Legislature(2013 - 2014)Anch Temporary LIO
01/13/2014 09:00 AM Senate LEGISLATIVE BUDGET & AUDIT
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| Audio | Topic |
|---|---|
| Start | |
| Approval of Minutes | |
| Revised Program - Legislative (rpls) | |
| Other Committee Business | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
LEGISLATIVE BUDGET AND AUDIT COMMITTEE
Anchorage, Alaska
January 13, 2014
9:06 a.m.
MEMBERS PRESENT
Senator Anna Fairclough, Chair
Senator Click Bishop
Senator Cathy Giessel
Senator Donald Olson
Representative Mike Hawker, Vice Chair (via teleconference)
Representative Alan Austerman (via teleconference)
Representative Bob Herron (via teleconference)
Representative Kurt Olson (via teleconference)
MEMBERS ABSENT
Representative Andy Josephson
Representative Scott Kawasaki (alternate)
Representative Bill Stoltze (alternate)
Senator Kevin Meyer
Senator Mike Dunleavy (alternate)
COMMITTEE CALENDAR
APPROVAL OF MINUTES
REVISED PROGRAM - LEGISLATIVE (RPLs)
OTHER COMMITTEE BUSINESS
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
DAVID TEAL, Legislative Fiscal Analyst
Legislative Finance Division
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided information on the RPLs to the
Joint Committee on Legislative Budget and Audit.
DOUG VINCENT-LANG, Acting Director
Division of Wildlife Conservation
Alaska Department of Fish & Game
Anchorage, Alaska
POSITION STATEMENT: Testified and answered questions during
discussion of RPL 11-2014-0262.
KEVIN BROOKS, Deputy Commissioner
Office of the Commissioner
Alaska Department of Fish & Game
Juneau, Alaska
POSITION STATEMENT: Testified and answered questions during
discussion of RPL 11-2014-0262.
DON HABEGER, Director
Division of Corporations, Business, and Professional Licensing
Department of Commerce, Community & Economic Development
Juneau, Alaska
POSITION STATEMENT: Answered questions during discussion of
licensing and fees.
JoELLEN HANRAHAN, Deputy Commissioner
Office of the Commissioner
Department of Commerce, Community & Economic Development
Juneau, Alaska
POSITION STATEMENT: Answered questions during discussion of
licensing and fees.
ACTION NARRATIVE
9:06:44 AM
CHAIR ANNA FAIRCLOUGH called the Legislative Budget and Audit
Committee meeting to order at 9:06 a.m. Representatives
Austerman (via teleconference), Herron (via teleconference),
Olson (via teleconference), and Hawker (via teleconference), and
Senators Bishop, Giessel, Olson, and Fairclough were present at
the call to order.
^Approval of Minutes
Approval of Minutes
9:08:00 AM
CHAIR FAIRCLOUGH announced that the first order of business
would be the approval of the minutes.
SENATOR GIESSEL made a motion to approve the minutes of December
11, 2013. There being no objection, the minutes from the
meeting of December 11, 2013 were approved.
^Revised Program - Legislative (RPLs)
Revised Program - Legislative (RPLs)
9:08:26 AM
CHAIR FAIRCLOUGH announced that the next order of business would
be consideration of the Revised Program - Legislative (RPLs).
9:08:40 AM
DAVID TEAL, Legislative Fiscal Analyst, Legislative Finance
Division, Alaska State Legislature, testified that two Revised
Programs - Legislative (RPLs) were submitted for consideration.
Directing attention to RPL 10-2014-5110, a request by the
Division of Agriculture, Department of Natural Resources, for
$25,000 of statutory designated program receipts (SDPR), for
phytosanitary certification services for Alaska businesses
exporting logs and other plant materials to be internationally
exported, he explained that the agency incurred travel costs and
was required to make payment to the United States Department of
Agriculture (USDA) for each certificate. He pointed out that
failure to approve this RPL would result in termination of this
certification process for the remainder of Fiscal Year 2014. He
relayed that the Legislative Finance Division "has no technical
problems with this RPL."
9:09:47 AM
SENATOR GIESSEL asked why this was not foreseen for request
during the budget process.
