Legislature(2017 - 2018)HOUSE FINANCE 519
04/19/2017 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB97 | |
| HB150 | |
| HB167 | |
| HB90 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 74 | TELECONFERENCED | |
| + | SB 34 | TELECONFERENCED | |
| + | SB 97 | TELECONFERENCED | |
| + | HB 150 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 90 | TELECONFERENCED | |
| += | HB 167 | TELECONFERENCED | |
HOUSE BILL NO. 90
"An Act relating to occupational licensing fees;
relating to an occupational investigation surcharge;
and providing for an effective date."
3:19:27 PM
CRYSTAL KOENEMAN, STAFF TO REPRESENTATIVE SAM KITO,
recapped that the bill intended to spread the investigative
charges to all licensees and work similar to a surcharge,
reducing the high fee fluctuations that some board
experienced due to investigative costs and low number of
licensees.
Representative Wilson asked whether there were individuals
who were members of more than one board. Ms. Koeneman
answered in the affirmative. Representative Wilson asked
whether an individual on two boards paid each individual
licensing fee. Ms. Koeneman answered in the affirmative.
Representative Wilson wanted to ensure that the legislation
did not impact business licensing fees. Ms. Koeneman
responded in the affirmative and added that the bill only
impacted professional licensing fees.
3:22:36 PM
Co-Chair Foster OPENED Public Testimony.
3:22:46 PM
MARK RICHARDS, EXECUTIVE DIRECTOR, RESIDENT HUNTERS OR
ALASKA, FAIRBANKS (via teleconference), spoke in opposition
of HB 90. He spoke to the Big Game Commercial Services
Board regarding how guiding affected resident hunting
opportunities and the wildlife resources. He pointed out
that the board was in debt due to investigative costs that
were the second or third highest out of all boards. He
reported that the Board of Nursing had the highest
investigative costs. He pointed to the discrepancy in the
costs of investigations per member due to differences in
the number of licensees. Nurses had 20 thousand members and
its portion of fees related to investigations was $47
versus two thousand guide licensees each paying $316 of
their fee towards investigations. He stated that due to the
nature of the guiding service that involved "taking of a
public resource" the activity required a certain level of
enforcement presence. Ninety five percent of all guides
operated within the law, however the bad actors lead to
high investigatory costs. He elucidated that under the bill
the nurses would pay $300 thousand more in increased
licensing fees to help cover the investigative costs of the
Big Game Commercial Services Board. The guide board fees
would significantly decrease. He relayed that the guide
board's concern that the high cost of guide licensing fees
deterred illegal behavior. He emphasized that by removing
the burden of the high fee some guide's standards would
relax and lead to "bad behavior." He urged members to vote
in opposition of the bill or exempt the board from the
provisions in the bill.
3:26:26 PM
AL BRETT, SELF, FAIRBANKS (via teleconference), spoke in
opposition of HB 90. He communicated his unease with
allowing the division to adjust fees through regulation
versus statute. He shared that he was a registered Class A
guide and reported that the previous two times the fees
were raised was during the hunting season and was
inconvenient. He believed there was a problem with the
government controlling businesses and resources. He
suggested that investigations were a "civil process" where
grievances were best addressed in civil court. He opined
that it was unfair for the state to "intervene" in civil
issues "on boards related to occupations."
3:28:55 PM
Co-Chair Foster CLOSED Public Testimony.
Representative Ortiz asked how Ms. Koeneman would respond
to the first testifier. Ms. Koeneman deferred to the
Department of Commerce, Community and Economic Development
(DCCED) to answer the question.
