Legislature(2017 - 2018)BARNES 124

02/13/2017 03:15 PM LABOR & COMMERCE

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Audio Topic
03:19:41 PM Start
03:20:30 PM HB90
04:25:22 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 90 OCC. LICENSING FEES; INVESTIGATION COSTS TELECONFERENCED
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                                                                         
                       February 13, 2017                                                                                        
                           3:19 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Sam Kito, Chair                                                                                                  
Representative Adam Wool, Vice Chair                                                                                            
Representative Andy Josephson                                                                                                   
Representative Louise Stutes                                                                                                    
Representative Chris Birch                                                                                                      
Representative Gary Knopp                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Colleen Sullivan-Leonard                                                                                         
Representative Mike Chenault (alternate)                                                                                        
Representative Bryce Edgmon (alternate)                                                                                         
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 90                                                                                                               
"An Act relating to occupational licensing fees; relating to an                                                                 
occupational investigation surcharge; and providing for an                                                                      
effective date."                                                                                                                
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 90                                                                                                                   
SHORT TITLE: OCC. LICENSING FEES; INVESTIGATION COSTS                                                                           
SPONSOR(s): REPRESENTATIVE(s) KITO                                                                                              
                                                                                                                                
01/30/17       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/30/17       (H)       L&C, FIN                                                                                               
02/13/17       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
CRYSTAL KOENEMAN, Staff                                                                                                         
Representative Sam Kito                                                                                                         
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions regarding HB 90 on                                                                    
behalf of Representative Kito, prime sponsor.                                                                                   
                                                                                                                                
ALVIN KENNEDY, Investigator                                                                                                     
Division  of Corporations,  Business,  and Professional  Licensing                                                              
(DCBPL)                                                                                                                         
Department of Commerce, Community & Economic Development (DCCED)                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions regarding HB 90.                                                                      
                                                                                                                                
JANEY HOVENDEN, Director                                                                                                        
Division  of Corporations,  Business,  and Professional  Licensing                                                              
(DCBPL)                                                                                                                         
Department of Commerce, Community & Economic Development (DCCED)                                                                
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions regarding HB 90.                                                                      
                                                                                                                                
AL BARRETTE                                                                                                                     
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified in opposition to HB 90.                                                                        
                                                                                                                                
JOHANNA CROSSETT, Direct-Entry Midwife                                                                                          
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 90.                                                                           
                                                                                                                                
ERROL CHAMPION, Chair                                                                                                           
Industry Issues Group                                                                                                           
Alaska Association of Realtors                                                                                                  
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in opposition to HB 90.                                                                        
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:19:41 PM                                                                                                                    
                                                                                                                                
VICE  CHAIR  ADAM  WOOL  called   the  House  Labor  and  Commerce                                                            
Standing    Committee   meeting    to   order    at   3:19    p.m.                                                              
Representatives  Josephson, Stutes, Birch,  Knopp, Kito,  and Wool                                                              
were present at the call to order.                                                                                              
                                                                                                                                
         HB 90-OCC. LICENSING FEES; INVESTIGATION COSTS                                                                     
                                                                                                                                
3:20:30 PM                                                                                                                    
                                                                                                                                
VICE CHAIR  WOOL announced that  the only order of  business would                                                              
be HOUSE BILL  NO. 90, "An Act relating to  occupational licensing                                                              
fees;  relating to  an occupational  investigation surcharge;  and                                                              
providing for an effective date."                                                                                               
                                                                                                                                
3:20:50 PM                                                                                                                    
                                                                                                                                
CHAIR SAM  KITO, as  prime sponsor  of HB  90, stated that  boards                                                              
with  a limited  number  of registrants  -  such as  the Board  of                                                              
Certified   Direct-Entry  Midwives,   the   Big  Game   Commercial                                                              
Services  Board, and  The  Real Estate  Commission  - share  large                                                              
investigative  costs  over a  small  number  of people.    Statute                                                              
requires  that each board  is financially  self-sufficient.   This                                                              
leads  to large  spikes in  licensing  fees from  one biennium  to                                                              
another.    These  large  fees can  become  an  impediment  for  a                                                              
licensee to enter a profession.                                                                                                 
                                                                                                                                
CHAIR KITO  explained that the  issue has previously  been brought                                                              
before the  legislature in different  forms.  He noted  that years                                                              
ago,  efforts   were  made  by   the  department   to  internalize                                                              
investigation  costs.    However,   the  effort  was  unsuccessful                                                              
because  the  bill relied  on  the  general  fund.   He  mentioned                                                              
deliberating  about  labor and  commerce  issues  that could  help                                                              
larger  groups  of  people  perform   their  functions  much  more                                                              
safely, easily, and  financially reasonably:  This issue  is a top                                                              
priority of the labor and commerce issues he hopes to address.                                                                  
                                                                                                                                
CHAIR   KITO  informed   that   HB  90   would   take  the   board                                                              
investigation  costs and would  assess a  fee among all  licensees                                                              
and registrants  of occupational licenses.   That amount  of money                                                              
would pay  for the  investigations for  all the licensing  boards.                                                              
He explained that  individual board investigative  costs vary from                                                              
thousands of dollars  to less than $100.  The  total amount spread                                                              
over all of the  licensees equates to about $60  per biennium [per                                                              
licensee].   This is $7  to $20 more  than some licensees  pay now                                                              
and thousands  of dollars less  than some  pay now.   He expressed                                                              
that the  change of  the cost structure  in HB  90 would  make the                                                              
professions more approachable for people starting new careers.                                                                  
                                                                                                                                
