HSTA - 02/28/95 Number 191 HB 163 - COMPLIANCE ESTIMATE COST REQUIREMENTS ROD MOURANT, Administrative Assistant to Representative Pete Kott, came before the committee to present HB 163. This legislation would require an agency, when they are proposing new regulations, to present a cost compliance estimate with those regulations. Currently, when regulations are drafted, an agency completes a fiscal note on the cost of the regulation process, but no cost compliance estimate is prepared for a private sector impact. The committee member's packets includes a letter from the National Federation of Independent Businesses (NFIB) supporting this concept. Eighty-three percent of their members support the concept. The original concept of this legislation was included in the 1995 Alaska Minerals Commission Report, as recommendation number four. The mining industry experiences the frustration of regulation without consideration of cost to the industry. Mr. Mourant said they have fiscal notes from all except for five agencies. The fiscal notes vary from zero to $178,000, the latter being from the Department of Environmental Conservation. This is for merely preparing the cost estimate for compliance with any regulation, not for compliance with regulation. REPRESENTATIVE GREEN liked the concept, but wondered if it would be possible for an individual to get a meaningful or accurate cost estimate regarding whatever regulation was being proposed. Number 261 MR. MOURANT answered that when an agency drafts regulations based on statute adopted by legislation signed into law, they determine who the constituency is first. Then they fashion the regulation to comply with the statute they are interpreting. At that time they should have an estimated idea of what the cost will be, for instance, the filing of a new tax forms, or the requirement to build a new ramp of access for handicapped persons. This, of course, only deals with the adoption of regulations, or the repeal of regulations. Number 274 REPRESENTATIVE PORTER followed up by saying he presumed this would force the agency to contact the affected people and get their estimate of these costs. MR. MOURANT agreed that it would certainly urge the agencies to talk with the affected constituency about the impact of the proposed legislation, or how the private industry interprets the proposed legislation. Number 280 CHAIR JAMES said she thought that evaluating the cost to our economy would be valuable, and also measuring what the cost benefit will be. They should be sure that what they do is worth the cost. Chair James wondered how specific they needed to be, because every time someone does "a finding," or does a report that backs up what they do, they must also create evidence for a lawsuit, in case someone doesn't like it. She liked the concept, but thought they should avoid being too specific and, thereby, try to do the lawyer's job for them. She said they also need to get a negative fiscal note on this bill. REPRESENTATIVE WILLIS wondered if this was in place in Florida and if Mr. Mourant heard any feedback. CHAIR JAMES referred him to a research report from Florida, provided to them by the sponsor. A point made in the report was that they determined they needed that legislation, and they went so far as to require an Environmental Impact Statement (EIS), which is very costly. CHAIR JAMES noted, for the record, that Representative Ivan was present. Number 340 ELMER LINDSTROM, Special Assistant to the Commissioner, Department of Health and Social Services, said he was not at the meeting to speak for the Administration, but he had some conversations with colleagues in other departments and said his agency is one that submitted a zero fiscal note. They viewed it in relationship with other regulation bills on the table, specifically HB 130. It required an economic or detailed analysis, which they regarded as something that would require additional expertise and costs in their department, so, consequently, they viewed HB 163 as less costly. Some agencies looked at HB 163 and did not see the phrase "cost estimate" as self-defining, and thus regard it as being similar to the language in HB 130 that would require an economic analysis. The Executive Branch would need some guidance from the committee about what the intent of this is, and about the meaning of "cost estimate." Number 361 CHAIR JAMES mentioned receiving a package pertaining to regulations on subsistence living, and legislation that they passed last year. It was the Department of Administration and the Department of Health and Social Services regulations that covers both. She wanted to do an evaluation of those regulations and the statute to see how much duplication there is from the regulation to the statute. She is still looking for ways to streamline the process. Chair James feels if they saw the regulations before the they passed a statute, they might take another look at whether to do it. They need to think more thoroughly about what they are creating when they create these bills, and "take the blame" for the cost of implementing them. Number 395 MR. LINDSTROM said he also read the regulations and he recalled that there were about 50 pages. Most of the verbiage relates to licensing of homes and so forth. When you get into licensing, it is tricky. Number 401 REPRESENTATIVE PORTER asked what the cost of the regulation would be to the person who wants to be in a certain businesses. CHAIR JAMES said each agency has its own uniqueness in the kind of regulations they have. The Florida research report shows that the legislature made various levels of regulations, and refined it to say that some didn't need it, and some needed it more extensively. The decision had to be made about whether or not it was even necessary. Some regulations didn't apply. She thinks they should determine just how much policy should be in regulations. Her idea is that they ought to slim down the policy in the regulations. It is easier to change or slim down policy than to change or slim down regulations. CHAIR JAMES said if there were no more questions or comments they would put HB 163 with the other bills in the Regulation Review Committee. She stated that the committee has cleaned up all the bills, except for HB 81 on preventative maintenance. However, next Thursday she said we will use the next meeting time for the subcommittee on regulation reform.