Legislature(2005 - 2006)CAPITOL 106

04/20/2005 08:30 AM RULES

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved CSHB 123(RLS) Out of Committee
Heard & Held
Bills Previously Heard/Scheduled
Moved CSHB 121(2d RLS) Out of Committee
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                                                               
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                                                               
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                                                               
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                                                               
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 [15] 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                                                               
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.                                                                                                 

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