Legislature(2017 - 2018)HOUSE FINANCE 519

02/13/2018 01:30 PM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 273 EXTEND: MARIJUANA CONTROL BOARD TELECONFERENCED
Heard & Held
+= HB 274 EXTEND: BD OF PSYCHOLOGISTS/PSYCH ASSOC. TELECONFERENCED
Moved HB 274 Out of Committee
+= HB 275 EXTEND: BOARD OF MASSAGE THERAPISTS TELECONFERENCED
Moved CSHB 275(FIN) Out of Committee
+ HB 278 EXTEND:CERT. REAL ESTATE APPRAISERS BOARD TELECONFERENCED
Moved HB 278 Out of Committee
-- Public Testimony --
+ HB 279 EXTEND: REAL ESTATE COMMISSION TELECONFERENCED
Heard & Held
-- Public Testimony --
+ HB 280 EXTEND: BOARD OF MARITAL & FAMILY THERAPY TELECONFERENCED
Moved HB 280 Out of Committee
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                     February 13, 2018                                                                                          
                         1:34 p.m.                                                                                              
                                                                                                                                
1:34:53 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Foster  called the House Finance  Committee meeting                                                                    
to order at 1:34 p.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Neal Foster, Co-Chair                                                                                            
Representative Paul Seaton, Co-Chair                                                                                            
Representative Les Gara, Vice-Chair                                                                                             
Representative David Guttenberg                                                                                                 
Representative Scott Kawasaki                                                                                                   
Representative Dan Ortiz                                                                                                        
Representative Lance Pruitt                                                                                                     
Representative Steve Thompson                                                                                                   
Representative Cathy Tilton                                                                                                     
Representative Tammie Wilson                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Jason Grenn                                                                                                      
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Caitlyn  Ellis,  Staff,  Representative  Sam  Kito;  Crystal                                                                    
Koeneman,  Staff, Representative  Sam  Kito; Megan  Holland,                                                                    
Staff,   Representative   Andy   Josephson;   Kris   Curtis,                                                                    
Legislative Auditor,  Alaska Division of  Legislative Audit;                                                                    
Sara  Chambers, Deputy  Director, Division  of Corporations,                                                                    
Business   and   Professional   Licensing,   Department   of                                                                    
Commerce, Community and Economic Development.                                                                                   
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
David Edwards-Smith, Chair, Board  of Massage Therapy; David                                                                    
Derry,  Chair, Board  of Certified  Real Estate  Appraisers,                                                                    
Kenai;  Lydia Larsen,  Vice President,  Appraisal Institute,                                                                    
Fairbanks; Tracy Barickman,  Real Estate Commission, Palmer;                                                                    
Dorthea  Goddard-Aguero,  Chair,  Board  of  Marital  Family                                                                    
Therapy, Anchorage.                                                                                                             
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 273    EXTEND: MARIJUANA CONTROL BOARD                                                                                       
                                                                                                                                
          HB  273  was  HEARD  and  HELD  in  committee  for                                                                    
          further consideration.                                                                                                
                                                                                                                                
HB 274    EXTEND: BD OF PSYCHOLOGISTS/PSYCH ASSOC.                                                                              
                                                                                                                                
          HB 274  was REPORTED out  of committee with  a "do                                                                    
          pass"  recommendation  and   with  one  previously                                                                    
          published fiscal impact note: FN1(CED).                                                                               
                                                                                                                                
HB 275    EXTEND: BOARD OF MASSAGE THERAPISTS                                                                                   
                                                                                                                                
          CSHB 275(FIN)  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.                                                                         
                                                                                                                                
HB 278    EXTEND:CERT. REAL ESTATE APPRAISERS BOARD                                                                             
                                                                                                                                
          HB 278  was REPORTED out  of committee with  a "do                                                                    
          pass"  recommendation  and   with  one  previously                                                                    
         published fiscal impact note: FN1 (CED).                                                                               
                                                                                                                                
HB 279    EXTEND: REAL ESTATE COMMISSION                                                                                        
                                                                                                                                
          HB  279  was  HEARD  and  HELD  in  committee  for                                                                    
          further consideration.                                                                                                
                                                                                                                                
HB 280    EXTEND: BOARD OF MARITAL & FAMILY THERAPY                                                                             
                                                                                                                                
          HB 280  was REPORTED out  of committee with  a "do                                                                    
          pass"  recommendation  and   with  one  previously                                                                    
         published fiscal impact note: FN1 (CED).                                                                               
                                                                                                                                
Co-Chair Foster reviewed the meeting agenda. He notified                                                                        
the committee  that there would  be a ceremony  renaming the                                                                    
House Finance Committee room as the Senator Al Adams Room.                                                                      
                                                                                                                                
HOUSE BILL NO. 274                                                                                                            
                                                                                                                                
     "An Act extending the termination date of the Board of                                                                     
     Psychologist and Psychological Associate Examiners;                                                                        
     and providing for an effective date."                                                                                      
1:37:19 PM                                                                                                                    
                                                                                                                                
Co-Chair  Foster shared  that the  committee had  previously                                                                    
heard the bill on February 6, 2018.                                                                                             
                                                                                                                                
CAITLYN ELLIS, STAFF, REPRESENTATIVE  SAM KITO, relayed that                                                                    
the  bill would  implement a  full 8-year  extension of  the                                                                    
board.                                                                                                                          
                                                                                                                                
Co-Chair  Seaton MOVED  to REPORT  HB 274  out of  committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
note.                                                                                                                           
                                                                                                                                
HB  274 was  REPORTED  out  of committee  with  a "do  pass"                                                                    
recommendation  and  with  one previously  published  fiscal                                                                    
impact note: FN1(CED).                                                                                                          
                                                                                                                                
1:39:35 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
1:40:16 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
HOUSE BILL NO. 275                                                                                                            
                                                                                                                                
     "An Act extending the termination date of the Board of                                                                     
     Massage Therapists; and providing for an effective                                                                         
     date."                                                                                                                     
                                                                                                                                
