Legislature(2017 - 2018)SENATE FINANCE 532
04/03/2018 09:00 AM Senate FINANCE
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| HB302 | |
| HB280 | |
| HB274 | |
| HB278 | |
| HB273 | |
| HB275 | |
| HB279 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 76 | TELECONFERENCED | |
| + | HB 128 | TELECONFERENCED | |
| += | HB 286 | TELECONFERENCED | |
| + | HB 273 | TELECONFERENCED | |
| + | HB 274 | TELECONFERENCED | |
| + | HB 275 | TELECONFERENCED | |
| + | HB 278 | TELECONFERENCED | |
| + | HB 279 | TELECONFERENCED | |
| + | HB 280 | TELECONFERENCED | |
| + | HB 302 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
April 3, 2018
9:04 a.m.
9:04:21 AM
CALL TO ORDER
Co-Chair MacKinnon called the Senate Finance Committee
meeting to order at 9:04 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Anna MacKinnon, Co-Chair
Senator Click Bishop, Vice-Chair
Senator Peter Micciche
Senator Gary Stevens
Senator Natasha von Imhof
MEMBERS ABSENT
Senator Donny Olson
ALSO PRESENT
Ashley Strauch, Staff, Representative Adam Wool; Kris
Curtis, Legislative Auditor, Alaska Division of Legislative
Audit; Sara Chambers, Deputy Director, Division of
Corporations, Business and Professional Licensing,
Department of Commerce, Community and Economic Development;
Megan Holland, Staff, Representative Andy Josephson;
Caitlyn Ellis, Staff, Representative Sam Kito; Megan
Holland, Staff, Representative Andy Josephson;
Representative Sam Kito, Sponsor; Crystal Koeneman, Staff,
Representative Sam Kito; Hannah Lager, Budget Manager,
Department of Commerce, Community and Economic Development;
Errol Champion, Alaska Association of Realtors, Juneau.
PRESENT VIA TELECONFERENCE
Debra Hamilton, Chair, Board of Professional Counselors,
Soldotna; Karen Cunningham, Board of Marital and Family
Therapy, Anchorage; David Derry, Chair, Board of Certified
Real Estate Appraisers, Kenai; Erika McConnell, Director,
Marijuana and Alcohol Control Office, Nome; David Edwards-
Smith, Chair, Board of Massage Therapists, Kenai; Volker
Hruby, American Massage Therapy Association Alaska Chapter,
Anchorage; Jill Motz, Self, MatSu; Traci Barickman, Chair,
Real Estate Commission, Palmer; Deborah Barollini, Self,
Anchorage.
SUMMARY
HB 273 EXTEND: MARIJUANA CONTROL BOARD
HB 273 was HEARD and HELD in committee for
further consideration.
HB 274 EXTEND: BD OF PSYCHOLOGISTS/PSYCH ASSOC.
HB 274 was REPORTED out of committee with a "do
pass" recommendation and with one forthcoming
fiscal impact note from the Department of
Commerce, Community and Economic Development.
HB 275 EXTEND: BOARD OF MASSAGE THERAPISTS
HB 275 was HEARD and HELD in committee for
further consideration.
HB 278 EXTEND:CERT. REAL ESTATE APPRAISERS BOARD
HB 278 was HEARD and HELD in committee for
further consideration.
HB 279 EXTEND: REAL ESTATE COMMISSION
HB 279 was HEARD and HELD in committee for
further consideration.
HB 280 EXTEND: BOARD OF MARITAL & FAMILY THERAPY
HB 280 was REPORTED out of committee with a "do
pass" recommendation and with one previously
published fiscal impact note: FN 1(CED).
HB 302 EXTEND: BOARD OF PROFESSIONAL COUNSELORS
HB 302 was REPORTED out of committee with a "do
pass" recommendation and with one previously
published fiscal impact note: FN 1(CED).
HOUSE BILL NO. 302
"An Act extending the termination date of the Board of
Professional Counselors; and providing for an
effective date."
9:05:02 AM
ASHLEY STRAUCH, STAFF, REPRESENTATIVE ADAM WOOL, discussed
the sponsor statement for HB 302 (copy on file):
HB302 extends the sunset date for the Board of
Professional Counselors to June 30, 2026. I encourage
all the members to review the Legislative Audit
summary and the full audit report. You will see that
the Board has served the public's interest by
effectively licensing and regulating professional
counselors and certified counselor supervisors. From
FY14 to FY16, the Board has had a 46% increase in new
licenses, and has issued 190 new licenses and 73
supervisor certifications over that time.
Additionally, the Board has worked to implement new
tele-health regulations to guide the distance delivery
of services for mental health occupations.
The Board of Professional Counselors serves an
important role in monitoring licenses and working to
ensure that only qualified individuals practice in
Alaska. The continuation of this Board is important to
the ongoing improvement of the professional counselor
occupation.
