CS FOR HOUSE BILL NO. 140(FIN) am "An Act relating to the proposed adoption, amendment, or repeal of a regulation; and relating to contact with agencies about regulations." 9:59:19 AM REPRESENTATIVE LORA REINBOLD, stated that the intent of the legislation was to provide better information about regulations that may significantly affect private individuals and businesses, other state agencies and local governments. She shared that HB 140 required that regulation notices include information about estimated costs beyond those to the agency. In view of the increasing reach of the Washington D.C. into Alaska's affairs, the bill also requires that when the federal government is the reason for the regulation, the exact federal law, executive order or decision be identified in order for Alaskans to better understand government actions that affect their businesses and lives. Senator Dunleavy wondered who might be in opposition to the bill. Representative Reinbold replied that there was some initial opposition to the bill from the Regulatory Commission of Alaska (RCA), and the Alaska Oil and Gas Conservation Commission (AOGCC). She pointed out that neither organization offered vocal opposition until she asked for their input. She stressed that the current version exempted those organizations. Senator Hoffman queried the reason that they wanted to be exempted. Representative Reinbold responded that she did not want to speak for those organizations. She furthered that, in general, those organizations felt that they were independent and "quasi-judicial." She stated that the Alaska's legal department felt that, just because they were independent did not merit their exemption. Senator Olson wondered if Representative Reinbold was in favor of the exemptions. Representative Reinbold responded that she felt fine about the exemptions, and remarked that many bills required some compromise. 10:04:57 AM Senator Olson felt that some of the exempted agencies should be examined further. Co-Chair Meyer felt that the legislation could be expanded at a later date, in order to incorporate some of the exempted organizations. Representative Reinbold announced that all of the agencies, boards, and commissions were included with the four exclusions. She felt that there were good reasons for the Board of Game and Board of Fish to be excluded, because of the number of regulations. She did not want to be inundated as a regulatory review committee with 600 emails based on regulations. She felt that increasing accountability and transparency was essential, and was provided in a packet. Senator Hoffman felt that the organizations were exempt because the fiscal note for the executive branch stated that the exemption would reduce the overall fiscal impact. He relayed that the last paragraph of the executive branch fiscal note stated that the agencies must add indeterminate positions and resources would be needed to comply with the legislation. Co-Chair Meyer wondered if the fiscal note total for the bill was $600,000. Vice-Chair Fairclough replied that the total for the fiscal notes was $677,000. Co-Chair Meyer stated that the bill had been modified from its original version in order to reduce the fiscal impact. Vice-Chair Fairclough looked at FY 16, and noted that the annual operating cost increase that was quantified under the three fiscal notes was $677,200, without the indeterminate note. Senator Olson felt that there were many people that may be negatively impacted by the exclusion of some of the organizations. He felt that the people should be protected by having many of the regulations publicly reviewed. 10:09:31 AM Vice-Chair Fairclough wondered if there was a consideration for a tiered approach for gradual implementation of the program in order to understand the fiscal impact of the broader approach. She stressed that she supported the concept, but was concerned about the indeterminate note. Representative Reinbold replied that she felt the legislation outlined a phased approach. She shared that the bill was "gentle" as related to her feelings about the regulatory process. She explained that the bill looked in aggregate of the costs to the agency, other agencies, and municipalities. It provided an aggregate based on a good faith effort with no ability to sue for inaccuracy or inefficient information, and provide online public transparency. Vice-Chair Fairclough stressed that she was not commenting on the pressure that the bill may provide, but rather whether a phased approach focusing on each department may be simpler. She felt that the bill may be outlining a broader approach to the issue. Ms. Chambers testified regarding the fiscal note. She announced that one of the fiscal notes totaled $333,000 in the first year. She noted that there were many elements in the bill which triggered that number. She stated that the division supported transparency in government, and remarked that there were many activities in the bill that the agency currently conducts. She remarked that the division's boards and commissions operated slightly differently that other boards and commissions. The bill had the potential to impact the licensees, because any costs that result from the bill would be picked up by the licensees. The fiscal impact was not a general fund obligation. She looked at Section 2 of the bill, and expressed concern regarding the issue of aligning the boards and commissions with regular response to specific issues raised by the administrative regulation review committee and some governor's office concerns. She felt that the issue was important to her division, because they tried to be as transparent as possible. She stressed that the travel cost in the fiscal note should be considered a "worst case scenario", because it related to the possibility of board meetings in response to any changes or recommendations by the Governor's Office or the Administrative Regulation and Review Committee. She stated that the division conducted approximately 25 regulation projects per year, which were board and commissions. She stated that she did not anticipate the division's travel costs, she stressed that there could be a possibility for an in person meeting. 