Legislature(2017 - 2018)BARNES 124
02/13/2017 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB90 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 90 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 90-OCC. LICENSING FEES; INVESTIGATION COSTS
3:20:30 PM
VICE CHAIR WOOL announced that the only order of business would
be HOUSE BILL NO. 90, "An Act relating to occupational licensing
fees; relating to an occupational investigation surcharge; and
providing for an effective date."
3:20:50 PM
CHAIR SAM KITO, as prime sponsor of HB 90, stated that boards
with a limited number of registrants - such as the Board of
Certified Direct-Entry Midwives, the Big Game Commercial
Services Board, and The Real Estate Commission - share large
investigative costs over a small number of people. Statute
requires that each board is financially self-sufficient. This
leads to large spikes in licensing fees from one biennium to
another. These large fees can become an impediment for a
licensee to enter a profession.
CHAIR KITO explained that the issue has previously been brought
before the legislature in different forms. He noted that years
ago, efforts were made by the department to internalize
investigation costs. However, the effort was unsuccessful
because the bill relied on the general fund. He mentioned
deliberating about labor and commerce issues that could help
larger groups of people perform their functions much more
safely, easily, and financially reasonably: This issue is a top
priority of the labor and commerce issues he hopes to address.
CHAIR KITO informed that HB 90 would take the board
investigation costs and would assess a fee among all licensees
and registrants of occupational licenses. That amount of money
would pay for the investigations for all the licensing boards.
He explained that individual board investigative costs vary from
thousands of dollars to less than $100. The total amount spread
over all of the licensees equates to about $60 per biennium [per
licensee]. This is $7 to $20 more than some licensees pay now
and thousands of dollars less than some pay now. He expressed
that the change of the cost structure in HB 90 would make the
professions more approachable for people starting new careers.
3:25:09 PM
CHAIR KITO said this effort is similar to health insurance or
other realms. He acknowledged the contrary position is that
some boards feel they don't use investigations at the same level
as other boards and are not interested in paying the cost. He
offered his opinion that the shared cost among all licensees is
relatively minor in light of the overall licensing costs and
helps the entire division. He remarked:
I think it provides the ability for the division to
have a better way of spreading costs out instead of
trying to spend so much work managing how much ...
money a board might be able to accommodate. So one of
the challenges in the system right now is because the
costs have to be adjusted per biennium, if you have a
licensing fee that could ... result in a very
significant increase in fees, there's nothing, even in
our current statute, that allows those costs to be
spread out over ... [multiple biennia] although that
is being done. Because it's the only way to avoid a
significant barrier of entry to some of those
professions. So, in a sense, the department is
violating the law in a way, even directed to [do so]
by our Legislative Audit Division to make sure that we
are not creating a situation where we ... are turning
people away from a profession.
CHAIR KITO offered his opinion that helping professions with
fewer licensees is also beneficial to professions with a larger
number of licensees. He informed that he is a registrant with
the Alaska State Board of Registration for Architects,
Engineers, and Land Surveyors (AELS). Under HB 90, his annual
board fee would increase by $20, an amount he stated he could
afford. He relayed that the increase would be not too much of
an impact on his budget. He expressed that a family member of
his might want to receive services from a midwife and everyone
benefits from ensuring that professions have the resources they
need. He stated that he is willing to discuss other solutions
to this problem, although he said the proposed legislation
seemed to him to be the most fair to the most people.
3:28:06 PM
REPRESENTATIVE STUTES shared that she knew of a board that was
charged very significant investigative charges, which put the
board a half a million dollars in the hole unbeknownst to its
members. She explained that the problem was that the department
determined if the investigations should proceed with either no
input or objections from the board. She remarked that the board
said, "We can handle this and we can find these individuals, and
it will be much more cost-effective than launching this big
investigation, when we know what's ... happened." She stated
that the bill doesn't address that problem. She acknowledged it
might be a separate issue, but the issues coincide. She
suggested having enforceable parameters on how investigations
are launched. Investigations are expensive and lead to boards
incurring huge fees.
