HB 140-REGULATIONS: NOTICE, REVIEW, COMMENT  2:02:54 PM CHAIR COGHILL reconvened the meeting and announced the consideration of HB 140. "An Act relating to the proposed adoption, amendment, or repeal of a regulation; and relating to contact with agencies about regulations." [This was the first hearing and CSHB 127(FIN) am was before the committee.] 2:03:24 PM REPRESENTATIVE LORA REINBOLD, Alaska State Legislature, Juneau, Alaska, sponsor of HB 140, explained that this legislation is intended to address the problem of government over regulation, which local businesses believe is stifling growth. She read the following excerpt from the Alaska State Medical Association and stated that it was the motivation to continue her mission to help reform the regulatory process: The regulatory process is deficient and closed. The Department of Law's advice to departments on the regulatory process dissuades public discussion or discourse once a regulatory package is released publicly. In fact, departments are often instructed not to answer questions or provide additional information during the public hearings except for pointing to the exact language in the proposed regulation. This leads to a frustrating and seemingly meaningless public process, beyond submitting written comment. Furthermore, once public hearings are held, there is no requirement that the final regulations be similar to the proposed regulation. REPRESENTATIVE REINBOLD described HB 140 as a significant step toward increased transparency in the regulatory process and a more business-friendly climate in Alaska. She provided the following sectional analysis: [Original punctuation provided.] Bill section 1. Gives the Act a short title. Bill section 2. Amends AS 44.62.040(c) to remove the exemption for boards and commissions. Adds language to accommodate those agencies that have different rules for the adoption of regulations. Allows the governor 30 days to return regulations to the adopting agency. Bill section 3. Amends AS 44.62.190(d) to identify additional information that may be included, if applicable, about the reason for the proposed action, including federal or state action requiring the proposed action. Adds information that is to be provided for the estimated annual costs of the proposed action, including the costs to private persons, other state agencies, and municipalities. States that the estimated annual costs are to be based on a good faith effort to estimate the costs using information available to the state agency. Bill section 4. Adds new subsections to the notice statute, AS 44.62.190. The first, sec. 44.62.190(f), prohibits court actions to challenge a regulatory action for the inaccuracy or insufficiency of the cost estimates. The second, sec. 44.62.190(g), requires, as feasible, that the subject lines of electronic mail and titles of written publications providing the information required by AS 44.62.190(d) give the reader a fair idea of the substance of the proposed regulation, amended regulation, or repealed regulation. Bill section 5. Amends AS 44.62.200(c) to require that a complete copy of each regulatory action, and, if feasible, the material incorporated by reference, be posted on the Alaska Online Public Notice System. Bill section 6. Amends AS 44.62.200(d) to remove the exemptions for the Regulatory Commission of Alaska, the Board of Fisheries, and the Board of Game, from the requirement to provide a brief description of the changes made by the proposed regulation, amended regulation, or repealed regulation. Bill section 7. Adds sec. 44.62.213(a) to authorize contact between agencies and the public when developing regulations. Adds sec. 44.62.213(b), which directs agencies to make a good faith effort to answer written or at meeting questions before the public comment period ends. After that, allows an agency to answer the questions. Requires an answer to be written and that the question and answer be made available to the public. In sec. 44.62.213(c), prohibits court actions to challenge a regulatory action for the inaccuracy or insufficiency of answers provided under sec. 44.62.2 13. Bill section 8. Amends AS 44.62.215, which requires an agency to keep a record of public comment when adopting a regulation, to delete the exemption for boards and commissions and to require that an agency keep a record of public comment received electronically or orally as well as in writing. Bill section 9. Amends AS 44.62.245(c) to require an agency to send certain notices to the members of the Administrative Regulation Review Committee. Bill section 10. Amends AS 44.62.320(b) to tie the submission of regulations by the lieutenant governor to the Administrative Regulation Review Committee for review to the time the regulation is submitted to the lieutenant governor for filing. Bill section 11. Amends AS 44.62.320 to allow the Administrative Regulation Review Committee chair to submit comment on a regulation to the lieutenant governor within 10 days after receiving the regulation from the agency under (b) of the section. Bill section 12. Provides applicability provisions for the sections of the bill. REPRESENTATIVE REINBOLD mentioned the indeterminate fiscal note and stated that her office was talking with certain agencies to see, based on input from this committee, whether they potentially need to be exempted from certain provisions in the bill. SENATOR