9:06:45 AM
KRIS CURTIS, LEGISLATIVE AUDITOR, ALASKA DIVISION OF
LEGISLATIVE AUDIT, discussed the document "A Sunset Review
of the Department of Commerce, Community, and Economic
Development, Board of Professional Counselors (board)"
(copy on file). She stated that the purpose of a sunset
audit was to determine whether a board or commission was
serving the public's interest, and whether it should be
extended. She stated that the report conclusions began on
page 3. She stated that, overall, she found that the board
was serving the public's interest, by effectively licensing
and regulating professional counselors and counselor
supervisors. She stated that it was found that the board
monitored licensees, and worked to ensure that only
qualified individuals practiced. Furthermore, it was found
that the board actively developed and adopted regulations
to improve the profession. She recommended the full,
maximum eight-year extension. There were no recommendations
as part of the audit. She remarked that there was some
standard information within the report. She noted the
scheduled licensing activity on page 5. She shared that, as
of January 2017, there were 657 active licensees. She noted
that it was a 46 percent increase, as compared to the prior
2009 sunset. She shared that page 6 showed a schedule of
revenues and expenditures. The board had a surplus of
$70,000 as of March 31. She stated that the board and
management planned to decrease fees in FY 18 to address the
surplus. The list of fees was on page 7. She noted that
response to the audit began on page 19. She announced that
the Office of the Governor (GOV), the department, and the
board chair agreed that the board served the public's
interest and should be extended to the maximum 8 years.
Senator Micciche stated that he had heard the audit
findings in another committee. He remarked that within the
discussion, it was learned that the cost and time for the
audit was not covered by the board. He felt that maybe the
legislature should consider that the board cover the cost
of the audit.
Senator von Imhof referenced page 6 of the audit, in which
there was a deficit in FY 13, FY 14, and FY 15. A fee
structure change then occurred, so there was a surplus in
FY 16 and FY 17. She noted that the fees would be
decreased. She wondered whether there was a certain
allowable surplus percentage, so there could possibly be a
cushion to be absorbed over time.
Ms. Curtis replied that statutes did not provide for that.
She shared that the statutes outlined that license fees
should cover the cost of regulation. She stated that there
was a problem over the years of the allocation of indirect
costs, but was corrected recently. She stressed that the
statute did not provide flexibility or a cushion, but
rather stated that fees should be set to cover the cost of
regulation.
9:11:18 AM
Co-Chair MacKinnon wondered whether the department had
language suggestions to address the peaks and valleys in
the boards to make it more sustainable to those who were
paying fees to the state.
SARA CHAMBERS, DEPUTY DIRECTOR, DIVISION OF CORPORATIONS,
BUSINESS AND PROFESSIONAL LICENSING, DEPARTMENT OF
COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, addressed
Senator von Imhof's question. She stated that the
department had worked to examine how statute could be
altered to provide more effective tools. She shared that
there were struggles within the existing authority, but
those had been corrected. She remarked that because the
statute required the revenues to approximately equal the
expenditures for the programs that had some expenditures
that were impossible to anticipate. She shared that
licensing fees paid for administrative costs, and also paid
for all investigations and legal costs. She stressed that
the licensee paid for those expenditures.
Senator von Imhof announced that she would have a
conversation about the issue at a later date.
9:16:55 AM
Senator Micciche was concerned that boards and commissions
did not become profit centers. He thought the matter was
worthy of discussion.
Senator Stevens asked if Ms. Chambers was hearing from
licensees regarding the unfairness of fees going towards
the activities of un
Ms. Chambers answered in the affirmative.
Co-Chair MacKinnon OPENED public testimony.
DEBRA HAMILTON, CHAIR, BOARD OF PROFESSIONAL COUNSELORS,
SOLDOTNA (via teleconference), stated that she was
available for questions.
Senator Micciche wondered whether the balance was fair in
the licensing fees for her board.
Ms. Hamilton replied that she was currently looking at that
issue. She remarked that she joined the board at a time of
deficit, had worked to reverse that deficit, and was
currently in a surplus. She shared that there was some
feedback regarding the licensure fee increases.
Co-Chair MacKinnon CLOSED public testimony.
9:20:20 AM
Vice-Chair Bishop commented that continued conversation
would be worthy to address the concern over peaks and
valleys. He remarked that it would be nice to find a
solution.
Senator Micciche thought people did not understand that
boards and commissions were self-funded and self-regulated
and did not use state funds.
Co-Chair MacKinnon noted that there had been a fiscal not
review with the Legislative Finance Division. She put on
the record that the $21,100 was the cost of the board
itself.
Vice-Chair Bishop MOVED to report HB 302 out of Committee
with individual recommendations and the accompanying fiscal
note. There being NO OBJECTION, it was so ordered.
HB 302 was REPORTED out of committee with a "do pass"
recommendation and with one previously published fiscal
impact note: FN 1(CED).
9:24:31 AM
AT EASE
9:26:00 AM
RECONVENED
HOUSE BILL NO. 280
"An Act extending the termination date of the Board of
Marital and Family Therapy; and providing for an
effective date."