1:40:47 PM                                                                                                                    
                                                                                                                                
CRYSTAL KOENEMAN,  STAFF, REPRESENTATIVE SAM  KITO, reminded                                                                    
the  committee that  the bill  extended the  board for  four                                                                    
years at  the recommendation of the  Division of Legislative                                                                    
Audit.                                                                                                                          
                                                                                                                                
Vice-Chair Gara asked  about the cost to  a licensed massage                                                                    
therapist for  the licensing fees and  fingerprinting costs.                                                                    
Ms.  Koeneman replied  that in  FY  2018 the  non-refundable                                                                    
application fee was  $200, the licensing fee  for a biennial                                                                    
license  was  $290  and  the  non-refundable  fingerprinting                                                                    
processing fee was $60.                                                                                                         
                                                                                                                                
Co-Chair Seaton  MOVED to  ADOPT Amendment  1, 30-LS1185\D.2                                                                    
(Radford, 2/6/18) (copy on file).                                                                                               
                                                                                                                                
     Page 1, line 1, following "Therapists;":                                                                                   
          Insert "relating  to license renewal  and criminal                                                                    
          history record checks for massage therapists;"                                                                        
                                                                                                                                
     Page 1, following line 6:                                                                                                  
     Insert new bill sections to read:                                                                                          
                                                                                                                                
     "* Sec. 2.  AS 08.61.050 is amended to read:                                                                               
     Sec. 08.61.050. Standards for license renewal. The                                                                         
     board shall renew a license issued under this chapter                                                                      
     to a licensee who                                                                                                          
          (1)  pays the required fee;                                                                                           
          (2)   meets the continuing  education requirements                                                                    
          established by the board;                                                                                             
          (3)  has not been  convicted of, or pled guilty or                                                                    
          no contest to, a  crime involving moral turpitude,                                                                    
          or has been convicted of,  or pled guilty to or no                                                                    
          contest to,  a crime involving moral  turpitude if                                                                    
          the  board  finds  that the  conviction  does  not                                                                    
          affect   the   person's    ability   to   practice                                                                    
          competently and safely;                                                                                               
          (4)   has a current  cardiopulmonary resuscitation                                                                    
          certification; and                                                                                                    
          (5)   has been fingerprinted and  has provided the                                                                    
          fees required  by the Department of  Public Safety                                                                    
          under   AS   12.62.160    for   criminal   justice                                                                    
          information  and   a  national   criminal  history                                                                    
          record  check  once   every  three  renewals;  the                                                                    
          fingerprints and  fees shall  be forwarded  to the                                                                    
          Department of Public Safety to  obtain a report of                                                                    
          criminal justice information under  AS 12.62 and a                                                                    
          national  criminal history  record check  under AS                                                                    
          12.62.400.                                                                                                            
                                                                                                                                
     * Sec. 3. The uncodified law of the State of Alaska is                                                                     
     amended by adding a new section to read:                                                                                   
                                                                                                                                
          APPLICABILITY. AS 08.61.050, as  amended by sec. 2                                                                    
          of this  Act, applies to applications  for renewal                                                                    
          of a  license to  practice as a  massage therapist                                                                    
          under  AS 08.61  filed on  or after  the effective                                                                    
          date of  sec. 2 of this Act."                                                                                         
                                                                                                                                
     Renumber the following bill section accordingly.                                                                           
                                                                                                                                
     Page 1, line 7:                                                                                                            
                                                                                                                                
                                                                                                                                
          Delete "This"                                                                                                         
          Insert "Section 1 of this"                                                                                            
                                                                                                                                
     Page 1, following line 7:                                                                                                  
                                                                                                                                
     Insert a new bill section to read:                                                                                         
          "* Sec. 5. Sections 2 and 3 of this Act takes                                                                         
          effect July 1, 2018."                                                                                                 
                                                                                                                                
Representative Wilson OBJECTED for discussion.                                                                                  
                                                                                                                                
Co-Chair Seaton explained the amendment.  He voiced that the                                                                    
amendment  changed the  fingerprinting and  criminal history                                                                    
requirement  to  once  every  six  years  or  three  renewal                                                                    
cycles.  He thought  that the  requirement at  every renewal                                                                    
was a  burden on the  industry and the department.  He noted                                                                    
that  the  massage  board  was   the  only  board  currently                                                                    
requiring   repeat  fingerprinting   and  criminal   history                                                                    
checks.  In addition  to the  $60 fingerprinting  processing                                                                    
fee, another fee was charged  for the actual fingerprinting,                                                                    
which varied  from $26 to  $35 depending on location  in the                                                                    
state.                                                                                                                          
                                                                                                                                
Co-Chair Foster asked for the sponsor's opinion.                                                                                
                                                                                                                                
1:44:43 PM                                                                                                                    
                                                                                                                                
Ms. Koeneman  shared that the  sponsor was in  opposition to                                                                    
the amendment.  She relayed that  currently another  bill HB                                                                    
110-Massage  Therapy Licensing;  Exemptions (CHAPTER  10 SLA                                                                    
18 - 05/15/2018) that addressed  the issue would be referred                                                                    
to  the House  Finance Committee  in approximately  one week                                                                    
and  was   currently  in  the   House  Labor   and  Commerce                                                                    
Committee.                                                                                                                      
                                                                                                                                
Representative Ortiz  asked for explanation about  the other                                                                    
bill.  Ms. Koeneman  answered the  House Labor  and Commerce                                                                    
Committee  had been  working on  a bill  to address  several                                                                    
issues  facing  the  massage therapy  board.  Representative                                                                    
Ortiz asked  whether the opposition was  due to insufficient                                                                    
language  in  the  amendment.   Ms.  Koeneman  answered  the                                                                    
sponsor did not oppose  the amendment's language but opposed                                                                    
adding it  to a sunset  bill. The sponsor favored  a "clean"                                                                    
sunset  bill and  addressing substantive  issues in  another                                                                    
piece of legislation.                                                                                                           
                                                                                                                                
