HB 183 - ALASKA PUBLIC UTILITIES COMMISSION Number 0090 CHAIRMAN ROKEBERG announced the committee's first order of business is HB 183, "An Act relating to the powers and duties of the chair of the Alaska Public Utilities Commission; relating to membership on the Alaska Public Utilities Commission; and relating to the annual report of the Alaska Public Utilities Commission." The chairman indicated he had intended to postpone the hearing on HB 183 because two committee members who wished to propose amendments are absent. The chairman noted, however, he wishes to take the testimony of the two witnesses who have signed up, and hold the legislation over after that testimony. He informed the committee no amendments or action would be taken up on HB 183 at this hearing. Chairman Rokeberg requested the testimony of Douglas Neeley in Glennallen. Number 0122 DOUGLAS NEELEY, Copper Basin Sanitation Service Company, responded via teleconference from Glennallen. Mr. Neeley commented he had intended to listen to the discussion and the amendments. He questioned if the committee planned to take any action at all on this legislation today. CHAIRMAN ROKEBERG responded in the negative. He noted the two proposed amendments are from absent members. Representative Murkowski had intended to offer a "clean-up" amendment recommended by the Department of Law. Representative Brice had intended to offer an amendment to remove the qualifications of office regarding political affiliations [for commissioners]. REPRESENTATIVE HARRIS informed the chairman that Mr. Neeley's concern is in relation to garbage deregulation, and the chairman might wish to explain that this legislation is not the right vehicle for that. He confirmed for the chairman that Mr. Neeley's business is Copper Basin Sanitation Service Company. CHAIRMAN ROKEBERG indicated the committee had received Copper Basin Sanitation's letter and thanked Mr. Neeley. The chairman pointed out that HB 183 does not speak to the refuse regulation issue. He informed Mr. Neeley that the committee is in receipt of the latest version of SB 133, which had originally taken up the refuse issue by deleting it from the APUC [Alaska Public Utilities Commission]. However, as the chairman understands it, the latest version of SB 133 excludes those provisions and maintains the status quo. He asked Ms. Seitz if that is correct. Number 0272 JANET SEITZ, Legislative Assistant to Representative Rokeberg, Alaska State Legislature, came forward as the aide to the House Labor and Commerce Standing Committee. Ms. Seitz noted the latest version of SB 133 the committee is in receipt of, Version K, does contain reference to garbage-related services in the definition of a public utility. She stated, "It does describe furnishing, collection and disposal services of garbage, refuse, trash or other waste material to the public for compensation; that is part of the definition of a public utility contained in the latest draft of SB 133 that we have." CHAIRMAN ROKEBERG confirmed, therefore, the commission would retain its regulatory control. The chairman recommended Mr. Neeley obtain a copy of SB 133, Version K, adopted that day by the Senate Finance Standing Committee. Chairman Rokeberg believes SB 133 will ultimately be the vehicle utilized. The chairman indicated the committee is using HB 183 for coordination and to develop some potential amendments; HB 183 may also be held as a possible back-up bill. He questioned if Mr. Neeley had any further comments. MR. NEELEY indicated his questions had been answered and thanked the committee. CHAIRMAN ROKEBERG asked Mr. Zobel in Anchorage if he had comments or if he was present to listen and answer questions. Number 0427 RON ZOBEL, Assistant Attorney General, Fair Business Practices Section, Civil Division (Anchorage), Department of Law, testified next via teleconference from Anchorage. He is one of the two assistant attorney generals assigned to the APUC. Mr. Zobel indicated he has a comment he had intended to make at the April 28 hearing that he thinks is now more important in retrospect. Mr. Zobel said, "One of the things you've done by this bill is put in Section 10 of the committee substitute [Version I] which amends [AS] 42.05.171, provisions about an arbitrator." He indicated he thinks the intention was to allow case hearing and proposed decision making to be delegated to an arbitrator. Mr. Zobel said his comment would also apply to the delegation to hearing officers. [Section 10 of HB 183, Version I, reads: * Sec. 10. AS 42.05.171 is amended to read: Sec. 42.05.171. Formal hearings. A formal hearing that the commission has power to hold may be held by or before three or more commissioners, a hearing officer, or an administrative law judge designated for the purpose by the commission. In appropriate cases, a formal hearing may