SARA CHAMBERS, ACTING DIRECTOR, ALCOHOL AND MARIJUANA
CONTROL OFFICE, DEPARTMENT OF COMMERCE, COMMUNITY AND
ECONOMIC DEVELOPMENT, responded that the fee setting
process was codified in statute and the bill did not alter
the fundamental principle that the division set fees "in
concert with the boards and the programs pay for their
expenses." The investigative process was transparent with
the exception of items that were necessary to remain
confidential. She expounded that the bill served as an
insurance policy for investigative costs. The state had
historically struggled with setting licensing fees in a
timely manner so licensees could budget to cover an
increased license fee expense. She deemed that the
volatility came from investigator's statutory
responsibility, in concert with a board to pursue
violations. The division lacked the resources to actively
seek out violations but had a responsibility to investigate
complaints. She related that the amount and level of
investigations were impossible to anticipate. Some of the
state's licensing programs had investigative fees of over
$100 thousand for a single investigation either for
violations or from challenges to a denied license.
3:33:08 PM
Representative Ortiz understood the concept of an insurance
pool and understood the volatility in costs. He was
specifically concerned with the testifier's scenario that
his board would be charged less and nurses more under the
bill. Ms. Chambers relayed that the division had done some
modeling and determined that nurses would pay $9 in
additional fees each licensing period. She detailed that
very few boards would have increased license fees of over
$50 every two years and boards with extremely high fees and
deficits such as the midwifery and guide boards would save
several hundred dollars. The state was looking "at a
greater savings" with nominal fee increases to larger
licensing programs that had investigative costs but had the
"economy of scale to spread the expense across its
membership."
Representative Kawasaki appreciated the bill. He asked how
the different boards would change their future fees with
the addition of the surcharge. Ms. Chambers indicated that
the division analyzed board's expenses and revenue and set
their fees accordingly. The investigative costs would be
deducted from the equation and allocated through the
surcharge. The remainder of the fees would be set based on
the current fee analysis model. The investigative fees
would be allocated separately.
Representative Thompson reported receiving feedback from
licensees that the investigators were not familiar with the
profession they were investigating. He commented that the
situation made the investigations longer. He wondered how
many investigators were on staff and if they were trained
in regards to what they investigated. Ms. Chambers stated
that the investigative process included board members,
which assured appropriate expertise. She indicated that
many licensing programs lacked boards. When investigating a
licensure program with a board, the division relied on
board member review by an advising board member before
proceeding with an investigation. Rarely, an area was so
specialized an investigation required expert witnesses to
speak to the specialty. The division requested the board's
consent before an expert witness was retained.
Representative Thompson was satisfied with her answer.
Representative Wilson was concerned with the person who
engaged in an activity without a license yet the board's
licensees had to pay for the investigation. She asked why
the state did not pass the investigatory costs on to the
offender instead of the board. Ms. Koeneman responded that
she had a good point. She explained that when the guiding
statutes were established the licensees wanted to protect
their industry through regulation of unlicensed activity
under their purview. She asserted that addressing
unlicensed activity was a larger policy call and board
members should engage in the discussion over relinquishing
their duty.
3:40:39 PM
Representative Wilson clarified that she did not want
boards to relinquish anything. She was suggesting that an
unlicensed individual caught engaging in the licensed
activity should be held responsible for the investigatory
costs and not the board.
REPRESENTATIVE SAM KITO, thought that the issue was "broad
and complicated." In attempting to address the unlicensed
practice issue he discovered that even if the activity was
covered under criminal statutes, the Department of Law
(DOL) investigations would still need to rely on the DCCED
investigators for their expertise. He voiced that
Representative Wilson's inquiry was a broader question that
he contemplated would need to be addressed as a second step
after the changes in HB 90 were implemented. He commented
that if costs were recovered from unlicensed violators he
wanted the revenue deposited into the general fund (GF). He
worried that an "adverse motivation" might arise within the
division to pursue unlicensed practice if the department
knew the money was dedicated to its licensing fund.
Representative Wilson referred to a chart in members packet
titled, "FY 2016 Professional Licensing Statistics" by the
Division of Corporations, Business and Professional
Licensing [copy on file]. She asked how much the bill would
save or increase the guide board licensing fees. Ms.