COGHILL recalled that the exemptions relate to Section 6. REPRESENTATIVE REINBOLD offered to return and talk about the specific provisions. SENATOR WIELECHOWSKI directed attention to the letter from the Alaska Oil and Gas Conservation Commission (AOGCC) that expressed concerns with the bill. One concern was that, "giving the Governor veto power over the decisions of an agency that is, by design and statute, independent would violate that independence." He questioned whether it wouldn't be better to strip Section 2 from the bill. REPRESENTATIVE REINBOLD referenced the memorandum from Legislative Legal Services that addresses the question of whether a quasi-judicial entity ought to be excluded from the bill. CHAIR COGHILL asked the sponsor to provide the committee a copy of the opinion. He asked her understanding of the question about the governor's veto power. REPRESENTATIVE REINBOLD stressed the nothing in the bill gives veto power to anyone. Section 2 does allow the governor to send a regulation back to an agency for two reasons. The first is if the regulation is inconsistent with law. The second is that the governor may send the regulation back [so the agency can respond to specific issues that were raised.] SENATOR WIELECHOWSKI questioned giving the governor what is tantamount to veto power over agencies that are set up to be independent. CHAIR COGHILL referenced Section 11 and asked if 10 days was sufficient for the Administrative Regulation Review Committee (ARRC) to review a regulation. REPRESENTATIVE REINBOLD opined that it was adequate if the committee is active and has good staff. SENATOR MCGUIRE said she believes that 10 days strikes an appropriate balance and she likes that the provision is discretionary with regard to submitting the regulation to the lieutenant governor. She offered personal experiences when she chaired the committee. CHAIR COGHILL noted the individuals available to answer questions. 2:18:54 PM SENATOR WIELECHOWSKI noted that AOGCC's first concern was that the bill would force commissioners to participate in ex parte communications. He asked the sponsor her thoughts on that concern. REPRESENTATIVE REINBOLD responded that there was nothing that requires a commissioner to participate in ex parte communications. SENATOR WIELECHOWSKI read the explanation from AOGCC and summarized that the commissioners are saying that they make their decisions in the public, but the bill would allow people to call a commissioner and demand an explanation of their reasons for a proposed regulation or a change in regulation. He pointed out that the public can't engage in that kind of back and forth with judges and that's what raises the ex parte issue in the bill. REPRESENTATIVE REINBOLD responded that the commissioners can deal with that through a "frequently asked questions" page on the website, they could have staff respond to questions, or they could hold a public hearing and answer questions then. The goal is to ensure that people have an opportunity to speak with their government, but the communication doesn't have to be direct. SENATOR WIELECHOWSKI said he's very supportive of parts of the bill, but is concerned that decision makers who are acting like judges would be required to participate in ex parte communications. He suggested including a provision that excludes quasi-judicial decisions. REPRESENTATIVE REINBOLD responded that Legislative Legal Services issued an opinion that said that just because an agency is independent or quasi-judicial does not exclude it from provisions in the bill. However, there is a statute that states that the way that the AOGCC writes regulations may be cause for concern. She said her office was working with the chair of AOGCC to address that issue. CHAIR COGHILL advised that the committee was working on a Senate committee substitute that would address some of the concerns and still allow some review. He opened public testimony. 2:22:47 PM SARAH GEARY, Legislative Coordinator, Alaska Municipal League (AML), Juneau, Alaska, stated support for HB 140 on behalf of AML. She said that because many state and federal regulations impact municipality budgets, it would be helpful for planning purposes to have an idea of what those impacts will be. HB 140 will ensure that agencies consider the costs that regulations potentially impose on individuals, businesses, and municipalities. She expressed gratitude for the attempt to look at the broader impacts of regulation changes. 2:24:11 PM LESLEE OREBAUGH, Assisted Living Association of Alaska (ALAA), testified in support of HB 140 on behalf of ALAA. She said the unintended consequences and costs of regulations have long plagued individuals and the business industry in the state. She offered this view from the perspective of 24 years of business ownership. Although government officials often say that they have considered private business, it doesn't appear to make a difference. She restated support for the legislation. 2:25:49 PM AL TAMAGNI Leadership Chair, National Federation of Independent Business (NFIB), Anchorage, Alaska, said his comments echo those of the previous speaker. HB 140 gives the business community an opportunity to voice opinions and place some responsibility on agencies. It levels the playing field by providing full and open disclosure. 2:26:58 PM CHAIR COGHILL stated he would hold HB 140 for further consideration.