Legislature(2017 - 2018)BARNES 124

01/22/2018 03:15 PM LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 273 EXTEND: MARIJUANA CONTROL BOARD TELECONFERENCED
Heard & Held
-- Public Testimony --
*+ HB 274 EXTEND: BD OF PSYCHOLOGISTS/PSYCH ASSOC. TELECONFERENCED
Heard & Held
-- Public Testimony --
*+ HB 275 EXTEND: BOARD OF MASSAGE THERAPISTS TELECONFERENCED
Heard & Held
-- Public Testimony --
+= HB 180 MONEY SERVICES BUSINESS: REQS; LICENSING; TELECONFERENCED
Scheduled but Not Heard
-- Public Testimony --
                    ALASKA STATE LEGISLATURE                                                                                  
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                                                                         
                        January 22, 2018                                                                                        
                           3:21 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. 273                                                                                                              
"An Act extending  the termination date of  the Marijuana Control                                                               
Board; and providing for an effective date."                                                                                    
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
HOUSE BILL NO. 274                                                                                                              
"An  Act  extending   the  termination  date  of   the  Board  of                                                               
Psychologist   and   Psychological   Associate   Examiners;   and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
HOUSE BILL NO. 275                                                                                                              
"An Act  extending the termination  date of the Board  of Massage                                                               
Therapists; and providing for an effective date."                                                                               
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
HOUSE BILL NO. 180                                                                                                              
"An  Act relating  to money  transmission  and currency  exchange                                                               
businesses; relating  to transmitting value that  substitutes for                                                               
money;  relating  to   licensing  requirements  and  registration                                                               
through the Nationwide Multistate  Licensing System and Registry;                                                               
relating  to  surety  bonding requirements;  authorizing  certain                                                               
licensees to contract to use  subdelegates for reloading funds on                                                               
certain  stored-value   cards;  relating  to   record  retention,                                                               
reporting requirements,  and enforcement provisions;  relating to                                                               
exemptions;  relating  to  money  services  Internet  activities;                                                               
relating to  transmitting value and  currency; and  providing for                                                               
an effective date."                                                                                                             
                                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 273                                                                                                                  
SHORT TITLE: EXTEND: MARIJUANA CONTROL BOARD                                                                                    
SPONSOR(s): REPRESENTATIVE(s) KITO                                                                                              
                                                                                                                                
01/12/18       (H)       PREFILE RELEASED 1/12/18                                                                               
01/16/18       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/16/18       (H)       L&C, FIN                                                                                               
01/22/18       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
BILL: HB 274                                                                                                                  
SHORT TITLE: EXTEND: BD OF PSYCHOLOGISTS/PSYCH ASSOC.                                                                           
SPONSOR(s): REPRESENTATIVE(s) KITO                                                                                              
                                                                                                                                
01/12/18       (H)       PREFILE RELEASED 1/12/18                                                                               
01/16/18       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/16/18       (H)       L&C, FIN                                                                                               
01/22/18       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
BILL: HB 275                                                                                                                  
SHORT TITLE: EXTEND: BOARD OF MASSAGE THERAPISTS                                                                                
SPONSOR(s): REPRESENTATIVE(s) KITO                                                                                              
                                                                                                                                
01/12/18       (H)       PREFILE RELEASED 1/12/18                                                                               
01/16/18       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/16/18       (H)       L&C, FIN                                                                                               
01/22/18       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
CRYSTAL KOENEMAN, Staff                                                                                                         
Representative Sam Kito                                                                                                         
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented HB 273 and HB 275 on behalf of                                                                 
the bill sponsor, Representative Kito.                                                                                          
                                                                                                                                
KRISTIN CURTIS                                                                                                                  
Legislative Auditor                                                                                                             
Legislative Audit Division                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Provided information on the audit requests.                                                              
                                                                                                                                
ERIKA MCCONNELL, Director                                                                                                       
Alcohol and Marijuana Control Office (AMCO)                                                                                     
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions during discussion of the                                                              
sunset review.                                                                                                                  
                                                                                                                                
BRANDON EMMETT, Industry Seat Board Member                                                                                      
Marijuana Control Board                                                                                                         
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 273.                                                                          
                                                                                                                                
JANA WELTZIN, Owner                                                                                                             
JDW Counsel, LLC                                                                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 273.                                                                          
                                                                                                                                
LEAH LEVINTON                                                                                                                   
Enlighten Alaska                                                                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 273.                                                                          
                                                                                                                                
BRUCE SCHULTE                                                                                                                   
Campaign to Regulate Marijuana                                                                                                  
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 273.                                                                          
                                                                                                                                
CAITLYN ELLIS, Staff                                                                                                            
Representative Sam Kito                                                                                                         
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented HB 274 on behalf of the bill                                                                   
sponsor, Representative Kito.                                                                                                   
                                                                                                                                
ALLEN LEVY, Chair                                                                                                               
Board of Psychologists and Psychological Associate Examiners                                                                    
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified during discussion of HB 274.                                                                   
                                                                                                                                
ROBERT LANE, PhD                                                                                                                
Federal/State Advocacy Coordinator                                                                                              
Alaska Psychological Association                                                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 274                                                                           
                                                                                                                                
SARA CHAMBERS, Deputy Director                                                                                                  
Juneau Office                                                                                                                   
Division of Corporations, Business, and Professional Licensing                                                                  
Department of Commerce, Community & Economic Development                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified during discussion of HB 275.                                                                   
                                                                                                                                
DAVID EDWARDS-SMITH, Chair                                                                                                      
Board of Massage Therapists                                                                                                     
Soldotna, Alaska                                                                                                                
POSITION STATEMENT:  Testified during discussion of HB 275.                                                                   
                                                                                                                                
VOLKER HRUBY, President                                                                                                         
American Massage Therapy Association (AMTA) - Alaska Chapter                                                                    
Girdwood, Alaska                                                                                                                
POSITION STATEMENT:  Testified during discussion of HB 275.                                                                   
                                                                                                                                
KIM VERREYDT                                                                                                                    
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 275.                                                                          
                                                                                                                                
JANE GNASS                                                                                                                      
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 275.                                                                          
                                                                                                                                
JILL MOTZ                                                                                                                       
Wasilla, Alaska                                                                                                                 
POSITION STATEMENT:  Testified in support of HB 275.                                                                          
                                                                                                                                
YAEL HICKOK                                                                                                                     
Chugiak, Alaska                                                                                                                 
POSITION STATEMENT:  Testified in opposition to HB 275.                                                                       
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:21:13 PM                                                                                                                    
                                                                                                                                
CHAIR  SAM KITO  called  the House  Labor  and Commerce  Standing                                                             
Committee meeting  to order at  3:21 p.m.   Representatives Kito,                                                               
Josephson, Knopp,  Birch, and  Wool were present  at the  call to                                                               
order.   Representative  Stutes  arrived as  the  meeting was  in                                                               
progress.                                                                                                                       
                                                                                                                                
             HB 273-EXTEND: MARIJUANA CONTROL BOARD                                                                         
                                                                                                                                
3:22:40 PM                                                                                                                    
                                                                                                                                
CHAIR KITO  announced that the  first order of business  would be                                                               
HOUSE BILL  NO. 273,  "An Act extending  the termination  date of                                                               
the  Marijuana  Control Board;  and  providing  for an  effective                                                               
date."                                                                                                                          
                                                                                                                                
3:22:51 PM                                                                                                                    
                                                                                                                                
CRYSTAL KOENEMAN, Staff, Representative Sam Kito, Alaska State                                                                  
Legislature, paraphrased from the Sponsor Statement [Included in                                                                
members' packets], which read:                                                                                                  
                                                                                                                                
     House  Bill 273  extends the  termination date  for the                                                                    
     Marijuana Control Board until June 30, 2024.                                                                               
                                                                                                                                
     Per statute, this board is  scheduled to sunset on June                                                                    
     30, 2018 with  a one-year wind down  if the legislature                                                                    
     does not  pass legislation extending it.  The licensing                                                                    
     function  will remain  after  this  date; however,  the                                                                    
     administrative  functions of  the board  would transfer                                                                    
     to the department.                                                                                                         
                                                                                                                                
     Legislative Audit  reviewed the board's  operations and                                                                    
     determined  that it  is  in the  best  interest of  the                                                                    
     state  to  extend  this board.  The  audit  makes  four                                                                    
     recommendations  and  recommends a  six-year  extension                                                                    
     with a new  termination date of June 30,  2024. This is                                                                    
     shy of  the full eight-year extension  that Legislative                                                                    
     Audit is authorized to provide.                                                                                            
                                                                                                                                
     The recommendations are as follows:                                                                                        
     1.  The board  members, Alcohol  and Marijuana  Control                                                                    
     Office  (AMCO)  director,  and  enforcement  supervisor                                                                    
     should   work  together   to   formally  establish   an                                                                    
     enforcement   plan   to  direct   limited   enforcement                                                                    
     resources.                                                                                                                 
     2. The board  and the AMCO director  should implement a                                                                    
     process to monitor and track  complaints to ensure they                                                                    
     are assessed  for follow up action  and investigated in                                                                    
     a timely manner.                                                                                                           
     3. The AMCO director  should develop written procedures                                                                    
     for  establishing  the  expiration dates  of  marijuana                                                                    
     handler   permits   and   ensure  staff   receive   the                                                                    
     appropriate training.                                                                                                      
     4.  The  AMCO  director should  develop  and  implement                                                                    
     procedures to segregate the  duties for calculating and                                                                    
     remitting fees to local governments.                                                                                       
                                                                                                                                
     The Marijuana Control Board is  a regulatory and quasi-                                                                    
     judicial board consisting of  five members appointed by                                                                    
     the governor, created  for controlling the cultivation,                                                                    
     manufacture, and  sale of marijuana  in the  state. The                                                                    
     board  consists of  one member  from the  public safety                                                                    
     sector,  one   from  the  public  health   sector,  one                                                                    
     residing in a  rural area, one actively  engaged in the                                                                    
     marijuana  industry, and  one  who is  either from  the                                                                    
     general  public or  actively engaged  in the  marijuana                                                                    
     industry.                                                                                                                  
                                                                                                                                
