Legislature(2017 - 2018)ADAMS ROOM 519
02/27/2018 09:00 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB96 | |
| HB273 | |
| HB267 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 96 | TELECONFERENCED | |
| += | HB 273 | TELECONFERENCED | |
| += | HB 299 | TELECONFERENCED | |
| + | HB 267 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 273
"An Act extending the termination date of the
Marijuana Control Board; and providing for an
effective date."
9:13:05 AM
CRYSTAL KOENEMAN, STAFF, REPRESENTATIVE SAM KITO, thanked
the committee and relayed Representative Kito's apologies
for his absence. The bill would extend the Marijuana
Control Board for six years. She appreciated the time the
committee took to address issues raised in the audit. She
noted the licensing program and industry were new.
Vice-Chair Gara noted that Representative Wilson had asked
in a previous meeting what could be done to get General
Fund (GF) money back [that had been used to get the program
running] that would have been paid by license fees if the
industry had been up and running. He asked for detail.
Ms. Koeneman referenced discussion about the $1.5 million
[in state funds] used to help startup the program so the
initial licensees were not burdened with additional costs.
She did not believe there was any issue from the industry
or the board to have the money paid back. She explained
that the money could not be contained in the fiscal note.
She noted it was possible for the House Finance Committee
to put intent language in the language section of the
operating budget.
Representative Wilson stated that all of the money
currently generated went there [to the General Fund]. She
stated that revenue was tracked for other boards. She
surmised the industry had probably started paying the money
back. She stated that all of the taxes earned on revenue
businesses made went into the General Fund, but it was not
necessarily tracked separately. She wanted to make sure the
industry was paying its way and remarked that it was not
tracked the same as other boards. They had to make sure
whatever came in went out.
9:15:58 AM
Co-Chair Foster listed other individuals available for
questions. He asked the Department of Commerce, Community
and Economic Development (DCCED) to address the fiscal
note.
ERIKA MCCONNELL, DIRECTOR, ALCOHOL AND MARIJUANA CONTROL
OFFICE, DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC
DEVELOPMENT (via teleconference), reviewed the fiscal
impact note from DCCED. The note illustrated that if the
board was discontinued, the Alcohol and Marijuana Control
Office (AMCO) would eliminate eight positions and the
associated costs of approximately $1.66 million. The
positions included three investigators, one records and
licensing supervisor, two occupational licensing examiners,
one administrative assistant I, and one criminal justice
technician I.
Representative Wilson asked how AMCO planned on making up
the $532,800 in the current budget that it would not be
receiving in the following year. She wondered how many more
licenses the agency would need. Alternatively, she
questioned whether the agency would be close to having the
same $1.6 million at the end of FY 19.
Ms. McConnell answered that the board continued to receive
new license applications. It was difficult to specify the
precise number of needed licensees to maintain self-
sufficiency. She expounded that the different license types
submitted different licensing fees. The board was on track
to becoming self-sufficient in FY 20 or soon thereafter.
The board felt confident that ending state unrestricted
general fund (UGF) support was acceptable in FY 20 with the
board evaluation of licensing fees at that time.
Representative Wilson asked for verification that the board
counted on licensing fees to hire positions. Whereas,
marijuana taxes went through DOR to the General Fund. She
surmised the board was not involved in tracking tax
revenue.
Ms. McConnell answered in the affirmative. The board
received licensing and application fees but did not receive
any support from marijuana taxes.
Vice-Chair Gara referenced that the state had been paying
for the board's operation costs with GF and marijuana tax
revenue. He asked if the board intended to reimburse the
state.
Ms. McConnell replied in the affirmative.
Vice-Chair Gara surmised the reimbursement to the state
would come from surplus or increased license fees in future
years.
Ms. McConnell answered it would be a combination of more
licenses and an evaluation of whether license fees needed
to be adjusted. The board was clear on the legislative
intent that the money would be repaid.
9:20:29 AM
Co-Chair Seaton asked if the department believed there was
adequate legislative intent that the fees would not be
reduced to pay the direct cost only of the operating board
until the money had been repaid to the GF. He wondered if
there needed to be more specific legislative intent to
allow the collection and use of fees to cover past
operations. He asked whether the board had authority to use
excess fees to repay GF.
Ms. McConnell responded there had been clear legislative
intent in FY 17 that the legislature wanted the $1.5
million to be repaid. At the same time, the board had been
authorized to repay any excess dollars as carry forward to
help stabilize the board's revenue for the next couple of
years. She did not have the experience to know whether it
was appropriate to recommend for the legislature to add
intent language in the FY 19 budget. She believed the
legislature's intent was clear and the board would be
working over the next several years to repay the startup
costs. She communicated that the board was amenable to the
addition of intent language in the operating budget if the
legislature felt it appropriate to do so.
9:22:54 AM
Representative Guttenberg asked if the board's reading of
the intent of the legislation that the board would pay back
the startup costs with fees. Ms. McConnell replied in the
affirmative.
Co-Chair Seaton MOVED to REPORT HB 273 out of committee
with individual recommendations and the accompanying fiscal
note. There being NO OBJECTION, it was so ordered.
HB 273 was REPORTED out of committee with a "do pass"
recommendation and with one new fiscal impact note from the
Department of Commerce, Community and Economic Development.
[Note: additional discussion on HB 273 took place after the
following "at ease."]
