Legislature(2017 - 2018)HOUSE FINANCE 519
03/06/2017 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB106 | |
| HB56 | |
| HB81 | |
| HB49 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 49 | TELECONFERENCED | |
| + | HB 56 | TELECONFERENCED | |
| + | HB 81 | TELECONFERENCED | |
| + | HB 106 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 49
"An Act extending the termination date of the Board of
Certified Direct-Entry Midwives; and providing for an
effective date."
2:48:05 PM
REPRESENTATIVE SAM KITO, SPONSOR, introduced himself and
the bill.
CRYSTAL KOENEMAN, STAFF, REPRESENTATIVE SAM KITO, shared
the sponsor's statement (copy on file):
House Bill 49 extends the termination date for the
Board of Certified Direct-Entry Midwives until June
30, 2021.
Legislative Audit conducted their review of this board
and determined that "The board is serving the public's
interest by effectively licensing and regulating
certified direct-entry midwives and apprentice
midwives. The board monitors licensees and works to
ensure only qualified individuals practice.
Furthermore, the board adopts regulations to improve
the practice of midwifery. In accordance with AS
08.03.010(c)(8), the board is scheduled to terminate
on June 30, 2017. We recommend that the legislature
extend the board's termination date to June 30, 2021."
The board currently oversees 52 active licensees and
is composed of five members: two certified direct-
entry midwives, one physician licensed by the State
Medical Board, one certified nurse midwife licensed by
the Board of Nursing, and one public member.
The continuation of the Board of Certified Direct-
Entry Midwives is important to the health and safety
of Alaska's women and children, as it serves an
important role in protecting the well-being of
Alaskans by identifying individuals who are willing to
pursue technical training and meet specified technical
qualifications necessary for license as midwives.
Thank you for your support of House Bill 49.
2:50:18 PM
Co-Chair Foster noted there were individuals available for
questions.
Representative Wilson queried the cost of the audit,
relative to the size of the group the board oversaw. She
wondered whether the board paid for the audit.
Representative Kito deferred the question to the division.
He answered that the four-year extension had been
recommended by the division.
Co-Chair Foster recognized that Vice-Chair Gara had joined
the meeting.
Co-Chair Seaton noted the fee increase of 169 percent and
the one-time surcharge of $2000.
Representative Kito explained that the audit recommended
that licensing fees should be increased to cover the cost
of board operations.
2:52:42 PM
KRIS CURTIS, LEGISLATIVE AUDITOR, ALASKA DIVISION OF
LEGISLATIVE AUDIT, testified that the previous sunset audit
conducted on the board had been in 2014, and at that point
the division found that the Division of Corporations,
Businesses and Professional Licensing (DCBPL) investigative
staff had not been actively processing investigations that
posed a public safety risk. She said that at that point the
board was extended only 2 years; the division had conducted
a 2016 follow-up sunset review. The latest review found
that the board is serving in the public's interest by
effectively licensing and regulating certified direct-entry
midwives (CDM) and apprentice midwives. She stated that the
division recommended that the legislature extend the
board's termination date to June 30, 2021, provided the
board execute the following recommendations [from the
Performance Audit of the Department of Commerce, Community
and Economic Development, State Board of Certified Direct-
Entry Midwives (board) April 30, 2016(copy on file)]:
Recommendation 1: DCBPL management, in consultation
with the board, should increase licensing fees to
eliminate the board's operating deficit.
High regulatory costs relative to the low number of
licensees has led to high license fees. The board
primarily receives its revenue from license and
renewal fees. Renewals are conducted on a biennial
basis, creating a two-year cycle in board revenues.
Fee levels were increased in FY 15, but fees were not
high enough to cover operating costs. As shown in
Exhibit 3, the board's deficit grew to $183,081 as of
February 29, 2016, the second year of its biennial
licensing period (see Recommendation 1.)
Recommendation 2: The DCBPL director should take steps
to ensure license records are accurately recorded.
Audit test work identified two instances where DCBPL
staff provided insufficient support to the board. In
one instance, division staff noted the wrong license
as on probation in the online licensing database. In
another instance, a consent agreement approved by the
board had the wrong year. Both instances were due to
administrative error by DCBPL staff.
Recommendation 3: The legislature should consider
alternate forms of regulating the midwifery
profession.
