Legislature(2017 - 2018)SENATE FINANCE 532

04/03/2018 09:00 AM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 76 MARICULTURE REVOLVING LOAN FUND TELECONFERENCED
<Bill Hearing Postponed until 1:30 p.m.>
+ HB 128 SHELLFISH ENHANCE. PROJECTS; HATCHERIES TELECONFERENCED
<Bill Hearing Postponed until 1:30 p.m.>
+= HB 286 APPROP: OPERATING BUDGET/LOANS/FUNDS TELECONFERENCED
Scheduled but Not Heard
<Pending Referral>
+ HB 273 EXTEND: MARIJUANA CONTROL BOARD TELECONFERENCED
Heard & Held
+ HB 274 EXTEND: BD OF PSYCHOLOGISTS/PSYCH ASSOC. TELECONFERENCED
Moved HB 274 Out of Committee
+ HB 275 EXTEND: BOARD OF MASSAGE THERAPISTS TELECONFERENCED
Heard & Held
+ HB 278 EXTEND:CERT. REAL ESTATE APPRAISERS BOARD TELECONFERENCED
Heard & Held
+ HB 279 EXTEND: REAL ESTATE COMMISSION TELECONFERENCED
Heard & Held
+ HB 280 EXTEND: BOARD OF MARITAL & FAMILY THERAPY TELECONFERENCED
Moved HB 280 Out of Committee
+ HB 302 EXTEND: BOARD OF PROFESSIONAL COUNSELORS TELECONFERENCED
Moved HB 302 Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
                 SENATE FINANCE COMMITTEE                                                                                       
                       April 3, 2018                                                                                            
                         9:04 a.m.                                                                                              
                                                                                                                                
9:04:21 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair  MacKinnon  called  the  Senate  Finance  Committee                                                                    
meeting to order at 9:04 a.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Lyman Hoffman, Co-Chair                                                                                                 
Senator Anna MacKinnon, Co-Chair                                                                                                
Senator Click Bishop, Vice-Chair                                                                                                
Senator Peter Micciche                                                                                                          
Senator Gary Stevens                                                                                                            
Senator Natasha von Imhof                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Donny Olson                                                                                                             
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Ashley  Strauch,  Staff,   Representative  Adam  Wool;  Kris                                                                    
Curtis, Legislative Auditor,  Alaska Division of Legislative                                                                    
Audit;   Sara  Chambers,   Deputy   Director,  Division   of                                                                    
Corporations,    Business   and    Professional   Licensing,                                                                    
Department of Commerce,  Community and Economic Development;                                                                    
Megan   Holland,  Staff,   Representative  Andy   Josephson;                                                                    
Caitlyn  Ellis,   Staff,  Representative  Sam   Kito;  Megan                                                                    
Holland,     Staff,    Representative     Andy    Josephson;                                                                    
Representative Sam  Kito, Sponsor; Crystal  Koeneman, Staff,                                                                    
Representative  Sam  Kito;  Hannah  Lager,  Budget  Manager,                                                                    
Department of Commerce,  Community and Economic Development;                                                                    
Errol Champion, Alaska Association of Realtors, Juneau.                                                                         
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Debra  Hamilton, Chair,  Board  of Professional  Counselors,                                                                    
Soldotna;  Karen Cunningham,  Board  of  Marital and  Family                                                                    
Therapy, Anchorage;  David Derry, Chair, Board  of Certified                                                                    
Real  Estate Appraisers,  Kenai; Erika  McConnell, Director,                                                                    
Marijuana and  Alcohol Control Office, Nome;  David Edwards-                                                                    
Smith,  Chair, Board  of Massage  Therapists, Kenai;  Volker                                                                    
Hruby, American Massage  Therapy Association Alaska Chapter,                                                                    
Anchorage; Jill  Motz, Self, MatSu; Traci  Barickman, Chair,                                                                    
Real  Estate Commission,  Palmer;  Deborah Barollini,  Self,                                                                    
Anchorage.                                                                                                                      
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 273    EXTEND: MARIJUANA CONTROL BOARD                                                                                       
                                                                                                                                
          HB  273  was  HEARD  and  HELD  in  committee  for                                                                    
          further consideration.                                                                                                
                                                                                                                                
HB 274    EXTEND: BD OF PSYCHOLOGISTS/PSYCH ASSOC.                                                                              
                                                                                                                                
          HB 274  was REPORTED out  of committee with  a "do                                                                    
          pass"  recommendation  and  with  one  forthcoming                                                                    
          fiscal   impact  note   from  the   Department  of                                                                    
          Commerce, Community and Economic Development.                                                                         
                                                                                                                                
HB 275    EXTEND: BOARD OF MASSAGE THERAPISTS                                                                                   
                                                                                                                                
          HB  275  was  HEARD  and  HELD  in  committee  for                                                                    
          further consideration.                                                                                                
                                                                                                                                
HB 278    EXTEND:CERT. REAL ESTATE APPRAISERS BOARD                                                                             
                                                                                                                                
          HB  278  was  HEARD  and  HELD  in  committee  for                                                                    
          further consideration.                                                                                                
                                                                                                                                
HB 279    EXTEND: REAL ESTATE COMMISSION                                                                                        
                                                                                                                                
          HB  279  was  HEARD  and  HELD  in  committee  for                                                                    
          further consideration.                                                                                                
                                                                                                                                
HB 280    EXTEND: BOARD OF MARITAL & FAMILY THERAPY                                                                             
                                                                                                                                
          HB 280  was REPORTED out  of committee with  a "do                                                                    
          pass"  recommendation  and   with  one  previously                                                                    
         published fiscal impact note: FN 1(CED).                                                                               
                                                                                                                                
HB 302    EXTEND: BOARD OF PROFESSIONAL COUNSELORS                                                                              
                                                                                                                                
          HB 302  was REPORTED out  of committee with  a "do                                                                    
          pass"  recommendation  and   with  one  previously                                                                    
         published fiscal impact note: FN 1(CED).                                                                               
                                                                                                                                
HOUSE BILL NO. 302                                                                                                            
                                                                                                                                
     "An Act extending the termination  date of the Board of                                                                    
     Professional   Counselors;   and   providing   for   an                                                                    
     effective date."                                                                                                           
                                                                                                                                
9:05:02 AM                                                                                                                    
                                                                                                                                
ASHLEY STRAUCH,  STAFF, REPRESENTATIVE ADAM  WOOL, discussed                                                                    
the sponsor statement for HB 302 (copy on file):                                                                                
                                                                                                                                
     HB302  extends  the  sunset  date   for  the  Board  of                                                                    
     Professional Counselors  to June 30, 2026.  I encourage                                                                    
     all  the  members  to   review  the  Legislative  Audit                                                                    
     summary and  the full audit  report. You will  see that                                                                    
     the  Board   has  served   the  public's   interest  by                                                                    
     effectively   licensing  and   regulating  professional                                                                    
     counselors  and certified  counselor supervisors.  From                                                                    
     FY14 to FY16,  the Board has had a 46%  increase in new                                                                    
     licenses,  and  has  issued 190  new  licenses  and  73                                                                    
     supervisor     certifications    over     that    time.                                                                    
     Additionally,  the Board  has worked  to implement  new                                                                    
     tele-health regulations to  guide the distance delivery                                                                    
     of services for mental health occupations.                                                                                 
                                                                                                                                
     The   Board  of   Professional  Counselors   serves  an                                                                    
     important role  in monitoring  licenses and  working to                                                                    
     ensure  that  only  qualified individuals  practice  in                                                                    
     Alaska. The continuation of this  Board is important to                                                                    
     the ongoing  improvement of the  professional counselor                                                                    
     occupation.                                                                                                                
                                                                                                                                