Koeneman responded that the big game guides currently paid
$316 per licensing period and would save $261 in their
licensing costs under the bill. Representative Wilson
stated that when boards were formed the costs to run them
were accessed and paid by the board. She declared that the
bill was a "big policy change." She understood what the
sponsor intended to accomplish but she felt that the
approach was penalizing the licensees who were not breaking
the law. Ms. Koeneman added that she had reviewed the FY
2016 investigative actions and discovered that 22 percent
was due to unlicensed activity and 88 percent of the
investigations were from licensees doing their job and
having some missteps. Representative Wilson replied that
the licensees should pay as well.
3:45:48 PM
Representative Kito added that spreading out all of the
investigatory costs including for unlicensed activity,
benefitted all boards and the public service. He offered
that the lower costs decreased the "barrier to entry" for
certain professions that had a small number of licensees.
Representative Thompson remembered that previously the
legislature passed laws requiring fees recovered from an
offender would cover the cost of the licensees' fees. Ms.
Chambers answered that if the legislation was passed it did
not pertain to Title 8, which contained licensing statutes.
Vice-Chair Gara was aware that a number of people with
business licenses were not tied to a board. He asked for
confirmation that the costs would not be spread to
individuals that were not regulated by a board. Ms.
Chambers indicated the state had 43 licensing programs but
only 22 operated under boards. However, all professional
licensees were required to pay into the proposed system.
She exemplified that construction contractors had
professional licensure but did not have a board and were
required to pay into the new system. Vice-Chair Gara asked
whether there was an error in the bill. He referred to
section 7 of the bill [page 4, line 8] that addressed an
investigation surcharge added to AS 08.01.065 and cited (a)
(2). He did not see (a) (2) in existing statute but deduced
that it was a reference to the new provision in the bill.
Ms. Koeneman responded in the affirmative.
3:49:38 PM
Representative Kito clarified that the bill included all of
the professions regulated under Title 8 that included those
with a board or exclusively a license. He used the example
of acupuncturists in the scenario of a professional license
without a board.
Representative Ortiz had some of the same concerns as
Representative Wilson. He clarified that unlicensed
activity comprised of 22 percent of investigations. Ms.
Koeneman responded in the affirmative. Representative Ortiz
asked if the position was that the passage of the bill
brought greater good for the law abiding licensees but did
not impact whether the "bad actors had a greater stake or
lesser stake in the issue." Ms. Koeneman agreed with his
statement.
Representative Wilson was concerned that under existing law
a mechanism did not exist to collect investigatory fees
unless a case was a criminal one. She reiterated her
previous concerns and still had a problem with the
legislation. She added that if no one was found guilty the
board still had to pay the investigative costs. Ms.
Koeneman relayed that currently there was a $5000 fine for
licensed activity in AS 08.01.102. However, the fine would
not cover the entire costs and was deposited into the
general fund.
Ms. Chambers interjected that even though a board and the
division was able to charge fines for unlicensed and
licensed violations, the finds did not cover any of the
investigatory expenses because the fees went into GF. She
addressed Representative Kito's remarks regarding
incentivizing the division to enforce unlicensed activity.
She did not think that increased fees for unlicensed
activity deterred negative behavior. She shared that all of
the boards were in favor of the legislation.
3:54:53 PM
Representative Guttenberg suggested that if the issue was
an easy one to fix it would have been dealt with years ago.
He wondered whether DOL assumed the cost of a criminal
licensing investigation. Ms. Koeneman deferred the question
to the division.
ANGELA BIRT, CHIEF INVESTIGATOR - CORPORATIONS, BUSINESSES
AND PROFESSIONAL LICENSING, DEPARTMENT OF COMMERCE,
ANCHORAGE (via teleconference), answered that a small
portion of the caseloads became criminal and were
prosecuted through the Office of Special Prosecutions and
Appeals without charges to the division. She furthered that
civil prosecutions through DOL and any Administrative
Hearings costs were part of the board's investigative
costs. Representative Guttenberg clarified his question by
restating it. Ms. Birt responded that typically a criminal
case began with DOL and the board was not charged for the
criminal component. She explained that at the conclusion of
the criminal case statute allowed board punishments. She
exemplified that the Big Game Commercial Services Board
could fine up to two times the criminal conviction. She
stated that she was less familiar of the route
Representative Guttenberg had described.
