HOUSE BILL NO. 168 "An Act relating to regulation notice and review by the legislature; and relating to the Administrative Regulation Review Committee." HOUSE CONCURRENT RESOLUTION NO. 10 Proposing an amendment to the Uniform Rules of the Alaska State Legislature relating to the jurisdiction of standing committees. 9:49:16 AM Co-Chair Foster indicated that HB168 and HCR 10 would be addressed together. REPRESENTATIVE MIKE CHENAULT, SPONSOR, introduced the legislation. He read from the sponsor statement as follows: The purpose of House Bill 168 is to repeal the statutes pertaining to the Administrative Regulation Review Committee (AARC). According to the analysis provided by Legislative Research, included in your packets, the ARRC has not overturned any regulations as a result of these committee hearings. Although AS 24.20.445 provides that the committee can suspend regulations for a "certain time period," the Alaska Supreme Court found in a 1980 case, that the Legislature has no implied power to veto agency regulations by informal legislative action and such actions would violate Article II of the state Constitution. The actions available to the ARRC are to introduce legislation to supersede or nullify regulations. However, Legislative Research was not able to find any effort to do so from 2003 to the present. House Bill 168 repeals all references to the ARRC throughout the statutes. The sectional analysis references the statutes where the ARRC is repealed. A uniform rule change, House Concurrent Resolution 10, is also being proposed that allows the jurisdiction of a standing committee to oversee proposed or adopted regulations to replace regulation oversight that are currently under the jurisdiction of ARRC. The Administrative Regulation Review Committee has not been funded for this and the upcoming fiscal years. 9:53:03 AM Co-Chair Foster OPENED Public Testimony 9:53:22 AM ED MARTIN, SELF, COOPER LANDING (via teleconference), opposed HB 168 and HCR 10. He thought the regulation review committee was a first line of defense to ensure that the regulations followed the intent of the law. He hoped that the ARRC members felt that the review of the regulations of any new administration was imperative. He pointed to the regulations by the new Marijuana Control Board not reflecting the intent of the law and noted that the issue affected him personally. He argued that the regulations were not reviewed by the AARC. He continued to provide testimony as to the importance of a regulation review committee to ensure the individual liberties of Alaskans. He offered that the original intent of the committee was to review regulations within 45 days to ensure that "no arbitrary and capricious laws" were enacted. 9:57:34 AM Co-Chair Foster CLOSED Public Testimony. Co-Chair Foster encouraged anyone to submit their public testimony in writing. Representative Wilson wanted to clarify that the legislature was eliminating the AARC. However, the regulation review responsibilities would be sent to the standing committees. She opined that the standing committee was a more appropriate for review since the committee could draft a bill to clarify the statute. She declared that regulatory review was important and ensured that the legislature was not abandoning review; it was changing the process. Co-Chair Seaton related that he previously served as the Vice-Chair for the Regulation Review Committee and he had notified all the chairs of the standing committees that it was the committee aides' responsibilities to review the regulations. He explained that when an agency completed drafting regulations it opened a public comment period; the corresponding standing committee should review the regulations and participate in the comment period. He reported that during his tenure several regulations were withdrawn and changed in that manner. He emphasized that it was easier to change regulations on the front end rather than after the regulation was adopted via legislation. He shared that a Supreme Court decision relating to the separation of powers eliminated the AARC's power to pass a resolution to annul a regulation. He believed that it was the responsibility of the committee of jurisdiction; the corresponding standing committee that was deeply involved in the department's matters over which they reside. One committee charged with reviewing all the regulations was not efficient. He emphasized that committees of jurisdiction were more appropriate and effective for the regulatory review task. 10:02:31 AM Representative Kawasaki indicated that the AARC only functions with a motivated chairperson. He voiced that he was not in favor of the legislation despite the lack of results by the committee in recent years. He believed that the committee serve a public purpose. He reminded people that the legislature was part-time and the AARC committee was an interim committee. He did not believe a standing committee should be responsible for regulation review due to its periodic nature. He relayed that a recent regulation adopted by the Alcohol Control Board (ABC) was discordant with a distillery bill he had co-sponsored that passed several years ago. He thought that the AARC could have prevented the issue if the committee was utilized to its fullest extent. He did not want to see the executive branch over-riding the legislature. Representative Ortiz asked what the impact of leaving the AARC intact without funding was. Representative Chenault answered that statutes should be removed when they are not needed. He commented that the AARC met 30 times over the last 14 years. Fifteen meetings occurred over one legislative session without ever repealing a regulation. He indicated that as long as there was a committee responsible for reviewing new regulations he was comfortable with removing the AARC. He spoke to incidences throughout his legislative career when he questioned regulations and sent them to the AARC for review without results. He restated that the committee had not proposed legislation since 2003. He advocated for the elimination of the committee. 