9:06:45 AM                                                                                                                    
                                                                                                                                
KRIS  CURTIS,   LEGISLATIVE  AUDITOR,  ALASKA   DIVISION  OF                                                                    
LEGISLATIVE AUDIT,  discussed the document "A  Sunset Review                                                                    
of  the  Department  of Commerce,  Community,  and  Economic                                                                    
Development,  Board  of   Professional  Counselors  (board)"                                                                    
(copy  on file).  She stated  that the  purpose of  a sunset                                                                    
audit was  to determine  whether a  board or  commission was                                                                    
serving  the public's  interest,  and whether  it should  be                                                                    
extended. She  stated that the  report conclusions  began on                                                                    
page 3. She  stated that, overall, she found  that the board                                                                    
was serving the public's  interest, by effectively licensing                                                                    
and   regulating  professional   counselors  and   counselor                                                                    
supervisors. She  stated that  it was  found that  the board                                                                    
monitored  licensees,   and  worked  to  ensure   that  only                                                                    
qualified individuals  practiced. Furthermore, it  was found                                                                    
that the  board actively  developed and  adopted regulations                                                                    
to  improve  the  profession.   She  recommended  the  full,                                                                    
maximum eight-year extension.  There were no recommendations                                                                    
as  part of  the audit.  She  remarked that  there was  some                                                                    
standard  information  within  the  report.  She  noted  the                                                                    
scheduled licensing activity on page  5. She shared that, as                                                                    
of January 2017, there were  657 active licensees. She noted                                                                    
that it was a 46 percent  increase, as compared to the prior                                                                    
2009 sunset.  She shared  that page 6  showed a  schedule of                                                                    
revenues  and  expenditures.  The  board had  a  surplus  of                                                                    
$70,000  as of  March  31.  She stated  that  the board  and                                                                    
management planned to decrease fees  in FY 18 to address the                                                                    
surplus. The  list of  fees was  on page  7. She  noted that                                                                    
response to the  audit began on page 19.  She announced that                                                                    
the Office  of the Governor  (GOV), the department,  and the                                                                    
board  chair  agreed  that the  board  served  the  public's                                                                    
interest and should be extended to the maximum 8 years.                                                                         
                                                                                                                                
Senator  Micciche  stated  that   he  had  heard  the  audit                                                                    
findings in  another committee. He remarked  that within the                                                                    
discussion, it  was learned that  the cost and time  for the                                                                    
audit was not  covered by the board. He felt  that maybe the                                                                    
legislature should  consider that  the board cover  the cost                                                                    
of the audit.                                                                                                                   
                                                                                                                                
Senator von Imhof  referenced page 6 of the  audit, in which                                                                    
there  was a  deficit in  FY 13,  FY 14,  and FY  15. A  fee                                                                    
structure change  then occurred, so  there was a  surplus in                                                                    
FY  16  and  FY  17.  She  noted  that  the  fees  would  be                                                                    
decreased.  She   wondered  whether  there  was   a  certain                                                                    
allowable surplus  percentage, so there could  possibly be a                                                                    
cushion to be absorbed over time.                                                                                               
                                                                                                                                
Ms. Curtis replied  that statutes did not  provide for that.                                                                    
She  shared that  the statutes  outlined  that license  fees                                                                    
should cover the  cost of regulation. She  stated that there                                                                    
was a problem  over the years of the  allocation of indirect                                                                    
costs,  but was  corrected recently.  She stressed  that the                                                                    
statute  did  not  provide flexibility  or  a  cushion,  but                                                                    
rather stated that  fees should be set to cover  the cost of                                                                    
regulation.                                                                                                                     
                                                                                                                                
9:11:18 AM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon  wondered  whether  the  department  had                                                                    
language  suggestions to  address the  peaks and  valleys in                                                                    
the boards  to make  it more sustainable  to those  who were                                                                    
paying fees to the state.                                                                                                       
                                                                                                                                
SARA  CHAMBERS, DEPUTY  DIRECTOR, DIVISION  OF CORPORATIONS,                                                                    
BUSINESS   AND   PROFESSIONAL   LICENSING,   DEPARTMENT   OF                                                                    
COMMERCE,  COMMUNITY  AND  ECONOMIC  DEVELOPMENT,  addressed                                                                    
Senator   von  Imhof's   question.  She   stated  that   the                                                                    
department  had  worked  to examine  how  statute  could  be                                                                    
altered  to provide  more effective  tools. She  shared that                                                                    
there  were struggles  within  the  existing authority,  but                                                                    
those  had been  corrected.  She remarked  that because  the                                                                    
statute  required the  revenues to  approximately equal  the                                                                    
expenditures  for the  programs that  had some  expenditures                                                                    
that  were   impossible  to  anticipate.  She   shared  that                                                                    
licensing fees paid for administrative  costs, and also paid                                                                    
for all  investigations and legal  costs. She  stressed that                                                                    
the licensee paid for those expenditures.                                                                                       
                                                                                                                                
Senator  von   Imhof  announced   that  she  would   have  a                                                                    
conversation about the issue at a later date.                                                                                   
                                                                                                                                
9:16:55 AM                                                                                                                    
                                                                                                                                
Senator Micciche  was concerned that boards  and commissions                                                                    
did not  become profit  centers. He  thought the  matter was                                                                    
worthy of discussion.                                                                                                           
                                                                                                                                
Senator  Stevens  asked if  Ms.  Chambers  was hearing  from                                                                    
licensees  regarding the  unfairness of  fees going  towards                                                                    
the activities of un                                                                                                            
                                                                                                                                
Ms. Chambers answered in the affirmative.                                                                                       
                                                                                                                                
Co-Chair MacKinnon OPENED public testimony.                                                                                     
                                                                                                                                
DEBRA  HAMILTON, CHAIR,  BOARD  OF PROFESSIONAL  COUNSELORS,                                                                    
SOLDOTNA   (via  teleconference),   stated   that  she   was                                                                    
available for questions.                                                                                                        
                                                                                                                                
Senator Micciche  wondered whether  the balance was  fair in                                                                    
the licensing fees for her board.                                                                                               
                                                                                                                                
Ms. Hamilton replied that she  was currently looking at that                                                                    
issue. She remarked  that she joined the board at  a time of                                                                    
deficit,  had  worked  to  reverse  that  deficit,  and  was                                                                    
currently  in a  surplus.  She shared  that  there was  some                                                                    
feedback regarding the licensure fee increases.                                                                                 
                                                                                                                                
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
                                                                                                                                
9:20:20 AM                                                                                                                    
                                                                                                                                
Vice-Chair  Bishop  commented  that  continued  conversation                                                                    
would  be  worthy to  address  the  concern over  peaks  and                                                                    
valleys.  He  remarked that  it  would  be  nice to  find  a                                                                    
solution.                                                                                                                       
                                                                                                                                
Senator  Micciche thought  people  did  not understand  that                                                                    
boards and  commissions were self-funded  and self-regulated                                                                    
and did not use state funds.                                                                                                    
                                                                                                                                
Co-Chair MacKinnon  noted that there  had been a  fiscal not                                                                    
review  with the  Legislative Finance  Division. She  put on                                                                    
the  record that  the  $21,100  was the  cost  of the  board                                                                    
itself.                                                                                                                         
                                                                                                                                
Vice-Chair Bishop  MOVED to report  HB 302 out  of Committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
note. There being NO OBJECTION, it was so ordered.                                                                              
                                                                                                                                
HB  302 was  REPORTED  out  of committee  with  a "do  pass"                                                                    
recommendation  and  with  one previously  published  fiscal                                                                    
impact note: FN 1(CED).                                                                                                         
                                                                                                                                
9:24:31 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:26:00 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
HOUSE BILL NO. 280                                                                                                            
                                                                                                                                
     "An Act extending the termination date of the Board of                                                                     
     Marital and Family Therapy; and providing for an                                                                           
     effective date."                                                                                                           
                                                                                                                                
9:26:00 AM                                                                                                                    
                                                                                                                                
MEGAN   HOLLAND,  STAFF,   REPRESENTATIVE  ANDY   JOSEPHSON,                                                                    
discussed the bill.   She stated that the  bill extended the                                                                    
Board of  Marital and  Family Therapy.  She stated  that the                                                                    
Board of  Marital and Family Therapy  regulated and licensed                                                                    
therapists   and  approved   supervisors.  The   board  also                                                                    
established   and   enforced    training,   education,   and                                                                    
continuing  education  requirements  of its  licensees.  The                                                                    
board currently  oversaw 85 licensees  in Alaska.  The board                                                                    
received  a  full   eight-year  extension  from  Legislative                                                                    
Audit. She  announced that there was  no opposition received                                                                    
for extension of the board.                                                                                                     
                                                                                                                                
