
 no different than any of the omnibus bills that extend commissions            
 or the Administrative Procedures Act itself.                                  
 REPRESENTATIVE GREEN still wondered if the reason the other states            
 did not experience legal challenge on this law was because they had           
 constitutions that granted differing authority to the legislature             
 than ours.                                                                    
 MS. BEHR stated her research had indicated that three of the states           
 did not think there was a legal issue and the fourth thought it was           
 an unresolved legal issue.  She said she could not say what the               
 decision of Alaska courts would be on this issue.                             
 CHAIR JAMES asked if there were any other questions for Ms. Behr.             
 She called for Sharon Barton to testify.                                      
 SHARON BARTON, Director of Administrative Services, Division of               
 Administrative Services, Department of Administration, said she               
 could add very little to the comments of her fellow colleagues in             
 the administration.  She wanted to echo their general concerns.               
 She concurred the additional information required in Section 8 was            
 going to be costly and thought a better method would be to make               
 this information available on request of the committee.  She also             
 thought there would be greater monitoring of the legislation by the           
 agencies leading to greater costs.  She also did not think the                
 agencies would have the information available to provide the                  
 committee regarding the judicial decisions on a particular                    
 regulation, and so would experience an increase in cost.  She                 
 thought maybe regulation reform would be something to spend more              
 money on, but would want assurances the benefit was going to                  
 warrant the additional cost.                                                  
 Number 435                                                                    
 FRANK DILLON, Executive Director of the Alaska Trucking                       
 Association, supported HB 267.  He said the trucking industry is              
 regulated by a variety of regulations, both state and federal.  He            
 claimed over the last decade, regulations had gotten out of sync              
 with reality.  He offered an example to illustrate his point.  He             
 discussed the requirement of the state that all employers have an             
 employee bulletin board, listing pertinent and necessary                      
 information to the employee.  This should be pretty                           
 straight-forward and easy to comply with.  He said the problem was            
 that the information required to be on this board was distributed             
 by approximately nine different agencies and consisted of about 50            
 items that should be listed on the board.  He spoke of a letter               
 from the prior Governors Administration that ended with a                     
 statement to not consider the letter as a definitive answer to his            
 questions, as they did not know for sure what was required to be on           
 those bulletin boards.  He thought this was pretty symptomatic of             
 the entire regulatory system and was greatful for Chair James                 
 introduction of this and other regulatory reform bills.  He                   
 recognized this could be a terrifying prospect to those in the                
 agencies, but felt that many if not most of the regulations no                
 longer accomplish their stated purpose or legislative intent.  He             
 also argued that the main purpose for writing regulations, in his             
 experience with the agencies, was job security.  He thought                   
 regulations were supposed to be written to protect the public, but            
 when they get so confusing to private industry, many businesses               
 give up trying to comply.  He hoped that with the review of                   
 regulations proposed by HB 267, it would be possible to weed out              
 bad regulations and write new ones that would be better and easier            
 to comply with.  He wanted to reiterate his support for HB 267.               
 Number 479                                                                    
 MR. MCKEE said he supported the concept of the bill, but felt there           
 could be an amendment on page two, line 20 and line 23, which                 
 references common law of the state.  He thought this should be                
 changed to common law of the individual.  He thought this would               
 better address his earlier references to property rights.                     
 Number 507                                                                    
 CHAIR JAMES asked if there was anyone else from the public wishing            
 to testify.  She said her intention was to send this to a quick               
 subcommittee for some amendments and then recalendar it for the               
 next meeting.  She said it would be open to any of the committee              
 members who wished to work with her and the administration on a               
 proposed committee substitute for this bill.                                  
 REPRESENTATIVE ED WILLIS expressed his interest in participating on           
 the subcommittee.                                                             
 REPRESENTATIVE PORTER also expressed his interest.                            
 Representative Robinson arrived at 9:25 a. m.                                 
 CHAIR JAMES stated the next bill on the agenda SB 92 by House Rules           
 at the request of the Legislative Budget and Audit Committee.                 

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