Legislature(1999 - 2000)
03/29/1999 08:04 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CS FOR SENATE BILL NO. 24(JUD)
"An Act relating to regulations; relating to
administrative adjudications; amending Rule 65, Alaska
Rules of Civil Procedure; and providing for an
effective date."
This was the fourth hearing for this bill.
Co-Chair John Torgerson's intention was to address the
fiscal notes during this meeting.
Senator Dave Donley moved for adoption of CS SB 24 Version
"X", which incorporated amendments the committee made to
Version "W" at its last hearing. There was no objection and
it was adopted.
Co-Chair John Torgerson noted the committee had received
three fiscal notes to this version of the bill. These were
from the Department of Fish and Game, Division of Habitat
and Restoration, the Department of Environmental
Conservation and the Department of Law, Civil Division.
GERON BRUCE, Legislative Liaison, Department of Fish and
Game, testified to the latest fiscal note from his
department. He explained there were three elements to the
fiscal note. One element was for $30,000 to be used to
contract for economic developing services to cover the
costs of the cost benefit analysis or to determine that an
analysis would not be required. Second was an RSA to the
Department of Law for assistance in preparing the
regulations under the new provisions. The third was for
additional part-time staff to carry out the new
requirements.
Co-Chair John Torgerson asked how many regulations did the
Division of Habitat and Restoration do each year. Geron
Bruce answered the department did very few. This system
assumed that the division would not necessary do
regulations every year and would apply to the special
critical habitat or game refuge areas designated by the
Legislature. Regulations also governed the permitting
process. He detailed the process of when regulations were
adopted. Co-Chair John Torgerson tried to distinguish
between the comment Mr. Bruce made that they did not do
very many regulations and the request for additional staff
and contract out work to do the regulations. Geron Bruce
responded that they had to estimate how many regulations
they might do. He noted that amendments to the special area
plans were often at the result of public request and
interest. Therefore, they could not anticipate how many
regulations would be done each year, but he estimated one
or two per year.
Co-Chair John Torgerson asked if the division didn't
currently go through a public testimony process on those
regulations? Geron Bruce replied that they generally did.
However, as a result of budget cuts, dedicated staff who
developed the management plans for the special areas was no
longer with the department. Other staff would have to be
added to comply with the new legislation.
Co-Chair John Torgerson so two regulations would cost the
Department of Law $26,000 each to adopt. Geron Bruce
deferred to the Department of Law.
Co-Chair John Torgerson questioned the need for 1.2 staff
for two regulations. Geron Bruce responded that was their
minimum estimate and they could need more. He stressed
that the department could not guess how many regulation
changes there would be. He noted the positions were viewed
as temporary positions to be used only as needed.
Co-Chair John Torgerson asked if the department had
identified the cost of supplemental notices separately in
their calculations. Geron Bruce answered those costs were
included in the functions the addition staff would perform.
He detailed how it would relate to the cost benefit
analysis.
Co-Chair John Torgerson lastly asked what equipment needed
to be purchased to implement the regulations under the new
provisions. Geron Bruce responded that computer and
telephone equipment would need to be purchased.
Senator Loren Leman asked about the support language on the
fiscal note and read it into the record. It in part stated
that the bill would require costly and redundant public
notices for even non-subtenant regulation changes. He asked
what in the bill gave the department that impression.
Geron Bruce replied it was the department's interpretation
of Section 10.
Senator Loren Leman said it wasn't his intent for that to
happen and suggested the language be made clear or the
committee's intent be expressed into the record. He
deferred to the sponsor to clarify.
Senator Dave Donley emphasized that the Department of Fish
and Game's statement was not true. It was an exaggeration
not based on the actual language of the bill. The bill
clearly gave the department more than sufficient leeway not
to have to do that. He surmised that the department knew
that and it was obvious they did not like the limitations
on their current powers. They could make a judgement call
as to whether or not a regulation created significant
changes.
