Legislature(2015 - 2016)HOUSE FINANCE 519
03/16/2015 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB115 | |
| HB26 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 115 | TELECONFERENCED | |
| += | HB 26 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 26
"An Act extending the termination date of the Board of
Certified Direct-Entry Midwives; and providing for an
effective date."
2:24:35 PM
LAURA STIDOLPH, STAFF, REPRESENTATIVE KURT OLSON, relayed
that the bill would extend the sunset date of certified
direct entry midwives to June 30, 2017; a two-year
extension. She noted that the board's deficit and audit
issues had been discussed during a previous hearing and
that there were people on hand to speak to those specific
issues.
2:25:59 PM
Co-Chair Thompson relayed that the fiscal note reflected
$5,500 of expenditures for board travel and advertising of
meetings. He related that in FY 14 the board's revenue
total was $3,990, while expenditures were $55,795; a
deficit of $51,805. He said that the board had a current
operating deficit of over $115,000, and had been in deficit
spending since 2008. He shared that licensing fees had
increased, and were due for another increase in spring
2014, but with the limited number of midwives in the state,
how the board would catch up with the deficit was
questionable.
Ms. Stidolph answered that with the board bearing the
burden of the large cost of investigations, even an
increase in the board's fees would not cover the deficit.
She deferred the question to the department for further
detail.
Co-Chair Thompson understood that Legislative Budget and
Audit (LB&A) had been tasked with reviewing the board and
would be coming forward with recommendations.
SARA CHAMBERS, DIRECTOR, DIVISION OF CORPORATIONS, BUSINESS
AND PROFESSIONAL LICENSING, DEPARTMENT OF COMMERCE,
COMMUNITY AND ECONOMIC DEVELOPMENT, stated that the fiscal
note spoke to the expenses that were particular to the
board; if the board were to sunset the division would
continue to license midwives and would relieve licensees of
the expense of board travel, which was the only isolatable
expense in regard to the board itself. She agreed that the
board had been in a deficit position and had been working
toward an assertive and meaningful to the budget. She
relayed that fees had been increased for both midwives and
apprentices; midwives now paid the highest licensing fee
charges by the division: $1,750 every two years. She added
that the apprentice fees had risen from over $100 to over
$900 in 2013. She noted that it would take several more
increases and continued attempts to rein in spending and
get out of the deficit positon, but with a very small
number of licensees that could take several licensing
cycles.
Co-Chair Thompson observed that most of the deficit was due
to investigations. Ms. Chambers replied in the affirmative.
She added that investigations figured prominently in the
legislative audit findings.
Co-Chair Thompson highlighted the LB&A criticism of the
department for not pursuing 4 different midwifery cases.
Ms. Chambers responded that there were several cases that
had been referred to the Department of Law's Office of
Special Prosecutions and Appeals that had not been followed
up on and had been deemed a low priority. She said that at
the time the agency had not done its due diligence to
follow up on the cases, but that since had corrected the
issue putting new safeguards into place to double check
files sent over to sister agencies; in addition, an expert
witness had been retained to review the cases to determine
which of the agencies was most appropriate for each case.
She explained that the licensees involved in the cases in
question had refused to sign a consent agreement. She
assured the committee that the division was actively
pursuing remedies to the problems.
Co-Chair Thompson asked if there was any chance of
recouping the investigation expenditures.
2:32:14 PM
Ms. Chambers answered no. She shared that there was a
proposal in the budget that would give the board and the
division the opportunity recoup fines to help mitigate some
of the expenses.
Co-Chair Thompson observed terminating the board would cost
the state more money than renewing the sunset date.
Ms. Chambers replied that she was not familiar with the
numbers.
Representative Wilson queried the difference between
retaining the board, and allowing the licenses to be
handled by the department.
Ms. Chambers replied that the board currently had the
ability to review and approve licenses, which would revert
back to the division. She said that the board handled most
of the administrative elements, including investigative,
which allowed for public deliberation that would not be
allowed under the department.
Representative Wilson expressed concern that the fiscal
note did not reflect the $115,000 deficit. She asked who
paid the $115,000 when it was not being paid by the board.
Ms. Chambers answered that the division had appropriation
authority. She added that board was in a deficit position,
which department was working actively to correct, and the
appropriation authority was being covered by boards that
were in a surplus position. She stated that that this
happened on an annual basis by nature because there was one
time, every two years that a board would bring in revenue
that was meaningful during their renewal period and offset
the programs that had opposing biennial revenue periods.
She stated that the funds were not mixed in the sense that
the operations were being paid for by another because of
the carry forward, but at the higher appropriation level
all of the licensing programs were able to be solvent to
stay in the black.