9:24:17 AM
AT EASE
9:28:44 AM
RECONVENED
Co-Chair Seaton made clarifying remarks to HB 273. He noted
the committee had been advised there should be a language
amendment in the budget describing the legislature's
intent. He noted there had been two different amounts
mentioned in terms of what the board would repay the
General Fund. He asked the Legislative Finance Division to
address the committee on the subject.
LACEY SANDERS, ANALYST, LEGISLATIVE FINANCE DIVISION,
relayed that AMCO had received several years of
appropriations. The initial appropriation had been a
supplemental made in FY 15. Each year after that AMCO had
received GF. She noted that earlier in the meeting it had
been stated there was a $1.5 million repayment of GF. She
clarified that the total GF received from FY 15 through the
FY 19 governor's proposed budget was $5.4 million. If some
type of language was added to the operating budget, there
would need to be clarification on which amount needed to be
repaid. There had been conversation about how it could be
done - one way to address the issue was to amend the carry
forward language allowing AMCO to carry forward the
receipts. The carry forward language had been included to
allow AMCO to ramp up as it brought on licensees. The
language could be amended to limit the amount to the amount
of the board's annual operating budget. She explained the
change would cover the board for a year and anything that
lapsed could be counted towards the GF repayment.
Co-Chair Seaton stated that generally on professional
boards there was a fee structure supporting the operation
of the board. He explained that typically fees were reduced
if they were bringing in more than needed for the board's
operation. There needed to be some clarification that any
excess revenue from fees would go towards repaying GF prior
to making a reduction to fees.
Representative Pruitt appreciated the conversation. He
shared that he had chaired the DCCED budget subcommittee
right after the board had been established. He agreed the
intent had been for the board to repay all of the costs it
took to get the program up and running. He noted the
process was taking four to five years. He agreed
clarification needed to be made to provide a clear
understanding that extra fees would go towards recouping
the state's cost for establishing and regulating the board.
He reasoned the board had to appropriately manage its fees
to do so. He continued that the board could not just lower
fees once it had attained the amount needed to cover its
operations for a year.
9:33:48 AM
Representative Ortiz asked what the agency's annual budget
amount was. He supported the intent of the previous
speaker; however, he wondered if passing the intent
language would put the board and industry in a difficult
position to meet the obligations.
Ms. Sanders replied that she did not have the precise cost
breakdown on hand. She would have to consult with the
department first. The intent would be for the agency to
have an entire year of operating revenue, which should not
limit the agency. She elaborated that the agency could
carry forward an entire year of revenue annually, to ensure
it would be covered if revenue came in lower during a given
year.
Vice-Chair Gara stated was discussing different legislative
intent options. He noted the legislature always hoped
someone would follow legislative intent. One option would
be to put the language in a bill, which he believed would
be sloppy. He hoped to receive something in writing -
potentially in regulation - from the board outlining how it
intended to pay back the funds in a way that did not harm
the industry. He did not believe including the language in
a bill was the right approach.
9:36:04 AM
Representative Guttenberg was thinking about the operation
of AMCO. He asked if the operation of the Marijuana Control
Board was similar to the Alcoholic Beverage Control (ABC)
Board operation.
Ms. Sanders believed the Marijuana Control Board was the
only board with carry forward language. The ABC Board was
lapsing a small amount and did not have carry forward
language.
Representative Guttenberg pointed out that AMCO was one
agency with two boards, operating with different sets of
rules. He stated, "we just need to do the right thing at
the end of the day."
Representative Wilson clarified it was not the
legislature's intent to implement a time limit [on the time
it took the board to pay the state back]. She elaborated
that the board would not lower the fees until its
obligation was met (e.g. in five to ten years). She noted
Ms. McConnell had said the board could pay back the $1.5
million. She reasoned the board could pay back the $5.4
million, which would just take longer. She clarified the
legislature was not expecting the board to pay the state
back in one year. She added there would be more license
applications and there were more in the queue at present.
Vice-Chair Gara asked to hear from the department.
Ms. Sanders relayed that the legislature would work with
the department to make sure the language was clear and did
not hinder the agency.
Vice-Chair Gara believed it would behoove the board to
provide the legislature with a written document specifying
a timeline that did not harm the industry.
Co-Chair Foster noted there was some intent language to
consider.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 267 CSHB267(RES) Sponsor Statement 2.23.18.pdf |
HFIN 2/27/2018 9:00:00 AM |
HB 267 |
| HB 267 Supporting Documents--Letters and Resolutions in Support 2.23.18.pdf |
HFIN 2/27/2018 9:00:00 AM |
HB 267 |
| HB 267 Supporting Document--Legal Consequences for Violating Confidentiality 2.23.18.pdf |
HFIN 2/27/2018 9:00:00 AM |
HB 267 |
| HB 267 Supporting Document--Lake and Peninsula Borough Municipal Code Title 6--2.23.18.pdf |
HFIN 2/27/2018 9:00:00 AM |
HB 267 |
| HB 267 CSHB267(RES) Sectional Summary--Release of Hunting and Fishing Records to Municipalities 2.26.18.pdf |
HFIN 2/27/2018 9:00:00 AM |
HB 267 |
| HB 267 Explanation of Changes--HB 267 Version D to Version O 2.26.18.pdf |
HFIN 2/27/2018 9:00:00 AM |
HB 267 |
| HB 96 Amendment #1.pdf |
HFIN 2/27/2018 9:00:00 AM |
HB 96 |
| HB 267 Supporting Document--Lake and Pen Borough Clarificatioin--Policy on Guided Trips 2.27.2018.pdf |
HFIN 2/27/2018 9:00:00 AM |
HB 267 |