HB 264 - NEGOTIATED REGULATION MAKING Number 2300 CHAIR JAMES brought up the next order of business which was HB 264, "An Act providing for a negotiated regulation making process; and providing for an effective date," sponsored by Representative James. Number 2315 WALTER WILCOX, Legislative Assistant to Representative James, Alaska State Legislature, came before the committee. He identified CSHB 264(STA), 0-LS0910\F, Bannister, 1/15/98, as the working document. Mr. Wilcox indicated Section 09.65.235 relates to civil immunity and can be found on page 7 of the old and new draft. Number 2375 REPRESENTATIVE ELTON moved to adopt Version F. There being no objection, Version F was before the committee. Number 2401 DOUGLAS MERTZ testified in behalf of the Prince William Sound Region Citizens Advisory Council (RCAC) which is a nonprofit organization formed in the aftermath of the Exxon Valdez spill. Number 2425 MR. MERTZ stated there were some specific problems the RCAC found to be quite serious and contrary to the intent of the bill. Mainly the committee makeup is of members of the regulated profession - it does not include members of the public. [TAPE 98-2, SIDE B WAS NOT RECORDED ON] TAPE 98-3, SIDE A Number 0001 MR. MERTZ indicated there is no provision to provide notice that a committee is being formed. He referred the Open Meetings Act and noted the public does not have the right to participate or say anything. The bill states the committee members serve at the pleasure of the head of the agency. For example, if a commissioner had a particular bias or private agenda he could boot a member off the committee without stating a reason. Subject to the Open Meetings Act he said, "The Open Meetings Act doesn't apply to non- decision making committees within an agency." He suggested making a simple technical amendment making it clear. Mr. Mertz provided the following suggested text for amendments: Number 0170 "Regarding notice of proposed formation of a regulations committee, insert, 'The agency shall request nominations to the committee through notices in newspapers of general circulation at least fourteen days before making appointments to the committee.' "Regarding fair and balanced makeup of regulations committees, insert, 'The membership of a negotiated regulation making committee shall fairly reflect the main interests and viewpoints regarding the subject of the regulations.' "Regarding the right of the public to participate, insert, 'The committee shall permit public testimony at its meetings.' "Regarding termination of a committee member, insert, 'May be removed by the had of the agency for good cause.' "Regarding applicability of the Open Meeting Act, insert, 'Notwithstanding anything in those sections to the contrary.' Number 0245 CHAIR JAMES made it clear that it was a volunteer program which is intended to eliminate disputes. She pointed out the purpose of negotiated rulemaking would automatically not do those things even though it says they can or can't. Number 0443 MR. MERTZ responded the golden rules of legislative interpretation is intent is meaningless unless you actually required it. He said the intent of the bill is clear, yet, nowhere does it 'require'. The way it is written it could be abused, if a commissioner wanted to use it to stack the process in favor of a particular viewpoint. Number 0525 CHAIR JAMES indicated there is a cost involved because HB 309 has no fiscal notes. That means, while an agency determines that they are going to use this process, they know that they have to get the money somewhere else because they are not going to be able to tap their budget. Number 0524 MR. MERTZ made reference to the increasing cost of newspaper advertising. The commissioner still would have the discretion of who to appoint. But, at least people would be notified and could make the request to be on the committee. Number 0586 REPRESENTATIVE BERKOWITZ noted he too was concerned about the notice requirement. He pointed out, if you look at the Administrative Procedure Act, that notice is required as is. Number 0613 MR. MERTZ responded that notice is only required in the formal regulations promulgating process, and under this bill there would have to be notice of a meeting. But, you should have soliciting to prevent a stacked and biased committee. Number 0645 REPRESENTATIVE ELTON stated one of the impediments to using this process is going to be cost. He agreed notice prior to the formation of a committee makes sense and recognized that legal notice is a large source of revenue for many newspapers. Number 0663 REPRESENTATIVE ELTON said, There may be some ways that a good manager can't take, for example: that all agencies now have a home page which they could notice perhaps a potential formation of one of these committees. Number 0687 REPRESENTATIVE ELTON made reference to Mr. Mertz [written] comment that nothing in the bill requires that a committee's makeup be fair and representative of the broad range of interests. He pointed out in HB 264, page 2, lines 13 and 14, that the agency shall consider whether, "(2) there are a limited number of unidentifiable interests that are held by more than one person and that will be significantly affected by the regulation." And goes on to say, "there is a reasonable likelihood that a committee can be convened with a balanced representation of persons who can adequately represent the interest identified under (2) of this section." Number 0772 REPRESENTATIVE ELTON believed that accomplishes one of Mr. Mertz's concerns, and construed this bill has added a new step that does help to do that, and takes some of the discretion of the manager away. That is what this accomplishes. Number 0788 MR. MERTZ referred to legal battles of interpretation of statutes. He