Legislature(2005 - 2006)CAPITOL 106
04/20/2005 08:30 AM RULES
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HB 123-OCCUPATIONS: FEES & EXTENSION OF BOARDS 8:40:01 AM CHAIR ROKEBERG announced that the first order of business would be HOUSE BILL NO. 123, "An Act relating to occupational licensing fees and receipts; extending the termination dates of the Boards of Barbers and Hairdressers, Social Work Examiners, Pharmacy, Professional Counselors, Psychologist and Psychological Associate Examiners, and Veterinary Examiners; relating to an exemption that allows one bill to continue more than one board, commission, or agency program; and providing for an effective date." 8:40:18 AM REPRESENTATIVE COGHILL moved to adopt CSHB 123, Version 24- LS0360\X, Mischel, 4/18/05, as the working document. REPRESENTATIVE BERKOWITZ objected. 8:40:44 AM RICK URION, Director, Division of Occupational Licensing, Department of Commerce, Community, & Economic Development (DCCED), reminded the committee that the Division of Occupational Licensing is charged with managing occupations. The division charges the occupation the cost of regulating them. One of the largest costs is disciplinary actions. Mr. Urion explained that for years the fines that were generated from disciplinary actions "went into the mix". However, the law refers to "fees" with no mention of fines. Therefore, this legislation will correct the aforementioned. The professions pay a lot of money for disciplinary actions, and the fines generated by those actions will help offset the costs. He emphasized that it isn't a money-making operation; disciplinary actions cost more than is ever generated in fines. The language in Sections 1-4 allows the [division] to take the fines and "put them into the mix". 8:42:11 AM CHAIR ROKEBERG explained that the fines and penalties went to the general fund (GF) rather than to the occupation, which was the direction the legislature gave the division last year in legislation. He further explained that [CSHB 123(FIN)] had a drafting technicality such that the legislation allocated all the funds to the board rather than to the specific occupational license. Therefore, Version X directs the fines to the particular occupational license. He characterized it as an accounting methodology. 8:43:29 AM REPRESENTATIVE BERKOWITZ commented that he didn't see any mention of fines or penalties in CSHB 123(FIN). CHAIR ROKEBERG clarified that the House Finance Committee deleted the section mentioning fines and penalties because the committee was concerned that it didn't allocate the funds to the occupations. He informed the committee that he had spoken with those on the House Finance Committee, who are in concurrence with [Version X]. REPRESENTATIVE BERKOWITZ related his understanding that the House Finance Committee stripped the provisions because they believe they should be in another bill. He said he is inclined to support such reasoning. 8:44:44 AM CHAIR ROKEBERG agreed that was part of the House Finance Committee's stated rationale. However, in terms of the policy and the balance [of Version X], the House Finance Committee is in concurrence with Version X. He opined that whether or not it's appropriate to include these sunsets with policy matters is another issue. Chair Rokeberg said that this provision is a creature of the legislature rather than the administration. 8:45:24 AM REPRESENTATIVE BERKOWITZ said there is another problem from a policy perspective. If the legislature allows the department to collect fines and penalties in order to make-up shortfalls, it could be an incentive for the department to increase fines and penalties disproportionate to the sanctions levied. He opined that fines and penalties shouldn't be made a fundraising mechanism for anyone because the fines and penalties become a way of taxing wrongdoers in order to make-up budgetary shortfalls, which is a bad policy call. 8:46:12 AM MR. URION informed the committee that in total fines last year, the division [collected] $64,000 for the approximately 50,000 professionals it licenses. The cost of disciplinary actions far exceeded the fines collected. He emphasized that this isn't a money-making operation. 8:46:50 AM REPRESENTATIVE BERKOWITZ agreed that the current situation [with fines] is not a money-making operation. "But if you incentivize it for the department to make it a money-making operation, I think it becomes more of a money-making operation," he said. He further said that he didn't know how the aforementioned impacts the justice these licensing boards are to be doling out. 8:47:12 AM MR. URION specified that the legislature sets fines in statute. In further response, Mr. Urion confirmed that there are caps on some [of these fines]. The way the system is set up it will never be a money-making situation because someone [in one of the professions] has to do something bad for which a complaint is filed and then the judiciary process follows to establish the fine. 8:47:55 AM REPRESENTATIVE BERKOWITZ highlighted that the legislation refers to fines and penalties. He questioned [the definition] of a penalty, which he surmised could be when someone is overcharged for a certain profession and that profession is required to pay it back. Representative Berkowitz then asked if this legislation runs afoul of the dedicated funds provision of the state constitution. CHAIR ROKEBERG said that penalties are late fees and things of that nature, while fines are [established] by the process in which there is a hearing officer that acts independently and makes recommendations to the board or commission for the final sanctions. Therefore, there's a check and balance on the process. With regard to the constitutionality issue, Chair Rokeberg specified that [this legislation] doesn't create a dedicated fund but rather directs a fine to the appropriate area. REPRESENTATIVE BERKOWITZ pointed out that these are fines that would otherwise go to the GF and be dispersed through the normal budgetary process. 