Representative Guttenberg was under  the impression that the                                                                    
massage  board was  the only  one being  required to  retake                                                                    
fingerprints each  licensing renewal.  He asked  why besides                                                                    
repeatedly, fingerprints were required  at all. Ms. Koeneman                                                                    
responded   that  the   establishing  legislation   required                                                                    
fingerprinting  and  background  checks   as  a  "check  and                                                                    
balance"  with  every  renewal  and it  had  been  a  policy                                                                    
decision   made   by   the    legislature   at   the   time.                                                                    
Representative Guttenberg  asked about  a check  and balance                                                                    
on  what and  wondered what  the point  was. He  wondered if                                                                    
there was  concern about identity theft.  He emphasized that                                                                    
very few  boards required fingerprints and  none repeatedly.                                                                    
Ms. Koeneman deferred to the board.                                                                                             
                                                                                                                                
DAVID EDWARDS-SMITH,  CHAIR, BOARD  OF MASSAGE  THERAPY (via                                                                    
teleconference),   replied  that   there  was   a  transient                                                                    
population  of massage  therapists that  worked in  multiple                                                                    
states.  He elaborated  that the  purpose of  fingerprinting                                                                    
triggered  a  background  check  that  provided  information                                                                    
regarding  whether   a  crime   of  "moral   turpitude"  was                                                                    
committed.  The   board  discovered  a   "few"  prostitution                                                                    
charges  from background  checks  that  resulted in  license                                                                    
denials.                                                                                                                        
                                                                                                                                
1:49:45 PM                                                                                                                    
                                                                                                                                
Representative   Wilson  asked   whether  the   prostitution                                                                    
charges were discovered during  the initial background check                                                                    
or under  renewal. Mr. Edwards-Smith answered  that at least                                                                    
one  crime of  moral  turpitude was  found  under the  first                                                                    
renewal period.  Representative Wilson  asked for  the total                                                                    
number of  licensees. Mr.  Edwards-Smith replied  that there                                                                    
were approximately 1,200.  Representative Wilson agreed that                                                                    
the  background check  renewal requirement  was not  made of                                                                    
any other  board and felt that  one out of 1,200  was a very                                                                    
low threshold.  She thought  the requirement  was burdensome                                                                    
and was  unaware at the  time of initial licensure  that the                                                                    
massage board  would be the only  board requiring background                                                                    
checks at every renewal. She favored the amendment.                                                                             
                                                                                                                                
Vice-Chair   Gara   stated   that   fingerprinting   was   a                                                                    
"roundabout way" to  get a background check on  a person. He                                                                    
noted that one set of  fingerprints was already required. He                                                                    
asked if  anyone had ever  considered having the state  do a                                                                    
background check  without fingerprinting.  Mr. Edwards-Smith                                                                    
replied  that the  fingerprint  card  triggered the  federal                                                                    
background  check  which  was more  thorough  than  a  state                                                                    
background only check. The purpose  was looking to address a                                                                    
"significant" transient population of therapists in Alaska.                                                                     
                                                                                                                                
Representative  Wilson  thought  the debate  was  not  about                                                                    
whether the  issue was right  or wrong. She would  prefer to                                                                    
include the amendment in the  current bill that had a better                                                                    
chance of passing than in a separate piece of legislation.                                                                      
                                                                                                                                
Representative Wilson WITHDREW her OBJECTION.                                                                                   
                                                                                                                                
Representative  Pruitt OBJECTED  because  the  topic was  in                                                                    
another  bill.  He  relayed that  he  recently  withdrew  an                                                                    
amendment  regarding the  Alaska Public  Offices Commission,                                                                    
(APOC)  from  consideration  because  he  was  informed  the                                                                    
amendment's substance  was included in a  different bill. He                                                                    
felt that the process should be consistent.                                                                                     
                                                                                                                                
1:54:22 PM                                                                                                                    
                                                                                                                                
Co-Chair Seaton  provided closing remarks on  the amendment.                                                                    
He was  uncertain whether the  other bill  regarding massage                                                                    
therapy licensure  changes would  move out of  the committee                                                                    
it currently sits.  He declared that the current  bill was a                                                                    
licensing bill  and the issue strictly  dealt with licensing                                                                    
requirements.   The   amendment   was  not   adding   "other                                                                    
substantive  elements" to  the licensure  program. He  urged                                                                    
member's support for the amendment.                                                                                             
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN  FAVOR: Guttenberg,  Kawasaki,  Ortiz, Thompson,  Tilton,                                                                    
Wilson, Gara, Foster, Seaton                                                                                                    
                                                                                                                                
OPPOSED: Pruitt,                                                                                                                
                                                                                                                                
The MOTION PASSED (9/1).                                                                                                        
                                                                                                                                
1:56:30 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
1:56:38 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Representative  Wilson  MOVED  to  ADOPT  Amendment  2,  30-                                                                    
LS1185\D.3 (Radford, 2/8/18).                                                                                                   
     Page 1, Line 5:                                                                                                            
          Delete "2022"                                                                                                         
          Insert "2024"                                                                                                         
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
Co-Chair  Seaton  MOVED  to  REPORT  CSHB  275(FIN)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal  note. There being NO  OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
CSHB  275(FIN) 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.                                                                                                                    
                                                                                                                                
1:58:01 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
1:58:28 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
HOUSE BILL NO. 278                                                                                                            
                                                                                                                                
     "An Act extending the termination date of the Board of                                                                     
     Certified Real Estate Appraisers; and providing for an                                                                     
     effective date."                                                                                                           
                                                                                                                                
1:58:47 PM                                                                                                                    
                                                                                                                                
MEGAN   HOLLAND,  STAFF,   REPRESENTATIVE  ANDY   JOSEPHSON,                                                                    
indicated that HB 278 extended  the termination date for the                                                                    
Board of  Certified Real Estate Appraisers  until June 30th,                                                                    
2026. She shared  that the board had received  a full 8-year                                                                    
extension from the Legislative  Audit Division. In addition,                                                                    
in 2005 and  2007 the board received  favorable reviews from                                                                    
federal audits.                                                                                                                 
                                                                                                                                
