02/09/2022 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB143 | |
| SB173 | |
| SB151 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 173 | TELECONFERENCED | |
| *+ | SB 143 | TELECONFERENCED | |
| *+ | SB 151 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
February 9, 2022
1:31 p.m.
MEMBERS PRESENT
Senator Joshua Revak, Vice Chair
Senator Peter Micciche
Senator Gary Stevens
Senator Elvi Gray-Jackson
MEMBERS ABSENT
Senator Mia Costello, Chair
COMMITTEE CALENDAR
SENATE BILL NO. 143
"An Act relating to horizontal property regimes and common
interest communities; and relating to mortgages, deeds of trust,
and other property liens."
- MOVED SB 143 OUT OF COMMITTEE
SENATE BILL NO. 173
"An Act relating to the practice of dentistry; relating to
dental radiological equipment; and providing for an effective
date."
- MOVED SB 173 OUT OF COMMITTEE
SENATE BILL NO. 151
"An Act extending the termination date of the Alcoholic Beverage
Control Board; and providing for an effective date."
- MOVED SB 151 OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: SB 143
SHORT TITLE: COMMON INTEREST COMMUNITIES; LIENS
SPONSOR(s): SENATOR(s) REVAK
01/18/22 (S) PREFILE RELEASED 1/7/22
01/18/22 (S) READ THE FIRST TIME - REFERRALS
01/18/22 (S) L&C
02/09/22 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: SB 173
SHORT TITLE: DENTIST SPEC. LICENSE/RADIOLOGIC EQUIP
SPONSOR(s): SENATOR(s) WILSON
01/28/22 (S) READ THE FIRST TIME - REFERRALS
01/28/22 (S) L&C, FIN
02/09/22 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: SB 151
SHORT TITLE: EXTEND ALCOHOLIC BEVERAGE CONTROL BOARD
SPONSOR(s): SENATOR(s) MICCICHE
01/18/22 (S) PREFILE RELEASED 1/7/22
01/18/22 (S) READ THE FIRST TIME - REFERRALS
01/18/22 (S) L&C, FIN
02/09/22 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
EMMA TORKELSON, Staff
Senator Josh Revak
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided information and presented the
sectional analysis for SB 143.
SARAH BADTEN, Counsel
Birch Horton Bittner and Cherot
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 143.
SUSAN JENSEN, Operations Manager
Bayshore Owners Association Inc. (Bayshore)
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 143.
JASON HENNINGS, Chapter President
Community Associations Institute of Alaska
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 143.
SENATOR DAVID WILSON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of SB 173.
JASMIN MARTIN, Staff
Senator David Wilson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced SB 173 on behalf of the sponsor.
DAVID LOGAN, DDS, Executive Director
Alaska Dental Society
Anchorage, Alaska
POSITION STATEMENT: Provided supporting testimony on SB 173.
SARA CHAMBERS, Director
Division of Corporations Business and Professional Licensing
Department of Commerce, Community and Economic Development
Juneau, Alaska
POSITION STATEMENT: Answered questions and provided information
during the hearing on SB 173.
DAVID NIELSON, DDS, Chair
Alaska Board of Dental Examiners
Anchorage, Alaska
POSITION STATEMENT: Provided information related to SB 173.
MADISON GOVIN, Staff
Senator Peter Micciche
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced SB 151 on behalf of the sponsor
KRIS CURTIS, Legislative Auditor
Legislative Audit Division
Legislative Affairs Agency
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Reviewed the sunset audit for the Alcoholic
Control Board (ABC Board) during the hearing on SB 151.
DANA WALUKIEWICZ, Chair
Alcoholic Beverage Control Board
Anchorage, Alaska
POSITION STATEMENT: During the hearing on SB 151, articulated
his reasons for disagreeing with the length of the extension
recommended in the sunset audit for the ABC Board.
ACTION NARRATIVE
1:31:17 PM
ACTING CHAIR STEVENS called the Senate Labor and Commerce
Standing Committee meeting to order at 1:31 p.m. Present at the
call to order were Senators Gray-Jackson, Micciche, Revak, and
Acting Chair Stevens.
SB 143-COMMON INTEREST COMMUNITIES; LIENS
1:32:28 PM
ACTING CHAIR STEVENS announced the consideration of SENATE BILL
NO. 143 "An Act relating to horizontal property regimes and
common interest communities; and relating to mortgages, deeds of
trust, and other property liens."
1:32:40 PM
SENATOR JOSHUA REVAK, speaking as sponsor, introduced SB 143 by
reading the sponsor statement.
[Original punctuation provided.]
In 1986, the Uniform Common Interest Ownership Act
(UCIOA) made major revisions to Alaska statutes
governing Homeowners Associations (HOA's) and
Condominium Owner's Association (COA's) in Alaska.
However, two issues were not fixed by UCIOA when it
passed and remain problematic for HOA's/COA's and the
members of these communities to this day. SB 143
addresses these two issues and ensures that all
associations, regardless of when they were formed,
receive the same treatment.
The first change SB 143 makes is to the process by
which HOA's/COA's make amendments to their governing
documents. As statutes currently stand, the process of
amending an HOA's/COA's charter is so onerous that
many associations are forced to continue operating
with long-outdated rules. Unless a statutory change is
made, these associations may be forced to operate
under outdated and archaic standards forever.
