Legislature(2017 - 2018)SENATE FINANCE 532

04/13/2018 01:30 PM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Delayed to 4:20 p.m. --
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 110 MASSAGE THERAPY LICENSING; EXEMPTIONS TELECONFERENCED
Moved CSHB 110(L&C) Out of Committee
<Bill Hearing Rescheduled from 4/12/18 at 1:30pm>
+= HB 318 MEMBERSHIP OF & EXTEND BD .SOC WORK EXAM TELECONFERENCED
Moved CSHB 318(FIN) Out of Committee
<Bill Hearing Rescheduled from 4/12/18 at 1:30pm>
+= HB 323 EXTEND: BOARD OF PHARMACY TELECONFERENCED
Moved HB 323 Out of Committee
<Bill Hearing Rescheduled from 4/12/18 at 1:30pm>
                  SENATE FINANCE COMMITTEE                                                                                      
                       April 13, 2018                                                                                           
                          4:23 p.m.                                                                                             
                                                                                                                                
4:23:55 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair  MacKinnon  called  the  Senate  Finance  Committee                                                                    
meeting to order at 4:23 p.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Lyman Hoffman, Co-Chair                                                                                                 
Senator Anna MacKinnon, Co-Chair                                                                                                
Senator Click Bishop, Vice-Chair                                                                                                
Senator Peter Micciche                                                                                                          
Senator Donny Olson                                                                                                             
Senator Gary Stevens                                                                                                            
Senator Natasha von Imhof                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative   Colleen  Sullivan-Leonard,   Sponsor;  Kris                                                                    
Curtis, Legislative Auditor,  Alaska Division of Legislative                                                                    
Audit;    Janey    McCullough,   Director,    Division    of                                                                    
Corporations,    Business   and    Professional   Licensing,                                                                    
Department of Commerce,  Community and Economic Development;                                                                    
Ted Madsen, Staff, Representative Ivy Spohnholz.                                                                                
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Richard Holt,  Chair, AK Board of  Pharmacy, Anchorage; Leif                                                                    
Holm, Board of Pharmacy,  North Pole; Danielle Lafon, Chair,                                                                    
Board  of   Social  Worker  Examiners,   Fairbanks;  Crystal                                                                    
Koeneman,  Staff, Representative  Sam  Kito; David  Edwards-                                                                    
Smith, Chair, Board of Massage Therapists, Soldotna.                                                                            
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
CSHB 110(L&C)                                                                                                                   
          MASSAGE THERAPY LICENSING; EXEMPTIONS                                                                                 
                                                                                                                                
          CSHB 110(L&C)  was REPORTED out of  committee with                                                                    
          a   "do   pass"   recommendation  and   with   one                                                                    
          previously published fiscal note: FN2 (CED).                                                                          
                                                                                                                                
CSHB 318(FIN)                                                                                                                   
          MEMBERSHIP OF & EXTEND BD .SOC WORK EXAM                                                                              
                                                                                                                                
          CSHB 318(FIN)  was REPORTED out of  committee with                                                                    
          a  "do  pass"  recommendation  and  with  one  new                                                                    
          fiscal  impact note  from Department  of Commerce,                                                                    
          Community and Economic Development.                                                                                   
                                                                                                                                
HB 323    EXTEND: BOARD OF PHARMACY                                                                                             
                                                                                                                                
          HB 323  was REPORTED out  of committee with  a "do                                                                    
          pass"  recommendation  and   with  one  previously                                                                    
         published fiscal impact note: FN 1(CED).                                                                               
                                                                                                                                
HOUSE BILL NO. 323                                                                                                            
                                                                                                                                
     "An Act extending the termination date of the Board of                                                                     
     Pharmacy; and providing for an effective date."                                                                            
                                                                                                                                
4:25:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE COLLEEN  SULLIVAN-LEONARD, SPONSOR, discussed                                                                    
the  bill.   She  explained  that  the   bill  extended  the                                                                    
termination date  of the Board  of Pharmacy. The  bill would                                                                    
extend the board for four  years; from June 30, 2018 through                                                                    
June 30, 2022. Adoption of  the bill would continue existing                                                                    
activities by the board, and  administration by the Division                                                                    
of   Corporations,  Business   and  Professional   Licensing                                                                    
(DCBPL). Failure to adopt the  legislation would result in a                                                                    
one-year wind-down of the board,  with the division assuming                                                                    
all license responsibility in FY  20. The composition of the                                                                    
board was seven members  including five licensed pharmacists                                                                    
and three members from the public.                                                                                              
                                                                                                                                
Representative  Sullivan-Leonard  continued to  discuss  the                                                                    
bill;  informing that  the board  regulated admission  in to                                                                    
the   practice  of   pharmacy,   established  and   enforced                                                                    
compliance   with   professional  standards,   and   adopted                                                                    
regulations.   The  board   established  and   maintained  a                                                                    
controlled  substance  database.   The  board  also  oversaw                                                                    
licensing  for pharmacists,  pharmacy interns,  technicians,                                                                    
licensing for drug  rooms (inside institutional facilities);                                                                    
and also registered pharmacies located  outside the state if                                                                    
a pharmacy  shipped drugs to  consumers inside the  State of                                                                    
Alaska.                                                                                                                         
                                                                                                                                
4:27:47 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
4:28:15 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
KRIS  CURTIS,   LEGISLATIVE  AUDITOR,  ALASKA   DIVISION  OF                                                                    
LEGISLATIVE  AUDIT, reminded  that the  purpose of  a sunset                                                                    
audit was  to determine  whether a  board or  commission was                                                                    
serving the  public interest  and should  be extended.   She                                                                    
referenced the  document "A Sunset  Review of  Department of                                                                    
Commerce,  Community  and  Economic  Development,  Board  of                                                                    
Pharmacy (board)" (copy on file).                                                                                               
                                                                                                                                
Ms. Curtis  read from the  report conclusions listed  on the                                                                    
first page:                                                                                                                     
                                                                                                                                
     The audit  concluded the board  operated in  the public                                                                    
     interest   by    effectively   licensing   pharmacists,                                                                    
     pharmacy   interns,   pharmacy  technicians,   in-state                                                                    
     pharmacies, drug    rooms, and  wholesale distributors.                                                                    
     Board  meetings  were   conducted  in  accordance  with                                                                    
     applicable laws  and the board  was active  in amending                                                                    
     regulations to improve the industry.                                                                                       
                                                                                                                                
Ms.  Curtis read  from page  9 of  the report,  which showed                                                                    
licensing  and  registration  activity.  She  detailed  that                                                                    
there were  3,747 active  licenses as  of March  2017; which                                                                    
was a 33 percent increase  compared to the prior 2009 sunset                                                                    
audit.                                                                                                                          
                                                                                                                                
