Legislature(2015 - 2016)HOUSE FINANCE 519
04/04/2016 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Confirmation Hearing: Alaska Mental Health Trust Authority: Laraine Derr | |
| HB254 | |
| HB156 | |
| HB209 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | HB 254 | TELECONFERENCED | |
| + | HB 156 | TELECONFERENCED | |
| + | HB 209 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 254
"An Act extending the termination date of the Big Game
Commercial Services Board; and providing for an
effective date."
1:46:51 PM
STEVE HANDY, STAFF, REPRESENTATIVE LOUISE STUTES, read from
a prepared statement:
What the bill does:
· House Bill 254, An Act extending the termination
date of the Big Game Commercial Services Board and
providing for an effective date, extends sunset date
of the Big Game Commercial Service Board's
(BGCSB) three years from June 30, 2016, to June 30,
2019.
Who the BGCSB is:
· The BGCSB is staffed by the Division of
Corporations, Business and Professional Licensing
and consists of;
· two licensed Registered Guide
· two licensed Transporters
· two private landholders
· two public members
· one member from the Board of Game.
What the BGCSB does:
· The BGCSB provides a legislative command to
assist in resource conservation and consumer
protection. The Board develops professional and
ethical standards, administers exams, makes final
licensing decisions and takes civil action
against persons who violate regulations.
· Board members are appointed by the Governor and
confirmed by the Legislature.
Why should the BGCSB be extended?
The Board's regulated professions include Assistant
Guides, Class
Guide
Guide
According to the report titled "Economic Impacts of
Guided Hunting in Alaska" prepared for the Alaska
Professional Hunters Association by McDowell Group, a
research and consulting firm;
· Guided hunting in Alaska accounted for a total of
2,210 jobs and $35 million in total labor income
in 2012, including all direct, indirect and
induced impacts.
· Guided hunting generated a total of $78 million
in economic activity in Alaska in 2012.
· Guided hunters purchased nearly $2 million in
hunting license and game tags.
Due to oversight by the legislature, the Board was
allowed to sunset before and this caused catastrophic
effects. It was the sunset that contributed the
financial difficulties reflected in the Legislative
Audit before you. However, in December, 2015, the
board was reinstated by the legislature.
The Big Game Commercial Services Board is essential to
the safety of hunters, guides and transporters coming
to Alaska to harvest our natural resources and to the
management of the resource itself.
Please consider and pass HB 254 to secure the BGCSB.
We have present Fred Parady, Deputy Commissioner of
Department of Commerce, Community, and Economic
Development and Sam Roher, president of Alaska
Professional Hunter Association, and Eddie Grasser
with the Alaska chapter of the Safari Club
International to answer specific questions.
1:50:10 PM
Representative Wilson asked for more details about when the
Board sunsetted and the potential fiscal impact. Mr. Handy
deferred to Mr. Parady.
Co-Chair Thompson encouraged committee members to continue
with questions and he would invite Mr. Parady to the table
shortly.
Representative Kawasaki asked when it sunsetted. Mr. Handy
responded that it sunsetted in 2005.
Representative Munoz remarked that there was legislation
moving through the process that would increase hunting and
licensing fees. She asked whether that legislation would
bring in revenue sufficient to cover the deficit. If not,
was the issue addressed with the bill sponsor. Mr. Handy
again differed to DCCED.
Co-Chair Neuman had received comments from Resident Hunters
of Alaska and other groups that opposed the extension
primarily because of charging transporters costs that might
have been incurred by big game commercial services. The
legislation also applied to people who carried non-
transporters. He read from a statement prepared by Resident
Hunters of Alaska:
"…not all air carriers who transport hunters to and
from the field choose to be a "transporter," in fact
many of the major air-taxis who fly hunters are not
"transporters" - are requesting the new fees for
mandated transporter hunt activity reports…"
Co-Chair Neuman remarked that they would be charged new
fees that mandated transporter hunter activity reports. He
suggested that other Alaska Airlines, Frontier, and Reeves
transported hunters. He wondered if they would be required
to pay the fees. He asked for details regarding the
discrepancies. Mr. Handy deferred to the experts at DCCED.
Co-Chair Neuman was not certain if he received the right
answer. Mr. Handy conveyed that he did not have the answer
and referred to the experts.
Co-Chair Neuman asked who would also be addressing the bill
before the committee.
Co-Chair Thompson would bring up others in the room and
online. He reviewed the list of available testifiers.