Unfortunately, this problem affects mostly older and
often lower-income properties; the very properties
that most need the protections provided by UCIOA. SB
143 does not eliminate the current amendment process,
but instead provides a more reasonable alternative for
associations who are unable to complete the process
currently laid out.
Secondly, when a home in an HOA/COA is abandoned, or
the owners stop paying their regular dues, the HOA/COA
(and thereby all the individuals who pay their dues)
bear the cost of maintaining the property until the
house is foreclosed upon. UCIOA grants all HOA's/COA's
"super-priority lien status," which allows them to
collect six months of outstanding HOA/COA dues from a
bank holding a first lien on the property. However, in
practice, the statute has been interpreted to not
grant super-priority lien status to HOA's/COA's
created before 1986 and UCIOA. SB 143 rectifies this
decades old problem for pre-1986 associations and
clarifies what is already in the statute to assure
that pre-1986 HOA's/COA's will receive their super-
priority lien just like their post-1986 counterparts.
SB 143 will serve to benefit homeowners associations,
condominium associations, common interest ownership
communities, and the homeowners within those
communities by providing an alternative to the
overburdensome charter amendment process currently
laid out in statute and assuring that even pre-1986
HOA's/COA's are compensated for the costs they incur
to maintain homes that are not paying dues. SB 143
will directly benefit all dues-paying homeowners in
HOA's/COA's and grant all HOA's/COA's, regardless of
when they were formed, the same flexibility and rights
SENATOR REVAK thanked the chair for hearing the bill and advised
that his staff was available to walk through the sectional
analysis.
1:36:01 PM
SENATOR GRAY-JACKSON asked for further explanation of
lienholders and notices.
SENATOR REVAK explained that lienholders typically are banks and
several dozen banks could hold liens in a single homeowner's
association. Lienholders must be given notice and agree to any
change an association proposes to its bylaws. For example, an
association cannot update the amount it holds in escrow to pay
for utilities unless every bank that holds a lien in that
homeowners association agrees. In older associations that have
not gone through the onerous task of updating the bylaws, that
escrow amount may not come close to covering the actual cost of
the utilities. Responding to a further question, he clarified
that the bill does have to do with bylaws. The 1986 Uniform
Common Interest Ownership Act (UCIOA) that changed Alaska
statutes governing Alaska homeowners associations and
condominium owner association is being interpreted to not apply
to associations formed pre-1986 so they do not have the same
opportunities as newer associations.
SENATOR GRAY-JACKSON noted that he talked about bylaws but he
also mentioned utilities.
ACTING CHAIR STEVENS suggested Ms. Torkelson respond.
1:38:38 PM
EMMA TORKELSON, Staff, Senator Josh Revak, Alaska State
Legislature, Juneau, Alaska, explained that the reference to
utilities was an example of an association that wanted to change
an outdated rule in the bylaws.
ACTING CHAIR STEVENS asked Ms. Torkelson to present the
sectional analysis.
1:39:33 PM
MS. TORKELSON presented the sectional analysis for SB 143. It
read as follows:
[Original punctuation provided.]
Section 1 Amends AS 34.07 by adding a new section
which lays out an alternative method for Common
Interest communities formed before Uniform Common
Interest Ownership Act of 1986 (UCIOA) to obtain
lienholder approval of proposed changes to their
governing documents.
She noted that Section 3 inserts this same language in AS 34.08
so it affects associations formed post 1986. She continued:
Under this section, pre-UCIOA communities who choose
to use this alternative "shall send to a lienholder a
dated written notice and a copy of the proposed
amendment by certified mail, return receipt
requested[.]" If the association complies with the
written notice requirements and the lienholder does
not respond within 60 days of the postmark date of the
notice, "the lienholder is considered to have approved
the proposed amendment."
MS. TORKELSON clarified that this is not a repeal but an
alternative method in case the lienholder does not respond to
the written notice.
1:41:17 PM
SENATOR MICCICHE offered that this does not sidestep what the
homeowners want to do; it provides an alternative to the
lienholder approval requirement.
MS. TORKELSON agreed this only provides an alternative to the
written consent requirement for lienholders. It does not change
any requirement to get approval from the property owners in the
association.
SENATOR REVAK added that his office initially heard that
lienholders did not want to commit to proposed changes to bylaws
on homeowner associations in general, and particularly in
writing.
1:43:40 PM
MS. TORKELSON continued the sectional analysis:
Section 2 Amends AS 34.08 to clarify that
communities formed before UCIOA are granted super-
priority lien status in the same way that their post-
UCIOA counterparts are currently granted by AS
34.08.470(b).
She restated that the existing statute granted super-priority
lien status to all HOAs but it was interpreted to only include
those formed post UCIOA, which passed in 1986. She noted that a
list of 250 HOAs that are affected was in the bill packets.
Section 3 Inserts the same language as in Section 1
to AS 34.08 by to provide an alternative method for
Common Interest Communities formed after 1986 to
obtain lienholder approval of proposed changes to
their governing documents. Under this section, post-
UCIOA communities who choose to use this alternative
"shall send to a lienholder a dated written notice and
a copy of the proposed amendment by certified mail,
return receipt requested[.]" If the association
complies with the written notice requirements and the
lienholder does not respond within 60 days of the
postmark date of the notice, "the lienholder is
considered to have approved the proposed amendment."