9:26:00 AM
MEGAN HOLLAND, STAFF, REPRESENTATIVE ANDY JOSEPHSON,
discussed the bill. She stated that the bill extended the
Board of Marital and Family Therapy. She stated that the
Board of Marital and Family Therapy regulated and licensed
therapists and approved supervisors. The board also
established and enforced training, education, and
continuing education requirements of its licensees. The
board currently oversaw 85 licensees in Alaska. The board
received a full eight-year extension from Legislative
Audit. She announced that there was no opposition received
for extension of the board.
KRIS CURTIS, LEGISLATIVE AUDITOR, ALASKA DIVISION OF
LEGISLATIVE AUDIT, directed attention to document "A Sunset
Review of the Department of Commerce, Community, and
Economic Development, Board of Marital and Family Therapy
(board)," (copy on file). She stated that it was found
that, overall, the board was serving the public's interest
by effectively licensing and regulating marital and family
therapists; and marital and family therapist supervisors.
The board monitored licensees and worked to ensure that
only qualified individuals' practices. It was also found
that the board actively developed and adopted regulations
to improve the industry. She recommended an eight-year
extension. There were no recommendations made in the audit.
She noted the standard information within the report. She
noted that on page 6, there were the scheduled licensing
activities. She stated that, as of January 2017, there were
85 active licensees, which was a 7 percent decrease when
compared to the 2013 prior sunset audit. She noted the
schedule of revenues and expenditures on page 8. He stated
that the board had a surplus of approximately 68,000 as of
March 31, 2017. She remarked that the board had operated
with a surplus over the past several years. She shared that
license fees were listed on page 7. She stated that all
participating entities agreed that there should be an
extension of the board.
Co-Chair MacKinnon OPENED public testimony.
9:29:29 AM
KAREN CUNNINGHAM, BOARD OF MARITAL AND FAMILY THERAPY,
ANCHORAGE (via teleconference), testified in support of the
bill.
Co-Chair MacKinnon asked if Ms. Cunningham could speak to
the decrease in licensees since the previous sunset audit.
Ms. Cunningham explained that there was no graduate program
in the state for marriage and family therapy, so it was
required to obtain graduate education outside the state.
She continued that the state had somewhat rigorous
licensing requirements, as well as a lack of supervisors in
the state.
Co-Chair MacKinnon CLOSED public testimony.
9:32:12 AM
Vice-Chair Bishop addressed that fiscal note.
Co-Chair MacKinnon stated that the board cost more than the
$21,400. She stated that the proposed board budget was
approximately $93,000, but it was the portion directly
related to the board. She stated that it was covered by
receipt services from the licensees.
Vice-Chair Bishop MOVED to report HB 280 out of Committee
with individual recommendations and the accompanying fiscal
note. There being NO OBJECTION, it was so ordered.
HB 280 was REPORTED out of committee with a "do pass"
recommendation and with one previously published fiscal
impact note: FN 1(CED).
9:33:57 AM
AT EASE
9:35:47 AM
RECONVENED
HOUSE BILL NO. 274
"An Act extending the termination date of the Board of
Psychologist and Psychological Associate Examiners;
and providing for an effective date."
9:35:47 AM
CAITLYN ELLIS, STAFF, REPRESENTATIVE SAM KITO, stated that
the bill extended the Board of Psychologists and
Psychological Associate Examiners. She stated that the
board had a full eight-year extension recommended by
Legislative Audit. She stated that the board regulated 285
licensees. The board was scheduled to sunset in June 2018.
The audit had two recommendations. One was about fees,
because there was a miscalculation. The board agreed, and
reduced fees. She stated that the other recommendation was
about complying with record keeping. The board and
department agreed, and had taken steps to address the
recommendations.
Senator von Imhof looked at page 10 of the audit, which
recommended that the department director in consultation
with the board to reduce fees. She wondered whether there
was a new fee schedule. She stated that on page 6, the FY
17 fees were high. She queried the fees for FY 18.
SARA CHAMBERS, DEPUTY DIRECTOR, DIVISION OF CORPORATIONS,
BUSINESS AND PROFESSIONAL LICENSING, DEPARTMENT OF
COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, detailed that
the fees had been analyzed to make a change but was waiting
on board regulation (unrelated fees) so that changes could
be made in one package.
Co-Chair MacKinnon asked if there was an anticipated time-
frame for completion of the changes.
Ms. Chambers replied that she would provide that
information at a later date.
Vice-Chair Bishop wondered whether the courtesy licensing
was in compliance.
Ms. Chambers replied that there were already procedures to
ensure that it was corrected in the future, and there were
currently no courtesy licensees.
KRIS CURTIS, LEGISLATIVE AUDITOR, ALASKA DIVISION OF
LEGISLATIVE AUDIT, discussed the document "A Sunset Review
of the Department of Commerce, Community, and Economic
Development, Board of Psychologist and Psychological
Associate Examiners (board)," (copy on file). She stated
that it was found that the board was serving the public's
interest by effectively licensing psychologists and
psychological associates. There was a recommendation of an
eight-year extension. She noted the standard information.
The scheduled licensing activity was on page 5. She shared
that as of March 2017, there were 285 active licensees. She
remarked that there was a 174 percent increase from the
prior 2009 sunset audit.
Co-Chair MacKinnon OPENED public testimony.
Co-Chair MacKinnon CLOSED public testimony.