3:25:09 PM                                                                                                                    
                                                                                                                                
CHAIR  KITO said this  effort is  similar to  health insurance  or                                                              
other  realms.   He  acknowledged the  contrary  position is  that                                                              
some boards feel  they don't use investigations at  the same level                                                              
as other  boards and are  not interested in  paying the cost.   He                                                              
offered his  opinion that the shared  cost among all  licensees is                                                              
relatively  minor in  light  of the  overall  licensing costs  and                                                              
helps the entire division.  He remarked:                                                                                        
                                                                                                                                
      I think it provides the ability for the division to                                                                       
      have a better way of spreading costs out instead of                                                                       
     trying  to spend  so  much work  managing  how much  ...                                                                   
     money a board  might be able to accommodate.   So one of                                                                   
     the challenges  in the system  right now is  because the                                                                   
     costs have  to be adjusted  per biennium, if you  have a                                                                   
     licensing   fee  that  could   ...  result  in   a  very                                                                   
     significant increase  in fees, there's nothing,  even in                                                                   
     our  current  statute, that  allows  those costs  to  be                                                                   
     spread  out over  ... [multiple  biennia] although  that                                                                   
     is being  done.  Because  it's the  only way to  avoid a                                                                   
     significant   barrier  of   entry  to   some  of   those                                                                   
     professions.    So,  in  a   sense,  the  department  is                                                                   
     violating  the law in  a way, even  directed to  [do so]                                                                   
     by our Legislative  Audit Division to make  sure that we                                                                   
     are not  creating a situation  where we ...  are turning                                                                   
     people away from a profession.                                                                                             
                                                                                                                                
CHAIR  KITO offered  his  opinion  that helping  professions  with                                                              
fewer licensees  is also beneficial  to professions with  a larger                                                              
number of  licensees.  He  informed that  he is a  registrant with                                                              
the   Alaska  State   Board   of  Registration   for   Architects,                                                              
Engineers, and  Land Surveyors  (AELS).  Under  HB 90,  his annual                                                              
board fee  would increase  by $20,  an amount  he stated  he could                                                              
afford.   He relayed that  the increase would  be not too  much of                                                              
an impact  on his budget.   He expressed  that a family  member of                                                              
his might  want to  receive services from  a midwife  and everyone                                                              
benefits from  ensuring that professions  have the  resources they                                                              
need.   He stated that  he is willing  to discuss other  solutions                                                              
to  this  problem,  although  he  said  the  proposed  legislation                                                              
seemed to him to be the most fair to the most people.                                                                           
                                                                                                                                
3:28:06 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  STUTES shared that  she knew  of a board  that was                                                              
charged  very significant  investigative  charges,  which put  the                                                              
board a  half a  million dollars  in the  hole unbeknownst  to its                                                              
members.  She  explained that the problem was  that the department                                                              
determined  if the investigations  should  proceed with either  no                                                              
input or objections  from the board.  She remarked  that the board                                                              
said, "We can handle  this and we can find these  individuals, and                                                              
it  will be  much  more  cost-effective  than launching  this  big                                                              
investigation,  when we  know what's  ... happened."   She  stated                                                              
that the bill  doesn't address that problem.   She acknowledged it                                                              
might  be  a  separate  issue,  but  the  issues  coincide.    She                                                              
suggested  having  enforceable parameters  on  how  investigations                                                              
are launched.   Investigations  are expensive  and lead  to boards                                                              
incurring huge fees.                                                                                                            
                                                                                                                                
3:30:02 PM                                                                                                                    
                                                                                                                                
CHAIR  KITO  stated  that  there  are  different  aspects  to  the                                                              
problems with investigations  and licensing, and  he remarked, "We                                                              
looked at  it in terms  of this being one  piece."  He  noted that                                                              
he has  been thinking  about the  related issues.   He  stated his                                                              
concern  that investigating  claims  of  individuals  who are  not                                                              
licensed or  governed by  the board  might not be  a valid  use of                                                              
registrants'  fees.     He  expressed   that  the   discussion  is                                                              
necessary but should  happen in the next phase: first  look at the                                                              
costs, then  look at  the responsibilities  of the  investigators.                                                              
He remarked, "Are  the investigators there to make  sure that each                                                              
one of  us engineers is  doing the job  that we're supposed  to be                                                              
doing, or  is that  job also  to include  looking for people  that                                                              
are practicing without that license?"                                                                                           
                                                                                                                                