3:30:02 PM
CHAIR KITO stated that there are different aspects to the
problems with investigations and licensing, and he remarked, "We
looked at it in terms of this being one piece." He noted that
he has been thinking about the related issues. He stated his
concern that investigating claims of individuals who are not
licensed or governed by the board might not be a valid use of
registrants' fees. He expressed that the discussion is
necessary but should happen in the next phase: first look at the
costs, then look at the responsibilities of the investigators.
He remarked, "Are the investigators there to make sure that each
one of us engineers is doing the job that we're supposed to be
doing, or is that job also to include looking for people that
are practicing without that license?"
CHAIR KITO acknowledged that there are some questions and
concerns that remain about whether the investigative costs have
been identified properly. He stated that the information from
the Division of Legislative Audit did not find errors or
concerns with how investigations were taking place. However,
the division did find some issues with how costs were
distributed among licensees over a couple of years. He
referenced previous testimony from Kris Curtis, Legislative
Auditor, who had informed that most of the past issues with
investigative costs not being incorporated into the licensing
fees had been resolved. He added that under HB 90, current
debts from previous investigations would be borne by the
affiliated boards and would "start a new day"; new
investigations would be paid for through a combined fund as they
occur.
3:33:12 PM
REPRESENTATIVE BIRCH asked who manages the costs of
investigations. He offered his hope that the affiliated board
would have some control of or engagement with the investigative
costs incurred. He asked how a half-million-dollar
investigative charge could be incurred.
CHAIR KITO stated that the department currently fields the
requests for investigations. The requests come from individuals
- either board registrants or public members - who are concerned
about behaviors or practices of a licensed professional. The
complaints go to the investigator assigned to the board, who
then generally determines or verifies with a board member if an
investigation is warranted. He stated that the board is often
engaged in the decision of whether or not an investigation takes
place; investigators don't proceed with an investigation without
some consultation with the board. He informed that costs are
well known by the department and are reported to the individual
boards. Some investigations involving the Big Game Commercial
Services Board had very high costs due to significant amounts of
travel in remote areas.
3:36:24 PM
CRYSTAL KOENEMAN, Staff, Representative Sam Kito, Alaska State
Legislature, answered questions on HB 90 on behalf of
Representative Kito, prime sponsor. She referred to a breakdown
of the investigative process included in the committee packet.
She noted that boards with higher investigative costs have been
working with investigators to determine what should be
investigated. The department has been working with those boards
so that it doesn't appear that investigators act independently,
but work in tandem with the boards for the protection of
licensees and all of Alaska.
3:37:22 PM
REPRESENTATIVE JOSEPHSON remarked:
You could have criminal misconduct, for which there is
either a conviction or an acquittal. It can be ...
[a] very close call in either case, a different
standard ... and a belief that ... for example, if a
criminal charge were defeated, surely a civil charge
could be defeated, even though the standard is lower.
And there could be public safety issues; there could
be somebody who's just dead-set on keeping their
license ... and ... "to hell with anything else" kind
of thing. I suspect that happens.
REPRESENTATIVE JOSEPHSON stated that [defendants] are entitled
to due process of trials and hearings, though this process could
run up a big tab.
CHAIR KITO stated that he is not aware of any investigations
that have crossed into the criminal realm. He remarked, "If you
cross into the criminal realm, then I don't know that ... any
kind of a process within the board review has any bearing, but
any investigative materials that the investigator came up with,
I'm sure get transferred over into that criminal case." He
stated that he is not sure what a board's financial
responsibility would be.
MS. KOENEMAN stated that she knows of some cases that "have both
gone criminal and civil."
REPRESENTATIVE JOSEPHSON commented that the instances involving
the Big Game Commercial Services Board would likely involve
criminal charges.
3:39:57 PM
REPRESENTATIVE KNOPP stated his interest in finding a solution
to high investigative costs, although he offered his opinion
that HB 90 might not be the right mechanism. He drew attention
to AELS's budget from 2012 and 2013, and noted that the
investigative costs are minimal in comparison to the
administrative costs. He expressed that the fees mostly support
the administration.
3:41:21 PM
CHAIR KITO stated that the proposed legislation just addresses
the investigative costs. Both now and under HB 90, all other
costs are attributed to each individual board, which is
responsible for managing all other components. He remarked,
"All we're talking about is pulling those investigative costs
out for all the boards and then normalizing them among all the
boards. All those other costs would remain attributable to one
of the boards."