     The  continuation of  the  Marijuana  Control Board  is                                                                    
     important to the health and safety of Alaskans.                                                                            
                                                                                                                                
3:24:14 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BIRCH  asked how  the duties  and responsibilities                                                               
of the board in terms of state law interacted with federal law.                                                                 
                                                                                                                                
CHAIR  KITO   offered  his  understanding  that   previously  the                                                               
administration implemented  a memo which stated  that the federal                                                               
priorities  were "not  on enforcing  the  drug situation  locally                                                               
except in  the cases of significant  crimes."  He noted  that, as                                                               
the  memo had  since been  withdrawn, it  would be  best to  hear                                                               
about implementation  of state  statute on  the role  between the                                                               
state and federal government.                                                                                                   
                                                                                                                                
REPRESENTATIVE  BIRCH  related  that  he had  served  on  various                                                               
boards and  there was always a  concern for board liability.   He                                                               
expressed his concern for the protection of board members.                                                                      
                                                                                                                                
CHAIR  KITO offered  his belief  that  this could  be brought  up                                                               
later.                                                                                                                          
                                                                                                                                
REPRESENTATIVE KNOPP offered his belief  that the former chair of                                                               
the Alcohol  and Beverage Control  Board was a police  chief, and                                                               
when the memo was revoked, the chief  had felt it was his duty to                                                               
step aside.                                                                                                                     
                                                                                                                                
3:28:17 PM                                                                                                                    
                                                                                                                                
KRISTIN CURTIS, Legislative  Auditor, Legislative Audit Division,                                                               
Alaska  State  Legislature,  directed  attention  to  the  Sunset                                                               
Review  [included  in  members'  packets]  and  stated  that  the                                                               
purpose  of  the  sunset  review was  to  determine  whether  the                                                               
Marijuana  Control  Board was  serving  the  public interest  and                                                               
whether it  should be extended.   She  explained that this  was a                                                               
new board  created as a result  of the 2014 ballot  measure, that                                                               
there  was  background  information  on page  three,  and  report                                                               
conclusions on  page five  of the review.   She  paraphrased from                                                               
the Report Conclusions in the review, which read, in part:                                                                      
                                                                                                                                
     Overall, the  audit concludes the board  is serving the                                                                    
     public's  interest by  effectively licensing  marijuana                                                                    
     establishments and developing  and adopting regulations                                                                    
     necessary  to implement  statutes  that  allow for  the                                                                    
     cultivation,  manufacture,  and  sale of  marijuana  in                                                                    
     Alaska.  The  audit   makes  four  recommendations  for                                                                    
     operational improvements.                                                                                                  
                                                                                                                                
     The   board  met   its  statutory   mandate  to   adopt                                                                    
     regulations   necessary   for  implementing   statutes.                                                                    
     Significant   regulations    (3   AAC    306)   specify                                                                    
     requirements  for  the issuance,  renewal,  suspension,                                                                    
     and  revocation of  registrations to  operate marijuana                                                                    
     establishments; qualifications for  registration; and a                                                                    
     schedule  of  application,  registration,  and  renewal                                                                    
     fees.  The board  operated in  the public  interest and                                                                    
     did  not  duplicate  the  efforts  of  other  entities,                                                                    
     registration, and renewal fees.  The board also amended                                                                    
     regulations  to clarify  submissions to  the board  and                                                                    
     conduct  of board  meetings.  Regulatory additions  and                                                                    
     changes  during the  audit period  were public  noticed                                                                    
     according to the Administrative Procedures Act.                                                                            
                                                                                                                                
     To  help  evaluate  board effectiveness,  surveys  were                                                                    
     conducted as  part of the  audit. A survey was  sent to                                                                    
     101 licensees  and 71 (70 percent)  responded. A second                                                                    
     survey  was sent  to 16  local governments  that had  a                                                                    
     license  issued  in  their   jurisdiction  and  14  (88                                                                    
     percent)  responded.  Licensee   and  local  government                                                                    
     survey  questions   and  responses  are   presented  as                                                                    
     Appendices B and C of this report.                                                                                         
                                                                                                                                
     One   hundred  percent   of  local   government  survey                                                                    
     respondents   and  75   percent   of  licensee   survey                                                                    
     respondents rated the  board's overall effectiveness in                                                                    
     serving  the  public  interest  as  effective  or  very                                                                    
     effective.  Eighty-six  percent   of  local  government                                                                    
     survey   respondents  believe   the   board  does   not                                                                    
     duplicate efforts.                                                                                                         
                                                                                                                                
3:30:15 PM                                                                                                                    
                                                                                                                                
MS.  CURTIS  directed attention  to  page  8  of the  review  and                                                               
reported  that  the  [Marijuana Control]  Board  had  issued  122                                                               
licenses from  July 2016 through  April 2017, with 80  percent of                                                               
the  licensee  survey  respondents  rating  the  overall  license                                                               
experience as  good or excellent.   She further  paraphrased from                                                               
page 8, which read:                                                                                                             
                                                                                                                                
     Additionally,  as included  in AMCO's  FY 17  operating                                                                    
     budget,3  it  is the  intent  of  the legislature  that                                                                    
     application  and  licensing  fees  cover  the  cost  of                                                                    
     regulation  and   recover  unrestricted   general  fund                                                                    
     appropriations  made   while  the  program   was  being                                                                    
     established. AMCO  staff has implemented a  process for                                                                    
     tracking both  revenues and expenditures,  but reported                                                                    
     it  is too  early in  the development  of the  board to                                                                    
     determine  whether   the  current   fees  are   set  at                                                                    
     sufficient levels  to cover the cost  of regulating the                                                                    
     marijuana  industry.  AMCO  management  expects  to  be                                                                    
     fully funded  by application and  licensing fees  by FY                                                                    
     20. Exhibit  3 presents a schedule  of fees established                                                                    
     by the board.                                                                                                              
                                                                                                                                
MS. CURTIS  directed attention  to page 11  of the  review, which                                                               
listed  the first  of  four recommendations  made  by the  audit,                                                               
titled,  "The board  members, the  Alcohol and  Marijuana Control                                                               
Office  (AMCO  or  control   office)  director,  and  enforcement                                                               
supervisor  should   work  together  to  formally   establish  an                                                               
enforcement plan to direct  limited enforcement resources," which                                                               
read:                                                                                                                           
                                                                                                                                
     The  audit   identified  the  enforcement   section  is                                                                    
     operating  without a  formally established  enforcement                                                                    
     plan. Neither  the Marijuana Control Board  (board) nor                                                                    
     AMCO   director  had   considered  the   need  for   or                                                                    
     importance of  establishing enforcement goals  or plans                                                                    
     to  ensure  the  effective  allocation  of  enforcement                                                                    
     resources. Per  AS 17.38.121, the board  is vested with                                                                    
     the  powers  necessary  to   enforce  laws  related  to                                                                    
     marijuana and  may employ enforcement agents  and staff                                                                    
     it  considers necessary  to carry  out its  duties. The                                                                    
     board  has  tasked  the enforcement  section  with  the                                                                    
     responsibility  of detecting  violations and  enforcing                                                                    
     marijuana  laws.   By  not  formally   establishing  an                                                                    
     enforcement  plan,  the   enforcement  section  has  no                                                                    
     guidance  for prioritizing  its  limited resources  and                                                                    
     runs the risk of  not adequately protecting the public.                                                                    
     We recommend the board members,  the AMCO director, and                                                                    
     enforcement  supervisor   work  together   to  formally                                                                    
     establish an enforcement plan  to direct AMCO's limited                                                                    
     enforcement resources.                                                                                                     
                                                                                                                                
MS.  CURTIS paraphrased  from the  second recommendation,  titled                                                               
"The board  and the AMCO  director should implement a  process to                                                               
monitor  and track  complaints to  ensure they  are assessed  for                                                               
follow up action and investigated  in a timely manner," beginning                                                               
on page 11, which read:                                                                                                         
                                                                                                                                
     The  board and  AMCO management  have not  maintained a                                                                    
     process  to  monitor and  track  all  actions taken  on                                                                    
     complaints  to ensure  they are  resolved  in a  timely                                                                    
     manner.  The  board  does have  a  process  to  receive                                                                    
     complaints  from licensees,  law enforcement  agencies,                                                                    
     and   the  general   public   through  their   website,                                                                    
     telephone,  or  emails;  however, complaints  are  only                                                                    
     tracked   if   they   result  in   an   inspection   or                                                                    
     investigation.  Furthermore, the  basis for  a decision                                                                    
     not to investigate is not documented and maintained.                                                                       
                                                                                                                                
     According  to   AMCO  staff,  a  process   to  log  all                                                                    
     complaints   received   previously  existed   for   the                                                                    
     Alcoholic  Beverage Control  Board;  however, when  the                                                                    
     Marijuana    Control   Board    was   created,    staff                                                                    
     responsibilities  were realigned,  and the  maintenance                                                                    
     of the complaint log took  a lower priority compared to                                                                    
     new   responsibilities    associated   with   marijuana                                                                    
     regulation.                                                                                                                
                                                                                                                                
     The efficiency  with which complaints  are investigated                                                                    
     is one  of the sunset  evaluation criteria used  in the                                                                    
     legislative    oversight   process.    Alaska   Statute                                                                    
     44.66.050(c)(6)  specifies   the  sunset   review  must                                                                    
     evaluate:                                                                                                                  
                                                                                                                                
     The   efficiency  with   which   public  inquiries   or                                                                    
     complaints  regarding the  activities of  the board  or                                                                    
     commission  fi  led with  it,  with  the department  to                                                                    
     which  a   board  or  commission   is  administratively                                                                    
     assigned, or with the office  of victims' rights or the                                                                    
     office  of  the  ombudsman   have  been  processed  and                                                                    
     resolved.                                                                                                                  
                                                                                                                                