Ms. Curtis  directed attention to  the schedule  of revenues                                                                    
and expenditures  on page  10 of the  report and  noted that                                                                    
the board had a surplus  of approximately $275,000 as of the                                                                    
end  of FY  17.  She  noted that  there  was  a schedule  of                                                                    
licensing  fees at  the bottom  of  page 11  and added  that                                                                    
DCBPL management planned to do a  fee analysis at the end of                                                                    
2017 to examine adjustment of fees.                                                                                             
                                                                                                                                
Ms. Curtis  relayed that the  Division of  Legislative Audit                                                                    
was  recommending a  four-year  extension for  the board  in                                                                    
recognition  that  recent  statutory  changes  expanded  the                                                                    
board's  responsibilities  in  relation  to  the  controlled                                                                    
substance   prescription  database.   She   read  from   the                                                                    
background information on page 3 of the report:                                                                                 
                                                                                                                                
     Senate Bill 196, passed in  2008, requires the Board of                                                                    
     Pharmacy   (board)   to   establish  and   maintain   a                                                                    
     controlled substance prescription  database as provided                                                                    
     in AS 17.30.200. The law  was passed with the intent to                                                                    
     improve patient  care and foster  the goal  of reducing                                                                    
     misuse, abuse, and diversion of controlled substances.                                                                     
                                                                                                                                
     The  statute  requires  each dispenser  submit  to  the                                                                    
     board, by electronic  means, information regarding each                                                                    
     prescription dispensed for  a controlled substance. The                                                                    
     database electronically  collects information  from in-                                                                    
     state  and out  of-state  pharmacies as  well as  other                                                                    
     dispensers of  controlled substance  prescriptions. The                                                                    
     database  allows   pharmacists  and   practitioners  to                                                                    
     review  prescription history  prior  to prescribing  or                                                                    
     dispensing  a  controlled  substance. The  database  is                                                                    
     also to be used to:                                                                                                        
                                                                                                                                
      monitor prescribing   practices  and   patterns  of                                                                    
        prescribing or dispensing;                                                                                              
      identify practitioners  who   prescribe  controlled                                                                    
        substances in an unprofessional or unlawful manner;                                                                     
      identify individuals who may be  abusing controlled                                                                    
        substances; and                                                                                                         
      identify individuals   who  present   forgeries  or                                                                    
        otherwise false or altered prescriptions to a                                                                           
        pharmacy.                                                                                                               
                                                                                                                                
Ms. Curtis  relayed that there  were quite a  few structural                                                                    
problems when the legislation went  into effect in 2008, and                                                                    
the problems were  slow to be addressed.  The report grouped                                                                    
the challenges  into two  areas, including  the completeness                                                                    
of information, which was listed on  page 4. The law did not                                                                    
provide a way  to identify the people that  were required to                                                                    
submit information to  the database, so the  board could not                                                                    
verify completeness. Regulations established  at the time of                                                                    
the creation  of the database called  for monthly reporting;                                                                    
which was not timely enough to be useful.                                                                                       
                                                                                                                                
Ms.  Curtis continued  to discuss  the  requirement for  the                                                                    
board to monitor the prescription  drug database. The second                                                                    
area of challenge  was the use of  the information gathered.                                                                    
The  law did  not require  practitioners and  pharmacists to                                                                    
consult  the database  prior to  prescribing or  dispensing,                                                                    
rather it  was totally voluntary.  The board was  advised by                                                                    
the  Department  of Law  that  information  in the  database                                                                    
could  not  be  forwarded to  practitioners  or  pharmacists                                                                    
because  it  was  illegal to  send  an  unsolicited  report.                                                                    
Consequently, the board did not  use the information, and it                                                                    
was not  used to identify  patterns of abuse  or prescribing                                                                    
practices.                                                                                                                      
                                                                                                                                
4:31:58 PM                                                                                                                    
                                                                                                                                
Ms.  Curtis   continued  discussing  the   new  requirements                                                                    
regarding the  drug database. She  described that  there had                                                                    
been recent  significant changes in  the law to  address the                                                                    
problem  areas.   Changes  included  that   prescribers  and                                                                    
dispensers must  register with the  database, and  the board                                                                    
of  pharmacy could  notify  other  occupational boards  that                                                                    
licensees  had  registered. The  change  provided  a way  to                                                                    
identify   incompleteness   and  noncompliance.   In   2018,                                                                    
beginning in  July, dispensers would  be required  to submit                                                                    
information   to   the   database  daily.   Dispensers   and                                                                    
practitioners would be required  to check the database prior                                                                    
to  dispensing or  prescribing  or administering  medication                                                                    
with  controlled  substances  (with  some  exclusions).  The                                                                    
board was also able to provide unsolicited reports.                                                                             
                                                                                                                                
Ms. Curtis noted  that on page 12 of the  report there was a                                                                    
conclusion  that with  the statutory  changes the  board was                                                                    
empowered to help combat the  abuse of controlled substance.                                                                    
Given  that the  changes  were very  recent,  the audit  was                                                                    
unable to evaluate  the degree to which the  board would use                                                                    
the  new  authority  to serve  the  public's  interest.  The                                                                    
conclusion furthered  that DCBPL management did  not believe                                                                    
the  board should  proactively analyze  data to  meet public                                                                    
health   objectives.   Further,  Department   of   Commerce,                                                                    
Community,  and  Economic   Development  (DCCED)  management                                                                    
indicated  that  additional  resources were  needed  if  the                                                                    
legislature  intended  for the  board  to  analyze data  and                                                                    
become proactive in helping enforce prescription drug laws.                                                                     
                                                                                                                                
Ms. Curtis  continued discussing the recommendations  of the                                                                    
audit.   She   noted   that    the   report   included   two                                                                    
recommendations that began on page 14:                                                                                          
                                                                                                                                
                                                                                                                                
     Recommendation  1:  DCBPL's chief  investigator  should                                                                    
     work  with the  director to  improve the  timeliness of                                                                    
     investigations.                                                                                                            
                                                                                                                                
     The  audit  identified  and reviewed  13  of  20  cases                                                                    
     opened for  over 180 days  between July 2014  and March                                                                    
     2017. Six  of the 13  (46 percent) cases were  found to                                                                    
     have unjustified periods of  inactivity ranging from 51                                                                    
     to 184 days.                                                                                                               
                                                                                                                                
Ms.  Curtis explained  that the  periods of  inactivity were                                                                    
largely due to  competing priorities, specifically oversight                                                                    
of the controlled substance prescription database.                                                                              
                                                                                                                                
Ms.  Curtis  read  recommendation  2 from  page  14  of  the                                                                    
report:                                                                                                                         
                                                                                                                                
     DCBPL's  director should  improve procedures  to ensure                                                                    
     required   licensure  documentation   is  appropriately                                                                    
     obtained and retained.                                                                                                     
                                                                                                                                
