SENATE JUDICIARY COMMITTEE February 8, 1999 1:35 p.m. MEMBERS PRESENT Senator Robin Taylor, Chairman Senator Rick Halford, Vice-Chairman Senator Dave Donley Senator John Torgerson Senator Johnny Ellis MEMBERS ABSENT All members present COMMITTEE CALENDAR SENATE BILL NO. 24 "An Act relating to the adoption, amendment, repeal, legislative review, and judicial review of regulations; and amending Rule 202, Alaska Rules of Appellate Procedure." -HEARD AND HELD PREVIOUS SENATE COMMITTEE ACTION SB 24 - See Judiciary minutes dated 1-29-99. WITNESS REGISTER Ms. Deborah Behr Assistant Attorney General Legislation and Regulations Division Department of Law PO Box 110300 Juneau, AK 99801-0300 POSITION STATEMENT: Commented on SB 24 ACTION NARRATIVE TAPE 99-8, SIDE A Number 001 CHAIRMAN ROBIN TAYLOR called the Judiciary Committee meeting to order at 1:35 p.m. and announced the committee would consider SB 24 as the first and only order of business. SB 24-REGULATIONS: ADOPTION & JUDICIAL REVIEW SENATOR DAVE DONLEY, prime sponsor of SB 24, moved the committee adopt the new work draft marked 1-LS0274\H, dated 2-8-99. Without objection, it was so ordered. SENATOR DONLEY explained the changes incorporated into the new committee substitute: Section 3 states that a state agency may not adopt regulations that are different than the legislative intent of the statute under which they are being adopted. Section 4 additionally exempts the Department of Natural Resources and the Department of Corrections as well as State Boards and Commissions from the requirements of the bill. Section 5 requires any proposed action on regulations, including amendments, adoption or repeal of regulations, to be posted on the Internet. Number 060 SENATOR DONLEY moved to amend the committee substitute to include "Limited Entry Commission" after "Board of Fish" on page 3, line 31. SENATOR HALFORD objected, then withdrew his objection and so without objection, the committee substitute was amended. SENATOR DONLEY continued, explaining Section 8 exempts the Department of Natural Resources and State Boards and Commissions from the supplemental public notice requirements in the original bill. Section 12 imposes a time limit of two years on the implementation of regulations to comply with a new statute. If no regulations are adopted within two years, a department is required to submit a report to the Legislature explaining why. Section 14 sets, in most cases, a two-year time limit on administrative adjudication. Number 095 CHAIRMAN TAYLOR said that those people wishing to have regulations carried out are being coerced by the department to "play games". Two years is an exorbitant amount of time and he would like to see a standard of 6 months, as well as "some teeth" to enforce this provision. SENATOR DONLEY replied he is open to suggestions and merely proposed this as a reasonable starting point. Number 122 SENATOR TORGERSON asked why SENATOR DONLEY had proposed this idea versus an absolute time line. SENATOR DONLEY replied this is a step forward and "more than we have now". He would be willing to consider changes if the committee wants to do something stronger. However, it would be difficult to impose a penalty that prohibited a department from creating regulations after two years, considering they may have wanted to avoid the regulations in the first place. CHAIRMAN TAYLOR remarked "You could end up with an Administrative veto just by failure to do the regulations". SENATOR TORGERSON said that was his point, and perhaps this section is too broad. SENATOR DONLEY considered adding a requirement that the Commissioner of the department failing to adopt the regulations sign an affidavit stating the delay was beyond their control. SENATOR DONLEY insisted he is serious about enforcing compliance of this section but understands there are, on occasion, legitimate delays in the implementation of regulations. He remarked there is currently no deadline, and the only recourse to compel the adoption of regulations is a lawsuit. SENATOR TORGERSON reminded the committee they had requested from the Department Of Law an example of a typical time line of a new regulation. CHAIRMAN TAYLOR asked MS. DEBORAH BEHR if she had a response. MS. BEHR replied she sent a letter to the committee dated February 3, 1999. MS. BEHR explained the time line of a regulation depends on the complexity of a project; the minimum time, by statute, is sixty days. She has put regulations in place in sixty-one days but large, complex projects require more public comment and can take a long time. There is a "staleness rule" within the Department of Law that requires new public comment if a proposal is more than one year old. Number 207 SENATOR TORGERSON asked if MS. BEHR, taking into consideration the Legislature's frustration with delays, could suggest an alternative to the notice requirement of the department in Section 12. MS. BEHR emphasized she had received this new committee substitute only five minutes prior to speaking. She said, in her professional opinion, Section 12 already has substantial teeth. If the Administrative Procedures Act (APA) is not followed, a regulation can be voided. She indicated that under this provision, anyone who is dissatisfied with a regulation, even a regulation required by law and consistent with Legislative intent, can sue. Number 233 CHAIRMAN TAYLOR asked about a case in which it took years to agree on a regulation concerning solid waste but, due to a change in the administration, was never signed into law. CHAIRMAN TAYLOR remarked that it seems a garbage dump should have the same regulations under any administration. MS. BEHR said she would research this case but did know that both the federal government and Native law issues were involved. CHAIRMAN TAYLOR asked MS. BEHR for suggestions on how they could "firm up" Section 12. CHAIRMAN TAYLOR said he preferred a one-year deadline. He asked MS. BEHR if it was unusual that regulations would take two years to develop. MS. BEHR replied that the Department of Law already imposes a standard that requires new public comment on a project that has been noticed more than a year before. MS. BEHR stated that with the budget crisis and thinly stretched personnel in many departments, she is concerned with setting "hard and fast" time lines. She proposed that, due to the cost/benefit analysis and multiple rounds of public notice, the fiscal notes that agencies submit will be higher than those associated with the bill now. She concluded that the new requirements will require new personnel, and she is "not sure the money is around to do that". CHAIRMAN TAYLOR commented that the fiscal notes attached to