     By not tracking complaints,  there is an increased risk                                                                    
     that board staff may  not investigate complaints and/or                                                                    
     not  investigate complaints  in a  timely manner.  Such                                                                    
     instances   could  reduce   the   board's  ability   to                                                                    
     effectively   enforce  marijuana   laws.  Additionally,                                                                    
     complaints  received   directly  by  board   staff  via                                                                    
     telephone or email  may never be resolved  in the event                                                                    
     of staff turnover.                                                                                                         
                                                                                                                                
     We recommend the board and  the AMCO director implement                                                                    
     a process  to monitor and track  complaints received to                                                                    
     ensure  they  are assessed  for  follow  up action  and                                                                    
     investigated in a timely manner.                                                                                           
                                                                                                                                
3:32:57 PM                                                                                                                    
                                                                                                                                
MS.  CURTIS paraphrased  from  the  third recommendation,  titled                                                               
"The  AMCO   director  should  develop  written   procedures  for                                                               
establishing the  expiration dates  of marijuana  handler permits                                                               
and ensure staff receive the  appropriate training," beginning on                                                               
page 12, which read:                                                                                                            
                                                                                                                                
     Forty-seven  of  53  marijuana handler  permits  tested                                                                    
     were issued  by AMCO  with incorrect  expiration dates.                                                                    
     Of  these, 45  were  issued for  a  longer period  than                                                                    
     allowed by  regulation. Regulation at 3  AAC 306.700(c)                                                                    
     states that:                                                                                                               
                                                                                                                                
     To obtain a marijuana handler  permit, a person who has                                                                    
     completed  the   marijuana  handler   permit  education                                                                    
     course  described  under  (b)  of  this  section  shall                                                                    
     present  the  course   completion  certificate  to  the                                                                    
     director.  Th  e  director   shall  issue  a  marijuana                                                                    
     handler  permit card  valid for  three  years from  the                                                                    
     date of issue.                                                                                                             
                                                                                                                                
     Management  interprets the  three-year validity  period                                                                    
     to start on the date  of the course completion. In most                                                                    
     instances,  expiration  dates  of the  handler  permits                                                                    
     were  established  at three  years  from  the date  the                                                                    
     individual applied for the permit.  The lack of written                                                                    
     procedures and sufficient  training contributed to AMCO                                                                    
     staff's varying interpretations  for calculating permit                                                                    
     expiration dates.                                                                                                          
                                                                                                                                
     By not  issuing permits in accordance  with regulation,                                                                    
     AMCO  is allowing  permit holders  to handle  marijuana                                                                    
     and  marijuana  products  beyond   the  period  set  in                                                                    
     regulation  without   obtaining  updated   training  on                                                                    
     marijuana laws.                                                                                                            
                                                                                                                                
     We   recommend  the   AMCO  director   develop  written                                                                    
     procedures  for establishing  the  expiration dates  of                                                                    
     marijuana handler permits and  ensure staff receive the                                                                    
     appropriate training.                                                                                                      
                                                                                                                                
3:33:20 PM                                                                                                                    
                                                                                                                                
MS.  CURTIS paraphrased  from the  fourth recommendation,  titled                                                               
"The  AMCO director  should develop  and implement  procedures to                                                               
segregate the duties for calculating  and remitting fees to local                                                               
governments," beginning on page 13 of the review, which read:                                                                   
                                                                                                                                
     AMCO  management does  not adequately  segregate duties                                                                    
     over   remittances  of   application   fees  to   local                                                                    
     governments.  The  audit  found one  AMCO  employee  is                                                                    
     responsible for  calculating and approving  the amounts                                                                    
     to be  remitted to  local governments, and  no separate                                                                    
     review is performed.                                                                                                       
                                                                                                                                
     Upon  receipt  of  a new  or  renewal  application,  AS                                                                    
     17.38.200(c) requires the  board to immediately forward                                                                    
     a   copy  of   each   application  and   half  of   the                                                                    
     registration  application fee  to the  local regulatory                                                                    
     authority  for  the  local   government  in  which  the                                                                    
     applicant   desires    to   operate.    Management   is                                                                    
     responsible  for  establishing   internal  controls  to                                                                    
     ensure  fees   remitted  are  accurate   and  complete.                                                                    
     Segregation  of duties  is a  key internal  control for                                                                    
     appropriately receiving and distributing funds.                                                                            
                                                                                                                                
     AMCO  management   did  not   consider  the   need  for                                                                    
     segregating  the duties  for  remitting  fees to  local                                                                    
     governments.  The  lack   of  adequate  segregation  of                                                                    
     duties increases the risks of error or fraud.                                                                              
                                                                                                                                
     We recommend  the AMCO  director develop  and implement                                                                    
     procedures  to  adequately  segregate  the  duties  for                                                                    
     calculating and remitting fees to local governments.                                                                       
                                                                                                                                
MS. CURTIS shared that the  response from Department of Commerce,                                                               
Community & Economic Development was  on page 33 and the response                                                               
from the Marijuana Control Board was  on page 35.  She added that                                                               
both expressed agreement to all four of the recommendations.                                                                    
                                                                                                                                
3:34:20 PM                                                                                                                    
                                                                                                                                
CHAIR KITO offered his belief  that there had not been withdrawal                                                               
of the  aforementioned memo during  the completion of  the sunset                                                               
review.   He  asked if  that decision  by the  federal government                                                               
would have  any impact  on the efficacy  or the  applicability of                                                               
the Alaska Marijuana Control Board.                                                                                             
                                                                                                                                
MS. CURTIS replied  that it was outside the scope  of the review,                                                               
and it had not been considered during the audit.                                                                                
                                                                                                                                
3:35:24 PM                                                                                                                    
                                                                                                                                
ERIKA MCCONNELL,  Director, Alcohol and Marijuana  Control Office                                                               
(AMCO), in response to Representative  Birch, said that there was                                                               
a  work   project  to   develop  regulations   regarding  on-site                                                               
consumption.  This  proposal had received more than  500 pages of                                                               
comment  when it  had been  opened  for public  comment and  that                                                               
several issues had been identified  which needed work through the                                                               
regulations.  These issues had  been forwarded to a sub-committee                                                               
for work with a new proposal due at the April meeting.                                                                          
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  referenced  a  break-in  in  Anchorage                                                               
resulting in  the loss of  more than  $100,000 in assets  in less                                                               
than  65 seconds.   He  asked  if it  was necessary  to show  the                                                               
floorplan of the business on-line.                                                                                              
                                                                                                                                
MS.  MCCONNELL   expressed  concern  for  the   security  of  the                                                               
licensees.   She explained  that the  application forms  had been                                                               
revised  to  no  longer  request  that  the  applicant  show  any                                                               
security apparatus.   She added that the AMCO was  also trying to                                                               
find the  balance between  public access  to information  for the                                                               
board  and  the   security  concerns  of  the   licensees.    She                                                               
acknowledged  that the  licensed premise  diagram would  still be                                                               
required for  review, but  it would be  removed from  the website                                                               
once the facility began operation.                                                                                              
                                                                                                                                
REPRESENTATIVE JOSEPHSON noted that  the Alaska State Legislature                                                               
had  introduced many  bills after  the  marijuana initiative  had                                                               
been passed,  although very few  were passed.   He asked  if this                                                               
hands-off approach  by the Legislature  was working, or  if there                                                               
was a need for "greater guidance."                                                                                              
                                                                                                                                
MS. MCCONNELL shared her belief  that the Marijuana Control Board                                                               
had been  very responsive throughout  the regulatory  process, to                                                               
address issues that  had been found in reviews by  the AMCO.  She                                                               
deferred to the board members for their comments.                                                                               
                                                                                                                                
REPRESENTATIVE   WOOL   asked   about  the   investigations   for                                                               
complaints.                                                                                                                     
                                                                                                                                
MS. MCCONNELL  replied that, in  general, AMCO  only investigated                                                               
submitted complaints and was not looking for problems.                                                                          
                                                                                                                                
REPRESENTATIVE WOOL  asked if there  were "stings"  or operations                                                               
to intentionally get people to break the rules.                                                                                 
                                                                                                                                
MS.  MCCONNELL   relayed  that,  with  alcohol,   there  was  the                                                               
compliance check  and the shoulder  tap program.  She  noted that                                                               
AMCO  was working  to  resurrect those  programs  and would  also                                                               
apply  them for  marijuana.   She explained  that the  compliance                                                               
check  was  an  attempt  by  underaged  people  to  purchase  the                                                               
regulated product, and  the shoulder tap was  an underaged person                                                               
waiting outside  the facility and  asking people to  purchase for                                                               
them.  She  offered her belief that these were  important ways to                                                               
enforce the laws for regulated substances.                                                                                      
                                                                                                                                
REPRESENTATIVE WOOL  asked if there  was enough staff  to enforce                                                               
both marijuana and alcohol.                                                                                                     
                                                                                                                                
MS.  MCCONNELL offered  her belief  that  it made  sense to  have                                                               
these two substances  regulated through the same  office, even as                                                               
the staff  was extremely  busy.  She  relayed that  although they                                                               
could use  more people, she was  not going to ask  for more staff                                                               
and that the office was managing.                                                                                               
                                                                                                                                
REPRESENTATIVE  WOOL  referenced  an  infraction  for  inaccurate                                                               
labeling  by a  Fairbanks  business, in  which  the business  was                                                               
fined $500,000.   He asked if  there was a schedule  of fines, or                                                               
if this  was an  arbitrary amount,  as it appeared  to be  a very                                                               
high fine for a new business.                                                                                                   
                                                                                                                                
MS.  MCCONNELL explained  that the  situation went  far beyond  a                                                               
labelling issue,  that this was a  product manufacturing facility                                                               
that was  not testing the vast  majority of its product,  a major                                                               
health and safety issue.  She shared  that it was the result of a                                                               
tip that the business was not  testing or tracking the product as                                                               
required.  She  explained that she then wrote  an accusation with                                                               
a recommendation for  the license to be revoked  and submitted it                                                               
to  the Board  for consideration.   She  reported that  the Board                                                               
decided that a  fine was important, and although there  was not a                                                               
table  of fines,  there was  a proposal  for certain  amounts for                                                               
each  subsequent  violation or  three  times  the profit  of  the                                                               
licensee.  She  noted that, as the business had  a profit of more                                                               
than  $1  million,  the  board  decided  that  a  high  fine  was                                                               
warranted.                                                                                                                      
                                                                                                                                