Co-Chair Neuman had just been asked by one of his
constituents about the issue. He asked how many registered
guides were in the State of Alaska and how many guides and
transporters were members of the Alaska Professional
Hunters Association. Mr. Handy thought it was over 1000. He
had other individuals that could provide specific numbers.
Co-Chair Thompson invited Mr. Parady to come forward.
1:54:02 PM
FRED PARADY, DEPUTY COMMISSIONER, DEPARTMENT OF COMMERCE,
COMMUNITY, AND ECONOMIC DEVELOPMENT, spoke in support of HB
254 to extend the sunset date for the BGCSB. He expressed
the department's appreciation for the valuable insight
provided to the department by the Legislative auditor and
her staff for process improvements. In looking at the 2015
audit by the Division of Legislative Audit there were
strong words of support provided to the board. Amongst the
findings were that the board had provided reasonable
assurances that licensees were qualifies and that the
board's regulation and licensing benefitted public safety
and safeguarded Alaska's wildlife. In light of the deficit,
the department recommended a 3-year extension to 2019. The
division's audit had 4 recommendations. The first was that
the department improved its public notice process. The
Department of Commerce, Community and Economic Development
had completed the process by rewriting its policies,
improving its checklists, and shifted responsibility for
notifications to one person to ensure accountability. The
second recommendation concerned investigations. There were
currently approximately 70 cases before the board in the
context of investigations. He mentioned that Angela Birt,
Section Chief, was in charge of the investigative unit for
all professions had insured that the gap in inactivity in
an investigation was less than 60 days. It was part of her
performance evaluation for each of her investigators. The
department had created a system to sustain electronic
contact when guides were in the field and created standard
operating procedures. The department created a tickler file
to send out reminders if there was inactivity for 30 days.
Often the sources of inactivity were awaiting action by
some other agency so that the investigation was momentarily
on hold. The department had also created a sanction matrix
that guided the implementation of investigations.
Mr. Parady continued with the third recommendation by the
Division of Legislative Audit which was to increase fees.
The fees were increased for the 2015 2-year renewal cycle
and were increased again for the 2017 cycle, part of what
was drawing the question from the transporters. He was
happy to report that whereas the deficit of the board was
$1.1 million on June 30, 2015, it decreased by $896
thousand as of December 31, 2015. It was a decrease of $225
thousand in the current licensing cycle. He anticipated
that the debt would be reduced by $535 thousand and would
be eliminated in the subsequent 2-year cycle. The board was
operating in the black at present and was working towards
erasing its deficit. The fourth recommendation had to do
with a transportation licensing update, the work of which
had been accomplished.
Mr. Parady emphasized the need for the board in order to
direct the associated profession. Because of their unique
insights into their activities the board provided
assistance to the public, the state, the DCCED, and to the
Division of Corporations, Business and Professional
Licensing (DCBPL). In stepping back to the 30 thousand foot
view, guides in this sort of activity as part of the
tourism industry were a bright spot in the state's economy.
He concluded his comments by noting that licensing would
not go away even if the board did. The issues that came
before the board were complex and the department
appreciated the board's expertise in guiding the
profession. He was ready for questions.
1:58:23 PM
Representative Wilson wanted to understand how the board
sunsetting caused the current deficit. Mr. Parady did not
know all the details due to when he started as deputy
commissioner. His general understanding was that the
department did not have the board's expertise and insight
guiding how to proceed with investigations in terms of
knowing what was worthy of investigation and how to spend
investigative resources. A second problem was noted in the
audit that the deficit situation was made worse by about
$236 thousand (Page 11 of the audit report) because the
indirect cost allocation methodology that was corrected
following a special audit in 2011.
Representative Wilson asked for the fee increase
information. Mr. Parady would provide a copy of the
increases which occurred in 2015 and 2017 on a bi-annual
cycle. He added that in 2017 the average increase was 31
percent. There was also a new records fee and a new
transporter fee of $50 - a fee to help draw monies
associated with specific activities and to spread the load
to erase the deficit.
Representative Wilson was concerned with the bill and was
aware of guides that had been investigated. She was trying
to understand whether the deficit resulted from something
that had happened and the indirect costs or whether the
DCCED had conducted investigations that should not have
occurred. She provided an example. A fellow was charged and
went to court. He was found not guilty and the department
paid over $80 thousand trying to prosecute him. It was her
understanding that the cost of $80 thousand was then passed
on to other guides in the form of increased fees. She
thought only those found guilty should have to pay the
fees. She asked whether there was a provision that
protected guides that did the right thing.