REPRESENTATIVE KNOPP asked for clarification that the bill only
addresses professional licensing and not business licensing.
CHAIR KITO answered yes; the bill pertains only to the
individuals that for life, health, or safety reasons are
required to have a license or registration.
3:42:24 PM
REPRESENTATIVE BIRCH asked whether a board has an option to
contract independently for background research. He also asked
if the investigative assets available to the board all come from
within the Department of Commerce, Community & Economic
Development (DCCED) or the Department of Law.
CHAIR KITO stated that years ago, AELS asked for changes in
statute to designate one investigator for AELS investigations,
and HB 90 would not affect that. He offered his understanding
that the department can authorize an investigator to hire
someone to collect additional information for things that the
investigator does not have the capacity to do.
3:43:39 PM
VICE CHAIR WOOL asked if there are any groups that use a
disproportional amount of investigative resources - not per
individual but per group.
3:44:06 PM
MS. KOENEMAN responded that there are. She indicated that on
their websites, boards include annual reports for
investigations. In terms of investigations, intakes,
complaints, and probations, acupuncturists had a total of 10,
architects, engineers, and land surveyors a total of 70, big
game guides 148, barbers and hairdressers 162. She noted that
these numbers represent the total investigations, intakes,
complaints, and probations for each of the specific boards.
VICE CHAIR WOOL asked if some investigations, depending on what
field they're in, are inherently more expensive and require more
expertise.
MS. KOENEMAN answered absolutely. She added that the costs can
vary by profession.
VICE CHAIR WOOL noted that the Board of Certified Direct-Entry
Midwives has only 64 or 65 members to spread out the potential
cost of any large investigations. This circumstance has led to
midwives' fees going up to approximately $4,000. He asked for
confirmation that if the costs were spread over 74,000
licensees, then license fees would average about $30 per year.
This would not include any board's past debts.
MS. KOENEMAN responded that is correct. She added that the
aforementioned $30 fee comes from rough estimates; the
department is working to get more accurate cost data to her.
3:47:37 PM
REPRESENTATIVE BIRCH asked if when a $100,000 investigation is
deemed necessary, the board is made aware of the fact that it
could have an adverse impact on annual licensing fees.
3:48:24 PM
ALVIN KENNEDY, Investigator, Division of Corporations, Business,
and Professional Licensing (DCBPL), Department of Commerce,
Community & Economic Development (DCCED), responded to
Representative Birch's question, saying that when a complaint is
filed, an investigator is assigned. Once the matter is found to
be within the investigator's jurisdiction, the investigator
meets with someone on the board to review the case and ensures
that the investigation should proceed. He remarked:
The investigator does not determine whether or not
statute ... or regulation has been violated, it's
actually the board member who makes that determination
as to whether or not what type of discipline will be
doled out from what we find out if it is, in fact, a
violation of statute or regulation. So boards are
involved very early on in the process when we start
our investigations. Again, we're the fact finders, we
find the facts, and then we present them to ... one or
two members depending upon the board who's reviewing
the case so that they can make a determination as to
which direction we're going to go.
3:49:55 PM
REPRESENTATIVE BIRCH asked how many investigators there are.
MR. KENNEDY responded that there are currently 16 assigned to
regulate for 43 different professions.
REPRESENTATIVE BIRCH asked if there is a budget generated before
an investigation in order for the board to have some expectation
of costs and make a balanced decision.
MR. KENNEDY stated that normally the board determines if a trip
is needed. He expressed that very seldom do investigators fly
to remote places; investigators usually drive if a trip is
deemed necessary. In most occurrences, investigators partner
with someone in the area, such as state troopers, who house and
transport the investigator to reduce costs.
REPRESENTATIVE BIRCH asked if overseeing the 43 professions
keeps the 16 investigators busy.
MR. KENNEDY answered it does. He stated that they review
complaints as they come in. If a person checks certain boxes
when filing an application for licensing, then the application
goes to the investigative division for review. The division
ensures that Alaska does not license someone with barrier crimes
in his/her background that might be a threat to public safety.
3:52:32 PM
REPRESENTATIVE STUTES asked if any board member can make the
determination of whether or not there will be an investigation.