3:46:14 PM                                                                                                                    
                                                                                                                                
CHAIR  KITO  referenced  the fiscal  note  [Include  in  members'                                                               
packets] which  identified $532,000 from general  funds and asked                                                               
about the necessity for this funding.                                                                                           
                                                                                                                                
MS.  MCCONNELL offered  her understanding  that when  the program                                                               
was created  there was  a requirement  that it  be funded  by the                                                               
fees.   In FY16 and FY17,  the office was funded  by unrestricted                                                               
General  Funds,  with  the  understanding  that  there  would  be                                                               
subsequently less in the ensuing years  and for it to be entirely                                                               
self-supported  by FY2020.    She explained  that  for FY19,  the                                                               
general fund allocation request was  for half of the FY18 amount.                                                               
She  pointed out  that  the industry  was  still determining  the                                                               
number of licenses  to determine the income  necessary to support                                                               
the needs of this regulated industry.                                                                                           
                                                                                                                                
CHAIR KITO mused that this  was in recognition for the transition                                                               
from start up to regular operations.                                                                                            
                                                                                                                                
MS. MCCONNELL expressed her agreement.                                                                                          
                                                                                                                                
REPRESENTATIVE BIRCH  offered his  understanding that  "there's a                                                               
lot of cash moving around."   He asked if the annual license fees                                                               
were paid with "a fistful of cash."                                                                                             
                                                                                                                                
MS.  MCCONNELL  relayed that  most  people  paid with  checks  or                                                               
cashier's checks, and that they did not receive very much cash.                                                                 
                                                                                                                                
REPRESENTATIVE KNOPP  asked how  the shoulder tap  program worked                                                               
and who was held accountable under the program.                                                                                 
                                                                                                                                
MS. MCCONNELL  explained that  every store  must have  a security                                                               
person at  the front entrance to  make sure that no  one under 21                                                               
[years of age]  entered.  She said that the  shoulder tap program                                                               
was a  bit challenging because  someone had to notice  that after                                                               
the purchaser went outside, they  gave it to someone who appeared                                                               
to  be underage.    She  said that  they  tried  to address  each                                                               
situation on a case by case basis for accountability.                                                                           
                                                                                                                                
REPRESENTATIVE   JOSEPHSON  shared   his   observation  that   in                                                               
Anchorage there  were "dozens  of retail  operations."   He asked                                                               
about  the  determination  for  the  number  of  licensees.    He                                                               
questioned whether  there was  enough demand for  them to  all be                                                               
profitable.                                                                                                                     
                                                                                                                                
MS. MCCONNELL  replied that there was  not a limit to  the number                                                               
of state  licenses; however, the  local governments were  able to                                                               
set a  limit, even though  the Municipality of Anchorage  had not                                                               
done so.                                                                                                                        
                                                                                                                                
3:52:21 PM                                                                                                                    
                                                                                                                                
BRANDON  EMMETT, Industry  Seat Board  Member, Marijuana  Control                                                               
Board, stated his  support for the proposed bill  and offered his                                                               
belief that the Marijuana Control Board  had done "quite a lot of                                                               
great work  for the State  of Alaska" and  that he would  like to                                                               
see that work  continued.  He opined that  a functional regulated                                                               
marijuana industry was  more in line with the needs  of the state                                                               
than the previously unregulated system.                                                                                         
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  asked if  the  board  was seeking  any                                                               
guidance from  the legislature or  would they prefer  a hands-off                                                               
approach.                                                                                                                       
                                                                                                                                
MR. EMMETT  replied that the  board currently "does not  have any                                                               
specific asks  of the legislature."   He acknowledged  that there                                                               
were  some issues  that he  believed  could be  addressed by  the                                                               
legislature.                                                                                                                    
                                                                                                                                
REPRESENTATIVE  WOOL drew  attention  to page  23  of the  sunset                                                               
audit  [APPENDIX  B]  depicting   survey  data  for  the  overall                                                               
licensing  experience, the  overall renewal  experience, and  the                                                               
overall board effectiveness.  He  pointed out that the percentage                                                               
of responses for poor, creates  an unnecessary barrier, or not at                                                               
all effective was  at least 20 percent and asked  if any of these                                                               
applicant responses concerned him as a board member.                                                                            
                                                                                                                                
MR. EMMETT offered his understanding  that many of the complaints                                                               
had been made at the beginning  of the process, as there had been                                                               
significant barriers  at entry,  mainly financial  barriers which                                                               
made it  "a pay-to-play  system."  He  opined that  although some                                                               
applicants  found  it difficult  to  enter  the industry,  as  it                                                               
matured the  number of complaints  would diminish.   He suggested                                                               
that the process  was relatively smooth in comparison  to that of                                                               
other states.                                                                                                                   
                                                                                                                                
REPRESENTATIVE  WOOL  asked if  the  merger  of the  alcohol  and                                                               
marijuana boards had been effective or divergent.                                                                               
                                                                                                                                
MR.  EMMETT  stated  that  there  were  some  subtle  differences                                                               
between the  alcohol and  the marijuana  industries and  that the                                                               
greatest challenge was  for total resources.  He  opined that the                                                               
staff has "been  stretched to the limit," working  very hard with                                                               
very  limited  resources.   He  acknowledged  that, although  the                                                               
State of  Alaska was  in trying economic  times, an  expansion of                                                               
resources would be applicable.                                                                                                  
                                                                                                                                
3:59:28 PM                                                                                                                    
                                                                                                                                
CHAIR KITO opened public testimony on HB 273.                                                                                   
                                                                                                                                
3:59:57 PM                                                                                                                    
                                                                                                                                
JANA WELTZIN, Owner,  JDW Counsel, LLC, stated that  her law firm                                                               
serviced about  40 percent of  the marijuana licenses  in Alaska,                                                               
as  well as  marijuana  licensee holders  in Washington,  Oregon,                                                               
Arizona, and  Nevada.  She  declared her support of  the proposed                                                               
bill, pointing  out that the  Marijuana Control Board  had worked                                                               
hard to  create an evolving  structure for the industry,  and had                                                               
built an efficient office.                                                                                                      
                                                                                                                                
4:01:20 PM                                                                                                                    
                                                                                                                                
LEAH LEVINTON, Enlighten  Alaska, stated that she was  one of the                                                               
first  marijuana retail  license holders  in Alaska.   She  added                                                               
that  the license  process was  very involved,  and that  she had                                                               
learned a lot alongside the  Marijuana Control Board.  She lauded                                                               
the  hard work  of Ms.  McConnell  and declared  support for  the                                                               
Marijuana  Control  Board  in the  progress  and  development  of                                                               
responsible  regulation to  help  keep  the industry  consistent.                                                               
She stated  support for the  proposed bill, noting that  the AMCO                                                               
office could use additional staff.                                                                                              
                                                                                                                                
4:03:46 PM                                                                                                                    
                                                                                                                                
BRUCE  SCHULTE, Campaign  to Regulate  Marijuana, shared  that he                                                               
had  served on  the Marijuana  Control Board  and he  praised the                                                               
office  staff.    He  referenced  an  earlier  recommendation  to                                                               
establish  enforcement  priorities,  which   he  declared  to  be                                                               
"imperative."   He  shared that  although it  was a  new process,                                                               
there had been enforcement of  subjective interpretation for what                                                               
the regulation should  be.  He stated that this  was unfair and a                                                               
misapplication  of law.   He  offered hope  that the  Legislature                                                               
would  not have  to  become  involved in  this,  unless the  AMCO                                                               
office  was not  able to  arrive at  specific limitations  on the                                                               
enforcement staff and protect the due process.                                                                                  
                                                                                                                                
REPRESENTATIVE JOSEPHSON asked for an example.                                                                                  
                                                                                                                                
MR. SCHULTE offered an example  of an incident when the Marijuana                                                               
Control  Board had  met on  a Thursday  and Friday,  and received                                                               
input from  the staff, although  nothing had been said  about CBD                                                               
oil  on the  shelves  of the  retail stores.    On the  following                                                               
Monday, several stores  around the state were raided  and the CBD                                                               
oil was  confiscated under an  interpretation of regulation.   He                                                               
reported that  many of  the products  were identical  to products                                                               
carried  on  other  retailer  shelves.    He  acknowledged  that,                                                               
although the discussion about CBD  oil was valid and appropriate,                                                               
this  could have  been handled  differently.   He opined  that it                                                               
would have been appropriate for  the staff to have discussed this                                                               
at the meeting of the Marijuana  Control Board.  It was not until                                                               
several  months later  that  the head  of  enforcement asked  the                                                               
board for  guidance in areas  that enforcement was unsure  of how                                                               
to respond.   He expressed  his concern that, although  there was                                                               
law  enforcement  authority, they  were  not  bound by  the  same                                                               
levels of due process.                                                                                                          
                                                                                                                                
REPRESENTATIVE    WOOL   asked    if    the   dual    enforcement                                                               
responsibilities for the two separate areas was a good thing.                                                                   
                                                                                                                                
MR. SCHULTE  said that, given  the economic environment,  it made                                                               
sense  to "keep  things as  lean as  possible."   He offered  his                                                               
belief  that, when  affordable, it  would be  better to  maintain                                                               
separation of the  two offices.  He acknowledged  that there were                                                               
similarities  in  the  two  industries and  that  the  staff  was                                                               
stretched thin.                                                                                                                 
                                                                                                                                
4:10:54 PM                                                                                                                    
                                                                                                                                
CHAIR KITO announced that public testimony would remain open.                                                                   
                                                                                                                                
CHAIR KITO announced that HB 273 would be held over.                                                                            
                                                                                                                                