9:41:25 AM
AT EASE
9:43:44 AM
RECONVENED
Co-Chair MacKinnon noted that the committee had a brief
conversation concerning the difference in the words,
"psychologist" and "psychiatrist."
Vice-Chair Bishop discussed the fiscal note.
Co-Chair MacKinnon stated that there would be a forthcoming
fiscal note.
Vice-Chair Bishop MOVED to report HB 274 out of Committee
with individual recommendations and the accompanying fiscal
note. There being NO OBJECTION, it was so ordered.
HB 274 was REPORTED out of committee with a "do pass"
recommendation and with one forthcoming fiscal impact note
from the Department of Commerce, Community and Economic
Development.
9:46:01 AM
AT EASE
9:47:38 AM
RECONVENED
HOUSE BILL NO. 278
"An Act extending the termination date of the Board of
Certified Real Estate Appraisers; and providing for an
effective date."
9:47:38 AM
MEGAN HOLLAND, STAFF, REPRESENTATIVE ANDY JOSEPHSON,
discussed HB 278. She stated that the bill extended the
termination date of the Board of Certified Real Estate
Appraisers. She shared that the Board of Certified Real
Estate Appraisers came to be after the housing market crash
in the early 2000s. There was a federal mandate requiring
states to regulate real estate appraisers, so the state
board served to fulfill the federal requirement. The board
was responsible for licensing, training, regulating, and
license enforcement of real estate appraisers in the state.
She stated that the board currently managed 261 licensees.
The board received a full eight-year recommendation from
Legislative Audit. Additionally, there were additional
audits from the federal audits in 2005 and 2007. She stated
that she had received no opposition to the board extension.
KRIS CURTIS, LEGISLATIVE AUDITOR, ALASKA DIVISION OF
LEGISLATIVE AUDIT, addressed the document "A Sunset Review
of the Department of Commerce, Community, and Economic
Development, Board of Certified Real Estate Appraisers
(board)," (copy on file). She stated that the audit
included a background information section beginning on page
3, which explained the regulatory oversight structure for
the appraisal industry established by the federal
government. The framework involved private entities that
set appraisal standards and qualification criteria for
licensing. It included state boards that certified and
licensed real estate appraisers, and it included federal
entities that regulated the industry. She stated that the
Federal Appraisal Subcommittee was responsible for
monitoring state licensing boards and enforcing standards.
She explained that the information was included in the
background section of the audit, because it was important
to highlight that the board was subject to external
oversight outside of the sunset process. The external
oversight included onsite compliance reviews of the board.
She stated that the additional oversight factored into the
recommended term of extension. She noted that page 7 held
the report conclusions. She stated that it was found that
the board was serving the public's interest by monitoring
certificate holders and licensees; and working to ensure
that only qualified individuals were practicing. She stated
that it was also found that the board developed and adopted
regulations to comply with federal requirements to improve
the real estate appraisal industry and better protect the
public. She stated that there were two recommendations
beginning page 16. The first recommendation was that that
the director continue to improve administrative support to
the board. She shared that through the testing, some
challenges were found to administrative support. She
explained that there was an examination of the entry of the
certificate holders into the national registry, which was a
federal requirement. The audit found that three certificate
holders were entered into the registry incorrectly. Those
entries were correctly, when the division was notified. She
stated that there were five investigative cases tested, and
three of the five had extended unjustified periods of
inactivity. She stated that the periods ranged from 130 to
203 days, so there were some improvements needed in the
timeliness of the investigative process. She remarked that
there was not proof of whether three of the eleven board
meetings held during the audit period were public noticed.
She felt that those findings were not individually
significant, but when considered together it indicated a
need for improved administrative support to the board.
9:52:07 AM
Ms. Curtis looked at page 17, which was the second
recommendation. It was recommended that the division
director, in consultation with the board, reduce fees to
address the surplus. She shared that as of March 2017, the
surplus was $165,000, however it was expected that the
surplus be significantly higher as the renewal period was
June 2017. She remarked that by the end of FY 17 there was
an expected significant surplus. She noted that the board
had asked for a fee analysis from the division management,
but due to competing priorities there was no fee analysis.
As a result, licensees paid a higher than justified fee.
She looked at page 11, which was the standard schedule of
licensing activity. She noted that there were 261 licensees
as of March 2017. The schedule of revenues and expenditures
was on page 12, and the schedule of licensing fees on page
13. She remarked that on page 14, it was discussed that the
board planned to move forward with regulating appraisal
management companies. It would significantly expand the
boards duties in the future. She noted that, despite the
change of duties, she recommended the maximum eight-year
extension, which was in recognition of the additional
federal oversight. The Federal Oversight Committee
performed onsite reviews every two years. The department's
response to the audit was on page 27, which was a
concurrence of the findings and recommendations. The
board's response was on page 29, and they also were in
concurrence. She announced that on the bottom page 31, the
board stated that they had received an attorney general
opinion that concluded in order to move forward with
regulating appraisal management companies, a statutory
change was required. She stated that Legislative Audit did
not agree with that conclusion. She noted additional
auditor comments beginning on page 33, which described the
review of the federal code and state statutes. She remarked
that she did not believe that it was essential to change
statutes, but felt that "it certainly would not hurt to
clarify them."