1:45:23 PM
VICE CHAIR STEVENS turned to invited testimony.
1:45:56 PM
SARAH BADTEN, Counsel, Birch Horton Bittner and Cherot,
Anchorage, Alaska, stated that she has been practicing community
association law for about 15 years, helping homeowner and
condominium associations interpret and enforce their governing
documents. She has been approached by many associations that
have been affected by the issues SB 143 addresses.
She recounted that in Alaska, properties in condominium and
homeowner associations that were built before the Uniform Common
Interest Ownership Act (UCIOA) was adopted in 1986 are treated
differently than property in associations built post-1986.
Homeowners in pre-1986 communities are not able to change their
declaration. Responding to the earlier committee discussion, she
explained that the bylaws refer to how associations run their
business. What the bill addresses are the recorded covenants on
the property, which are also called the declaration or
restrictive covenants. It is those documents that older
communities cannot amend because lienholders must approve in
writing any change to the declaration. Associations have two
choices if the lienholders don't all respond; either they
continue to operate under the old standards or they operate in
non-compliance with the declaration. She stressed that she would
not advise operating in non-compliance.
MS. BADTEN stated that SB 143 resolves this problem by providing
a process for notification to lienholders about any change to
the declaration and an opportunity to respond. However, if the
lienholders are silent, the association may proceed to make the
change.
MS. BADTEN also voiced support for the provision that clarifies
that older associations have super-priority lien status just
like associations created after 1986. Some banks currently are
refusing to pay older associations any of the outstanding dues
on properties that have been foreclosed, arguing that it would
invalidate the declaration. SB 143 makes it clear that the same
rules relating to lienholder status apply to both pre- and post-
1986 associations. She pointed out that older associations need
this protection the most. Those buildings are more likely to be
in need of repair and the homeowners are less likely to have the
resources to pay additional assessments to offset unpaid dues.
SB 143 will help these pre-1986 properties be able to provide
the maintenance services the association is contractually
required to provide under its declaration. This provides equal
standing for both pre- and post-1986 properties.
1:50:45 PM
SENATOR GRAY-JACKSON offered her understanding that changes to
covenants need to be approved by the lienholders.
MS. BADTEN clarified that the lienholder approval needs to be in
writing.
SENATOR GRAY-JACKSON noted that her homeowner association (HOA)
was not on the list.
MS. BADTEN explained that the list is not comprehensive; it only
includes those condominium and homeowner associations that have
the word "association" in the name.
VICE CHAIR STEVENS observed that the list could be longer than
the 250 identified in the material in the bill packets.
MS. BADTEN agreed.
SENATOR MICCICHE said he understands the problem and he has no
issues with the bill.
1:53:32 PM
SUSAN JENSEN, Operations Manager, Bayshore Owners Association
Inc. (Bayshore), Anchorage, Alaska, concurred with Sarah
Badten's testimony in support of SB 143. She stated that
Bayshore was founded in 1974 and is comprised of 454 private
homes so the association has to deal with at least that many
banks. She related that Bayshore has wanted to amend its
declaration a number of times through the years but was never
able to do so because of the requirement to get written approval
from all lienholders. For example, the outdated requirements in
Bayshore's declaration limit the reserve to $20,000 despite
infrastructure upgrades that would cost far more than that.
Bayshore also lost the opportunity about 10 years ago for a
$100,000 improvement that would have made it safer for children
to walk to school using the association's green belts. The
declaration did not allow it. Further, the association often
loses out on dues and fees owed to it on properties that are
awaiting sale or in foreclosure by the bank. In some instances
the unpaid dues and fees amounted to $11,000 on individual
properties. This debt is passed along to the innocent dues
paying property owners. She urged the committee to pass SB 143
to protect older associations.
ACTING CHAIR STEVENS listed the individuals available to answer
questions.
SENATOR MICCICHE summarized that SB 143 addresses the
restriction that prevents older associations from changing their
declaration by giving lienholders the opportunity to respond in
writing to a proposed change within 60 days. If the responses
are not forthcoming, the wishes of the members of the HOA will
be honored.
MS. JENSEN answered yes and added that the members of the
association are thrilled that the bill was put forward.
SENATOR MICCICHE said he wanted it to be clear that SB 143 is
about honoring the rights of the individual homeowners. He
referenced the list of 248 associations and noted that just
seven were in non-compliance. He asked what the typical reason
is for being out of compliance.
1:59:50 PM
MS. BADTEN answered that associations that are not
professionally managed may not file their biannual report to the
state timely and will be out of compliance until the report is
filed.
2:00:56 PM
VICE CHAIR STEVENS asked Ms. Neseth if she had any comments.
2:01:11 PM
PHOEBE E. NESETH, Esq., Director, Government and Public Affairs,
Community Associations Institute stated that she submitted a
letter that addresses how other states have incorporated
provisions similar to those in SB 143.
2:01:55 PM
ACTING CHAIR STEVENS opened public testimony on SB 143.