be held before an arbitrator designated for the purpose by the commission. The testimony and evidence in a formal hearing may be taken by the commissioners, by the hearing officer, [OR] by the administrative law judge, or by the arbitrator to whom the hearing has been assigned. A commissioner who has not heard or read the testimony, including the argument, may not participate in making a decision of the commission. In determining the place of a hearing, the commission shall give preference to holding the hearing at a place most convenient for those interested in the subject of the hearing.] MR. ZOBEL directed the committee's attention to the language in existing law in Section 10 of Version I beginning on line 29, page 4, "A commissioner who has not heard or read the testimony, including the argument, may not participate in making a decision of the commission." That provision has been interpreted by some commissioners to - and probably does - prevent the commission from delegating the hearing of a case and the making of a proposed decision to a hearing officer or an arbitrator. Mr. Zobel indicated this procedure, however, is allowed under similar provisions in AS 44.62.500 of the Administrative Procedure Act, regarding decision in a contested case. He noted, however, the Administrative Procedure Act does not apply to the APUC. [AS 42.62.500 read: Sec. 44.62.500. Decision in a contested case. (a) If a contested case is heard before an agency (1) the hearing officer who presided at the hearing shall be present during the consideration of the case and, if requested, shall assist and advise the agency; and (2) a member of the agency who has not heard the evidence may not vote on the decision. (b) If a contested case is heard by a hearing officer alone, the hearing officer shall prepare a proposed decision in a form that may be adopted as the decision in the case. A copy of the proposed decision shall be filed by the agency as a public record with the lieutenant governor and a copy of the proposed decision shall be served by the agency on each party in the case and the party's attorney. The agency itself may adopt the proposed decision in its entirety, or may reduce the proposed penalty and adopt the balance of the proposed decision. (c) If the proposed decision is not adopted as provided in (b) of this section the agency may decide the case upon the record, including the transcript, with or without taking additional evidence, or may refer the case to the same or another hearing officer to take additional evidence. If the case is so assigned the hearing officer shall prepare a proposed decision as provided in (b) of this section upon the additional evidence and the transcript and other papers that are part of the record of the earlier hearing. A copy of the proposed decision shall be furnished to each party and the party's attorney as prescribed by (b) of this section. The agency may not decide a case provided for in this subsection without giving the parties the opportunity to present either oral or written argument before the agency. If additional oral evidence is introduced before the agency, an agency member may not vote unless that member has heard the additional oral evidence.] Number 0562 MR. ZOBEL commented AS 44.62.500 has a section which allows delegation to a hearing officer to hear the matter and to submit a proposed decision. The agency in that instance can approve the decision in its entirety without reading the whole transcript or having attended the hearing. If the agency wants to modify the decision, it has to read the record or take additional evidence. Mr. Zobel indicated he thinks the sentence he has mentioned in the existing APUC statute, "A commissioner who has not heard or read the testimony, including the argument, may not participate in making a decision of the commission.", would need to be altered along the lines of the language in AS 42.62.500 if it is the committee's intention to allow more efficiency by the commission through delegation to hearing officers or arbitrators. Mr. Zobel further indicated he might be able to provide possible language early next week. He noted there has been previous talk at the commission about delegating to hearing officers and that sentence in the existing law is pointed to as inhibiting that; the commissioner either has to be there or read the whole record, which somewhat defeats the purpose of delegation to a hearing officer or arbitrator. That completed Mr. Zobel's testimony. Number 0659 CHAIRMAN ROKEBERG said he appreciated and agreed with Mr. Zobel's comment. The chairman questioned if it might be possible for Mr. Zobel to make a recommendation and even a draft amendment by the committee's 3:15 p.m. meeting on Monday [May 3, 1999]. MR. ZOBEL indicated he could do so. CHAIRMAN ROKEBERG indicated he thought an