        HB 274-EXTEND: BD OF PSYCHOLOGISTS/PSYCH ASSOC.                                                                     
                                                                                                                                
4:11:05 PM                                                                                                                    
                                                                                                                                
CHAIR KITO  announced that  the next order  of business  would be                                                               
HOUSE BILL  NO. 274,  "An Act extending  the termination  date of                                                               
the Board of Psychologist  and Psychological Associate Examiners;                                                               
and providing for an effective date."                                                                                           
                                                                                                                                
4:11:26 PM                                                                                                                    
                                                                                                                                
CAITLYN ELLIS, Staff, Representative Sam Kito, Alaska State                                                                     
Legislature, paraphrased the Sponsor Statement [Included in                                                                     
members' packets], which read:                                                                                                  
                                                                                                                                
     House Bill  274 extends  the Board of  Psychologist and                                                                    
     Psychological Associate  Examiners to June 30,  2026 in                                                                    
     accordance  with  the   recommendation  of  Legislative                                                                    
     Audit.                                                                                                                     
                                                                                                                                
     The board  was established to regulate  the practice of                                                                    
     psychology in  Alaska and is composed  of five members:                                                                    
     three    licensed     psychologists,    one    licensed                                                                    
     psychological  associate,  and  one public  member  who                                                                    
     does not have  a financial interest in  the health care                                                                    
     industry.  As of  March 2017,  the board  regulated 285                                                                    
     licensees.                                                                                                                 
                                                                                                                                
     The board  is responsible for  establishing examination                                                                    
     and  education requirements  for licensees  and issuing                                                                    
     licenses   to   qualified  applications,   establishing                                                                    
     continuing education requirements  for license renewal,                                                                    
     establishing standards for  the practice of psychology,                                                                    
     imposing disciplinary sanctions,  reviewing the quality                                                                    
     and  availability  of  psychological  services  in  the                                                                    
     state   when   requested   by  DCCED,   and   compiling                                                                    
     information for submission to DCCED  on the practice of                                                                    
     psychology by licensees in the state.                                                                                      
                                                                                                                                
     The Division  of Legislative  Audit conducted  a review                                                                    
     of the board  and determined that the  board is serving                                                                    
     the  public's  interest  by effectively  licensing  and                                                                    
     regulating psychologists  and psychological associates.                                                                    
     The board  monitors licensees and works  to ensure only                                                                    
     qualified individuals practice in Alaska.                                                                                  
                                                                                                                                
     The board is currently scheduled  to sunset on June 30,                                                                    
     2018   and  will   have  one   year  to   conclude  its                                                                    
     administrative   operations   unless  the   legislature                                                                    
     extends the  termination date. House Bill  274 reflects                                                                    
     the  recommendations  of  the Division  of  Legislative                                                                    
     Audit, and  extends the termination date  for the Board                                                                    
     till June 30, 2026.                                                                                                        
                                                                                                                                
4:13:11 PM                                                                                                                    
                                                                                                                                
KRISTIN CURTIS, Legislative  Auditor, Legislative Audit Division,                                                               
Alaska  State  Legislature,  directed  attention  to  the  sunset                                                               
review  audit,   dated  October   2017,  [Included   in  member's                                                               
packets],  and paraphrased  from  the  report conclusions,  which                                                               
read:                                                                                                                           
                                                                                                                                
     Overall,  the  audit  concludes the  board  served  the                                                                    
     public's   interest   by  effectively   licensing   and                                                                    
     regulating psychologists  and psychological associates.                                                                    
     The  board monitored  licensees  and  worked to  ensure                                                                    
     only qualified individuals practice in Alaska.                                                                             
                                                                                                                                
     In accordance  with AS  08.03.010(c)(18), the  board is                                                                    
     scheduled to  terminate on June 30,  2018. We recommend                                                                    
     that the legislature extend  the board's termination to                                                                    
     June 30, 2026.                                                                                                             
                                                                                                                                
MS.  CURTIS  stated  that  page  5 of  the  report  detailed  the                                                               
licensing activity  and reported  that there 285  active licenses                                                               
as of March  2017, a 174 percent increase since  the prior sunset                                                               
audit in  2009.   She moved  on to the  Schedule of  Revenues and                                                               
Expenditures on page 7 and reported  that the Board had a surplus                                                               
of almost $400,000 at the end  of FY17, noting that the Board, in                                                               
conjunction  with the  Division  of  Corporations, Business,  and                                                               
Professional  Licensing  (DCBPL),  had increased  fees  for  FY17                                                               
despite this surplus.   She pointed out that the  fee levels were                                                               
shown on page 6.                                                                                                                
                                                                                                                                
MS.  CURTIS   paraphrased  the  first   recommendation,  "DCBPL's                                                               
director, in  consultation with the  board, should  reduce fees,"                                                               
on page 9, which read:                                                                                                          
                                                                                                                                
     DCBPL management did not  adequately set licensing fees                                                                    
     equal  to  the  costs  of  regulating  the  profession.                                                                    
     Alaska  Statute 08.01.065  requires  the Department  of                                                                    
     Commerce, Community, and  Economic Development annually                                                                    
     review fees  to determine  whether regulatory  costs of                                                                    
     each occupation approximately  equal fees collected. If                                                                    
     fees and costs do not equal, fees should be adjusted.                                                                      
                                                                                                                                
     At  the end  of  FY  16, the  board  had  a surplus  of                                                                    
     $273,347.  Rather  than   adjusting  fees  downward  to                                                                    
     reduce the  deficit, DCBPL  management, at  the request                                                                    
     of the board,  increased the FY 17  application fee for                                                                    
     psychologists and  psychological associates and  the FY                                                                    
     17  licensure fees  for  psychological associates.  Per                                                                    
     the board chair, fees were  changed to ensure associate                                                                    
     and  psychologist  licensees  paid the  same  fee.  The                                                                    
     application  fee was  increased to  cover the  costs of                                                                    
     processing  incoming applications.  When analyzing  the                                                                    
     fee  levels,   DCBPL  management  did   not  adequately                                                                    
     consider  the surplus  and make  necessary adjustments.                                                                    
     The oversight resulted in  licensees paying higher than                                                                    
     justified license fees.                                                                                                    
                                                                                                                                
     We  recommend DCBPL's  director,  in consultation  with                                                                    
     the board, reduce fees.                                                                                                    
                                                                                                                                
MS.  CURTIS  paraphrased   the  second  recommendation,  "DCBPL's                                                               
director  should  develop  and  implement  procedures  to  ensure                                                               
courtesy licensees  comply with monthly  reporting requirements,"                                                               
on page 10, which read:                                                                                                         
                                                                                                                                
     The  audit  found  four out  of  13  courtesy  licenses                                                                    
     issued during the audit period  did not comply with the                                                                    
     monthly  reporting requirements.  According  to 12  AAC                                                                    
     60.035(a), a  courtesy licensee  must submit  a monthly                                                                    
     report  to the  board  during the  period of  licensure                                                                    
     indicating  the number  of  days  practiced during  the                                                                    
     month.  Absent submitting  the required  reports, there                                                                    
     is no way  to determine if the  licensee was performing                                                                    
     services  in  excess of  the  30  days allowed  by  the                                                                    
     license.                                                                                                                   
                                                                                                                                
     Failure to  ensure compliance was  due in part  to high                                                                    
     turnover  of licensing  staff during  the audit  period                                                                    
     and  lack  of procedures  to  ensure  DCBPL staff  were                                                                    
     monitoring and reporting noncompliance to the board.                                                                       
                                                                                                                                
     We  recommend DCBPL's  director  develop and  implement                                                                    
     procedures  to ensure  courtesy  licensees comply  with                                                                    
     monthly reporting requirements.                                                                                            
                                                                                                                                
MS.  CURTIS   directed  attention   to  the  response   from  the                                                               
Department of Commerce, Community  & Economic Development (DCEED)                                                               
on page 21,  and the response from the Board  of Psychologist and                                                               
Psychological Associate  Examiners on page  23.  She  stated that                                                               
both the Board and the DCEED agreed with the recommendations.                                                                   
                                                                                                                                
4:15:29 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL asked for  clarification on the justification                                                               
for the fee increase despite the surplus.                                                                                       
                                                                                                                                
MS. CURTIS  offered her belief  that the  intent was to  have the                                                               
licensing fee for the  psychologists and psychological associates                                                               
to  be the  same  level, as  it  would take  the  same amount  of                                                               
resources to  process both  the licenses.   She pointed  out that                                                               
instead  of reducing  one  and increasing  the  other, they  only                                                               
increased the  one fee, and  did not  consider the surplus.   She                                                               
said that  this was  a simple oversight  for not  considering the                                                               
surplus, which resulted in too high a fee.                                                                                      
                                                                                                                                
4:17:08 PM                                                                                                                    
                                                                                                                                
ALLEN  LEVY,  Chair,  Board of  Psychologists  and  Psychological                                                               
Associate Examiners,  said that  he was  currently in  his second                                                               
year of his  second term on the board and  had been serving since                                                               
2012.   He expressed  agreement with the  sunset audit,  that the                                                               
board was acting in the public  interest, and doing a good job of                                                               
regulating   the  practice   of  psychology   in  Alaska,   while                                                               
protecting  the  public  and  ensuring   an  adequate  supply  of                                                               
licensed  professionals.   He said  that steps  had already  been                                                               
taken to implement the two  recommendations from the sunset audit                                                               
for tracking the courtesy licenses,  with an expectation to see a                                                               
significant fee decrease  at the next renewal  period for license                                                               
fees in  2019.  He  declared support for the  continued existence                                                               
of the board, and opined that  the audit was fair, effective, and                                                               
accurate in its conclusions.                                                                                                    
                                                                                                                                