She asked if this determination is unilateral or if it requires
a majority of the board.
MR. KENNEDY answered it's unilateral. He relayed that there are
two public members normally assigned to each board, and public
members do not review investigations. Those board members who
are licensed within the profession are the members who review
the cases and determine what direction the division will go,
depending on the jurisdiction.
REPRESENTATIVE STUTES asked if an investigation would be
launched if a board has seven members and six say they don't
want an investigation, but one believes an investigation is
needed.
MR. KENNEDY stated that by the time the investigation is in
front of the entire board, the investigation has already been
conducted. When the entire board is looking at a case, it is
determining - by majority - whether or not to accept discipline.
REPRESENTATIVE STUTES asked if there is currently a back log of
cases.
MR. KENNEDY answered no. He added that right now, when a
complaint comes in, there is a 72-hour window to respond.
Paperwork is sent out either to a board member to review and
determine whether or not there was a violation or to the
complainant. Cases are immediately assigned to an investigator
once received by the division. The division aims to close cases
within 180 days.
3:55:09 PM
REPRESENTATIVE STUTES asked how many investigations are
currently going on.
MR. KENNEDY stated he does not know. He informed that in the
last fiscal year, the division looked into 1,600 investigations,
complaints, probation matters, and intake matters.
REPRESENTATIVE STUTES asked Mr. Kennedy to provide the number of
current open investigations and the number of investigations
that were concluded in 2016.
3:57:11 PM
REPRESENTATIVE BIRCH asked how much activity is seen with the
board managing euthanasia permits.
MR. KENNEDY answered not a lot.
3:57:43 PM
VICE CHAIR WOOL asked if Ms. Hovenden foresees it being easier
to manage the boards as a whole with spreading out the
investigative costs as opposed to looking at each individual
board.
3:58:10 PM
JANEY HOVENDEN, Director, Division of Corporations, Business,
and Professional Licensing (DCBPL), Department of Commerce,
Community & Economic Development (DCCED), stated that spreading
out the costs would make fee analysis easier. She noted that
the midwives and big game guides are in very difficult positions
needing to raise fees to a level that creates a barrier to the
profession.
VICE CHAIR WOOL asked if an individual doing massages without a
license is reported, then should the other massage therapists be
responsible for covering the cost of an investigation.
MS. HOVENDEN said that is how the statute is written. She
offered her understanding that the issue has been considered in
previous legislation. She proposed that it could be deemed
public safety and be paid for by the general fund, but as
statute is written, it is to be paid for by licensees of the
profession.
VICE CHAIR WOOL asked whether the investigative costs are mostly
travel or if investigators bill for time like a private
investigator would.
MS. HOVENDEN answered that investigators keep track of time
worked to 15 minutes increments for billing. This ensures that
the programs or boards are billed for the corresponding time.
She noted that this is where the volatility of costs comes in.
Administrative and indirect costs are quite predictable and
would keep fees constant. The investigative costs are variable.
VICE CHAIR WOOL referred to Mr. Kennedy's testimony regarding
investigators staying with troopers. He noted that
investigations of pharmacists would be very different from big
game guides. He asked for confirmation that different people
investigate big game hunting and pharmacist violations.
MS. HOVENDEN stated that each investigator is assigned one or
more program; some are assigned to a particular program because
it requires experience. All the investigators are capable of
cross training, but investigators are usually specialized in
their assigned programs.
4:02:51 PM
VICE CHAIR WOOL opened public testimony on HB 90.
4:03:01 PM
AL BARRETTE testified in opposition to HB 90. He compared the
discussion to a discussion on income tax where the collective
pays for everybody. He stated that the proposed legislation
lacks incentive to reduce investigations. The bill would fund
investigations by charging individuals with occupational
licenses. He drew attention to his letter to the committee
[included in the committee packet], which asked if these
occupations are overrated. He stated his familiarity with big
game commercial services, and offered that an individual could
be trapping, make a game violation unrelated to guiding, and
then pay a fee for the criminal violation. After, the Big Game
Commercial Services Board would conduct its own investigation
about whether a standard was violated within the guiding
industry. He said that although the trapping violation had
nothing to do with guiding, the investigation is required based
on how the regulations are written. He proposed that each
occupation needs to look at the reasons behind the high costs
and reoccurrences of investigations.