said, One of the main rules is you can have an intent stated but the intent is not operative. You also need something that puts the standard into law. He said, "It would be perfectly legal here for a commissioner, or head of an agency, to go through this process, identify the interests and needs, and so on, and still appoint a committee that represents only one interest - that would be legal. Bear in mind also, there is no judicial review." He believed the way to put the commissioner on the spot, to appointing a fair committee, is to point to 'the committee shall be fair and representative of the interests.' This intent becomes mandatory law. Without it, it is not required. Number 0897 REPRESENTATIVE ELTON stated he thought the intent was already codified in law by saying the members of this committee can adequately represent the interests identified under (2) which are that there are varied interests and the commissioner, or the agency director is required to make a finding that those different interests be there. He did not believe that gave the manager more latitude than Mr. Mertz's proposed language. Number 0928 MR. MERTZ said he believed the law is very clear that intent language like this is not mandatory. If there is any question about whether the standard is mandatory, then make it mandatory. Number 0944 REPRESENTATIVE MARK HODGINS said, "I see this bill as coming forward as a step for folks to begin to get into the process. They are not making a decision that is binding, they are making an advice type decision. That binding decision will be made later on and there is a mechanism that brings that into the public's comment period. I don't think we should unduly restrict by adding extra commitments that this committee would have to do to start this process. While I do agree with some of the things that you brought forward, if this was a binding committee I would say yes, but this is not a binding committee." Number 1009 DEBORAH BEHR, Assistant Attorney General, Legislation and Regulations Section, Department of Law, reiterated Representative Hodgins' statement that the intent of HB 264 is to provide more public input into the process in a less bureaucratic manner, and less costly, and avoiding delay. Some of the suggestions made were discussed by the administrative committee and were rejected because of concerns about delay, bureaucracy and cost. Number 1064 MS. BEHR said, "This is an advisory process, this is a (indisc.), anything that comes down has to go through the entire Administrative Procedure Act which includes lots of public notice - lots of opportunities to comment. There are lots of checks in the process through people being able to go to the commissioner and ask for members to be added, to go to the regulation review committee and ask for review of the situation, go to the governor, to go to any elected official and ask for some review of it." Number 1084 MS. BEHR referred to page 6, lines 4 through 6 of the proposed committee substitute and said a regulation that goes through negotiated rulemaking process is given no greater (indisc.) than any other regulation when it goes to the court. It is still subject to judicial review. Number 1111 MS. BEHR stated the original bill did have a notice of formulation of the committee, however, the House Special Committee on Administrative Regulation Review decided that was not necessary in a state like Alaska. If a person wanted notice of it they could send a letter to the commissioner. If there is a problem, it is going to be subject to the Open Meetings Act, the commissioner can always add someone later. Number 1139 MS. BEHR continued, a formal notification process is costly and also a delay. If you are going to have a meeting, you have to give people the opportunity to provide their name and background and repeated that they decided that this wasn't necessary. There is a more informal process that meets the same goal. She stated they also agreed that the committee should be balanced. Number 1162 MS. BEHR addressed a second concern regarding fair representation of all interests. She said that it is difficult to determine whether someone is fair or not. Ms. Behr indicated she believes the standards in the bill are helpful because they are balanced. For example, it would be difficult for her to give legal advice to the commissioner as to who is a fair person and who is not. Number 1188 MS. BEHR believed the participation in the process is an absolute essential element of any successful regulation. The public participation is guaranteed in the Administrative Procedure Act. Again, any citizen can write a letter to this committee or to the commissioner and say please look at it. If the commissioner believes the committee is not looking into it - they serve at the pleasure of the commissioner - the commissioner can say you better look at it or we'll find someone who will. Number 1228 MS. BEHR mentioned if there is a problem, there are "checks" done. She pointed out they have to come back and report to the legislature in five years as to whether or not it is working. She stated changes could be made at that point. Number 1242 MS. BEHR believed that the bill is clear on the Open Meeting Act change. She suggested the committee members contact their legal counsel if they had any questions on that. Number 1253 MS. BEHR responded to the concern of pleasure or cause. She said, "These are limited duration committees -- It's not like somebody who's going to be there for three years or four years. In order for me to be able to successfully work with getting someone off the (indisc.), I have to generally have a history. And I have to be able to prove a history. What typically happens is someone doesn't come to meetings and they have a good excuse. We