     Three  of 25  facility applications  tested as  part of                                                                    
     the  audit  did  not include  the  required  regulatory                                                                    
     documentation.                                                                                                             
                                                                                                                                
Ms.  Curtis reported  that in  one  case, a  self-inspection                                                                    
report  was not  provided, in  one case  a background  check                                                                    
report was  not obtained,  and in one  case DCBPL  staff did                                                                    
not follow up when an  application disclosed that a citation                                                                    
was issued  on a pharmacist out-of-state  license. The board                                                                    
was  not  held  responsible  for   the  errors,  as  it  did                                                                    
appropriately  approve the  license pending  receipt of  key                                                                    
documentation.  The oversight  was  due to  lack of  follow-                                                                    
through  by  DCBPL  staff in  obtaining  the  documentation.                                                                    
Further, the  division tested 25 individual  licenses tested                                                                    
found that  one pharmacy  intern's license  application file                                                                    
did  not  include  evidence of  the  applicant  meeting  the                                                                    
educational requirement.                                                                                                        
                                                                                                                                
4:35:03 PM                                                                                                                    
                                                                                                                                
Ms. Curtis  informed that  responses to  the audit  began on                                                                    
page 45. The governor's office  agreed that the board served                                                                    
the public's  interest and  should be  extended and  did not                                                                    
comment   regarding   the   controlled   prescription   drug                                                                    
database.  The  department's response  was  on  page 47.  It                                                                    
agreed  with both  recommendations of  the audit.  Regarding                                                                    
recommendation 1,  DCCED stated that it  had implemented new                                                                    
procedures to address  the finding. Regarding recommendation                                                                    
2,  the   department  agreed  that  additional   checks  and                                                                    
balances  were  needed  to  make  sure  that  administrative                                                                    
record was complete.  The  department stated that additional                                                                    
resources were  needed to ensure  that standards  were being                                                                    
met.  The board  chair's response  was on  page 49,  and the                                                                    
chair agreed with both recommendations.                                                                                         
                                                                                                                                
4:35:53 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Bishop asked  about  Exhibit 1  on  page 1;  and                                                                    
asked if the board was fully staffed.                                                                                           
                                                                                                                                
Ms. Curtis  deferred the  question to  the board  chair. She                                                                    
stated that the audit was dated August 2016.                                                                                    
                                                                                                                                
Co-Chair  MacKinnon planned  on bringing  up the  department                                                                    
staff  to  address  questions.   She  addressed  the  excess                                                                    
receipt authority  in the amount  of $275,000.  She wondered                                                                    
why there a request had not  been made to hire the necessary                                                                    
personnel.                                                                                                                      
                                                                                                                                
Representative Sullivan-Leonard was pleased  to see that the                                                                    
board extension  was recommended for four  years rather than                                                                    
six or  eight. She  thought it was  important to  follow the                                                                    
board closely with regard to  new statutory requirements; as                                                                    
well as  ensure that the  board had the  necessary resources                                                                    
to accomplish its goals.                                                                                                        
                                                                                                                                
4:37:30 PM                                                                                                                    
                                                                                                                                
RICHARD HOLT,  CHAIR, AK BOARD  OF PHARMACY,  ANCHORAGE (via                                                                    
teleconference), stated that the  board worked diligently in                                                                    
the protection of Alaskan  patients and serving communities.                                                                    
The  board  had worked  hard  in  adapting to  ever-changing                                                                    
pharmacy  practice   and  licensing,  in  addition   to  the                                                                    
controlled  substance  prescription database.  He  supported                                                                    
the  extension of  the  board,  in order  for  the board  to                                                                    
continue serving the needs of  patients and populations that                                                                    
were reliant  upon the  board as  subject matter  experts in                                                                    
the field of pharmacy.                                                                                                          
                                                                                                                                
Co-Chair MacKinnon asked if Mr.  Holt had heard the comments                                                                    
from Ms.  Curtis regarding  the department's  assertion that                                                                    
the board needed more personnel to complete its duties.                                                                         
                                                                                                                                
Mr. Holt  informed that  the board had  a new  employee that                                                                    
split duties  between board functions and  monitoring of the                                                                    
prescription drug  database. He referenced SB  37, which had                                                                    
proposed to  give the board  authority to hire  an executive                                                                    
administrator  using licensing  receipts  services fees  for                                                                    
out of state entities.                                                                                                          
                                                                                                                                
Co-Chair MacKinnon  asked how the  board was trying  to gain                                                                    
authority.                                                                                                                      
                                                                                                                                
Mr.  Holt  explained that  SB  37  was  heard in  the  House                                                                    
Finance  Committee the  previous day  and would  provide the                                                                    
board with authority to hire an executive administrator.                                                                        
                                                                                                                                
4:40:18 PM                                                                                                                    
                                                                                                                                
Senator Stevens asked about the  board's $275,000 of surplus                                                                    
funds.                                                                                                                          
                                                                                                                                
Mr. Holt  did not  recall the exact  amount of  surplus from                                                                    
year  to  year.  He  thought   the  amount  of  surplus  was                                                                    
cumulative.                                                                                                                     
                                                                                                                                
Co-Chair   MacKinnon   informed   that  according   to   the                                                                    
Legislative Finance Division (LFD)  the carry-forward for FY                                                                    
12 to FY 13 was $29,896; for FY 14 to FY 15 the carry-                                                                          
forward  was $201,479;  and in  FY 16  to FY  17 the  carry-                                                                    
forward surplus was $275,216.                                                                                                   
                                                                                                                                
4:41:25 PM                                                                                                                    
                                                                                                                                
Vice-Chair Bishop  asked Mr. Holt  if the board was  at full                                                                    
strength.                                                                                                                       
                                                                                                                                
Mr. Holt answered in the affirmative.                                                                                           
                                                                                                                                
4:41:56 PM                                                                                                                    
                                                                                                                                
LEIF   HOLM,   BOARD   OF    PHARMACY,   NORTH   POLE   (via                                                                    
teleconference),  agreed with  the remarks  of the  previous                                                                    
testifier.                                                                                                                      
                                                                                                                                
Co-Chair MacKinnon OPENED public testimony.                                                                                     
                                                                                                                                
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
                                                                                                                                
4:42:43 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Bishop   discussed  FN  1  from   Department  of                                                                    
Commerce,  Community and  Economic  Development. The  fiscal                                                                    
note  had a  cost of  $27,900 annually  if the  bill passed.                                                                    
There would  be $26,400  of expenses  would be  incurred for                                                                    
travel   for  members   to  attend   four  board   meetings.                                                                    
Advertising the  board meetings would  cost $400,  and $1000                                                                    
in expenses  would be incurred  for training  and conference                                                                    
fees.  There  would  be  $100  stipends  for  board  members                                                                    
attending.                                                                                                                      
                                                                                                                                
