SENATE JUDICIARY COMMITTEE February 22, 1999 1:33 p.m. MEMBERS PRESENT Senator Rick Halford, Vice-Chairman Senator Dave Donley Senator John Torgerson Senator Johnny Ellis MEMBERS ABSENT Senator Robin Taylor, Chairman COMMITTEE CALENDAR SENATE BILL NO. 11 "An Act relating to good time credits for prisoners serving sentences of imprisonment for certain murders, attempted murders, or conspiracies to commit murder." -MOVED CSSB 11(JUD) OUT OF COMMITTEE 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." -MOVED CSSB 24(JUD) OUT OF COMMITTEE PREVIOUS SENATE COMMITTEE ACTION SB 11 - See Judiciary Committee minutes dated 2-17-99 and 2-22-99. SB 24 - See Judiciary minutes dated 1-27-99, 2-8-99 and 2-22-99. WITNESS REGISTER Ms. Deborah Behr Assistant Attorney General Legislation and Regulations Division Department of Law PO Box 110300 Juneau, AK 99801-0300 POSITION STATEMENT: Opposed SB 24 Ms. Teresa Williams Assistant Attorney General Fair Business Practices Section Department of Law 1031 West 4th Ave. suite 200 Anchorage, AK 99501-1994 POSITION STATEMENT: Opposed SB 24 ACTION NARRATIVE TAPE 99-11, SIDE A Number 001 VICE-CHAIRMAN RICK HALFORD called the Judiciary Committee meeting to order at 1:33 and announced SB 11 would be the first order of business. SB 11 - PRISON TIME CREDITS FOR MURDERERS SENATOR DAVE DONLEY, prime sponsor of SB 11, reminded the committee that SB 11 reduces the amount of good time sentence reduction a person can be awarded. The original version of the bill included a reduction for crimes other than first and second degree murder, but the proposed committee substitute limits the application of the good time reduction to people convicted of first and second degree murder only. SENATOR DONLEY suggested there is a distinction between people who attempt and/or conspire to commit murder and those who actually do it. Number 030 SENATOR DONLEY moved the adoption of CSSB 11(JUD). Without objection, the committee substitute was adopted. SENATOR DONLEY stated the committee had already taken public testimony on the bill and there was no one else wishing to testify at this time. SENATOR DONLEY moved CSSB 11(JUD) from committee with individual recommendations and accompanying fiscal notes. Without objection, it was so ordered, and CSSB 11(JUD) moved from committee. VICE-CHAIRMAN HALFORD indicated SB 24 would be the next order of business. SB 24-REGULATIONS: ADOPTION & JUDICIAL REVIEW SENATOR DONLEY, prime sponsor of SB 24, reminded the committee they had already heard this bill three times. He indicated the Administration offered to work with his staff on this bill and had, although they are still not happy with it. He presented a new work draft that incorporates some of the changes proposed in the last hearing. The work draft deletes the section relating to the Administrative Regulation Review Committee (ARRC), as what it encompassed is already within the powers of the ARRC. SENATOR DONLEY also stated that people cannot use a deficient cost/benefit analysis or inadequate public notification to halt or negate the implementation of new regulations. Number 090 SENATOR DONLEY moved the adoption of CSSB 24(JUD). Without objection, the committee substitute was adopted. SENATOR DONLEY explained he also had an amendment to the committee substitute. The amendment excludes the Board of Fisheries, the Board of Game, and the Commercial Fisheries Limited Entry Commission. SENATOR DONLEY said these groups were excluded from the original bill and were never meant to be included. SENATOR DONLEY moved amendment #1, which read: Page 3, Line 2; Amend subsection (g) to read: (g) In this section, (1) "adopting state agency head" means the governor if the state agency is the Office of the Governor, or the commissioner of the department within which the state agency is located; (2) "state agency" does not include the Board of Fisheries, the Board of Game, or the Alaska Commercial Fisheries Entry Commission. SENATOR TORGERSON objected, to ask about the section dealing with emergency regulations. SENATOR DONLEY replied there is a general exception for emergency requirements in section 10. SENATOR HALFORD asked if the bill contained the current standard for emergency regulations and SENATOR DONLEY replied that SB 24 adopts a new standard, but exempts emergency regulations. SENATOR HALFORD clarified that the time line for emergency regulations maintains what is in current law. SENATOR DONLEY said it does, and he was not trying to affect the emergency regulations process. Number 140 SENATOR TORGERSON removed his objection. And so, without objection, Amendment #1 was adopted. MS. DEBORAH BEHR, Regulations Attorney for Alaska and an Assistant Attorney General for the Department of Law, confirmed she had met with SENATOR DONLEY and his staff to work on SB 24 and they still disagree about it. She proposed that the fiscal notes associated with this new committee substitute will be higher due to the new functions added into the bill. MS. BEHR said SB 24 dramatically changes the regulations process and the administrative adjudication process, and throws out 40 years of case law, opening the state to more litigation. MS. BEHR proposed that the bill will result in a less stable and predictable business environment. The bill changes the required standard of a regulation from "reasonably necessary" to "clearly necessary" and will likely result in new court tests to many regulations, even those previously seen as routine and not worth a court test. MS. BEHR stated, "I frankly don't know what the court is going to do with routine regulations of state government." MS. BEHR explained the bill adds key terms with no definitions, another area open to litigation with little clear legislative intent. She said the terms "cost," "benefit," and "clearly necessary" are examples of undefined terms. She stated the bill will set up an environment for litigation that is not helpful for business. MS. BEHR remarked the bill enlarges the existing bureaucracy in a time of budget shortages, and