Senator Dave Donley asked about Administrative Order 157
issued by Governor Knowles. Geron Bruce was unfamiliar with
the order. Senator Dave Donley said Item 10 in that order
directed the department to submit a plan to the Governor on
how the department would consider the cost to the regulated
public regarding a proposed regulation versus the state's
interest in the benefit from the particular regulation. He
asked if Mr. Bruce had seen the plan. Geron Bruce had not.
Senator Dave Donley asked if Geron Bruce participated in
the preparation of the fiscal note before the committee.
Geron Bruce did not and said the Division of Habitat and
Restoration had prepared it. Senator Dave Donley asked if
they had reviewed the department's plan pursuant to the
administrative order. Geron Bruce didn't think so, but the
subject had not come up in his discussions with them.
Senator Dave Donley suggested that since the governor's
executive order from 1995 required them to have a plan to
deal with the same issue, they should have a plan to deal
with the legislation within their existing budget or they
would be in violation of the governor's order. Therefore,
he didn't think they would need additional staff.
There was further debate.
Senator Al Adams also read the order and noted that the
order contained a provision to minimize the cost to the
public of complying with state regulations. He interpreted
that language to be different that the requirement of a
cost benefit analysis dictated in the bill.
Senator Dave Donley read a portion of the order into the
record to make his point. "Each adopting agency immediately
shall submit a plan to the Governor for a process of
reviewing in consultation with the Department of Law its
existing regulations for the purposes of identifying within
budget constraints, revisions to be amended or repealed
because the cost to the regulated public is excessive when
compared to the state's interest in, or benefit from the
particular requirement." He noted that the statement
included both the words "cost" and "benefit".
Break 8:20 AM / 8:21 AM
Senator Dave Donley moved to amend the Department of Fish
and Game fiscal note to delete funding for all provisions
except the supplies line item component for all years
listed (Amendment #12). This was to cover the postage for
the supplemental notices. Senator Al Adams objected, saying
the departments needed resources to carry out the
provisions of the legislation. The Department of Law would
need funds RSA'd to assist them in handling the
determinations of the necessity of the cost benefit
analysis.
DEBORAH BEHR, Assistant Attorney General, Legislative and
Regulations Section, Civil Division, Department of Law,
spoke to the motion on the fiscal note at the request of
Senator Al Adams. She repeated her statement that because
this legislation was a new concept, the department
anticipated court challenges. She gave examples of statutes
that had been in place for many years and settled. Under
this legislation, the process would have to begin all over
again.
She had particular concerns with Section 13, which would
require the Department of Law to defend regulations against
claims that the regulation imposed more than necessary
intrusion on the rights of persons and property. The bill
would require two tests that were not required now. It
would be extremely expensive to bring evidence as to what
was substantial state interest. She expected she would need
an economist to help make these determinations. She would
also have to get information about what the impacts would
be on private people. Their information was protected by
the Alaska Constitutional Right of Privacy so she would
have to do extensive discovery requests to get that
information. It would be an expensive and continuing cost
on every new regulation.
Sections 2 and 3 would also be very expensive. They
required the Department of Law to look at the intent of the
statutes. There was no time limit on the intent of the
statute so she would have to research legislative intent.
In most cases, it would be hard to get since the Alaska
Legislature did not do formal committee reports, she
warned.
She said the agencies were focused on the cost benefit
analysis and supplemental notice provisions. She felt they
would be problematic but not as bad as the aforementioned
sections. She would have to advise the departments on the
cost benefit analysis about what were adequate costs and
benefits, what types of records they would have to have to
defend a court challenge and whether or not the exemption
applied and their particular circumstances.
She summarized saying this was a novel law and there was
nothing in any other state or federal statutes to give
direction. She would therefore have to give advice based
on her best guess.
Co-Chair John Torgerson interrupted asking if there wasn't
another possibility that she would tell the agencies that
the Department of Law needed legislation instead of trying
to research many years of intent language. That was the
heart of the bill. With that legislation there would be a
fiscal note and therefore no need to hire additional staff
to research. "You are running down a path that doesn't
give you an out and you do have outs in this bill. One of
them was to say 'You can't do that regulation because you
can't defend the intent of the legislature at that time.'"
He stressed.