KRIS  CURTIS,   LEGISLATIVE  AUDITOR,  ALASKA   DIVISION  OF                                                                    
LEGISLATIVE AUDIT, directed attention  to document "A Sunset                                                                    
Review  of  the  Department   of  Commerce,  Community,  and                                                                    
Economic Development,  Board of  Marital and  Family Therapy                                                                    
(board),"  (copy on  file).  She stated  that  it was  found                                                                    
that, overall,  the board was serving  the public's interest                                                                    
by effectively  licensing and regulating marital  and family                                                                    
therapists;  and marital  and family  therapist supervisors.                                                                    
The  board monitored  licensees  and worked  to ensure  that                                                                    
only  qualified individuals'  practices. It  was also  found                                                                    
that the  board actively  developed and  adopted regulations                                                                    
to  improve  the  industry. She  recommended  an  eight-year                                                                    
extension. There were no recommendations  made in the audit.                                                                    
She noted  the standard  information within the  report. She                                                                    
noted that  on page  6, there  were the  scheduled licensing                                                                    
activities. She stated that, as  of January 2017, there were                                                                    
85 active  licensees, which  was a  7 percent  decrease when                                                                    
compared  to the  2013  prior sunset  audit.  She noted  the                                                                    
schedule of revenues  and expenditures on page  8. He stated                                                                    
that the board  had a surplus of approximately  68,000 as of                                                                    
March 31,  2017. She  remarked that  the board  had operated                                                                    
with a surplus over the  past several years. She shared that                                                                    
license  fees were  listed on  page 7.  She stated  that all                                                                    
participating  entities  agreed  that  there  should  be  an                                                                    
extension of the board.                                                                                                         
                                                                                                                                
Co-Chair MacKinnon OPENED public testimony.                                                                                     
                                                                                                                                
9:29:29 AM                                                                                                                    
                                                                                                                                
KAREN  CUNNINGHAM,  BOARD  OF MARITAL  AND  FAMILY  THERAPY,                                                                    
ANCHORAGE (via teleconference), testified  in support of the                                                                    
bill.                                                                                                                           
                                                                                                                                
Co-Chair MacKinnon  asked if Ms.  Cunningham could  speak to                                                                    
the decrease in licensees since the previous sunset audit.                                                                      
                                                                                                                                
Ms. Cunningham explained that there  was no graduate program                                                                    
in  the state  for marriage  and family  therapy, so  it was                                                                    
required  to obtain  graduate education  outside the  state.                                                                    
She  continued   that  the   state  had   somewhat  rigorous                                                                    
licensing requirements, as well as  a lack of supervisors in                                                                    
the state.                                                                                                                      
                                                                                                                                
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
                                                                                                                                
9:32:12 AM                                                                                                                    
                                                                                                                                
Vice-Chair Bishop addressed that fiscal note.                                                                                   
                                                                                                                                
Co-Chair MacKinnon stated that the  board cost more than the                                                                    
$21,400.  She  stated that  the  proposed  board budget  was                                                                    
approximately  $93,000,  but  it was  the  portion  directly                                                                    
related  to the  board. She  stated that  it was  covered by                                                                    
receipt services from the licensees.                                                                                            
                                                                                                                                
Vice-Chair Bishop  MOVED to report  HB 280 out  of Committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
note. There being NO OBJECTION, it was so ordered.                                                                              
                                                                                                                                
HB  280 was  REPORTED  out  of committee  with  a "do  pass"                                                                    
recommendation  and  with  one previously  published  fiscal                                                                    
impact note: FN 1(CED).                                                                                                         
                                                                                                                                
9:33:57 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:35:47 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
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."                                                                                      
                                                                                                                                
9:35:47 AM                                                                                                                    
                                                                                                                                
CAITLYN ELLIS,  STAFF, REPRESENTATIVE SAM KITO,  stated that                                                                    
the   bill  extended   the   Board   of  Psychologists   and                                                                    
Psychological  Associate  Examiners.  She  stated  that  the                                                                    
board  had  a  full   eight-year  extension  recommended  by                                                                    
Legislative Audit.  She stated that the  board regulated 285                                                                    
licensees. The board  was scheduled to sunset  in June 2018.                                                                    
The  audit  had two  recommendations.  One  was about  fees,                                                                    
because there  was a miscalculation.  The board  agreed, and                                                                    
reduced fees.  She stated that the  other recommendation was                                                                    
about  complying   with  record   keeping.  The   board  and                                                                    
department  agreed,  and  had taken  steps  to  address  the                                                                    
recommendations.                                                                                                                
                                                                                                                                
Senator  von Imhof  looked at  page 10  of the  audit, which                                                                    
recommended  that the  department  director in  consultation                                                                    
with the  board to reduce  fees. She wondered  whether there                                                                    
was a  new fee schedule. She  stated that on page  6, the FY                                                                    
17 fees were high. She queried the fees for FY 18.                                                                              
                                                                                                                                
SARA  CHAMBERS, DEPUTY  DIRECTOR, DIVISION  OF CORPORATIONS,                                                                    
BUSINESS   AND   PROFESSIONAL   LICENSING,   DEPARTMENT   OF                                                                    
COMMERCE, COMMUNITY AND  ECONOMIC DEVELOPMENT, detailed that                                                                    
the fees had been analyzed to  make a change but was waiting                                                                    
on board  regulation (unrelated fees) so  that changes could                                                                    
be made in one package.                                                                                                         
                                                                                                                                
Co-Chair MacKinnon  asked if there was  an anticipated time-                                                                    
frame for completion of the changes.                                                                                            
                                                                                                                                
Ms.   Chambers  replied   that   she   would  provide   that                                                                    
information at a later date.                                                                                                    
                                                                                                                                
Vice-Chair  Bishop wondered  whether the  courtesy licensing                                                                    
was in compliance.                                                                                                              
                                                                                                                                
Ms. Chambers  replied that there were  already procedures to                                                                    
ensure that it  was corrected in the future,  and there were                                                                    
currently no courtesy licensees.                                                                                                
                                                                                                                                
KRIS  CURTIS,   LEGISLATIVE  AUDITOR,  ALASKA   DIVISION  OF                                                                    
LEGISLATIVE AUDIT,  discussed the document "A  Sunset Review                                                                    
of  the  Department  of Commerce,  Community,  and  Economic                                                                    
Development,   Board  of   Psychologist  and   Psychological                                                                    
Associate  Examiners (board),"  (copy on  file). She  stated                                                                    
that it  was found that  the board was serving  the public's                                                                    
interest   by   effectively  licensing   psychologists   and                                                                    
psychological associates.  There was a recommendation  of an                                                                    
eight-year  extension. She  noted the  standard information.                                                                    
The scheduled licensing  activity was on page  5. She shared                                                                    
that as of March 2017,  there were 285 active licensees. She                                                                    
remarked  that there  was a  174 percent  increase from  the                                                                    
prior 2009 sunset audit.                                                                                                        
                                                                                                                                
Co-Chair MacKinnon OPENED public testimony.                                                                                     
                                                                                                                                
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
                                                                                                                                
9:41:25 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:43:44 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  MacKinnon noted  that  the committee  had a  brief                                                                    
conversation  concerning   the  difference  in   the  words,                                                                    
"psychologist" and "psychiatrist."                                                                                              
                                                                                                                                
Vice-Chair Bishop discussed the fiscal note.                                                                                    
                                                                                                                                
Co-Chair MacKinnon stated that  there would be a forthcoming                                                                    
fiscal note.                                                                                                                    
                                                                                                                                
Vice-Chair Bishop  MOVED to report  HB 274 out  of Committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
note. There being NO OBJECTION, it was so ordered.                                                                              
                                                                                                                                
HB  274 was  REPORTED  out  of committee  with  a "do  pass"                                                                    
recommendation and  with one forthcoming fiscal  impact note                                                                    
from  the Department  of  Commerce,  Community and  Economic                                                                    
Development.                                                                                                                    
                                                                                                                                
9:46:01 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:47:38 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
HOUSE BILL NO. 278                                                                                                            
                                                                                                                                
     "An Act extending the termination date of the Board of                                                                     
     Certified Real Estate Appraisers; and providing for an                                                                     
     effective date."                                                                                                           
                                                                                                                                