CHAIR  KITO  acknowledged  that   there  are  some  questions  and                                                              
concerns that  remain about whether  the investigative  costs have                                                              
been identified  properly.   He stated  that the information  from                                                              
the  Division  of  Legislative   Audit  did  not  find  errors  or                                                              
concerns  with how  investigations  were taking  place.   However,                                                              
the  division   did  find   some  issues   with  how   costs  were                                                              
distributed  among   licensees  over  a  couple  of   years.    He                                                              
referenced  previous  testimony   from  Kris  Curtis,  Legislative                                                              
Auditor,  who had  informed  that  most of  the  past issues  with                                                              
investigative  costs not  being  incorporated  into the  licensing                                                              
fees  had been  resolved.   He  added that  under  HB 90,  current                                                              
debts  from  previous   investigations  would  be   borne  by  the                                                              
affiliated   boards   and   would   "start   a   new   day";   new                                                              
investigations would  be paid for through a combined  fund as they                                                              
occur.                                                                                                                          
                                                                                                                                
3:33:12 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   BIRCH   asked    who   manages   the   costs   of                                                              
investigations.   He offered  his hope  that the affiliated  board                                                              
would have  some control of  or engagement with  the investigative                                                              
costs   incurred.      He   asked    how   a   half-million-dollar                                                              
investigative charge could be incurred.                                                                                         
                                                                                                                                
CHAIR  KITO  stated  that  the  department  currently  fields  the                                                              
requests for investigations.   The requests come  from individuals                                                              
- either board  registrants or public members -  who are concerned                                                              
about  behaviors or  practices of  a licensed  professional.   The                                                              
complaints  go to  the  investigator assigned  to  the board,  who                                                              
then generally  determines or verifies  with a board member  if an                                                              
investigation  is warranted.   He stated that  the board  is often                                                              
engaged in the  decision of whether or not an  investigation takes                                                              
place; investigators  don't proceed with an  investigation without                                                              
some consultation  with  the board.   He informed  that costs  are                                                              
well known  by the department and  are reported to  the individual                                                              
boards.   Some investigations  involving  the Big Game  Commercial                                                              
Services Board had  very high costs due to significant  amounts of                                                              
travel in remote areas.                                                                                                         
                                                                                                                                
3:36:24 PM                                                                                                                    
                                                                                                                                
CRYSTAL  KOENEMAN, Staff,  Representative Sam  Kito, Alaska  State                                                              
Legislature,   answered  questions   on   HB  90   on  behalf   of                                                              
Representative Kito,  prime sponsor.  She referred  to a breakdown                                                              
of the  investigative process  included in  the committee  packet.                                                              
She noted  that boards with  higher investigative costs  have been                                                              
working   with  investigators   to   determine   what  should   be                                                              
investigated.  The  department has been working  with those boards                                                              
so that  it doesn't appear  that investigators act  independently,                                                              
but  work  in  tandem  with  the  boards  for  the  protection  of                                                              
licensees and all of Alaska.                                                                                                    
                                                                                                                                
3:37:22 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON remarked:                                                                                              
                                                                                                                                
     You could have  criminal misconduct, for which  there is                                                                   
     either  a conviction  or an  acquittal.   It can be  ...                                                                   
     [a]  very  close  call  in   either  case,  a  different                                                                   
     standard  ... and a  belief that ...  for example,  if a                                                                   
     criminal  charge were  defeated, surely  a civil  charge                                                                   
     could be  defeated, even though  the standard  is lower.                                                                   
     And  there could be  public safety  issues; there  could                                                                   
     be  somebody  who's  just   dead-set  on  keeping  their                                                                   
     license ...  and ... "to  hell with anything  else" kind                                                                   
     of thing.  I suspect that happens.                                                                                         
                                                                                                                                
REPRESENTATIVE  JOSEPHSON stated  that  [defendants] are  entitled                                                              
to due process  of trials and hearings, though  this process could                                                              
run up a big tab.                                                                                                               
                                                                                                                                
CHAIR  KITO stated  that he  is  not aware  of any  investigations                                                              
that have crossed  into the criminal realm.  He  remarked, "If you                                                              
cross into  the criminal  realm, then  I don't  know that  ... any                                                              
kind of  a process within  the board review  has any  bearing, but                                                              
any investigative  materials that  the investigator came  up with,                                                              
I'm  sure get  transferred  over  into that  criminal  case."   He                                                              
stated   that  he   is   not  sure   what   a  board's   financial                                                              
responsibility would be.                                                                                                        
                                                                                                                                
MS. KOENEMAN stated  that she knows of some cases  that "have both                                                              
gone criminal and civil."                                                                                                       
                                                                                                                                
REPRESENTATIVE  JOSEPHSON commented  that the instances  involving                                                              
the  Big  Game Commercial  Services  Board  would  likely  involve                                                              
criminal charges.                                                                                                             
                                                                                                                                
3:39:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KNOPP stated  his interest  in finding a  solution                                                              
to  high investigative  costs,  although  he offered  his  opinion                                                              
that HB 90  might not be the  right mechanism.  He  drew attention                                                              
to  AELS's  budget  from  2012   and  2013,  and  noted  that  the                                                              
investigative   costs   are   minimal   in   comparison   to   the                                                              
administrative costs.   He expressed that the  fees mostly support                                                              
the administration.                                                                                                             
                                                                                                                                