9:10:06 AM
MR. TEAL, in response, explained that demand for logs by China
had exceeded the expectation, and that the budgeted amount was
insufficient.
9:10:34 AM
SENATOR GIESSEL made a motion for the approval of RPL 10-2014-
5110 to the Department of Natural Resources. There being no
objection, it was so ordered.
9:11:02 AM
MR. TEAL directed attention to RPL 11-14-0262, in which the
Alaska Department of Fish & Game (ADF&G), Division of Wildlife
Conservation, requested approval to spend $750,000 of federal
receipts for a capital project. This would include the purchase
of digital cameras and software for aerial photocensus of
caribou and other big game. He explained that the funding
source was derived from the Federal Pittman-Robertson Wildlife
Restoration funding, financed from the sales of guns and
ammunition. He pointed out that there had been an increase in
the sales of both; hence, there was more money available. He
expressed his concern that these increased sales were not
permanent; however, this request for a capital project RPL was
for a one-time expenditure. He noted that Governor Parnell had
submitted a similar request for this capital project in the past
year, which had not been approved in the budget. He reflected
that "this is typically a touchy subject because LB&A
(Legislative Budget and Audit Committee) is often hesitant about
reversing a decision of the full legislature." He pointed out
that the previous capital request had been for unrestricted
general funds, whereas the current request was for federal
receipts. He explained that, although this was for the same
purpose, it was from a different fund source.
9:12:53 AM
SENATOR OLSON asked for more specifics to the use of $750,000
for the aerial photo endeavors.
MR. TEAL replied that, although the requested $750,000 were
federal funds, a 25 percent match was required by the state. He
pointed out that the ADF&G was not requesting any additional
money, as they already had the funding for the 25 percent match
in their budget. He reported that the survey was for caribou
and other big game; however, as he was unsure of the specific
areas, an ADF&G representative was available for further
questions.
9:14:15 AM
DOUG VINCENT-LANG, Acting Director, Division of Wildlife
Conservation, Alaska Department of Fish & Game, stated that
there were numerous caribou herds throughout Alaska, which,
primarily, were counted using photocensus equipment. Currently,
ADF&G utilized outdated film technology and he pointed out that
the supply of film would run out in the next year and a half.
He suggested that the use of digital technology alongside the
film cameras for a year would benefit the studies for a more
consistent count of caribou and the long term data base. He
offered his belief that having this overlap of the two systems
would avoid any lag in the data base.
9:15:09 AM
SENATOR OLSON asked for clarification that this funding would be
to purchase updated equipment.
MR. VINCENT-LANG expressed agreement that this was for equipment
purchases for the surveys.
SENATOR OLSON asked if this money would be used for airplane
charters.
MR. VINCENT-LANG, in response, said that the department would
continue to use its existing infrastructure. He emphasized that
the funding was solely for equipment, noting that a technology
change was necessary as, soon, there would no longer be film to
purchase.
9:15:51 AM
CHAIR FAIRCLOUGH asked if the equipment life would be longer
than seven years.
MR. VINCENT-LANG stated that he expected the equipment to have a
long life expectancy, 15 to 30 years. He reiterated that it was
no longer possible to buy film for the existing cameras. He
reiterated that this was directing funding from the sale of guns
and ammunition toward equipment purchases, and not toward any
long term commitments.
9:17:04 AM
SENATOR BISHOP asked if completion of the upgrade to new digital
cameras would be possible within this existing budget.
MR. VINCENT-LANG offered his belief that this funding would
complete the entire equipment purchase. In response to a
further question from Senator Bishop, he explained that the
department was hopeful for a greater applicability by the new
cameras toward other species, including moose. He pointed out
that, as moose and bear were in a more vegetated habitat in
comparison to caribou, the department would review the
possibilities of using the new digital cameras for those counts,
as well.
9:18:18 AM
SENATOR GIESSEL asked about the use of drones for aerial
surveys, and the use of this equipment by drones.
MR. VINCENT-LANG, in response, reported that the drones had
limited storage and range, and, as they were not flying straight
transects, aerial surveys were more difficult to achieve with a
drone. He opined that the applicable drone technology was still
ten years in the future, and that this camera equipment could be
transferred to the drones.