creates additional notice requirements and public meetings and costs associated with them. According to MS. BEHR, SB 24 would require another round of public comment for any change to a regulation, even changes to which all parties agree. MS. BEHR reported SB 24 has unintended impacts on health and safety procedures and will require, for example, the Department of Public Safety to show a cost/benefit analysis supporting sex offender registration. MS. BEHR concluded, "I'm not sure that that's something that you necessarily want to spend public money to do." MS. BEHR stated there is also a problem with incomplete exemptions throughout the bill. She mentioned that the Department of Corrections is exempted from certain sections of the bill but included in others. She suggested this might lead to unhappy prisoners "using this to get him/herself out of a situation." MS. BEHR insisted that, "The bottom line is that this bill is a handy target for litigation and I'm not sure this is the way we want to go . . . " Number 244 MS. BEHR reviewed the changes made in the new version of the bill. First, section 2 changes the standard regulations must meet from "reasonably necessary" to "clearly necessary." She said, in many cases, this standard will be hard to meet in a court challenge and could result in the court voiding regulations that are reasonable. Next, section 3 mandates that new regulations must not change the intent of the statute they reference. MS. BEHR expressed concern that the legislative intent behind statutes is difficult to interpret, especially when it regards things such as new technology not envisioned at the time of the passage of the statute. Under SB 24, MS. BEHR is not certain how this type of thing would be addressed. She said this is particularly important to business, with the constant evolution of business technology. She acknowledged the burden is on the person challenging the statute, but remarked, "I don't know what the court would do with a statute when it clearly could not have been the intent of the Legislature, because it didn't exist." MS. BEHR suggested possible solutions to the problems that section 3 attempts to address might include tighter statutes, a better paper record of legislative intent, and a more active Administrative Regulation Review Committee (ARRC). Another concern expressed by MS. BEHR regarded the cost/benefit analysis required by section 4 of SB 24, and its potential impact on business. She maintained that cost and benefits are difficult to measure in certain instances and this bill will open the State up to litigation. MS. BEHR also expressed concern that this bill might prevent a commissioner from privatizing any state services. SENATOR HALFORD asked if a cost/benefit analysis would have to be done for "regulating of what the statute requires, or for a particular twist in the regulation . . . clearly the statute is self-fulfilling on it's face." MS. BEHR agreed, but said details would be subject to a cost/benefit analysis. She suggested the cost/benefit requirement be reserved for large projects only, and although SB 24 exempts small projects, it still encompasses "middle-of-the-road state government projects." MS. BEHR also proposed exempting health and safety requirements from SB 24. Number 320 SENATOR TORGERSON remarked that anyone listening to MS. BEHR might think nothing could ever happen under SB 24. While in fact, what would happen is departments would have to come to the Legislature and request legislation. MS. BEHR agreed, but said the Legislature is not always in session to deal with things that arise. SENATOR TORGERSON replied, "So you put it off a year 'til the Legislature has an opportunity to deal with it . . . a lot of these things the Legislature should deal with, I mean, that's half of the problem we have here . . . " SENATOR HALFORD agreed. MS. BEHR continued her analysis of SB 24. Section 8 requires another round of public comment if there is significant change in the substance of a regulation. This seems reasonable, but MS. BEHR reported that, typically, these changes originate from public comment or from legal concerns of the Department of Law. As written, the bill contains no limit to the number of costly rounds of public comment that would occur. MS. BEHR emphasized the costs of public comment hearings as well as the expense of additional meetings of boards and Commissions to consider public comments. MS. BEHR expressed concern that seasonal regulations might be delayed and suggested the committee give a waiver to small businesses. She also suggested the ARRC committee be more active, departments put regulations and proposals on the Internet, and public comment be limited to one round. Number 394 SENATOR TORGERSON asked, in the case of a seasonal time crunch, what would prevent "filing the reg they have and then creating another reg for the new, great idea that came in so it wouldn't shut down the construction season." MS. BEHR replied this may not work in all situations and, "I would hate to have a commissioner adopt a regulation that he thought was not appropriate . . . I don't necessarily think that is a good idea." SENATOR DONLEY commented that he does not really want commissioners incorporating last minute "great ideas." If such ideas are necessary, they can be implemented by emergency regulation and finalized later. Number 420 DEBORAH BEHR explained that section 12 of SB 24 is new and requires that new regulations be adopted within two years of the passage of the enabling statute. MS. BEHR contended that two years may not be appropriate in exceptional cases, and this bill provides no "escape hatch" for responding by regulation to court decisions asking for definitions of key concepts in contested statutes. SENATOR HALFORD implied that the court specifically allowed that in its decision. MS. BEHR noted, "The courts are reluctant to legislate." SENATOR HALFORD retorted, "They are?" Number 455 SENATOR DONLEY said the Legislature can file a writ of mandamus to force