Legislature(2011 - 2012)HOUSE FINANCE 519
03/20/2012 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB196 | |
| HB261 | |
| HB358 | |
| HB337 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 221 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 196 | TELECONFERENCED | |
| += | HB 261 | TELECONFERENCED | |
| += | HB 337 | TELECONFERENCED | |
| += | HB 358 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
March 20, 2012
1:39 p.m.
1:39:35 PM
CALL TO ORDER
Co-Chair Stoltze called the House Finance Committee meeting
to order at 1:39 p.m.
MEMBERS PRESENT
Representative Bill Stoltze, Co-Chair
Representative Bill Thomas Jr., Co-Chair
Representative Anna Fairclough, Vice-Chair
Representative Mia Costello
Representative Bryce Edgmon
Representative Les Gara
Representative David Guttenberg
Representative Reggie Joule
Representative Mark Neuman
Representative Tammie Wilson
MEMBERS ABSENT
Representative Mike Doogan
ALSO PRESENT
Joe Michel, Staff, Representative Bill Stoltze; David Teal,
Director, Legislative Finance Division; Timothy Clark,
Staff, Representative Bryce Edgmon; Representative Lance
Pruitt, Sponsor; Dirk Craft, Staff, Representative Lance
Pruitt; Lynette Bergh, Staff, Representative Thompson; Don
Habegar, Director, Division of Corporations, Business, and
Professional Licensing, Department of Commerce, Community
and Economic Development.
PRESENT VIA TELECONFERENCE
Boyd Brownfield, Self, Anchorage; Harley Hightower, Chair,
Board of Registration for Architects, Engineers, and Land
Surveyors, Anchorage.
SUMMARY
HB 196 BULK FUEL LOANS/POWER PROJECT FUND
CSHB 196(FIN) was REPORTED out of committee with
a "do pass" recommendation and with three new
fiscal impact notes by the House Finance
Committee for the Department of Commerce,
Community and Economic Development.
HB 261 COMMERCIAL FISHING ENTRY PERMIT LOANS
CSHB 261(FIN) was REPORTED out of committee with
a "do pass" recommendation and with one new zero
impact note from the Department of Commerce,
Community and Economic Development and one
previously published zero fiscal note: FN1 (DFG).
HB 337 BD OF ARCHITECTS, ENGINEERS, SURVEYORS
HB 337 was REPORTED out of committee with a "do
pass" recommendation and with one previously
published fiscal impact note: FN1 (CED).
HB 358 ANWR ADVERTISING CONTRACT
CSHB 358(FIN) was REPORTED out of committee with
a "do pass" recommendation and with a new fiscal
impact note by the House Finance Committee for
the Department of Commerce, Community and
Economic Development.
HOUSE BILL NO. 196
"An Act relating to the power project fund and to the
bulk fuel revolving loan fund; establishing a bulk
fuel loan account and making the bulk fuel loan
account and the bulk fuel bridge loan account separate
accounts in the bulk fuel revolving loan fund;
providing for technical assistance to rural borrowers
under the bulk fuel bridge loan program; relating to
the administration and investment of the bulk fuel
revolving loan fund by the division in the Department
of Commerce, Community, and Economic Development
responsible for community and regional affairs; and
providing for an effective date."
1:40:36 PM
Vice-Chair Fairclough MOVED to ADOPT the proposed committee
substitute for HB 196, Work Draft 27-LS0529\I
(Kirsch/Nauman, 3/20/12) as a working document.
Co-Chair Stoltze OBJECTED for the purpose of discussion.
JOE MICHEL, STAFF, REPRESENTATIVE BILL STOLTZE, explained
the additions in the new CS and stated that it offered two
changes from the previous version, which committee members
had examined earlier in the day. He pointed to page 7 of
the bill and related that the effective date was changed to
January 1, 2013 from January 1, 2012.
Co-Chair Stoltze inquired why the date change was
necessary. Mr. Michel replied that certain regulations
needed to be adopted and that the additional year would
provide the Department of Commerce, Community and Economic
Development (DCCED) with time to make the changes.
Co-Chair Stoltze WITHDREW his OBJECTION. There being NO
further OBJECTION, Work Draft 27-LS0529\I was ADOPTED.
REPRESENTATIVE BRYCE EDGMON, SPONSOR, hoped that Mr. Teal's
upcoming discussion on the new fiscal notes would resolve
concerns that the notes should reflect the "streamlining of
the process" that HB 196 was attempting to achieve.