9:20:00 AM
REPRESENTATIVE AUSTERMAN asked for more information regarding
the source of the 25 percent match to the federal funds and the
total cost of the project.
MR. VINCENT-LANG replied that this match would come from the
Alaska Department of Fish & Game fund, and he considered this to
be of significant importance for conducting statewide wildlife
business. He relayed that the total project cost was $1
million.
REPRESENTATIVE AUSTERMAN asked for clarification that the total
cost would be $1 million.
MR. VINCENT-LANG expressed his agreement.
9:21:13 AM
CHAIR FAIRCLOUGH asked for the reasons to address this funding
now, as opposed to waiting for the legislative session. She
pointed out, as had been noted earlier, the legislature had
declined to authorize this funding during its previous session.
MR. VINCENT-LANG offered his belief that the funding had been
declined because it was requesting use of general fund dollars.
The urgency was to purchase equipment to allow an additional
year of use with both digital and film cameras.
9:22:06 AM
CHAIR FAIRCLOUGH asked who would do the actual wildlife counts,
and if the data would be shared with the federal government, as
they would provide the funding.
MR. VINCENT-LANG replied that ADF&G would do the count, and that
although it was Alaska data, it would be shared with other
agencies.
9:22:41 AM
CHAIR FAIRCLOUGH asked whether any strings were attached to
acceptance of the funding.
MR. VINCENT-LANG replied that the department had wide discretion
with the use of these funds for research and management of
huntable populations, which included caribou.
9:23:15 AM
REPRESENTATIVE AUSTERMAN asked where the matching money was
coming from in the Alaska Department of Fish & Game funds.
9:24:01 AM
KEVIN BROOKS, Deputy Commissioner, Office of the Commissioner,
Alaska Department of Fish & Game, explained that ADF&G had
identified existing capital project funding of $200,000 for
equipment, which was referenced in the proposed RPL. He
expressed confidence that the department could find an
additional $50,000 from its operating funds which would be used
in conjunction with the existing capital project funds of
$200,000 to fulfill the required $250,000 of matching funds.
REPRESENTATIVE AUSTERMAN opined that it would be necessary to
review the ADF&G budget to determine what other funds "were
sitting there waiting to be spent."
9:25:19 AM
CHAIR FAIRCLOUGH asked what equipment would not be purchased if
these funds were used as previously requested.
MR. BROOKS explained that capital equipment appropriations were
requested by the Division of Wildlife Conservation from the
Alaska State Legislature every two or three years. These
requests were typically for smaller equipment, such as snow
machines; however, as the need for matching funds had become a
higher priority, these smaller purchases would be deferred.
9:26:14 AM
SENATOR OLSON asked for clarification regarding the use of
drones, noting that the disparity in size with the planes
currently being used for photocensus would not allow the
equipment to be used on smaller planes.
MR. VINCENT-LANG offered his understanding that the university
was researching many sizes of drones, some of which could
accommodate the equipment.
9:27:16 AM
SENATOR OLSON asked for clarification regarding the photocensus
difficulties due to vegetative background.
MR. VINCENT-LANG replied that caribou were most often counted on
the open tundra, as this was an easier count. He noted that
many of the moose counts occurred in areas with more vegetative
cover, which made it more difficult to ensure an accurate count.
He expressed confidence for consistent caribou counts utilizing
the new digital technology; however, the accurate counts for
other game could be more inconsistent.
SENATOR OLSON expressed his agreement for the use of digital
equipment, although he questioned whether this was the
appropriate time to purchase it.
9:28:42 AM
REPRESENTATIVE AUSTERMAN commented on the need to upgrade the
technology, and expressed his support for the RPL.
CHAIR FAIRCLOUGH asked if this RPL would require any expansion
of personnel.
MR. BROOKS replied that additional staff or resources would not
be necessary.
CHAIR FAIRCLOUGH asked if there would be any expansion to the
responsibilities of Alaska Department of Fish & Game.
MR. BROOKS replied that this would only be a replacement of
technology, and would not include any expansion of services.
CHAIR FAIRCLOUGH recounted that the department had the ability
and the funds to absorb the required match and that ADF&G had
stated there would not be an expansion of services which
required state support.
