Legislature(2013 - 2014)BARNES 124
03/11/2014 11:00 AM House ADMINISTRATIVE REGULATION REVIEW
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| Overview: Regulations Process and Administrative Order 266 | |
| Adjourn |
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ALASKA STATE LEGISLATURE
ADMINISTRATIVE REGULATION REVIEW COMMITTEE
March 11, 2014
11:04 a.m.
MEMBERS PRESENT
Representative Lora Reinbold, Chair
Representative Mike Hawker
Representative Geran Tarr
Senator Gary Stevens
MEMBERS ABSENT
Senator Cathy Giessel, Vice Chair
Senator Hollis French
COMMITTEE CALENDAR
OVERVIEW: REGULATIONS PROCESS AND ADMINISTRATIVE ORDER 266
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
RANDY RUARO, Policy Director/Legal Counsel
Capitol Office
Office of the Governor
Juneau, Alaska
POSITION STATEMENT: Provided information on regulations and
Administrative Order 266.
ACTION NARRATIVE
11:04:12 AM
CHAIR LORA REINBOLD called the Administrative Regulation Review
Committee meeting to order at 11:04 a.m. Representatives Tarr
and Reinbold and Senator Stevens were present at the call to
order. Representative Hawker arrived as the meeting was in
progress.
^Overview: Regulations Process and Administrative Order 266
Overview: Regulations Process and Administrative Order 266
11:05:20 AM
CHAIR REINBOLD announced that the only order of business would
be a review of the regulations process and Administrative Order
266.
11:05:40 AM
RANDY RUARO, Policy Director/Legal Counsel, Capitol Office,
Office of the Governor, appreciated the committee taking an
interest in reviewing regulations. He acknowledged that
regulations can be tedious and technical, but it is important to
have a good understanding of them. Although it seems that
regulations continually grow, they are important, he said. He
offered to discuss when the state has discretion to not adopt
regulations. In particular, he noted, many regulations are the
result of federal government action and tied to programs or laws
that the state must follow due to the U.S. Constitution. He
pointed out that federal law is the supreme law of the land with
some rare exceptions, such as when a statute or regulation is
found to be unconstitutional or in instances in which the
federal agency does not have statutory authority to adopt the
regulation. With those few exceptions, federal regulations are
a mandate to the states, he said.
MR. RUARO highlighted that currently significant regulatory
activity occurs at the federal level, for example, 141
regulation packages have occurred during the three days of
January 1-3, 2014. The sheer volume of federal regulation makes
it hard to track and difficult to identify the ones that will
impact the state. Certainly, state agencies track regulations
that impact their operations and the administration comments on
regulations under the Administrative Procedures Act (APA), and
any legislator or citizen can comment on regulations that have
not yet been adopted. For example, one regulation that the
administration has been tracking is a federal reinsurance fee,
set at $63 for each health-insurance covered employee for 2014.
The regulations are not yet final, but if the fees do apply to
the state, municipal, or school district employees, those
entities will need to pay the fees by the end of December.
11:10:02 AM
CHAIR REINBOLD asked for further clarification on the purpose of
the $63 fee.
MR. RUARO explained that the $63 fee is deposited into a
treasury account in Washington DC and returned to qualified
insurance companies. He offered his belief that the intent is
that during the early years of the Patient Protection and
Affordable Care Act (PPACA), [often referred to as "Obamacare"],
the fees will cover insurers who do not earn a reasonable return
on their policy issuances. These insurers would be entitled to
receive this fee. Although he is not an expert on it, he
characterized the fee as being a moving target because the
regulations are not yet final. Still, he reiterated, this
provides an example of a federal regulation that the
administration is tracking and will continue to follow.
CHAIR REINBOLD requested more information on this specific
regulation as it could have a huge impact on the state and
municipalities.
MR. RUARO responded that the administration is still evaluating
whether the fees will be levied against state health plan
participants.