In order to address the deficit, licensing fees would
need to be significantly increased. Fees are expected
to be upwards of $4,000 for CDMs and $2,000 for
apprentice permits by the year 2020. The high
licensing fees could limit entry into the profession.
Ms. Curtis noted the department's response on Page 21 of
the audit. She shared that the department concurred with
recommendation's 1 and 2, but did not respond to
recommendation 3, as it was not directed to the department.
However, the department acknowledged that merging the board
could result in economies of scale. She spoke to the
board's response on Page 23 of the audit. The board
concurred with recommendations 1 and 2, but strongly
disagreed with recommendation 3:
Midwifery is a unique profession that any other board
would have difficulty regulation. The suggestion of
the Board of Nursing and the Physician's Board would
be problematic on several different levels. These two
boards have historically been competitive to the CDM
profession and often oppose legislation that we have
introduced to improve the standard of care and safety
of our clients. I am concerned that we would be
regulated out of practice or to a very minimal
practice, which is what the majority of the Alaskan
population clearly does not want. Also, I believe that
the doctor's and nurse's board would not want CDMs
sitting on their Board (which we would need to do if
we were to have proper representation) and having a
voice in decisions regarding their regulations and
practices.
2:57:27 PM
Representative Wilson asked who decided which cases
warranted investigation.
Ms. Curtis responded that the division had an investigative
section that had the statutory responsibility to conduct
investigations. The board was removed from, but eventually
weighed in on, the decision.
Representative Wilson asked whether unlicensed midwives
were charged with reimbursing the board for any fines.
Ms. Curtis deferred to DCCED. She offered that there were
no dedication of fines to any particular board; any levied
fines went to the General Fund.
Representative Wilson thought that there should be a
mechanism that could protect midwives from having their
licensing fees increased because of acts of unlicensed
midwives.
Ms. Curtis asked whether Representative Wilson was asking
if the board's deficit was the result of investigations.
Representative Wilson replied in the affirmative.
Ms. Curtis stated that the schedule on Page 6 of the audit
highlighted the board's expenditures. She said that
historically the problem with deficit had stemmed from
investigations; however, not only unlicensed activity
generated investigations.
3:00:20 PM
Representative Wilson surmised that the board would have to
pay the fee even though the fee was already in the general
fund.
Ms. Curtis explained that the cost of regulating was borne
by licensees, and any fees that were collected went into
the general fund.
Representative Wilson asserted that any money collected,
based on an investigation, had to be paid by the board,
even if it went into the general fund.
Ms. Curtis answered that the revenues from the fines did
not offset the costs of investigations.
Representative Wilson felt that the fees should offset the
costs of investigations.
3:02:04 PM
Representative Kawasaki asked why there had been an
extension of 2 years had been recommended, rather than a 4
year, 6 year, or 8 year.
Ms. Curtis replied she had never seen a one-year extension.
They had received recommendations for termination. She
spoke to boards with significant deficit such as the Board
of Game with a $1 million deficit, which resulted in a
short recommendation for extension. She explained that
problems that posed a public safety risk could prompt a
short recommendation. She said that it was very unusual to
have 2 year recommendation for extension. She added that
the number and nature of the findings would be weighed when
considering the length of extension; housekeeping issues
would not impact the extension recommendation, but deficits
would reduce the number of years recommended.
Representative Kawasaki wondered whether the extension were
always even numbered years.
Ms. Curtis answered that extensions seemed to be made in
even numbers. She said that workload was a factor in
determining sunset timelines.
3:04:11 PM
Representative Kawasaki preferred longer sunset timelines
because it meant less work for auditors. He asked about the
long sheet (copy on file) in the packet, created by the
division and the board, related to ways in which the
deficit could be erased.
Ms. Curtis replied that she had not seen the document.
Representative Pruitt thought that the deficit was the crux
of the problem. He spoke of the differing views of all of
the involved parties. He wondered whether the board had
offered a proposal of how to eliminate the debt. He asked
when the legislature should expect action to be taken on
the third recommendation.
