CSHB 264(FIN) - NEGOTIATED REGULATION MAKING CHAIRMAN GREEN brought CSHB 264(FIN) before the committee as the final order of business. WALT WILCOX, staff to Representative Jeannette James who is prime sponsor of HB 264, said the legislation enables and encourages negotiated regulation/rule making. Currently, negotiated regulation making is in use by the Federal Government, the states of Montana and Nebraska, as well as several other states. Mr. Wilcox stated that the citizens of Alaska have been hounding Representative James and the Administrative Regulation Review Committee for changes in the regulation review process for several years, and this is one solution wherein regulations that are very complex can bring the impacted parties to the table prior to the promulgation of the regulations, bringing in industry and other interested parties to help formulate their ideas and policies for the regulations before they are actually written. Mr. Wilcox related that with the current process, the commissioner promulgates the regulations and puts them out for public hearing and they are somewhat cast in concrete. HB 264 will provide the opportunity, especially in complex regulations such as air regs, water regs and airport regs, to bring the impacted members in first. The Administrative Procedures Act will be followed after the process. It is purely a voluntary process to be used or not used by the commissioner. Although it will cost more up front to do, it appears that it will cost less in the long run. Mr. Wilcox pointed out that the Administration is in support of HB 264, and he noted Deborah Behr of the Department of Law has been working closely with the sponsor on the drafting of the legislation. Number 255 CHAIRMAN GREEN asked how the process works under negotiated rule making. DEBORAH BEHR, Assistant Attorney General, Department of Law, said negotiated rule making is not what would be done in the average rule making process because it involves calling a committee together, having the committee meet, so it is intended to be for the larger more complex projects. Outlining the process, Ms. Behr explained that the commissioner would decide, based on their factors, whether negotiated rule making would be appropriate under the circumstance. After the commissioner decides whether or not it is appropriate to have negotiated rule making, the commissioner would give notice to the public of the intent to set up a committee. Once the committee is selected, the agency puts someone on the committee who could speak for the department and would have a sense of what is going on there. The committee meets in a public meeting and issues a report if they reach consensus. If a committee consensus is not reached, then there would be a majority and a minority report and the commissioner could pick and choose what is appropriate. The entire APA process is then initiated. The commissioner makes the ultimate decision on the negotiated regulation and, at that point, it goes to through the Department of Law for review before going to the Lieutenant Governor's office. Ms. Behr said the intent of negotiated regulation/rule making is to bring more people into the process. She added that she is a firm believer that the more people involved, the more information people bring into the process, information that the committee might not otherwise have access to in developing a regulation. Number 333 PAM LA BOLLE, representing the Alaska State Chamber of Commerce, stated they think the idea of the process of is commendable, but they do have three concerns with the legislation. Those concerns include: (1) The legislation is open ended as far as a time frame. If the negotiation process continued over a long period of time, a lot of company time and resources could be eaten up; (2) The individual serving on the committee at the start of a negotiation process should be the same one who finishes that process; and (3) There is concern that if industry does not want to participate in the process, a substitute for industry that doesn't really adequately represent industry will be brought in and thereby forcing the industry to come to the table. Ms. La Bolle said the Alaska State Chamber would like to see some parameters put on how large this process would become and how long it could go on, and that it truly be voluntary so no one can be forced to participate. Number 396 SENATOR MACKIE asked Ms. La Bolle if she had discussed these concerns with the sponsor and staff. MS. LA BOLLE answered that she had not had the opportunity to do so as yet. MR. WILCOX said he thought her concerns could be worked out with one small amendment. There being no further testimony on HB 264, CHAIRMAN GREEN stated the legislation would be held in committee until the following week for a possible amendment. She then adjourned the meeting at 4:12 p.m.