11:12:07 AM
MR. RUARO related that the statutes broadly define regulation in
AS 44.62.640(a)(3) as follows, "regulation" means every rule,
regulation, order, or standard of general application or the
amendment, supplement, or revision of a rule, regulation, order,
or standard adopted by a state agency to implement, interpret,
or make specific the law enforced or administered by it, or to
govern its procedure ...."
MR. RUARO pointed out that the broad statutory definition causes
a significant number of regulations, noting that numerous state
and federal regulations are passed each year. In addition,
Alaska has numerous boards and commissions constantly reviewing
their requirements and generating regulation changes. A
significant number of regulations are generated solely by the
Board of Fisheries, the Board of Game, and the Alaska Department
of Fish & Game, in particular, since annual openings and closing
of seasons and boundary changes are necessary to provide updated
information.
MR. RUARO related that state departments have the most
discretion in terms of regulations, although they are bound by
statutory framework, which is the emphasis of Administrative
Order 266 (AO 266). The AO 266 works to address and develop
some best practices for commissioners when adopting regulations.
He directed attention to a copy of AO 266 in members' packets
and said that AO 266 is broken down along two lines. First, in
terms of existing regulations, it can be as simple as asking
agencies to review existing regulations to identify regulations
that are no longer necessary or are outdated so they can be
repealed or updated. In addition, commissioners can review
existing regulations for clarity and make them easier to read.
The governor wants a strong public process and input from
Alaskans affected by regulations, he said.
MR. RUARO said, secondly, in terms of proposed regulations, the
AO 266 provides similar guidance to commissioners to review
regulations and make suggestions on any impacts to the
community.
11:17:21 AM
MR. RUARO, in terms of what assistance can be provided, advised
that any member of the public can petition a state agency to
change a regulation. He described the state regulatory process
as an open one, although it's likely not used a lot, he said.
In terms of federal regulations, the public and legislators can
comment to the Alaska congressional delegation. The federal
government has a process to [nullify] or stop a regulation by a
majority vote. He reported that U.S. Senator Lisa Murkowski
tried this approach with Environmental Protection Agency (EPA)
regulations. Although she was not successful in her attempt,
this process is one that is in place at the federal level. He
encouraged members to really participate in the regulations
process since it helps improve them. In his experience, when
stakeholders and those affected by regulations participate,
often good suggestions arise.
11:19:35 AM
CHAIR REINBOLD commented on a recent House Education Standing
Committee meeting during which Commissioner of the Alaska
Department of Education and Early Development (EED) did not know
whether the state's mandates were fully funded for education.
She offered her belief that it is important to know the amount
of money the state is expending for federal mandates, especially
at a time when the state faces declining revenue. Further, it
is important to identify whether the authority stems from state
or federal regulation and whether it is fully funded, she said.
She pointed out that 20,000 to 30,000 pages of regulation have
been issued to implement PPACA. She asked whether the state
must comply or if it has authority to not implement regulations
unless it receives funding to do so.
MR. RUARO answered that it depends upon the specific regulation
as there may be different legal defenses available or other ways
to oppose federal regulation. Certainly, it is difficult to
take apart regulations to determine the specific points and
mandates that impact Alaska; however, the administration does
look for them and pursues actions if the Department of Law
agrees that a reasonable challenge can be brought. Ultimately,
the federal regulations require a case-by-case review and
evaluation, he said.
CHAIR REINBOLD remarked that it seems as though it is necessary
to apply the U.S. Constitution, and the state has sovereignty in
instances in which regulations don't specifically apply. For
example, she pointed out that the PPACA regulations are 30 times
as long as the enabling legislation. She asked for further
clarification on the number of regulations that have been issued
to implement "Obamacare."
MR. RUARO recalled about 350 pages were issued this week on part
of the PPACA; however it is an ongoing regulatory process.
CHAIR REINBOLD recalled that the PPACA regulations are over
20,000 pages.
MR. RUARO agreed the regulations are extensive.