Deborah Behr clarified that even if it were clearly within
the intent of the statute, there would still be a
requirement for the cost benefit analysis.
She added that there were some actions that needed to be
taken when the legislature was not in session. She gave an
example of air quality regulations.
Senator Dave Donley reminded the committee that there was a
specific exemption listed in Section 4. He read it into the
record and said that if legislative intent was clear and in
the statute, the example cited by the witness would not
apply. Deborah Behr disagreed, saying that for most of the
air and water programs, the statutes were general and non-
specific. She interpreted Section 4 as requiring an express
statutory language, rather than general. Many are
exemptions dealt with small businesses. The language only
would exempt it when it was expressly required by statute.
In many cases the statute was "Alaskanizing" a federal
requirement.
Senator Dave Donley countered it would be easy, if the
department found that problem, to request the Legislature
to expressly authorize to address problems for small
businesses in statute.
Deborah Behr noted another section where she anticipated
high costs for both the Department of Law and the state
agencies was that of the supplemental notices. She said
the way the section was written, it did not specify only
for substantial changes as the record indicated. She
referred to page 6 line 18. An earlier version did specify,
this version did not. Therefore the departments would be
required to go out for public notice each time and this was
an extremely costly process. She repeated that she
anticipated many court challenges.
Senator Dave Donley suggested that if the supplemental
process became so problematic, the Department of Law could
request the Legislature grant a specific authorization or
statutory change to address that rather than continue
trying to do it by regulations.
Senator Al Adams referred back to Administrative Order 157.
He noted that the order directed the departments to
"consider" minimizing cost, not necessarily do a cost
benefit analysis. Deborah Behr had drafted that order and
it was targeted for bills that were in Legislature at that
specific time. She noted for the committee that the
financial situation was considerable worse than at the time
of that order. She explained the differences between the
administrative order and the proposed legislation.
Senator Al Adams spoke to references made to federal law
and asked if this legislation matched the federal
requirements. Deborah Behr had researched the federal law
and found it was much different. This bill was unusual and
novel.
Senator Dave Donley said that since the witness was
involved in the preparation of the administrative order
requiring agencies submit a plan to the Governor, could she
provide copies of the plans. Deborah Behr responded that
the Department of Law plan was submitted to the Office of
Management and Budget. She would talk to that office and
request they provide copies to the committee.
Senator Al Adams noted the budget cuts since the order was
issued and that the administrative order directed the
agencies to comply within their budget constraints. There
were more constraints now then before due to severe budget
reductions.
TERESA WILLIAMS, Assistant Attorney General, Fair Business
Practices Section, Civil Division, Department of Law
testified via teleconference from Anchorage. She was
prepared to testify on a possible conceptual amendment
referred to by Senator Dave Donley. Senator Dave Donley
spoke to the proposed Amendment #11 that dealt with the
issue of setting standards of when commissioners could
remand decisions for additional findings of fact.
Co-Chair John Torgerson requested Senator Dave Donley to
remove his earlier motion to amend the fiscal note,
Amendment #12, so the committee could discuss Amendment
Senator Al Adams asked if Amendment #11 would affect the
fiscal notes. Senator Dave Donley was unsure if it would
affect the department's testimony.
Deborah Behr spoke to Amendment #11. In response to Senator
Dave Donley's request from the last meeting, the department
provided him with an amendment, which would work to address
the problem but have no cost. She compared Amendment #11 to
her suggested amendment and it was substantially different.
Amendment #11 would put a cap of 90 days for a state agency
to address a decision if they did not approve the remand.
She pointed out that this provision would apply to all
state agencies and there were boards and commissions that
did not meet every 90 days so it would affect their costs.
It would also place an additional priority to legal
resources to assist the department. It would have a fiscal
impact.
Senator Dave Donley said he thought he should address this
item as a separate piece of legislation. He spoke further
on the merits of the provision. He said he would not be
offering Amendment #11.
The committee turned its attention back to Amendment #12.
By a vote of 8-1, it was adopted. Senator Al Adams cast the
nay vote.
