HB 229-REPEAL ADMIN. REG. REVIEW COMMITTEE  8:16:19 AM CHAIR LYNN announced that the next order of business would be HOUSE BILL NO. 229 "An Act relating to regulation notice and review by the legislature; and relating to the Administrative Regulation Review Committee." [Because of their length, some amendments discussed or adopted during the meeting are found at the end of the minutes for HB 229. Shorter amendments are included in the main text.] [Left pending from the House State Affairs Standing Committee meeting of 2/4/16, was a motion to adopt Amendment 1, labeled 29-LS1104\A.1, Gardner, 2/3/16, with an objection for the purpose of discussion by Representative Gruenberg. The pending objection to the motion to adopt Amendment 1 was treated as withdrawn and Amendment 1 was treated as adopted.] REPRESENTATIVE KELLER moved to rescind the committee's actions on Amendment 1 [labeled 29-LS1104\A.1, Gardner, 2/3/16]. There being no objection, it was so ordered. 8:17:20 AM REPRESENTATIVE MIKE CHENAULT, Alaska State Legislature, presented HB 229, as prime sponsor. He stated that HB 229 relates to regulation notice and review by the legislature. He cited the state's declining revenues and the need to identify ways to reduce the cost of the legislature and state government. He further offered that the Administrative Regulation Review Committee, although active and effective at times, was not always so, and HB 229 proposes to abolish the Administrative Regulation Review Committee and turn regulation review over to other committees. 8:18:43 AM CHAIR LYNN asked the sponsor if, after a regulation is drafted by the department, it would be turned over to the committee of jurisdiction. REPRESENTATIVE CHENAULT confirmed that the department already sends regulations to certain legislators for review; however, under the proposed legislation a regulation would be sent to the committee of jurisdiction. The committee of jurisdiction would then have the option of scheduling a committee hearing on that regulation. 8:19:51 AM TOM WRIGHT, Staff, Representative Mike Chenault, Alaska State Legislature, testifying on behalf of Representative Chenault, prime sponsor of HB 229, said state statute requires that regulations be forwarded to all incumbent legislators and remarked that he is not sure if that occurs. 8:20:59 AM REPRESENTATIVE KELLER moved to adopt Amendment 2, [labeled 29- LS1104\A.4, Gardner, 3/10/16]. [Amendment 2 is provided at the end of the minutes on HB 229.] REPRESENTATIVE STUTES objected for purpose of discussion. REPRESENTATIVE KELLER declared his support for HB 229 and concurred with Representative Chenault's testimony. He explained that the intent of Amendment 2 was to establish a process for referring a regulation to a standing committee and to clarify the powers of the chair in this process. He further offered that the proposed amendment would give the chair the power to delay implementation of a regulation until the committee takes action on the regulation. 8:22:43 AM CHAIR LYNN asked the sponsor how much money would be saved through the proposed legislation. REPRESENTATIVE CHENAULT responded that the fiscal note indicates a savings of about $53,000. 8:23:51 AM JIM POUND, Staff, Representative Keller, Alaska State Legislature, stated that the intent of Amendment 2 was to reinstate authority to the legislature in light of the Alaska Supreme Court ruling on State v. A.L.I.V.E. Voluntary, which reads that the legislature cannot annul a regulation by resolution. He further explained that the court decision stated that in order for the legislature to repeal a regulation, it had to be done through a legislative process - that is, by an introduced bill that passes through both houses and is sent to the governor for signature. He offered that under Amendment 2, a regulation would be sent to the presiding officers of each house, who may pass it to the chair of the committee of jurisdiction to decide if that regulation needs to be reviewed. He voiced his belief that 95 percent of regulations are not problematic but about 5 percent need modification. He stated that under Amendment 2 if, after review, a committee was not satisfied with the regulation, the committee could ask the department to amend it to comply with legislative intent. If the department refused, the committee could put the regulation on hold until the regular session when the legislature could attempt to repeal it through the legislative process. He said that if the legislature fails to repeal the regulation through legislation, implementation of the regulation would occur the day after the end of the regular session of the legislature. If the committee takes no action on a regulation within 35 days of receipt, the department could proceed with implementation. 