2:00:12 PM                                                                                                                    
                                                                                                                                
KRIS  CURTIS,   LEGISLATIVE  AUDITOR,  ALASKA   DIVISION  OF                                                                    
LEGISLATIVE  AUDIT, relayed  that the  audit was  dated June                                                                    
13, 2017.  She cited page 3  of the audit and  detailed that                                                                    
the background information  section described the regulatory                                                                    
oversight  structure of  the appraisal  industry established                                                                    
by  the   federal  government.   She  summarized   that  the                                                                    
structure  included  private  entities  that  set  appraisal                                                                    
standards  and certification  licensing requirements,  state                                                                    
licensing  boards that  certified  and licensed  appraisers,                                                                    
and  federal  entities  that  regulated  and  monitored  the                                                                    
industry.  She   elaborated  that  a   federal  subcommittee                                                                    
monitored  state  licensing  boards  that  included  on-site                                                                    
reviews  of  the board  and  the  Division of  Corporations,                                                                    
Business and  Professional Licensing (CBPL).  She emphasized                                                                    
that the board was subject  to external oversight outside of                                                                    
the  sunset  review  process,  which  did  factor  into  the                                                                    
audit's recommended  term of extension. She  highlighted the                                                                    
audits conclusions on page 7 and read the following:                                                                            
                                                                                                                                
     Overall, the  audit concludes the board  is serving the                                                                    
     public's  interest  by  certifying and  licensing  real                                                                    
     estate  appraisers.  The  board  monitored  certificate                                                                    
     holders  and  licensees  and   worked  to  ensure  only                                                                    
     qualified  individuals  were  issued  certificates  and                                                                    
     licenses  in Alaska.  Furthermore, the  board developed                                                                    
     and   adopted  regulations   to  comply   with  federal                                                                    
     requirements,   improve  the   real  estate   appraisal                                                                    
     industry, and better protect the public.                                                                                   
                                                                                                                                
Ms.   Curtis   noted   that    the   audit   contained   two                                                                    
recommendations that  began on  page 16  of the  report. She                                                                    
read recommendation 1:                                                                                                          
                                                                                                                                
     DCBPL's   director    should   continue    to   improve                                                                    
     administrative support to the board.                                                                                       
                                                                                                                                
Ms. Curtis  reported that improvements  were necessary  in 3                                                                    
areas:                                                                                                                          
                                                                                                                                
        1. Due to general oversight, three certificate                                                                        
          holders   were   incorrectly   reported   in   the                                                                    
          Appraisal  Subcommittee  (ASC) national  registry,                                                                    
          which is required by federal  and state laws. Upon                                                                    
          identification  by   auditors,  the   errors  were                                                                    
          promptly corrected by DCBPL staff.                                                                                    
                                                                                                                                
        2. Auditors reviewed five investigative cases over                                                                    
          180 days old and identified three cases with                                                                          
          periods of inactivity without justification                                                                           
          ranging from 130 to 203 days.                                                                                         
                                                                                                                                
        3. Due to staff turnover, DCBPL management could not                                                                  
          provide evidence that three of 11 board meetings                                                                      
          held between July 1, 2014, and March 31, 2017,                                                                        
          were public noticed.                                                                                                  
Ms.  Curtis offered  that individually  the issues  were not                                                                    
significant but  indicated that improvements  were necessary                                                                    
when considered together. She turned to  Recommendation 2:                                                                      
                                                                                                                                
     DCBPL's director, in consultation with the board,                                                                          
     should reduce fees to address the surplus.                                                                                 
                                                                                                                                
She relayed the following:                                                                                                      
                                                                                                                                
     DCBPL management  did not conduct a  fee analysis after                                                                    
     four  requests  by  board  members.  The  board  had  a                                                                    
     surplus of $165,609 at the  end of March 2017, which is                                                                    
     expected  to  be higher  after  the  June 2017  renewal                                                                    
     period.   DCBPL  management   reported  that   the  fee                                                                    
    analysis was not completed due to other priorities.                                                                         
                                                                                                                                
Ms.  Curtis related  that the  licensees were  paying higher                                                                    
than justified fees as a result.                                                                                                
                                                                                                                                
2:03:28 PM                                                                                                                    
                                                                                                                                
Ms. Curtis provided  further detail. She pointed  to page 11                                                                    
of  the  audit that  included  the  table titled  "Board  of                                                                    
Certified  Real  Estate  Appraisers Licensing  and  Certifi-                                                                    
cation Activity FY 14 through  March 31, 2017" as Exhibit 2.                                                                    
She  noted that  261 licenses  were active  as of  March 31,                                                                    
2017.  The schedule  of revenues  and  expenditures were  on                                                                    
page 12  and the  Summary of  License and  Registration Fees                                                                    
were  included  on  page  13. She  related  that  the  board                                                                    
planned   to   move   forward  with   regulating   appraisal                                                                    
management  companies, which  extended  the board's  duties.                                                                    
Despite  the  increased  duties, the  audit  recommended  an                                                                    
eight-year extension  due to the on-site  external oversight                                                                    
the  board  received  every  other  year.  The  department's                                                                    
response to  the audit was  on page  27. She noted  that the                                                                    
department concurred with  the findings and recommendations.                                                                    
She pointed  out that  the board's response  was on  page 29                                                                    
who also  concurred with  the findings  and recommendations.                                                                    
The  board received  an attorney  general's  opinion that  a                                                                    
statute  was  necessary  to  regulate  appraisal  management                                                                    
companies. However,  the Division  of Legislative  Audit did                                                                    
not  agree with  the  interpretation. The  audit included  a                                                                    
letter on  page 33 stating  they believed the  authority was                                                                    
already in  federal and state  law and detailed  the reasons                                                                    
why.                                                                                                                            
                                                                                                                                