DAVID TEAL, DIRECTOR, LEGISLATIVE FINANCE DIVISION,
discussed the three fiscal notes and related that he had
been working on the notes at the behest of the sponsor in
order to make them appear the way the committee had
expected. He explained that the bill consolidated the
Bridge and Bulk Fuel Loan programs into a single location
and discussed the first fiscal note for the Alaska Energy
Authority (AEA). The AEA note was similar to how it had
originally appeared and reflected a loss of revenue in the
amount of $57,000 per year because the bill eliminated the
application and origination fees that were associated with
the loan program; the $57,000 would go back into general
fund. The second change in the AEA note was that the
$53,600 in administrative or operating costs that were
associated with the loan program would go away from AEA's
budget and would essentially be removed from the process.
The second fiscal note from AEA was for DCCED's Division of
Investments; instead of containing the $86,000 that was in
the original fiscal note, the new note directed the $53,600
that used to be in AEA to the Division of Investments. He
stated that because AEA would be retaining its position and
also because the Division of Investments wanted to add a
position, the funding for an additional position was kept
in the fiscal note. He mentioned that although the money
would not fully fund the position, the program should not
require a dedicated, full-time position. He observed that
the cost of the additional position in the Division of
Investments would be charged directly to the Bulk Fuel
Revolving Loan Fund, instead of going through the Division
of Community and Regional Affairs (DCRA); costs for
additional positions used to appear as inter-agency
receipts, but now the position could be direct charged to
the program. He related that the third fiscal note for the
Division of Investments was zeroed out and did not need to
be transmitted with the bill. He explained that the note
was zeroed because DCRA currently provided technical
assistance to communities that were applying for loans and
that it would continue to do so; DCRA would still be
helping people with bridge loans, while the bulk full loans
would be handled by the Division of Investments. He
observed that the third fiscal note originally had the
costs of technical assistance changing from the general
funds to the Bulk Fuel Loan Program, but that the
Legislative Finance Division did not see any reason to do
it this way because it was DCRA's role to assist
communities.
1:46:53 PM
AT EASE
1:47:20 PM
RECONVENED
Mr. Teal made a correction to his previous statement
regarding the third fiscal note and clarified that it was
the DCRA fiscal note that had been zeroed and did not need
to be transmitted with the bill; the Division of
Investments' note still reflected $53,600. He summarized
that the net change in operating cost was zero, but that
there was an annual loss in general fund revenue of
$57,000.
Vice-Chair Fairclough inquired if the Division of
Investments' note could be structured to fund the position
at a .50 full-time equivalent (FTE). She observed that the
new position was only being partially funded and wondered
whether the fiscal note should reflect that aspect in order
to inform the department of what the expectations were
regarding its role in funding the position. She queried if
there were receipts or other dollars that might be
available to "backfill" the position if a full FTE was
included in the fiscal note. Mr. Teal replied that a half-
time position could be added, but that if the Division of
Investments needed a position, it would have to hire a
full-time one. He observed that the Division of Investments
had requested $86,000 for the position, but that the fiscal
note only funded $53,600; in order to get the rest of the
funding, the division would have to pull money from other
loan programs. He stated that the fiscal note funded a
half-time to three-quarter-time position, but that the note
could be changed to reflect a half-time position if the
committee so desired; however, changing the position's
classification did not make a lot of difference.
1:50:42 PM
AT EASE
1:50:57 PM
RECONVENED
Vice-Chair Fairclough wondered whether the committee should
consider additional funding or compensation in the
legislation for the development of regulations. She noted
that the bill was asking for consolidation and was
providing money for a half-time FTE; however, the
department would be required to make new regulations, which
would take time and money. She stated that when she had
originally examined the fiscal notes, she had wondered why
there was not more funding, given the additional work that
DCCED would have to complete. She concluded that the
department would need to provide information regarding the
regulations in an expedient manner and that additional
funding would probably be needed to do so.
Representative Edgmon stated that he had been an employee
of DCCED and had worked with the Division of Administration
to draft regulations; he recalled that the department had a
full-time staff that worked on regulations, but that there
might be a little more time involved with "other parts" of
HB 196.
1:52:11 PM
Vice-Chair Fairclough MOVED to report CSHB 196(FIN) out of
committee with individual recommendations and the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
CSHB 196(FIN) was REPORTED out of committee with a "do
pass" recommendation and with three new fiscal impact notes
by the House Finance Committee for the Department of
Commerce, Community and Economic Development.
1:52:28 PM
AT EASE
1:55:05 PM
RECONVENED
HOUSE BILL NO. 261
"An Act relating to loans for the purchase of
commercial fishing entry permits; and providing for an
effective date."
Co-Chair Stoltze pointed to the previously adopted CS for
HB 261, Work Draft 27-LS0968\B (Bullard, 3/19/12) and added
that there had been an issue regarding the fiscal note.
TIMOTHY CLARK, STAFF, REPRESENTATIVE BRYCE EDGMON, directed
the committee's attention to the zero fiscal note and
stated that its only revisions were the deletions of errors
on the analysis page.