Co-Chair MacKinnon noted that page 11 gave the up or down
percentages on all the other boards. She wondered whether
the 261 licenses up or down compared to the last auditing
period.
Ms. Curtis replied that the prior sunset audit identified
266 licenses as of March 2013, so that was a slight
increase.
Co-Chair MacKinnon asked if new appraisers were coming
online successfully, or if there were challenges.
Ms. Curtis replied that there was no found challenge in
recruiting and retaining appraisers.
Co-Chair MacKinnon noted that they were held constant from
the previous audit.
Ms. Curtis replied that there were 266 as of March 2013,
which was relatively stable.
Co-Chair MacKinnon asked if Ms. Chambers could speak to
consistent numbers for the board, as there had been a
suggestion that the board made it difficult to process new
appraisers. She wondered about what challenges were
present.
SARA CHAMBERS, DEPUTY DIRECTOR, DIVISION OF CORPORATIONS,
BUSINESS AND PROFESSIONAL LICENSING, DEPARTMENT OF
COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, relayed that
appraisals were a fairly stable industry, and she had not
heard of any inherent challenges to getting licensed.
Co-Chair MacKinnon asked why the fees were not considered
sooner.
Ms. Chambers informed that the fees fell at a time when the
department was juggling multiple priorities, and there had
been a lack of resources. She offered to provide an update.
9:58:27 AM
Co-Chair MacKinnon OPENED public testimony.
DAVID DERRY, CHAIR, BOARD OF CERTIFIED REAL ESTATE
APPRAISERS, KENAI (via teleconference), testified in
support of the bill. He commented that the department had
given support that had allowed for the board. He discussed
the board being subject to annual audits.
Mr. Derry addressed Co-Chair MacKinnon's question about the
challenges to becoming certified. He discussed federal
requirements. The new regulations would be effective May
2018.
Co-Chair MacKinnon CLOSED public testimony.
Vice-Chair Bishop discussed the fiscal note.
Co-Chair MacKinnon queried the board's proposed fee
schedule that what was proposed from the department. She
noted that the board proposed $179,923, and the division
proposed $264,823. She wondered why there was a difference
in proposals.
Ms. Chambers wondered whether that query was held in the
audit.
10:04:53 AM
AT EASE
10:05:46 AM
RECONVENED
Co-Chair MacKinnon remarked that Ms. Chambers needed time
to research the difference.
HB 278 was HEARD and HELD in committee for further
consideration.
HOUSE BILL NO. 273
"An Act extending the termination date of the
Marijuana Control Board; and providing for an
effective date."
10:06:42 AM
REPRESENTATIVE SAM KITO, SPONSOR, discussed the bill. He
stated that the bill was a basic extension of the Marijuana
Control Board. He remarked that there was not even a full
year of revenue collection for the new board, but there was
a sunset in order to have a review to determine whether it
was operating in the state's interest. He shared that it
was found that the board was operating in the state's
interest. He noted the difference between the board and the
other professional boards in that if the sunset did not
occur, there was no "wind down" period. Therefore, it was
stop functioning, if there was no sunset extension.
CRYSTAL KOENEMAN, STAFF, REPRESENTATIVE SAM KITO, discussed
the bill. She stated that the bill was a six-year board
extension. He shared that there were four audit
recommendations. The board was created in 2015, and had met
over 24 times since July 2015 to establish the new
industry. She remarked that the board was created to
control the cultivation, manufacture, and sale of marijuana
in the state. She stated that since June 2016 the board
approved 278 license applications, denied 8 applications,
and revoked 2 licenses. She stated that Mx. McConnell could
detail the operations of the board.
10:09:48 AM
KRIS CURTIS, LEGISLATIVE AUDITOR, ALASKA DIVISION OF
LEGISLATIVE AUDIT, discussed the document "A Sunset Review
of the Department of Commerce, Community, and Economic
Development, Marijuana Control Board (board)," (copy on
file). She stated that it was the board's first sunset
review. Report conclusions began on page 5, and overall the
audit found that the board was serving the public's
interest by effectively licensing marijuana establishments
by establishing regulations that allowed for the
cultivation, manufacture, and sale of marijuana in Alaska.
The audit recommended a six-year extension. She explained
that in order to help assess the effectiveness of the new
board, there was a survey sent to licensees, and a separate
survey to local governments. The survey was sent to 101
licensees, and there was a 70 percent response rate.
Another survey was sent to 16 local government, and there
was an 88 percent response rate. The survey instruments and
the responses were summarized in Appendices B and C of the
audit. She stated that, overall, the responses were fairly
positive. She announced that 100 percent of local
government survey respondents, and 75 percent of licensee
survey respondents rated the board's overall effectiveness
at serving the public's interest as effective or very
effective. Additionally, over 93 percent of local
government survey respondents rated the board's
effectiveness at enforcing marijuana laws in their area as
good or excellent. She pointed to exhibit 2 on page 8,
which showed that the board issued 122 new licenses form
July 2016 through April 2017. She stated that 80 percent of
licensee survey respondents rated their overall license
experience as good or excellent. She noted that on page 8
it was outlined that the FY 17 operating budget included
intent language that stated that the application and
licensing fees should cover the cost of regulation and
recover the unrestricted general fund appropriations made
during the establishment of the program.