Representative Wilson  pointed to page  15 of the  audit and                                                                    
pointed  out  that the  prior  2013  sunset audit  made  two                                                                    
recommendations that had been  only partially addressed. She                                                                    
asked  what   assurance  Ms.  Curtis  had   that  the  prior                                                                    
recommendations  would be  fully  addressed  by the  current                                                                    
sunset date. Ms. Curtis answered  that every audit addressed                                                                    
the prior  audit report. The  prior audit  recommendation to                                                                    
improve  administrative  support  to   the  board  had  been                                                                    
partially   addressed  but   additional  improvements   were                                                                    
necessary  and   were  addressed   in  the   current  audits                                                                    
Recommendation    1.   The    management   system's    prior                                                                    
recommendation  was  also  partially  addressed,  DCBPL  was                                                                    
aware of the risk, and  understood the cost and believed the                                                                    
risk  was  justified.  Representative Wilson  asked  if  the                                                                    
recommendations were current.  Representative Wilson did not                                                                    
understand  who   was  taking   the  risk.  She   asked  for                                                                    
clarification. Ms. Curtis answered  that the division had an                                                                    
investigative  case  management  system  that  the  auditors                                                                    
evaluated.  She   elaborated  that   the  issues   had  been                                                                    
partially addressed  in the past however,  all investigators                                                                    
continue to  have the  ability to view  and update  all case                                                                    
information besides their own  regardless of the need. There                                                                    
were  no  controls  for limited  reviews.  A  business  need                                                                    
should  drive someone's  ability to  access the  system. She                                                                    
indicated  that  "risk"  was an  audit  term.  The  division                                                                    
informed the legislature of the  issue, but the auditors did                                                                    
not  feel it  was  significant enough  to  reiterate in  the                                                                    
current audit.                                                                                                                  
                                                                                                                                
2:08:02 PM                                                                                                                    
                                                                                                                                
Representative Guttenberg  appreciated the audit  report. He                                                                    
mentioned the board's federal oversight.  He asked about the                                                                    
overlap  between  the  federal  oversight  and  the  state's                                                                    
audit.  He wondered  whether the  auditors read  the federal                                                                    
report and  if the  federal government considered  the state                                                                    
audits. Ms.  Curtis answered  that the  legislative auditors                                                                    
looked at the federal report,  but she found it unlikely the                                                                    
federal  government  would look  at  the  state report.  The                                                                    
federal  government   was  ensuring   that  the   board  was                                                                    
complying with  federal law.  She relayed  that historically                                                                    
the  division was  under federal  review  each year  because                                                                    
improvements   were   necessary.  Recently,   the   division                                                                    
implemented regulations to  address the federal requirements                                                                    
and  were now  being reviewed  every other  year. The  state                                                                    
auditors  examined   the  federal  reviews  to   ensure  the                                                                    
division  was meeting  federal requirements.  Representative                                                                    
Guttenberg  asked if  there was  any redundancy  between the                                                                    
two reviews.                                                                                                                    
                                                                                                                                
2:10:06 PM                                                                                                                    
                                                                                                                                
Ms.  Curtis  answered  that  both  audit  functions  used  a                                                                    
similar process but with different criteria.                                                                                    
                                                                                                                                
SARA  CHAMBERS, DEPUTY  DIRECTOR, DIVISION  OF CORPORATIONS,                                                                    
BUSINESS   AND   PROFESSIONAL   LICENSING,   DEPARTMENT   OF                                                                    
COMMERCE, COMMUNITY  AND ECONOMIC DEVELOPMENT, spoke  to the                                                                    
agency's  fiscal  note FN1  (CED).  She  explained that  the                                                                    
fiscal note  reflected the finite  costs of operating  the 5                                                                    
member board. The  fiscal note totaled $21.  4 thousand that                                                                    
covered  travel  for  board members  to  attend  four  board                                                                    
meetings  per   year,  public  notice  of   board  meetings,                                                                    
training and conference fees, and per diem.                                                                                     
                                                                                                                                
2:11:25 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster OPENED public testimony.                                                                                        
                                                                                                                                
DAVID  DERRY,   CHAIR,  BOARD   OF  CERTIFIED   REAL  ESTATE                                                                    
APPRAISERES,  KENAI (via  teleconference), favored  the bill                                                                    
and asked for support to extend the board until 2026.                                                                           
                                                                                                                                
2:12:06 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster CLOSED public testimony.                                                                                        
                                                                                                                                
2:12:53 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:13:02 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  Seaton MOVED  to REPORT  HB 278  out of  committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
note.                                                                                                                           
HB  278 was  REPORTED  out  of committee  with  a "do  pass"                                                                    
recommendation  and  with  one previously  published  fiscal                                                                    
impact note: FN1 (CED).                                                                                                         
                                                                                                                                
2:13:37 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:13:58 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
HOUSE BILL NO. 279                                                                                                            
                                                                                                                                
"An Act  extending the termination  date of the  Real Estate                                                                    
Commission; and providing for an effective date."                                                                               
                                                                                                                                
2:14:19 PM                                                                                                                    
                                                                                                                                
MEGAN   HOLLAND,  STAFF,   REPRESENTATIVE  ANDY   JOSEPHSON,                                                                    
briefly  explained  the  bill.   She  relayed  that  HB  279                                                                    
extended the termination date of  the Real Estate Commission                                                                    
until June 30th, 2026; a full  8 years as recommended by the                                                                    
Legislative   Audit   Division.  The   commission   oversees                                                                    
brokers,   associate  brokers,   and   sales  licenses.   In                                                                    
addition,   the   commission   regulated   supervisors   and                                                                    
licensees. The  current total of licensees  across the state                                                                    
was 567.                                                                                                                        
                                                                                                                                
