Legislature(2017 - 2018)BARNES 124
03/01/2017 03:15 PM House LABOR & COMMERCE
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| HB121 | |
| HB114 | |
| HB90 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 90 | TELECONFERENCED | |
| += | HB 79 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 114 | TELECONFERENCED | |
| += | HB 121 | TELECONFERENCED | |
HB 90-OCC. LICENSING FEES; INVESTIGATION COSTS
3:26:24 PM
CHAIR KITO announced that the final order of business would be
HOUSE BILL NO. 90, "An Act relating to occupational licensing
fees; relating to an occupational investigation surcharge; and
providing for an effective date."
3:27:02 PM
CHRYSTAL KOENEMAN, Staff, Representative Sam Kito, Alaska State
Legislature, presented HB 90 on behalf of Representative Kito,
prime sponsor. She stated that HB 90 would spread the total
investigation surcharge across all licensees, regardless of
profession. The proposed investigative surcharge replace the
amount that the licensees currently pay in their overall license
fee. She noted that the bill would have no impact on any
deficits among the various boards; she remarked, "Those boards
will still be required to pay off that deficit." She added that
the department has stated that HB 90 would not impact the
investigations: under HB 90, there would be no increase in
investigations and there would be no diminishment of service.
3:28:07 PM
REPRESENTATIVE JOSEPHSON asked what the administration's
response is to the proposed bill.
3:28:29 PM
JANEY HOVENDEN, Director, Division of Corporations, Businesses,
and Professional Licensing (DCBPL), Department of Commerce,
Community & Economic Development (DCCED), stated that the
administration has no position on HB 90, although many boards
have weighed in and awaited a solution to the volatility in
investigative costs. She noted that some boards have submitted
their position.
REPRESENTATIVE JOSEPHSON asked Ms. Koeneman if HB 90 is "the
grand solution that we've been looking for."
3:29:36 PM
MS. KOENEMAN answered, "I hope so." She expressed that she has
worked on this issue for seven years and there have been many
different proposals over the years. Some of the proposals would
have utilized the General Fund which is not "palatable" given
the state's current fiscal situation.
3:30:18 PM
REPRESENTATIVE STUTES noted her support of the bill because in
the past, boards have had difficulties and the department has
had issues with proper accounting. She said, "I'm not trying to
cast any dispersions currently. ... My thought is this may be a
wider overview so things won't go so far before they're brought
back around."
3:31:22 PM
REPRESENTATIVE BIRCH noted that in 2010-2011 the investigative
budget was $6.8 million, in 2012-2013 it was $7.5 million, in
2014-2015 it was $8.3 million, and in 2016-2017 it is estimated
to be over $9 million. He characterized this as significant
growth. He mentioned that the main cost driver seems to be the
investigative work. He asked how the investigators are managed.
He asked, "How do you get to a point where you don't need any
investigators, where everybody is doing what they are supposed
to be doing?"
3:32:51 PM
ANGELA BIRT, Chief Investigator, Anchorage Office, Division of
Corporations, Businesses, and Professional Licensing (DCBPL),
Department of Commerce, Community & Economic Development
(DCCED), responded that the 22 investigative staff members
engage in positive timekeeping and support 43 licensed
professions with 21 sitting boards. She explained that two
staff members were added last year under Senate Bill 74. She
explained that some staff members are dedicated to certain
programs because these programs have enough of a workload and
other staff members work on an as-needed basis during surge
times, such as biennial license renewals. Renewals require
reviewing applications because under statute, any "yes" answer
to a professional fitness question has to have an investigative
review. She remarked:
I, like you, would prefer that we get to a point where
people do not have to endure investigations, but
unfortunately we do have some consumers that have bad
experiences and the investigative staff provides them
with an opportunity to redress those and talk with
both sides to determine whether or not a violation of
the law has occurred.
MS. BIRT informed the committee that the investigative staff
keeps track of time to the quarter hour and charges the
particular program for the time spent supporting it. The costs
vary significantly between programs.