10:15:14 AM
Co-Chair MacKinnon OPENED public testimony.
ERIKA MCCONNELL, DIRECTOR, MARIJUANA AND ALCOHOL CONTROL
OFFICE, NOME (via teleconference), asserted that there were
enforcement priorities related to health and safety issues.
Co-Chair MacKinnon asked if Ms. McConnell was going to
comply with the audit's request.
Ms. McConnel. answered in the affirmative.
Senator von Imhof asked if the board had begun any action
to address the complaints.
Ms. McConnell replied that the recommendation was already
resolved. The board was able to add a criminal justice
technician to the staff, who was an administrative
assistant to the enforcement unit. That staff member
entered every complaint received into the Alaska Records
Management System, and documenting any resolution of that
complaint.
Co-Chair MacKinnon CLOSED public testimony.
Vice-Chair Bishop discussed the fiscal note.
Senator Micciche asked about the transition.
HANNAH LAGER, BUDGET MANAGER, DEPARTMENT OF COMMERCE,
COMMUNITY AND ECONOMIC DEVELOPMENT, explained that, in the
FY 19, there were general fund receipts supporting the
marijuana program, but there was an expectation to
eventually be fully funded by program receipts starting in
FY 20.
Senator Micciche wondered how the transition would occur,
and asked why unrestricted general funds would still be
used for the program.
Ms. Lager responded that there was carry-forward
authorization in the current year.
Co-Chair MacKinnon asked if Ms. Lager stated that the
department was forward-funding for an anticipated loss.
10:21:46 AM
AT EASE
10:23:34 AM
RECONVENED
Co-Chair MacKinnon informed that there would be an
examination of the general fund spend on the fiscal note.
HB 273 was HEARD and HELD in committee for further
consideration.
CS FOR HOUSE BILL NO. 275(FIN)
"An Act extending the termination date of the Board of
Massage Therapists; relating to license renewal and
criminal history record checks for massage therapists;
and providing for an effective date."
10:24:11 AM
REPRESENTATIVE SAM KITO, SPONSOR, discussed CSSB 275(FIN).
He stated that the bill would extend the Board of Massage
Therapists. He shared that the bill was only recently
established. Some of the audit recommendations were being
addressed in another piece of legislation. He remarked that
there was some overlap between an amendment in the bill,
and HB 110, which may need to be resolved. He stated that
the bill included a reduction in the frequency of
background checks. He remarked that the initial legislation
required the background check at every renewal cycle. The
current version changed the background check to occur every
third renewal cycle to decrease the administrative burden
and cost.
CRYSTAL KOENEMAN, STAFF, REPRESENTATIVE SAM KITO, noted
that Legislative Audit recommended a four-extension to
2022. The other body recommended a six-year extension based
on potential savings to Legislative Audit, and steps that
the board was taking to address the audit recommendations.
The board was created in 2015, and the licensing fees were
based on an estimate of 600 massage therapists. She
announced that the number had grown significantly. She
shared that there were 1186 new licenses at the time of the
audit. She remarked that there were over 1400 active
licenses in the last licensing cycle. She stated that the
division had taken steps to adjust the licensing fees
accordingly. She announced that there were three audit
recommendations. She reiterated that there was another
piece of legislation, because some of those recommendations
were better addressed through statutory changes.
10:27:18 AM
KRIS CURTIS, LEGISLATIVE AUDITOR, ALASKA DIVISION OF
LEGISLATIVE AUDIT, discussed the document "A Sunset Review
of the Department of Commerce, Community, and Economic
Development, Board of Massage Therapists (board)," (copy on
file). She remarked that it was a new board, and this was
its first sunset review. The audit found that the board was
serving the public's interest in all areas except
licensing. She stated that the audit found that applicants
were not consistently issued licenses in according with
statutes, regulations, or their procedures. Additionally,
there was an FBI audit that found improvements were needed
to comply with federal standards over criminal history
record information obtained as part of the licensing
process. The audit recommended that the legislature extend
the board for only four years. She highlighted the features
of the audit.
10:33:13 AM
Senator von Imhof asked about the significance of the
phrase, "additional supervisory resources are needed."
Ms. Curtis surmised that the department's comments may mean
that they need additional financial resources. She deferred
to Ms. Chambers.
SARA CHAMBERS, DEPUTY DIRECTOR, DIVISION OF CORPORATIONS,
BUSINESS AND PROFESSIONAL LICENSING, DEPARTMENT OF
COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, stated that
the program was anticipated to have 600 licensees, while
here was currently 1,400. She remarked that some of the
unusual requirements caused some stress. She remarked that
additional staff was needed for the board.
Senator von Imhof wondered whether there should be an
administrative fee taken from some of the board surpluses
to help with some of the supervisory positions.