Representative Wilson  noted that members'  packets included                                                                    
a letter of opposition  (Deborah Brollini, January 29, 2018)                                                                    
(copy on file). She asked  for details. Ms. Holland answered                                                                    
that the letter had been  addressed the previous week in the                                                                    
House Labor  and Commerce Committee.  Ms. Holland  had given                                                                    
the   letter  to   Tracy  Barickman,   Chair,  Real   Estate                                                                    
Commission,  who reviewed  the  letter  and discovered  that                                                                    
the complaint  had been  previously processed  and concluded                                                                    
that  the  substance of  the  complaint  was not  under  the                                                                    
commission's purview.                                                                                                           
                                                                                                                                
2:16:29 PM                                                                                                                    
                                                                                                                                
Representative Wilson  asked if any information  or response                                                                    
had been sent back to the  author of the letter. Ms. Holland                                                                    
deferred the question to the Real Estate Commission.                                                                            
                                                                                                                                
TRACY  BARICKMAN,   REAL  ESTATE  COMMISSION,   PALMER  (via                                                                    
teleconference),  answered  that   the  complaint  had  been                                                                    
addressed via  an investigative  process and  the individual                                                                    
had been notified of the findings.                                                                                              
                                                                                                                                
2:17:51 PM                                                                                                                    
                                                                                                                                
KRIS  CURTIS,   LEGISLATIVE  AUDITOR,  ALASKA   DIVISION  OF                                                                    
LEGISLATIVE  AUDIT, referenced  a copy  of the  audit report                                                                    
dated June  2017. She cited  the "Report  Conclusions" found                                                                    
on page 7 and read the following:                                                                                               
                                                                                                                                
          Overall,  the audit  concludes  the commission  is                                                                    
          serving  the  public's   interest  by  effectively                                                                    
          licensing  and  regulating real  estate  licensees                                                                    
          and  offices. The  commission monitored  licensees                                                                    
          and  worked to  ensure only  qualified individuals                                                                    
          practice  in Alaska.  Furthermore, the  commission                                                                    
          developed and  adopted regulations to  improve the                                                                    
          real  estate  industry   and  better  protect  the                                                                    
          public.                                                                                                               
                                                                                                                                
          In  accordance   with  AS   08.03.010(c)(19),  the                                                                    
          commission is  scheduled to terminate on  June 30,                                                                    
          2018.  We recommend  that  the legislature  extend                                                                    
          the  commission's  termination  date to  June  30,                                                                    
          2026.                                                                                                                 
                                                                                                                                
Ms. Curtis  delineated that  the prior  sunset audit  was in                                                                    
July  2015 and  only  extended the  commission through  June                                                                    
2017. The prior audit concluded  that the commission was not                                                                    
serving the  public's interest because it  failed to procure                                                                    
a  master   errors  and  omissions  insurance   policy.  The                                                                    
commission had  been required  in statue  in 2008  to obtain                                                                    
the  master errors  and omissions  insurance policy  for the                                                                    
real estate  licensees and required the  licensees to obtain                                                                    
an  error   and  omissions   policy  either   through  their                                                                    
independent  policy or  through the  board's master  policy.                                                                    
However,  if the  board  was unable  to  provide the  master                                                                    
policy,  the  statute  absolved  the  licensees  from  their                                                                    
requirement to  obtain the  insurance. The  audit discovered                                                                    
that no  suitable reason had  been given by the  division or                                                                    
board why the  insurance was not procured.  During the prior                                                                    
sunset period statutes were  changed requiring all licensees                                                                    
to  carry   the  errors   and  omissions   insurance  policy                                                                    
regardless  whether  the  board   obtained  a  master  copy.                                                                    
However, the  division awarded the  contract for  the policy                                                                    
in June  2017, and the  current audit recommended  an 8-year                                                                    
extension. She moved to page  17 of the audit that contained                                                                    
Recommendation 1:                                                                                                               
                                                                                                                                
     DCBPL's chief investigator should continue to improve                                                                      
     oversight to ensure cases are actively investigated                                                                        
     and completed timely.                                                                                                      
                                                                                                                                
She explained that the recommendation  was a repeat from the                                                                    
prior  audit  that discovered  29  out  of 36  investigative                                                                    
cases  had unjustified  periods of  inactivity ranging  from                                                                    
124 days  to 4.5  years. The audit  found that  the division                                                                    
had made  progress in decreasing  the period  of inactivity.                                                                    
An  electronic dashboard  was created  to  monitor the  case                                                                    
resolution progress,  and internal benchmarks  were designed                                                                    
to   establish   timeliness   and  performance   goals   for                                                                    
investigators. The  current audit identified three  cases in                                                                    
a  judgmental   sample  of  seven  cases   with  periods  of                                                                    
inactivity  without justification,  ranging from  72 to  194                                                                    
days.  The testing  found  improvements  were still  needed.                                                                    
Therefore,   the   audit    recommended   that   the   chief                                                                    
investigator should continue to  improve oversight to ensure                                                                    
cases were actively investigated.  She reported that page 29                                                                    
included the department's response to  the audit and page 31                                                                    
contained the  board's response. The governor's  response to                                                                    
the audit was  on page 27. All the  responses concurred with                                                                    
the audit findings and recommendation.                                                                                          
                                                                                                                                
2:21:24 PM                                                                                                                    
                                                                                                                                
Representative  Kawasaki  had  a  question  about  the  fund                                                                    
balance surplus.  He noted  that the  balance was  over $600                                                                    
thousand.  He  wondered  how  the  board  would  reduce  the                                                                    
surplus.                                                                                                                        
                                                                                                                                
SARA  CHAMBERS, DEPUTY  DIRECTOR, DIVISION  OF CORPORATIONS,                                                                    
BUSINESS   AND   PROFESSIONAL   LICENSING,   DEPARTMENT   OF                                                                    
COMMERCE, COMMUNITY AND  ECONOMIC DEVELOPMENT, answered that                                                                    
the  board  had recently  completed  a  renewal period.  The                                                                    
division  and  board were  working  together  to ensure  the                                                                    
surplus did not remain.                                                                                                         
                                                                                                                                