9:47:38 AM                                                                                                                    
                                                                                                                                
MEGAN   HOLLAND,  STAFF,   REPRESENTATIVE  ANDY   JOSEPHSON,                                                                    
discussed  HB 278.  She stated  that the  bill extended  the                                                                    
termination  date  of the  Board  of  Certified Real  Estate                                                                    
Appraisers.  She shared  that  the Board  of Certified  Real                                                                    
Estate Appraisers came to be  after the housing market crash                                                                    
in the  early 2000s. There  was a federal  mandate requiring                                                                    
states  to regulate  real estate  appraisers,  so the  state                                                                    
board served  to fulfill the federal  requirement. The board                                                                    
was  responsible for  licensing,  training, regulating,  and                                                                    
license enforcement of real estate  appraisers in the state.                                                                    
She stated  that the board currently  managed 261 licensees.                                                                    
The  board received  a full  eight-year recommendation  from                                                                    
Legislative  Audit.  Additionally,   there  were  additional                                                                    
audits from the federal audits  in 2005 and 2007. She stated                                                                    
that she had received no opposition to the board extension.                                                                     
                                                                                                                                
KRIS  CURTIS,   LEGISLATIVE  AUDITOR,  ALASKA   DIVISION  OF                                                                    
LEGISLATIVE AUDIT,  addressed the document "A  Sunset Review                                                                    
of  the  Department  of Commerce,  Community,  and  Economic                                                                    
Development,  Board  of  Certified  Real  Estate  Appraisers                                                                    
(board),"  (copy  on  file).   She  stated  that  the  audit                                                                    
included a background information  section beginning on page                                                                    
3, which  explained the  regulatory oversight  structure for                                                                    
the   appraisal   industry   established  by   the   federal                                                                    
government.  The framework  involved  private entities  that                                                                    
set  appraisal  standards  and  qualification  criteria  for                                                                    
licensing.  It  included  state boards  that  certified  and                                                                    
licensed  real estate  appraisers, and  it included  federal                                                                    
entities that  regulated the industry.  She stated  that the                                                                    
Federal   Appraisal   Subcommittee   was   responsible   for                                                                    
monitoring state  licensing boards and  enforcing standards.                                                                    
She  explained  that the  information  was  included in  the                                                                    
background section  of the audit,  because it  was important                                                                    
to  highlight  that  the  board   was  subject  to  external                                                                    
oversight  outside  of  the  sunset  process.  The  external                                                                    
oversight included  onsite compliance reviews of  the board.                                                                    
She stated  that the additional oversight  factored into the                                                                    
recommended term  of extension. She  noted that page  7 held                                                                    
the report  conclusions. She stated  that it was  found that                                                                    
the board  was serving  the public's interest  by monitoring                                                                    
certificate  holders and  licensees; and  working to  ensure                                                                    
that only qualified individuals  were practicing. She stated                                                                    
that it was also found  that the board developed and adopted                                                                    
regulations to  comply with federal requirements  to improve                                                                    
the real  estate appraisal industry  and better  protect the                                                                    
public.  She  stated  that there  were  two  recommendations                                                                    
beginning page  16. The first  recommendation was  that that                                                                    
the director  continue to improve administrative  support to                                                                    
the  board.  She  shared  that  through  the  testing,  some                                                                    
challenges  were   found  to  administrative   support.  She                                                                    
explained that there was an  examination of the entry of the                                                                    
certificate holders into the national  registry, which was a                                                                    
federal requirement. The audit  found that three certificate                                                                    
holders were  entered into  the registry  incorrectly. Those                                                                    
entries were correctly, when the  division was notified. She                                                                    
stated that there were five  investigative cases tested, and                                                                    
three  of  the  five  had extended  unjustified  periods  of                                                                    
inactivity. She stated  that the periods ranged  from 130 to                                                                    
203  days, so  there were  some improvements  needed in  the                                                                    
timeliness of  the investigative process. She  remarked that                                                                    
there was  not proof  of whether three  of the  eleven board                                                                    
meetings held  during the audit period  were public noticed.                                                                    
She  felt   that  those   findings  were   not  individually                                                                    
significant,  but when  considered together  it indicated  a                                                                    
need for improved administrative support to the board.                                                                          
                                                                                                                                
9:52:07 AM                                                                                                                    
                                                                                                                                
Ms.  Curtis  looked  at  page   17,  which  was  the  second                                                                    
recommendation.  It   was  recommended  that   the  division                                                                    
director,  in consultation  with the  board, reduce  fees to                                                                    
address the surplus.  She shared that as of  March 2017, the                                                                    
surplus  was  $165,000, however  it  was  expected that  the                                                                    
surplus be  significantly higher  as the renewal  period was                                                                    
June 2017. She  remarked that by the end of  FY 17 there was                                                                    
an expected  significant surplus.  She noted that  the board                                                                    
had asked for  a fee analysis from  the division management,                                                                    
but due to  competing priorities there was  no fee analysis.                                                                    
As a  result, licensees  paid a  higher than  justified fee.                                                                    
She looked  at page 11,  which was the standard  schedule of                                                                    
licensing activity. She noted  that there were 261 licensees                                                                    
as of March 2017. The  schedule of revenues and expenditures                                                                    
was on page  12, and the schedule of licensing  fees on page                                                                    
13. She remarked that on page  14, it was discussed that the                                                                    
board  planned to  move  forward  with regulating  appraisal                                                                    
management  companies.  It  would significantly  expand  the                                                                    
boards duties  in the  future. She  noted that,  despite the                                                                    
change  of duties,  she recommended  the maximum  eight-year                                                                    
extension,  which  was  in  recognition  of  the  additional                                                                    
federal   oversight.   The   Federal   Oversight   Committee                                                                    
performed onsite  reviews every two years.  The department's                                                                    
response  to  the  audit  was   on  page  27,  which  was  a                                                                    
concurrence  of   the  findings  and   recommendations.  The                                                                    
board's  response was  on page  29,  and they  also were  in                                                                    
concurrence. She announced  that on the bottom  page 31, the                                                                    
board  stated that  they had  received  an attorney  general                                                                    
opinion  that  concluded  in  order  to  move  forward  with                                                                    
regulating  appraisal  management   companies,  a  statutory                                                                    
change was  required. She stated that  Legislative Audit did                                                                    
not  agree  with  that   conclusion.  She  noted  additional                                                                    
auditor comments  beginning on page 33,  which described the                                                                    
review of the federal code  and state statutes. She remarked                                                                    
that she  did not  believe that it  was essential  to change                                                                    
statutes,  but felt  that "it  certainly would  not hurt  to                                                                    
clarify them."                                                                                                                  
                                                                                                                                
Co-Chair MacKinnon  noted that page  11 gave the up  or down                                                                    
percentages on  all the other  boards. She  wondered whether                                                                    
the 261  licenses up or  down compared to the  last auditing                                                                    
period.                                                                                                                         
                                                                                                                                
Ms. Curtis  replied that the  prior sunset  audit identified                                                                    
266  licenses  as  of  March  2013, so  that  was  a  slight                                                                    
increase.                                                                                                                       
                                                                                                                                
Co-Chair  MacKinnon  asked  if new  appraisers  were  coming                                                                    
online successfully, or if there were challenges.                                                                               
                                                                                                                                
Ms.  Curtis replied  that there  was no  found challenge  in                                                                    
recruiting and retaining appraisers.                                                                                            
                                                                                                                                
Co-Chair MacKinnon  noted that they were  held constant from                                                                    
the previous audit.                                                                                                             
                                                                                                                                
Ms. Curtis  replied that  there were 266  as of  March 2013,                                                                    
which was relatively stable.                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon asked  if Ms.  Chambers  could speak  to                                                                    
consistent  numbers  for the  board,  as  there had  been  a                                                                    
suggestion that the  board made it difficult  to process new                                                                    
appraisers.   She  wondered   about  what   challenges  were                                                                    
present.                                                                                                                        
                                                                                                                                