2:02:23 PM
JASON HENNINGS, Chapter President, Community Associations
Institute of Alaska, Anchorage, Alaska, testified in support of
SB 143. He stated that he had managed community associations for
about 10 years in both Anchorage and Wasilla. He has experience
with both pre- and post-1986 HOAs and has found the collection
methods fairly easy for those formed after 1986. This helps the
capital reserves in an association over the long term. By
contrast, there are past collections issues with older HOAs and
the reserves can be inadequate to replace a roof or do other
maintenance. He agreed with previous testimony that associations
in less affluent areas are more likely to be affected. He
stressed how difficult it is for older associations that are
unable to change their declarations because the banks don't
respond.
2:04:01 PM
VICE CHAIR STEVENS found no further public testimony or
questions from the committee and solicited the will of the
committee.
2:04:11 PM
SENATOR MICCICHE moved to report SB 143, work order 32-LS0211\I,
from committee with individual recommendations and attached zero
fiscal note(s).
VICE CHAIR STEVENS found no objection and SB 143 was reported
from the Senate Labor and Commerce Standing Committee.
2:04:49 PM
At ease
SB 173-DENTIST SPEC. LICENSE/RADIOLOGIC EQUIP
2:06:04 PM
ACTING CHAIR STEVENS reconvened the meeting and announced the
consideration of SENATE BILL NO. 173 "An Act relating to the
practice of dentistry; relating to dental radiological
equipment; and providing for an effective date."
2:06:32 PM
SENATOR DAVID WILSON, Alaska State Legislature, Juneau, Alaska,
sponsor of SB 173, stated that the bill does two things: 1) it
transfers the inspection of dental radiology equipment from the
Board of Dental Examiners to the Department of Health and Social
Services; and 2) it establishes a specialty license. Members of
the dental industry brought these suggestions forward and the
matter has been considered in previous legislatures. These
updates are needed and will enhance public safety. He deferred
further introduction to Jasmin Martin.
2:07:24 PM
JASMIN MARTIN, Staff, Senator David Wilson, Alaska State
Legislature, Juneau, Alaska, introduced SB 173 on behalf of the
sponsor. She stated that the components in the bill were
contained in legislation in the 2020 session that was cut short
[due to COVID-19]. She paraphrased the following sponsor
statement.
[Original punctuation provided.]
Senate Bill 173 does two things. It transfers dental
radiological equipment inspections from the Board of
Dental Examiners to the Department of Health and
Social Services and it establishes a specialty dental
license in the State of Alaska.
For the first part, the Board of Dental Examiners
currently certifies inspectors of dental radiological
equipment who in turn conduct inspections at dental
offices. This bill would move the authority and
responsibility for inspections to the Department of
Health and Social Services, which already inspects
medical radiological equipment and employs state
inspectors. This bill also allows for the collection
of fees to cover the costs associated with inspection.
The second part of the legislation is a "truth in
advertising" concept. It simply establishes that if a
dentist advertises as a specialist in a field, they
must meet certain minimum qualifications as a
specialist as established by the Alaska State Board of
Dental Examiners (board). There is currently no
definition in statue for what a dental specialist is,
and the board does not have the authority to define
the term.
A dentist in Alaska can legally promote themselves as
specialist in fields such as orthodontics, oral
surgery, endodontistry, etc., even if they have no
specialty training in that fields. The board cannot
stop this practice if it does not have the authority
to set standards for what a specialist is. This lack
of authority for the board makes it difficult to
police misleading advertisements to the public.
2:08:37 PM
MS. MARTIN presented the sectional analysis for SB 173. It read
as follow:
[Original punctuation provided.]
Section 1: Conforming language in AS 08.01.065(c).
Section 2: Adds a new section (k) to AS 08.01.065
(Title 8. Business and Professions, Chapter 1.
Centralized Licensing, Section 065. Establishment of
fees)
Requires the Board of Dental Examiners to
establish and collect fees on behalf of the
Department of Health and Social Services for the
inspection of dental radiological equipment.
Section 3: Adds new sections to AS 08.36 (Title 8.
Business and Professions, Chapter 36. Dentistry)
AS 08.36.242. License to practice as a specialist
required.
Establishes that a dentist may not advertise
using the term "specialist," the name of a
specialty, or other phrases that suggest they are a
specialist unless they have a specialist license as
established.
AS 08.36.243. Qualification for specialist; scope of
practice.
(a) Establishes that in order to qualify for a
specialist licenses a person must
(1) Hold a dental license issued by the board
and
(2) Meet the qualifications of a specialist as
established by the board in regulation.
(b) In creating the qualifications for a
specialist license, the board shall consider
the standards of a nationally recognized
certifying entity approved by the board.
(c) Establishes that a dental specialist can only
claim to be a specialist in the specialty they
hold a license in. Sec. 08.36.245. Suspension
or revocation of specialist license.
Establishes that a board may suspend or revoke
a specialist license as set by AS 08.36.315.
Section 4: Adds a new section (d) to AS 44.29.020
(Title 44.
State Government, Chapter 29. Department of Health and
Human Services, Section 020. Duties of the Department)
Requires DHSS to establish standards of registration,
use, record keeping, and inspection of dental
radiological equipment in compliance with federal law.