4:04:55 PM
REPRESENTATIVE JOSEPHSON recalled that previous testimony taught
that the board members - the licensees - ask for the
investigation. He characterized that Mr. Barrette's complaint
is not with the DCCED, but with his co-professionals.
MR. BARRETTE responded that the characterization is partially
true. He stated that HB 90 aims to recoup the costs by
requiring all licensees to pay a surcharge to even out the ebb
and flow of the investigations of all licensed persons. He
remarked, "It should be ... maybe you, the legislature, telling
... you need to review what's going on within your occupation,
your industry. Why is nursing or why is big game commercial
services having such a high bill or reoccurrence of
investigations? Is it because the standards are overregulated?"
REPRESENTATIVE JOSEPHSON asked if Mr. Barrette's theory is to
lessen the standard so people comply.
MR. BARRETTE answered no. He again offered the example of
someone committing a violation that had nothing to do with
his/her occupational license, yet the occupational board would
investigate it again.
REPRESENTATIVE JOSEPHSON asked if an individual is found to have
violated his/her hunting license, then is it reasonable to infer
that he/she might not be as trustworthy when guiding?
MR. BARRETTE answered that would be reasonable. He remarked,
"Would it be reasonable to say if you got a drunk driving ticket
that you're not complying with the nursing board or ... the
board of architecture?"
4:07:52 PM
JOHANNA CROSSETT, Direct-Entry Midwife, testified in support of
HB 90. She stated her appreciation for the interest and
discussion of a way to provide some predictability of licensing
fees.
4:08:32 PM
VICE CHAIR WOOL asked whether the Board of Certified Direct-
Entry Midwives' increase of licensing fees to approximately
$4,000 would reduce the number of participants in the profession
or increase the occurrence of individuals practicing without a
license.
MS. CROSSETT she offered her opinion that the high fees could
potentially reduce the amount of direct-entry midwives
practicing or apprenticing. She stated that she does not
foresee midwives practicing unlicensed.
4:09:29 PM
ERROL CHAMPION, Chair, Industry Issues Group, Alaska Association
of Realtors, testified in opposition to HB 90. He stated that
the bill goes over the mark. In previous years, [the Real
Estate Commission] did not pay its own way but has run a surplus
in the last five years. He stated that it's important for
boards to take ownership of investigative costs. He stated that
if a colleague "doesn't pass muster," then maybe other factors
like education need to be addressed. Amalgamating the charges
and handing them out won't work. He explained that complaints
about a realtor don't go to the full Real Estate Commission; a
complaint goes to one realtor member, then the investigator and
the commission member decide whether the investigation should go
forward. The rest of the commission doesn't hear the complaint
until the investigation is completed to determine if action is
needed. He relayed that he is not sure the 2,643 realtors need
to take ownership of 70,000 licenses. He said he understands
the issue and need to smooth things out, and stated his desire
to let the Real Estate Commission and the division levee out the
cost of investigations. If the costs are blended, he remarked,
"I think we lose something." He compared it to blending all the
grades for all students in school.
4:12:22 PM
REPRESENTATIVE JOSEPHSON stated that HB 90 is a good idea. He
informed that the Real Estate Commission could become insolvent,
and HB 90 works as insurance for the members offered for $20 per
person. He offered his understanding that realtors didn't ask
for a relationship to hair dressers. He stated that the current
system is unfair because members absorb the cost of a bad actor.
MR. CHAMPION responded that the current system is not broken,
and there is no need to fix it. He noted there is a great
director at DCBPL and good accounting practices. He stated that
not many boards are interested in the blending of charges. He
remarked, "I don't see what we're gaining by this legislation."
4:14:16 PM
REPRESENTATIVE BIRCH asked if the [Real Estate Commission] has
always been under a state licensing umbrella. He noted that
some professions, such as physicians and attorneys, are
independently managed.
MR. CHAMPION answered that that is his impression with his 18
years of experience. He added that often the investigator
doesn't understand real estate, and this bill further removes
ownership of errors and omissions.