Ms. Curtis clarified that the intent of recommendation 3
had been to acknowledge that direct entry midwives had a
board that was serving the public's interest, and should
exist. She said that the division's concern was that the
number of midwives would decline because of barrier to
entry due to increased licensing fees. She stressed that
the recommendation had not been made to address the
deficit, but to ensure that the public's interest was being
served by the board. She felt that it was a management
decision as to how the deficit would be addressed, but the
increase in licensing fees had seemed extreme.
3:09:50 PM
Representative Pruitt requested to hear from the
department.
Vice-Chair Gara asked whether Ms. Curtis could speak to the
investigation costs for violations that had proved
unfounded.
Ms. Curtis answered in the negative.
Vice-Chair Gara worried about people being put out of
business for minor violations. He noted that often
traditional medical professionals and midwives disagreed
about each other's practices, and wondered if having them
share a board would be practical.
3:11:46 PM
Representative Wilson asked about the cost of the most
recent audit and how it was paid for.
Ms. Curtis thought the audit had taken about 450 hours
which was approximately $38,000. She said that a follow up
review had been conducted by the request of Legislative
Budget and Audit to look into the public safety risk of not
following up on the investigations.
Representative Wilson asked who paid for the audit.
Ms. Curtis answered the audit was part of the Division of
Audit's operating budget that was approved annually, and
was not paid for by the boards that were audited.
Representative Wilson thought the boards had to pay the
costs.
Ms. Curtis answered that the statute that dictated that the
boards would pay the operational costs was the operational
cost of regulation the board and not the legislative
oversight process of sunsets.
3:14:00 PM
Representative Thompson spoke to the investigation costs.
He lamented that investigators assigned to certain boards
may not understand certain aspects to the work the boards
oversee, adding to the investigating costs.
Ms. Curtis said that she did not know. She stated that
there were some boards that had dedicated investigators,
such as the medical board.
3:15:30 PM
JANEY HOVENDEN, DIRECTOR, DIVISION OF CORPORATIONS,
BUSINESS AND PROFESSIONAL LICENSING, DEPARTMENT OF
COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, introduced
herself.
Representative Pruitt asked about the denial of the board
to carry a surplus budget forward.
Ms. Hovenden answered that there had been concerns by the
Department of Law about incorporating the $2000 surcharge,
instead the $2000 had been incorporated into the licensing
fee, raising the fee to the current level of $3,800. She
said that she would not be able to speak to changes that
were made to the fees before she took her position.
Representative Pruitt asked how long it would take the
board to get to a place where the fees would cover the
debt.
Ms. Hovenden referred to a handout with an Excel
spreadsheet chart titled "Board of Direct-Entry Midwives"
dated September 7, 2016 (copy on file), which offered a fee
analysis. She noted where the board had recommended a one-
time surcharge of $2000, over to biennium. Due to the
concerns of the Department of Law, the fee of $3,800 was
recommended. She said that the fee increase would be
stretched out to 2021.
Representative Pruitt spoke to the challenge of the
continued cost of investigating unlicensed individuals. He
asked about the department's suggestion to make sure it did
not penalize individuals working within the proper confines
of the law. He felt that individuals who were properly
licensed should not be penalized.
3:20:57 PM
Ms. Hovenden answered that the department did not breakout
the information in investigations between licensed and
unlicensed individuals.
Representative Pruitt asked if a breakdown could be done.
Ms. Hovenden answered that it would not be that difficult,
but the department did not currently look at the
information down to that level.
Representative Pruitt recalled that the issue had been
brought up a couple of years earlier. He believed the issue
had been brought up by midwives a couple of years earlier.
3:22:58 PM
Ms. Koeneman relayed that civil penalties for licensed
midwives were set under Alaska Statute 08.08.075. She said
that there was another statute for unlicensed activity, AS
08.01.082, and did not delineate any civil penalty or any
monetary amount. She said that it would be a policy call by
the committee to open the unlicensed activity statutes to
modify the language. She noted there was another bill in
the finance committee that would address investigative
costs.
Representative Pruitt understood that currently there was
no penalty for being unlicensed.
Ms. Koeneman answered that under Title 8 there were no
fines other than the $5,000 civil penalty. She added that
criminal charges could be applied under Title 11.
Representative Pruitt asked how to discourage people from
practicing without a license.
Ms. Koeneman thought that the answer could be found by
reading the statute.
Representative Kawasaki referred to the fee proposals
intended to erase the deficit by 2021. He wondered whether
the timeline had been spurred by the audit.