SARA  CHAMBERS, DEPUTY  DIRECTOR, DIVISION  OF CORPORATIONS,                                                                    
BUSINESS   AND   PROFESSIONAL   LICENSING,   DEPARTMENT   OF                                                                    
COMMERCE, COMMUNITY  AND ECONOMIC DEVELOPMENT,  relayed that                                                                    
appraisals were  a fairly stable  industry, and she  had not                                                                    
heard of any inherent challenges to getting licensed.                                                                           
                                                                                                                                
Co-Chair MacKinnon  asked why the  fees were  not considered                                                                    
sooner.                                                                                                                         
                                                                                                                                
Ms. Chambers informed that the fees  fell at a time when the                                                                    
department was  juggling multiple priorities, and  there had                                                                    
been a lack of resources. She offered to provide an update.                                                                     
                                                                                                                                
9:58:27 AM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon OPENED public testimony.                                                                                     
                                                                                                                                
DAVID  DERRY,   CHAIR,  BOARD   OF  CERTIFIED   REAL  ESTATE                                                                    
APPRAISERS,   KENAI  (via   teleconference),  testified   in                                                                    
support of  the bill. He  commented that the  department had                                                                    
given support that  had allowed for the  board. He discussed                                                                    
the board being subject to annual audits.                                                                                       
                                                                                                                                
Mr. Derry addressed Co-Chair  MacKinnon's question about the                                                                    
challenges  to  becoming  certified.  He  discussed  federal                                                                    
requirements.  The new  regulations would  be effective  May                                                                    
2018.                                                                                                                           
                                                                                                                                
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
                                                                                                                                
Vice-Chair Bishop discussed the fiscal note.                                                                                    
                                                                                                                                
Co-Chair   MacKinnon  queried   the  board's   proposed  fee                                                                    
schedule  that what  was proposed  from the  department. She                                                                    
noted  that the  board proposed  $179,923, and  the division                                                                    
proposed $264,823.  She wondered why there  was a difference                                                                    
in proposals.                                                                                                                   
                                                                                                                                
Ms. Chambers  wondered whether  that query  was held  in the                                                                    
audit.                                                                                                                          
                                                                                                                                
10:04:53 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:05:46 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair MacKinnon  remarked that  Ms. Chambers  needed time                                                                    
to research the difference.                                                                                                     
                                                                                                                                
HB  278  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
HOUSE BILL NO. 273                                                                                                            
                                                                                                                                
     "An Act extending the termination date of the                                                                              
     Marijuana Control Board; and providing for an                                                                              
     effective date."                                                                                                           
                                                                                                                                
10:06:42 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  SAM KITO,  SPONSOR, discussed  the bill.  He                                                                    
stated that the bill was  a basic extension of the Marijuana                                                                    
Control Board.  He remarked that  there was not even  a full                                                                    
year of revenue collection for  the new board, but there was                                                                    
a sunset in  order to have a review to  determine whether it                                                                    
was operating  in the  state's interest.  He shared  that it                                                                    
was  found  that the  board  was  operating in  the  state's                                                                    
interest. He noted the difference  between the board and the                                                                    
other  professional boards  in that  if the  sunset did  not                                                                    
occur, there  was no "wind  down" period. Therefore,  it was                                                                    
stop functioning, if there was no sunset extension.                                                                             
                                                                                                                                
CRYSTAL KOENEMAN, STAFF,  REPRESENTATIVE SAM KITO, discussed                                                                    
the  bill. She  stated that  the bill  was a  six-year board                                                                    
extension.   He   shared   that  there   were   four   audit                                                                    
recommendations. The board was created  in 2015, and had met                                                                    
over  24  times  since  July   2015  to  establish  the  new                                                                    
industry.  She  remarked  that  the  board  was  created  to                                                                    
control the cultivation, manufacture,  and sale of marijuana                                                                    
in  the state.  She stated  that since  June 2016  the board                                                                    
approved  278 license  applications, denied  8 applications,                                                                    
and revoked 2 licenses. She  stated that Mx. McConnell could                                                                    
detail the operations of the board.                                                                                             
                                                                                                                                
10:09:48 AM                                                                                                                   
                                                                                                                                
KRIS  CURTIS,   LEGISLATIVE  AUDITOR,  ALASKA   DIVISION  OF                                                                    
LEGISLATIVE AUDIT,  discussed the document "A  Sunset Review                                                                    
of  the  Department  of Commerce,  Community,  and  Economic                                                                    
Development,  Marijuana  Control  Board (board),"  (copy  on                                                                    
file).  She stated  that  it was  the  board's first  sunset                                                                    
review. Report conclusions began on  page 5, and overall the                                                                    
audit  found  that  the  board   was  serving  the  public's                                                                    
interest by  effectively licensing  marijuana establishments                                                                    
by   establishing   regulations   that   allowed   for   the                                                                    
cultivation, manufacture,  and sale of marijuana  in Alaska.                                                                    
The audit  recommended a  six-year extension.  She explained                                                                    
that in  order to help  assess the effectiveness of  the new                                                                    
board, there was a survey  sent to licensees, and a separate                                                                    
survey  to local  governments. The  survey was  sent to  101                                                                    
licensees,  and  there  was  a  70  percent  response  rate.                                                                    
Another survey  was sent to  16 local government,  and there                                                                    
was an 88 percent response  rate. The survey instruments and                                                                    
the responses were  summarized in Appendices B and  C of the                                                                    
audit. She  stated that, overall, the  responses were fairly                                                                    
positive.   She  announced   that  100   percent  of   local                                                                    
government survey  respondents, and  75 percent  of licensee                                                                    
survey respondents  rated the board's  overall effectiveness                                                                    
at  serving  the  public's interest  as  effective  or  very                                                                    
effective.   Additionally,   over   93  percent   of   local                                                                    
government    survey   respondents    rated   the    board's                                                                    
effectiveness at  enforcing marijuana laws in  their area as                                                                    
good  or excellent.  She pointed  to  exhibit 2  on page  8,                                                                    
which showed  that the  board issued  122 new  licenses form                                                                    
July 2016 through April 2017.  She stated that 80 percent of                                                                    
licensee  survey  respondents  rated their  overall  license                                                                    
experience as  good or excellent.  She noted that on  page 8                                                                    
it was  outlined that  the FY  17 operating  budget included                                                                    
intent  language  that  stated   that  the  application  and                                                                    
licensing  fees  should cover  the  cost  of regulation  and                                                                    
recover  the unrestricted  general fund  appropriations made                                                                    
during the establishment of the program.                                                                                        
                                                                                                                                
10:15:14 AM                                                                                                                   
                                                                                                                                
Co-Chair MacKinnon OPENED public testimony.                                                                                     
                                                                                                                                
ERIKA  MCCONNELL, DIRECTOR,  MARIJUANA  AND ALCOHOL  CONTROL                                                                    
OFFICE, NOME (via teleconference),  asserted that there were                                                                    
enforcement priorities related to health and safety issues.                                                                     
                                                                                                                                
Co-Chair  MacKinnon  asked if  Ms.  McConnell  was going  to                                                                    
comply with the audit's request.                                                                                                
                                                                                                                                
Ms. McConnel. answered in the affirmative.                                                                                      
                                                                                                                                
Senator von  Imhof asked if  the board had begun  any action                                                                    
to address the complaints.                                                                                                      
                                                                                                                                
Ms. McConnell  replied that  the recommendation  was already                                                                    
resolved.  The board  was  able to  add  a criminal  justice                                                                    
technician  to   the  staff,   who  was   an  administrative                                                                    
assistant  to  the  enforcement   unit.  That  staff  member                                                                    
entered  every complaint  received into  the Alaska  Records                                                                    
Management System,  and documenting  any resolution  of that                                                                    
complaint.                                                                                                                      
                                                                                                                                
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
                                                                                                                                
Vice-Chair Bishop discussed the fiscal note.                                                                                    
                                                                                                                                
Senator Micciche asked about the transition.                                                                                    
                                                                                                                                
                                                                                                                                
HANNAH  LAGER,  BUDGET   MANAGER,  DEPARTMENT  OF  COMMERCE,                                                                    
COMMUNITY AND  ECONOMIC DEVELOPMENT, explained that,  in the                                                                    
FY  19,  there were  general  fund  receipts supporting  the                                                                    
marijuana  program,   but  there   was  an   expectation  to                                                                    
eventually be  fully funded by program  receipts starting in                                                                    
FY 20.                                                                                                                          
                                                                                                                                