3:58:26 PM
Co-Chair Foster MOVED to ADOPT Amendment 1:
Page 1, line 11, following "chapter"
Insert "; the regulations may provide for a
reduction in the amount of the surcharge imposed
under this paragraph for a licensee who is required by
law to hold and maintain one license in order to
qualify for and maintain another license"
Representative Wilson OBJECTED for discussion.
Ms. Koeneman explained the amendment. She stated that
Amendment 1 allowed for the department to reduce a
surcharge imposed under the bill if a licensee was required
to hold and maintain another license in order to qualify
for a license. She exemplified that in order for a nurse to
hold an Advanced Practice Registered Nurse License it was
necessary to maintain a Registered Nurse license. She
reported that the situation affected 960 licensees out of
11 thousand registered nurses.
Representative Wilson WITHDREW her OBJECTION.
There being NO OBJECTION, it was so ordered.
4:00:21 PM
Vice-Chair Gara relayed that there was one fiscal impact
note in the amount of $3.4 thousand from DCCED FN 1 (CED)
for the implementation of regulations, postage, and
printing.
Co-Chair Seaton MOVED to report CSHB 90 (FIN) out of
Committee with individual recommendations and the
accompanying fiscal note.
Representative Wilson OBJECTED.
A roll call vote was taken on the motion.
IN FAVOR: Gara, Guttenberg, Kawasaki, Ortiz, Thompson,
Seaton, Foster
OPPOSED: Tilton, Wilson, Grenn, Pruitt
The MOTION PASSED (7/4).
CSHB 90 (FIN) was REPORTED OUT of Committee with a "do
pass" recommendation and with a previously published fiscal
impact note: FN1 (CED).
4:04:36 PM
AT EASE
4:06:47 PM
RECONVENED
Co-Chair Foster reviewed the agenda for the following day.
He recessed the meeting to a call of the chair [Note: the
meeting never reconvened].
| Document Name | Date/Time | Subjects |
|---|---|---|
| REAL ID Act - Transmittal Letter - Rep. Edgmon.pdf |
HFIN 4/19/2017 1:30:00 PM |
HB 74 |
| CS HB 74 (STA) Sectional Analysis.pdf |
HFIN 4/19/2017 1:30:00 PM |
HB 74 |
| SB97 Sponsor Statement 04.08.2017.pdf |
HFIN 4/19/2017 1:30:00 PM |
SB 97 |
| SB97 Sectional Analysis ver D 04.08.2017.pdf |
HFIN 4/19/2017 1:30:00 PM |
SB 97 |
| HB150 Additional Document - 2017 Military Pay Chart 3.14.17.pdf |
HFIN 4/19/2017 1:30:00 PM |
HB 150 |
| HB150 Additional Document-Sockeye Fire Spreadsheet from DMVA 3.14.17.pdf |
HFIN 4/19/2017 1:30:00 PM |
HB 150 |
| HB150 Sponsor Statement 3.14.17.pdf |
HFIN 4/19/2017 1:30:00 PM |
HB 150 |
| HB150 Supporting Document-Letter DMVA 3.14.17.pdf |
HFIN 4/19/2017 1:30:00 PM |
HB 150 |
| HB 74 HFIN DPS Regarding REAL ID -signed.pdf |
HFIN 4/19/2017 1:30:00 PM |
HB 74 |
| CSHB 74 House Finance REAL ID Presentation 4.19 FINAL v2.pdf |
HFIN 4/19/2017 1:30:00 PM |
HB 74 |
| HB 90 - Amendment #1.pdf |
HFIN 4/19/2017 1:30:00 PM |
HB 90 |
| HB 90 Testimony Letter.pdf |
HFIN 4/19/2017 1:30:00 PM |
HB 90 |