HOUSE CS FOR CS FOR SENATE BILL NO. 24(JUD) An Act relating to regulations; and providing for an effective date. HANS NEIDIG, STAFF, SENATOR DAVE DONLEY, stated that SB 24 would reform how administrative regulations are adopted by the Department of Environmental Conservation (DEC) by creating a pilot program that places reasonable new limits on the power of the Department to impose new regulations on Alaskans. Mr. Neidig noted that the legislation pertains only to the Department of Environmental Conservation. The original scope of the bill has been reduced dramatically in an effort to single out a department where the measures required in SB 24 could serve as a pilot program. Mr. Neidig added that SB 24 is written in such a way so as to make it easy to broaden its applicability to other departments in the future. Mr. Neidig advised that SB 24 increases opportunities for public notice and comment regarding adoption of DEC regulations when there is a substantial change to previously proposed regulations. Also, SB 24 requires that DEC, within 90 days after the effective date of the statute or amendment, publish notice on their intent to promulgate regulations for said statute or amendments. It also sets a 2-year time limit for the adoption of regulations. Regulations adopted by State agencies have the effect of law similar to statutes adopted by the Legislature. The regulation adoption process, however, has very few of the safeguards and opportunities for public input that the legislative process has. Unlike statutes which require a series of public hearings in the State House and Senate, regulations can be adopted with a single notice and hearing which may or may not even reflect the actual content of the final version of the regulation. Mr. Neidig stated that once adopted, State regulations could only be amended by the agency that adopted them or by the adoption of a statute that somehow directly conflicts with the regulation. That makes State regulations in Alaska very hard to amend or appeal once in place. Entrenched State bureaucrats, with little incentive to be responsive to the public, often have more real control over public policy through regulations than elected State officials. SB 24 begins to make State regulators more accountable to the public and to elected officials by placing reasonable and needed restraints on the ever-increasing number of State regulations Alaskans live with. Co-Chair Therriault pointed out that Section 4 was the most important portion of the bill. He asked if the sponsor had requested Sections 1-3. Mr. Neidig replied, that language had been added in the House Judiciary Committee at the request of Senator Leman in order to streamline the current system. Mr. Neidig advised that Section "D" was the most contentious section and the portion that Senator Donley feels the most strongly about. It would require a State agency to go back out to public notice if during the second notice, substantial changes were made to the regulation. The current standard is to determine whether or not substantial subject changes were made. There is a new standard being created indicating that if there is change the substance of a regulation, then they must return to public notice. The interpretation of notice is broad. Mr. Neidig reiterated that is where the disagreement lies and that information must be published. Co-Chair Therriault understood that the Department might not want to be removed from the loop. Representative Phillips voiced concern that if the agency makes changes and the public is noticed, there would be no recourse or penalty. Mr. Neidig replied that in previous versions of the bill, there was recourse; however, and through all the testimony taken, many of those issues have been deleted in an attempt to establish a reasonable pilot program. Representative J. Davies asked what was broken in the current system. Mr. Neidig stated that public testimony and/or opportunity has not been provided to the public regarding changes to regulations. (TAPE CHANGE, HFC 00 - 120, Side 2). Representative Phillips asked if the newspaper and publisher industry were comfortable with the proposed language. Mr. Neidig replied that language was one of the five sections which had been added by the House Judiciary Committee. At the last meeting, the last two sections were withdrawn. There remains only one reference at this time. PAMELA LABOLLE, PRESIDENT, ALASKA STATE CHAMBER OF COMMERCE, JUNEAU, testified in support of the legislation. She voiced frustration in how the bill has been protested by the various agencies. Ms. LaBolle noted that businesses have three complaints about the current regulation process: ? Sometimes the regulations are over-reaching or little resemblance the original statute; ? Changes have been made during the process, which has significantly altered what the regulations is suppose to be about; and ? Complaints have been made regarding the excessive amount of time to create regulations. Originally, the bill covered several agencies. During the last year in the Senate, it had over 20 hearings. She noted that it has been reduced to a pilot project just for DEC because that is the Department where the most concerns have been voiced. Ms. LaBolle urged that what is left of the bill should be adopted. Co-Chair Therriault suggested that this legislation could be classified as the "evil department" theory. Co-Chair Therriault stated that there is a rate fee being established and stated that what was left of the bill caused him concern. He believed that it could be used to delay things. Representative Phillips stated that regulatory reform has been a concern of the Legislature for many years. She asked the argument against leaving that language placing a penalty on the agencies. Ms. LaBolle believed that was a "scare" tactic. Every time there is a change, the agency threatens to hold up projects. JANIE ADAIR, (TESTIFIED VIA TELECONFERENCE), DIRECTOR, DIVISION OF ENVIRONMENTAL HEALTH, DEPARTMENT OF ENVIRONMENTAL CONSERVATION, ANCHORAGE, noted that she had asked the Department of Law to describe the substantial change language and requested a letter from that Department. [Copy on File]. Ms. Adair pointed out that the sponsor of the bill had not spoken with the Department regarding the goals of the legislation. She agreed that the regulatory process is frustrating. Every regulation that is adopted has to have an authority line. The Department of Law is judicious in looking at all the proposals. Ms. Adair spoke to the regulation packages. Every comment received on each proposal is read and responded to. She stated that she has provided numerous packages in her role with the Department. She reminded the Committee about the Solid Waste Disposal package. The Department of Law requires that DEC have regulations adopted within a year of the first public notice. Ms. Adair noted concern that there is no limit on the number of times regulations need to be public noticed. Public notice is expensive. The Department understands that the public notice will have to go out at least two times. Ms. Adair acknowledged the frustration of the process and commented that there are other proposals to the Administrative Procedures Act. She suggested that this is the direction needed to be taken rather than a proposed piece-meal project. Representative Phillips referenced legislation, which currently passed the House floor and that would streamline the process. Ms. Adair explained that everything the Department does gets posted on the web site. The published notices are in the newspapers and statewide publications. The best way to make people aware of regulatory proposals is through direct mailings. Ms. Adair emphasized that there have been no cost savings in using the Internet services. Representative Phillips asked how many times had the Department been faced with legislation where they did not understand the intent. Ms. Adair replied that the intent is usually clear. Mr. Neidig addressed the amendments included in the packet. He noted that Amendment #1 was an internal reference and technical correction. [Copy on File]. Amendment #2 addresses concerns of Department of Environmental Conservation and future case challenges. [Copy on File]. Co-Chair Therriault noted that it was his intent to make contact with some other industries throughout the State before further discussion. SB 24 was HELD in Committee for further consideration.