Mr. Parady responded that her question was germane. It was
a conflict that confronted the department in all of the
DCBPL statues where the department was directed by the
legislature to balance each profession within its fee
structure when there was already a regulatory function in
place for the general benefit of citizens of Alaska and
perhaps should come from the general fund. He suggested
that she would run into her questions that she had broached
across any range of state activities where investigation
took place. Some investigations did not result in a guilty
conviction and therefore she was suggesting that they
should not return to the board. However, the decision to
conduct the investigation, the rules that governed the
profession, and the need for the investigation rested
within the profession. Unless there was a place to divert
the costs they would be carried by the profession.
2:02:33 PM
Co-Chair Thompson commented that the bill was only to
extend the board rather than to address fees.
Representative Wilson contended that if the department was
performing undue investigations and putting the cost onto
the board it was something that needed to be changed. For
instance, in the audit report on Page 14, under
"contractual" the state went from $94 thousand in FY 12 to
$172 thousand, to $188 thousand. She assumed "contractual"
had to do with investigator services. She wondered if she
was correct.
Co-Chair Thompson relayed that Ms. Curtis from the Division
of Legislative Audit would be testifying following Mr.
Parady's testimony.
Mr. Parady was unsure of the contractual line item
Representative Wilson was referring to. He thought that the
Department of Law's services were covered through an
interagency receipt.
Representative Wilson was concerned that additional costs
were being passed to guides through the board. She felt it
was relevant and expressed misgivings about increasing fees
such that it would discourage guides from participating in
the industry.
Representative Kawasaki referred to Exhibit 2 on page 14 of
the BGCSB Audit produced by the Division of Legislative
Audit (copy on file). He pointed to the personal services
line between $250 thousand to $300 thousand the past couple
of years. He also pointed to Exhibit 3 on page 18 where it
showed the total number of licenses issued. The exhibit
showed 111 total licenses issued in FY 12, 141 in FY 13,
157 in FY 14, and 119 in the following year. He was
uncertain of the costs, time, and effort to process the
renewals. He mentioned talking earlier in the day about the
Board of Barbers and Hairdressers reporting that 1000
manicurists needed licenses. He thought it seemed like for
that board it would take a significant amount of time to
process renewals. He wondered how much time it would take
for BGCSB to process its renewals.
Mr. Parady responded that the activities in each of the
licensee groups that were mandated in statute varied
broadly. In dealing with Manicurist's licensures, for
example, there were substantial health issues. He explained
that for big game outfitters several times a year the
department administered extensive tests for guides to be in
the field. The cost of administering those tests would not
necessarily exist for another profession. There were 43
professions that were licensed; 21 that had boards and 22
that did not. Licensing varied widely depending on the
profession.
Representative Guttenberg was concerned with administrative
and legal costs associated with legal actions. He wondered
if the department would be responsible for initiating
charges if there was not a board. Mr. Parady responded in
the affirmative. He supposed that costs would be borne by a
particular profession if the "bad actors" in that
profession were unlicensed and generated an investigation.
ON a lighter note, he reported that in the two years of his
tenure he had a case where a chiropractor treated a horse.
There was a question about whether it was a violation of
chiropractic or veterinary practice. It turned out to be a
violation of veterinary practice.
Representative Guttenberg thought Mr. Parady had answered
his question about whether charges went back to the license
holder, independent of whether the board existed.
Vice-Chair Saddler asked, in the years which there was a
deficit in the expenses of the board for investigations, if
they were made up from the general fund. If not, he asked
him to identify the funding source. Mr. Parady believed it
remained within the DCBPL, a receipt-supported agency. He
would confirm his answer later.
Vice-Chair Saddler was unclear about Mr. Parady's answer.
He suspected that investigators received payment for their
services. He asked if it came out of the DCBPL's budget in
which the legislature appropriated from the general fund.
Mr. Parady responded that he needed to confirm his
response. He explained that DCBPL operated within its
budget, operating in the black. The agency was receipt-
supported and did not received a general fund
appropriation.
Vice-Chair Saddler asked if the deficit was a result of
ongoing receipt deficits from those individuals paying fees
or if it was historical deficits from the past. Mr. Parady
indicated that the board was currently operating in the
black. The deficit was generated from the past. He
clarified that he was referring to the rolled up DCBPL,
receipt-supported in aggregate.