Co-Chair  MacKinnon  noted  that  the fiscal  note  did  not                                                                    
reflect the  full cost  to the state  or the  board members.                                                                    
The  board's  total revenue  was  $1,014,241  and its  total                                                                    
expenditures was $940,504.                                                                                                      
                                                                                                                                
Vice-Chair  Bishop stated  that  the  funds were  Designated                                                                    
General Funds (DGF) of receipt supported services.                                                                              
                                                                                                                                
Co-Chair MacKinnon noted that  the members of the profession                                                                    
were  providing the  state with  resources  to continue  the                                                                    
administration of the pharmacy profession.                                                                                      
                                                                                                                                
4:44:34 PM                                                                                                                    
                                                                                                                                
JANEY  MCCULLOUGH,   DIRECTOR,  DIVISION   OF  CORPORATIONS,                                                                    
BUSINESS   AND   PROFESSIONAL   LICENSING,   DEPARTMENT   OF                                                                    
COMMERCE,  COMMUNITY AND  ECONOMIC DEVELOPMENT,  stated that                                                                    
the board had a level  of pharmacy expertise that was needed                                                                    
in the division. She recommended extension of the board.                                                                        
                                                                                                                                
Senator Micciche asked about a  gap of $75,000 between funds                                                                    
received and the cost to run the program.                                                                                       
                                                                                                                                
Ms. McCullough  asked if Senator Micciche  was talking about                                                                    
revenues  and   expenditures  listed  in  the   report.  She                                                                    
informed that the excess funds  were carried forward for the                                                                    
program to be used in years of non-renewal of licenses.                                                                         
                                                                                                                                
Senator Micciche  asked if  Co-Chair MacKinnon  could repeat                                                                    
the  figures  associated  with the  cost  of  operating  the                                                                    
board.                                                                                                                          
                                                                                                                                
Co-Chair MacKinnon  specified that in  FY 16 and FY  17, the                                                                    
board's  total expenditures  were $940,504.  The information                                                                    
came from an LFD review.                                                                                                        
                                                                                                                                
4:46:24 PM                                                                                                                    
                                                                                                                                
Senator Micciche asked who covered the costs.                                                                                   
                                                                                                                                
Co-Chair MacKinnon  asked if those  who were  licensed under                                                                    
the board paid a fee and supported the DGF.                                                                                     
                                                                                                                                
Ms. McCullough  stated that the  licensing fees paid  by all                                                                    
licensees supported  the program and paid  all the expenses.                                                                    
There was no  other revenue received to  support the expense                                                                    
of the board.                                                                                                                   
                                                                                                                                
Senator Micciche considered the  actual cost of the programs                                                                    
was  being discussed.  He  thought it  was  helpful for  the                                                                    
public  to understand  that all  the costs  were covered  by                                                                    
licensees.                                                                                                                      
                                                                                                                                
Ms. McCullough answered in the affirmative.                                                                                     
                                                                                                                                
4:47:51 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
4:49:16 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  MacKinnon   stated  that   there  were   72  hours                                                                    
remaining in  session. The committee had  discussed the bill                                                                    
and the  associated funding.  She wanted  to make  sure that                                                                    
the  bill  would pass  both  bodies  before the  legislature                                                                    
adjourned.                                                                                                                      
                                                                                                                                
Vice-Chair Bishop  MOVED to report  HB 323 out  of Committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
note. There being NO OBJECTION, it was so ordered.                                                                              
                                                                                                                                
HB  323 was  REPORTED  out  of committee  with  a "do  pass"                                                                    
recommendation  and  with  one previously  published  fiscal                                                                    
impact note: FN 1(CED).                                                                                                         
                                                                                                                                
4:51:01 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
4:52:52 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
CS FOR HOUSE BILL NO. 318(FIN)                                                                                                
                                                                                                                                
     "An Act extending the termination  date of the Board of                                                                    
     Social Work  Examiners; relating to the  composition of                                                                    
     the Board  of Social Work Examiners;  and providing for                                                                    
     an effective date."                                                                                                        
                                                                                                                                
4:52:52 PM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon  read the  title of  the bill.  She noted                                                                    
that the  sponsor, Representative Ivy Spohnholz,  was on the                                                                    
House floor.                                                                                                                    
                                                                                                                                
TED MADSEN,  STAFF, REPRESENTATIVE IVY  SPOHNHOLZ, discussed                                                                    
the bill.  He noted that  the bill was an  eight-year sunset                                                                    
extension for the  Board of Social Work  Examiners. He noted                                                                    
that  Section 2  of  the  bill contained  a  "tweak" to  the                                                                    
board's composition.  The subject  was discussed on  page 10                                                                    
of the  report by the  Division of Legislative  Audit. Under                                                                    
current law,  the board  could not  be entirely  composed of                                                                    
government agency  employees, or non-profit  social workers.                                                                    
He explained  that the  requirement had  made it  onerous to                                                                    
fill  the seats  of  the board.  The  proposed change  would                                                                    
allow for the  four licensed social workers on  the board to                                                                    
be non-profit employees.  He noted that it  was difficult to                                                                    
find a for-profit social worker  to fill the position on the                                                                    
board. The  agency responses indicated  that the  change had                                                                    
been supported.                                                                                                                 
                                                                                                                                
4:55:03 PM                                                                                                                    
                                                                                                                                
Ms. Curtis  discussed the document  "A Sunset Review  of the                                                                    
Department of Commerce,  Community and Economic Development,                                                                    
Board  of Social  Work Examiners  (board)," (copy  on file).                                                                    
She read from the report conclusions on the first page:                                                                         
                                                                                                                                
     The  audit concluded  that the  board  operated in  the                                                                    
     public's   interest   by  effectively   licensing   and                                                                    
     regulating   social   workers.  Board   meetings   were                                                                    
     conducted in  compliance with law,  investigations were                                                                    
     generally  processed timely,  and the  board issued  or                                                                    
     changed regulations to improve the profession.                                                                             
                                                                                                                                
Ms. Curtis  informed that the  division was  recommending an                                                                    
eight-year extension  of the  board. She  directed attention                                                                    
to page  6, which showed  a schedule of  licensing activity.                                                                    
As  of March  2017, there  were 783  total active  licenses,                                                                    
which was  a 41 percent  increase when compared to  the 2009                                                                    
sunset  audit.  Page 7  of  the  report  was a  schedule  of                                                                    
revenues and expenditures.  At the end of FY 17  there was a                                                                    
surplus of  $95,000. The fees were  listed on page 8  of the                                                                    
audit.                                                                                                                          
                                                                                                                                
Ms. Curtis  directed attention to  page 9, where  the report                                                                    
began listing two recommendations for improvements:                                                                             
                                                                                                                                
     Recommendation No. 1:                                                                                                      
     DCBPL's director should improve procedures to ensure                                                                       
     board-required documentation is obtained prior to                                                                          
     licensure.                                                                                                                 
                                                                                                                                