3:41:21 PM                                                                                                                    
                                                                                                                                
CHAIR KITO  stated that  the proposed  legislation just  addresses                                                              
the investigative  costs.   Both now  and under  HB 90,  all other                                                              
costs  are   attributed  to  each   individual  board,   which  is                                                              
responsible  for  managing all  other  components.   He  remarked,                                                              
"All  we're talking  about is  pulling  those investigative  costs                                                              
out for  all the boards  and then normalizing  them among  all the                                                              
boards.   All those other costs  would remain attributable  to one                                                              
of the boards."                                                                                                                 
                                                                                                                                
REPRESENTATIVE KNOPP  asked for  clarification that the  bill only                                                              
addresses professional licensing and not business licensing.                                                                    
                                                                                                                                
CHAIR  KITO   answered  yes;  the   bill  pertains  only   to  the                                                              
individuals  that   for  life,  health,  or  safety   reasons  are                                                              
required to have a license or registration.                                                                                     
                                                                                                                                
3:42:24 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BIRCH  asked whether  a  board  has an  option  to                                                              
contract  independently for  background research.   He also  asked                                                              
if the investigative  assets available to the board  all come from                                                              
within   the  Department   of  Commerce,   Community  &   Economic                                                              
Development (DCCED) or the Department of Law.                                                                                   
                                                                                                                                
CHAIR  KITO stated  that  years  ago, AELS  asked  for changes  in                                                              
statute  to designate  one investigator  for AELS  investigations,                                                              
and HB  90 would not  affect that.   He offered his  understanding                                                              
that  the  department  can  authorize   an  investigator  to  hire                                                              
someone  to collect  additional  information for  things that  the                                                              
investigator does not have the capacity to do.                                                                                  
                                                                                                                                
3:43:39 PM                                                                                                                    
                                                                                                                                
VICE  CHAIR  WOOL  asked  if  there are  any  groups  that  use  a                                                              
disproportional  amount  of  investigative  resources  -  not  per                                                              
individual but per group.                                                                                                       
                                                                                                                                
3:44:06 PM                                                                                                                    
                                                                                                                                
MS. KOENEMAN  responded  that there  are.  She  indicated  that on                                                              
their    websites,    boards   include    annual    reports    for                                                              
investigations.      In   terms    of   investigations,   intakes,                                                              
complaints,  and probations,  acupuncturists  had a  total of  10,                                                              
architects,  engineers, and  land  surveyors a  total  of 70,  big                                                              
game guides  148, barbers  and hairdressers 162.   She  noted that                                                              
these  numbers   represent  the  total  investigations,   intakes,                                                              
complaints, and probations for each of the specific boards.                                                                     
                                                                                                                                
VICE CHAIR  WOOL asked if  some investigations, depending  on what                                                              
field they're in,  are inherently more expensive  and require more                                                              
expertise.                                                                                                                      
                                                                                                                                
MS. KOENEMAN  answered absolutely.   She added that the  costs can                                                              
vary by profession.                                                                                                             
                                                                                                                                
VICE CHAIR  WOOL noted  that the  Board of Certified  Direct-Entry                                                              
Midwives has  only 64 or  65 members to  spread out  the potential                                                              
cost of  any large investigations.   This circumstance has  led to                                                              
midwives' fees  going up  to approximately $4,000.   He  asked for                                                              
confirmation   that  if   the  costs  were   spread  over   74,000                                                              
licensees,  then license fees  would average  about $30  per year.                                                              
This would not include any board's past debts.                                                                                  
                                                                                                                                
MS.  KOENEMAN responded  that  is  correct.   She  added that  the                                                              
aforementioned   $30  fee   comes   from   rough  estimates;   the                                                              
department is working to get more accurate cost data to her.                                                                    
                                                                                                                                
3:47:37 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BIRCH asked  if when a  $100,000 investigation  is                                                              
deemed necessary,  the board  is made  aware of  the fact  that it                                                              
could have an adverse impact on annual licensing fees.                                                                          
                                                                                                                                
3:48:24 PM                                                                                                                    
                                                                                                                                
ALVIN KENNEDY,  Investigator, Division of Corporations,  Business,                                                              
and  Professional  Licensing  (DCBPL),   Department  of  Commerce,                                                              
Community   &   Economic   Development   (DCCED),   responded   to                                                              
Representative Birch's  question, saying that when  a complaint is                                                              
filed, an investigator  is assigned.  Once the matter  is found to                                                              
be  within  the  investigator's   jurisdiction,  the  investigator                                                              
meets with  someone on the  board to review  the case  and ensures                                                              
that the investigation should proceed.  He remarked:                                                                            
                                                                                                                                
     The  investigator  does  not determine  whether  or  not                                                                   
     statute  ...  or  regulation  has  been  violated,  it's                                                                   
     actually the  board member who makes  that determination                                                                   
     as to  whether or  not what type  of discipline  will be                                                                   
     doled out  from what we  find out if  it is, in  fact, a                                                                   
     violation  of  statute or  regulation.   So  boards  are                                                                   
     involved  very early  on in  the process  when we  start                                                                   
     our investigations.   Again, we're the fact  finders, we                                                                   
     find the facts,  and then we present them to  ... one or                                                                   
     two  members depending  upon the  board who's  reviewing                                                                   
     the case  so that  they can make  a determination  as to                                                                   
     which direction we're going to go.                                                                                         
                                                                                                                                
3:49:55 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BIRCH asked how many investigators there are.                                                                    
                                                                                                                                