11:23:02 AM
CHAIR REINBOLD returned attention to the regulations promulgated
by the Board of Fisheries and the Board of Game. She reported
that her community is quite frustrated that the boards don't
report to anyone. She acknowledged that the legislature has
provided these boards with tremendous power, but she inquired as
to whom the boards must report when they adopt regulations.
MR. RUARO related his understanding that the Alaska Board of
Fisheries and the Board of Game were established as autonomous,
independent boards in Alaska's Constitution. The idea was that
these boards would operate outside any influence from the
legislature or the governor. At the time, this was viewed as
the structure for decisions. He said it is rare that all sides
are happy with decisions, particularly with regard to
allocations.
11:24:38 AM
CHAIR REINBOLD suggested that the Commissioner of ADF&G has less
power than the boards. She related her understanding that the
legislature is limited to either comment, submit a letter to
delay action to review the legislative intent, or take a broad
vote of the legislature to intervene on regulations. She asked
whether there is any way to repeal regulations or if he could
recommend any procedure or changes to assist in repealing
regulations.
MR. RUARO answered that a statute in the APA allows any Alaskan
resident to petition a state agency to change regulations.
Outside the petition process, the legislature would need to
enact a statutory change as statutes have more authority than
regulations.
11:26:38 AM
CHAIR REINBOLD reviewed a situation in which statute requires
one thing, but a court case did not reference the specific
statute. She highlighted that the [Board of Fisheries or Game]
promulgated regulations that contradicted the statutes; however,
the Department of Law supported the department based on a court
case. She questioned the power of the courts to do so.
MR. RUARO emphasized that the court has the overall authority to
interpret the statutes and to determine whether they are
constitutional or not. He assumed if an agency was indicating
it was not able to take a different approach due to a court
order, then it would likely be correct unless the decision was
later overruled. Thus, the judicial branch has the authority to
interpret statutes as to constitutionality, he said.
11:27:55 AM
CHAIR REINBOLD, in reference to her scenario, offered her belief
that the specific statute was clear; however, it was not
referenced in the court case. She suggested that the court did
not take a comprehensive view, but rather it took a selective
view. She highlighted this as an area that should be reviewed
and addressed.
11:28:19 AM
SENATOR STEVENS suggested that the best approach is to remove
outdated regulations as they confuse things. He referred to
page 2 of AO 266, the second bullet point under existing
regulations, which read, "Identify regulations that should be
repealed or amended to decrease the burden of fiscal and non-
fiscal impacts on the affected public." He asked what the
administration is actively doing to accomplish this and whether
the legislature receives any report of repealed regulations.
MR. RUARO responded that the governor's office has started such
a repeal review process, which he believed was not active prior
to the issuance of AO 266. In speaking with Ms. Deborah Behr,
the regulations attorney, he found she supports the departments'
review of expired regulations since these regulations can
stagnate and cause confusion with other regulatory or statutory
authority. He characterized identifying regulations that can be
repealed as a first step and said the administration will be
looking for more outdated regulations in the future.
SENATOR STEVENS suggested that it would be appropriate to
receive a report of repealed regulations.
MR. RUARO agreed to do so.
11:30:15 AM
CHAIR REINBOLD also agreed. She asked for further clarification
on how many regulations are passed and repealed each year.
MR. RUARO offered to obtain a list from Ms. Behr and provide it
to the committee. He noted that gross numbers can be misleading
because a number of regulations reappear each year to reference
cites that must be updated, and he gave the example of the
building code. He offered to cull out those types of
regulations from the ones that are truly discretionary
regulations.
CHAIR REINBOLD acknowledged that the committee will appreciate
this effort. She noted that many people erroneously believe the
legislature promulgates regulations. When the legislature
passes a statute to repeal a specific regulation, sometimes more
regulations are adopted that again misinterpret the statute.
She asked for the effect on regulations if the legislature
repeals statutes, in other words, whether the regulations are
immediately suspended.
MR. RUARO responded that if a statute expressly repeals
regulations then the regulations become invalid and should be
taken off the register. In further response to a question, he
said the process to remove them from the register might not be
automatic. He related the cleanup effort may not have been
undertaken yet or may have missed some regulations.