Representative Edgmon added that the two sentences that
referred to an earlier version of the bill were taken out
of the fiscal note, but that it still remained a zero note.
Representative Neuman stated that he had made some
inquiries outside of the committee regarding the
legislation and mentioned that the interest rate on the
fishing loans had been changed several times. He pointed
out that if there was a lower interest rate available to
someone who had already taken a commercial fishing loan,
the borrower could apply to refinance at the lower rate for
a fee of around $100.
Vice-Chair Fairclough discussed a letter in members'
packets, which had expressed concern regarding the
legislation. She was supportive of the bill's intent, but
wanted to give the sponsor an opportunity to respond to the
concerns. She stated that her understanding of the bill was
that it provided lower-cost money than was available in a
commercial loan market after an individual was unable to
qualify in that commercial market. She inquired how the
state determined whether an applicant for a loan had been
declined or had simply failed qualify, and further queried
if there was something in statutes or regulations that
helped make that determination. Representative Edgmon
paraphrased from the Commercial Fishing Lone Act statute
and stated that a borrower was only eligible for Section B
loans if he or she "is not eligible for financing from a
state financial institution as defined in Title 6, or a
federally chartered financial institution, or the
Commercial Fishing and Agriculture Bank (CFAB)."
Vice-Chair Fairclough reiterated that she was still unsure
how the eligibility was determined. Representative Edgmon
responded that the eligibility requirements for the Section
B loans specified that in order to qualify, someone must
have been a state resident for a continuous period of at
least two years directly preceding the date of the
application, must not be eligible through a commercial bank
or CFAB, must lack employment opportunities other than
commercial fishing, must not have past due on any child
support obligations, and must never have received a loan
under the Section A provision of the Commercial Fishing
Revolving Loan Act. He observed that all of the requirement
provisions would make it difficult, if not impossible, for
an applicant to seek lending through traditional means and
concluded that the bill offered a "leg up" to those trying
to get involved in the commercial fishing industry.
1:59:47 PM
Vice-Chair Fairclough observed that there was a difference
between qualifying for a loan under the current language
versus being declined by a commercial lender, but that she
understood and supported the intent of the legislation. She
inquired if there was a way for a Section B borrower to
receive discounts on the loan percentages for consistently
making payments on time. Representative Edgmon replied in
the affirmative and elaborated that it was called the Pay
On-Time program; if a borrower had complied with the
payments for the first year, they would be eligible for as
much as a 1 percent reduction to the interest rate of the
loan. He explained that if a borrower entered the program
at a 5.25 percent interest rate and all went well, they
would be eligible to lower their rate to as little as 4.25
percent.
Vice-Chair Fairclough wondered how the discounted interest
rate would compare and compete in a commercial market.
Co-Chair Stoltze observed there had not been any testimony
from the traditional banks on the legislation. He opined
that CFAB seemed to be more interested in protecting its
"turf" than serving the state's farmers and fishermen.
Co-Chair Thomas told a personal story about his son
receiving a state loan to buy a boat. His son had applied
and had been turned down by two traditional banks, but had
eventually received a loan from the state. He offered that
the difference between the traditional banks and state was
that the banks did not ask him to cosign on his son's loan,
but that he had cosigned on the state loan. He recalled
that he had been denied for a loan from CFAB about 25 years
prior because he was not qualified. He stated that he had
attempted to go through CFAB for a Bristol Bay fishing boat
and gillnet permit because he knew that he would not have
qualified through a commercial bank or the state. He shared
that although he had 20 years of prior fishing experience
as a gillnetter in Southeast Alaska, CFAB had denied him a
loan because they thought he lacked experience. He voiced
agreement with Co-Chair Stoltze's earlier observation
regarding CFAB's desire to protect its "turf." He supported
the legislation and thought it would help young fishermen
who were starting out in the industry.
Vice-Chair Fairclough directed the committee's attention to
multiple letters of support, which raised issues with the
earlier mentioned letter of concern.
2:04:13 PM
Vice-Chair Fairclough MOVED to report CSHB 261(FIN) out of
committee with individual recommendations and the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
CSHB 261(FIN) was REPORTED out of committee with a "do
pass" recommendation and with one new zero impact note from
the Department of Commerce, Community and Economic
Development and one previously published zero fiscal note:
FN1 (DFG).
2:04:58 PM
AT EASE
2:07:37 PM
RECONVENED
HOUSE BILL NO. 358
"An Act relating to an advertising campaign in support
of opening the Arctic National Wildlife Refuge for
development."
2:07:44 PM
Co-Chair Stoltze discussed the issues of concern that had
been expressed during HB 358's prior hearing; the two
issues were that the CS needed an addition to prevent the
legislation from influencing political action and that
there needed to be a cap placed on the maximum dollar
amount of the advertising campaign.