MR.  KENNEDY responded  that there  are currently  16 assigned  to                                                              
regulate for 43 different professions.                                                                                          
                                                                                                                                
REPRESENTATIVE BIRCH  asked if there is a budget  generated before                                                              
an investigation in  order for the board to have  some expectation                                                              
of costs and make a balanced decision.                                                                                          
                                                                                                                                
MR. KENNEDY  stated that normally  the board determines if  a trip                                                              
is needed.   He expressed  that very  seldom do investigators  fly                                                              
to  remote  places;  investigators  usually  drive if  a  trip  is                                                              
deemed  necessary.   In  most occurrences,  investigators  partner                                                              
with someone  in the area, such  as state troopers, who  house and                                                              
transport the investigator to reduce costs.                                                                                     
                                                                                                                                
REPRESENTATIVE  BIRCH  asked  if  overseeing  the  43  professions                                                              
keeps the 16 investigators busy.                                                                                                
                                                                                                                                
MR.  KENNEDY  answered  it  does.   He  stated  that  they  review                                                              
complaints  as they come  in.   If a person  checks certain  boxes                                                              
when filing  an application  for licensing,  then the  application                                                              
goes  to the  investigative  division for  review.   The  division                                                              
ensures that Alaska  does not license someone with  barrier crimes                                                              
in his/her background that might be a threat to public safety.                                                                  
                                                                                                                                
3:52:32 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  STUTES asked  if  any board  member  can make  the                                                              
determination of  whether or not  there will be an  investigation.                                                              
She asked  if this determination  is unilateral or if  it requires                                                              
a majority of the board.                                                                                                        
                                                                                                                                
MR. KENNEDY answered  it's unilateral.  He relayed  that there are                                                              
two public  members normally  assigned to  each board,  and public                                                              
members do  not review  investigations.   Those board  members who                                                              
are  licensed within  the profession  are the  members who  review                                                              
the  cases and  determine  what direction  the  division will  go,                                                              
depending on the jurisdiction.                                                                                                  
                                                                                                                                
REPRESENTATIVE   STUTES  asked  if   an  investigation   would  be                                                              
launched  if a  board has  seven members  and six  say they  don't                                                              
want  an  investigation,  but one  believes  an  investigation  is                                                              
needed.                                                                                                                         
                                                                                                                                
MR.  KENNEDY stated  that  by the  time  the  investigation is  in                                                              
front  of the  entire board,  the investigation  has already  been                                                              
conducted.   When the  entire board  is looking at  a case,  it is                                                              
determining - by majority - whether or not to accept discipline.                                                                
                                                                                                                                
REPRESENTATIVE STUTES  asked if there  is currently a back  log of                                                              
cases.                                                                                                                          
                                                                                                                                
MR.  KENNEDY  answered  no.   He  added  that  right now,  when  a                                                              
complaint  comes  in,  there  is  a  72-hour  window  to  respond.                                                              
Paperwork  is sent  out either  to a  board member  to review  and                                                              
determine  whether  or  not  there  was  a  violation  or  to  the                                                              
complainant.   Cases are immediately  assigned to  an investigator                                                              
once received by  the division.  The division aims  to close cases                                                              
within 180 days.                                                                                                                
                                                                                                                                
3:55:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   STUTES   asked   how  many   investigations   are                                                              
currently going on.                                                                                                             
                                                                                                                                
MR. KENNEDY  stated he  does not  know.  He  informed that  in the                                                              
last fiscal year,  the division looked into  1,600 investigations,                                                              
complaints, probation matters, and intake matters.                                                                              
                                                                                                                                
REPRESENTATIVE STUTES  asked Mr. Kennedy to provide  the number of                                                              
current  open  investigations  and the  number  of  investigations                                                              
that were concluded in 2016.                                                                                                    
                                                                                                                                
3:57:11 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BIRCH asked  how much  activity is  seen with  the                                                              
board managing euthanasia permits.                                                                                              
                                                                                                                                
MR. KENNEDY answered not a lot.                                                                                                 
                                                                                                                                
3:57:43 PM                                                                                                                    
                                                                                                                                
VICE CHAIR  WOOL asked  if Ms. Hovenden  foresees it  being easier                                                              
to  manage  the   boards  as  a  whole  with   spreading  out  the                                                              
investigative  costs  as opposed  to  looking at  each  individual                                                              
board.                                                                                                                          
                                                                                                                                
3:58:10 PM                                                                                                                    
                                                                                                                                
JANEY  HOVENDEN,  Director, Division  of  Corporations,  Business,                                                              
and  Professional  Licensing  (DCBPL),   Department  of  Commerce,                                                              
Community &  Economic Development  (DCCED), stated that  spreading                                                              
out the  costs would  make fee  analysis easier.   She  noted that                                                              
the midwives and  big game guides are in very  difficult positions                                                              
needing to  raise fees to  a level that  creates a barrier  to the                                                              
profession.                                                                                                                     
                                                                                                                                
VICE CHAIR  WOOL asked if an  individual doing massages  without a                                                              
license is reported,  then should the other massage  therapists be                                                              
responsible for covering the cost of an investigation.                                                                          
                                                                                                                                