the adoption of new regulations. MS. BEHR insisted this will not work in all situations and could be inadequate in cases where the statute has been on the books for more than two years without the adoption of regulations. SENATOR DONLEY said this is a new, different argument and he would work on addressing this concern in the process. DEBORAH BEHR explained section 13 changes the presumption of validity of a regulation and says a court cannot uphold a regulation unless it is the least intrusive on rights of property or it serves a substantial state interest. The bill contains no definition of "substantial state interest," so MS. BEHR said the court "will have to figure out what that means." She suggested one problem that might arise from this standard is whether to use the best scientific way to do something versus the least intrusive way. The substantial state interest standard, along with the presumption of invalidity, will make it difficult for even reasonable approaches that are good public policy to meet this standard. MS. BEHR said although the bill prohibits a temporary restraining order or an injunction, a person could still get a declaratory injunction under SB 24. Number 504 MS. TERESA WILLIAMS, representing the Department of Law, addressed the issue of administrative adjudication. MS. WILLIAMS said now, when a challenge to a regulation is brought under the Administrative Procedures Act (APA), the Governor's office appoints a hearing officer. Generally, a board or commission is the final decision maker, and the hearing officer only hears the case and issues a proposed decision. The board or commission can accept the decision, remand it, or call for the record and make its own decision. SB 24 institutes a 60-day deadline on the issuance of a final decision in such cases and, according to MS. WILLIAMS, "that time line is impossible . . . even if the person making the final decision is a single person. It is clearly untenable for a board or commission." MS. WILLIAMS said hearing officers often request that the parties involved submit proposed findings and conclusions, or send drafts of proposed decisions to the parties for review and rebuttal. She said this process enhances the final decision but, due to the fact that hearing officers are private attorneys with their own case loads, this process takes time. To convene a public meeting of a Board or Commission, assemble a quorum of private citizens, give advance public notice, and give members time to deliberate over the information presented in the case could not happen. MS. WILLIAMS also argued that, though most hearings are completed within two years, those delayed are delayed mostly at the request of the respondent. Another reason for lengthy delays is parallel criminal or civil proceedings. In cases such as this, the Commission often relies on the findings from the case for its own decision and saves a lot of its own time and money. MS. WILLIAMS said these problems and others keep some administrative proceedings from being completed within two, or even four years and would require the issue to be taken up again from the beginning at the Supreme Court level. Number 592 MS. WILLIAMS also expressed concern that SB 24 "really takes away the final decision making authority from the department and gives it to this single hearing officer . . . " TAPE 99-11, SIDE B Number 594 MS. WILLIAMS asserted the process proposed in SB 24 gives too much power to hearing officers with their own agenda, and with no public accountability. She argued that transferring these cases back to the court will end up taking longer as the process starts over and the court is educated about any technical aspects of a particular case. In conclusion, MS. WILLIAMS said this legislation seems to be directed at a particular problem and is "way too wide in scope to be effective." She said the APA currently allows for court intervention to compel agency action. SENATOR DONLEY asked why agencies cannot set time lines for hearing officers. MS. WILLIAMS said that is done, but the hearing officers do not always comply. The governor's office is advised when a hearing officer fails to meet a deadline. SENATOR TORGERSON asked the normal time line for the adjudication process. MS. WILLIAMS replied it averages about 18 months for a straightforward case. SENATOR TORGERSON suggested if the hearing officers were not paid unless they kept their time line, and if respondents were held to the same standard, there would be fewer delays. MS. WILLIAMS commented, "we have refused to pay hearing officers who have gone past the deadline," but there is no incentive in SB 24 for quick action by the respondents. Number 514 SENATOR TORGERSON said it would be a matter of a simple amendment to exempt cases that have ongoing parallel court action. SENATOR DONLEY suggested they could change the bill to impose the time limit on the proposed decision, rather than the final decision and add thirty days for the final decision. TERESA WILLIAMS said the problem with that is Boards and Commissions cannot usually convene within thirty days. SENATOR DONLEY said he could insert an exemption for Boards and Commissions. SENATOR HALFORD commented there are 21 fiscal notes included with this bill and it appears that SENATOR DONLEY "has reached out and touched someone." He concluded that the goal is right on target, though some exemptions might make sense. Number 475 SENATOR DONLEY said he would like to continue to work with the Administration on this bill. SENATOR DONLEY moved CSSB 24(JUD) from committee with individual recommendations and the accompanying fiscal notes. SENATOR ELLIS objected, saying the bill needs more work that should be done in the Judiciary Committee, not the Finance Committee. The roll was taken on the motion. Voting yea: SENATOR DONLEY, SENATOR HALFORD and SENATOR TORGERSON. Voting nay: SENATOR ELLIS, and so CSSB 24(JUD) moved from committee. With nothing else to come before the committee, VICE-CHAIRMAN HALFORD adjourned at 2:33 p.m.