8:27:27 AM REPRESENTATIVE VAZQUEZ commented that the 35-day limitation for the committee response may be too short, especially considering unavailability of legislators during interim. MR. POUND commented that the average normal comment period on a regulation is 40 days. The intent was to stay within that time period. REPRESENTATIVE VAZQUEZ voiced her concern that the procedure as stated would suppress the legislature's ability to annul any regulation at any time and would put the legislature in a position subservient to the executive branch. MR. POUND stated that the legislature was currently in that position. He reminded the committee members that the legislature has gone to court over regulations and lost. 8:31:22 AM REPRESENTATIVE KELLER requested the sponsor speak to Amendment 2. MR. WRIGHT deferred to Susan Pollard. 8:32:55 AM SUSAN POLLARD, Chief Assistant, Legislation & Regulations Section, Department of Law (DOL), stated that DOL had concerns with the suspension provisions in Amendment 2. She paraphrased page 2, Section 4 (e), by saying that in certain instances a standing committee of the legislature could suspend a regulation for a period of time based on when the next legislative session is, and the legislature could choose to act or not act during that time. She posited that the suspension part of the amendment brings up concerns from the 1980 case, State v. A.L.I.V.E. Voluntary. She explained that in the cited court case, the Alaska Supreme Court considered a now repealed regulation related to the power of the legislature to repeal a regulation by way of concurrent resolution. She conceded that the issue of that case was slightly different from the language in the proposed amendment; however, she claimed that in State v. A.L.I.V.E. Voluntary, the court considered the instances in which the legislature can act to effectuate something which affects the public and determined that moving by concurrent resolution to suspend a regulation was not sustainable under the Alaska Constitution. She noted that Amendment 2 attempts to sidestep the State v. A.L.I.V.E. Voluntary ruling by including a suspension provision as opposed to an annulment provision, but does not, however, remove legal questions or the possibility of litigation, depending on the situation. 8:37:03 AM REPRESENTATIVE KELLER offered two comments for Ms. Pollard's response: one, the process has yet to be established; and two, the suspension in the proposed amendment would be for a time specific and not an annulment. MS. POLLARD responded that it is unknown at this point if the proposed amendment's suspension of regulation would run afoul of State v. A.L.I.V.E. Voluntary. She offered that currently the legislature has the power to review and annul regulations by changing statute. 8:38:53 AM REPRESENTATIVE KREISS-TOMKINS asked Ms. Pollard to state again the defendant in the case that she cited. MS. POLLARD answered that it was a non-profit group referred to by the acronym A.L.I.V.E. REPRESENTATIVE KREISS-TOMKINS asked Ms. Pollard if the concern was that suspension of a regulation until the end of the next legislative session would effectively put the regulation in limbo for 11 months and may have an adverse effect on the public. MS. POLLARD said DOL's concern is that whenever the legislature acts outside of the legislative enactment process and the constitutional requirements considered in the State v. A.L.I.V.E. Voluntary court case, it runs the risk of a legal challenge to that action. She conceded that there may be a practical effect, alluded to by Representative Kreiss-Tomkins, of regulations in long-term suspension and public perception regarding those regulations; however, she contended that was not the concern to which she referred. 8:41:37 AM REPRESENTATIVE KREISS-TOMKINS offered that there are two concerns to be addressed in consideration of Amendment 2: one, the constitutional concern; and two, the pragmatic concern of regulations in limbo impacting the public. He related it to a hypothetical situation - a regulation passed by the Board of Fisheries and suspended by the House Resources Standing Committee, which would essentially put the regulation in limbo until the adjournment of the next legislative session. MS. POLLARD agreed that his example reflects the procedure described in Section 4 of Amendment 2. 8:42:56 AM REPRESENTATIVE KELLER asked if the concern was regarding a possible lawsuit due to the delay in implementing regulations and, if so, what the basis of that lawsuit would be. MS. POLLARD opined that it is difficult to speculate. In State v. A.L.I.V.E. Voluntary the Department of Revenue (DOR) was enforcing a regulation against the plaintiff in the case. REPRESENTATIVE KELLER asked Ms. Pollard to explain the enforcement aspect - that is, if the legislature could delay the enforcement of an existing regulation through suspension. MS. POLLARD claimed that the issue of the status of the regulation during suspension, including enforcement of the regulation, is a question not yet answered and is the basis of the hearing. 