2:36:24 PM
Representative Wilson wondered if another audit when the
bill would be up again for sunset in two years.
Ms. Chambers deferred the question to the Division of
Legislative Audit.
KRIS CURTIS, LEGISLATIVE AUDITOR, ALASKA DIVISION OF
LEGISLATIVE AUDIT (via teleconference), replied if the
board received an extension, another sunset review would be
triggered by statute. She said that given the sort
timeframe since the last audit she expected the field work
would take less time, but another audit would be conducted.
Co-Chair Thompson understood that LB&A planned to examine
the board and make a recommendation.
Ms. Curtis answered that the current review by that
committee had not factored into the suggested sunset date.
Representative Wilson asked how much the most recent audit
had cost. Ms. Curtis replied that the division did not
track the cost of audits. She shared that an hourly rate of
approximately $67 per hour had been calculated, so that
could be multiplied by the 1,100 hours it took to conduct
the audit. She explained that a typical sunset occupational
board audit took approximately 500 to 600 hours to
complete. She relayed that this particular board audit took
longer because of the nature of the problems that were
found and because it had been done by a new auditor.
2:39:30 PM
Representative Gattis felt that not hearing from the board
was limiting the conversation. She queried the purpose of
the board. She asserted that she was pro-midwife, but she
believed the board had struggled. She relayed that she took
issue with extending the board another two years.
Ms. Chambers noted that the department had invited the
board to address the committee. She believed it would be
appropriate for the board to provide input during committee
discussions.
Co-Chair Thompson asked whether the increase in fees would
affect the number of midwives paying into the licensing
pool.
Ms. Chambers replied that it was a possibility. She said
that it was always a concern, not specific to midwifery,
that a rise in fees would cause people to drop out of
licensure.
2:41:55 PM
Representative Guttenberg pointed out that the audit cited
a division failure for some of the board's issues. He
wondered how much of the financial problems of the board
could be attributed to the department.
Ms. Curtis answered that 100 percent of the cause for the
reduced extension was due to the division and not the
board. She related that areas for improvement would always
be found; but in regards to the severity of the problems,
the majority were at the division level.
Representative Gara surmised that the board had done
nothing wrong, and queried the logic of the limited
extension.
Ms. Curtis did not view the recommendation as a punishment.
She asserted that legislative audit was the legislatures
monitoring mechanism; the two-year extension was given
because the issues were so important and worth the cost to
come back to the table to ensure that the problems
recognized in the audit were handled.
2:45:14 PM
Representative Gara argued that the audit punished the
board by creating uncertainty. He did not think that
threatening the board was the proper way to get the
department to do its job.
Ms. Curtis relied that it was difficult to explain the
reasoning pertaining to board action versus division
action, and how that factored into an extension. She
reminded the committee that it was only a recommendation;
she would present the report and provide information but it
would be up to policy makers to make the final decision.
Representative Gara recommended that the board be given a
full extension. He asked if fee increases were the only way
that the board could maintain its finances.
Ms. Chambers answered that the department was fully in
compliance with legislative audit's recommendations and
took full responsibility in the areas of deficiency. She
stated that the division would set fees with the advice and
input of the board. She believed that some of the
responsibility lay with the board continuing to rein in
spending and refining decision making processes to reduce
expenditures.
2:49:19 PM
Representative Pruitt read from the letter from the Board
of Direct-Entry Midwives chair, Cheryl Corrick, located
within the audit:
"Recommendation No. 2:
I concur with this recommendation, with reservations.
The Board has requested that, in addition to the
proposed increases in licensing fees for CDMs, the
Division also increase apprentice licensing fees to
50% of CDM fees. The Board sees this as a potential
way to help meet the shortfall. So far, the Board's
request has been denied over the past two years."
Representative Pruitt wondered why the board's suggestion
had not been considered.
Ms. Chambers answered that the increase had been
implemented but that it affected a small number of
midwives. She said that fees would need to be increased
again in order to keep up with rate of spending while
trying to chip away at the negative carry forward.
Representative Pruitt wondered whether the division had the
ability to recoup costs of the investigations from
individuals found to be at fault. He asked whether the
department had, or should have, the ability to recoup costs
of investigations involving unlicensed individuals.
Ms. Chambers answered that the division did not currently
have the ability to recoup costs from licensed or
unlicensed individuals; it would require a statutory
change.
Representative Pruitt asked whether the challenges found by
the audit were related to the board or the department.
Ms. Curtis replied that most of the problems stemmed from
the department.
Representative Pruitt asked whether similar challenges were
faced by other boards. He requested suggestions from
legislative audit on how to fix the problem.