The committee then addressed the fiscal note from the
Department of Environmental Conservation.
JANICE ADAIR, Director, Division of Environmental Health,
Department of Environmental Conservation, testified via
teleconference from Anchorage. She said there were four
sections in the bill the department believed created
significant costs. The first was to Section 3 regarding
changing the intent of statute. Generally speaking, she did
not feel the department did that currently. Therefore,
they must be doing something the Legislature wanted to
change. She spoke to the difficulty in doing research in
the Legislative Library on the intent of legislation.
Section 4, the cost benefit analysis was another area of
concern. The department did about 25 regulation packages a
year, some of which were complex. The way she read the
bill, and only one would have been exempted from the cost
benefit analysis requirement. Most of the regulations that
were based on federal requirements included provision to
"Alaskanize" those requirements. The Department of Law did
not believe the exemption would apply to the changes to
federal requirements. She gave examples of water quality
criteria, drinking water analysis and solid waste
regulations. Therefore, most of the department's
regulations would require an extensive cost benefit
analysis. She noted that the department had submitted a
plan to Office of Management and Budget to implement
Administrative Order 157. She interpreted the requirement
of the bill to be much different in that it would require
the analysis to consider the cost and the benefit to the
public at large rather than the regulated public.
Currently, the regulations considered only the regulated
public. She gave an example of the recently revised
seafood processing regulations and spoke further of the
problems associated with the requirements.
Section 10 in conjunction with Section 14 were also
problematic. These dealt with the supplemental public re-
notices. She said the department currently re-noticed when
there was a substantive change to the proposed regulations.
She said they received many changes from the Department of
Law, but did not have them review the regulations before
they when out for public comment. Part of the fiscal note
included funds for the Department of Law to have that
review done first. That would hopefully be one way to limit
the number of times a regulation went out for public
comment. She added that the department also changed
regulations based on public comment received. That was the
purpose of the public comment period. The mailing list for
the public notices exceeded 3000 names and it would be
expensive to send out multiple public notices.
It cost approximately $5,000 to send public notices for
every regulation package the department did.
The fiscal note added an economist for the cost benefit
analysis, and a second paralegal position for the
department. They would also need assistance in doing the
research and an additional clerical position for support to
those positions.
Senator Loren Leman asked Janice Adair about the mailing
list of 3000 names and wanted to know if the department
made efforts to purge the list. Janice Adair replied they
did purge the list and usually limited it to current permit
holders and people who specifically requested inclusion on
the list.
Co-Chair John Torgerson noted the fiscal note reference to
25 regulations done per year with only one exempt under the
regulation. He wondered if 49 regulations then went beyond
the intent of the enabling statute. Janice Adair answered
no, that she looked at the exemptions from page 3 relating
to regulations drafted to meet federal requirements. Co-
Chair John Torgerson countered that the regulation would be
exempt if it did not go beyond the scope of the enabling
legislation. Janice Adair responded that many of the
statutes had been on the books for a long time and intent
was lost. Therefore, it had to do with the number of years
the statutes had been on the books, not that the department
was going outside the intent.
Janice Adair added that the fiscal notes only dealt with
the department costs and did not reflect the public costs.
Co-Chair John Torgerson suggested if there was question,
the department could submit legislation so the Legislature
could debate the merits of the regulation.
Senator Dave Donley began to comment.
Tape: SFC - 99 #68, Side B
Senator Dave Donley continued saying the witness raised a
concern the committee might want to address relating to
exemptions to regulations needed to meet federal
requirements. He noted the possibility of the department
wishing to exempt the applicability of an existing federal
requirement and said he would consider an amendment to
allow that. Co-Chair John Torgerson commented that he
didn't always agree with the federal requirements. He asked
if the amendment would allow the department to adopt the
regulations without Legislative approval. Senator Dave
Donley said the intent was to enable the department to
address those times when they were exempting the
applicability of a federal requirement because they had a
parallel state requirement that met the federal mandate.
