HB 158 - CRITERIA FOR REGULATIONS Number 0807 CHAIR ROKEBERG announced that the next order of business would be HOUSE BILL NO. 158, "An Act relating to the criteria for the adoption of regulations and to the relationship between a regulation and its enabling statute; and providing for an effective date." Number 0791 REPRESENTATIVE LESIL McGUIRE, Alaska State Legislature, sponsor, suggested that the committee hear testimony on HB 158 and then hold it over the interim so that various concerns regarding unintended results could be addressed. She explained that nationwide review of rules and regulations began back in the 1930s and reached a peak in the 1970s when government at both the federal and state levels began to grow astronomically. Alaska was a territory, and thus the powers among the executive, legislative, and judicial branches were conceived a little differently; at that point in time, folks wanted to make sure that the governor had the ability to represent the state's views in a high-powered fashion, so the executive branch was vested with stronger powers than the average state executive branch would have been. At that point in time, there was skepticism of the legislature. Later down the line, Alaska followed a trend evidenced in a lot of other states of putting a couple of different safeguards into its statutory framework. One was the creation of a regulation review committee, and the second was a statute that would allow the legislature, through a concurrent resolution, to repeal any regulations that it found to be inconsistent with legislative intent. REPRESENTATIVE McGUIRE went on to explain that in 1980, the Alaska Supreme Court - in the A.L.I.V.E. Voluntary decision - ruled that [this statute] was unconstitutional on the basis that it did not comply with the presentment requirement because it essentially allowed other statutes to be amended without the changes first being presented to the governor in the regular fashion. She added that there were 11 other states at that time with similar provisions, and therefore Alaska was not alone in its feelings of frustration over the issue. REPRESENTATIVE McGUIRE also explained that the U.S. Supreme Court - in INS v. Chadha - ruled that the veto power was a violation of powers on the federal level; although that case didn't have a direct impact on Alaska, she added, the result was clear, and in the years that followed INS v. Chadha, nine other states with a similar provision had it ruled unconstitutional. In two states - Idaho and New Hampshire - their supreme courts upheld the power to veto by resolution; their basic reasoning was that the separation of powers in those states charges only the legislative branch with the power to make laws, while their executive branches have only the power to execute those laws, and that these two branches of government were distinct and different. A further aspect of their rulings is that they determined that rules from administrative agencies actually had a lesser power - a lesser effect - than the laws made by the legislatures. Therefore, in Idaho and New Hampshire the ability to repeal by resolution is alive and well, and was ruled perfectly constitutional by their courts. Number 0521 REPRESENTATIVE McGUIRE said that in the nine other states that had their laws regarding veto by resolution overturned, all of them, with the exception of Kansas, have taken some other remedial step in response. In a brief overview of the remedial steps the other states took, she explained that in Connecticut, the voters - via the state constitution - gave the legislature the ability to veto by regulation (in Alaska, this option has been twice rejected by the voters). In West Virginia, they created a system whereby state agencies don't have the power to promulgate rules without first submitting them to the legislature (she noted that this is similar to the concept in HB 158 in that the burden of proof comes through the legislature). She also explained that in West Virginia, after submitting the proposed regulations to the legislature, the legislature in turn must enact a statute that authorizes the regulations to go into law. She recounted that Michigan is doing something similar to what is proposed in HB 158 in that if the regulation review committee - which Alaska already has - disapproves of a rule, it cannot go into effect unless there is a two-thirds vote by the legislature. She added that Michigan, via the regulation review committee, has powers to suspend any rule during the interim, and the rule/regulation would then have to come up for full review during the regular legislative session. She explained that in Kentucky, any regulation that comes before the regulation review committee and is found to be deficient will go into effect, but only until the start of the next legislative session, and thus has a "shelf-life" of one year. REPRESENTATIVE McGUIRE remarked that Alaska is one of the very few states that has done nothing to put some sort of check on the [administrative] agencies' ability to interpret state laws and make additional laws via regulation. And although she acknowledged that the agencies have done a good job, she said she thinks that the situation in Alaska borders on being unconstitutional. The legislature is the body charged with making laws, and although that authority can be delegated, she added that she thinks it was anticipated that this authority would be narrowly delegated, and that there would be some overview, or check, on the agencies' power. REPRESENTATIVE McGUIRE noted that other states are experimenting with the concept of "sunsetting" whereby regulations go into effect without any input from the legislature but they expire every two years. Some states require "pre-submission," she added, with a vote of the legislature before adoption. She also noted that many other states have a regulation review committee, as Alaska does, but the difference is that the committees in these other states actually have the power to do something. Alaska's Joint Committee on Administrative Regulation Review [which she chairs] "has no power to do anything," she explained, and according to a legal opinion, "for all intents and purposes is nonexistent." Alaska's regulation review committee can comment on regulations and review them, but "it really means nothing," she said. REPRESENTATIVE McGUIRE, with regard to the other states that have regulation review committees that do have the power to do something, noted that in some states, the committee has the ability to void a regulation; in many states, the committee has the ability to block adoption pending review; in other states, the committee sends the regulation over to the actual committee that has subject-matter jurisdiction in order that it may review the regulation; and in a lot of states there is the ability to object formally to a regulation and thus transfer the burden back to the agency. REPRESENTATIVE McGUIRE, in sum, said that Alaska has done nothing since the A.L.I.V.E. Voluntary decision; in fact, existing statute makes reference to an annulment power that Alaska no longer has. Alaska has made attempts, throughout the years, she explained, to get a constitutional power on the ballot, but those attempts have failed. She added that there have been attempts on the part of some legislators to get pilot programs into place that would allow for more public comment and response, but those attempts also have failed. Sunsetting has