Representative  Kawasaki asked  if Ms.  Chambers had  worked                                                                    
for the department  in 2011 when the fees  were doubled. Ms.                                                                    
Chambers   answered  in   the  affirmative.   Representative                                                                    
Kawasaki  surmised   that  the  commission  had   made  vast                                                                    
improvements. He  asked whether there was  reason to believe                                                                    
the fee spike would occur  again in the future. Ms. Chambers                                                                    
explained that  the reason  the fee  spike occurred  was the                                                                    
failure of  the division to adequately  communicate with the                                                                    
commission  and  licensees, which  came  as  a surprise.  In                                                                    
addition, the  division had made  major improvements  to the                                                                    
fee  analysis  that  was  used in  tandem  with  boards  and                                                                    
commissions. She  voiced that  it was  difficult to  use the                                                                    
past to  predict the future.  She related that  spikes could                                                                    
be  anticipated in  the future  because  there were  unknown                                                                    
quantities  that  needed to  be  factored  in for  statutory                                                                    
requirements. The primary  variables were investigations and                                                                    
appeals of  board decisions. At times,  investigations  cost                                                                    
upwards  of   $100  thousand.   A  similar   scenario  could                                                                    
unpredictably  swing the  fees  higher.  State law  required                                                                    
licensees  to cover  the costs;  the  division attempted  to                                                                    
provide a cushion but not one as large as the commissions.                                                                      
                                                                                                                                
2:24:50 PM                                                                                                                    
                                                                                                                                
Representative Kawasaki mentioned the  fiscal note costs. He                                                                    
noted that  the fiscal  note for a  7 member  commission was                                                                    
the  same  as the  previous  fiscal  notes  for a  5  member                                                                    
commission.  He  wondered  why. Ms.  Chambers  believed  the                                                                    
fiscal note  contained an  error and  would address  it with                                                                    
the division  director. She stated  that all the  boards and                                                                    
the  real  estate  commission specifically,  were  doing  an                                                                    
excellent   job   in   cutting   costs   using   video   and                                                                    
teleconferencing for meetings.                                                                                                  
                                                                                                                                
Representative Guttenberg spoke  to periods of investigative                                                                    
inactivity in  cases referenced in  the audit. He  noted the                                                                    
improvement but wondered what the  expectation should be. He                                                                    
thought  that the  current period  of  inactivity was  still                                                                    
long. He wondered  if there was a conflict  between the full                                                                    
extension  and the  recommendation. Ms.  Curtis answered  it                                                                    
was  a   division  function  and   not  a   board  function.                                                                    
Therefore, the auditors  did not weigh the  issue heavily in                                                                    
the   audit   recommendation   pertaining  to   the   sunset                                                                    
extension.                                                                                                                      
                                                                                                                                
2:27:01 PM                                                                                                                    
                                                                                                                                
Representative Thompson  spoke to the fiscal  note error and                                                                    
deduced that  the fiscal note  missed two members.  He asked                                                                    
if it was  necessary to fix the fiscal note  before the bill                                                                    
moved out of committee.                                                                                                         
                                                                                                                                
Co-Chair Seaton  asked whether the committee  could count on                                                                    
a  revised fiscal  note. Ms.  Chambers replied  that it  was                                                                    
necessary to discuss the matter with the division director.                                                                     
                                                                                                                                
2:27:57 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:28:24 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  Foster asked  Ms. Chambers  to address  the fiscal                                                                    
note.                                                                                                                           
                                                                                                                                
Ms.  Chambers  explained   that  commission  was  structured                                                                    
similarly to  other boards and commissions.  The fiscal note                                                                    
FN1 (CED),  represented the  additional expenses  to operate                                                                    
the  commission.  The  fiscal  note  provided  the  spending                                                                    
authority of $21  thousand for board members  to attend four                                                                    
meetings  per year,  travel, advertising  of public  notice,                                                                    
per diem, and training and conference fees.                                                                                     
                                                                                                                                
2:29:29 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster OPENED public testimony.                                                                                        
                                                                                                                                
Co-Chair Foster CLOSED public testimony.                                                                                        
                                                                                                                                
2:30:06 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:30:38 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Foster relayed the bill would be held.                                                                                 
                                                                                                                                
HB  279  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
HOUSE BILL NO. 280                                                                                                            
                                                                                                                                
     "An Act extending the termination date of the Board of                                                                     
     Marital and Family Therapy; and providing for an                                                                           
     effective date."                                                                                                           
                                                                                                                                
2:31:08 PM                                                                                                                    
                                                                                                                                
MEGAN   HOLLAND,  STAFF,   REPRESENTATIVE  ANDY   JOSEPHSON,                                                                    
explained that the legislation  would extend the termination                                                                    
date of  the Board of  Marital and Family Therapy  for eight                                                                    
years.  She  provided details  about  the  board. The  board                                                                    
regulated and  licensed therapists and  approved supervisors                                                                    
throughout   the  state.   Currently,  85   therapists  were                                                                    
licensed through the board.                                                                                                     
                                                                                                                                
Representative  Wilson  relayed  that  one  of  the  audit's                                                                    
recommendations in  the previous  2013 audit was  related to                                                                    
implementing regulations for telehealth.  She asked when the                                                                    
board would complete the regulation writing process.                                                                            
                                                                                                                                
DORTHEA  GODDARD-AGUERO,  CHAIR,  BOARD  OF  MARITAL  FAMILY                                                                    
THERAPY,  ANCHORAGE  (via  teleconference), replied  that  a                                                                    
draft of the regulations was  submitted to the Department of                                                                    
Law  (DOL)  and the  board  was  waiting for  comments.  She                                                                    
believed  it was  too early  in the  process to  determine a                                                                    
completion date.                                                                                                                
                                                                                                                                
2:33:49 PM                                                                                                                    
                                                                                                                                
KRIS  CURTIS,   LEGISLATIVE  AUDITOR,  ALASKA   DIVISION  OF                                                                    
LEGISLATIVE AUDIT,  addressed the audit dated  May 2017. She                                                                    
cited  the "Report  Conclusions" section  on page  3 of  the                                                                    
audit report. She read the following:                                                                                           
                                                                                                                                