Senator Dave Donley moved Amendment #13. This would add
language to page 3 line 11 and page 7 line 8, ".or to/that
exempt the applicability of federal requirements." That
would address the witness's concern. Senator Loren Leman
suggested the provision allow for revising or reducing the
requirements. Senator Dave Donley entertained the friendly
amendment to insert "to revise" before "or exempt". Senator
Dave Donley made the amendment conceptual to allow the
drafters make the language simpler.
Senator Al Adams asked for comment by Janice Adair. She
thought that might help.
Senator Pete Kelly referred to comments by Co-Chair John
Torgerson that if the department could not find the intent
of a statute, they could make a request of the Legislature.
He asked where that was contained in the bill. Co-Chair
John Torgerson replied page 5 line 13 explained it most
clearly. It said that a state agency was not required to
prepare a cost benefit analysis if the estimated cost to
implement the proposed regulatory action was equal to or
not substantially greater than the cost of implementing the
proposed regulatory action estimated in the fiscal note
prepared for the bill. He did not want the department to
second-guess through the cost benefit analysis. He
emphasized that when the Legislature passed legislation and
the Governor adopted it, both parties made a policy call on
the expense involved. He did not want the departments to
undermine that and essentially veto the legislation by
citing a large cost benefit analysis.
Senator Dave Donley moved to amend the Department of
Environmental Conservation fiscal note to only include the
$5,000 supply component for each year (Amendment #14.)
Senator Al Adams objected, saying this agency needed the
large fiscal note because they dealt with many regulations.
He felt it should include at least $50,000.
Senator Gary Wilken referred to page 2 of the fiscal note
asking which of the four components Senator Dave Donley
objected to. He thought this department was one that
required the most support for regulation review. Senator
Dave Donley replied that section 1 dealt with determining
Legislative intent. Clearly, if there were a specific
problem with that it would be preferable that the
department come back to the Legislature and ask for
additional guidance rather than adopt regulations that did
not comply. The second section dealt with the cost benefit
analysis. It included specifying changes between
Alaskanizing federal requirements. Amendment #13 addressed
that. This would eliminate the need to hire an economist.
The bill included several exemptions to the cost benefit
analysis. He detailed the exemptions and argued that the
department should have a position already in place to
comply with the requirements of Administrative Order 157
even though the department said they complied differently.
He felt the committee already gave sufficient leeway in
giving flexibility on how the cost benefit analysis was
prepared. The third section dealt with the public notice,
which would be funded by this amendment.
Senator Gary Wilken asked if those reasons eliminated the
need for the remaining line items on the fiscal note.
Senator Dave Donley believed the department would have to
change the way they did business. He felt they could be
done with existing staff who should have experience under
the philosophy of the current Administration.
Senator Loren Leman spoke to the amendment saying he felt
they should revise the way the public notices were
published if the mailing list contained up to or over 3000
names. He said there were less expensive ways, such as
using Internet bulletin boards. If someone wished to be on
the mailing list just to get mail, they should pay for
that, in his opinion.
Senator Loren Leman then asked Janice Adair if the
regulations were consistent with statute, then what was the
basis for the recent bed and breakfast regulations. What
was the understanding of the statute authority and did the
department admit they overreached? Janice Adair quoted the
statute directing the department to adopt the regulations
regarding serving food. As far as whether there was an
overreach, the department just didn't use the correct
terminology in defining all bed and breakfast providers.
She noted that under this bill, they would have to go back
out to public notice to do this regulation.
Senator Pete Kelly referred to Section 4 and the cost
benefit analysis requirement based on Amendment #13. He
asked about the venue to come back to the Legislature to
ask for intent clarification. He pointed out that the
Legislature at that time could be different than the
Legislature that adopted the law.
Senator Dave Donley suggested there were many venues, which
were currently available. The department could request a
bill be introduced. They cold make suggestions during the
budget subcommittee process. They could approach the
standing chairperson of the particular committee that had
oversight of the matter and suggest changes. Or they could
go to the sponsor of the original bill and ask for
revisions.
Senator Pete Kelly requested further discussion to clarify
and define these avenues.
Co-Chair John Torgerson ordered the bill held in committee.
No action was taken on Amendment #14 and it was also held.
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