CS FOR SENATE BILL NO. 24(JUD) "An Act relating to regulations; relating to administrative adjudications; amending Rule 65, Alaska Rules of Civil Procedure; and providing for an effective date." This was the fifth hearing for this bill. Co-Chair John Torgerson reminded the committee that a motion to adopt Amendment #14 was on the table. Senator Dave Donley moved to withdraw his motion to adopt Amendment #14. There was no objection. Senator Dave Donley moved for adoption of the CS Version "Y". It was adopted without objection. Senator Dave Donley stated he would not offer Amendment Senator Dave Donley spoke to Amendment #16 and moved for adoption. Senator Lyda Green asked how Section 3 would read. Senator Dave Donley read into the record. Without objection adopted. Senator Dave Donley moved for adoption of Amendment #17. Co-Chair John Torgerson explained his amendment that clarified language to page 2 line 25. Without objection, it was adopted. Senator Dave Donley moved for adoption of Amendment #18. Co-Chair John Torgerson explained. Senator Gary Wilken wanted to make sure that it changed the * substantially. So the burden was up to the commissioner? Co-Chair John Torgerson believed the burden would be up to the plaintiff. Senator Dave Donley explained it would first be up to the Department of Law then the plaintiff. Co-Chair John Torgerson commented it should reduce the number of times the regulation had to go out for public notice. Senator Gary Wilken question. Co-Chair John Torgerson respond. Without objection Amendment #18 was adopted. Senator Dave Donley moved for adoption of Amendment #19. Co-Chair John Torgerson explained. The burden of proof would be the same. Without objection, Amendment #19 was adopted. Senator Dave Donley moved for adoption of Amendment #20 and explained that it had the same scheme as Amendment #16 and addressed the cost benefit analysis. Without objection, adopted. JANICE ADAIR, Director, Division of Environmental Health, Department of Environmental Conservation, testified to the fiscal note. She appreciated the work on the bill but still had some concerns about how the department would instigate some of the changes. She spoke to the number of comments received on some of the proposed regulations. If she received only 13 comments, they would be required to send out second notices to all 3000 people on the mailing list. While she would like to hear from more people, she did not. She noted the prior amendment to the fiscal note. The highest cost to do the notices was newspaper publishing and printing of the notices. Those costs were contained in the contractual component. Senator Loren Leman spoke to the number and length of public notices published in newspapers. Janice Adair detailed the requirements of public notices. Senator Gary Wilken referred to Amendment #18 and the addition of the word, "substantially" Janice Adair said it did somewhat, but she was still unsure what substantially meant in relationship to regulation changes. Senator Gary Wilken thought it was the intent of the amendment was to prevent from re-sending additional public notices. Co-Chair John Torgerson responded not necessarily. Senator Dave Donley agreed and said there was a reason because if there was a substantial change, the public may want to know of the changes. Senator Gary Wilken referred to page 2 line 25 and the relationship between the cost benefit analysis and the fiscal note. He asked for clarification. Senator Dave Donley replied there were three potential scenarios. The department could research in the Legislative Library. Second, *. If the commissioner found that the cost of doing the analysis was greater than the benefit of the regulation, there was an exemption. He said there were about five other options. Senator Gary Wilken asked if that applied to legislation that was in place for over ten years. Senator Dave Donley said it was. Senator Gary Wilken asked if Senator Dave Donley would consider an amendment to limit this bill to legislation passed in the past few years. Senator Dave Donley said the point was to require the cost benefit analysis to determine the impact to the public. Senator Gary Wilken moved for adoption of Amendment #21. This would delete language from page 4 lines 21-29. Co- Chair John Torgerson objected and asked if this reflected current statute. Senator Gary Wilken affirmed. Senator Loren Leman felt that to delete members of the standing committees would be a mistake. Senator Gary Wilken withdrew his motion. Senator Loren Leman questioned the mailing list of 3000 names and wondered how that list could be shortened. Janice Adair noted the provision in the bill requiring all interested parties be included. Senator Loren Leman asked how good Janice Adair felt that list was. Janice Adair replied that they did remove names for undeliverable mail. Senator Loren Leman asked if they ever did mailouts to determine interest in remaining on the mailing list. She did not have very good response and then received complaints from those who were purged as a result. She added that the regulations were posted on the Internet. Senator Dave Donley moved to amend the Department of Environmental Conservation fiscal note as Amendment #22 to delete all components but supplies and contractual for each year. The contractual component would be reduced to $35.75. Without objection, it was adopted. Senator Dave Donley moved to amend the Department of Law fiscal note to reflect the Department