3:25:38 PM
Ms. Hovenden answered in the affirmative. She stated that
the board had been active and engaged in increasing fees
for that particular reason.
Representative Kawasaki spoke to the conflicting nature of
recommendations one and three. He was supportive of
extending the board for a longer time period and did not
believe that the deficit had to be completely erased by
2021. He agreed with recommendation 3.
Ms. Koeneman answered that the statutory authority to
collect fees did not give the legislature or the board any
additional authority to collect outside of the annual
review. She said that stretching the payment out over 3 or
4 biennium would go against the statutory intent.
Representative Kawasaki referred to the Division of Audit's
recommendation to extend the board four years, and he
wondered whether the existing deficit, plus the high fees
would be problematic.
Ms. Koeneman understood that it the board did not have the
fees paid up within 4 years, legislative audit would have
no choice but to make another recommendation stating the
board and the department needed to modify the fees on order
to eliminate the deficit.
3:28:35 PM
Co-Chair Seaton thought payment of the deficit was tied to
the four-year sunset.
Ms. Curtis responded there was no term recommended by the
Division of Audit for fixing the issue. She stated that the
law specified the cost of regulation must be covered every
time rates were set. She said that the four year extension
was made in order to understand whether the number of
midwives in the state were serving the public's interest
and had nothing to do with the fee setting process.
Representative Kawasaki noted that the step-down
calculations that the division proposed would have the
board outside of the deficit by 2021, but a drop in the
deficit over the next four year could result in a cleaner
audit.
3:30:45 PM
Ms. Curtis replied that she would revisit the issue in four
years to provide an answer.
Representative Wilson requested the cost of investigations
in the past several years. She wondered whether the
legislature could be equally at fault for the deficit.
Ms. Koeneman answered that investigative costs for FY 16
was $31,000; FY 14 and FY 15, $41,522 total; FY 12 and FY
13, $45,457; FY 10 and FY 11, $8,034. She said that the
figures did not include some of the indirect costs
associated with the department's cost allocation plan. She
agreed the department was getting in the way of the board.
She said that in FY 09, licensing costs dropped from $2088,
down to $500, and rose as the investigative costs
increased.
Representative Wilson requested why the increase in
investigative costs had jumped significantly.
3:33:59 PM
Co-Chair Foster OPENED public testimony.
JOHANNA CROSSET, CERTIFIED DIRECT-ENTRY MIDWIFE, JUNEAU,
she expressed gratitude for the current conversation. She
hoped for a solution to prevent deficit in the future. She
explained it had been a surprise to hear of the proposal
for the fee increase. She asked the committee to continue
conversing. She directed a comment to Representative Wilson
about looking into the investigative costs, penalties, and
fees going to the general fund as opposed to the board.
SUSAN TERWILLIGER, PRESIDENT, MIDWIVES ASSOCIATION,
ANCHORAGE (via teleconference), spoke in support of the
legislation. She shared that each member of the association
had endured the large hit related to the increase in
licensing. The board wanted to pay down the deficit. She
said that HB 90 would deal with investigation costs to
correct the issue over time. She shared that midwives
provided high quality care to low-risk women for less cost
and were regulated by a board that was familiar with the
nature of their work. She referred to a handout in members'
packets that detailed the cost savings that resulted from
midwife assisted births. Many women and babies were
thankful for the extension of the board.
3:38:08 PM
DEBORAH SCHNEIDER, CHAIR, BOARD OF CERTIFIED DIRECT ENTRY
MIDWIVES, ANCHORAGE (via teleconference), urged the passage
of the bill. She had been involved crafting regulations to
protect mothers and babies. She was very appreciative of
the conversation supporting the continuation of the board's
cost-effectiveness. She referred to the issue related to
investigations, and the high cost of investigations covered
in the audit, and shared that there had been several cases
that had been under investigation for 4 to 6 years,
generating enormous cost. She stressed that the midwives
were committed to paying down the debt. She believed
midwifery could be expanded in Alaska if the issues were
addressed. She expressed appreciation for the work done by
the committee.
Co-Chair Foster CLOSED public testimony.
HB 49 was HEARD and HELD in committee for further
consideration.
Co-Chair Foster discussed housekeeping.