Senator Micciche  wondered how  the transition  would occur,                                                                    
and  asked why  unrestricted  general funds  would still  be                                                                    
used for the program.                                                                                                           
                                                                                                                                
Ms.   Lager   responded   that   there   was   carry-forward                                                                    
authorization in the current year.                                                                                              
                                                                                                                                
Co-Chair  MacKinnon  asked  if  Ms. Lager  stated  that  the                                                                    
department was forward-funding for an anticipated loss.                                                                         
                                                                                                                                
10:21:46 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:23:34 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  MacKinnon   informed  that   there  would   be  an                                                                    
examination of the general fund spend on the fiscal note.                                                                       
                                                                                                                                
HB  273  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
CS FOR HOUSE BILL NO. 275(FIN)                                                                                                
                                                                                                                                
     "An Act extending the termination  date of the Board of                                                                    
     Massage  Therapists; relating  to  license renewal  and                                                                    
     criminal history record  checks for massage therapists;                                                                    
     and providing for an effective date."                                                                                      
                                                                                                                                
10:24:11 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE SAM  KITO, SPONSOR, discussed  CSSB 275(FIN).                                                                    
He stated  that the bill  would extend the Board  of Massage                                                                    
Therapists.  He  shared  that the  bill  was  only  recently                                                                    
established. Some  of the  audit recommendations  were being                                                                    
addressed in another piece of  legislation. He remarked that                                                                    
there was  some overlap  between an  amendment in  the bill,                                                                    
and HB  110, which may need  to be resolved. He  stated that                                                                    
the  bill   included  a  reduction   in  the   frequency  of                                                                    
background checks. He remarked  that the initial legislation                                                                    
required the  background check at  every renewal  cycle. The                                                                    
current version changed the background  check to occur every                                                                    
third renewal  cycle to  decrease the  administrative burden                                                                    
and cost.                                                                                                                       
                                                                                                                                
CRYSTAL  KOENEMAN,  STAFF,  REPRESENTATIVE SAM  KITO,  noted                                                                    
that  Legislative  Audit  recommended  a  four-extension  to                                                                    
2022. The other body  recommended a six-year extension based                                                                    
on potential  savings to Legislative  Audit, and  steps that                                                                    
the board  was taking to address  the audit recommendations.                                                                    
The board was  created in 2015, and the  licensing fees were                                                                    
based  on  an  estimate   of  600  massage  therapists.  She                                                                    
announced  that  the  number had  grown  significantly.  She                                                                    
shared that there were 1186 new  licenses at the time of the                                                                    
audit.  She  remarked  that  there  were  over  1400  active                                                                    
licenses in  the last licensing  cycle. She stated  that the                                                                    
division  had  taken  steps to  adjust  the  licensing  fees                                                                    
accordingly.  She  announced  that there  were  three  audit                                                                    
recommendations.  She  reiterated  that  there  was  another                                                                    
piece of legislation, because  some of those recommendations                                                                    
were better addressed through statutory changes.                                                                                
                                                                                                                                
10:27:18 AM                                                                                                                   
                                                                                                                                
KRIS  CURTIS,   LEGISLATIVE  AUDITOR,  ALASKA   DIVISION  OF                                                                    
LEGISLATIVE AUDIT,  discussed the document "A  Sunset Review                                                                    
of  the  Department  of Commerce,  Community,  and  Economic                                                                    
Development, Board of Massage  Therapists (board)," (copy on                                                                    
file). She  remarked that it was  a new board, and  this was                                                                    
its first sunset review. The  audit found that the board was                                                                    
serving   the  public's   interest  in   all  areas   except                                                                    
licensing. She  stated that the audit  found that applicants                                                                    
were  not consistently  issued  licenses  in according  with                                                                    
statutes,  regulations, or  their procedures.  Additionally,                                                                    
there was an  FBI audit that found  improvements were needed                                                                    
to  comply  with  federal standards  over  criminal  history                                                                    
record  information  obtained  as   part  of  the  licensing                                                                    
process. The  audit recommended that the  legislature extend                                                                    
the board for only four  years. She highlighted the features                                                                    
of the audit.                                                                                                                   
                                                                                                                                
10:33:13 AM                                                                                                                   
                                                                                                                                
Senator  von  Imhof  asked about  the  significance  of  the                                                                    
phrase, "additional supervisory resources are needed."                                                                          
                                                                                                                                
Ms. Curtis surmised that the  department's comments may mean                                                                    
that they need additional  financial resources. She deferred                                                                    
to Ms. Chambers.                                                                                                                
                                                                                                                                
SARA  CHAMBERS, DEPUTY  DIRECTOR, DIVISION  OF CORPORATIONS,                                                                    
BUSINESS   AND   PROFESSIONAL   LICENSING,   DEPARTMENT   OF                                                                    
COMMERCE,  COMMUNITY AND  ECONOMIC DEVELOPMENT,  stated that                                                                    
the  program was  anticipated to  have 600  licensees, while                                                                    
here  was currently  1,400. She  remarked that  some of  the                                                                    
unusual requirements  caused some stress. She  remarked that                                                                    
additional staff was needed for the board.                                                                                      
                                                                                                                                
Senator  von  Imhof  wondered whether  there  should  be  an                                                                    
administrative fee  taken from  some of the  board surpluses                                                                    
to help with some of the supervisory positions.                                                                                 
                                                                                                                                
Ms.  Chambers  stated  that the  department  had  found  the                                                                    
procedural  errors that  the additional  oversight (to  make                                                                    
sure procedures  were followed)  was necessary  and extended                                                                    
to board training.                                                                                                              
                                                                                                                                
10:38:07 AM                                                                                                                   
                                                                                                                                
Senator Micciche  wanted to learn what  management of boards                                                                    
and  commissions  cost  comprehensively. He  believed  there                                                                    
were many  costs that were unaccounted  for. He acknowledged                                                                    
that  some  boards  were  much  more  labor  intensive  than                                                                    
others.                                                                                                                         
                                                                                                                                
Ms. Chambers  was happy  to share  the information  with the                                                                    
committee. She stated that  the department had documentation                                                                    
of indirect expenses.                                                                                                           
                                                                                                                                
Ms. Curtis stated that page 14 standard.                                                                                        
                                                                                                                                
Co-Chair MacKinnon OPENED public testimony.                                                                                     
                                                                                                                                
DAVID  EDWARDS-SMITH, CHAIR,  BOARD  OF MASSAGE  THERAPISTS,                                                                    
KENAI (via teleconference), spoke in support of the bill.                                                                       
                                                                                                                                
Co-Chair MacKinnon  asked how the  board was  complying with                                                                    
the federal findings.                                                                                                           
                                                                                                                                
Mr. Edwards-Smith asked if  Co-Chair MacKinnon was referring                                                                    
to the findings pertaining to fingerprint chain of custody.                                                                     
                                                                                                                                
Co-Chair MacKinnon agreed.                                                                                                      
                                                                                                                                
Mr.  Edwards-Smith affirmed  that the  application had  been                                                                    
changed to inform applicants of the use of fingerprints.                                                                        
                                                                                                                                
10:43:26 AM                                                                                                                   
                                                                                                                                
Co-Chair MacKinnon asked if Mr.  Edwards-Smith had adopted a                                                                    
policy to motivate the department to adopt a policy.                                                                            
                                                                                                                                
Mr.  Edwards-Smith  stated  that the  board  considered  the                                                                    
subject to be a division issue.                                                                                                 
                                                                                                                                
Co-Chair  MacKinnon  wondered  whether  the  department  had                                                                    
addressed  the   FBI  audit  findings  for   the  particular                                                                    
licensure.                                                                                                                      
                                                                                                                                
Ms. Chambers  stated that  there were 3  areas that  the FBI                                                                    
identified.  She  announced  that  there  were  channels  of                                                                    
communication which  allowed for hacking into  the system to                                                                    
get access  to certain documentation. She  shared that there                                                                    
was  a new  secure  piece  of technology  that  met the  FBI                                                                    
requirements. She  stated that  the application  concern was                                                                    
corrected  prior  to  the  conclusion   of  the  audit.  The                                                                    
inadequate chain  of custody  was currently  being addressed                                                                    
by working  with other  agencies and  departments to  see if                                                                    
there  were opportunities  to share  resources  to secure  a                                                                    
fingerprint card  to meet  the federal  recommendations. She                                                                    
remarked that  there was no statutory  provision to maintain                                                                    
chain of custody. She remarked  that a statute change may be                                                                    
needed to alter the mandate to process fingerprint cards.                                                                       
                                                                                                                                