10:09:19 AM Representative Ortiz asked whether the potential oversight ability of the legislature was impaired during interim by eliminating the committee. He wondered why the committee should be disbanded if there were no financial impacts to retain it. Representative Chenault remembered that approximately $60,000 was allocated yearly for regulation review. He noted the committee was governed under the same rules as standing committees and could not pass legislation during interim. 10:11:34 AM Vice-Chair Gara thought the state had much bigger items to be concerned with. He commented that when an agency adopted regulations every legislature saw the regulation and was invited to make comments. A legislator could change or reverse a regulation through legislation and a committee was unnecessary. He did not believe that the AARC accomplished anything and a significant amount of time was consumed in the process. Co-Chair Seaton argued that every committee had a full-time committee-aide and it was that person's responsibility to review regulations during the interim. He remarked that the committee staff had the expertise to review regulations. He agreed that there was a cost to the AARC. He indicated that a lawyer was hired to review every regulation by the administration when he was vice-chair of the AARC. He reiterated that the regulatory review should happen on the front end during the public comment period. He shared that he had seen regulations changed many times resulting from the public comment period. 10:15:15 AM TOM WRIGHT, STAFF REPRESENTATIVE CHENAULT, provided an example when the Department of Transportation and Public Facilities (DOT) recently proposed aircraft registration fees via regulation and a bill was drafted in response to overwhelmingly negative public comment. He voiced that he had witnessed legislation by individual legislators introduced in response to opposition to regulation many times over the years. Representative Ortiz asked why the committee had ever been formed. Representative Chenault was unable to answer the question. Vice-Chair Gara recalled that the AARC was instituted by the "other party" in response to mistrust of the Knowles administration in the 1990's. He believed that the committee "diverted" legislator's time for more important issues. He emphasized that the committee was unnecessary. Co-Chair Seaton added that at the time the AARC was formed the legislature believed that it could nullify regulations. However, the Supreme Court subsequently ruled that the chief function of the AARC was unconstitutional. Representative Pruitt thought that the inception of the AARC went back to the 1970s and the Supreme Court case was in 1980 which did not allow the review committee to act. He reminded committee members that the legislature acting together or either body individually can form a committee via resolution and if sentiment among lawmakers was in favor of a special committee action was possible. He agreed that the committee did not function in the way it was intended. He opined that the idea of the committee was a good one, but he thought it was time to "shut the books" on it in an effort to eliminate unnecessary statute. 10:20:02 AM Representative Wilson asked about the regulation regarding the aircraft registration fee. She asked whether the AARC had met on the issue. Representative Chenault answered that the committee was currently not in operation. Representative Wilson opined that the public got involved in the recent DOT regulation proposal and the regulation was changed during the public comment period. The standing committees were inherently involved, had a better understanding of proposed regulations, and could inform the public of the regulatory comment period. She agreed with Co-Chair Seaton that standing committees had the expertise and were best suited to monitor regulations. She emphasized the importance of regulation review. Co-Chair Foster asked whether the will of the committee was to move the bill out of committee. Representative Wilson believed the bills should report out. Co-Chair Seaton MOVED to report HB 168 out of Committee with individual recommendations and the accompanying fiscal note. There being NO OBJECTION, it was so ordered. HB 168 was REPORTED out of committee with a "do pass" recommendation and with a zero fiscal note by the Legislature. Representative Wilson MOVED to report HCR 10 out of Committee with individual recommendations and the accompanying fiscal note. Representative Pruitt OBJECTED for discussion. Representative Pruitt spoke to his objection. He wanted to briefly describe what the resolution accomplished. He explained that the resolution assigned the jurisdiction over monitoring regulations to the standing committees. He opined that the resolution "maintained' the legislature's "vigilance" in ensuring that regulations would be analyzed. Representative Chenault commented that Representative Pruitt was correct about what the resolution did. He added that the resolution changed Uniform Rules to ensure the standing committees were aware of their jurisdiction. Representative Kawasaki maintained his objection to the legislation. He believed that the AARC had a definitive purpose as a permanent interim committee. The legislature was never intended to operate full-time. He felt that the committee was appropriate and should be enhanced. He pointed to the state of Idaho that had an active regulatory review committee. He strongly supported the AARC. He opposed the bills but was in favor of moving them from committee. Co-Chair Seaton appreciated the resolution that would place the language in the Uniform Rules. The uniform rule would specify that regulation review was the responsibility of standing committees "in black and white." The committee chair would task the committee aide with the review duty during the interim. He believed the resolution clearly established that the authority of the duty was assigned by the legislature. He was supportive of the resolution. Co-Chair Foster noted that the previous public testimony period was for both bills. Representative Pruitt WITHDREW his OBJECTION. HCR 10 was REPORTED out of committee with a "do pass" recommendation and with a zero fiscal note by the Legislature. 10:30:23 AM AT EASE 10:33:50 AM RECONVENED