Representative Gara mentioned that when he worked for the
Office of the Attorney General there were a couple of
attorneys he worked with. One of them handled criminal
cases going after people that had committed game violations
and one who handled civil cases going after penalties from
people (some of them guides) who engaged in game
violations. He asked if Mr. Parady's department received
bills from the attorney general's office when it handled
such cases. Mr. Parady would have to get back to
Representative Gara with an answer.
Representative Gara suggested fines would be collected as
well. He wondered if the fines came through Mr. Parady's
office. Mr. Parady stated that fines typically went into
the general fund rather than their source. He would have to
do some research and get back to Representative Gara.
Representative Munoz asked about the criteria for beginning
an investigation. Mr. Parady could provide a guide handout
on the investigation matrix.
Co-Chair Thompson asked that a copy be given to his staff
to be dispersed.
2:11:54 PM
Co-Chair Neuman agreed that the state needed the BGCSB to
oversee guides and transporters. His concerns had to do
with some of the recommendations that were provided by the
Division of Legislative Audit. He referred to Page 33 of
the audit for the BGCSB which was the response from DCCED.
He pointed to Recommendation 3 which talked about how the
program had a known deficit in 2011 and after a legislative
inquiry into the division's proposed necessary fee
increases for the program, the decision was made not to
pursue a fee increase at the time. He summarized that the
board had been encouraged to increase its fees which the
board had refused to do. It appeared that the board was
looking at a modest increase. He asked what fees would have
to be increased in order to reduce the deficit. He also
wondered why the board had not taken any action at present.
Mr. Parady thought that it was a historical description of
the board's unwillingness to act in 2011. The board had
enacted two full rounds of fee increases in 2013 and in
2015. He had a 1-page summary which he would share with
staff. The increases were typically 31 percent. Some of
them were 14 percent. The board was trying to keep the
costs lower on the newer members coming into the
profession. The most recent round of increases was 14 to 31
percent.
2:14:34 PM
Co-Chair Neuman had no idea about what the percentage was
applied to. Mr. Parady provided two examples. A new master
guide license for a resident was $650 and for a non-
resident it was $1350. After the fee increase the cost of a
resident license would be $850 and for a non-resident it
was $1700 - both numbers reflected a 31 percent increase.
Co-Chair Neuman asked if the air transport industry would
be charged additional fees. Mr. Parady would provide a
written answer to his question. In general, he understood
the transporter fee was $50 for transporting a big game
animal. It was unclear to him as to whom might transport an
animal that was not a registered transporter versus who had
to be registered.
Co-Chair Thompson invited Ms. Curtis to the table.
KRIS CURTIS, LEGISLATIVE AUDITOR, ALASKA DIVISION OF
LEGISLATIVE AUDIT, relayed that there was information in
the audit report that would answer many of the questions
that were asked earlier. She would first address
Representative Wilson's questions concerning fees. She
relayed that in the appendix of the audit there was
historical information by license including the proposed
fee at the time of the audit in the previous summer. There
was a question regarding personal services and contractual
information in Exhibit 2. There was a question about what
was "contractual." She confirmed that Department of Law was
included. The board could also hire experts for certain
cases and could be found on the contractual line and it
varied by investigation. She had heard some questions about
what drove the investigative costs. She responded that her
audit found that there was a high case load for the
particular occupation. When Legislative Audit tested the
timeliness of the investigations they found 17 out of 25
cases that were reviewed had periods of inactivity ranging
from 5 months to 5 years. There were several cases that
were not being addressed in a timely manner. There were
some changes made including adding a dedicated investor to
the board to help address some of the backlog.
Ms. Curtis continued with her response. She addressed the
questions about the number of licensees. Representative
Kawasaki drew attention to Exhibit 3 on page 18 of the
audit. She noted that in comparing the current audit to the
one completed in 2011 overall there was a 13 percent
decrease in the number of licenses (found in the footnote).
Various types of licensees decreased to different rates and
could be found in the exhibit.