Ms. Curtis  detailed that of  the 25 licenses  tested, there                                                                    
was  one error.  The  board had  appropriately approved  the                                                                    
license,  but   it  was   conditional  upon   receiving  key                                                                    
documentation.  Subsequently  DCBPL  staff  had  issued  the                                                                    
license without obtaining the documentation.                                                                                    
                                                                                                                                
Ms. Curtis continued discussing the recommendations:                                                                            
                                                                                                                                
     Recommendation No. 2:                                                                                                      
     The  Office of  the  Governor,  Boards and  Commissions                                                                    
     director  should  work  with   the  board  to  identify                                                                    
     potential  applicants for  the board's  vacant clinical                                                                    
     social worker position.                                                                                                    
                                                                                                                                
Ms.  Curtis  detailed that  the  position  became vacant  in                                                                    
March  2017, and  was still  vacant in  October of  the same                                                                    
year.  She   referenced  earlier  testimony   regarding  the                                                                    
statutory requirements for board  members and the difficulty                                                                    
in finding applicants.                                                                                                          
                                                                                                                                
Ms. Curtis  noted that  the response to  the audit  began on                                                                    
page   19.  The   Office  of   the  Governor   responded  to                                                                    
recommendation 2 and agreed  that the stringent requirements                                                                    
should  be  changed  and  encouraged the  board  to  seek  a                                                                    
legislative fix.  The response  from DCCED  was on  page 21,                                                                    
and  agreed with  both recommendations.  With regard  to the                                                                    
recommendation  for improving  licensure documentation,  the                                                                    
department agreed  that additional checks and  balances were                                                                    
needed  to ensure  the administrative  record was  complete.                                                                    
The department also stated  it needed additional supervisory                                                                    
resources to ensure the standards were met.                                                                                     
                                                                                                                                
Ms.  Curtis continued  discussing the  audit and  noted that                                                                    
the board's response was on page  23 of the audit. The board                                                                    
agreed with both recommendations.                                                                                               
                                                                                                                                
4:57:58 PM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon  asked if Ms. Curtis  had done historical                                                                    
research  in  order to  determine  why  the legislature  had                                                                    
adopted such stringent guidelines.                                                                                              
                                                                                                                                
Ms. Curtis answered in the negative.                                                                                            
                                                                                                                                
Mr. Madsen  indicated he had contacted  Legislative Research                                                                    
Services regarding the original  enactment of the board. The                                                                    
board  member guidelines  had been  a part  of the  original                                                                    
legislation crafted to create the  board in 1988. The intent                                                                    
was to find a private,  for-profit social worker to serve on                                                                    
the  board;  however,  the   vast  majority  of  individuals                                                                    
working in  social work  were not  working for  a for-profit                                                                    
entity.                                                                                                                         
                                                                                                                                
4:59:25 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
5:00:22 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Mr.  Madsen read  an excerpt  of an  email from  Legislative                                                                    
Research Services (copy not on file):                                                                                           
                                                                                                                                
     We reviewed the bill  files and House committee minutes                                                                    
     for HB 526,  and note that a major concern  in 1988 was                                                                    
     the issue of  social workers in private  practice and a                                                                    
     lack  of regulation  or any  means to  discipline those                                                                    
     individuals  when   or  if   a  client   complained  of                                                                    
     unprofessional behavior.                                                                                                   
                                                                                                                                
     During the  committee process, the bill  was amended to                                                                    
     include  regulation  of  a clinical  social  worker  in                                                                    
     private practice and language  was added to ensure that                                                                    
     at  least  one licensed  member  of  the board  was  in                                                                    
     private practice.                                                                                                          
                                                                                                                                
DANIELLE  LAFON, CHAIR,  BOARD OF  SOCIAL WORKER  EXAMINERS,                                                                    
FAIRBANKS (via teleconference), spoke  in support of HB 318.                                                                    
She stated that the board  supported HB 318, and thought the                                                                    
board was necessary to  continue providing public protection                                                                    
by overseeing social work licensure in Alaska.                                                                                  
                                                                                                                                
5:01:45 PM                                                                                                                    
                                                                                                                                
Senator  Stevens asked  if there  were  social workers  that                                                                    
were not government employees.                                                                                                  
                                                                                                                                
Ms.  Lafon stated  that  there were  social  workers in  the                                                                    
state that  were not governmental employees,  however it was                                                                    
hard  to quantify  the number  as  the board  did not  track                                                                    
employment location.                                                                                                            
                                                                                                                                
Senator Stevens asked  if Ms. Lafon could  estimate a number                                                                    
of non-governmental employee social workers in the state.                                                                       
                                                                                                                                
Ms. Lafon answered in the negative.                                                                                             
                                                                                                                                
Senator  Stevens asked  is  Ms. Lafon  saw  an advantage  in                                                                    
having a non-governmental social worker on the board.                                                                           
                                                                                                                                
Ms. Lafon  was not  sure why the  regulation was  written as                                                                    
such. She noted that the board  had a vacancy for a year due                                                                    
to the  challenging regulation and  lack of  applicants. The                                                                    
board had discussed  the matter extensively and  did not see                                                                    
a conflict with changing the requirement as proposed.                                                                           
                                                                                                                                
5:03:14 PM                                                                                                                    
                                                                                                                                
Co-Chair   MacKinnon   referenced  a   recommendation   that                                                                    
additional supervision  was needed.  She asked if  the board                                                                    
had made the request of the administration.                                                                                     
                                                                                                                                
Ms. Lafon was not sure what Co-Chair MacKinnon referenced.                                                                      
                                                                                                                                
Ms.  Curtis  clarified that  the  agency's  response to  the                                                                    
audit was  to state that  it was important to  ensure checks                                                                    
and  balances  were   in  place  in  order   to  ensure  its                                                                    
administrative record was  complete. The department believed                                                                    
additional  supervisory  resources  were  needed  to  ensure                                                                    
departmental standards were met.                                                                                                
                                                                                                                                
Co-Chair MacKinnon  asked if the administration  had come to                                                                    
the  board  to  ask  for  additional  receipt  authority  or                                                                    
support for using board funds from licenses.                                                                                    
                                                                                                                                
Ms. Lafon discussed the audit  findings. She stated that the                                                                    
board  sent  its  division employees  to  training  sessions                                                                    
through  the Association  of Social  Work Boards.  The board                                                                    
members  also  received  training. The  board  had  received                                                                    
notification  from the  division that  it was  educating its                                                                    
staff to license social workers appropriately.                                                                                  
                                                                                                                                
5:05:50 PM                                                                                                                    
                                                                                                                                
Co-Chair   MacKinnon  asked   if   the  administration   had                                                                    
requested  additional  DGF to  support  from  the board  for                                                                    
additional supervision of the board's licensees.                                                                                
                                                                                                                                