11:33:00 AM
CHAIR REINBOLD returned attention to AO 266. She asked for a
status report of the findings and any non-compliance.
MR. RUARO reported on AO 266, noting in the initial round, the
administration asked departments to review the statutes and
regulations to find expired or conflicting regulations. Thus
far, the administration has compiled a list of repeals and has
submitted them to regulations attorney for processing. He
reiterated that the governor's office has taken the initial step
and will work on a more in-depth review for amendments to
existing statutes and in simplifying regulations. He
anticipated that the administration will focus more attention on
this effort after the legislative session. In further response
to Chair Reinbold, he recalled that the process has identified
roughly 20 sets of regulations that could be repealed; however,
these regulations are thousands of pages in length. Thus, the
goal of AO 266 has been to remove as many outdated regulations
as it can, and, in the process, to find other regulations that
were missed. He described the regulatory review process as an
ongoing one, but anticipated he will become very familiar with
the administrative code.
11:35:08 AM
CHAIR REINBOLD asked what legislators can do to help with the
process.
MR. RUARO suggested that when legislators receive constituent
complaints about any regulation, they should contact the
commissioner with the complaints. At the same time, legislators
can advise their constituents that they can petition an agency
via the APA to change the regulations. In doing so, it would
also create a process for the department or agency to review the
regulation with possible changes, he said.
11:36:44 AM
CHAIR REINBOLD turned to the minimum qualifications of those
staff initiating regulations.
MR. RUARO answered that each department has a regulation
specialist who is trained on the process and procedures of
adopting regulations. These specialists work with the program
staff familiar with the program, the director, and the
commissioner to develop regulations, in consultation with the
Department of Law (DOL).
11:37:31 AM
CHAIR REINBOLD inquired as to who sets penalties and enforcement
for non-compliance.
MR. RUARO answered that the department does if it is not
specified in regulation. For example, the authority for clean
water rests with the Department of Environmental Conservation.
11:38:27 AM
CHAIR REINBOLD asked for further clarification on whether each
board has authority to promulgate regulations.
MR. RUARO answered that it depends on the enabling statutes as
to the board's authority, so one would have to review the
entity's statute for the specific authority. He said it is
fairly common for boards to have some regulatory authority.
11:38:59 AM
CHAIR REINBOLD requested a listing of the boards that do not
have any oversight once regulations are promulgated.
MR. RUARO responded that most boards have an independent area of
expertise and have authority to take action without oversight of
the legislature and executive branch. Their actions would still
need to comply with statutes and the Alaska Constitution so
there is a check and balance from the court system, he said.
CHAIR REINBOLD suggested that many court cases change the intent
but are based on a false interpretation or a misinterpretation.
She felt this has created a tremendous burden on some
individuals or else it results in a back door approach in
conflict with statute. She asked whether he has any
recommendations to address this issue.
MR. RUARO answered that the remedy is for the legislature to
clarify its intent. He agreed, at times, a back and forth
between the legislature and the courts ensues, with the
legislature refining its intent in the process. He said it is
inherent in a system with co-equal branches of government and
the courts.
11:41:08 AM
CHAIR REINBOLD asked whether he could recommend whether boards
and commissions should report back to the legislature.
MR. RUARO answered that some boards already have reporting
requirements in statute and certainly the legislature has
authority to require or request an annual report.
11:42:03 AM
CHAIR REINBOLD related that she has sponsored legislation that
addresses some of the issues raised today. Her bill is
currently before the House Finance Committee, she said. She
reiterated her concern with the extensive federal regulations to
implement the Patient Protection and Affordable Care Act. She
questioned what the legislature can do to help protect jobs,
people, and businesses from federal mandates and the effects of
these regulations. She requested follow-up on AO 266, including
reporting on a list of repealed regulations.
11:44:46 AM
ADJOURNMENT
There being no further business before the committee, the
Administrative Regulation Review Committee meeting was adjourned
at 11:45 a.m.
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