Ms. Curtis next addressed the most controversial
recommendation of the audit having to do with the $1
million deficit. She had heard allegations that it was the
sunset itself that caused the deficit. She did not know
where the information was coming from. It was not something
the audit concluded. She explained that when the occupation
sunsetted, the occupation was still regulated by the
department and would still incur costs that would have
become part of the new deficit at the time the board was
created. When her division did the audit in 2011 it
identified the deficit at that time of $376 thousand. If
the state did not reduce expenditures and increase revenues
the deficit would increase. After that point the division
changed its cost allocation methodology which increased the
deficit by over $200 thousand. They tried to increase fees
in 2012. There was a great amount of push back from the
industry. Their proposed increases were over 60 percent.
The occupation objected and ultimately the fees were not
increased in FY 12. There were fewer licenses bringing in
revenue to share the costs. She concluded that she had just
listed the major contributors. Fees were increased in FY 14
but at that point the increase in revenues were not
covering the costs.
2:20:43 PM
Representative Wilson was concerned about payments being
received without a board in place. Ms. Curtis responded
that that the cost of investigating would be borne by the
occupation regardless of whether they had a board. The
process would be different, but the costs would be the
same.
Representative Wilson supposed a problem was brought to the
board and the board decided whether to go forward with a
complaint. She wondered, without a board, if the problem
would be brought to someone else in the administration who
would determine whether the complaint moved forward. Ms.
Curtis explained how it worked. A complaint was brought
forward to be investigated. The board was not involved with
the investigation at all. Members had to keep an arms-
length distance to be able to eventually rule on it. The
complaint would be investigated and an attempt would be
made to work out a consent agreement with the claimant. If
an agreement was not successful there would most likely be
a review of the evidence by an assistant attorney general
and a determination would be made about whether there was
enough evidence. The commissioner would subsequently file a
complaint with the board. They would move forward to try to
take the license away. She was uncertain whether the
progress would happen without the board.
Representative Wilson asked if legislation was necessary to
enforce using the fees paid to the state to help offset the
state's deficit. Ms. Curtis responded that it was
definitely outside of the board purview. She was uncertain
about the violation of dedicated revenues.
Representative Wilson expressed her opinion that increasing
the fees like the state had been would definitely have an
impact. They were private business folk not making a profit
and would likely stop their service. She thought it was
important to know whether the problem was being made better
or worse.
Co-Chair Neuman asked what caused the $1 million deficit.
Ms. Curtis responded that it was due to an untimely
increasing of fees. If the fees had been increased
appropriately at the first sign of a deficit, it could have
been addressed more timely. In addition, the division
changed its cost allocation methodology after it was found
to be inappropriate in 2011. She relayed that over $200
thousand of the deficit was because of the indirect cost
allocations. Mainly, though, it was due to untimely
increasing fees.
2:25:15 PM
Co-Chair Neuman thought he was hearing that $200 thousand
of the $1 million deficit was because the department
changed the fee schedule as opposed to the board self-
regulating and increasing its own fees. Ms. Curtis referred
to Exhibit 2 that showed that the department allocated
indirect costs to boards such as electricity. There was a
methodology of allocating the costs to the boards. In 2011,
when Legislative Audit looked they found that it was not
appropriate because certain divisions were not getting
their appropriate allocation and the methodology was
changed. They started allocating based on licensees by
board, an equitable way of allocating it. They had to do
some widespread adjustments which resulted in the BGCSB
having an increase of over $200 thousand in its deficit.
Co-Chair Neuman confirmed that it was due to changes from
the department. Ms. Curtis responded affirmatively.
2:26:42 PM
Co-Chair Thompson OPENED public testimony.
2:26:57 PM
MARK RICHARDS EXECUTIVE DIRECTOR, RESIDENT HUNTERS OF
ALASKA, opposed the legislation. He noted a letter
previously submitted on April 1, 2016. There were several
reasons the group opposed extending the BGCSB the main one
being that the board had been involving itself in issues
that affected resident Alaska hunters outside its purview.
Speaking about financial matters associated with the board
he wanted to address the board's ongoing debt and why the
group did not believe the board would be able to fund
itself in the black moving forward. He pointed out that
whether there was a BGCSB the guide industry would continue
being regulated. Guide licensing and examinations would
still take place, complaints would still come in, and
investigations would still occur. Not all occupational
licensees had their own board but were regulated and
overseen by the State of Alaska. If the board sunsetted the
continual modification and changes to guide regulations
would stop. The associated costs with such changes and the
continual lessoning of guide ethics regulations that
allowed big game guides to do things like spotting animals
from the air with the intention of harvesting those animals
would also stop. He pointed out that the new 3000 percent
increase in fees to transporters was in large part how the
board intended to pay off its debt by the end of FY 17. The
new fees to transporters were not enshrined permanently. In
the letter by his group and another letter from Seahawk Air
owner, Roland Ruoss reported that shortly the board would
be voting on reducing or eliminating fees to transporters.