Ms. Lafon answered in the negative.                                                                                             
                                                                                                                                
Co-Chair MacKinnon  stated that  the committee  would direct                                                                    
the department to  have communication with the  board on the                                                                    
matter.                                                                                                                         
                                                                                                                                
Ms.  Curtis  stated that  the  comment  from the  department                                                                    
could be  seen in multiple sunset  audits. Legislative Audit                                                                    
had found multiple instances (for  multiple boards) in which                                                                    
DCPBL staff  did not  follow up  to obtain  documentation or                                                                    
other   details.  There   was  standard   language  inserted                                                                    
regarding the need for additional resources.                                                                                    
                                                                                                                                
Co-Chair MacKinnon  asked if the department  was making such                                                                    
statements  when there  was excess  DGF  available from  the                                                                    
board. She wondered  if the problem was a  training issue or                                                                    
a personnel issue.                                                                                                              
                                                                                                                                
Ms.  Curtis   stated  that  the  department   had  made  the                                                                    
statement multiple times, and she  thought all the boards in                                                                    
question were in a state of surplus.                                                                                            
                                                                                                                                
5:07:43 PM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon  referenced  a  repeated  theme  in  the                                                                    
audits  related to  a recommendation  for additional  staff.                                                                    
She  wondered  if there  was  a  connection between  surplus                                                                    
revenue and the request.                                                                                                        
                                                                                                                                
Ms. McCullough  stated that the division  had identified the                                                                    
need  to have  more  occupational licensers  to  be able  to                                                                    
issue more licenses.                                                                                                            
                                                                                                                                
5:09:15 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
5:09:28 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Ms.  McCullough  stated  that the  division  had  determined                                                                    
(through   audit  findings)   that  occupational   licensing                                                                    
examiners needed more oversight on  the quality of work. She                                                                    
detailed  that supervisors  typically had  7 to  8 employees                                                                    
under direct supervision, which could  include 6 or 7 boards                                                                    
under a supervisor's purview. The  division was finding that                                                                    
more  training,  oversight  and mentoring  would  solve  the                                                                    
resource problem.                                                                                                               
                                                                                                                                
Ms.  McCullough  continued  that  the  division  would  need                                                                    
spending authority to provide more of the resources needed.                                                                     
                                                                                                                                
Co-Chair  MacKinnon  asked if  the  division  would ask  all                                                                    
boards for additional funds for extra supervisory capacity.                                                                     
                                                                                                                                
Ms.  McCullough stated  that the  division would  spread out                                                                    
the  work  of an  additional  supervisor,  and all  programs                                                                    
would  benefit   from  additional  supervision   over  daily                                                                    
occupational licensing work.                                                                                                    
                                                                                                                                
Co-Chair MacKinnon  asked how the funds  would be collected,                                                                    
and if  it would adequately  be shared with  all licensures,                                                                    
or only with those boards that had a surplus.                                                                                   
                                                                                                                                
Ms. McCullough  reiterated that  all programs  would benefit                                                                    
from additional staff.                                                                                                          
                                                                                                                                
Co-Chair  MacKinnon  asked if  all  programs  would pay  for                                                                    
additional staff.                                                                                                               
                                                                                                                                
Ms.  McCullough answered  in the  affirmative and  clarified                                                                    
that additional supervisory staff  would be supported by all                                                                    
licensing fees.                                                                                                                 
                                                                                                                                
5:12:56 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Bishop commented  that he  hoped that  the DCCED                                                                    
commissioner  was listening,  so  he could  assist with  the                                                                    
issues being discussed.                                                                                                         
                                                                                                                                
Co-Chair  MacKinnon noted  that  the  commissioner had  been                                                                    
present earlier in the meeting.                                                                                                 
                                                                                                                                
5:13:35 PM                                                                                                                    
                                                                                                                                
Vice-Chair Bishop  discussed a  new fiscal impact  note from                                                                    
the   Department  of   Commerce,   Community  and   Economic                                                                    
Development, OMB  Component 2360. He detailed  that the cost                                                                    
would  be $21,400  annually. He  read from  the Analysis  on                                                                    
page 2 of the fiscal note:                                                                                                      
                                                                                                                                
     If the bill passes the following expenses will be                                                                          
     incurred:                                                                                                                  
     Travel:  $19.9(board  members   to  attend  four  board                                                                    
     meetings per year)                                                                                                         
     Services: $0.4  (advertising of public notice  of board                                                                    
     meetings)  $1.0  (training  and conference  fees)  $0.1                                                                    
     (stipends for board members  attending board meeting in                                                                    
     community of residence                                                                                                     
                                                                                                                                
     Professional licensing programs  within the Division of                                                                    
     Corporations, Business  and Professional  Licensing are                                                                    
     funded by Receipt Supported  Services, fund source 1156                                                                    
     Rcpt  Svcs (DGF).  Licensing fees  for each  occupation                                                                    
     are  set  per  AS  08.01.065 so  the  total  amount  of                                                                    
     revenue    collected     approximately    equals    the                                                                    
     occupation's actual regulatory costs.                                                                                      
                                                                                                                                
Co-Chair  MacKinnon noted  that from  FY  16 to  FY 17,  the                                                                    
board's  total   revenue  $333,783;  and   had  expenditures                                                                    
totaling  $215,924. The  information  had  been provided  by                                                                    
LFD. The  carry-forward in the  FY 12  to FY 13  time period                                                                    
was $36,860.  From FY 14 to  FY 15 there had  been a deficit                                                                    
carry-forward of $21,989. The  surplus carry-forward from FY                                                                    
16 to FY 17 was $95,870.                                                                                                        
                                                                                                                                
5:15:16 PM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon OPENED public testimony.                                                                                     
                                                                                                                                
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
                                                                                                                                
Vice-Chair  Bishop  MOVED to  report  CSHB  318(FIN) out  of                                                                    
Committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal note.                                                                                                       
                                                                                                                                
CSHB  318(FIN) was  REPORTED  out of  committee  with a  "do                                                                    
pass"  recommendation and  with one  new fiscal  impact note                                                                    
from   Department  of   Commerce,  Community   and  Economic                                                                    
Development.                                                                                                                    
                                                                                                                                
5:16:23 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
5:19:01 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
CS FOR HOUSE BILL NO. 110(L&C)                                                                                                
                                                                                                                                
     "An Act  relating to the  Board of  Massage Therapists;                                                                    
     relating to  the practice of massage  therapy; relating                                                                    
     to  massage  therapy  establishments; relating  to  the                                                                    
     Department   of  Commerce,   Community,  and   Economic                                                                    
    Development; and providing for an effective date."                                                                          
                                                                                                                                