have to build a pattern for that. And in order to get a pattern - by that time the committee process will be overlooked. These committees, I don't think will last for more than a year, maybe longer. At that point we -- essentially what you're doing is setting up where there is no way to remove someone who is not doing a good job." Number 1302 MS. BEHR concluded, the check and balance is for example, if the commissioner is acting inappropriately, they know how to get to the legislature, governor and regulation review committee. Number 1314 REPRESENTATIVE BERKOWITZ stated Ms. Behr indicated a person receives notice after they have discovered that the rulemaking is implied - that something is already going on. He believed that was not the type of adequate notice that Nebraska, Montana and the federal statutes envisioned. Number 1341 MS. BEHR agreed that they have these provisions. However, the statutes are not being used that much because of the bureaucratic steps that are in it. In a small state like Alaska, it is very hard to keep a meeting hidden and she could not see no reason why a commissioner would want to keep it hidden. Number 1357 MS. BEHR said, "The goal of the state is to get a consensus, and since they are not being funded more money for this it doesn't help us to set up some veil of secrecy. Also, all the meetings have to be noticed to the public. So the first time there is a notice - that someone has some objection to the makeup of the committee they could certainly come to the commissioner, or the governor, or the regulation review committee and handle it that way." Number 1382 REPRESENTATIVE BERKOWITZ noted one of the other goals is designed to foster public confidence in the process by making the process more open and available. If there is an appearance that any cloaking is going on that destroys that intent. Number 1394 MS. BEHR assured Representative Berkowitz if the commissioner asked, she will tell them to give as much public notice as possible. Number 1400 CHAIR JAMES said, "It is a different piece of legislation than we're use to having, because it's a volunteer process. And that's the only way we can keep the cost down and also encourage public support." The net results of the regulations would be more effective and more workable. Number 1468 REPRESENTATIVE ELTON noted there are no rules in the Open Meeting Act, or any other references, to preclude a member of one of these committees from voting over teleconference. Number 1489 MS. BEHR said it was her understanding that voting over teleconference is allowed. Number 1511 KIRSTEN SHELTON, Lobbyist, Alaska Conservation Voice, came before the committee. She agreed with HB 264, but had suggestions. She said their greatest concern is the selection of participants is too discretionary - the measure says to guarantee the participation of all interested parties. No time is warranted to develop a consistent, reliable methodology that would address this concern. MS. SHELTON suggested the bill should be made clear that consensus agreement may be altered, if as a result of public comments. MS. SHELTON asked for clarifying procedures for appointing conveners and facilitators and stipulations regarding funding. MS. SHELTON suggested more extensive public notice be given regarding the formation of a committee. Ensure that certain rules that pertain to expansion of the committee be retained. MS. SHELTON said, "And the possibility of developing a pilot project to pre-test the negotiated regulation making." Number 1625 CHAIR JAMES stated if there was a fiscal note on HB 264, it is dead. She said when the regulations go through the public process, someone may come forward with an interest they have that is overwhelming - and the regulations could be changed. This committee is goal as opposed to process oriented. Amendments could be made in 1999. Number 1730 MR. WILCOX said they are trying to bring the public into the regulation making process. People in Alaska feel regulations have become unfairly forced upon them - regulations they had no part in making or do not understand. The tyranny of regulations is what people are so upset about in the state of Alaska. He noted all the fiscal notes from the departments were zero. Number 1837 REPRESENTATIVE ELTON said he is supportive of this effort and referred to Mr. Wilcox's statement, "the tyranny of regulations." He said we see this in federal and state law, and in federal and state regulations - that those who are most likely to organize and participate in the process are those who have - what could be construed as a direct economic benefit. He explained there is a tie between the rule, the regulation, or the law - and their economic benefit. Some of us can not (indisc.) in economic benefits - by rule or by regulation - may be to protect our health, safety, and the opportunity their children may have in the future. Representative Elton said they had to define those who have a valid public interest - more broadly than those who have an economic interest. Representative Elton said this gives us an opportunity to try new ways to do that. Number 1916 CHAIR JAMES clarified that the public, that Mr. Wilcox hears from, believes the regulations are tyrannical. Number 1955 REPRESENTATIVE ELTON responded sometimes those who define those regulations as tyrannical have a direct economic interest in those regulations. He said some times it is easier to organize around an economic interest than it is to organize around another interest, amorphous such as public health. Number 2015 REPRESENTATIVE MARK HODGINS made the motion to move CSHB 264 out of committee with individual recommendations and attached zero fiscal notes. There being no objection, CSHB 264 moved from the House State Affairs Committee.