CSHB 264(FIN) - NEGOTIATED REGULATION MAKING CHAIRMAN GREEN brought CSHB 264(STA) before the committee. Number 485 REPRESENTATIVE JEANNETTE JAMES, prime sponsor of HB 264, read the following sponsor statement into the record: "House Bill 264 enables and encourages negotiated regulation/rule making. Currently negotiated regulation making is in use by the Federal Government, Montana and Nebraska and several other states. "The citizens of Alaska are clamoring for the Legislature to do something about the regulation process; negotiated regulation making addresses the issue on point. "Negotiated regulation making is used only in cases involving very complex or controversial regulations. "Negotiated regulation is a voluntary process for drafting regulations that brings together those parties who would be significantly impacted by a regulation (rule), including the Government, to reach consensus on some or all of its aspects before the rule is formally published as a proposal. An impartial mediator is used to facilitate intensive discussions among the participants, who operate as a committee open to the public. "Regulations drafted using this process tend to be more technically accurate, clear and specific, and less likely to be challenged in litigation than are rules drafted by the agency alone without input from outside parties. The Administrative Procedures Act notices process is unchanged. "The negotiated regulation making process costs more money at the front end than the traditional approach (e.g. the added cost for a facilitator). In addition, agency personnel must work closely as a team with outside party representatives and their time must be dedicated to the project if it is to succeed. The advantages clearly outweigh these considerations, however. Because representatives of all the interested parties draft the regulation, the formal process of public notice and comments is generally very smooth and very few comments and concerns are raised in that process. More importantly, lengthy regulation litigation is hopefully generally eliminated and compliance with the rule is believed to be much higher. Thus, agency long-term costs of litigating rules and enforcing standards are sharply reduced. "There is no fiscal impact for this piece of legislation and the reason for that is that it is purely voluntary. It is assumed the agencies will choose this form whenever it appears that it is going to be beneficial to them." REPRESENTATIVE JAMES noted there was a draft State Affairs SCS for the committee's consideration which addresses concerns expressed by the Alaska State Chamber of Commerce. Number 520 SENATOR MACKIE moved the adoption of SCS CSHB 264(STA), version "R." Hearing no objection, the motion carried. Number 547 CHAIRMAN GREEN commented that she thinks the aim of the legislation is good, but she is concerned that if the selection of the membership is done by the agency head and then they are given the information from the agency head it could be biased even though there are volunteers sitting in on it. She is also concerned that this will present a delay rather than efficiency or timeliness in the process. TAPE 98-20, SIDE B Number 585 DOUGLAS MERTZ, representing the Prince William Sound Regional Citizens Advisory Council, said the original legislation would have allowed a commissioner or agency head to create a totally biased committee, one which was front loaded to that commissioner's own special interest so that the entire regulation writing process could be biased throughout its length. He added that the current version of the bill is much better than the original version, but the council still has concerns with the legislation. This version still allows the members of the regulation writing committee to refuse to hear testimony or refuse to consider written material from other public interests who are not on the committee. It gives them immunity from the Executive Branch Ethics Act and it makes the appointment and creation of this immune from judicial review. Mr. Mertz said if the committee passes out this legislation, the council urges to do it without any backsliding toward the original version, and to do it with a clearly stated intent that the new process is to be used without any kind of biasing on the front end or favoring of a particular interest by a commissioner. Number 559 CHAIRMAN GREEN commented that she shares some of Mr. Mertz's concerns, but she wasn't sure that this legislation was making the process any worse. MR. MERTZ said the only ways in which this a step backwards to what exists now is that the appointment of this committee is immune from judicial review and that the state employees who are part of it would be exempt from the Executive Branch Ethics Act. Number 535 SENATOR MACKIE inquired if the Administration supports the legislation. DEBORAH BEHR, Assistant Attorney General, Department of Law, said throughout the legislative process she has worked closely with the sponsor and the staff, and this draft is totally workable for the Administration. She emphasized that it is a voluntary process to be used in appropriate cases. Number 525 PAM LABOLLE, President, Alaska State Chamber of Commerce, stated their concerns that this be decided at the commissioner level, that a time limit be established, the grants and gifts language be deleted, as well as continuity of membership on the committee have all been addressed in the State Affairs SCS. There being no further testimony on HB 264, CHAIRMAN GREEN stated she would entertain a motion to move the legislation out of committee. Number 515 SENATOR MACKIE moved SCS CSHB 264(STA) and the accompanying zero fiscal note be passed out of committee with individual recommendations. Hearing no objection, it was so ordered.