3:34:30 PM
REPRESENTATIVE BIRCH asked if the complaints are public. He
asked how the investigative staff directs its energy and effort
in responding to a criticism or initiating an investigation.
MS. BIRT answered that the primary driver of investigations is
consumer complaints. She explained, "We triage those based on
the severity of the complaint and the potential for public
harm." She expressed that reports of doctors overprescribing
medications are an example of high-visibility, high-priority
investigations. Some complaints driven by customer
dissatisfaction are investigated and often do not involve a
violation of the law. She remarked:
For instance, if you contract to come up here and go
big game hunting and you don't get a sheep, that
doesn't necessarily mean that your guide did anything
wrong. When we receive a complaint we do need to look
into it, we do need to solicit the input from the
person who is licensed and ask them what happened, and
that does take time and effort on the investigators to
collect all the materials in order to provide a full
and fair inquiry.
MS. BIRT explained that in many investigations involving the
health care industry, investigators must collect medical records
from before, during, and after treatment to determine whether or
not the treatment was appropriate. She noted that consumer
complaints are the most common; complaints from facilities who
let licensed staff go due to mental, behavioral, or substance
problems are the highest priority. Other complaints include
inconsistencies in applications or falsified applications for
licensure. She remarked, "In order to make the best decision
about whether or not a person is safe to practice in Alaska and
should be given a license, the boards rely on us to collect the
information to make their decisions."
3:37:25 PM
REPRESENTATIVE BIRCH asked if the complaints are recorded and
allocated to the 43 professions and 21 sitting boards. He asked
where the bulk of the resources are going.
MS. BIRT responded, "The primary drivers of our complaints are
based on the licensee base." She noted that there are over
16,000 practicing nurses, which is about a third of the licensed
professionals in the state, and two investigators are designated
to that program because of the volume. Other investigators have
responsibility for up to 10 programs with small licensing bases.
She commented that some sectors receive few complaints and other
sectors get many. She remarked, "Some sectors are extremely
litigious, so we have less opportunity to resolve these without
going into a hearing, which increases cost."
3:39:09 PM
REPRESENTATIVE JOSEPHSON pointed out that a schedule of revenue
and expenditures dated October 27, 2016, [included in the
committee packet] shows a budget of about $11 million, which
came almost entirely from the licensees themselves. He
remarked, "So we see an increase in the budget, but it's all
self-funded, except for this $12,000."
3:39:52 PM
MS. HOVENDEN responded, "That's correct."
REPRESENTATIVE JOSEPHSON mentioned that the number of licensees
has grown by 20,000 in the last six or seven years. He asked
whether more people asking to be licensed demonstrates that
there is more money in the economy, that people are getting
insurance claims filed more easily, and that there is more
confidence in each industry.
MS. HOVENDEN answered yes. She added that the department has
added some licensing programs and has seen an increase of
licensing in the existing programs.
3:40:48 PM
REPRESENTATIVE WOOL pointed out that the proposed surcharge is
estimated at $55, which he stated is "a pretty good deal." He
noted that the surcharge would slightly increase some
[licensees'] payments and would save others a large amount. He
drew attention to the current fee of $3,800 for midwives'
licensing. He remarked, "Now the investigative portion would be
55, and I understand there is old debt that needs to be paid
off." He stated that the current investigative costs per
licensee was $639 for midwives and $776 for naturopaths, and
both groups have roughly the same amount of licensees. He asked
if old debt is the reason midwives' current licensing fee is so
high.
3:42:35 PM
MS. KOENEMAN answered that the high fee is the result of two
things: paying off debt of prior investigations and spreading
the costs among few licensees.
REPRESENTATIVE WOOL asked whether requiring all licensees to pay
a $55 investigative charge in addition to licensing fees would
encourage more investigations: There would be no incentive for
any group to "keep an eye on its members" if investigative costs
were distributed among 74,000 licensees.