8:45:24 AM REPRESENTATIVE KELLER attested that proposed regulation is not law. He stated his belief that Alaskans have the right to the process and the legislature is uniquely positioned to hear concerns about regulations. He further contended that the Department of Health & Social Service (DHSS) regulation - disallowing guns in private care homes - raises constitutional concerns, and when confronted DHSS's response was to extend approval time for that regulation to outside of session time. He recommended that the legislature have input into the regulation process before a regulation takes effect. MR. WRIGHT suggested that in the example Representative Keller mentioned, the legislature has the prerogative to write statute to nullify the regulation. In regard to Representative Kreiss- Tomkins' concern, Mr. Wright recommended that the Board of Game and the Board of Fisheries be exempt from the proposed amendment because, in his opinion, regulations coming from end-of-season decisions cannot wait a whole season for implementation. He cautioned that there may be unknown consequences to Amendment 2 and careful thought and more work is needed before adoption. 8:49:20 AM MR. WRIGHT, in response to Chair Lynn, stated that he has concerns about Amendment 2, but supports the bill moving out of committee. REPRESENTATIVE KELLER stated that he supports Amendment 2 and fears that HB 229 without it further distances the legislature from the regulatory process. 8:52:08 AM The committee took an at-ease from 8:52 a.m. to 8:55 a.m. 8:55:27 AM MR. WRIGHT requested that the agencies look at Amendment 2 to determine any fiscal impacts. REPRESENTATIVE KELLER requested the chair schedule HB 229 for the next House State Affairs Standing Committee meeting and promised to consult with the agencies. CHAIR LYNN announced that HB 229 was held over. AMENDMENTS The following amendments to HB 229 were either discussed or adopted during the hearing. [Shorter amendments are provided in the main text only.] Amendment 2 [29-LS1104\A.4, Gardner, 3/10/16] (pending): Page 1, line 1, following "legislature;": Insert "providing for legislative review,  amendment, approval, disapproval, annulment, and delay  of proposed agency regulations;" Page 1, lines 4 - 6: Delete all material. Page 1, line 7: Delete "Sec. 2" Insert "Section 1" Renumber the following bill sections accordingly.   Page 2, lines 1 - 8: Delete all material and insert:  "* Sec. 2. AS 24.05.182(a) is amended to read: (a) A standing committee of the legislature furnished notice of a proposed action under AS 44.62.190 or 44.62.320(d) shall, consistent with  the committee's jurisdiction as provided in the  uniform rules of the legislature, review the proposed regulation, amendment of a regulation, or repeal of a regulation before the date the regulation is scheduled by the department or agency to be adopted, amended, or repealed.  * Sec. 3. AS 24.05.182(d) is amended to read: (d) A standing committee that receives a copy of  a proposed regulation, amendment, or order of repeal  under AS 44.62.320(d) shall, within 35 days after  receipt of the proposed regulation, amendment, or  order of repeal, approve or disapprove the proposed  regulation, amendment, or order of repeal. If the  standing committee does not take action within 35 days  after receipt of the proposed regulation, amendment,  or order of repeal, the proposed regulation,  amendment, or order of repeal shall be considered  approved. If a standing committee determines that a regulation, amendment to a regulation, or repeal of a regulation does not properly implement legislative intent and disapproves or returns the proposed  regulation, amendment, or order of repeal to the  department or agency, the standing committee's findings shall, within 35 days after receipt of the  proposed regulation, amendment, or order of repeal, be transmitted to the (1) department or agency;  (2) regulations attorney at the Department  of Law; and  (3) senate secretary and the chief clerk of  the house of representatives [ADMINISTRATIVE REGULATION REVIEW COMMITTEE].  * Sec. 4. AS 24.05.182 is amended by adding new subsections to read: (e) A proposed regulation, amendment, or order of repeal that is disapproved under this section or that is returned to the department or agency with a proposed amendment, other than an emergency regulation adopted under AS 44.62.250, shall be suspended until the adjournment of the next regular legislative session following the date of the committee's disapproval. The notice of disapproval under this section expires upon adjournment of the regular legislative session during which the disapproval or amendment was made or, if the legislature is not in regular session, the next regular legislative session following the date of disapproval, unless the legislature enacts a law that annuls the proposed regulation or order of repeal. (f) If the standing committee that is reviewing a proposed regulation, amendment, or