Vice-Chair Fairclough MOVED to ADOPT the proposed committee
substitute for HB 358, Work Draft 27-LS1406\I (Bailey,
3/19/12) as a working document.
Co-Chair Stoltze OBJECTED for the purpose of discussion.
REPRESENTATIVE LANCE PRUITT, SPONSOR, asked his staff to
discuss the change in the new CS.
DIRK CRAFT, STAFF, REPRESENTATIVE LANCE PRUITT, explained
that the only addition to the CS was Section 1, subsection
(e)(4), which was on Page 2, line 26 of the legislation.
Subsection (e)(4) was added at Representative Gara's
request in order to insure that the legislation would not
be used for any lobbying purposes on any elected official
or any kind of campaign.
Co-Chair Stoltze requested the exact wording of the new
language. Mr. Craft read from the bill starting on the
beginning of subsection E on line 16.
"A qualified trade association may not use money from
a contract awarded under (a) of this section"
Mr. Craft continued reading from the bill on subsection
(e)(4).
"in an advertising campaign that refers to a
particular elected official or candidate for public
office or specifically promotes or criticizes a
political party."
Co-Chair Stoltze commented that the other issue of concern,
which was the maximum cap of the advertising campaign, had
been addressed in the fiscal note.
Mr. Craft remarked that the sponsor had attempted to put
the cap in the legislation itself, but that they were
advised against putting it directly in statute because it
would take away from the appropriating powers of the Alaska
Legislature. Co-Chair Stoltze interjected that it would
certainly take away flexibility from the legislature and
that fiscal notes were a more flexible document than
statutes.
Vice-Chair Fairclough discussed the fiscal from the House
Finance Committee for DCCED; the note set the
aforementioned cap at $1.5 million in general funds. She
spoke to several indeterminate fiscal notes.
Co-Chair Stoltze indicated that the committee would only
adopt the House Finance Committee fiscal note and
identified it as OMB component number 1844.
Co-Chair Stoltze WITHDREW his OBJECTION. There being NO
further OBJECTION, Work Draft 27-LS1406\I was ADOPTED.
2:12:14 PM
Vice-Chair Fairclough MOVED to report CSHB 358(FIN) out of
committee with individual recommendations and the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
Representative Gara inquired if the program would run for
two years. Co-Chair Stoltze responded in the affirmative
and that it would run until 2015.
2:13:12 PM
CSHB 358(FIN) was REPORTED out of committee with a "do
pass" recommendation and with a new fiscal impact note by
the House Finance Committee for the Department of Commerce,
Community and Economic Development.
Representative Joule referenced comments that were made in
a prior meeting, in which Vice-Chair Fairclough discussed a
trip that Alaska Legislators had taken to Washington, D.C.
He discussed the need to for Alaska to do work around the
country to get a groundswell of support regarding the
Arctic National Wildlife Refuge (ANWR) and opined that
being reactive to particular bill "has not been getting the
job done." He offered that having a more full-time effort
was the beginning of Alaska's future regarding ANWR, as
well as other issues facing the state. He shared that
unfortunately, Congress and others outside of Alaska
operated with very little accurate information and that how
the state marketed itself those individuals and entities
was important.
2:15:04 PM
AT EASE
2:18:46 PM
RECONVENED
HOUSE BILL NO. 337
"An Act relating to the Board of Registration for
Architects, Engineers, and Land Surveyors and to the
Department of Commerce, Community, and Economic
Development."
2:18:46 PM
Vice-Chair Fairclough MOVED to ADOPT HB 337, 27-LS1405\A as
a working document.
There being NO OBJECTION, HB 337 was ADOPTED.
LYNETTE BERGH, STAFF, REPRESENTATIVE THOMPSON, provided an
overview of the legislation:
I would like to thank the Chair and the Committee for
hearing House Bill 337 today, "An Act relating to the
Board of Registration for Architects, Engineers, and
Land Surveyors and to the Department of Commerce,
Community, and Economic Development."
For brevity's sake, I will refer to the Board of
Architects, Engineers, and Land Surveyors as the AELS
board.
House Bill 337 revises the Statutes to designate a
full-time investigator, rather than part-time, to
serve the AELS Board. This full-time position will
ensure that the AELS Board can meet the growing
demands of oversight of the industries in its area of
responsibility.
Currently, the AELS Board shares one part-time
investigator with five other Boards: Construction
Contractors, Home Inspectors, Electrical
Administrator, Mechanical Administrator, and Storage
Tank Workers. The investigator's oversight includes a
total of approximately 20,000 licensees. Of these
20,000 licensees, 28% of them are AELS registrants.
That's over 5,600 licensees for the AELS Board alone.
A new regulation will take effect within the next 30
days. Ten additional engineering professions that have
not been previously regulated will be placed under the
AELS Board's oversight. Therefore, the number of
branches will expand from the current 6 branches to a
new total of 16 branches. Some of the newly regulated
professions are from the structural, environmental,
nuclear, and industrial engineer branches.