Section 5: Conforming language in AS 44.46.029
Section 6: Conforming language in AS 46.03.022
Section 7: Repeals:
AS 08.36.075: Section of law requiring the Board of
Dental Examiners to set standards for inspection of
dental radiological equipment. Placed under DHSS by
section 4.
AS 18.05.065, AS 18.60.525(e), and AS 44.29.027:
Sections of law prohibiting DHSS from regulating
dental radiological equipment.
Section 8: Allows the Board of Dental Examiners, the
Department of Commerce, Community, and Economic
Development, and the Department of Health and Social
Services to adopt regulations in line with this act.
Section 9: Allows the departments and board to
immediately begin setting regulations.
Section 10: Set a delayed effective date for the rest
of the act to July 1, 2023.
2:10:33 PM
ACTING CHAIR STEVENS asked for the source of the funds that pay
for the inspections.
MS. MARTIN replied that the Board of Dental Examiners collects
fees to pay for the inspections and those funds are passed on to
the Department of Health and Social Services.
VICE CHAIR STEVENS asked if the fees are collected from the
licensed dentists who have equipment that is inspected.
MS. MARTIN answered yes.
SENATOR MICCICHE observed that the Department of Commerce,
Community and Economic Development (DCCED) fiscal note reflects
the need for a new position. He asked if the entire cost of the
bill is covered by the licensing fees.
MS. MARTIN replied that is the intent, but she would defer to
Ms. Chambers.
ACTING CHAIR STEVENS turned to invited testimony.
2:12:02 PM
DAVID LOGAN, DDS, Executive Director, Alaska Dental Society,
Anchorage, Alaska, thanked the sponsor for introducing the bill
and the committee for hearing it. He summarized that the bill
has two parts: 1) it addresses expert inspections; and 2) it
addresses specialty dental licenses. He deferred to Dr. Nielson
to speak to why the issue of specialty licenses has been
problematic for the board.
Speaking to the matter of inspections, he explained that
dentists are required to have their x-ray machines inspected by
a certified inspector once every six years. This has been
difficult. At this time there are no certified inspectors in the
state, and by the end of this year some dentists will either be
faced with not providing x-rays or operating out of compliance,
neither of which is acceptable.
2:13:29 PM
SENATOR GRAY-JACKSON thanked Dr. Logan for meeting with her
yesterday to explain the bill.
VICE CHAIR STEVENS asked how to prevent the potential compliance
issue.
DR. LOGAN offered his understanding that if the inspections were
transferred, the Department of Health and Social Services (DHSS)
could promulgate regulations, set the standards, and presumably
do the inspections. He noted that dentists could look at the
date sticker on their equipment to determine whether or not an
inspection was needed.
ACTING CHAIR STEVENS asked Ms. Chambers to address the question
of funding the inspections.
2:15:15 PM
SARA CHAMBERS, Director, Division of Corporations Business and
Professional Licensing, Department of Commerce, Community and
Economic Development (DCCED), Juneau, Alaska, confirmed that the
intention is that the individual dentists will be charged for
the inspections and payment will be through fee recovery receipt
services. As a general rule, if a program grows the associated
costs are borne by the licensees in that industry. She said the
DCCED fiscal note looks large but that is primarily because the
program has not been operating for several years. She described
it as a public safety cost to cover the backlog of uncollected
fees.
ACTING CHAIR STEVENS asked if she was concerned about x-ray
equipment potentially being out of compliance.
MS. CHAMBERS replied that as a consumer of dental services and
as the director of the division she would like assurance that
dental radiological equipment that is in use is safe. She added
that while the Board of Dental Examiners has employed different
strategies to make this work, it is outside their scope. She
posited that it is more appropriate for DHSS to address this
missing piece.
SENATOR GRAY-JACKSON asked her to speak to the effect the
specialty services component will have on Medicaid.
MS. CHAMBERS deferred the question to DHSS.
2:18:25 PM
ACTING CHAIR STEVENS asked Dr. Nielson if he had any comment on
the bill.
2:18:50 PM
DAVID NIELSON, DDS, Chair, Alaska Board of Dental Examiners,
Anchorage, Alaska, said he had prepared comments on Section 2
and was happy to answer any additional questions, but he thought
Dr. Logan and Sara Chambers explained it very well. Moving to
Section 3, he explained that the Dental Practice Act repealed
specialty licenses in about 2012. The result was that the board
stopped investigating false and misleading advertising
complaints. To restart these investigations, it is necessary to
have specialty license categories that can hold up under legal
scrutiny. He highlighted that an accredited dental post-graduate
program takes an extra two years of training beyond dental
school. He also informed the committee that the board has had to
deny a few licenses for specialists who want to come work in
Alaska because there is no way to approve such an applications
without having a license type that is limited to a specialty
area of dentistry.
ACTING CHAIR STEVENS asked if there were further questions.
2:21:18 PM
SENATOR GRAY-JACKSON said she would like somebody from DHSS to
provide information about what effect the specialty services
component will have on Medicaid.
ACTING CHAIR STEVENS passed the request to the committee aide
for follow up.