MS.  HOVENDEN said  that  is  how the  statute  is  written.   She                                                              
offered her  understanding that the  issue has been  considered in                                                              
previous  legislation.   She  proposed  that  it could  be  deemed                                                              
public  safety  and be  paid  for  by  the  general fund,  but  as                                                              
statute  is written,  it is  to be paid  for by  licensees of  the                                                              
profession.                                                                                                                     
                                                                                                                                
VICE CHAIR WOOL  asked whether the investigative  costs are mostly                                                              
travel  or  if   investigators  bill  for  time   like  a  private                                                              
investigator would.                                                                                                             
                                                                                                                                
MS.  HOVENDEN  answered  that investigators  keep  track  of  time                                                              
worked to  15 minutes increments  for billing.  This  ensures that                                                              
the  programs or  boards are  billed for  the corresponding  time.                                                              
She noted  that this is  where the volatility  of costs  comes in.                                                              
Administrative  and  indirect  costs  are  quite  predictable  and                                                              
would keep fees constant.  The investigative costs are variable.                                                                
                                                                                                                                
VICE  CHAIR WOOL  referred to  Mr.  Kennedy's testimony  regarding                                                              
investigators   staying   with    troopers.      He   noted   that                                                              
investigations  of pharmacists  would be  very different  from big                                                              
game  guides.   He asked  for confirmation  that different  people                                                              
investigate big game hunting and pharmacist violations.                                                                         
                                                                                                                                
MS.  HOVENDEN stated  that each  investigator is  assigned one  or                                                              
more program;  some are assigned  to a particular  program because                                                              
it  requires experience.   All  the investigators  are capable  of                                                              
cross  training,  but investigators  are  usually  specialized  in                                                              
their assigned programs.                                                                                                        
                                                                                                                                
4:02:51 PM                                                                                                                    
                                                                                                                                
VICE CHAIR WOOL opened public testimony on HB 90.                                                                               
                                                                                                                                
4:03:01 PM                                                                                                                    
                                                                                                                                
AL BARRETTE  testified in opposition  to HB  90.  He  compared the                                                              
discussion  to a  discussion on  income tax  where the  collective                                                              
pays  for everybody.    He stated  that  the proposed  legislation                                                              
lacks incentive  to reduce  investigations.   The bill  would fund                                                              
investigations   by   charging   individuals   with   occupational                                                              
licenses.   He  drew  attention  to his  letter  to the  committee                                                              
[included  in  the   committee  packet],  which   asked  if  these                                                              
occupations  are overrated.   He stated  his familiarity  with big                                                              
game commercial  services,  and offered that  an individual  could                                                              
be  trapping, make  a  game violation  unrelated  to guiding,  and                                                              
then pay a  fee for the criminal  violation.  After, the  Big Game                                                              
Commercial  Services Board  would  conduct  its own  investigation                                                              
about  whether   a  standard  was  violated  within   the  guiding                                                              
industry.    He said  that  although  the trapping  violation  had                                                              
nothing to  do with guiding,  the investigation is  required based                                                              
on  how  the regulations  are  written.    He proposed  that  each                                                              
occupation  needs to  look at the  reasons behind  the high  costs                                                              
and reoccurrences of investigations.                                                                                            
                                                                                                                                
4:04:55 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  recalled that previous  testimony taught                                                              
that  the   board  members   -  the  licensees   -  ask   for  the                                                              
investigation.   He  characterized that  Mr. Barrette's  complaint                                                              
is not with the DCCED, but with his co-professionals.                                                                           
                                                                                                                                
MR.  BARRETTE responded  that  the characterization  is  partially                                                              
true.    He  stated  that  HB 90  aims  to  recoup  the  costs  by                                                              
requiring all  licensees to  pay a surcharge  to even out  the ebb                                                              
and  flow of  the  investigations  of all  licensed  persons.   He                                                              
remarked, "It  should be ...  maybe you, the legislature,  telling                                                              
... you  need to review  what's going  on within your  occupation,                                                              
your  industry.   Why is  nursing or  why is  big game  commercial                                                              
services   having   such   a  high   bill   or   reoccurrence   of                                                              
investigations?  Is it because the standards are overregulated?"                                                                
                                                                                                                                
REPRESENTATIVE  JOSEPHSON asked  if  Mr. Barrette's  theory is  to                                                              
lessen the standard so people comply.                                                                                           
                                                                                                                                
MR.  BARRETTE  answered no.    He  again  offered the  example  of                                                              
someone  committing  a  violation  that  had nothing  to  do  with                                                              
his/her  occupational license,  yet the  occupational board  would                                                              
investigate it again.                                                                                                           
                                                                                                                                
REPRESENTATIVE JOSEPHSON  asked if an individual is  found to have                                                              
violated his/her  hunting license, then is it  reasonable to infer                                                              
that he/she might not be as trustworthy when guiding?                                                                           
                                                                                                                                
MR.  BARRETTE answered  that would  be reasonable.   He  remarked,                                                              
"Would it be reasonable  to say if you got a  drunk driving ticket                                                              
that  you're not  complying  with  the nursing  board  or ...  the                                                              
board of architecture?"                                                                                                         
                                                                                                                                
