02/13/2018 01:30 PM House FINANCE

HOUSE BILL NO. 273                                                                                                            
                                                                                                                                
     "An Act extending the termination date of the                                                                              
     Marijuana Control Board; and providing for an                                                                              
     effective date."                                                                                                           
                                                                                                                                
2:39:44 PM                                                                                                                    
                                                                                                                                
Co-Chair  Foster  noted the  bill  had  last been  heard  on                                                                    
February  6, 2018  and had  closed public  testimony on  the                                                                    
same date.                                                                                                                      
                                                                                                                                
CRYSTAL KOENEMAN,  STAFF, REPRESENTATIVE SAM  KITO, provided                                                                    
a  brief  description of  the  legislation.  The bill  would                                                                    
extend the board  six years. She believed  the members' bill                                                                    
files  contained a  letter from  Erika McConnell,  Executive                                                                    
Director, Alcohol  and Marijuana Control Office  (AMCO) with                                                                    
answers  to  committee  members  questions  from  the  prior                                                                    
meeting.                                                                                                                        
                                                                                                                                
Representative  Wilson had  been disappointed  the committee                                                                    
had  not heard  from  the Alcohol  Beverage  Control   Board                                                                    
(ABC).  She  asked  to  delay   the  bill  to  allow  for  a                                                                    
discussion with  both boards to  understand how  they worked                                                                    
under AMCO. She stated the information had been confusing.                                                                      
                                                                                                                                
Co-Chair Foster asked if there  were any other comments from                                                                    
committee members on the issue.                                                                                                 
                                                                                                                                
Representative   Kawasaki   agreed  there   were   lingering                                                                    
questions.  He  recounted  that AMCO  had  been  created  to                                                                    
create efficiencies. He thought  that there were some issues                                                                    
that needed to be examined further.                                                                                             
                                                                                                                                
2:42:32 PM                                                                                                                    
                                                                                                                                
Ms. Koeneman  did not  believe there  would be  an objection                                                                    
from  the  sponsor.  She  understood   that  the  ABC  board                                                                    
extension bill was set to report  out of the House Labor and                                                                    
Commerce Committee shortly.                                                                                                     
                                                                                                                                
Representative Kawasaki requested  the following information                                                                    
be  addressed the  next time  the bill  was heard.  He asked                                                                    
about the startup general fund  (GF) money for the marijuana                                                                    
board and how the funds  would be recovered through fees. He                                                                    
requested   further  analysis   on  the   marijuana  board's                                                                    
application  process. Finally,  he wondered  how AMCO  split                                                                    
enforcement between  both boards  and who made  the staffing                                                                    
decisions regarding enforcement duties.                                                                                         
                                                                                                                                
2:45:09 PM                                                                                                                    
                                                                                                                                
Representative Wilson  asked to hear from  the department on                                                                    
whether it was able to recoup  the costs from all the boards                                                                    
in general.                                                                                                                     
                                                                                                                                
Vice-Chair Gara wanted  to know why it would  be another two                                                                    
years before  fees would  cover the  costs of  operating the                                                                    
marijuana board.                                                                                                                
                                                                                                                                
Representative Wilson  asked why audits were  covered by the                                                                    
legislature. She thought boards  would be more serious about                                                                    
addressing the  recommendations if they covered  the audit's                                                                    
cost. She  noted that the  cost of one particular  audit was                                                                    
$40,000.  She wanted  to know  why the  legislature did  not                                                                    
charge the audit costs back to the boards.                                                                                      
                                                                                                                                
2:48:01 PM                                                                                                                    
                                                                                                                                
Ms. Curtis  answered that  she had put  some thought  into a                                                                    
memorandum she had  sent regarding the cost  of a particular                                                                    
audit. She further explained that  main purpose of the audit                                                                    
staff  was to  complete the  Comprehensive Annual  Financial                                                                    
Report  (CAFR) and  the  single audit  each  year. When  the                                                                    
division  was  not doing  the  specific  CAFR work  auditors                                                                    
turned to  other statutorily required  audits and  the audit                                                                    
requests  approved  by  the  Legislative  Budget  and  Audit                                                                    
Committee  (LBA).   She  maintained   that  there   were  no                                                                    
additional  costs  to  the  agency  for  other  audits;  the                                                                    
division  still  needed  the  same  number  of  auditors  to                                                                    
perform  the single  and  CAFR audits.  She  added that  the                                                                    
sunset audits were done with  excess resources during slower                                                                    
months.  She  characterized  it   as  an  opportunity  costs                                                                    
because there were  other special audits that  also could be                                                                    
done  outside the  sunset process  like  performance or  LBA                                                                    
audits.                                                                                                                         
                                                                                                                                
Representative Wilson clarified that  she was not looking to                                                                    
cut  the  division's  budget.  She   was  merely  trying  to                                                                    
determine  why  the   audits  had  been  paid   for  by  the                                                                    
legislature.                                                                                                                    
                                                                                                                                
HB 273 was HEARD and HELD in committee for further                                                                              
consideration.                                                                                                                  
                                                                                                                                
Co-Chair Foster reviewed the schedule for the following                                                                         
day.