This means the number of licensees the AELS Board
oversees will increase drastically. It is necessary
for the safety of Alaskans to add these branches;
however, the addition of these 10 branches will add to
an already heavy workload for the part-time
investigator.
Each of the six Boards that the part-time investigator
oversees has an increasing number of licensees. The
investigator faces mounting pressure to spend less
time on AELS Board registrants and more time on the 5
other boards to which he is assigned. On top of the
oversight workload, this sole investigator is required
to maintain knowledge of all statutes and regulations
of all boards he oversees.
Clearly, the lack of a full-time investigator for the
Board could reduce its effectiveness in carrying out
charges required by the Statutes and the Regulations.
An unintended consequence of overloading the
investigator may result in a failure to fulfill to the
fullest extent the State and Regulatory charges. As a
result, the State of Alaska may be put at risk, and
inadvertently create a hazard to public health,
safety, and welfare.
House Bill 337 will ensure that the AELS Board can
continue proper oversight of the licensees while
remaining in compliance with all State Regulations and
all State Statutes mandated by the Legislature. As a
result of hiring a full-time investigator, the AELS
Board will be able to maintain its reputation and
integrity of the professions it oversees.
2:23:21 PM
Ms. Bergh continued to discuss HB 337:
At this time, I would like to address the fiscal note
and point out that the AELS Board intends to begin
forward funding the full-time investigator position
starting in December 2013 at which time the next
scheduled fee increase will take place. Currently the
licensees pay $125.00 for biennial licensure. It is
estimated that the pay increase will be minimal,
approximately $20 or less per licensee per year. All
testimony to date has been in favor of the pay
increase. There was no testimony in opposition.
Co-Chair Stoltze inquired whether the landscape architects
were still members of AELS board. Ms. Bergh replied in the
affirmative.
Co-Chair Stoltze inquired why landscape architects were not
referred to in the bill title. Ms. Bergh opined that
perhaps landscape architects had been combined into the
general category of architects, but admitted that she was
unsure of the answer.
Co-Chair Stoltze noted that when the landscape architects
had first come on the AELS board, they originally had no
interest in having a board seat; however, after several
years, they changed their minds and had repeatedly tried to
get a seat on the board. He observed that landscape
architects represented a very small part of industry in
terms of size and numbers and that although they did not
have a seat on the board, they did have representation on
the board. He shared that the landscape architects had been
"brutal" with him once he had reminded them of their "past
agreement," and inquired if the bill would enable the
landscape architects to resurface the issue of obtaining a
seat on the AELS board. Ms. Bergh replied that to her
knowledge, it did not put that offer on the table.
Co-Chair Stoltze stated that he preferred a "no" answer to
"not to my knowledge" and queried if the sponsor supported
or opposed the landscape architects having a seat on the
AELS board. Ms. Bergh replied that the sponsor wanted to
make sure that the AELS board, with its current makeup, had
enough oversight by giving it a full-time investigator. She
related that the sponsor was not adding other boards, but
noted that the AELS board had met in December of 2011 and
had decided to add some new branches; however, none of the
additions included the landscape architects.
2:26:28 PM
Representative Costello inquired if Don Habegar could come
to the table and answer questions and mentioned that there
had been lengthy testimony in the DCCED subcommittee
related to some challenges involved with investigations and
the process of investigations, as well as the rising costs
that all of the professional licensing boards were
experiencing. She asked Mr. Habegar to share DCCED's
efforts to get a handle on the issue and related that she
was concerned with the solution of adding an investigator.
She offered that it was her understanding that the
department was currently analyzing the process of how
investigations were handled and that "perhaps not every
complaint needs to be taken to the nth degree before it's
turned away." She indicated that she did not want to see a
pattern of the different boards requesting additional
investigators when the department was currently in the
middle of a process that was attempting to address the
problem.
DON HABEGAR, DIRECTOR, DIVISION OF CORPORATIONS, BUSINESS,
AND PROFESSIONAL LICENSING, DEPARTMENT OF COMMERCE,
COMMUNITY AND ECONOMIC DEVELOPMENT, replied that the
division was going through an intensive review of
investigations because of legislative audits, as well as
other concerns over the years regarding timeliness in the
investigative processes. He shared that one of the things
that the division was attempting to correct was its
investigative software; although the software system was
relatively new and was intended to address a number of the
issues, it became clear after working with the software
that there were a number of improvements that were still
needed in that area. He related that the analysis had been
completed and that the recommendations were currently
before management. The software was just one example of a
process that the division was going through. He mentioned
that some of the audits had requested simple changes, such
as having a correct hierarchy of investigators under the
chief; the division was in the process of instituting a
senior investigator position to address that concern. He
mentioned that it was true that the department was in the
middle of "these fixes," but that the requests for
investigations and the demand for the investigators' time
had also been increasing. He stated that in 2011, the
Division of Corporations, Business, and Professional
licensing had 1100 requests from the public, which had
asked for attention to make sure a licensee was not in
violation of rules and regulations; the division's report
was posted in its website. He shared that he had 18
investigators who each had an average caseload of about of
40 to 45 cases per year and that the division was trying to
manage its resources in the face of rising demand for its
investigators' time.