4:15:33 PM
CHAIR KITO stated that HB 90 would change the financing
mechanism for investigative costs, but would not to change the
structure of how investigations are completed. The investigator
currently assigned to the Real Estate Commission would still be
assigned the same duties under HB 90. He stated that sometimes
new investigators are trained on issues pertaining to an
investigation, although that would happen regardless of HB 90.
He offered an example that he can pay for someone to plow the
street in front of his house but not pay to plow the street in
front of his neighbor's house. He asked how anyone would
account for paying for just one portion of the street. Some
boards are adversely impacted by overly high and sporadic
investigation costs. He remarked:
It is in the public's interest to have those costs
spread out over all the professions, and all the
professions do have the opportunity to receive support
services from the investigative group, whether [or
not] they need those support services ... Every board
would have a different need for those services, but
every board ... in investigations has the ability to
draw from that. Because of the fact that a profession
is licensed with fewer representatives or because of
the fact that they have specific investigations that
may cost a significant amount of money, they are being
penalized with their licensing.
CHAIR KITO expressed that it's becoming cost prohibitive to
become part of some professions. The bill aims to enhance and
support commerce.
4:18:05 PM
REPRESENTATIVE STUTES asked if HB 90 would make it less likely
for a board or board members to be responsible for their own
actions. She asked what the deterrent would be for a board to
not continually violate the parameters if the board is not being
held responsible for its own investigations.
4:19:02 PM
VICE CHAIR WOOL offered that one incentive not to continually
violate parameters is that individuals could lose their licenses
or be fined. There is punishment other than incurring debt to
the board.
REPRESENTATIVE STUTES asked whether an investigated violation
goes to someone at DCBPL other than the investigation division;
she asked, "So there can be punitive damages other than the
investigations?"
4:20:29 PM
MS. HOVENDEN asked for the question to be clarified.
REPRESENTATIVE STUTES clarified her question and asked, "If a
board is chronically incurring investigative costs by way of
violations, is there something that the department does to
follow up on this chronic investigative charges by this
particular board? Are there other avenues of penalizing this
board: If it's ... one board, but several different members
that are constantly having this issue?"
MS. HOVENDEN stated that it is not the boards themselves
incurring the costs - the costs are incurred by licensees.
Neither the board nor the division can control number of the
complaints received. She stated that the board is responsible
for contacting licensees about a particular problem such as
continuing education.
4:22:31 PM
REPRESENTATIVE STUTES asked if there is an avenue for the
department to get involved in punitive responses. She asked if
the engineering board had 1,000 members and in one year had 500
violations that had been investigated, would the department get
involved or would it be kept between the board and the
investigator?
MS. HOVENDEN answered that the investigator works with the board
or licensees with any problem. The licensees are fined and have
penalties.
REPRESENTATIVE STUTES asked whether the board has the capability
to recommend revoking a license.
MS. HOVENDEN stated that the board makes the final decision on a
situation with a licensee after an investigation.
REPRESENTATIVE STUTES asked for clarification on whether the
board has the option to revoke a license.
MS. HOVENDEN stated that the board must follow regulations, but
can revoke licenses under set circumstances.
4:25:15 PM
VICE CHAIR WOOL announced that HB 90 was held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB090 Sectional Analysis 2.8.17.pdf |
HL&C 2/13/2017 3:15:00 PM |
HB 90 |
| HB090 Sponsor Statement 2.8.17.pdf |
HL&C 2/13/2017 3:15:00 PM |
HB 90 |
| HB090 Supporting Document - Board License Action Options 2.8.17.pdf |
HL&C 2/13/2017 3:15:00 PM |
HB 90 |
| HB090 Supporting Document - Licensing Statistics 2.8.17.pdf |
HL&C 2/13/2017 3:15:00 PM |
HB 90 |
| HB090 Supporting Document - Summary of All Professional Licensing 2.8.17.pdf |
HL&C 2/13/2017 3:15:00 PM |
HB 90 |
| HB090 Fiscal Note DCCED-DCBPL 2.10.17.pdf |
HL&C 2/13/2017 3:15:00 PM |
HB 90 |
| HB090 Supporting Document - CBPL Investigative Process 2.8.17.pdf |
HL&C 2/13/2017 3:15:00 PM |
HB 90 |