SENATOR OLSON expressed his agreement with Mr. Brooks.
CHAIR FAIRCLOUGH expressed her support for the proposed RPL.
9:32:12 AM
SENATOR GIESSEL made a motion for the approval of RPL 11-2014-
0262 to the Alaska Department of Fish & Game. There being no
objection, it was so ordered.
^Other Committee Business
Other Committee Business
9:32:37 AM
CHAIR FAIRCLOUGH announced that the next order of business would
be a discussion of issues related to the Division of
Corporations, Business, and Professional Licensing. She relayed
that a sub-committee had been appointed during the previous
October, including herself, Senator Giessel, and Representatives
Austerman, Hawker, and Josephson. She listed issues to be
addressed, including the calculation of licensing fees. She
reported that licensing fees, by statute, were supposed to be
calculated on a two year cycle, however it appeared they were
now determined on a six year calculation. She noted that
investigations were responsible for an increase to the licensing
fees for all licensees, rather than a fine being imposed on
those investigated. She stated that boards and commissions were
not receiving their financial statements, and that travel
expenses were not reimbursed in a timely manner.
9:34:11 AM
JoELLEN HANRAHAN, Deputy Commissioner, Office of the
Commissioner, Department of Commerce, Community & Economic
Development, declared that both the Division of Administrative
Services and the Division of Corporations, Business, and
Professional Licensing were engaged in significant efforts "to
address and find solutions for some of the concerns and for
stability of fees." She reported that both the department and
the division were focused on the business climate and the ways
to stabilize fees by ensuring there was an accounting foundation
with integrity for the licensing programs and there was
increased transparency for reporting. She declared that there
were now quarterly revenue and expenditure reports posted on the
department website, as well as more detailed system reports.
She referenced HB 187, earlier legislation introduced to gain
consistency for fees. She declared that there would be
increased authorization for board travel and for third party
reimbursements.
9:36:54 AM
DON HABEGER, Director, Division of Corporations, Business, and
Professional Licensing, Department of Commerce, Community &
Economic Development, explained that the division referenced AS
08.01.065 for its guidelines to the review of licensee fees. He
noted that licenses were renewed on a bi-annual basis, and fees
were adjusted after a review of expenses and revenue. He
offered his belief that there was now better, more frequent
communication with the boards, especially during the fee cycle.
He reported that every two years he presented a draft review of
the fees to each board. This review took each group fee within
the occupation and made an equal percentage adjustment based on
the review of expenses and revenue. Upon occasion, it would be
determined that a group within an occupation needed to be
adjusted differently. He pointed out that the division would
write the draft regulations for the suggested fee, and post them
for public comment. Based on this input, the division would
make its determination for the proposed fees. He pointed out
that some programs used a cost recovery cycle greater than two
years. He noted that, as the investigations could be costly, an
investigation of programs with small licensing pools could have
a greater financial effect than an investigation on the programs
in larger pools. He shared that the investigators from the
division would determine whether a complaint was valid and
whether the division had jurisdiction. If a violation had
occurred, the investigators would begin gathering evidence. As
a board would often make the determination for suspension or
revocation of a license, this evidence would only be submitted
to one or two board members, who would offer guidance to the
division. If it was necessary for the entire board to vote on a
license, those members who had initially received the evidence
would recuse themselves from the vote. He emphasized that the
division and the administration were concerned about fee spikes,
and were attempting to ensure stability of professional
licensing fees. He noted that, if the expenses did not appear
to be a recurring pattern, the distribution of costs over
another two year licensing cycle could be determined to be
appropriate.
9:43:23 AM
MR. HABEGER emphasized that investigative fees created greater
uncertainty for the smaller programs, and he pointed out that
the medical board, by statute, had a full time dedicated
investigator, which made its costs more predictable. He noted
that, as investigations were complaint driven, this accounted
for the fee spikes. Addressing another issue, timely travel
reimbursement, he stated that the division did reimburse board
members for their travel, to allow them as much flexibility as
necessary in the travel purchases. If a board member is
attending a meeting, there is approval to purchase travel within
the travel cap. He explained that receipts were required for
travel processing, and he reported that board members, on
average, returned the receipts for processing within one week.