accompanying summary explaining the situation would be very helpful, if it didn't cause Mr. Zobel too much work. The chairman provided the committee's fax number. Proceeding onward, the chairman questioned if the committee is working from Version I. MS. SEITZ confirmed the committee is working from Version I of HB 183 and has two pending amendments to this version. The committee adopted Amendment 3 to Version I [adopted 4/28/99; labeled 1-LS0764\I.3, Cramer, 4/28/99] . Ms. Seitz confirmed that Amendment 1 [offered and amended 4/28/99; labeled 1-LS0764\I.1, Cramer, 4/28/99] and Amendment 2 [offered 4/28/99; labeled 1-LS0764\I.2, Cramer, 4/28/99] are both still before the committee. Number 0741 REPRESENTATIVE HALCRO indicated the committee also still has Amendment 8 to Version H offered at the Monday, April 26 hearing [stated as "Friday"]. Representative Halcro noted the committee had been waiting on the determination of constitutionality and now has the opinion. CHAIRMAN ROKEBERG asked Ms. Seitz to organize materials with the committee in preparation for the Monday hearing [May 3]. He noted there is Amendment 1 and commented Representative Murkowski has an amendment to Amendment 1 which can be handled then. MS. SEITZ commented Amendment 1 is marked I.1. She indicated Amendment 2, marked I.2, was held by the chairman on April 28. It is the amendment regarding rate charges. Ms. Seitz pointed out there is also the corrected Amendment 8 [to Version H] from Representative Halcro, which was being held for the legal opinion. She confirmed this amendment concerns the appointment of the chair and copies of the legal opinion are being distributed to the committee. Additionally there is a new amendment, from Representative Brice, relating to the political qualifications. Number 0852 CHAIRMAN ROKEBERG stated the committee should be prepared to bring these items forward. The chairman indicated he would like Ms. Seitz to discuss the legal opinion on Amendment 8 with Representative Halcro and Walt Wilcox [aide to the House Special Committee on Utility Restructuring] to ensure this can be addressed. Chairman Rokeberg requested Mr. Zobel's comments on Amendment 1. The chairman confirmed Mr. Zobel and Representative Murkowski had had a conversation regarding deletion of the amendment language, "complexity of issues, or another reason", on line 19 of the original written amendment. [Amendment 1, labeled 1-LS0764\I.1, Cramer, 4/28/99, as amended by the committee on 4/28/99, read: Page 1, line 5, following ";": Insert "relating to timely action by the Alaska Public Utilities Commission;" Page 3, line 26: Delete "a new subsection" Insert "new subsections" Page 3, lines 28 - 30: Delete ", the chair of the commission shall promptly fix a date for hearing when a hearing is appropriate. The hearing shall be without undue delay. The" Insert "for which a hearing is clearly warranted, the chair of the commission shall assign a priority rating to the issue and promptly fix a date for hearing. The hearing shall be expedited in accordance with the priority rating. Regardless of the priority rating, a" Page 4, following line 2: Insert a new subsection to read: "(c) Unless to do so would violate the due process rights of a party, the commission shall ensure that its dockets are closed in a timely fashion and not delayed due to inaction, complexity of issues, or another reason. Failure of a commission member to comply with this subsection constitutes grounds for removal from the commission under AS 42.05.035. The chair of the commission may dismiss a commission employee for failure to comply with this subsection."] Number 0955 MR. ZOBEL agreed with the view Representative Murkowski had expressed at the previous hearing: this language would not allow for any reason. The phrase "another reason" is particularly troublesome, it is too broad; there is no reason for delay at all. Mr. Zobel additionally commented he thinks the phrase, "Unless to do so would violate the due process rights of a party,", is rather superfluous. It is implied that the commission cannot violate due process rights of a party. However, he said he has not tried to rewrite this particular section. Mr. Zobel indicated one reason is that these issues are in Jim Baldwin's [Assistant Attorney General, Governmental Affairs Section, Civil Division (Juneau), Department of Law] area of expertise. Number 1024 CHAIRMAN ROKEBERG indicated his wish had been to take Mr. Zobel's testimony for the committee's information so less time would have to be spent at the May 3 hearing. The chairman repeated that Representative Murkowski would be offering an amendment to the amendment, and looking at the balance of that statement. He confirmed no one else wished to testify on HB 183 and announced HB 183 would be held over for further action on Monday [May 3].