There was also the possibility that a forthcoming legal
opinion could render the entire transporter category as it
related to aircraft untenable and unworkable. The board
would lose the fees to aircraft transporters permanently.
He felt that the board needed to fund itself from the
licensees as originally supposed to oversee as the guide
board and as the legislature originally intended.
Mr. Richards noted that the recent fiscal note that was
given to the committee only showed the cost of meetings and
did not reflect the other costs associated with the board
such as administrative costs associated with changes to
regulations or investigatory costs; the main source of the
board's continued debt. He mentioned the McDowell report
from the Alaska Professional Hunters Association that spoke
to the income the guide industry generated across Alaska.
He thought it was being used to bolster the need for the
board to continue. He opined that the guide industry
generated enough revenue that it should be able to fund its
own board on the licensing fees of its licensees. He also
relayed that the same report for the guide industry was
also meaningless in terms of whether the guide industry
needed the board to continue to function. He reiterated
that the guide industry would not cease to exist if the
board sunsetted. The question was whether the board could
function in a manner that was beneficial to the state and
the guide industry while being funded by its main licensees
it oversaw. His group did not believe it could. He added
that he had attended the BGCSB meetings for many years and
heard guides complain about other guides abusing the
system. He inquired about why the bad actors had not been
dealt with. Complaints were filed with the Alaska State
Troopers and with the board to no avail. He claimed that
high investigatory costs were responsible for slowing down
investigations and causing the board to sign consent
agreements rather than bringing violators to the full brunt
of the law. The consent agreements often allowed a guide to
continue to operate. He surmised that the board could not
function the way it was intended to function. His group
would have no issue with the board if it would stay out of
trying to affect resident hunters. He thanked committee
members for their time.
2:32:56 PM
SAM ROHRER, PESIDENT, ALASKA PROFESSIONAL HUNTERS
ASSOCIATION, KODIAK (via teleconference), spoke in support
of HB 254 to extend the BGCSB. He reported that currently
there were approximately 304 active contracting guides in
Alaska. He relayed that of the 304 active guides
approximately half of them were members of the Alaska
Professional Hunters Association. He signified that the
board was critical to the long-term viability of the
guiding industry. The board provided the only interaction
between the division and the guiding industry. He supposed
that without the board the industry had no meaningful input
on the development of regulations that directly impacted
the guiding industry. There were two specific issues he
wanted to address. The first was the board's debt. He
explained that it was important to note that some of the
debt began to accumulate during the period of time when the
board previously sunsetted. The current board inherited the
debt which continued to increase due to investigations that
the board had little or no input in. The situation had
changed and the debt was well on its way to being retired.
However, the debt would not go away even if the board
disbanded. He claimed that without the board's oversight
the debt would continue to grow and would continue to get
charged back to the guide industry in the form of increased
licensing fees.
Mr. Rohrer continued by addressing a second issue. He
pointed out that it was in the public's interest to have a
well-regulated guide industry. An important aspect was the
licensing of new registered guides. Under the current
board, prospective guides went through rigorous testing
including a written test and multiple oral tests taken in
front of proctors made up of board members and currently
licensed guides. During the period the board was sunsetted
the registered guide test consisted of a multiple choice
test and eventually with the test the answers became
available online for a fee. He reiterated that without a
board he did not believe it was possible to maintain the
same level of testing and assumed the testing would return
to the multiple choice test. He urged members to support HB
254.
2:35:56 PM
PAUL CHERVENAK, SELF, KODIAK (via teleconference), spoke in
favor of HB 254. He relayed that he was a 36 year resident
and hunter of Alaska and was a licensed master guide and
marine transporter. He believed in helping to develop
standards and manage the industry to make it one of the
safest and most professional there was. He opined that the
BGCSB enabled it to happen. He also believed that hunters
and commercial operators should help to pay for the
industry they used. He supported the recent increase in
license and reporting fees and urged members to support and
move HB 254 out of committee.