He detailed that division staff had to follow a statewide
format, once the receipts had been received. He stated that the
division processing time was, on average, four days. The
request was then forwarded to the administrative service
division for checks to be written which was, on average, a five
day process. He allowed that, should travel costs be higher
than the travel cap, there was consideration for
reauthorization. He pointed out that a board member could be
carrying the expenses for 30 - 45 days.
9:47:59 AM
MR. HABEGER reported that the division had shifted to a
quarterly processing system for financial statements, as this
was a more predictable method and allowed time to double check
for accuracy. He shared that, for the first three quarters,
revenue and expense reports for all programs would be released
about 30 days after the close of the fiscal quarter. For the
year-end report, it would take the division about 45 days for
allocation of indirect costs and release of the final reports.
He noted that this information was available to the public on
the department website.
9:49:34 AM
CHAIR FAIRCLOUGH reported that the Legislative Budget and Audit
Committee would create a sub-committee to collect testimony from
the public regarding any issues and challenges for licensing and
fees.
9:50:10 AM
REPRESENTATIVE AUSTERMAN expressed his confusion regarding the
Big Game Commercial Services Board quarterly financial
statements, each of which reflected a different amount of money
available for operations with no apparent consistency. He asked
if this had been corrected.
MS. HANRAHAN, in response to Representative Austerman, stated
that this issue had not been brought to their attention, and had
not been judged to be an on-going issue. She declared that she
would follow up on this.
REPRESENTATIVE AUSTERMAN replied that he had already sent copies
of this information to her department, which reflected quarterly
losses for thousands of dollars. He expressed his surprise for
her lack of awareness to this issue.
MR. HABEGER declared that his division had conducted a
reconciliation process which had reviewed all of the board
reports for the past 10 years. He reminded the committee that
the legislature had appropriated $3.4 million to "essentially
payback and correct another issue with the division which was
charging indirect costs, 100 percent to professional licenses."
He stated that this money had been distributed through all the
boards and the information had been corrected for the past 10
years. He reflected that, early in his tenure, the reports had
been changing; however, since completion of the reconciliation
project, "those numbers should not be changing."
9:54:18 AM
REPRESENTATIVE HAWKER expressed his appreciation for the
"conversation we've had on ministerial process, how things are
supposed to be working." He declared, however, that he had not
heard any reference for "the crux of the issues that have been
brought to us repeatedly, and to the best of my knowledge still
remain operative and of concern to our regulated community." He
directed attention to travel by the regulatory authority boards.
He explained that these boards were from industries which self-
assessed for the money for board operation. He offered his
belief that there was still a lot of concern that the Division
of Corporations, Business, and Professional Licensing was second
guessing the need for travel for appropriate reasons by these
boards. He declared that it was necessary to give these boards
the autonomy to spend "their own money the way they believe it
needs to be spent for their particular profession." He directed
attention to an additional concern that the division had
responded that "there is not enough legislative appropriation
for us to allow people to travel, for the boards to spend their
money." He questioned how this could be a problem, as the
boards were self-assessed to pay for their activities.
9:56:33 AM
MR. HABEGER offered his understanding that this had been
addressed by the legislature in a prior year, when the
legislature increased this amount by $200,000. He declared that
he had not denied funds to any board for out of state travel in
the current year. He expressed hope that this was no longer an
issue. He directed attention to the annual report by the boards
to the division, which listed requests for about $550,000 in
travel expenses, both in state and out of state. He explained
that his office previously had travel appropriations for
$300,000, which had since been increased to $400,000. He
relayed that the legislature had also addressed the third party
reimbursement issue, which created a mechanism that brought this
payment as revenue to a specific board.
9:58:11 AM
REPRESENTATIVE HAWKER expressed his understanding that, although
the language for third party reimbursement had been addressed,
anecdotal concerns still existed among the regulated community
for funding requests. He asked that these concerns be satisfied
during the legislative session.
9:58:43 AM
CHAIR FAIRCLOUGH clarified that, although there would not be any
public testimony at this time, the issue would be addressed
during the legislative session.
REPRESENTATIVE AUSTERMAN asked if the EasyBiz accounts through
Alaska Airlines were used for board members' travel.