Ms. Chambers stated that the department had found the
procedural errors that the additional oversight (to make
sure procedures were followed) was necessary and extended
to board training.
10:38:07 AM
Senator Micciche wanted to learn what management of boards
and commissions cost comprehensively. He believed there
were many costs that were unaccounted for. He acknowledged
that some boards were much more labor intensive than
others.
Ms. Chambers was happy to share the information with the
committee. She stated that the department had documentation
of indirect expenses.
Ms. Curtis stated that page 14 standard.
Co-Chair MacKinnon OPENED public testimony.
DAVID EDWARDS-SMITH, CHAIR, BOARD OF MASSAGE THERAPISTS,
KENAI (via teleconference), spoke in support of the bill.
Co-Chair MacKinnon asked how the board was complying with
the federal findings.
Mr. Edwards-Smith asked if Co-Chair MacKinnon was referring
to the findings pertaining to fingerprint chain of custody.
Co-Chair MacKinnon agreed.
Mr. Edwards-Smith affirmed that the application had been
changed to inform applicants of the use of fingerprints.
10:43:26 AM
Co-Chair MacKinnon asked if Mr. Edwards-Smith had adopted a
policy to motivate the department to adopt a policy.
Mr. Edwards-Smith stated that the board considered the
subject to be a division issue.
Co-Chair MacKinnon wondered whether the department had
addressed the FBI audit findings for the particular
licensure.
Ms. Chambers stated that there were 3 areas that the FBI
identified. She announced that there were channels of
communication which allowed for hacking into the system to
get access to certain documentation. She shared that there
was a new secure piece of technology that met the FBI
requirements. She stated that the application concern was
corrected prior to the conclusion of the audit. The
inadequate chain of custody was currently being addressed
by working with other agencies and departments to see if
there were opportunities to share resources to secure a
fingerprint card to meet the federal recommendations. She
remarked that there was no statutory provision to maintain
chain of custody. She remarked that a statute change may be
needed to alter the mandate to process fingerprint cards.
10:46:48 AM
Co-Chair MacKinnon felt that it was unacceptable. She
remarked that the department had been given a year to
address the concerns. She felt that it was the
administration's responsibility to comply with existing
law. She wanted to meet with Ms. Chambers at a later time.
Ms. Chambers was happy to meet with Co-Chair MacKinnon and
other parties to address the concerns.
Co-Chair MacKinnon wondered if there was further
information about why the administration did not comply
with the chain of custody issue, other than the assertion
of a change in statute.
Ms. Chambers replied that the data was secure. She stressed
that the question was about whether the fingerprints were
actually the applicant.
Vice-Chair Bishop asserted that there were a myriad of
fingerprinting protocols in different state agencies.
10:50:04 AM
VOLKER HRUBY, AMERICAN MASSAGE THERAPY ASSOCIATION ALASKA
CHAPTER, ANCHORAGE (via teleconference), testified in
support of the bill. He noted that a recent audit had
identified suggestions. The reasons for establishing the
board were the same reasons he believed the board should be
extended. He thought while the division did a good job
providing support for the board, it was not qualified to
perform the functions of the board. He referenced comments
by Ms. Chambers.
Mr. Hruby continued his testimony, and considered that the
board had done a good job implementing statute. He urged
committee members to move the bill from committee.
JILL MOTZ, SELF, MATSU (via teleconference), testified in
support of the bill. She understood that the fingerprint
issue was an issue. The board had gathered from the FBI
report that it was necessary to gather more information.
Co-Chair MacKinnon reminded that the committee's
responsibility to ensure that there was compliance with
state statutes and federal requirements. She did not
consider the bill to be stalled in committee.
Vice-Chair Bishop thought that the committee was attempting
to protect the integrity of the therapists with their
fingerprints.
Co-Chair MacKinnon CLOSED public testimony.
10:55:41 AM
Vice-Chair Bishop addressed the fiscal note.
Co-Chair MacKinnon pointed out that the board cost more
than what was reflected on the fiscal note
Co-Chair MacKinnon announced the due date for the
amendments.
Co-Chair MacKinnon announced visitors to the committee in
the audience.
HB 275 was HEARD and HELD in committee for further
consideration.
HOUSE BILL NO. 279
"An Act extending the termination date of the Real
Estate Commission; and providing for an effective
date."
10:57:44 AM
MEGAN HOLLAND, STAFF, REPRESENTATIVE ANDY JOSEPHSON,
discussed HB 279. She stated that the bill would extend the
termination date of the Real Estate Commission. She stated
that the commission oversaw brokers, associate brokers, and
sales licensees. They were responsible for the regulation
of supervisors and licensees, and enforcing their
requirements. The commission currently oversaw
approximately 2500 licensees, and received a full
recommended eight-year extension from Legislative Audit.