4:19:24 PM                                                                                                                    
                                                                                                                                
ROBERT  LANE,  PhD,  Federal/State Advocacy  Coordinator,  Alaska                                                               
Psychological  Association, shared  that  he was  a professor  at                                                               
Alaska Pacific University  and, as a psychologist,  worked on the                                                               
legislative committee  for the Alaska  Psychological Association.                                                               
He testified in support of HB  274 as it provided regulations for                                                               
guiding  the practice  and provided  safety for  the public.   He                                                               
added that it provided regulations  to help guide the educational                                                               
programs, and  it kept Alaska "on  par with all the  other states                                                               
in the union who have licensed psychologists."                                                                                  
                                                                                                                                
4:20:41 PM                                                                                                                    
                                                                                                                                
CHAIR KITO opened public testimony.                                                                                             
                                                                                                                                
CHAIR KITO announced that HB 274 would be held over.                                                                            
                                                                                                                                
           HB 275-EXTEND: BOARD OF MASSAGE THERAPISTS                                                                       
                                                                                                                                
4:21:01 PM                                                                                                                    
                                                                                                                                
CHAIR KITO  announced that the  final order of business  would be                                                               
HOUSE BILL  NO. 275,  "An Act extending  the termination  date of                                                               
the Board of  Massage Therapists; and providing  for an effective                                                               
date."                                                                                                                          
                                                                                                                                
4:21:20 PM                                                                                                                    
                                                                                                                                
CRYSTAL KOENEMAN, Staff, Representative Sam Kito, Alaska State                                                                  
Legislature, paraphrased from the Sponsor Statement [Included in                                                                
members' packets], which read:                                                                                                  
                                                                                                                                
     House  Bill 275  extends the  termination date  for the                                                                    
     Board of Massage Therapists until June 30, 2022.                                                                           
                                                                                                                                
     Per statute, this board is  scheduled to sunset on June                                                                    
     30, 2018 with  a one-year wind down  if the legislature                                                                    
     does not  pass legislation extending it.  The licensing                                                                    
     function  will remain  after  this  date; however,  the                                                                    
     administrative  functions of  the board  would transfer                                                                    
     to the department.                                                                                                         
                                                                                                                                
     Legislative Audit  reviewed the board's  operations and                                                                    
     determined  that it  is  in the  best  interest of  the                                                                    
     state  to  extend this  board.  The  audit makes  three                                                                    
     recommendations  and recommends  a four-year  extension                                                                    
     with a new  termination date of June 30,  2022. This is                                                                    
     half of the full  eight-year extension that Legislative                                                                    
     Audit is authorized to provide.                                                                                            
                                                                                                                                
     The recommendations are as follows:                                                                                        
                                                                                                                                
     1.   The  Division   of  Corporations,   Business,  and                                                                    
     Professional    Licensing's   (DCBPL)    director,   in                                                                    
     consultation  with the  board,  should  take action  to                                                                    
     improve  procedures  to ensure  licensure  requirements                                                                    
     are met.                                                                                                                   
                                                                                                                                
     2. DCBPL's  director should address the  Federal Bureau                                                                    
     of Investigations audit findings and concerns.                                                                             
                                                                                                                                
     3. The director  of the Office of  the Governor, Boards                                                                    
     and Commissions  should work to fill  the public member                                                                    
     position.                                                                                                                  
                                                                                                                                
     The   board  currently   oversees  over   1,400  active                                                                    
     licensees and  is made  up of  five members.  State law                                                                    
     requires  four board  positions be  filled by  licensed                                                                    
     massage therapists actively engaged  in the practice of                                                                    
     massage   therapy  for   a   period   of  three   years                                                                    
     immediately  preceding the  appointment. The  remaining                                                                    
     position  is to  be filled  by an  individual from  the                                                                    
     general  public. Statute  prohibits  the public  member                                                                    
     from  being   a  licensed  health  care   provider,  an                                                                    
     employee of  the State, or  a current or  former member                                                                    
     of another occupational licensing board.                                                                                   
                                                                                                                                
     The continuation of the Board  of Massage Therapists is                                                                    
     important to the health and safety of Alaskans.                                                                            
                                                                                                                                
4:23:15 PM                                                                                                                    
                                                                                                                                
KRISTIN CURTIS, Legislative  Auditor, Legislative Audit Division,                                                               
Alaska  State  Legislature,  directed  attention  to  the  sunset                                                               
review  audit, also  dated October  2017,  [Included in  member's                                                               
packets],  and paraphrased  from  the  report conclusions,  which                                                               
read:                                                                                                                           
                                                                                                                                
     In  all areas  except  licensing, the  audit found  the                                                                    
     board  was  operating  in  the  public's  interest.  In                                                                    
     general,    meetings   were    conducted   effectively,                                                                    
     investigations  were appropriately  processed, and  the                                                                    
     board  actively   issued  or  changed   regulations  to                                                                    
     improve the industry and better protect the public.                                                                        
                                                                                                                                
     The audit  concluded the board  and DCBPL  staff should                                                                    
     improve  its licensing  procedures. Testing  found that                                                                    
     applicants  were not  consistently  issued licenses  in                                                                    
     accordance    with   statutes,    regulations,   and/or                                                                    
     procedures.  Additionally, improvements  are needed  to                                                                    
     comply  with   the  federal  standards   over  criminal                                                                    
     history  record information  obtained  as  part of  the                                                                    
     licensing process.                                                                                                         
                                                                                                                                
     In accordance  with AS  08.03.010(c)(12), the  board is                                                                    
     scheduled to  terminate on June 30,  2018. We recommend                                                                    
     that  the legislature  extend  the board's  termination                                                                    
     date to June 30, 2022.                                                                                                     
                                                                                                                                
MS. CURTIS  directed attention to  page 11 of the  sunset review,                                                               
which  listed the  schedule of  licensing activity,  and reported                                                               
that from  FY16 through August  2017, the board had  issued 1,186                                                               
licenses, which was double the expected  number.  She moved on to                                                               
page 14, the Schedule of  Revenues and Expenditures, noting that,                                                               
as the board  had a surplus of  $265,000 at the end  of FY17, the                                                               
license fees  were lowered in FY18  to address the surplus.   She                                                               
pointed out that the license fees were listed on page 15.                                                                       
                                                                                                                                
MS. CURTIS  reported that there  were three  recommendations, and                                                               
she  paraphrased  from  the first  recommendation,  "Division  of                                                               
Corporations,  Business,  and  Professional  Licensing's  (DCBPL)                                                               
director, in  consultation with the  Board of  Massage Therapists                                                               
(board),  should  take action  to  improve  procedures to  ensure                                                               
licensure requirements are met," which read:                                                                                    
                                                                                                                                
     Three of 31 license applications  tested as part of the                                                                    
     audit   were  licensed   without  adequate   supporting                                                                    
     documentation and/or review. Deficiencies included:                                                                        
                                                                                                                                
      A background  check report  for one  initial applicant                                                                    
     was  not completed.  The  licensee  operated without  a                                                                    
     background   check  report   from  licensure   date  of                                                                    
     September 2015 through receipt  of the background check                                                                    
     report July  2017 during  the license  renewal process.                                                                    
     Regulation6    requires    applicants   submit    their                                                                    
     fingerprints for a background  check report in order to                                                                    
     obtain  a  license  to practice  massage  therapy.  Per                                                                    
     regulation, licenses  can be issued to  applicants even                                                                    
     though  a   background  check   report  has   not  been                                                                    
     received.   However,  DCBPL   staff  must   ensure  the                                                                    
     background check  is completed timely.  The applicant's                                                                    
     fingerprint card  was sent back  multiple times  due to                                                                    
     incomplete  information. DCBPL  staff  did not  perform                                                                    
     additional follow-up to  obtain a completed fingerprint                                                                    
     card because staff failed to  list the applicant on the                                                                    
     DCBPL   spreadsheet   used  for   tracking   background                                                                    
     reports.                                                                                                                   
                                                                                                                                
      One  applicant   answered  "yes"  to   a  professional                                                                    
     fitness question, however no  evidence could be located                                                                    
     to   demonstrate  that   the   applicant  provided   an                                                                    
     explanation.  Furthermore, it  is  unclear whether  the                                                                    
     board considered an explanation prior to licensing.                                                                        
                                                                                                                                
      One  applicant answered  "yes"  to  a professional  fi                                                                    
     question  and provided  an  explanation which  included                                                                    
     evidence of a permanent  revocation of a national board                                                                    
     certification  for  violating  the respective  code  of                                                                    
     ethics and  standards of practice. DCBPL  staff and the                                                                    
     board   did  not   forward  the   application  to   the                                                                    
     investigative  section   for  review.  A   license  was                                                                    
     granted with  the requirement that the  individual take                                                                    
     a two  credit ethics  course. The background  check did                                                                    
     not show  any convictions,  and according to  the board                                                                    
     chair, the board  believed that a license  could not be                                                                    
     denied   based  on   the  revocation   of  a   national                                                                    
     certificate. However,  DCBPL procedures called  for the                                                                    
     application  to  be  forwarded  to  investigations  for                                                                    
     further review. It  is unclear why DCBPL  staff did not                                                                    
     forward the application.                                                                                                   
                                                                                                                                
     Alaska Statute 08.61.030(9) states that:                                                                                   
                                                                                                                                
     The board may  issue a license to a person  who has not                                                                    
     been convicted of,  or pled guilty or no  contest to, a                                                                    
     crime  involving  moral  turpitude,  or  who  has  been                                                                    
     convicted of, or pled guilty  or no contest to, a crime                                                                    
     involving moral  turpitude if the board  finds that the                                                                    
     conviction  does not  affect  the  person's ability  to                                                                    
     practice competently and safely.                                                                                           
                                                                                                                                
     The lack  of a  thorough and  timely evaluation  of the                                                                    
     above  applicants' professional  fitness increased  the                                                                    
     risk to public safety.                                                                                                     
                                                                                                                                
     We  recommend DCBPL's  director,  in consultation  with                                                                    
     the board, take action  to improve procedures to ensure                                                                    
     licensure requirements are met.                                                                                            
                                                                                                                                
MS. CURTIS paraphrased from the second recommendation, "DCBPL's                                                                 
director should address the Federal Bureau of Investigations                                                                    
(FBI) audit findings and concerns," which read:                                                                                 
                                                                                                                                