5:19:01 PM                                                                                                                    
                                                                                                                                
CRYSTAL  KOENEMAN,  STAFF,   REPRESENTATIVE  SAM  KITO  (via                                                                    
teleconference), discussed  the bill.  The bill  was brought                                                                    
forward by  the Board  of Massage  Therapy, which  was newly                                                                    
established  in  2015.  She   referenced  the  recent  board                                                                    
extension,  at   which  time  some  licensure   issues  came                                                                    
forward.  The   bill  would  address  the   issues  to  more                                                                    
effectively  license members  of  the  profession, give  the                                                                    
board better oversight, and protect Alaskans.                                                                                   
                                                                                                                                
Ms.  Koeneman continued  discussing  the  bill. She  relayed                                                                    
that the bill would require  the Board of Massage Therapy to                                                                    
adopt regulations  covering massage  therapy establishments;                                                                    
which would give  authorities the tools needed  to shut down                                                                    
operations of human trafficking  and prostitution that tried                                                                    
to  use  massage therapy  as  a  front.  In 2015  the  board                                                                    
learned from the Federal Bureau  of Investigation (FBI) that                                                                    
there were  35 businesses in  Anchorage that were used  as a                                                                    
front    for   human    trafficking.   Regulating    massage                                                                    
establishments gave  the board  an additional tool  in order                                                                    
to hold owners of the establishments accountable.                                                                               
                                                                                                                                
Ms.  Koeneman  relayed  that the  bill  would  increase  the                                                                    
minimum course of  study from 500 hours to  625 hours, which                                                                    
was  in  line with  national  standards.  In 2012,  national                                                                    
massage  therapy  associations  met and  had  developed  new                                                                    
standards  for  the  industry.  One  recommendation  was  to                                                                    
increase the required course hours,  but the information had                                                                    
not  been available  at the  time  the original  legislation                                                                    
passed.  All three  massage schools  in Alaska  would exceed                                                                    
the minimum course hours requirement.  The bill also reduced                                                                    
the minimum  required safety education which  covered blood-                                                                    
borne pathogen coursework, in order to address redundancy.                                                                      
                                                                                                                                
Ms. Koeneman  detailed that there  was a change to  the bill                                                                    
in  the other  body  that would  remove  a restriction  that                                                                    
prevented members  having served  on prior boards.  The bill                                                                    
also  modified  the  bi-annual  fingerprint  requirement  to                                                                    
every six  years, which would  decrease burden  on licensees                                                                    
but  would  still  gave  the  board  adequate  oversight  to                                                                    
continue background checks.                                                                                                     
                                                                                                                                
5:24:10 PM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon OPENED public testimony.                                                                                     
                                                                                                                                
5:24:44 PM                                                                                                                    
                                                                                                                                
DAVID  EDWARDS-SMITH, CHAIR,  BOARD  OF MASSAGE  THERAPISTS,                                                                    
SOLDOTNA  (via  teleconference),  spoke in  support  of  the                                                                    
bill.                                                                                                                           
                                                                                                                                
Co-Chair MacKinnon  asked if  Mr. Edwards-Smith  could speak                                                                    
to the fingerprinting issue.                                                                                                    
                                                                                                                                
Mr.  Edwards-Smith  stated  that  HB 110  would  reduce  the                                                                    
burden of a renewing  licensee having to redo fingerprinting                                                                    
every period. He felt fingerprinting  was very important for                                                                    
background checks,  but thought  reducing it to  every three                                                                    
cycles would be adequate.                                                                                                       
                                                                                                                                
Co-Chair MacKinnon asked Mr. Edwards-Smith  if the board had                                                                    
any problem with chain-of-custody with fingerprints.                                                                            
                                                                                                                                
Mr. Edwards-Smith  referenced a  letter from  Sara Chambers,                                                                    
Deputy  Director, DCBPL  (copy on  file) that  indicated the                                                                    
division was looking to make  improvements including a board                                                                    
recommendation to accept a certain  type of finger printers.                                                                    
He   discussed   the   concept   of   chain-of-custody   and                                                                    
recommendations.                                                                                                                
                                                                                                                                
5:28:20 PM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon  referenced a  letter from  the Americans                                                                    
For Prosperity group (copy on  file) that supported reducing                                                                    
the number of  required course hours. She asked  if he could                                                                    
speak to the board's discussion on the matter.                                                                                  
                                                                                                                                
Mr. Edwards-Smith stated that  the 625 required course hours                                                                    
proposed  in  the  bill  was a  product  of  seven  national                                                                    
massage therapy organizations that  had been active for many                                                                    
years. The groups had done a  study to look at the tests and                                                                    
educational   requirements   for    massage   therapy.   The                                                                    
comprehensive  study and  other  boards  had determined  625                                                                    
hours was a national standard.                                                                                                  
                                                                                                                                
5:31:08 PM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon  asked  if the  board  anticipated  that                                                                    
other  states   would  follow  suit  after   the  study  was                                                                    
disseminated. She  questioned if  other states  believed 500                                                                    
hours was adequate.                                                                                                             
                                                                                                                                
Mr. Edwards-Smith  indicated that through  conversation with                                                                    
other states,  the board understood that  every single state                                                                    
that was licensing  massage therapy would like  to change to                                                                    
625 hours.                                                                                                                      
                                                                                                                                
Co-Chair  MacKinnon asked  if the  board  had discussed  the                                                                    
issue  and  was  supportive  of the  proposed  625  required                                                                    
hours.                                                                                                                          
                                                                                                                                
Mr. Edwards-Smith answered in the affirmative.                                                                                  
                                                                                                                                
5:33:36 PM                                                                                                                    
                                                                                                                                
Senator Micciche thought it seemed  as though half of states                                                                    
had  500  hours  of  required  training.  He  preferred  the                                                                    
minimum adequate hours  of training. He asked  what could be                                                                    
gained through the additional training.                                                                                         
                                                                                                                                
Mr. Edwards-Smith  asserted that additional  education would                                                                    
provide for  a stronger  therapist with  backgrounds related                                                                    
to  pathology, anatomy  and  physiology,  and technique.  He                                                                    
discussed  proposed changes  to curriculum,  to better  deal                                                                    
with pathologies that had changed  since the adoption of the                                                                    
500-hour requirement.                                                                                                           
                                                                                                                                
Senator  Micciche wished  he had  a list  of all  the states                                                                    
required hours of education and training.                                                                                       
                                                                                                                                
5:35:36 PM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
                                                                                                                                
Vice-Chair Bishop asked if fingerprints changed.                                                                                
                                                                                                                                
Ms.  Koeneman answered  in the  negative, and  informed that                                                                    
fingerprints were not kept on  file, and so the fingerprints                                                                    
would need  to be reprocessed  to be run through  a national                                                                    
background check program.                                                                                                       
                                                                                                                                