     Overall,  the  audit   concludes  the  board  generally                                                                    
     serves the  public's interest by  effectively licensing                                                                    
     and  regulating  marital   and  family  therapists  and                                                                    
     approving marital  and family therapy  supervisors. The                                                                    
     board  monitors  licensees  and works  to  ensure  only                                                                    
     qualified individuals practice  in Alaska. Furthermore,                                                                    
     the board  develops and  adopts regulations  to improve                                                                    
     the marital and family therapy occupation.                                                                                 
                                                                                                                                
     In accordance  with AS  08.03.010(c)(11), the  board is                                                                    
     scheduled to  terminate on June 30,  2018. We recommend                                                                    
     that  the legislature  extend  the board's  termination                                                                    
     date to June 30, 2026.                                                                                                     
                                                                                                                                
Ms.   Curtis   offered   that   the   audit   contained   no                                                                    
recommendations. She  reported that  the schedule  of "Board                                                                    
of  Marital  and  Family Therapy  License  Activity,  FY  14                                                                    
through  January 31,  2017" was  on page  6. She  reiterated                                                                    
that  85 active  licenses  were reported.  The "Schedule  of                                                                    
License Revenues and Expenditures" were  found on page 8 and                                                                    
showed a surplus of over $68  thousand as of March 31, 2017.                                                                    
She  noted that  the board  was able  to maintain  a surplus                                                                    
despite  the  small number  of  licensees.  The schedule  of                                                                    
license fees  was found on  page 7. The  governor's response                                                                    
was on  page 19, the response  from DCCED was found  on page                                                                    
21,  and the  board's response  was  found on  page 23.  All                                                                    
entities agreed  with the  audit conclusions.  She addressed                                                                    
Representative   Wilson's  question.   She  explained   that                                                                    
Legislative  Audit  decided  to  examine how  the  4  mental                                                                    
health boards  were addressing telehealth and  felt that the                                                                    
issue  was  important.  All  the audits  for  the  4  boards                                                                    
described  each boards  progress  in developing  regulations                                                                    
required   with   the   passage   of  SB   74   -   Medicaid                                                                    
Reform;Telemedicine;Drug  Database  (CHAPTER  25  SLA  16  -                                                                    
06/21/2016). The  Marital and Family Therapy  Board had been                                                                    
interested in  drafting telehealth regulations prior  to the                                                                    
passage  of SB  74 and  the bill  provided the  incentive to                                                                    
delve  into  the  process.   The  department  was  currently                                                                    
experiencing  a  regulation  backlog   due  to  SB  74.  The                                                                    
auditors investigated  how DCCED was handling  the situation                                                                    
and  found  that  it   was  appropriately  prioritizing  the                                                                    
backlog.                                                                                                                        
                                                                                                                                
2:36:54 PM                                                                                                                    
                                                                                                                                
Representative Wilson cited  page 9, of the  audit and noted                                                                    
the same case confidentiality  security issues remained. Ms.                                                                    
Curtis replied in the affirmative.                                                                                              
                                                                                                                                
2:37:19 PM                                                                                                                    
                                                                                                                                
SARA  CHAMBERS, DEPUTY  DIRECTOR, DIVISION  OF CORPORATIONS,                                                                    
BUSINESS   AND   PROFESSIONAL   LICENSING,   DEPARTMENT   OF                                                                    
COMMERCE, COMMUNITY AND  ECONOMIC DEVELOPMENT, addressed the                                                                    
department's  fiscal note  FN1 (CED).  She related  that the                                                                    
fiscal  note for  the five  member board  amounted to  $21.4                                                                    
thousand  for board  members to  attend four  board meetings                                                                    
per year,  advertising of public  notice of  board meetings,                                                                    
training and conference fees, and  per diem. She stated that                                                                    
the  department  would absorb  the  board  functions if  the                                                                    
board sunset was not renewed.                                                                                                   
                                                                                                                                
Co-Chair Foster OPENED public testimony.                                                                                        
                                                                                                                                
Co-Chair Foster CLOSED public testimony.                                                                                        
MOVED  to REPORT  HB 280  out of  committee with  individual                                                                    
recommendations  and  the  accompanying fiscal  note.  There                                                                    
being NO OBJECTION, it was so ordered.                                                                                          
                                                                                                                                
HB  280 was  REPORTED  out  of committee  with  a "do  pass"                                                                    
recommendation  and  with  one previously  published  fiscal                                                                    
impact note: FN1 (CED).                                                                                                         
                                                                                                                                
2:39:03 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:39:24 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
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.                                                                                                                            
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
2:51:28 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 2:51 p.m.                                                                                          

Document Name Date/Time Subjects
HB 278 Audit Real-Estate-Appraisers-Final-Report-WEB.pdf HFIN 2/13/2018 1:30:00 PM
HB 278
HB278 Sponsor Statement 1.25.18.pdf HFIN 2/13/2018 1:30:00 PM
HB 278
HB 279 Audit REC-Final-Report-WEB.pdf HFIN 2/13/2018 1:30:00 PM
HB 279
HB279 Opposition Letter 1.30.18.pdf HFIN 2/13/2018 1:30:00 PM
HB 279
HB279 Sponsor Statement 1.25.18.pdf HFIN 2/13/2018 1:30:00 PM
HB 279
HB279 Supporting Document - REC Letter of Support 2.10.18.pdf HFIN 2/13/2018 1:30:00 PM
HB 279
HB 280 Audit MFT-Final-Report-WEB.pdf HFIN 2/13/2018 1:30:00 PM
HB 280
HB280 Sponsor Statement 1.25.18.pdf HFIN 2/13/2018 1:30:00 PM
HB 280
HB 275 - Amendments.pdf HFIN 2/13/2018 1:30:00 PM
HB 275
HB 273 HFIN Followup02.13.2018 .pdf HFIN 2/13/2018 1:30:00 PM
HB 273