the bill are "appalling." One department states, "The cost of performing the (cost/benefit) analysis would outweigh the benefits obtained from doing the analysis." CHAIRMAN TAYLOR said, "They will go out and collect a tax, even though the cost of collecting the tax loses money, and that they wouldn't want to know that...that seems odd to me." Number 333 SENATOR DONLEY mentioned another change to Section 4 that allows a commissioner to determine that the matter involved is so minor that the cost/benefit analysis is unnecessary. CHAIRMAN TAYLOR asked SENATOR DONLEY if this might be "an excuse frequently used". SENATOR DONLEY agreed it might, but maintained that the bill still represents a step forward. MS. BEHR made preliminary comments on the new committee substitute. She said SB 24 still has significant legal problems, as she testified to at the last hearing. She said she is available to work with the committee to come up with workable solutions that can be achieved within the State's current fiscal capabilities. MS. BEHR reported her continued concern with the ability of state agencies to obtain information from businesses, given our state's strong constitutional right to privacy. CHAIRMAN TAYLOR asked how the federal government obtains this information, and MS. BEHR replied she did not know. She suggested individual contractors may be needed to collect information. Number 344 MS. BEHR repeated her concern that regulations may be tested and overturned on the basis of an inadequate cost/benefit analysis. She noted the federal government has a provision that regulations cannot be voided simply on the basis of a cost/benefit analysis; SB 24 has no such provision. MS. BEHR argued this language is quite unusual and creates an unstable business climate. MS. BEHR said the inclusion of aesthetics and unquantifiable factors in the cost/benefit analysis requirement is confusing and would be difficult to argue in court. SENATOR DONLEY said he is beginning to see a pattern of continued criticism of this bill, even when suggested changes have been incorporated into it. He remarked he will continue to work on this bill. CHAIRMAN TAYLOR stated he understands MS. BEHR'S concern about possible obstruction of regulations, but said this is easily remedied by inserting an immunity provision. SENATOR DONLEY made a note of this. Number 379 SENATOR TORGERSON again suggested the committee look at the exemption given to the Department of Natural Resources (DNR). He thought DNR could be included, especially if the immunity clause is incorporated into the bill. SENATOR HALFORD remarked he has seen this issue stonewalled for 15 years. He suggested the true cure would be to change the core sections of the Administrative Procedures Act. He said the phrases "reasonably necessary" and "implied direction" in Sections 1 and 2 of the APA "give license to regulators to do whatever they please". He said under the current APA, the standard is so skewed against a challenge to a regulation, they can't win. He suggested that had they changed those two things in the authorization sections of the APA, they would have changed the balance of power in favor of private parties, and "we'd be a heck of a lot better off". SENATOR HALFORD stated his support for the intent of SB 24 and noted the APA has not been amended since 1959. He added, "Government has become far more aggressive from then to now". Number 418 SENATOR DONLEY appreciated SENATOR HALFORD'S suggestion, but predicted it would produce more opposition from the Administration in the form of multi-million dollar fiscal notes. He stated that he has tried to work with the Administration on this bill but, "When we take their suggestion, and then they criticize us for taking it, it seems unreasonable". DEBORAH BEHR reiterated that the bill has legal definition problems and she is willing to work with the committee on it. She noted that no other APA from any state contains the type of language proposed in SB 24. She offered to make some suggestions for improvement from the model Administrative Procedures Act. CHAIRMAN TAYLOR asked MS. BEHR if she could address the "root problem" raised by SENATOR HALFORD. MS. BEHR replied the deletion of "implied terms" would require legislative statutes to be more detailed and she, as regulations attorney, would have to reject all regulations not totally rooted in statute. She stressed that all typically standard changes not specified in the statute would have to wait until the Legislature was in session in order to be considered. Number 455 CHAIRMAN TAYLOR mentioned the Legislature currently spends a good deal of time correcting mistakes made in past legislation. He said SB 24 might take up some time, but "some of us get kind of frustrated with it after a while, that we can't seem to have any impact on those regulations". CHAIRMAN TAYLOR asked MS. BEHR how she treats legislative intent. MS. BEHR replied, when she is looking at statutes in order to determine the consistency of regulations, she looks at the language of the statute as well as any purpose or intent provided with the statute. CHAIRMAN TAYLOR asked if regulations would be restricted if the Legislature included more intent language with each statute. MS. BEHR replied that would be somewhat helpful, but under SENATOR HALFORD'S suggestion, a regulation could not be adopted unless it was applicable under the express terms of the statute. CHAIRMAN TAYLOR commented that last year Governor Knowles had vetoed the thirty pages of intent language that the Legislature had included with the budget. MS. BEHR replied appropriations bills do not generate regulations. Number 490 SENATOR TORGERSON asked MS. BEHR for an example of an emergency regulation and MS. BEHR cited the movement of a pilot station to a more appropriate location in the wake of the Exxon Valdez oil spill. MS. BEHR said an emergency regulation, which is rare, must be immediately necessary to preserve public safety. She clarified that an emergency order is different from an emergency regulation and is used by only a few departments, such as Fish and Game. SENATOR TORGERSON asked about the requirement that emergency regulations be adopted into permanent regulation within 120 days or are become void. MS. BEHR replied that the base language underlying that is current law and only technical, minor changes have been made in SB 24. SENATOR DONLEY asked CHAIRMAN TAYLOR if SB 24 could be heard again on Wednesday. CHAIRMAN TAYLOR assured him it could and SENATOR DONLEY said he would work on the bill in the meantime. CHAIRMAN TAYLOR asked if there was further testimony on SB 24. Hearing none, CHAIRMAN TAYLOR adjourned at 2:15 p.m.