10:16:29 AM AT EASE 10:26:13 AM RECONVENED Co-Chair Meyer CLOSED public testimony. Ms. Chambers stated that she had some more fiscal concerns that she would like to express to the committee. She looked at Section 3, and remarked that there was a requirement for the agency to make a good faith effort to estimate the cost to the state agency, private persons, other agencies, and municipalities. She stated that the division had a logistical concern with its twenty volunteer boards and commissions and the type of regulations that were often passed. She felt that it may be difficult to estimate the cost in a good faith effort that would amount to education to the public to some of the board regulations. She remarked that there could be continuing education changes, and the cost to the private person could be difficult to quantify if the variety of courses were examined nationwide. She understood that it was an extreme example, but was a potential way to not satisfy the education of the public. She also pointed out Section 7 regarding agency contact with the public. She remarked that the she was not intending to call out the division's inability to comply, but rather the difficulty with the boards and commissions to potentially comply with the requirements. She remarked that the good faith effort to answer public questions received in writing, or asked at a public meeting, were received, weighed, and deliberated at the boards and commissions meetings. She felt that the bill would require the boards to speak to questions that may come up in writing through the agency prior to public input would be collected. She stressed that the agency did not have staff that was empowered by the boards to speak on their behalf. She remarked that many of the boards were ably administered by the staff, but were mostly managed by licensee examiners that oversaw up to three boards. She felt that the bill may require additional meetings or procedures for boards to answer. 10:31:28 AM Ms. Chambers she pointed out that Section 8 only allowed oral commentary as public comment, which could be received through the division office. She explained that interested parties, licensees, and the public could contact the office to ask questions that the division would be obliged to respond. She noted that many of her concerns from the previous section would be amplified with the Section 8 issue. She remarked that there would need to be an additional staff person to corral the comments and maintain the concerns for the public record. Vice-Chair Fairclough wondered why the governor's order did not accomplish the proposed tasks in the bill. Ms. Chambers responded that the governor's order was received the fall prior, and the division worked to analyze the scope of regulations. She felt that the compliance level would result in a similar outcome. Vice-Chair Fairclough felt that the indeterminate fiscal note should be changed to zero. She suggested that a highly justified supplemental budget item could be included in following year. She stressed that the governor's order was the catalyst for implementation. Senator Hoffman felt that there should be an inclusion of the RCA, Boards of Fish and Game, and the AOGCC, so they can comply with the governor's executive order. He remarked that there were concerns regarding the actions of the Boards of Fish and Game, and stressed that they especially should be included in the legislation. 10:36:10 AM Senator Olson queried the most recent review of the regulations. He recalled that he never had to meet with a regulatory board while he was a member of a medical board. If there was a regulatory review of the medical board, he assumed it was conducted via teleconference. He wondered what had changed recently to require physical attendance for the review board meetings. Ms. Chambers responded that the fiscal note reflected the "worst case scenario", where board members may make the executive decision to meet. She shared that there were tools provided for teleconferencing. Many boards and commissions strived to meet via teleconference for focused purposes. Senator Olson felt that continued education did not require a face to face meeting. He agreed with Vice-Chair Fairclough, that the fiscal note could be almost zero. Ms. Chambers responded that the division would advise the boards to meet via teleconference, because there were minimal costs for meeting via teleconference. She stressed that, if a board intended to meet in person, she would allow that meeting to occur. ARNOLD LIEBELT, POLICY ANALYST, OFFICE OF MANAGEMENT AND BUDGET, (OMB) spoke to the fiscal impact of the legislation across all departments as related to Section 3. He stated that Section 2 should be considered the policy portion of the bill. He remarked that Section 2 outlined the repeal of the boards and commissions from the existing language. There were approximately more than 100 boards and commissions. He restated that the bill exempted the Board of Game, Board of Fish, RCA, and the AOGCC. He explained that the regulations would pass before the governor, and he would participate in the process. He stated that boards and commissions generally operated independently, and were staffed with members of the public to represent the public within the industries. He pointed out that Section 3 addressed the cost impact for the department and the boards and commissions, because it asks the state agencies to prepare an annual cost impact for private person including businesses and municipalities. Through the fiscal note process, the division already ascertained with that cost would be for legislation and anticipated regulations to state agencies. He stated that providing a cost estimate in the aggregate was helpful, but that was primarily the source of the cost. The indeterminate note from OMB represented all the other agencies that did not submit a fiscal note, but remarked that the note would have some impact. He stressed that OMB could not estimate the number of regulations or the cost therein. 10:43:05 AM Co-Chair Meyer looked at AO.266, and felt that the work outlined in the proposed legislation should already occur. Mr. Liebelt responded that the work was similar, but the cost came in when departments need to add to their workload by estimating what the cost would be for private persons. He stated that the departments were not currently staffed for the requirements in the legislation. He noted that the Boards of Game and Fish could see as much as 500 proposals per year for regulations. Senator Hoffman looked at the third paragraph of the executive branch fiscal note, which referred to 162 municipalities in Alaska. He assumed that those municipalities would also be impacted, but the fiscal note did not reflect what costs would be attributed to them. He wondered if there was an estimate for fiscal impact to the municipalities in Alaska. Mr. Liebelt agreed that the fiscal note excluded the municipalities, and the paragraph was included to comment on the number of municipalities that could or could not be impacted by regulations. He looked at Section 3, which stated that the department's boards and commissions would be required to provide the cost impact to the municipality as a result of regulations. Senator Hoffman stated that he did not understand why a fiscal note would be zeroed out, with the knowledge of probable costs. He felt that the agencies should be held accountable for cost outlines, because those agencies drafted the indeterminate fiscal note. He did not want to impose an unfunded mandate to the agencies or municipalities. 10:47:38 AM AT EASE 11:01:14 AM RECONVENED CSHB 140(FIN)am was HEARD and HELD in committee for further consideration. 11:02:02 AM AT EASE 11:02:42 AM RECONVENED