2:30:53 PM
Representative Wilson inquired if ten additional branches
would be added to the AELS board. Mr. Habegar responded
that through new regulations, there were additional
disciplines in the engineering field that required
licensure and that his understanding was that some
engineers that currently were generally licensed may be
able to specialize and convert to a specific license, which
would be one of the new categories. He added that there
would be other categories that were new to the state
system.
Representative Wilson wondered how many people the
additional branches would represent. Mr. Habegar replied
that there were estimates from his staff that the number of
new licensures in the new disciplines would be around 1,000
individuals; he was unsure regarding the correctness of the
estimate, but recalled hearing that number.
Representative Wilson inquired why the additional
disciplines were being added because she had not heard of a
lot of safety issues. Mr. Habegar responded that it was
difficult for him to speak on behalf of the AELS board, but
that the statutes required the board to regulate their own
profession; he opined that he could speculate the board's
reasoning and offered that it probably thought that
specialization was better for the profession. He observed
that there had been a lengthy public processes on the
specialization and that eventually the regulations were
passed.
Representative Wilson wondered if adding the extra people
would change the composition of the board and inquired how
much revenue the new investigator would cost the state. She
felt that she did not have enough information on the bill.
Representative Gara stated that he would have opposed the
bill if it were not for the fact that the AELS board would
be paying for the investigator. He observed that the
position would cost $109,000 and that the board would self-
regulate by raising fees on its own members to fund the
position. He concluded that the bill had zero cost to the
state and that he was comfortable with the legislation. He
inquired if his understanding of the bill was correct. Mr.
Habegar responded in the affirmative and explained that
licensing statute required that the costs would be passed
on to licensees and that it would come from increased fees.
Representative Gara queried how the legislature could be
comfortable that the members of a particular profession had
agreed to the changes and inquired whether the board had
made the decision themselves as "spokesmen for the
profession." Mr. Habegar responded that there were a number
people from the profession who were available to testify on
the bill during a Labor and Commerce Committee meeting and
that all of those testifiers had supported the bill.
Representative Gara stated that if there was a backlash,
the position could be taken out. He reiterated that the new
position did not cost the state anything and that he was ok
with the bill.
2:34:48 PM
Representative Guttenberg thought that the board was pretty
contentious. He asked what percentage of the investigations
that were conducted ended up being "actionable" afterwards.
Mr. Habegar replied that he did not have that information
with him, but that he would get it for the committee.
Representative Neuman inquired whether the AELS board
currently had an investigator and if it did not, how its
investigations were handled. Mr. Habegar replied that the
Division of Corporations, Business, and Professional
Licensing had 18 investigators and that, through statute,
only the medical board currently had a dedicated
investigator. He explained that the other boards shared the
investigators and that there was system in place to
determine where the investigators were needed. He shared
that currently, there was one investigator that solely took
care of the construction industry and that the majority of
the investigator's time was spent on architects, engineers,
and land surveyors. He mentioned that DCCED had an
agreement with the Department of Labor and Workforce
Development for additional investigative resources for the
construction industry.
Representative Neuman assumed that adding the investigator
would expedite disputes that came before the AELS board and
inquired if this was the justification of the legislation.
Mr. Habegar responded that the AELS board believed that
adding an investigator would enable better service and that
he agreed with the board's assessment.
Representative Gara "tepidly" supported the bill because he
did not believe the caseload of the Division of
Corporations, Business, and Professional Licensing's
investigators was compelling. He offered that district
attorneys and public defenders typically had caseloads of
over 100 cases and worked very long hours, but that the
division's investigators only had caseloads of 40 cases. He
stated that he was supportive of the legislation because
the profession wanted to regulate itself and fund the
position itself. Mr. Habegar clarified that the best-case
scenario for his investigators was a caseload of 40 to 45
cases, but that in reality, the investigators had more
cases than that.
2:38:38 PM
Representative Costello noted that the bill would create
one dedicated investigator for one specific board, but
observed that other boards were also experiencing an
increase in investigator demand. She wondered whether the
sponsor would be willing to change the legislation so that
the added position would benefit all of the professional
licensing boards; DCCED could be given the flexibility to
assign the new investigator to where the workload was. She
observed that the investigator could be assigned to the
AELS board full-time, but would be directed to where the
need was. Ms. Bergh replied that the sponsor had been
concerned about the number of licensees that were under the
purview of the part-time investor that served the AELS
board. She added that because the number of licensees and
branches under the AELS board was growing, there was an
imbalance of the amount of work that the investigator was
able to handle for the AELS board versus the other boards
that were served. The sponsor believed it would be a good
idea to have one investigator for the AELS board.