3:43:55 PM
MS. HOVENDEN offered her opinion that a flat fee would not
affect the amount of investigations. The cost of an
investigation shouldn't impact whether or not an investigation
is pursued or the validity of an investigation.
3:44:35 PM
CHAIR KITO offered his understanding that Representative Wool is
concerned that changing the funding methodology would change the
amount of investigations that occur. He expressed that there is
a kind of firewall in place: the investigations start by
complaints from individuals or members of the board and such
complaints would not be affected by a change in the cost
structure.
3:45:29 PM
REPRESENTATIVE KNOPP stated that he does not like the bill. He
remarked, "I think I just heard her say that all investigations
should be pursued regardless of costs." He explained that
boards are created to regulate an industry and control costs.
He said that there is no incentive for a board to control its
activities and costs when costs are spread without individual
board responsibility. He pointed out that investigative costs
vary greatly by profession. He offered his opinion that
spreading the cost is not the appropriate way to go and that HB
90 wouldn't fix the problem. He offered that it would be better
to let the boards discuss how to control costs with
individualized responsibility.
3:47:37 PM
CHAIR KITO, after ascertaining that there was no one who wished
to testify, closed public testimony on HB 90.
3:47:47 PM
REPRESENTATIVE WOOL commented that he understands Representative
Knopp's concern. He pointed out that investigative costs also
include pursuing non-licensed individuals, and those costs are
largely borne by the responsible, [licensed] individuals. He
expressed that HB 90 would help disperse that situation.
3:48:43 PM
REPRESENTATIVE BIRCH observed that the Board of Massage
Therapists had 756 licensees and spent $879 in investigations in
2014 and 2015, which amounted to about a dollar per person. He
said he agrees with Representative Knopp. He noted that there
is a $622 cost with every Euthanasia licensee. He stated, "If
you get a permit and there's a $6,000 charge, I'm ok with that
because it seems like it's a cost-causer, cost-payer." He
expressed that he likes the current system, which maps out
"what's going on."
3:50:17 PM
CHAIR KITO maintained that HB 90 would resolve one issue:
investigations are not equitable across boards. This disparity
leads to boards with fewer members having higher investigative
costs, and those with large membership end up with lower costs;
however, the department is asked to provide the same amount of
safety and security to all boards. He remarked that it seemed
worthwhile to him to spread the costs among the professions
because the investigators are available to support all of the
boards.
3:51:02 PM
REPRESENTATIVE JOSEPHSON stated his support for HB 90, although
he remarked that it is not a perfect solution. He said, "Part
of the reason I'm comfortable with this bill is because it's
$55." He characterized that such a fee would be a well-spent
form of insurance: Board membership and licensing costs could
be subject to hikes because of bad actors; therefore he called
the bill "a victory for 75,000 people." He expressed that the
issue has been discussed for many years and it is unfair to say
that one profession should be subject to massive fees and
licensure expenditures when a solution like HB 90 is available.
3:52:42 PM
REPRESENTATIVE WOOL moved to report HB 90 out of committee with
individual recommendations and the accompanying fiscal notes.
3:53:03 PM
REPRESENTATIVE KNOPP objected.
3:53:07 PM
A roll call vote was taken. Representatives Stutes, Josephson,
Wool, and Kito voted in favor of HB 90. Representatives Knopp,
Sullivan-Leonard, and Birch voted against it. Therefore, HB 90
was reported out of the House Labor and Commerce Standing
Committee by a vote of 4-3.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB090 Supporting Documents - Letters of Support 2.28.17.pdf |
HL&C 3/1/2017 3:15:00 PM |
HB 90 |
| HB090 Supporting Documents - Letters of Opposition 2.28.17.pdf |
HL&C 3/1/2017 3:15:00 PM |
HB 90 |
| HB090 Supporting Document - CBPL Program Fees and Investigation Cost Comparison 2.28.17.pdf |
HL&C 3/1/2017 3:15:00 PM |
HB 90 |