2:21:48 PM
ACTING CHAIR STEVENS opened public testimony on SB 173; finding
none, he closed public testimony. Finding no further questions
or comments from the committee, he solicited the will of the
committee.
2:22:13 PM
SENATOR MICCICHE moved to report SB 173, work order 32-LS0865\I,
from committee with individual recommendations and attached
fiscal note(s).
ACTING CHAIR STEVENS found no objection and SB 173 was reported
from the Senate Labor and Commerce Standing Committee.
2:22:37 PM
At ease
SB 151-EXTEND ALCOHOLIC BEVERAGE CONTROL BOARD
2:24:07 PM
ACTING CHAIR STEVENS reconvened the meeting and announced the
consideration of SENATE BILL NO. 151 "An Act extending the
termination date of the Alcoholic Beverage Control Board; and
providing for an effective date."
He stated the intention to hear from the sponsor, take invited
and public testimony, and asked the will of the committee.
2:24:43 PM
SENATOR PETER MICCICHE, sponsor of SB 151, stated that his staff
would introduce the bill and go through the sectional analysis.
2:25:10 PM
MADISON GOVIN, Staff, Senator Peter Micciche, Alaska State
Legislature, Juneau, Alaska, introduced SB 151 on behalf of the
sponsor with an abbreviated summary of the following sponsor
statement.
[Original punctuation provided.]
Senate Bill 151 extends the sunset date for the
Alcoholic Beverage Control (ABC) Board to June 30,
2026, in agreement with the September 2021 Legislative
Audit sunset review recommendation. The ABC Board is
made up of five members, two industry, one public
safety, one public, and one rural public.
In accordance with the provisions of Title 24 and
Title 44, Legislative Audit reviewed the activities of
the ABC Board and determined the board is effectively
serving the public interest by controlling the
manufacture, barter, possession, and sale of alcoholic
beverages in the state. Findings also included that
board meetings were conducted effectively, regulations
were adopted to implement statutory changes, and
investigations were conducted in a timely manner.
The audit concluded the board should improve
procedures for licensing efficiencies and issuing
renewals such as, improving the completeness and
accuracy of initial applications, reducing delays
associated with compliance information, issuing
licenses in a timely manner, automating the
application process and filling AMCO staff vacancies.
Additionally, operational improvements are needed in
enforcement, monitoring board-related local law
enforcement activity, and processing refunds to
municipalities. Given the important role in
safeguarding the health and safety of Alaskans and the
economic importance of the industry, the continuation
of this board is critical to the regulation of the
alcohol industry in Alaska.
I urge your support of this bill to extend the sunset
date of the Alcoholic Beverage Control Board.
MS. GOVIN noted that Kris Curtis would present the audit in more
detail.
2:26:44 PM
KRIS CURTIS, Legislative Auditor, Legislative Audit Division,
Legislative Affairs Agency, Alaska State Legislature, Juneau,
Alaska, stated that the Legislative Audit Division conducted an
audit of this board, the purpose of which was to determine
whether the board should be extended and whether it was serving
the public interest. She noted that a copy of the September 2021
audit was in the bill packet. She advised that this audit was
unique because it not only included the sunset audit but also a
special audit of the board's license process that the
Legislative Budget and Audit Committee requested. The report
summarizes both audits.
MS. CURTIS advised that the Report Conclusions begin on page 9
of the audit. She paraphrased the second paragraph on page 9:
[Original punctuation provided.]
Overall, the audit found that board meetings were
conducted effectively, regulations were adopted to
implement statutory changes, and investigations were
conducted in a timely manner. The audit also concluded
that the Alcohol and Marijuana Control Office (AMCO)
operations were impeded by the lack of an automated
application process and significant vacancies.
Further, deficiencies in controls over processing
licensee fee refunds were identified.
MS. CURTIS stated that the audit recommends that the legislature
extend the board four years, which is half the extension allowed
in statute. This is to assure that the legislature has the
ability to more timely review the board's progress in addressing
these licensing deficiencies.
MS. CURTIS directed attention to Exhibit 2 on page 14 of the
audit that reflects the 1,867 active licenses as of February 28,
2021. Additionally, the audit notes the board issued [1,177]
catering and special event permits from FY2020 through February
2021. The audit notes a backlog of applications that were due
December 2020. To allow the applicants to continue to operate
while the review was pending, the board issued over 300
temporary licenses. The division was informed that the backlog
was due to vacancies. The division investigated this further and
the results of that review are on page 15.
MS. CURTIS advised that Exhibit 3 summarizes the AMCO staff
positions that were vacant at least two months during the audit
period. In total, 7 staff positions were vacant for a cumulative
92 months from FY2018 through February 28, 2021. The reasons
management gave for the vacancies were: the uncertainty related
to an earlier proposal to merge AMCO into DCCED's Division of
Corporations, Business and Professional Licensing, and the
unknown effect of the COVID-19 pandemic on the alcoholic
beverage and marijuana industries. Additionally, one position
was not filled because the agency could not find workspace for a
position that was transferred from Fairbanks to MatSu. She
reported that the audit found that the extended vacancies
negatively affected AMCO's ability to support either board.