Ms. Curtis replied that the extension reduction was being
driven by the investigative problems, which were specific
to the midwife cases and were not found in other boards;
this was not a division-wide problem. She spoke to fee
setting. She relayed that if a board was significantly in a
deficit, legislative audit would make a recommendation that
the board work with the division to set fees appropriately.
She pointed out to the committee that a fee schedule could
be found in the audit. She said that deficits could vary
widely and that the situation could be tricky when setting
fees as a response to a spike in expenditures. She
furthered that the audit performed in FY 06, had an annual
licensing fee of over $2,000 biannually. She stressed that
this was not a new problem for the board.
2:55:27 PM
Representative Wilson pointed to page 2 of the fiscal note.
She wondered what the licenses would cost if the board were
to dissolve.
Ms. Chambers answered that the numbers in the fiscal note
would be different if the division were to manage the
licensing program differently.
Representative Wilson wondered who would pay for the
investigations if the board were dissolved.
Ms. Chambers replied that licensees always recouped the
costs of investigations, the existence of the board would
not change the licensing structure.
Representative Wilson surmised that no matter what, the
licensees would have to pay the fee if they wanted to
remain legally licensed.
Ms. Chambers replied in the affirmative.
Representative Wilson expressed unhappiness with the
problems faced by the midwives. She worried that midwives
would end up with licensing fees that they could not
afford.
Representative Pruitt clarified that licensing would still
exist even if the board disbanded. He felt that the
midwives would be penalized if the bill did not go forward
in the process. He thought that the legislation highlighted
that something was broken within the department and not
with the board or the midwives.
2:59:30 PM
Representative Gattis reiterated her concern that the
committee had not heard from the board. She strongly
believed input from the board was needed.
Ms. Stidolph agreed that a board member's input would be
valuable.
Co-Chair Thompson believed the board needed to exist. He
expressed concern at the cost of the audit for a board that
oversaw few licensees. He felt that the problem should be
reexamined in 2 years after the legislature received a
recommendation from Legislative Budget and Audit. He
thought that passing the legislation would allow the board
to continue to be involved in the ongoing education and
certification of midwives.
Representative Wilson reiterated concern of what could
happen if the committee immediately did nothing.
Representative Gara requested clarification on the cost of
the audit.
Co-Chair Thompson explained that the audit took 1,100
hours, billed out at $67 per hour, resulting in
approximately $74,000 total.
Representative Gara moved a conceptual amendment to extend
the termination date to 3-years.
Co-Chair Thompson said that the problem was that the costs
of investigations were being placed on boards that were not
responsible for the problems being investigated. He
reiterated that it would be prudent to wait for the
recommendations that LB&A would provide in 2 years.
3:04:57 PM
Representative Gara withdrew the conceptual amendment.
Co-Chair Neuman MOVED to REPORT HB 26 out of committee with
individual recommendations and the accompanying fiscal
note. There being NO OBJECTION, it was so ordered.
HB 26 was REPORTED out of committee with a "no
recommendation" recommendation and with one previously
published fiscal impact note: FN1 (CED).
Co-Chair Thompson discussed the agenda for the following
day.
| Document Name | Date/Time | Subjects |
|---|---|---|
| AS 38.05.125.pdf |
HFIN 3/16/2015 1:30:00 PM |
HB 115 |
| BLM-Alaska Conveys 729,000 Acres to State of Alaska.pdf |
HFIN 3/16/2015 1:30:00 PM |
HB 115 |
| Draft A Legal Memo-HB 115.pdf |
HFIN 3/16/2015 1:30:00 PM |
HB 115 |
| Leg Research-State Lands.pdf |
HFIN 3/16/2015 1:30:00 PM |
HB 115 |
| MyliusPresentationonLands-2013.pdf |
HFIN 3/16/2015 1:30:00 PM |
HB 115 |
| South Carolina Resolution.pdf |
HFIN 3/16/2015 1:30:00 PM |
HB 115 |
| State asks feds for transfer of 19,322 disputed acres on North Slope.pdf |
HFIN 3/16/2015 1:30:00 PM |
HB 115 |
| PL85-508.pdf |
HFIN 3/16/2015 1:30:00 PM |
HB 115 |
| US Constitution-9th and 10th Amendments.pdf |
HFIN 3/16/2015 1:30:00 PM |
HB 115 |
| USCODE-2011-title43-chap33A-sec1635.pdf |
HFIN 3/16/2015 1:30:00 PM |
HB 115 |
| Utah HB148.pdf |
HFIN 3/16/2015 1:30:00 PM |
HB 115 |
| CSHB 115 (RES)-Sponsor Statement.pdf |
HFIN 3/16/2015 1:30:00 PM |
HB 115 |
| HB 115 AK Miners Assoc Support.pdf |
HFIN 3/16/2015 1:30:00 PM |
HB 115 |