10:46:48 AM                                                                                                                   
                                                                                                                                
Co-Chair  MacKinnon  felt  that  it  was  unacceptable.  She                                                                    
remarked  that  the department  had  been  given a  year  to                                                                    
address   the   concerns.  She   felt   that   it  was   the                                                                    
administration's  responsibility  to  comply  with  existing                                                                    
law. She wanted to meet with Ms. Chambers at a later time.                                                                      
                                                                                                                                
Ms. Chambers was  happy to meet with  Co-Chair MacKinnon and                                                                    
other parties to address the concerns.                                                                                          
                                                                                                                                
Co-Chair   MacKinnon   wondered   if   there   was   further                                                                    
information  about why  the  administration  did not  comply                                                                    
with the  chain of custody  issue, other than  the assertion                                                                    
of a change in statute.                                                                                                         
                                                                                                                                
Ms. Chambers replied that the  data was secure. She stressed                                                                    
that the  question was about  whether the  fingerprints were                                                                    
actually the applicant.                                                                                                         
                                                                                                                                
Vice-Chair  Bishop  asserted that  there  were  a myriad  of                                                                    
fingerprinting protocols in different state agencies.                                                                           
                                                                                                                                
10:50:04 AM                                                                                                                   
                                                                                                                                
VOLKER  HRUBY, AMERICAN  MASSAGE THERAPY  ASSOCIATION ALASKA                                                                    
CHAPTER,  ANCHORAGE   (via  teleconference),   testified  in                                                                    
support  of the  bill.  He  noted that  a  recent audit  had                                                                    
identified  suggestions. The  reasons  for establishing  the                                                                    
board were the same reasons  he believed the board should be                                                                    
extended.  He thought  while  the division  did  a good  job                                                                    
providing support  for the  board, it  was not  qualified to                                                                    
perform the  functions of the board.  He referenced comments                                                                    
by Ms. Chambers.                                                                                                                
                                                                                                                                
Mr. Hruby  continued his testimony, and  considered that the                                                                    
board had  done a  good job  implementing statute.  He urged                                                                    
committee members to move the bill from committee.                                                                              
                                                                                                                                
JILL MOTZ,  SELF, MATSU  (via teleconference),  testified in                                                                    
support  of the  bill. She  understood that  the fingerprint                                                                    
issue  was an  issue. The  board had  gathered from  the FBI                                                                    
report that it was necessary to gather more information.                                                                        
                                                                                                                                
Co-Chair   MacKinnon    reminded   that    the   committee's                                                                    
responsibility  to ensure  that  there  was compliance  with                                                                    
state  statutes  and  federal   requirements.  She  did  not                                                                    
consider the bill to be stalled in committee.                                                                                   
                                                                                                                                
Vice-Chair Bishop thought that  the committee was attempting                                                                    
to  protect  the  integrity of  the  therapists  with  their                                                                    
fingerprints.                                                                                                                   
                                                                                                                                
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
                                                                                                                                
10:55:41 AM                                                                                                                   
                                                                                                                                
Vice-Chair Bishop addressed the fiscal note.                                                                                    
                                                                                                                                
Co-Chair  MacKinnon pointed  out  that the  board cost  more                                                                    
than what was reflected on the fiscal note                                                                                      
                                                                                                                                
Co-Chair   MacKinnon  announced   the  due   date  for   the                                                                    
amendments.                                                                                                                     
                                                                                                                                
Co-Chair MacKinnon  announced visitors  to the  committee in                                                                    
the audience.                                                                                                                   
                                                                                                                                
HB  275  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
HOUSE BILL NO. 279                                                                                                            
                                                                                                                                
     "An Act extending the termination date of the Real                                                                         
     Estate Commission; and providing for an effective                                                                          
     date."                                                                                                                     
                                                                                                                                
10:57:44 AM                                                                                                                   
                                                                                                                                
MEGAN   HOLLAND,  STAFF,   REPRESENTATIVE  ANDY   JOSEPHSON,                                                                    
discussed HB 279. She stated  that the bill would extend the                                                                    
termination date  of the Real Estate  Commission. She stated                                                                    
that the commission oversaw  brokers, associate brokers, and                                                                    
sales licensees.  They were  responsible for  the regulation                                                                    
of   supervisors   and   licensees,  and   enforcing   their                                                                    
requirements.     The    commission     currently    oversaw                                                                    
approximately   2500   licensees,   and  received   a   full                                                                    
recommended eight-year extension from Legislative Audit.                                                                        
                                                                                                                                
KRIS  CURTIS,   LEGISLATIVE  AUDITOR,  ALASKA   DIVISION  OF                                                                    
LEGISLATIVE AUDIT,  addressed the document "A  Sunset Review                                                                    
of  the  Department  of Commerce,  Community,  and  Economic                                                                    
Development,  Real Estate  Commission" (copy  on file).  She                                                                    
stated that  report conclusions began  on page 7.  The audit                                                                    
concluded  that  the  commission was  serving  the  public's                                                                    
interest  by  effectively   licensing  and  regulating  real                                                                    
estate  licensees and  real estate  offices. The  commission                                                                    
monitored  licensees   and  worked   to  ensure   that  only                                                                    
qualified    individuals    practiced.   Furthermore,    the                                                                    
commission developed and adopted  regulations to improve the                                                                    
real  estate  industry and  protect  the  public. The  audit                                                                    
recommended  an eight-year  extension.  She  noted that  the                                                                    
audit  period was  fairly  short, at  less  than two  years,                                                                    
because  the prior  sunset audit  was dated  July 2015.  The                                                                    
prior  sunset  audit  identified  that  the  board  was  not                                                                    
serving  the public's  interest,  because it  had failed  to                                                                    
adopt a  Master Errors  and Emissions Insurance  Policy. The                                                                    
commission was  required by  a 2008 law  to obtain  a master                                                                    
policy,  and make  it available  to licensees.  The statutes                                                                    
also stated that licensees could  obtain an insurance policy                                                                    
independently through  a private firm or  through the master                                                                    
policy provided to them.                                                                                                        
                                                                                                                                
11:02:22 AM                                                                                                                   
                                                                                                                                
Senator von  Imhof referenced  the surplus  on page  12. She                                                                    
wondered  whether  the  provision of  the  recovery  balance                                                                    
related to the surplus.                                                                                                         
                                                                                                                                
Ms.   Curtis  wondered   whether  Senator   von  Imhof   was                                                                    
referencing exhibit 4.                                                                                                          
                                                                                                                                
Senator von Imhof replied in the affirmative.                                                                                   
                                                                                                                                
Ms.  Curtis  stated  that  page 15,  exhibit  6  showed  the                                                                    
recovery fund balance.                                                                                                          
                                                                                                                                
Senator von Imhof asked if exhibit  4 and exhibit 6 were two                                                                    
separate financial  transactions. She wondered how  the fees                                                                    
were collected for exhibit 6.                                                                                                   
                                                                                                                                
Ms. Curtis  replied that they  were part of the  charged fee                                                                    
to the  applicant. There was  a separate fee  established on                                                                    
exhibit 5.                                                                                                                      
                                                                                                                                
Co-Chair MacKinnon wanted page numbers.                                                                                         
                                                                                                                                
Ms. Curtis  replied that  the fee was  collected as  part of                                                                    
the licensing process.                                                                                                          
                                                                                                                                
Senator  Stevens   looked  at  page  17,   and  queried  the                                                                    
acceptable period of inactivity.                                                                                                
                                                                                                                                
Ms. Curtis believed there was a six-month goal.                                                                                 
                                                                                                                                
Co-Chair  MacKinnon asked  about how  the division  measured                                                                    
the length of extension.                                                                                                        
                                                                                                                                
Ms. Curtis  stated that there  were few  courtesy licensees.                                                                    
She remarked that it was not a material recommendation.                                                                         
                                                                                                                                