MS. HANRAHAN expressed her belief that the state travel system
was no longer using EasyBiz, as board members booked their own
travel to allow for the flexibility to add destinations, family
members, and extended car rentals. Instead, a reimbursement
process had been requested. She reported that the executive
branch state travel office maintained more stringent rules for
deviations around travel, routing, lower cost tickets, and risk
management limitations. She mentioned that options for board
travel were being explored. Referencing an earlier statement by
Representative Hawker, she declared that the department was
supportive and was not trying to obstruct travel by board
members.
10:02:03 AM
CHAIR FAIRCLOUGH declared her intent to review an equitable
travel policy for all boards and commissions. She asked if such
a document currently existed.
MR. HABEGER, in response, offered his belief that there was a
travel policy; however, he wanted to confirm this.
CHAIR FAIRCLOUGH declared a need for a continuity of policy
among all the boards.
10:03:08 AM
SENATOR GIESSEL referred to the State of Alaska travel policy
for third party reimbursements. Directing attention to out of
state travel by board members for professional conferences of
national organizations, she referenced a letter to the National
Council of State Boards of Nursing (NCSBN), dated November 1,
2013, which prohibited board members from accepting free travel,
meals, and lodging for its two national meetings. She declared
that board members were now required to pre-pay, and then wait
for reimbursement. She reported that, previously, travel
bookings were made through the national organization, and then a
public disclosure was made by each board member accepting the
travel coverage. She declared that this process was now onerous
and burdensome for board members. She stated that national
meetings were opportunities for the board members to become
educated in the nuances of professional regulations. She
pointed out that boards were quasi-adjudicatory, as they had the
authority for discipline with professional licenses. She
requested more background information from the division for the
development of this new travel policy.
10:07:01 AM
SENATOR GIESSEL expressed her concern for the determination of
the fees, and asked for clarification on the setting of fees.
Citing an example of Certified Nurse Assistants (CNA), she
reported that these licensing fees had been significantly
increased in 2009 and 2010, even though the board had expressed
concerns that these were not highly paid jobs. She pointed out
that, subsequently, the fees were found to have been incorrectly
calculated, and refunds were being given. She relayed that one
board had reported at a December, 2013, board meeting, that its
indirect costs had been greatly increased with no explanation.
She repeated her desire for a clearer definition for the
determination of the fees and indirect costs, especially given
that the Alaska State Legislature had recently made a $3.4
million appropriation to assuage this.
10:08:30 AM
SENATOR OLSON reported that he had had positive experiences with
the division while serving on the Alaska State Medical Board.
He stated that reimbursement had been prompt.
MR. HABEGER offered to address any questions regarding indirect
costs, fees, and third party reimbursement issues. He stated
that the Department of Administration had a travel policy and
third party reimbursement policy which his division followed.
10:10:14 AM
CHAIR FAIRCLOUGH asked for more information about reserve
policies and carry forward amounts for boards and commissions,
with regard to fees. She asked whether the dedicated staff,
paid by the licensing fees, were used by the board or others.
She also asked for more information about investigations, noting
that the Board of Realtors had suggested that many state cases
should be immediately dismissed, rather than going through
costly formal investigations. She suggested that it would be
prudent to mediate each case rather than open a formal costly
investigation. She declared a need for the Legislative Budget
and Audit Committee to hear from the Department of Commerce,
Community & Economic Development regarding responses to the
issues raised by the boards, commissions, and licensees.
10:12:36 AM
REPRESENTATIVE HAWKER endorsed the comments by Chair Fairclough.
10:13:14 AM
REPRESENTATIVE AUSTERMAN expressed the need for a broader
conversation by the sub-committee to address the overall
operation of the Division of Corporations, Business, and
Professional Licensing. In response to Chair Fairclough, he
clarified that he was mainly referencing the policy issues.
SENATOR BISHOP offered an anecdotal concern by one of his
constituents regarding service from the division.
CHAIR FAIRCLOUGH suggested a follow up with the Division of
Administrative Services.
10:15:15 AM
ADJOURNMENT
There being no further business before the committee, the
Legislative Budget and Audit Committee meeting was adjourned at
10:15 a.m.
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