Representative Costello queried whether DCCED had
considered requesting an additional investigator during the
budget process or if the department had held off on
requesting the position because it was studying the problem
first. Mr. Habegar replied that the department did not
consider making any changes to staffing until it had
further investigated a number of issues that had driven
comments of concern in the legislative audits.
Representative Costello inquired when the department
expected its recommendations to be made available. Mr.
Habegar responded that the Division of Corporations,
Business, and Professional Licensing was on the tail end of
a cost allocation analysis, which would be completed in
approximately 30 to 60 days. He stated that the division
thought it would have better recommendations in the spring
of 2012.
2:41:21 PM
BOYD BROWNFIELD, SELF, ANCHORAGE (via teleconference),
spoke in support of the legislation and related his
personal experience of serving as both the chair and vice-
chair of the AELS board in the past. He expressed support
of AELS having its own investigator and mentioned that it
was the third largest board out of about 18 boards, but
that it was first in the category complexity. Within the
engineering profession alone, there were six separate and
distinct branches, each of which represented its own
challenges; the 6 branches were expected to increase in
number to 15. The uniqueness of the AELS board placed a
special demand on its investigator. He explained that the
current investigator served the AELS board only 20 percent
of the time and was assigned to 5 other boards. The board's
sole mandate was to carry out its mission to protect the
public's health, safety, and welfare through the regulation
of architecture, engineering, land surveying, and landscape
architecture. He related that the fourth largest board, the
medical board, currently had its own investigator. He
thought that it was imperative that the AELS have a full-
time investigator if it was to do an effective job serving
the entire state.
2:46:06 PM
Mr. Brownfield addressed earlier comments that were made in
committee and explained that landscape architects had a
temporary, non-voting seat on the AELS board; there were
only about 35 registrants from landscape architects on the
board. He observed that the landscape architects acted and
participated on the board; however, by statute, the seat
was temporary and non-voting. He spoke to an earlier
question regarding why the number of branches was
increasing to 15 from 6 and relayed that for 27 years there
had been 6 branches of engineering in state; he explained
that Alaska was one of the few states that still only had 6
branches. He shared an example that if a structural
engineer entered Alaska, they could not work in the state
under that branch and would be required to take an exam to
work as a civil engineer; agricultural engineers in Alaska
were likewise required to take the civil engineer
examination. He stressed that it was time for the state to
recognize that 6 branches were not sufficient and offered
that the state was losing business. He reiterated the
importance of a full-time investigator for the AELS board.
2:49:41 PM
Co-Chair Thomas noted that the legislation's sponsor
statement indicated that there would be 6 to 16 new
branches added to the AELS board, which was probably the
reason people were referring to 16 branches as a number.
Mr. Brownfield replied that one of the professions was
architect engineer; however, the board felt that it would
be confusing to the public if architects were considered
engineers and as a result, that branch was not included.
HARLEY HIGHTOWER, CHAIR, BOARD OF REGISTRATION FOR
ARCHITECTS, ENGINEERS, AND LAND SURVEYORS, ANCHORAGE (via
teleconference), vocalized the AELS board's support for the
legislation and concurred with the testimony of prior
testifiers. He related that because of a lack of a full-
time investigator, the board was presently being prevented
from preforming its charge of protecting the health,
safety, and welfare of the public. He pointed out that the
investigator who currently served the AELS board was
overextended due to his obligations to numerous other
boards, as well as increases in the number of registrants.
He warned that the "present conditions" exposed the state
of Alaska and the AELS board to liability. He related the
board's current fees were low and that if a small fee
increase occurred as result of the legislation, it would
not be significant. He addressed an earlier question
regarding the possibility of an investigator pool and
stated that the board had decided against that idea because
it felt that it would be difficult for an investigator to
know the statutes and regulations that applied to multiple
boards. He spoke to an earlier comment regarding being
unaware of safety issues in the state and noted that in the
past month, there had been three roof collapses in
Anchorage because the buildings were not designed to the
standard that they should have been.
2:53:56 PM
Co-Chair Thomas CLOSED public testimony.
Vice-Chair Fairclough observed that although some public
comments had stated that the board was not adding a
position, the fiscal note showed that a position was being
adding. She wondered whether the current investigator
positions were funded with general fund money. Mr. Habegar
responded that the bill did add one position and that the
investigators were funded with general fund fee-supported
services.