failed, as has any attempt to create a real power in the regulation review committee. Number 0166 REPRESENTATIVE McGUIRE, with regard to the question of "where do we go from here," suggested that "we need to go somewhere." She said that she has had numerous people come to her office - ranging from administrative folks to people in industry - who have expressed likes for certain aspects of HB 158 and dislikes for other aspects of it. She opined that no one she has talked with disagrees with the fact that something probably needs to be done. She expressed a willingness to work on the issue of restoring a balance with regard to regulations, whether something can be accomplished over the interim or over the next couple of years. She said, for the record: The reason why I introduced this, and the reason why I think it's important that we have something in place, is for the public; the public has the right and the ability to elect their legislative officials - the people who make laws - and what we have done is (in my opinion) negligently allowed administrative agencies to make laws, proliferate ... [regulations] that the public feels they have no control over. They might be a small businessman or [business]woman who [dislikes] the [regulation]; they can comment during the public process. But what happens if the agency doesn't like their public comment? Well, really, nothing. So, they come to us, as their elected officials, and they ask for us to do something; but the political will is very strong. REPRESENTATIVE McGUIRE recounted the following case in point. Just this year, the regulation review committee had a case that dealt with "on-bottom mariculture." The committee received a lot of public comment from folks who felt as if their views, in many cases, were not even listened to by the Alaska Department of Fish and Game (ADF&G). The very next morning the lieutenant governor signed the proposed regulations into law. TAPE 01-53, SIDE A Number 0001 REPRESENTATIVE McGUIRE continued by saying that regardless of whether she disagreed with the regulations, what she had wanted to do was give the public an opportunity to comment on the proposed regulations. Currently, the public is left with being required to present their views "to the very governor who hires the very commissioners who promulgate the very regulations that they disagree with"; she opined that this doesn't make very much sense. She offered that HB 158 may have some unanticipated consequences, and that she certainly didn't wish to create further problems. She said that her goal is to help the hardworking men and women of Alaska, not to hurt them, and that she hopes to get something in place that will allow the public to have a greater say and that will restore the law-making power to the legislature, at least somewhat more so. REPRESENTATIVE JAMES commented that she understood the sponsor's frustration, and she pointed out that a simple solution would be that when the legislature creates a statute, if it wants an agency to write regulations, it must specifically state so in that particular statute. In this way, the onus is placed on [the legislature] to make statutes specific with regard to regulations. CHAIR ROKEBERG suggested that the regulation review committee review the Administrative Procedure Act (APA) itself, and possibly look at making changes within it to ensure more public input. He also suggested that if private industry will support it, [the legislature] could again introduce a constitutional amendment that would nullify the A.L.I.V.E. Voluntary case. He noted, however, that money would have to be spent to educate the public on the separation of powers issue and that [the legislature] has lost power and is not simply "trying to grab it back, if you will." Number 0220 DEBORAH BEHR, Assistant Attorney General, Legislation and Regulations Section, Civil Division (Juneau), Department of Law (DOL), explained that she has been providing this function for DOL for about ten years, and that she would be delighted to work with the sponsor and any committee that wants to go forward and look at the regulations process; it is a very complex area of law that can result in a lot of unintended consequences and a lot of fiscal notes. She noted that there were some aspects of the APA that would be very interesting to look at, such as how to deal with the Internet and how it interfaces with getting the information across to the public; she offered that the statutes currently don't really cover that issue well. MS. BEHR noted that a couple of years ago she and Representative James had worked on the issue of negotiated rule making, and although there have been some responses back on that subject, it, too, "could use some fine-tuning." She said she agrees with the sponsor that HB 158 has unintended consequences, but she offered to hold those comments at this time since HB 158 will be reviewed during the interim. She said if the committee wished, she would be willing to provide a "101" on regulations at the committee's pleasure. She again noted that although the administration does not care for HB 158, she would be delighted to work on issues to improve the administrative process. Number 0357 REPRESENTATIVE COGHILL made a motion to adopt the proposed committee substitute (CS) for HB 158, version 22-LS0578\F, Bannister, 3/26/01, as a work draft. There being no objection, Version F was before the committee. CHAIR ROKEBERG noted that the committee has received written testimony from Stanley T. Foo of the Alaska Miners Association, Inc.; Tadd Owens of the Resource Development Council for Alaska, Inc.; [and Judith Brady of the Alaska Oil and Gas Association]. He also noted that Charlotte McCabe had concerns regarding HB 158 but wished to hold her comments for the time being. Number 0518 ROBERT B. STILES, President, Resource Development Council (RDC) for Alaska, Inc., testified via teleconference and gave two examples of problems with HB 158. First, it certainly throws into doubt the ability of the agency to use things such as site- specific criteria, particularly if it is not allowed within the individual statutes authorizing the program where that's applied. And for a second example, he said that it certainly throws into question the state's primacy regarding federally mandated programs such as the surface coal mining program - a program that is changing constantly. He offered that it is not unusual to have to change the regulations within that program once or twice a year, and under HB 158 as drafted, all of those regulations - some 200 pages of them - would have to be in statute in order to be in compliance with HB 158; additionally, any changes to those regulations would have to occur at the legislative level. He said he suspected that the legislature is not terribly interested in writing regulations, which HB 158 would require. Number 0681 JANICE ADAIR, Director, Division of Environmental Health, Department of Environmental Conservation (DEC), testified via teleconference and said in response to questions that if HB 158 were to pass, the DEC would not be able to use site-specific criteria would not be allowed in the promulgation of regulations. She acknowledged that currently, for example, the DEC could make a regulation that allowed for the discharge water to be no dirtier or cleaner than the receiving water. Number 0704 CHAIR ROKEBERG announced that the public hearing on HB 158 was closed, and that HB 158 would be held over.