8:49:15 AM REPRESENTATIVE MCGUIRE said that there's some precedent for the aforementioned. For example, some of the penalties resulting from criminal activities are directed to the Violent Crimes Compensation Board. She highlighted that the funds still have to be appropriated. This [legislation] relates a statement of intent with regard to where the money should go, she opined. 8:50:19 AM PAT DAVIDSON, Legislative Auditor, Legislative Audit Division, Alaska State Legislature, explained that statute specifies how the fees for the occupations are set. There is a calculation in which the regulation has to be offset by the fees, fines, and penalties. She specified that in statute the [funds from the fees, fines, and penalties] aren't being appropriated or dedicated rather the [statute] specifies the calculation by which the fees for licensure are going to be set by occupation. The funds still must be appropriated, she confirmed. 8:51:12 AM REPRESENTATIVE KERTTULA pointed out that the [fees, fines, and penalties] are program receipts and thus they're accounted for separately and appropriated. However, it's a situation in which those receipts are set aside for the programs. MS. DAVIDSON acknowledged that Representative Kerttula's thoughts are the belief of many. In fact, many of the licensees believe it's their money. However, due to the prohibition against dedicated funds, it isn't. She reiterated that there is a mechanism for calculations which are tracked such that the amount can enter into the budgetary process and be identified as the program receipts. 8:52:29 AM REPRESENTATIVE KERTTULA drew attention to Section 14, which is a repealor. She inquired as to its purpose. MR. URION said he didn't know the answer. The committee took an at-ease from 8:53 a.m. to 8:57 a.m. 8:57:27 AM CHAIR ROKEBERG turned to the matter of Section 7 of CSHB 123(FIN), which was inadvertently left out of Version X. 8:57:38 AM JOHN WALSH, Lobbyist, Alaska Psychological Association, informed the committee that the House Finance Committee accepted a provision for licensing by credential. The provision would modernize the statute to reflect what is occurring nationally. Therefore, Mr. Walsh said he would appreciate the committee reinserting Section 7 of CSHB 123(FIN) into Version X. In response to Representative Coghill, Mr. Walsh confirmed that the provision was officially amended in the House Finance Committee version. 8:59:17 AM REPRESENTATIVE COGHILL moved that the committee adopt Conceptual Amendment 1, which would insert Section 7 from CSHB 123(FIN) into CSHB 123, Version X. REPRESENTATIVE BERKOWITZ opined that the aforementioned motion is out of order because there is a pending motion to adopt Version X before the committee. CHAIR ROKEBERG announced that Conceptual Amendment 1 was withdrawn. REPRESENTATIVE BERKOWITZ maintained his objection to adopt CSHB 123, Version X. 9:00:16 AM A roll call vote was taken. Representatives Coghill, Kohring, McGuire, and Rokeberg voted in favor of adopting CSHB 123, Version X. Representatives Kerttula and Berkowitz voted against it. Therefore, Version X was adopted by a vote of 4-2. 9:00:43 AM REPRESENTATIVE COGHILL then moved that the committee adopt Conceptual Amendment 1, which would insert Section 7 from CSHB 123(FIN) into CSHB 123, Version X. There being no objection, Conceptual Amendment 1 was adopted. 9:01:11 AM REPRESENTATIVE KERTTULA commented that it seems unusual to roll all the professions into one bill. MS. DAVIDSON agreed that it's unusual. However, she suggested that there will be a couple of bills doing this because of the unusual amount of sunsets of boards and commissions this session. Typically, the legislature addresses three to four board/commission sunsets, but this year there are twelve current board/commission sunsets plus two holdovers from the prior year. REPRESENTATIVE KERTTULA expressed concern with going against the statutory policy. REPRESENTATIVE BERKOWITZ pointed out that Section  specifies the exemption from AS 44.66.050. MS. DAVIDSON interjected that in realizing how difficult it is for the legislature to address this many [sunsets], the years until the next sunset were set such that the legislature would only have to review four to six boards [in one year]. Therefore, the extension of the boards range from four to six years in order to accommodate the aforementioned. In further response to Chair Rokeberg, Ms. Davidson said that she was not familiar with the cost of getting one sunset bill through the legislature. 9:04:31 AM TAMARA COOK, Director, Legislative Legal and Research Services, Legislative Affairs Agency, said that she didn't have any idea as to the cost of getting one sunset bill through the legislature, In fact, she said that she didn't know how to calculate that. However, she surmised that one bill must be somewhat less expensive than many smaller bills. CHAIR ROKEBERG opined that it costs a lot [to move many sunset bills through the legislature versus one bill]. 9:05:28 AM REPRESENTATIVE KERTTULA announced that she would accept this for the purposes of getting through this session, but she maintained that it's a bad idea because each profession has its own particular needs. By combining all these professions in one bill, it sells the professions short. CHAIR ROKEBERG recalled that the audits were reviewed with regard to whether there was any contention. With the exception of the psychologists, there wasn't much controversy. The [boards or commissions] that did generate more interest were handled separately. 9:06:33 AM REPRESENTATIVE COGHILL moved to report CSHB 123, Version 24- LS0360\X, Mischel, 4/18/05, as amended, out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHB 123(RLS) was reported out of the House Rules Standing Committee.