Co-Chair  MacKinnon  asked if  Ms.  Koeneman  had any  other                                                                    
points to make on the fingerprinting change.                                                                                    
                                                                                                                                
Ms.  Koeneman   offered  that  the   current  fingerprinting                                                                    
process  for boards  under DCCED  was the  same that  was in                                                                    
place for a  concealed carry permit. She noted  that the FBI                                                                    
had  not  flagged  other   boards  over  the  fingerprinting                                                                    
process  but  had  flagged  that of  the  Board  of  Massage                                                                    
Therapy.  She thought  that appearances  might suggest  that                                                                    
the process was less secure,  but in reality the process was                                                                    
secure.                                                                                                                         
                                                                                                                                
Co-Chair  MacKinnon referenced  the aforementioned  April 9,                                                                    
2018 letter  authored by Sara  Chambers of  DCCED, regarding                                                                    
audit findings.                                                                                                                 
                                                                                                                                
5:38:59 PM                                                                                                                    
                                                                                                                                
Ms.  Koeneman  pointed  out that  there  were  495  programs                                                                    
throughout   the  country   that  offered   massage  therapy                                                                    
coursework and  certification. Of  the 495, there  were only                                                                    
73 that  fell below  the 625 hours.  Well over  400 programs                                                                    
across the nation  had over 625 hours required  to cover all                                                                    
the needed material for massage therapy certification.                                                                          
                                                                                                                                
5:39:45 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Bishop discussed  FN  2 from  the Department  of                                                                    
Commerce, Community and Economic  Development. For FY 19 the                                                                    
cost was  $10,800. In the out  years, there would be  a cost                                                                    
of $4,600. He read from the fiscal note analysis on page 2:                                                                     
                                                                                                                                
     HB  110 provides  authority for  the  Board of  Massage                                                                    
     Therapy  to establish  a  license  for massage  therapy                                                                    
     establishments   and   to   develop   regulations   for                                                                    
     licensing  requirements.   Regulating  massage  therapy                                                                    
     establishments  intended  to facilitate  protection  of                                                                    
     the pubic from businesses  that engage in prostitution,                                                                    
     sex  trafficking,  and  the  employment  of  unlicensed                                                                    
    persons performing massage-therapy type activities.                                                                         
                                                                                                                                
     If  the  bill passes  the  following  expenses will  be                                                                    
     incurred:                                                                                                                  
     Travel:  $4.6 (two  trips per  year  to conduct  onside                                                                    
     investigative inspections in out years)                                                                                    
     Services: $10.8  (costs to amend  regulations including                                                                    
     legal, printing and postage in the first year                                                                              
                                                                                                                                
     The  potential  number  of establishments  affected  by                                                                    
     this bill  is unknown  at this  time. Future  costs for                                                                    
     legal  and hearing  service expenses  in out  years are                                                                    
     unknown.                                                                                                                   
                                                                                                                                
     Professional licensing programs  within the Division of                                                                    
     Corporations, Business  and Professional  Licensing are                                                                    
     funded by Receipt Supported  Services, fund source 1156                                                                    
     Rcpt  Svcs (DGF).  Licensing fees  for each  occupation                                                                    
     are  set  per  AS  08.01.065 so  the  total  amount  of                                                                    
     revenue    collected     approximately    equals    the                                                                    
     occupation's actual regulatory costs.                                                                                      
                                                                                                                                
5:41:35 PM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon   thought  she   may  have   not  spoken                                                                    
accurately  regarding  revenue  and expenses.  Many  of  the                                                                    
boards and licensees were providing  DGF, and there had been                                                                    
great concern  that the  budget should be  cut, and  she was                                                                    
trying to make a distinction.  The state brought in revenues                                                                    
from licensees to support the  work of the boards. She noted                                                                    
that the  Board of Massage  Therapy's expenses for  2017 had                                                                    
been $224,300.                                                                                                                  
                                                                                                                                
5:43:13 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
5:45:58 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  MacKinnon   asked  about  total  cost   and  total                                                                    
expenses,  and  asked  about a  discussion  of  the  board's                                                                    
surplus.                                                                                                                        
                                                                                                                                
Ms. McCullough explained that in  FY 15, the program was new                                                                    
and  had not  yet collected  licensing fees.  The board  had                                                                    
gone into  a deficit position  of $69,926  at the end  of FY                                                                    
15.  When  revenue was  collected  in  FY 16,  $586,230  was                                                                    
brought in  and there was  a total expenditure  of $254,892,                                                                    
for an annual surplus of $331,338.                                                                                              
                                                                                                                                
Ms.  McCullough discussed  expenditures and  surpluses since                                                                    
the  inception  of the  board  and  collection of  licensing                                                                    
fees. At the  end of FY 17, the board  had a surplus balance                                                                    
of $335,053.  The department had  completed a  fee analysis,                                                                    
and lowered fees  so the board did not have  to carry such a                                                                    
high surplus.                                                                                                                   
                                                                                                                                
5:48:26 PM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon thought there had been a rate decrease.                                                                      
                                                                                                                                
Ms.  McCullough   reiterated  that  because  of   the  large                                                                    
surplus,   the  division   tried   to   keep  revenues   and                                                                    
expenditures  as  close  as  possible,  as  required  by  AS                                                                    
08.01.065.                                                                                                                      
                                                                                                                                
Co-Chair MacKinnon thanked Ms. McCullough for her work.                                                                         
                                                                                                                                
Vice-Chair  Bishop  MOVED to  report  CSHB  110(L&C) out  of                                                                    
Committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal note.                                                                                                       
                                                                                                                                
Senator Micciche OBJECTED for discussion.                                                                                       
                                                                                                                                
Senator Micciche discussed his  objection. He stated that he                                                                    
didn't   normally   support    an   increase   to   training                                                                    
requirements.  He  thought there  were  many  people in  the                                                                    
state  that  were  looking  for  work  and  that  additional                                                                    
training added additional expense.  He surmised that most of                                                                    
the people in the industry  supported the increase. He spoke                                                                    
about DGF and  clarified that the funds  were generally from                                                                    
Alaskans paying for a service.                                                                                                  
                                                                                                                                
Senator  Micciche WITHDREW  his  OBJECTION.  There being  NO                                                                    
further OBJECTION, it was so ordered.                                                                                           
                                                                                                                                
CSHB  110(L&C) was  REPORTED  out of  committee  with a  "do                                                                    
pass"  recommendation  and  with  one  previously  published                                                                    
fiscal note: FN2 (CED).                                                                                                         
                                                                                                                                
5:51:39 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
5:53:41 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair MacKinnon discussed the schedule for the following                                                                     
day.                                                                                                                            
                                                                                                                                
ADJOURNMENT                                                                                                                   
5:55:05 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 5:55 p.m.                                                                                          
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects
HB 110 Massage Therapy Testimony.docx SFIN 4/13/2018 1:30:00 PM
HB 110