order of repeal under this section disapproves the regulation, amendment, or order of repeal or proposes an amendment to the regulation, amendment, or order of repeal, the department or agency that proposed the regulation, amendment, or order of repeal may request leave of the standing committee to withdraw or amend the proposed regulation, amendment, or order of repeal. (g) In determining whether to approve, disapprove, or amend a proposed regulation, amendment, or order of repeal under this section, the standing committee shall consider (1) whether the absence of a regulation would significantly harm or endanger public health, safety, or welfare; (2) whether a less restrictive regulation would address the regulatory concerns while adequately protecting the public; (3) whether the regulation would directly or indirectly increase the cost of any goods or services; (4) whether the increased cost of implementing and enforcing the regulation would be more detrimental than the purpose of the regulation; (5) whether the regulation was designed solely for the purpose of the protection of the public and would have the primary effect of protecting the public; and (6) any other factors the committee considers to be appropriate." Renumber the following bill sections accordingly. Page 3, lines 4 - 7: Delete all material. Renumber the following bill sections accordingly. Page 3, line 24, through page 4, line 19: Delete all material. Renumber the following bill sections accordingly. Page 5, following line 5: Insert a new bill section to read:  "* Sec. 10. AS 44.62.180 is amended to read: Sec. 44.62.180. Effective date. A regulation or an order of repeal filed by the lieutenant governor becomes effective on the 30th day after the date of filing unless (1) otherwise specifically provided by the statute under which the regulation or order of repeal is adopted, in which event it becomes effective on the day prescribed by the statute; (2) it is a regulation prescribing the organization or procedure of an agency, in which event it becomes effective upon filing by the lieutenant governor or upon a later date specified by the state agency in a written instrument submitted with, or as part of, the regulation or order of repeal; (3) it is an emergency regulation or order of repeal adopted under AS 44.62.250, in which case the finding and the statement of the facts constituting the emergency shall be submitted to the lieutenant governor, together with the emergency regulation or order of repeal, which, in that event only, becomes effective upon filing by the lieutenant governor or upon a later date specified by the state agency in a written instrument submitted with, or as part of, the regulation or order of repeal; (4) a later date is prescribed by the state agency in a written instrument submitted with, or as part of, the regulation or order of repeal;  (5) a standing committee of the legislature  disapproves the regulation or returns it to the  department or agency with a proposed amendment, under  AS 24.05.182, in which case, if the proposed  regulation, amendment, or order of repeal takes  effect, it takes effect on the later of  (A) adoption by the agency of an amendment  proposed by a standing committee of the legislature;  or  (B) one day following adjournment of both  houses of the legislature as provided under  AS 44.62.325." Renumber the following bill sections accordingly. Page 5, line 31, following "legislators": Insert "and to the presiding officer of each  house" Page 6, line 4, through page 9, line 9: Delete all material and insert:  "* Sec. 12. AS 44.62.190(b) is amended to read: (b) If the form or manner of notice is prescribed by statute, in addition to the requirements of filing and furnishing notice under AS 44.62.010 - 44.62.300, or in addition to the requirements of filing and mailing notice under other sections of this chapter, the notice shall be published, posted, mailed, filed, or otherwise publicized as prescribed by the statute. In the notice furnished to the  legislature under AS 44.62.190(a)(6), new language  added to an existing regulation shall be underlined,  and language deleted from an existing regulation shall  be bracketed and capitalized.  * Sec. 13. AS 44.62.195 is amended to read: Sec. 44.62.195. Fiscal notes on regulations. If the adoption, amendment, or repeal of a regulation has  an economic effect on a department, agency, or person,  the proposed regulation or order of repeal must  include a fiscal note prepared by the department or  agency in accordance with this section [WOULD REQUIRE INCREASED APPROPRIATIONS BY THE STATE, THE DEPARTMENT OR AGENCY AFFECTED SHALL PREPARE AN ESTIMATE OF THE APPROPRIATION INCREASE FOR THE FISCAL YEAR FOLLOWING ADOPTION, AMENDMENT, OR REPEAL OF THE REGULATION AND FOR AT LEAST TWO SUCCEEDING FISCAL YEARS].  * Sec. 14. AS 44.62.195 is amended by adding a new subsection to read: (b) A fiscal note required under this section must include, where applicable, (1) a determination of the present need for the regulation and the expected need for the regulation; (2) a determination of the costs and benefits of the regulation and an explanation by the department or agency of whether the proposed regulation is the most cost-effective, efficient, and feasible means of allocating public and private resources to achieve the stated purpose; (3) the effect of the regulation on market competition; (4) the effect of the regulation on the cost of living, employment, and doing business in the geographical regions where the regulation would have the greatest effect; (5) the source of revenue to implement and enforce the regulation; (6) a summary of the short-term and long- term economic effects of the regulation, including an analysis of the persons or groups that would bear the costs of the regulation and the persons or groups that would benefit directly or indirectly from the regulation; (7) the difficulties the department or agency encountered, if any, in estimating the persons or groups that would benefit from the regulation or bear the costs of the regulation; (8) the effect that adopting or failing to adopt the regulation would have on the environment and public health.  * Sec. 15. AS 44.62.245(c) is amended to read: (c) The state agency shall also send the notice described in (b)(2) of this section to (1) a person who has placed the person's name on a distribution list kept by the agency that lists persons who want to receive the notice; the agency may allow a person to request that distribution of the notice be by electronic means and shall honor that request if appropriate means are available; (2) the regulations attorney in the Department of Law; and (3) the presiding officer of each house of  the legislature [THE MEMBERS OF THE ADMINISTRATIVE REGULATION REVIEW COMMITTEE].  * Sec. 16. AS 44.62.320(b) is amended to read: (b) At the same time a regulation is filed by the lieutenant governor, the lieutenant governor shall submit the regulation to the presiding officer of each  house of the legislature [CHAIRMAN AND ALL MEMBERS OF THE ADMINISTRATIVE REGULATION REVIEW COMMITTEE FOR REVIEW UNDER AS 24.20.400 - 24.20.460] together with the fiscal information required to be prepared under AS 44.62.195.  * Sec. 17. AS 44.62.320(c) is amended to read: (c) At the same time as a regulation is submitted to the governor under AS 44.62.040(c), the state agency shall submit the regulation to the presiding officer of each house of the legislature [CHAIR AND ALL MEMBERS OF THE ADMINISTRATIVE REGULATION REVIEW COMMITTEE FOR REVIEW UNDER AS 24.20.400 - 24.20.460] together with the fiscal information required to be prepared under AS 44.62.195.  * Sec. 18. AS 44.62.320(d) is amended to read: (d) Within 10 days after receiving a regulation under (b) or (c) of this section or under  AS 44.62.190(a)(6), the presiding officer of each  house of the legislature shall provide copies of the  regulation to the standing committee with jurisdiction  over the subject matter of the regulation as provided  in the uniform rules of the legislature for review  under AS 24.05.182 [, THE CHAIR OF THE ADMINISTRATIVE REGULATION REVIEW COMMITTEE MAY SUBMIT TO THE GOVERNOR, BY LEGISLATIVE MEMORANDUM OR LETTER, COMMENTS ON THE REGULATION].  * Sec. 19. AS 44.62 is amended by adding a new section to article 7 to read: Sec. 44.62.325. Legislative annulment of  regulations. (a) The legislature may, in the regular legislative session during which a disapproval or amendment is made or, if the legislature is not in regular session, the next regular session following the disapproval or amendment of a proposed regulation, amendment, or order of repeal by a standing committee under AS 24.05.182, annul the proposed regulation, amendment of the proposed regulation, or order of repeal by law. (b) If the legislature, following adjournment of the regular legislative session during which a disapproval or amendment is made or, if the legislature is not in regular session, the next regular session following disapproval or amendment of a proposed regulation, amendment, or order of repeal by a standing committee under AS 24.05.182, has not enacted a law that annuls the proposed regulation, amendment of the proposed regulation, or order of repeal, the proposed regulation, amendment of the proposed regulation, or order of repeal takes effect one day after adjournment of both houses of the legislature." Renumber the following bill sections accordingly. Page 9, line 13: Delete "(AS 44.62.040 - 44.62.319) [AS 44.62.040 - 44.62.320]" Insert "(AS 44.62.040 - 44.62.320)" Page 9, line 20: Delete "AS 24.05.182(b), 24.05.182(c), 24.05.182(d);" Page 9, line 22: Delete "AS 40.25.120(a)(11); and AS 44.62.320" Insert "and AS 40.25.120(a)(11)" CHAIR LYNN announced that HCR 15 would be rescheduled for the next House State Affairs Standing Committee. [HCR 15 was held over.]