Vice-Chair Fairclough commented that the bill relieved the
department of its current obligation and wondered whether
there would be an excess of general fund dollars that could
be used somewhere else. Mr. Habegar replied that he may
have misspoken and that the investigator positions were
fee-supported; the revenue was raised through licensing
fees and was used to support whatever program was required.
He explained that DCCED was required by statute to analyze
programs ever year and to recommend fee increases or
decreases.
Vice-Chair Fairclough inquired how many investigators there
would be in 2013. Mr. Habegar replied that if the bill
passed, the Division of Corporations, Business, and
Professional Licensing would have a total of 19
investigators.
Representative Gara expressed that he was confused about
the bill. He related that the testimony had stated that a
half-time position would be increased to a full-time
position, but noted that there was funding in the
legislation for a full-time position. He asked for
clarification on the issue. Mr. Habegar responded that the
bill required a dedicated investigator, but that there were
numerous issues that the division needed to deal with. He
shared that more enforcement investigations were being
requested by the construction industry and that it was also
the number one priority for the home builders association.
He stated that if the bill passed, it was his intent to
give a full-time position to the AELS board and use the
current position control number (PCN) for additional
resources in the construction industry.
Representative Gara observed that this was the second time
that day that DCCED had attempted to fill a half of a
position with at least the money for full position. He
offered that perhaps he had missed something earlier in the
testimony, but that he was just realizing that the bill
would be used to add half of a staff position somewhere
else.
2:57:59 PM
Vice-Chair Fairclough discussed that the current proposal
was paid for by receipts from licensees, which she was okay
with. She inquired if relieving the pressure on the AELS
board's investigative efforts would give the department the
opportunity to reallocate available time to investigate
other licensees under its control. Mr. Habegar responded in
the affirmative.
Representative Wilson surmised that using the PCN for
another board would affect how much that board was paying
in fees because someone had to make up the funding and
inquired if that assumption was correct. Mr. Habegar
answered in the affirmative and explained that state law
required DCCED to do an annual analysis for all the
programs. He stated that there were currently 40 programs
and that the Division of Corporations, Business, and
Professional Licensing would adjust fees based on the usage
of in-house resources.
Representative Wilson inquired whether 40 programs meant
that there were 40 boards. Mr. Habegar replied in the
negative and explained that Title 8 of the Alaska Statutes
had 40 programs, but that 20 of them were run by the
division and 20 were boarded.
Vice-Chair Fairclough discussed a previously published
fiscal impact note from the Division of Corporations,
Business, and Professional Licensing.
Representative Neuman inquired if the fiscal note was paid
for by fees and not general funds. Ms. Bergh responded in
the affirmative.
Co-Chair Thomas pointed to the fund source on the fiscal
note.
3:01:12 PM
Vice-Chair Fairclough MOVED to report HB 337 out of
committee with individual recommendations and the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
HB 337 was REPORTED out of committee with a "do pass"
recommendation and with one previously published fiscal
impact note: FN1 (CED).
Co-Chair Thomas discussed the committee schedule for the
following day.
ADJOURNMENT
3:02:10 PM
The meeting was adjourned at 3:02 PM.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB221 Sponsor Statement.pdf |
HFIN 3/20/2012 1:30:00 PM |
HB 221 |
| HB221 Sectional Analysis.pdf |
HFIN 3/20/2012 1:30:00 PM |
HB 221 |
| HB221 Court Rule 39.1.pdf |
HFIN 3/20/2012 1:30:00 PM |
HB 221 |
| HB221 AS 18.85.120.docx |
HFIN 3/20/2012 1:30:00 PM |
HB 221 |
| HB358 CS WORKDRAFT 27-LS1406-I.pdf |
HFIN 3/20/2012 1:30:00 PM |
HB 358 |
| HB196 CS WORKDRAFT 27-LS0529-I.pdf |
HFIN 3/20/2012 1:30:00 PM |
HB 196 |
| HB196 NEW FN-FIN-CED AEA 3.20.12pdf.pdf |
HFIN 3/20/2012 1:30:00 PM |
HB 196 |
| HB 196 NEW FN FIN CED INVESTMENTS 3.20.12pfd.1.pdf |
HFIN 3/20/2012 1:30:00 PM |
HB 196 |
| HB 196 NEW FN FIN CED CRA 3.20.12pfd.1.pdf |
HFIN 3/20/2012 1:30:00 PM |
HB 196 |
| 3 20 12 Summary of HB196 NEW Fiscal Notes.doc |
HFIN 3/20/2012 1:30:00 PM |
HB 196 |
| HB196 NEW FN-FIN-CED AEA 3.20.12pdf.pdf |
HFIN 3/20/2012 1:30:00 PM |
HB 196 |
| 3 20 12 Summary of HB196 NEW Fiscal Notes.doc |
HFIN 3/20/2012 1:30:00 PM |
HB 196 |