2:37:01 PM
DICK ROHRER, SELF, KODIAK (via teleconference), was
introduced to the guide business in 1965 when he came to
Alaska. He had been licensed as a guide since 1971. He was
a master guide and served 2 terms on the BGCSB beginning in
2005 when the board was reinstated. He spoke of being a
financial officer to the board. He was disappointed when he
found out through accounting methods that $236 thousand of
revenue disappeared in 2011. In the same year he had heard
the deficit at the time was $376 thousand. Taking both
figures into consideration if the revenue had been
maintained there would not have been a concern with revenue
or expenses. Another thing that happened when the board was
reinstated was that the board encouraged the Department of
Commerce, Community and Economic Development to implement a
computer system to keep hunting records in order to have
information readily available for the various agencies.
During the time it was being put together the board thought
it had commitments from federal agencies to provide $30
thousand to $40 thousand in revenue to go towards the
project that would have generated substantially more
revenue. The board was unable to figure out a way to
transfer the money directly to the board. He responded to a
question asked by Representative Kawasaki relaying that
there were only 112 under the board. He thought the number
reflected only the number of master guide outfitters. He
anticipated approximately 500 additional registered guide
outfitters and approximately 700 to 1000 more class "A"
assistant guides. He did not know the number of
transporters. He pointed out that it was not the board that
set the fees but rather the DCCED. He commented that it was
the legislature through the BGCSB statutes that established
the transporter license, rather than the board. He also
noted that, under the statutory definitions, air taxi
operators who flew from point-to-point were exempt from the
transporter licensing requirement. It was only those air
transporters that advertised big game hunting services and
charged a different fee for hunts were required to have a
transporter license. Any other air taxi operator was exempt
from the licensing requiring and exempt from the $50 that
he was claiming.
KELLY VREM, CHAIRMAN, BIG GAME COMMERCIAL SERVICES BOARD,
SUTTON (via teleconference), testified in support of the
bill. He relayed that the board was operating in the black.
The legal costs that caused the debt were out of the
board's control as Ms. Curtis had pointed out. The board
could only react to the charges levied against guides or
transports after they were made. The board decided the
appropriate level of punishment but did not get to decide
who to pursue in a violation. There were multiple ways to
incur a violation. It could be completely inadvertent. Some
examples included failing to file a form, failing to get
official permission from a land manager, or overtly meaning
to subvert the law. He relayed that the board currently
treated people with the same hammer. He felt a more nuanced
approach was needed and could only be attained after
reaching a consent agreement or obtaining a conviction. He
relayed additional challenges having to do with the
division raising the fees. Although he favored raising them
he claimed there had not been adequate public input prior
to the department deciding to do so. He believed it was the
only board that used volunteer proctors.
2:45:14 PM
VIRGIL UMPHENOUR, SELF, FAIRBANKS (via teleconference), was
in support of the board. He shared that the guiding
industry was unlike any other in the state: it was the most
regulated and had the highest standards. The board was
needed to decide whether investigations went forward. He
was very aggravated to see the DCCED violate Alaskans'
constitutional rights. He also mentioned that investigators
typically launched large investigations. He provided an
occurrence in which a young guide turned himself in and was
fined. He thought the board was needed to set standards and
to eliminate bureaucratic bullying. He thought the
transporters had been getting a free ride for too long. He
thanked the committee.
Co-Chair Thompson CLOSED public testimony.
2:49:29 PM
Representative Wilson asked about setting the fees. She
wondered if DCCED had not set the fees correctly. Mr.
Parady responded that the calculation of fees across the
department had confounded the DCCED for the past decade.
They had been the subject of a legislative audit twice.
Although the fee calculations were founded in mathematics
as the auditor described, the original push to increase the
fees was resisted by the board. The fee increase was
generated by the regulation rule making authority of the
DCCED, but it was done with the advice and recommendation
of the board. The delay lead to the worsening of the
problem. Currently, the board and the department had
initiated two rounds of fee increases, the board was
operating in the black, and the deficit would be erased.
Representative Wilson interjected that a larger picture was
at hand. She suggested that boards were mandated to cover
their costs with no costs to the state. She thought the
question the legislature should be addressing was whether
the state should allow boards to continue if they were not
self-sufficient. Boards having the ability to reject fee
increases was an issue unto itself. Mr. Parady agreed that
it was in statute that the fee balance in each profession
had to be self-supporting. The art of the mathematical
calculation was in the allocation of costs: the compilation
of all of the detail. It was currently changing with the
state's new accounting system and the department would be
adapting further.
Representative Wilson was not interested in moving the bill
forward because of her concerns with the legislature
breaking its own statute. She believed that because the
board had a deficit it was not in compliance with the law.