4:07:52 PM                                                                                                                    
                                                                                                                                
JOHANNA CROSSETT,  Direct-Entry Midwife,  testified in  support of                                                              
HB  90.    She  stated  her  appreciation  for  the  interest  and                                                              
discussion of  a way to provide  some predictability  of licensing                                                              
fees.                                                                                                                           
                                                                                                                                
4:08:32 PM                                                                                                                    
                                                                                                                                
VICE  CHAIR WOOL  asked  whether the  Board  of Certified  Direct-                                                              
Entry  Midwives'  increase  of  licensing  fees  to  approximately                                                              
$4,000 would reduce  the number of participants  in the profession                                                              
or increase  the occurrence  of individuals  practicing without  a                                                              
license.                                                                                                                        
                                                                                                                                
MS. CROSSETT  she offered  her opinion  that  the high fees  could                                                              
potentially   reduce   the   amount   of   direct-entry   midwives                                                              
practicing  or  apprenticing.    She  stated  that  she  does  not                                                              
foresee midwives practicing unlicensed.                                                                                         
                                                                                                                                
4:09:29 PM                                                                                                                    
                                                                                                                                
ERROL CHAMPION,  Chair, Industry Issues Group,  Alaska Association                                                              
of Realtors,  testified in  opposition to HB  90.  He  stated that                                                              
the  bill goes  over  the  mark.   In  previous years,  [the  Real                                                              
Estate Commission] did  not pay its own way but has  run a surplus                                                              
in  the last  five  years.   He  stated  that it's  important  for                                                              
boards to take  ownership of investigative costs.   He stated that                                                              
if a  colleague "doesn't  pass muster,"  then maybe other  factors                                                              
like education  need to  be addressed.   Amalgamating  the charges                                                              
and handing  them out  won't work.   He explained that  complaints                                                              
about a  realtor don't go  to the full  Real Estate  Commission; a                                                              
complaint goes  to one realtor  member, then the  investigator and                                                              
the commission member  decide whether the investigation  should go                                                              
forward.   The rest of the  commission doesn't hear  the complaint                                                              
until the  investigation is  completed to  determine if  action is                                                              
needed.  He  relayed that he is  not sure the 2,643  realtors need                                                              
to take  ownership  of 70,000 licenses.   He  said he  understands                                                              
the issue  and need to  smooth things out,  and stated  his desire                                                              
to let the Real  Estate Commission and the division  levee out the                                                              
cost of  investigations.  If the  costs are blended,  he remarked,                                                              
"I think we lose  something."  He compared it to  blending all the                                                              
grades for all students in school.                                                                                              
                                                                                                                                
4:12:22 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON stated that  HB 90 is  a good idea.   He                                                              
informed that the  Real Estate Commission could  become insolvent,                                                              
and HB 90 works  as insurance for the members offered  for $20 per                                                              
person.   He offered  his understanding  that realtors  didn't ask                                                              
for a relationship  to hair dressers.  He stated  that the current                                                              
system is unfair because members absorb the cost of a bad actor.                                                                
                                                                                                                                
MR.  CHAMPION responded  that the  current system  is not  broken,                                                              
and  there is  no need  to fix  it.   He  noted there  is a  great                                                              
director at DCBPL  and good accounting practices.   He stated that                                                              
not many  boards are interested  in the  blending of charges.   He                                                              
remarked, "I don't see what we're gaining by this legislation."                                                                 
                                                                                                                                
4:14:16 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BIRCH asked  if the [Real  Estate Commission]  has                                                              
always  been under  a state  licensing  umbrella.   He noted  that                                                              
some   professions,  such   as  physicians   and  attorneys,   are                                                              
independently managed.                                                                                                          
                                                                                                                                
MR. CHAMPION  answered  that that  is his impression  with  his 18                                                              
years  of  experience.    He added  that  often  the  investigator                                                              
doesn't  understand real  estate,  and this  bill further  removes                                                              
ownership of errors and omissions.                                                                                              
                                                                                                                                
4:15:33 PM                                                                                                                    
                                                                                                                                
CHAIR  KITO  stated   that  HB  90  would  change   the  financing                                                              
mechanism for  investigative costs,  but would  not to  change the                                                              
structure of how  investigations are completed.   The investigator                                                              
currently assigned  to the Real  Estate Commission would  still be                                                              
assigned the  same duties under HB  90.  He stated  that sometimes                                                              
new  investigators   are  trained  on  issues  pertaining   to  an                                                              
investigation,  although that  would happen  regardless of  HB 90.                                                              
He offered  an example  that he  can pay for  someone to  plow the                                                              
street in  front of his  house but not pay  to plow the  street in                                                              
front  of  his  neighbor's  house.   He  asked  how  anyone  would                                                              
account  for paying  for just  one portion  of the  street.   Some                                                              
boards  are  adversely  impacted   by  overly  high  and  sporadic                                                              
investigation costs.  He remarked:                                                                                              
                                                                                                                                