     DCBPL  did  not  comply  with  federal  standards  over                                                                    
     criminal  history  record  information. The  FBI  audit                                                                    
     conducted  in  April  2017 found  DCBPL  did  not  have                                                                    
     secure   channels   of   communication.   Additionally,                                                                    
     applicants  were not  notified  in  writing that  their                                                                    
     fingerprints  were to  be used  for  an FBI  background                                                                    
     check  and  were  not advised  of  the  procedures  for                                                                    
     obtaining,  changing, correcting,  or  updating an  FBI                                                                    
     identification record. Additionally,  the federal audit                                                                    
     found  inadequate  chain  of  custody  for  fingerprint                                                                    
     cards. A chain of custody  ensures the integrity of the                                                                    
     applicant/fingerprint process.                                                                                             
                                                                                                                                
     DCBPL  addressed  one  of  the  findings  by  including                                                                    
     verbiage    in   the    application   that    submitted                                                                    
     fingerprints  will be  sent to  the FBI  for a  federal                                                                    
     background  check. However,  as  of  October 2017,  the                                                                    
     other issues remain outstanding.                                                                                           
                                                                                                                                
     According  to   28  CFR  20.21(f)(1),  (2),   and  (3),                                                                    
     whichever   State   agency    collects,   stores,   and                                                                    
     disseminates criminal  history record  information must                                                                    
     prevent  unauthorized  access  to  information;  ensure                                                                    
     that  the  information   is  restricted  to  authorized                                                                    
     users;  and that  the information  cannot be  modified,                                                                    
     destroyed,  accessed, changed,  purged, or  overlaid by                                                                    
     other  entities.  Additionally,  per 28  CFR  50.12(b),                                                                    
     applicants must be advised  of procedures for obtaining                                                                    
     a  change, correction,  or updating  FBI identification                                                                    
     records.                                                                                                                   
                                                                                                                                
     Per   DCBPL   management,   staff   was   unaware   the                                                                    
     communications  and  fingerprint  cards  did  not  meet                                                                    
     federal  standards. Ensuring  data  is secure  protects                                                                    
     individual privacy and promotes public safety.                                                                             
                                                                                                                                
     We  recommend DCBPL's  director address  the FBI  audit                                                                    
     findings and concerns.                                                                                                     
                                                                                                                                
     Auditor's   Note:   Details  regarding   the   unsecure                                                                  
     channels of communication are  being withheld from this                                                                    
     report to  prevent the  weakness from  being exploited.                                                                    
     Pertinent  details  have  been communicated  to  agency                                                                    
     management in a separate confidential document.                                                                            
                                                                                                                                
MS. CURTIS paraphrased from recommendation 3, "The director of                                                                  
the Office of the Governor, Boards and Commissions should work                                                                  
to fill the public member position," which read:                                                                                
                                                                                                                                
     The public  member position on the  board became vacant                                                                    
     March 2017 and remained vacant as of October 2017.                                                                         
                                                                                                                                
     Per AS 08.61.010, the board  is statutorily required to                                                                    
     consist of five members  appointed by the governor, one                                                                    
     of  which is  a public  member  who is  not a  licensed                                                                    
     health  care  provider, employee  of  the  State, or  a                                                                    
     current   or  former   member  of   another  occupation                                                                    
     licensing  board. According  to Boards  and Commissions                                                                    
     staff,  stringent  requirements  make it  difficult  to                                                                    
     find   interested  applicants.   The   Office  of   the                                                                    
     Governor,   Boards    and   Commissions    section   is                                                                    
     responsible for actively  recruiting, interviewing, and                                                                    
     vetting board applicants.                                                                                                  
                                                                                                                                
     The lack  of a public  board member prevents  the board                                                                    
     from conducting business  with appropriate public input                                                                    
     and perspective.                                                                                                           
                                                                                                                                
     We  recommend  the  director  of   the  Office  of  the                                                                    
     Governor,  Boards  and  Commissions work  to  fill  the                                                                    
     public member position.                                                                                                    
                                                                                                                                
MS. CURTIS added  that the public member to the  board may not be                                                               
a licensed  health care provider,  an employee of the  state, and                                                               
may not  be a  current or former  member of  another occupational                                                               
licensing  board.    She  pointed   out  that  these  restrictive                                                               
requirements  could   make  it   difficult  to   find  interested                                                               
applicants.                                                                                                                     
                                                                                                                                
4:28:59 PM                                                                                                                    
                                                                                                                                
MS. CURTIS directed attention to  the response from the Office of                                                               
the Governor  on page 29, which  agreed to work to  help fill the                                                               
public member  position, with a  recommendation for the  board to                                                               
pursue a legislative fix to  those restrictive requirements.  She                                                               
noted  that  the Department  of  Commerce,  Community &  Economic                                                               
Development  response was  on page  31, and  that the  department                                                               
agreed  that  additional  checks  were necessary  to  ensure  the                                                               
administrative record  was complete.   The department  added that                                                               
additional supervisory resources were  necessary to help meet the                                                               
standards.  She addressed the  response from the Board of Massage                                                               
Therapists  on   page  33,  recounting  an   agreement  with  the                                                               
conclusions and recommendations.                                                                                                
                                                                                                                                
REPRESENTATIVE JOSEPHSON  questioned where the  documentation and                                                               
applications were housed as the board did not have an office.                                                                   
                                                                                                                                
MS.  CURTIS explained  that, for  this audit,  the applicant  was                                                               
going  to a  certified person  for fingerprinting,  and then  the                                                               
fingerprint card  was given  back to  the applicant  for mailing.                                                               
She declared that this problematic,  as it allowed for tampering.                                                               
She added  that she was  not aware  of the final  destination for                                                               
these cards.   She said that Representative  Josephson would need                                                               
to direct his question to the department.                                                                                       
                                                                                                                                
REPRESENTATIVE  WOOL asked  for  verification that  prior to  the                                                               
formation of the Board, a massage  therapist was not able to bill                                                               
an  insurance  company,  but  that the  Board  now  enabled  that                                                               
billing.                                                                                                                        
                                                                                                                                
MS. CURTIS offered her understanding  that previously the massage                                                               
therapists had  to work through another  health care professional                                                               
to bill insurance.                                                                                                              
                                                                                                                                
REPRESENTATIVE WOOL  asked why there was  a recurring requirement                                                               
for the submission of fingerprints.                                                                                             
                                                                                                                                
MS.  CURTIS  reported  that  this  requirement  was  helpful  for                                                               
combatting human trafficking and the  problems from the sex trade                                                               
industry and she offered her belief that this was not unusual.                                                                  
                                                                                                                                
REPRESENTATIVE WOOL  mused that anyone operating  illegally would                                                               
not register  or submit their  fingerprints and pointed  out that                                                               
there was  not a requirement  for fingerprints when  purchasing a                                                               
gun.                                                                                                                            
                                                                                                                                
REPRESENTATIVE  KNOPP   asked  if  massage   establishments  were                                                               
licensed  and  if it  was  necessary  to  be a  licensed  massage                                                               
therapist to own a massage establishment.                                                                                       
                                                                                                                                
MS.  CURTIS   replied  that  there   was  interest  in   the  law                                                               
enforcement  community for  licensing  massage establishments  to                                                               
help combat human  trafficking, although, she opined,  it was not                                                               
a current requirement.   She pointed out that  this would require                                                               
a statutory change.                                                                                                             
                                                                                                                                
4:35:54 PM                                                                                                                    
                                                                                                                                
SARA  CHAMBERS,  Deputy  Director,  Juneau  Office,  Division  of                                                               
Corporations,  Business, and  Professional Licensing,  Department                                                               
of  Commerce, Community  & Economic  Development, in  response to                                                               
the question regarding licensing  of massage establishments, said                                                               
that these establishments  were not licensed, although  it was of                                                               
keen interest to law enforcement.   She offered her belief that a                                                               
bill was to be introduced to address this.                                                                                      
                                                                                                                                
CHAIR KITO noted that she was referencing proposed HB 110.                                                                      
                                                                                                                                
MS. CHAMBERS  reported that  all the documents  were kept  in the                                                               
Department   of  Commerce,   Community  &   Economic  Development                                                               
offices, and on a secure data  base.  She said that any necessary                                                               
files were  transferred electronically to  the board.   She noted                                                               
that, as  a review by the  FBI suggested that the  system was not                                                               
secure, a  new system  had been  put in place  which met  all the                                                               
standards.  She acknowledged that  a primary reason for the board                                                               
had  been  to  allow  for   billing  to  insurance  when  working                                                               
independently.   She  stated  that this  was  the only  licensing                                                               
program  which  required  fingerprinting upon  every  renewal,  a                                                               
higher standard than any of the other licensing boards.                                                                         
                                                                                                                                
REPRESENTATIVE  WOOL questioned  having the  burden on  the board                                                               
members for illicit activity associated with the profession.                                                                    
                                                                                                                                
MS.  CHAMBERS relayed  that  this was  the  determination by  the                                                               
legislature when authorizing the board.                                                                                         
                                                                                                                                
4:40:27 PM                                                                                                                    
                                                                                                                                
DAVID  EDWARDS-SMITH, Chair,  Board of  Massage Therapists,  said                                                               
that  a lot  had been  accomplished with  the partnership  of the                                                               
division  since the  first board  meeting  in January  2015.   He                                                               
noted that  this was  the first  sunset audit,  that it  was very                                                               
positive, and the board was in support  of it.  He added that the                                                               
board was moving from its  "start-up version of the board" toward                                                               
board  operations.    He  posed   whether  it  was  necessary  or                                                               
important to have a board and  then stated that the real question                                                               
was:  "How  can we not have  a Board of Massage  Therapists?"  He                                                               
pointed  to the  diversity of  techniques in  the profession  and                                                               
stated that it  took a board of professionals  with experience in                                                               
the field to "be able to  navigate this diversity because we need                                                               
to be able to put those  techniques into context of the standards                                                               
and practice and code of  ethics that massage therapists are held                                                               
to."  He said that these  standards assured the public that there                                                               
was  a process  in place.    He stated  the board  also put  into                                                               
context these standards  in a variety of  settings, including spa                                                               
settings,  chiropractic clinics,  physical  therapy clinics,  and                                                               
airports.  He  reported that a look at the  science of radiology,                                                               
cardiology,  and  others  revealed  a  lot  of  funding  for  the                                                               
practice of  these sciences, whereas,  massage therapy  was still                                                               
an  emerging   science  with   different  education   and  career                                                               
opportunities as  the profession changed.   He reported  that the                                                               
board had reviewed  1,400 licenses, and that about  30 percent of                                                               
those   licenses  had   yes  answers   to  professional   fitness                                                               
questions.  He pointed out that,  during the tenure of the board,                                                               
there had been four different licensing examiners.                                                                              
                                                                                                                                
