CS FOR SENATE BILL NO. 203(JUD) "An Act relating to administrative hearings, to hearing officers, and to administrative law judges; establishing the office of administrative hearings and relating to that office; and providing for an effective date." This was the third hearing for this bill in the Senate Finance Committee. Co-Chair Wilken stated that this legislation would create an independent administrative hearing office within the Department of Administration, which would be supervised by a Chief Administrative Law Judge. Testimony would address Committee questions pertaining to whether the University of Alaska would be included in this legislation as well addressing the cost of producing and adopting of regulations. Members' packets also contain a letter in support of this legislation from the National Federation of Independent Businesses (NFIB) dated March 1, 2004 [copy on file]. In addition, discussion would be presented regarding the bill's fiscal notes. DAVE STANCLIFF, Regulatory Review Committee, Office of the Senate President Senator Gene Therriault, Judiciary Committee noted that, as reflected in the memorandum [copy on file] dated February 27, 2004 to Senate President, Senator Gene Therriault, from Tam Cook, Director, Division of Legal and Research Services, there is no Constitutional conflict in regards to applying the standards imposed by this legislation to both State and University of Alaska hearing officers. However, by desire and by an exemption provided in the State's procurement code, the University of Alaska is exempt from the jurisdiction of the proposed central panel. He also noted that certain State entities' jurisdictional issues are continuing negotiations with the bill's sponsor and the Governor Frank Murkowski Administration. The recommendation in regard to these negotiations is that they be further addressed by the House of Representatives Judiciary Committee, as the bill progresses. ANDY HEMENWAY, Hearing Officer, Procurement & Longevity Bonus, Department of Administration, communicated that efforts are being undertaken by the sponsor to address jurisdictional issues that have been presented by the Division of Insurance and the Department of Revenue. Mr. Stancliff also noted, in response to Senator Hoffman's concern regarding a possible conflict of interest that might arise were a full-time hearing officer to also practice law as a private citizen, that a law book titled "Judicial Canon" [copy not provided] would be distributed that would properly define how these types of issues should be addressed. He noted that this book is the national model in regards to the conduct of administrative hearing officers, and, as specified in the legislation, this is the law reference that must be adopted by the Chief Administrative Law Judge. He acknowledged that the sponsor "is very much aware" of this concern. Senator Dyson asked for an overview of "the criticisms or any opposition" to the bill. Mr. Stancliff responded that there has been broad based support and input from members of every committee that has conducted a hearing on this bill. There is no sense of partisanship. A conflict arises regarding how to incorporate the mechanics of this new model and its jurisdiction with the existing process and the transition to the new model. This transition process is the concern that has made some employees and divisions "nervous." At this point, the tensions have been 98-percent alleviated. Co-Chair Wilken noted that 15 fiscal notes accompany this legislation. ERIC SWANSON, Administrative Services Director, Department of Administration, summarized the Department's fiscal notes regarding the incorporation of the new centralized office of administrative hearings into the Department: ten positions would be transferred to the Department and $500,000 would be required to establish the new office during the first year with some of the funding being transferred from other agencies as interagency funding. However, he noted that some agencies funding sources are not transferable. $50,000 of new general fund funding would be required the first year to fund the new Chief Administrative Law Judge (CALJ) position. He noted that, other than the CALJ, the majority of the hearing officer positions would not be transferred to the office until on or after January first 2005. Co-Chair Wilken asked regarding the net total expected expenses. Mr. Swanson responded that the net total increase would be $52,000 in the first year. In addition, the Division of Insurance would experience an increase in receipt supported service expenses. Therefore the net total increase would amount to approximately $80,000 the first year. There would be a reduction in expenses as other funding sources transfer over in January 2005. Co-Chair Green moved to report the committee substitute from Committee with individual recommendations and accompanying fiscal notes. There being no objection, CS SB 203 (FIN) was REPORTED from Committee with $500,600 fiscal note #6, dated March 2, 2004, from the Department of Administration; negative $113,600 fiscal note #7, dated March 2, 2004, from the Department of Administration; zero fiscal note #8, dated February 27, 2004, from the Department of Labor and Workforce Development; negative $5,000 fiscal note #9, dated February 27, 2004, from the Department of Public Safety; zero fiscal note #10, dated February 25, 2004, from the Department of Health and Social Services; negative $22,500 fiscal note #11, dated February 27, 2004, from the Office of the Governor; indeterminate fiscal note #12, dated February 27, 2004, from the Department of Community and Economic Development; zero fiscal note #13, dated March 1, 2004, from the Department of Education and Early Development; zero fiscal note #14, dated February 24, 2004, from the Department of Environmental Conservation; $38,300 fiscal note #15, dated March 1, 2004, 7from the Department of Community and Economic Development; zero fiscal note #16, dated February 27, 2004, from the Department of Community and Economic Development; indeterminate fiscal note #17, dated February 12, 2004, from the Department of Law; indeterminate fiscal note #18, dated March 1, 2004, from the Department of Education and Early Development; negative $203,600 fiscal note #19, dated March 2, 2004, from the Department of Revenue; and negative $52,400 fiscal note #20, dated March 2, 2004 from the Department of Revenue.