     It  is in  the  public's interest  to  have those  costs                                                                   
     spread  out  over  all  the  professions,  and  all  the                                                                   
     professions do  have the opportunity to  receive support                                                                   
     services  from  the  investigative  group,  whether  [or                                                                   
     not] they need  those support services ...   Every board                                                                   
     would  have a  different need  for  those services,  but                                                                   
     every  board ... in  investigations  has the ability  to                                                                   
     draw from that.   Because of the fact that  a profession                                                                   
     is  licensed with  fewer representatives  or because  of                                                                   
     the  fact that  they have  specific investigations  that                                                                   
     may cost a  significant amount of money, they  are being                                                                   
     penalized with their licensing.                                                                                            
                                                                                                                                
CHAIR  KITO  expressed  that it's  becoming  cost  prohibitive  to                                                              
become part  of some professions.   The  bill aims to  enhance and                                                              
support commerce.                                                                                                               
                                                                                                                                
4:18:05 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  STUTES asked if  HB 90 would  make it  less likely                                                              
for  a board  or board  members to  be responsible  for their  own                                                              
actions.   She asked what  the deterrent would  be for a  board to                                                              
not continually violate  the parameters if the board  is not being                                                              
held responsible for its own investigations.                                                                                    
                                                                                                                                
4:19:02 PM                                                                                                                    
                                                                                                                                
VICE  CHAIR WOOL  offered that  one incentive  not to  continually                                                              
violate parameters  is that individuals could lose  their licenses                                                              
or be  fined.  There  is punishment other  than incurring  debt to                                                              
the board.                                                                                                                      
                                                                                                                                
REPRESENTATIVE  STUTES  asked whether  an  investigated  violation                                                              
goes to  someone at DCBPL  other than the investigation  division;                                                              
she  asked, "So  there  can be  punitive  damages  other than  the                                                              
investigations?"                                                                                                                
                                                                                                                                
4:20:29 PM                                                                                                                    
                                                                                                                                
MS. HOVENDEN asked for the question to be clarified.                                                                            
                                                                                                                                
REPRESENTATIVE  STUTES clarified  her  question and  asked, "If  a                                                              
board  is chronically  incurring  investigative  costs  by way  of                                                              
violations,  is  there  something  that  the  department  does  to                                                              
follow  up   on  this  chronic   investigative  charges   by  this                                                              
particular  board?  Are there  other  avenues of  penalizing  this                                                              
board:   If  it's ...  one board,  but  several different  members                                                              
that are constantly having this issue?"                                                                                         
                                                                                                                                
MS.  HOVENDEN  stated  that  it   is  not  the  boards  themselves                                                              
incurring  the  costs  -  the costs  are  incurred  by  licensees.                                                              
Neither  the board  nor the  division  can control  number of  the                                                              
complaints  received.  She  stated that  the board is  responsible                                                              
for  contacting  licensees  about  a particular  problem  such  as                                                              
continuing education.                                                                                                           
                                                                                                                                
4:22:31 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  STUTES  asked  if  there  is  an  avenue  for  the                                                              
department to  get involved in punitive  responses.  She  asked if                                                              
the engineering  board had 1,000 members  and in one year  had 500                                                              
violations that  had been investigated,  would the  department get                                                              
involved  or  would   it  be  kept  between  the   board  and  the                                                              
investigator?                                                                                                                   
                                                                                                                                
MS. HOVENDEN answered  that the investigator works  with the board                                                              
or licensees with  any problem.  The licensees are  fined and have                                                              
penalties.                                                                                                                      
                                                                                                                                
REPRESENTATIVE STUTES  asked whether the board has  the capability                                                              
to recommend revoking a license.                                                                                                
                                                                                                                                
MS. HOVENDEN stated  that the board makes the final  decision on a                                                              
situation with a licensee after an investigation.                                                                               
                                                                                                                                
REPRESENTATIVE  STUTES  asked  for clarification  on  whether  the                                                              
board has the option to revoke a license.                                                                                       
                                                                                                                                
MS. HOVENDEN  stated that the  board must follow  regulations, but                                                              
can revoke licenses under set circumstances.                                                                                    
                                                                                                                                
4:25:15 PM                                                                                                                    
                                                                                                                                
VICE CHAIR WOOL announced that HB 90 was held over.                                                                             
                                                                                                                                
4:25:22 PM                                                                                                                    
                                                                                                                              
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being  no further business  before the committee,  the House                                                              
Labor and  Commerce Standing  Committee meeting  was adjourned  at                                                              
4:25 p.m.                                                                                                                       

Document Name Date/Time Subjects
HB090 Sectional Analysis 2.8.17.pdf HL&C 2/13/2017 3:15:00 PM
HB 90
HB090 Sponsor Statement 2.8.17.pdf HL&C 2/13/2017 3:15:00 PM
HB 90
HB090 Supporting Document - Board License Action Options 2.8.17.pdf HL&C 2/13/2017 3:15:00 PM
HB 90
HB090 Supporting Document - Licensing Statistics 2.8.17.pdf HL&C 2/13/2017 3:15:00 PM
HB 90
HB090 Supporting Document - Summary of All Professional Licensing 2.8.17.pdf HL&C 2/13/2017 3:15:00 PM
HB 90
HB090 Fiscal Note DCCED-DCBPL 2.10.17.pdf HL&C 2/13/2017 3:15:00 PM
HB 90
HB090 Supporting Document - CBPL Investigative Process 2.8.17.pdf HL&C 2/13/2017 3:15:00 PM
HB 90