11:06:54 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
11:07:27 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair MacKinnon OPENED public testimony.                                                                                     
                                                                                                                                
TRACI BARICKMAN, CHAIR, REAL  ESTATE COMMISSION, PALMER (via                                                                    
teleconference),  testified  in  support of  the  bill.  She                                                                    
stated that the commission operated well.                                                                                       
                                                                                                                                
11:08:46 AM                                                                                                                   
                                                                                                                                
DEBORAH  BAROLLINI,  SELF, ANCHORAGE  (via  teleconference),                                                                    
spoke  in opposition  to  the bill.  She  asserted that  the                                                                    
commission did  not offer the  transparency that  the public                                                                    
deserved. She  stated that  she had  a complaint,  which was                                                                    
ignored by the commission.                                                                                                      
                                                                                                                                
Co-Chair  MacKinnon  relayed  that   the  committee  was  in                                                                    
receipt  of   Ms.  Barollini's   email  pertaining   to  the                                                                    
difficulties that  she had experienced  in working  with the                                                                    
commission.                                                                                                                     
                                                                                                                                
11:13:28 AM                                                                                                                   
                                                                                                                                
Senator Micciche asked Ms. Barickman  about a complaint that                                                                    
was submitted, asked why the complaint was rejected.                                                                            
                                                                                                                                
Ms. Barickman  stated that the complaint  process first went                                                                    
through the division,  where it must be  determined that the                                                                    
REC had  jurisdiction. She  understood that  Ms. Barollini's                                                                    
complaint   was  not   within   the   jurisdiction  of   the                                                                    
commission, and it had not been received by the commission.                                                                     
                                                                                                                                
Senator Micciche  asked what it  would take for  a complaint                                                                    
against  a  licensee to  be  within  the jurisdiction  of  a                                                                    
licensee.                                                                                                                       
                                                                                                                                
Ms. Barickman  stated that in  the case of a  complaint that                                                                    
was deemed to be within  the jurisdiction of the commission,                                                                    
the  division  would open  a  case.  Typically there  was  a                                                                    
consent agreement, and the respondent would be notified.                                                                        
                                                                                                                                
Co-Chair MacKinnon //                                                                                                           
                                                                                                                                
Senator  Micciche  asked Ms.  Barickman  if  there had  been                                                                    
discipline  on  any  realtor. He  wondered  if  the  process                                                                    
worked if there  had been issues within  the jurisdiction of                                                                    
the committee.                                                                                                                  
                                                                                                                                
Mr. Barickman  answered in the  affirmative. She  added that                                                                    
the commission's  quarterly meetings  were public,  but were                                                                    
not the appropriate forum for hearing complaints.                                                                               
                                                                                                                                
11:19:18 AM                                                                                                                   
                                                                                                                                
Senator  Micciche asked  Ms.  Chambers  why Ms.  Barollini's                                                                    
complaint had not reached the commission's jurisdiction.                                                                        
                                                                                                                                
SARA  CHAMBERS, DEPUTY  DIRECTOR, DIVISION  OF CORPORATIONS,                                                                    
BUSINESS   AND   PROFESSIONAL   LICENSING,   DEPARTMENT   OF                                                                    
COMMERCE, COMMUNITY  AND ECONOMIC DEVELOPMENT,  affirmed she                                                                    
had   reviewed  the   investigative   file  containing   Ms.                                                                    
Barollini's  complaint. The  concerns were  found not  to be                                                                    
within the jurisdiction of the  commission, but rather under                                                                    
the  purview  of the  Department  of  Law and  the  Landlord                                                                    
Tenant   Act.   Ms.   Barollini  was   provided   with   the                                                                    
information.                                                                                                                    
                                                                                                                                
Senator Micciche asked if the  Landlord Tenant Act covered a                                                                    
home in a condominium association.                                                                                              
                                                                                                                                
Ms. Chambers  deferred to  the Department  of Law.  She also                                                                    
agreed to provide further information.                                                                                          
                                                                                                                                
Senator   Micciche  thought   it  sounded   as  though   the                                                                    
commission was  not allowed  the opportunity  to act  on the                                                                    
matter. He wanted to reconcile the complaint.                                                                                   
                                                                                                                                
Ms. Chambers was  happy to work with  the chief investigator                                                                    
to ensure a thorough review of the case.                                                                                        
                                                                                                                                
Co-Chair   MacKinnon  believed   that   Ms.  Barollini   was                                                                    
suggesting that if a person was  not competent to act in the                                                                    
other  role  as  a  licensure,  the  board  should  make  an                                                                    
examination.                                                                                                                    
                                                                                                                                
11:24:08 AM                                                                                                                   
                                                                                                                                
ERROL  CHAMPION,  ALASKA  ASSOCIATION OF  REALTORS,  JUNEAU,                                                                    
spoke in support of the bill. He appreciated the efforts.                                                                       
                                                                                                                                
Senator Micciche discussed the fiscal note.                                                                                     
                                                                                                                                
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
                                                                                                                                
HB 279 was HEARD and HELD in committee for further                                                                              
consideration.                                                                                                                  
                                                                                                                                
11:27:15 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
11:27:47 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair MacKinnon discussed committee business.                                                                                
                                                                                                                                
ADJOURNMENT                                                                                                                   
11:28:59 AM                                                                                                                   
                                                                                                                                
The meeting was adjourned at 11:28 a.m.                                                                                         
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects
HB273 Legislative Audit 01.19.18.pdf SFIN 4/3/2018 9:00:00 AM
HB 273
HB273 Sponsor Statement 01.19.18.pdf SFIN 4/3/2018 9:00:00 AM
HB 273
HB274 Sponsor Statement 1.29.18.pdf SFIN 4/3/2018 9:00:00 AM
HB 274
HB274 Supporting Document - 2017 Legislative Audit 1.29.18.pdf SFIN 4/3/2018 9:00:00 AM
HB 274
HB 275 01.19.18 Support Letters.pdf SFIN 4/3/2018 9:00:00 AM
HB 275
HB 275 Support Gilmour.docx SFIN 4/3/2018 9:00:00 AM
HB 275
HB275 01.19.18 Opposition Letters.pdf SFIN 4/3/2018 9:00:00 AM
HB 275
HB275 Legislative Audit 10.11.17.pdf SFIN 4/3/2018 9:00:00 AM
HB 275
HB275(FIN) Sponsor Statement.pdf SFIN 4/3/2018 9:00:00 AM
HB 275
HB278 Sponsor Statement 3.31.18.pdf SFIN 4/3/2018 9:00:00 AM
HB 278
HB278 Supporting Document - 2017 Audit 3.31.18.pdf SFIN 4/3/2018 9:00:00 AM
HB 278
HB279 Letter of Opposition 3.31.18.pdf SFIN 4/3/2018 9:00:00 AM
HB 279
HB279 Letter of Support 3.31.18.pdf SFIN 4/3/2018 9:00:00 AM
HB 279
HB279 Sponsor Statement 3.31.18.pdf SFIN 4/3/2018 9:00:00 AM
HB 279
HB279 Supporting Document - 2017 Audit 3.31.18.pdf SFIN 4/3/2018 9:00:00 AM
HB 279
HB280 Sponsor Statement 3.31.18.pdf SFIN 4/3/2018 9:00:00 AM
HB 280
HB280 Supporting Document - 2017 Audit 3.31.18.pdf SFIN 4/3/2018 9:00:00 AM
HB 280
HB302 Sponsor Statement.pdf SFIN 4/3/2018 9:00:00 AM
HB 302
Professional Counselors Audit Report.pdf SFIN 4/3/2018 9:00:00 AM
HB 302
HB 279 Senare Finance Testimony Brollini 2.pdf SFIN 4/3/2018 9:00:00 AM
HB 279
HB 278, 275, 278, 279 DCCED Response - Corporations Buisness, and Professional Licensing 040318.pdf SFIN 4/3/2018 9:00:00 AM
HB 278
HB 76 follow up S FIN (DED).pdf SFIN 4/3/2018 9:00:00 AM
HB 76
HB 279 - Brickman Testimony 4.4.2018.pdf SFIN 4/3/2018 9:00:00 AM
HB 279