KRIS CURTIS, LEGISLATIVE AUDITOR, ALASKA DIVISION OF
LEGISLATIVE AUDIT, addressed the document "A Sunset Review
of the Department of Commerce, Community, and Economic
Development, Real Estate Commission" (copy on file). She
stated that report conclusions began on page 7. The audit
concluded that the commission was serving the public's
interest by effectively licensing and regulating real
estate licensees and real estate offices. The commission
monitored licensees and worked to ensure that only
qualified individuals practiced. Furthermore, the
commission developed and adopted regulations to improve the
real estate industry and protect the public. The audit
recommended an eight-year extension. She noted that the
audit period was fairly short, at less than two years,
because the prior sunset audit was dated July 2015. The
prior sunset audit identified that the board was not
serving the public's interest, because it had failed to
adopt a Master Errors and Emissions Insurance Policy. The
commission was required by a 2008 law to obtain a master
policy, and make it available to licensees. The statutes
also stated that licensees could obtain an insurance policy
independently through a private firm or through the master
policy provided to them.
11:02:22 AM
Senator von Imhof referenced the surplus on page 12. She
wondered whether the provision of the recovery balance
related to the surplus.
Ms. Curtis wondered whether Senator von Imhof was
referencing exhibit 4.
Senator von Imhof replied in the affirmative.
Ms. Curtis stated that page 15, exhibit 6 showed the
recovery fund balance.
Senator von Imhof asked if exhibit 4 and exhibit 6 were two
separate financial transactions. She wondered how the fees
were collected for exhibit 6.
Ms. Curtis replied that they were part of the charged fee
to the applicant. There was a separate fee established on
exhibit 5.
Co-Chair MacKinnon wanted page numbers.
Ms. Curtis replied that the fee was collected as part of
the licensing process.
Senator Stevens looked at page 17, and queried the
acceptable period of inactivity.
Ms. Curtis believed there was a six-month goal.
Co-Chair MacKinnon asked about how the division measured
the length of extension.
Ms. Curtis stated that there were few courtesy licensees.
She remarked that it was not a material recommendation.
11:06:54 AM
AT EASE
11:07:27 AM
RECONVENED
Co-Chair MacKinnon OPENED public testimony.
TRACI BARICKMAN, CHAIR, REAL ESTATE COMMISSION, PALMER (via
teleconference), testified in support of the bill. She
stated that the commission operated well.
11:08:46 AM
DEBORAH BAROLLINI, SELF, ANCHORAGE (via teleconference),
spoke in opposition to the bill. She asserted that the
commission did not offer the transparency that the public
deserved. She stated that she had a complaint, which was
ignored by the commission.
Co-Chair MacKinnon relayed that the committee was in
receipt of Ms. Barollini's email pertaining to the
difficulties that she had experienced in working with the
commission.
11:13:28 AM
Senator Micciche asked Ms. Barickman about a complaint that
was submitted, asked why the complaint was rejected.
Ms. Barickman stated that the complaint process first went
through the division, where it must be determined that the
REC had jurisdiction. She understood that Ms. Barollini's
complaint was not within the jurisdiction of the
commission, and it had not been received by the commission.
Senator Micciche asked what it would take for a complaint
against a licensee to be within the jurisdiction of a
licensee.
Ms. Barickman stated that in the case of a complaint that
was deemed to be within the jurisdiction of the commission,
the division would open a case. Typically there was a
consent agreement, and the respondent would be notified.
Co-Chair MacKinnon //
Senator Micciche asked Ms. Barickman if there had been
discipline on any realtor. He wondered if the process
worked if there had been issues within the jurisdiction of
the committee.
Mr. Barickman answered in the affirmative. She added that
the commission's quarterly meetings were public, but were
not the appropriate forum for hearing complaints.
11:19:18 AM
Senator Micciche asked Ms. Chambers why Ms. Barollini's
complaint had not reached the commission's jurisdiction.
SARA CHAMBERS, DEPUTY DIRECTOR, DIVISION OF CORPORATIONS,
BUSINESS AND PROFESSIONAL LICENSING, DEPARTMENT OF
COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, affirmed she
had reviewed the investigative file containing Ms.
Barollini's complaint. The concerns were found not to be
within the jurisdiction of the commission, but rather under
the purview of the Department of Law and the Landlord
Tenant Act. Ms. Barollini was provided with the
information.
Senator Micciche asked if the Landlord Tenant Act covered a
home in a condominium association.
Ms. Chambers deferred to the Department of Law. She also
agreed to provide further information.
Senator Micciche thought it sounded as though the
commission was not allowed the opportunity to act on the
matter. He wanted to reconcile the complaint.
Ms. Chambers was happy to work with the chief investigator
to ensure a thorough review of the case.
Co-Chair MacKinnon believed that Ms. Barollini was
suggesting that if a person was not competent to act in the
other role as a licensure, the board should make an
examination.
11:24:08 AM
ERROL CHAMPION, ALASKA ASSOCIATION OF REALTORS, JUNEAU,
spoke in support of the bill. He appreciated the efforts.
Senator Micciche discussed the fiscal note.
Co-Chair MacKinnon CLOSED public testimony.
HB 279 was HEARD and HELD in committee for further
consideration.
11:27:15 AM
AT EASE
11:27:47 AM
RECONVENED
Co-Chair MacKinnon discussed committee business.
ADJOURNMENT
11:28:59 AM
The meeting was adjourned at 11:28 a.m.