Mr. Parady offered that it was not the only board or
profession in the same circumstance. He conveyed that in
the audit report a revenue cycle was a 2-year period. For
example, in the first year the revenue might be $350
thousand or $400 thousand. In the second year it might be
$150 thousand. The department was trying not to send shock
waves into the system in terms of correcting the deficit.
The department was mindful of the statute and the statutory
requirements.
Representative Pruitt conveyed that the Division of
Corporations, Business and Professional Licensing had been
a giant mess for a while. It was not just the BGCSB.
However, the BGCSB was the most expensive board due to
investigations. As a result, it had the largest deficit. He
reminded members that the legislature placed intent
language in the bill directing the division to ensure that
the state covered its costs. He recalled the Board of Real
Estate raising its fees to cover costs and people were
outraged. Subsequently, the costs were dropped down
substantially. The legislation gave boards the ability to
ensure their costs were covered relieving the department
from having to do so. He thought boards would be in a
better position going forward. Lastly, there was one board
not covered by the statute being discussed: the Marijuana
Board. He thought it would be a problem in the future.
Co-Chair Thompson thought a future bill might be in order.
2:55:12 PM
Representative Gattis noted that part of the problem for
the BGCSB was that the fee structure was not increased when
it should have been. She thought there also needed to be a
change regarding investigations. She referred to a previous
testimony in the meeting and offered that she might
initiate a bill for consideration in the future.
Vice-Chair Saddler reviewed one fiscal impact note from the
Department of Commerce, Community and Economic Development.
The appropriation was from the Division of Corporations,
Business, and Professional Licensing. The Office of
Management and Budget Component number was 2360, dated
March 24, 2016 in the amount of $22.3 thousand for FY 17.
Co-Chair Thompson relayed that the fiscal note he had was
dated, April 1, 2016.
Vice-Chair Saddler stood corrected.
Representative Wilson asked why the deficits for the board
were not reflected in a fiscal note.
Co-Chair Thompson explained that the fiscal note reflected
the amount of revenue that would be brought in, and the
source from which it was being paid. It did not have
deficits listed. However, there were reports from the DCCED
that showed all of the boards and their deficits and
overages. He would provide the information from the DCCED.
Representative Wilson thought there should be a fiscal note
that included an explanation of what the members had heard
in the meeting. She thought it should reflect the fiscal
impact.
Representative Pruitt commented that the issue should be
reflect on paper and was an accounting situation. He
furthered that boards had borrowed from other boards to be
able to pay the deficits previously. That was the reason
the division was not in a deficit. He mentioned the Board
of Nurses that brought in a substantial surplus. The
surplus had been borrowed to pay for some of the deficit
costs. He did not believe including it in a fiscal note was
the proper way to address the issue. He asserted that it
was a clustered problem triggering two audits. Many
legislators had expressed frustration.
3:00:02 PM
Representative Wilson thought there should still be a
fiscal note from the Boards and Commissions that reflected
the accounting of each board. The fiscal note was not
reflective of the bill.
Co-Chair Thompson mentioned that Mr. Parady and Ms. Curtis
had reported the deficit of the board and explained that
the amount of fees resulting from licensure would catch
them up by FY 17 bringing the board into the black.
Representative Pruitt indicated there was a difference
between a board and the programs. All the bill was doing
was extending the board. He asserted that the board had a
$22.3 thousand cost. He suggested separating the two.
Vice-Chair Saddler suggested that when the House Finance
Committee was considering a board extension it should
request that a statement of the balance of the deficit or
credit for their investigations be included in the
information packets for members. He referred to a comment
Mr. Richards had made a comment about a pending legal
decision regarding transporters. He wanted to know more
about it.
Co-Chair Thompson wondered if it was something that could
be discussed because it was currently a pending court case.
Vice-Chair Saddler was unsure.
Co-Chair Thompson did not want to bring the issue up again
but suggested addressing it on the House Floor.
Vice-Chair Saddler withdrew his question.
Co-Chair Neuman MOVED to REPORT HB 254 out of committee
with individual recommendations and the accompanying fiscal
impact note. There being NO OBJECTION, it was so ordered.
HB 254 was REPORTED out of committee with a "do pass"
recommendation and with a new fiscal impact note by the
Department of Commerce, Community and Economic Development.
3:03:50 PM
AT EASE
3:07:26 PM
RECONVENED