2:30:08 PM
MS. CURTIS stated that pages 16-18 summarize the detailed review
of the license process. The audit found that overall, 76 percent
of new applications and 85 percent of transfer applications were
approved within six months. On average, it took 153 days to
approve and issue a new license and 131 days for a transfer
license. The audit found that the complex license requirements
made the application process complicated and inherently subject
to error. Because the applications are submitted manually, they
are not subject to online edits that might help limit errors.
2:30:56 PM
MS. CURTIS described three main aspects of the audit process
that caused delays. (1 The applications were incomplete or
inaccurate 96 percent of the time for new applications and 97
percent for transfer applications. Applications that are
determined deficient are returned for correction, which causes
delays. 2) Confirming compliance with statutory and regulatory
requirements causes significant delays. Waiting for the
compliance information adds an average of 88 days to the license
process and 35 days for transfer applications. 3) Once all the
requirements are met, issuing the license takes 23 days for a
new license and 28 for a transfer license. The audit determined
that automating this process could reduce the timeline.
2:32:10 PM
MS. CURTIS summarized the five recommendations of the audit that
start on page 27.
[Original punctuation provided with some formatting changes.]
Recommendation No. 1: The Department of Commerce,
Community, and Economic Development (DCCED)
commissioner should ensure AMCO staff vacancies are
filled in a timely manner and the AMCO director should
implement written licensing procedures.
Recommendation No. 2: The board should significantly
enhance or replace its licensing database and automate
the application process where possible.
The audit found several inefficiencies associated with
the receipt, review, and issuance of license
applications.
Recommendation No. 3: The board and AMCO director
should strengthen procedures for entering restricted
purchasers in the statewide database of written
orders.
MS. CURTIS noted that the prior sunset audit also included the
above recommendation. Testing found that due to insufficient
procedures, 27 individuals convicted of relevant violations were
not entered into the statewide database of written orders that
regulates the amount of alcohol that can be sold or purchased in
areas that have voluntary restrictions on alcohol.
Recommendation No. 4: The board and AMCO director
should implement procedures to ensure municipalities
receiving refunds of biennial license fees are
actively enforcing alcoholic beverage laws.
She noted that the prior sunset audit found that municipalities
were automatically receiving these refunds even though they were
not submitting the required quarterly reports. The current audit
found that municipalities were submitting the quarterly reports
but nobody looked at them.
Recommendation No. 5: The AMCO director should improve
procedures and fill vacancies in a timely manner to
ensure refunds to municipalities are appropriately
reviewed.
MS. CURTIS noted that similar to the prior sunset audit, just
one position in the AMCO office is responsible for calculating
and approving the refund, and there is no review. The
significant vacancies contributed to this deficiency.
2:34:36 PM
MS. CURTIS directed attention to the responses to the audit,
beginning with Commissioner Julie Anderson's response that
begins on page 47. Regarding Recommendations 1 and 5, she
maintained that all the vacancies had been filled. Regarding
Recommendation 2, she reported the department was developing a
needs assessment for an automated online database and online
license renewals. Regarding Recommendation 3, the commissioner
stated that the AMCO Enforcement Unit had entered all the
individuals into the database and had implemented new
procedures. Regarding Recommendation 4, the commissioner stated
that improved procedures would be implemented in the future.
2:35:38 PM
MS. CURTIS stated that the response from the Chair of the ABC
Board is on page 49. He strongly disagreed with the
recommendation to extend the board four years, maintaining that
an early sunset would jeopardize the public's trust and
undermine confidence in the public process. The Chair agreed
with the recommendations but believes the findings were not
materially sufficient to warrant a short extension. She
highlighted that over the last 20 years, this board has received
a three or four year extension in previous audits. She did not
recall any extension in the last 20 years that was longer than
four years.
ACTING CHAIR STEVENS summarized his understanding that an
extension for the ABC Board would normally be eight years and
this audit recommends a four-year extension.
MS. CURTIS clarified that eight years is the maximum extension
if the audit determines the entity is operating without any
concerns. If the division determines an entity should be
reviewed more frequently because of things such as major changes
to the alcohol laws, that would be a reason to review the board
earlier than eight years.
ACTING CHAIR STEVENS asked when the last audit was conducted.
MS. CURTIS replied it was four years ago.
ACTING CHAIR STEVENS asked if she believes all the
recommendations could be achieved in the next four years.
MS. CURTIS offered her belief that it would be possible to
implement a new database in that timeframe but the board has
some concern about whether that is possible. She suggested the
board and the division explain why it might take longer.
2:37:56 PM
ACTING CHAIR STEVENS turned to invited testimony.
2:38:02 PM
DANA WALUKIEWICZ, Chair, Alcoholic Beverage Control Board,
Anchorage, Alaska, stated that the ABC Board asked him to speak
to the sunset provisions in SB 151. In particular, the board is
requesting a six or eight year extension as opposed to the four
year extension that the Legislative Audit Division recommended.
Speaking as a CPA with more than 20 years of experience, he said
he agrees with the individual findings but not the overall
conclusion that the board should be extended just four years.
MR. WALUKIEWICZ discussed the audit findings relating to 1) the
lack of staffing; and 2) the lack of an automated system to
process and track new and renewal applications. He acknowledged
that the AMCO office had vacancies during the period the audit
reviewed, but maintained that it had nothing to do with the
board or executive director. Rather, it was a result of the
Department of Commerce, Community and Economic Development
(DCCED) delaying job vacancy announcements. He pointed out that
the AMCO office currently is fully staffed.