4:44:58 PM                                                                                                                    
                                                                                                                                
VOLKER  HRUBY, President,  American  Massage Therapy  Association                                                               
(AMTA)  -  Alaska  Chapter,  said  that he  had  been  a  massage                                                               
therapist  for 13  years, working  in the  spa industry,  medical                                                               
massage, and  private practice.   He noted that the  recent audit                                                               
pointed  out  that  having a  regulatory  board  allowed  massage                                                               
therapists to establish themselves  as health care professionals,                                                               
bill health insurance, create a legal  way for the public to file                                                               
a  complaint, give  voice  to  the public  over  the practice  of                                                               
massage therapy, and hold  massage therapists accountable through                                                               
licensure.   He  offered  his  belief that  the  board should  be                                                               
extended for these same reasons.   He pointed out that Department                                                               
of Commerce,  Community &  Economic Development  (DCCED) provided                                                               
administrative   support  for   the  board.     He   offered  his                                                               
understanding that failure  to pass HB 275  would necessitate the                                                               
duties  of the  board  revert to  the  Division of  Corporations,                                                               
Business, and  Professional Licensing in  DCCED.  He  opined that                                                               
the division did  not possess the capacity  or specific expertise                                                               
that the the massage therapists  serving on the board brought for                                                               
oversight in the industry.  He  offered his belief that the board                                                               
had done "an  excellent job of enacting  regulations to implement                                                               
statutes in  a short time  period."   He reported that  the board                                                               
had  issued   1,186  new  licenses,  almost   double  the  number                                                               
projected.  He  lauded the board members, pointing  out that each                                                               
of  them  was  committed  to  improvement  for  any  shortcomings                                                               
outlined  in the  [sunset]  audit.   He  stated  support for  the                                                               
proposed bill  and declared his  firm belief that to  fulfill the                                                               
mission  of  the  board  to provide  public  safety  for  massage                                                               
consumers  and   to  regulate  the  profession   by  setting  and                                                               
maintaining industry  standards, the Board of  Massage Therapists                                                               
must be extended.                                                                                                               
                                                                                                                                
CHAIR KITO stated that HB 180 would be postponed.                                                                               
                                                                                                                                
4:48:27 PM                                                                                                                    
                                                                                                                                
CHAIR KITO opened public testimony on HB 275.                                                                                   
                                                                                                                                
4:48:52 PM                                                                                                                    
                                                                                                                                
KIM VERREYDT shared her experience  as a health care provider for                                                               
almost 30 years,  as a massage therapist and  a flight paramedic.                                                               
She declared her  support of HB 275.  She  stated her belief that                                                               
all health care professionals should be regulated.                                                                              
                                                                                                                                
4:49:58 PM                                                                                                                    
                                                                                                                                
JANE GNASS  stated that she  had been licensed  massage therapist                                                               
for 20  years and that  she was  both state and  nationally board                                                               
certified.    She declared her  support for the extension  of the                                                               
termination  date  of  the  Board of  Massage  Therapists.    She                                                               
emphasized that  the Board  ensured "consistent  and professional                                                               
standards," and that it helped to "elevate our profession."                                                                     
                                                                                                                                
4:51:13 PM                                                                                                                    
                                                                                                                                
JILL MOTZ reported that she  currently held positions on both the                                                               
state  Board  of  Massage  Therapists  and  the  Alaska  American                                                               
Massage  Therapy  Association  boards   and  that  she  had  been                                                               
practicing  massage   therapy  since   2003.    She   shared  her                                                               
background  working as  a massage  therapist.   She declared  her                                                               
support  for HB  275, stating  that it  was "excellent  for small                                                               
businesses,  communities,   therapists,  and   most  importantly,                                                               
consumers."                                                                                                                     
                                                                                                                                
REPRESENTATIVE  WOOL asked  if  the  fingerprint requirement  was                                                               
burdensome.                                                                                                                     
                                                                                                                                
MS. MOTZ  replied that  this requirement  was often  discussed at                                                               
board meetings  and that there  had been attempts to  change this                                                               
requirement to once every three cycles.                                                                                         
                                                                                                                                
4:53:59 PM                                                                                                                    
                                                                                                                                
YAEL HICKOK  stated that she  had been a massage  therapist since                                                               
1999.   She declared that she  was against HB 275.   Although she                                                               
supported  the  licensing  for massage  therapists,  she  opposed                                                               
extending the board.   She added that the  licensing was helpful,                                                               
especially for  the ability to  bill insurance and  allow massage                                                               
therapists  to be  independent.   She  noted  that, although  the                                                               
licensing was supposed to reduce  crime and sex trafficking, that                                                               
had not been  proven to happen.  She declared  that the licensing                                                               
fees  were ridiculous,  and she  listed  the various  fees.   She                                                               
stated  that it  did  not make  sense to  have  to repeatedly  be                                                               
fingerprinted.   She  expressed  her support  for the  licensing,                                                               
even as  there was  not a  need for  the board.   She  shared the                                                               
results of a  Facebook survey of massage therapists,  in which 44                                                               
percent of the 121 respondents  said they wanted to eliminate the                                                               
board and continue  licensing, while 24 percent  said they wanted                                                               
to continue licensing  as it was, 14 percent said  they wanted to                                                               
eliminate licensing, and 18 percent said  they did not know.  She                                                               
added that she had not shared  her own opinion during the survey.                                                               
She declared that the survey  and responses on Facebook indicated                                                               
that many of the massage  therapists were unhappy with the board,                                                               
with many complaints for the  amount of time necessary to receive                                                               
a  license.   She shared  that communication  with the  board had                                                               
been problematic, reporting that she  had never been notified for                                                               
the scheduling of  a meeting.  She emphasized that  the board had                                                               
a responsibility  to represent the  licensees.  She  offered that                                                               
it was a possibility  to have a board at some  future date if the                                                               
massage  therapists were  more involved  in the  creation of  the                                                               
board, noting  that the  idea for licensing  without a  board had                                                               
not been  discussed.  She  reported that  her fees cost  her more                                                               
than a month's wages, which she deemed to be inexcusable.                                                                       
                                                                                                                                
5:00:45 PM                                                                                                                    
                                                                                                                                
CHAIR KITO announced that HB 275 would be held over.                                                                            
                                                                                                                                
5:01:05 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Labor and  Commerce Standing Committee  meeting was  adjourned at                                                               
5:01 p.m.                                                                                                                       

Document Name Date/Time Subjects
HB274 Sponsor Statement.pdf HL&C 1/22/2018 3:15:00 PM
HB 274
HB274A.PDF HL&C 1/22/2018 3:15:00 PM
HB 274
HB274 Legislative Audit 10.5.17.pdf HL&C 1/22/2018 3:15:00 PM
HB 274
HB273 Sponsor Statement 01.19.18.pdf HL&C 1/22/2018 3:15:00 PM
HB 273
HB273 Ver D 01.19.18.pdf HL&C 1/22/2018 3:15:00 PM
HB 273
HB273 Legislative Audit 01.19.18.pdf HL&C 1/22/2018 3:15:00 PM
HB 273
HB275 Version D 01.19.18.pdf HL&C 1/22/2018 3:15:00 PM
HB 275
HB275 Sponsor Statement 01.19.18.pdf HL&C 1/22/2018 3:15:00 PM
HB 275
HB275 Legislative Audit 10.11.17.pdf HL&C 1/22/2018 3:15:00 PM
HB 275
HB180 Fiscal note DCCED-DBS 5.8.17.pdf HL&C 1/22/2018 3:15:00 PM
HB 180
HB180 HLC Follow Up 5.15.17.pdf HL&C 1/22/2018 3:15:00 PM
HB 180
HB180 Support Document Money Services Act Powerpoint 5.8.17.pdf HL&C 1/22/2018 3:15:00 PM
HB 180
HB180 Sectional Analysis 5.2.17.pdf HL&C 1/22/2018 3:15:00 PM
HB 180
HB180 ver. A 5.2.17.PDF HL&C 1/22/2018 3:15:00 PM
HB 180
HB180 Sponsor Statement 5.2.17.pdf HL&C 1/22/2018 3:15:00 PM
HB 180
HB275 Fiscal Note DCCED-CBPL 1.19.18.pdf HL&C 1/22/2018 3:15:00 PM
HB 275
HB274 Fiscal Note DCCED-CBPL 1.19.18.pdf HL&C 1/22/2018 3:15:00 PM
HB 274
HB273 Fiscal Note DCCED-CBPL 1.19.18.pdf HL&C 1/22/2018 3:15:00 PM
HB 273
HB180 Fiscal note DCCED-DBS 1.19.18.pdf HL&C 1/22/2018 3:15:00 PM
HB 180
PrepaidAccountsFinalRule CFPB 2016-24503.pdf HL&C 1/22/2018 3:15:00 PM
HB 180
HB180 Money Services Business 1.22.18.pdf HL&C 1/22/2018 3:15:00 PM
HB 180
HB275 Opposition Letters 01.22.18.pdf HL&C 1/22/2018 3:15:00 PM
HB 275
HB275 Support Letters 1.24.18.pdf HL&C 1/22/2018 3:15:00 PM
HB 275