of Law memo as Amendment #23. Without objection, it was also adopted. Carol Carroll testified to the Department of Natural Resources fiscal note. Senator Dave Donley moved for adoption of Amendment #24, which would amend the Department of Natural Resources fiscal note. Without objection, it was adopted. JACK KREINHEDER, Senior Policy Analysis, Office of Management and Budget, testified. He asked for clarification of dec fiscal note. Senator Dave Donley said the contractual component was reduced 50 % and the supplies remained the same. All other components were deleted. Tape: SFC - 99 #76, Side B Jack Kreinheder said that helped. However, the extent of the fiscal note reductions would make it difficult to implement the bill. He had trouble understanding the intent for exemptions of the cost benefit analysis. They were not done in an hour. It seemed clear to him that the regulatory staff in the state was already under funded. Therefore the ability to absorb the costs of the analysis was limited. He detailed that an acceptable cost benefit analysis would not be possible under this provision so he assumed the committee intended only cursurary analysis be done. Senator Dave Donley said that was not the intent. They wanted the agencies to exercise common sense. Co-Chair John Torgerson noted that many regulations were outside the statutory authority. DEBORAH BEHR, Assistant Attorney General, Legislation and Regulations Section, Civil Division, Department of Law, testified. She had questioned many in the timber and other industries on this matter and was told that this would be a new tool that could be used to halt development. Parties wishing to prevent timber sales and other development could use this process to stop or slow such sales. In the section addressing supplemental notices, there was some question on whether the burden of proof would be placed on the person contesting the regulation. Several areas of the bill lent the process to inadvertent errors. She suggested if the intent was to place the burden of proof on the challenger, it needed to be stated in the supplemental notice as it was done in other provisions. She addressed the fiscal note. Some of the costs listed would be to cover the preparation of the regulation to ensure they would be defensible in court. The remaining costs would be incurred for defense of the regulations when they actually went to court. She spoke to the Department of Law's ability to defend the provisions of the bill. She referred to sections 2, 3 and 13 as the greatest concerns. There would need to be an excellent record to show that the regulation was necessary. Frankly, most regulations in the environmental area were compromises, she warned. The result was that these were often not the least intrusive methods, but rather the agreement of the involved parties as a compromise. She believed that very few state regulations would be required by substantial state interest, which was another provision of the bill. She anticipated litigation to determine the provisions of the bill. She felt this would result in an unsettling environment for business and investment in the state. GARVAN BUCARIA, testified via teleconference from Mat-Su. He spoke to the definition of "reasonable" and suggested that word meant different things to different people. He commented that the bill contained superlative language and needed to be cleaned up. He was unsure which state agencies the current bill would encompass. Co-Chair John Torgerson clarified that the bill excluded everyone but Department of Environmental Conservation, the Department of Natural Resources and the Division of Habitat and Restoration. Garvan Bucaria could not go along with that since those agencies were responsible for the health and safety of the state. They had enough to do without the extra burden placed on them by the Legislature to do these analyses. He spoke of water quality standards in Wasilla saying the only protection was these regulations. Co-Chair John Torgerson debated that this would not change the way water would flow into Wasilla Lake. Garvan Bucaria countered. He was concerned about the regulations being less effective since the agencies were working on limited resources. TERESA WILLIAMS, via teleconference from Anchorage. She was on line to address Amendment #11, which was not offered. She was concerned that the sponsor might offer it in the future. Senator Dave Donley took the testimony from Office of Management and Budget to heart and noted language on page 2 line 19 saying that was included early in the process and was no longer needed. Senator Dave Donley moved to delete page 2 line 17 "or that the cost and benefits cannot be easily determined" as Amendment #25. Senator Loren Leman or Senator Gary Wilken objected. Senator Dave Donley commented that the preceding line in the bill addressed the issue of when the cost of the analysis was prohibitive. Senator Gary Wilken felt they should defer to the commissioner's judgement and this amendment would nail down the options more than what was necessary. Amendment #25 was adopted by a vote of 4/2/3. Senator Gary Wilken and Senator Loren Leman voted nay. Senator Al Adams, Senator Randy Phillips and Senator Sean Parnell were absent. Senator Dave Donley made a motion to move from committee CS SB 24 (FIN). Senator Pete Kelly objected. Break 7:05 PM / 7:06 PM Senator Pete Kelly removed his objection and the bill moved from committee without objection. Break 7:08 PM