Speaking to the second finding, he emphasized that the board
fully supports procuring and implementing an automated system to
process and track new and renewal applications. He highlighted
that the board asked the executive director to scope the system
requirements and investigate potential vendors and acknowledged
that DCCED was assisting. However, neither the board not AMCO
has the resources to procure such a system. SB 9 has funds
earmarked for this project and the hope is that it will pass
both chambers this session and the funds will become available
to automate the application process. The board agrees that the
paper-based process is both time consuming and error prone.
2:41:22 PM
MR. WALUKIEWICZ restated his belief that the recommendation to
extend the board for just four years was a mistake, particularly
given that it has served the public interest for over 40 years.
He stressed that the board would have a lot of work when SB 9
becomes law and a six- to eight-year extension would send a
strong message of support for the board that has upheld the
public process and met the public need.
2:42:24 PM
ACTING CHAIR STEVENS noted who was available to answer
questions.
2:42:50 PM
ACTING CHAIR STEVENS opened public testimony on SB 151; finding
none, he closed public testimony.
He solicited the will of the committee.
2:43:10 PM
SENATOR GRAY-JACKSON moved to report SB 151, work order 32-
LS1280\A, from committee with individual recommendations and
attached fiscal note(s).
2:43:28 PM
ACTING CHAIR STEVENS found no objection and SB 151 was reported
from the Senate Labor and Commerce Standing Committee.
2:43:48 PM
There being no further business to come before the committee,
Acting Chair Stevens adjourned the Senate Labor and Commerce
Standing Committee meeting at 2:43 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 143 Sponsor Statement.pdf |
HCRA 3/8/2022 8:00:00 AM SL&C 2/9/2022 1:30:00 PM |
SB 143 |
| SB 143 Sectional Analysis version I.pdf |
HCRA 3/3/2022 8:00:00 AM HCRA 3/8/2022 8:00:00 AM SL&C 2/9/2022 1:30:00 PM |
SB 143 |
| SB 143 Statement of Zero Fiscal Impact.pdf |
HCRA 3/3/2022 8:00:00 AM SL&C 2/9/2022 1:30:00 PM |
SB 143 |
| SB 143 Support Document 1 - Sarah Badten.PDF |
HCRA 3/3/2022 8:00:00 AM HL&C 3/14/2022 3:15:00 PM SL&C 2/9/2022 1:30:00 PM |
SB 143 |
| SB 143 Support Document 2 - Pre-1986 Home-Condominium Owners Associations.pdf |
HCRA 3/3/2022 8:00:00 AM HL&C 3/14/2022 3:15:00 PM SL&C 2/9/2022 1:30:00 PM |
SB 143 |
| SB 143 Support Document 3 - Post-1986 Home-Condominium Owners Associations.pdf |
HCRA 3/3/2022 8:00:00 AM HL&C 3/14/2022 3:15:00 PM SL&C 2/9/2022 1:30:00 PM |
SB 143 |
| SB 143 Letters of Support Received as of 2.9.22.pdf |
HL&C 3/14/2022 3:15:00 PM SL&C 2/9/2022 1:30:00 PM |
SB 143 |
| SB 173 Sponsor Statement.pdf |
SFIN 2/24/2022 9:00:00 AM SL&C 2/9/2022 1:30:00 PM |
SB 173 |
| SB 173 Sectional Analaysis version I.pdf |
SFIN 2/24/2022 9:00:00 AM SL&C 2/9/2022 1:30:00 PM |
SB 173 |
| SB 173 Fiscal Note 242 - DOH.pdf |
SL&C 2/9/2022 1:30:00 PM |
SB 173 |
| SB 173 Fiscal Note 2252 - DOH.pdf |
SL&C 2/9/2022 1:30:00 PM |
SB 173 |
| SB 173 Fiscal Note 2360 - DCCED.pdf |
SL&C 2/9/2022 1:30:00 PM |
SB 173 |
| SB 173 Written Testimony Received as of 1.31.22.pdf |
SFIN 2/24/2022 9:00:00 AM SL&C 2/9/2022 1:30:00 PM |
SB 173 |
| SB 151 Sponsor Statement.pdf |
HL&C 4/13/2022 3:15:00 PM SFIN 2/24/2022 9:00:00 AM SL&C 2/9/2022 1:30:00 PM |
SB 151 |
| SB 151 Fiscal Note 3119 - DCCED.pdf |
HL&C 4/13/2022 3:15:00 PM SL&C 2/9/2022 1:30:00 PM |
SB 151 |
| SB 151 Supporting Document - 2021 Audit Summary.pdf |
HL&C 4/13/2022 3:15:00 PM SFIN 2/24/2022 9:00:00 AM SL&C 2/9/2022 1:30:00 PM |
SB 151 |
| SB 151 Supporting Document - 2021 Complete Audit.pdf |
HL&C 4/13/2022 3:15:00 PM SFIN 2/24/2022 9:00:00 AM SL&C 2/9/2022 1:30:00 PM |
SB 151 |