Legislature(2017 - 2018)SENATE FINANCE 532
04/14/2018 10:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB31 | |
| HB121 | |
| HB215 | |
| HB299 | |
| HB275 | |
| HB299 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | HB 31 | TELECONFERENCED | |
| += | HB 299 | TELECONFERENCED | |
| += | HB 121 | TELECONFERENCED | |
| += | HB 215 | TELECONFERENCED | |
| += | HB 275 | TELECONFERENCED | |
SENATE FINANCE COMMITTEE
April 14, 2018
10:09 a.m.
10:09:52 AM
CALL TO ORDER
Co-Chair MacKinnon called the Senate Finance Committee
meeting to order at 10:09 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Anna MacKinnon, Co-Chair
Senator Click Bishop, Vice-Chair
Senator Peter Micciche
Senator Donny Olson
Senator Gary Stevens
Senator Natasha von Imhof
MEMBERS ABSENT
None
ALSO PRESENT
Representative Geran Tarr, Sponsor; Representative Sam
Kito, Sponsor; Elizabeth Diament, Staff, Representative
Paul Seaton; Jill Lewis, Deputy Director, Division of
Public Health, Department of Health and Social Services;
Representative Adam Wool, Sponsor; Kris Curtis, Legislative
Auditor, Alaska Division of Legislative Audit; Juli Lucky,
Staff, Senator Anna MacKinnon; Crystal Koeneman, Staff,
Representative Sam Kito; Laura Stidolph, Staff,
Representative Adman Wool.
PRESENT VIA TELECONFERENCE
Erika McConnell, Director, Alcohol and Marijuana Control
Office, Anchorage.
SUMMARY
CSHB 31(FIN)
SEX ASSAULT TRAINING & EXAM KITS;DOM VIOL
SCS CSHB 31(STA) was REPORTED out of committee
with a "do pass" recommendation and with a new
zero fiscal note from the Department of Public
Safety, and a previously published zero fiscal
note: FN 3(DPS).
HB 121 OCC. HEALTH AND SAFETY CIVIL PENALTIES
HB 121 was REPORTED out of committee with a "do
pass" recommendation and with one previously
published fiscal impact note: FN 2(LWF).
CSHB 215(FIN)
DHSS: PUBLIC HEALTH FEES
CSHB 215(FIN) was REPORTED out of committee with
a "do pass" recommendation and with one
previously published fiscal impact note: FN
2(DHS).
CSHB 275(FIN)
EXTEND: BOARD OF MASSAGE THERAPISTS
SCS CSHB 275(FIN) was REPORTED out of committee
with a "do pass" recommendation and with one new
fiscal impact note from the Department of
Commerce, Community and Economic Development.
CSHB 299(FIN)
ABC BOARD: EXTEND; DIRECTOR; DECISIONS
CSHB 299(FIN) was HEARD and HELD in committee for
further consideration.
CS FOR HOUSE BILL NO. 31(FIN)
"An Act relating to law enforcement training in
domestic violence and sexual assault; relating to
sexual assault investigation protocols; requiring an
inventory and reports on untested sexual assault
examination kits; and providing for an effective
date."
10:11:09 AM
Co-Chair MacKinnon reported the bill had been heard on
April 4, 2018 where public testimony had been heard. The
fiscal notes had been reviewed as well.
REPRESENTATIVE GERAN TARR, SPONSOR, introduced herself.
Co-Chair MacKinnon shared that there were two outstanding
issues for the committee to address. The first was related
to the process of how anonymous reports worked. The
committee had engaged in discussions with the department
that had met her satisfaction. The second topic was the
cost of training resulting from an increase from 2 hours
from some departments to 12 hours. She had provided a
series of emails with the Anchorage Police Department
(APD), where APD had indicated it did not believe the
change would be an undue burden on its facilities. The bill
did not cover Village Public Safety Officers (VPSO), who
accessed a different form of training and were not police
officers.
Representative Tarr agreed.
10:13:00 AM
Co-Chair MacKinnon asked for a brief overview of the bill.
Representative Tarr explained that the bill accomplished
three things. First, it put in statute a victim centered
approach to reporting sexual assault crimes. She had
brought a sexual assault examination kit box to the meeting
in case someone had not seen one previously. She elaborated
the box was an evidence collection kit. Much work had been
done on the issue, and a victim centered approach had been
developed that included anonymous reporting and law
enforcement reporting. Anonymous reporting allowed the
victim to have the evidence collected, which needed to be
done in a timely fashion (within 72-hours), but did not
require the victim to decide whether they wanted to move
forward with a criminal prosecution. If a person wanted to
move forward with a prosecution at the time evidence was
collected they would select the law enforcement report. The
bill would put the victim centered approach into statute.
Representative Tarr explained the bill also required
individuals to receive 72 hours of sexual assault response
training during their law enforcement training in Alaska in
addition to 12 hours of domestic violence training, which
was currently in statute. Although the sexual assault
training was already in statute, the bill underscored its
importance. The bill also included an ongoing audit. The
first audit had concluded and was presented in November
2017, which provided an understanding of the issue in
Alaska. She noted the issue was also happening nationwide,
but there were over 3,000 untested rape kits in Alaska. It
would be somewhat expensive to get all of the kits tested
and go through the process with the victims to ensure they
wanted to participate. The audit would provide the
legislature with an annual status update. At some point it
would no longer be necessary when the backlog was
eliminated, and cases were prosecuted. She complimented Co-
Chair MacKinnon for discussions that had taken place in the
committee. She understood the discussions had been so
informative, some of Co-Chair MacKinnon's suggestions would
be incorporated into the process. She explained the bill
was one step towards ensuring there was reform in the way
rape kits were tested, victims received the justice they
deserved, and to keep dangerous criminals off the street.
10:15:47 AM
Co-Chair MacKinnon shared that under the current bill
victims went to healthcare providers when reporting
anonymously. She was concerned there could be a closure or
problem with keeping track of the location in Anchorage,
where storage for the rape kits was centralized. She had
asked if the department could work with state law
enforcement so that victims would go to law enforcement
instead of independent hospitals or medical facilities
across Alaska. There was more likely in the next 50 years
to be a state trooper position that could locate the
numbers for anonymous reporting than individual medical
facilities that may change over administrations and lose
track of important data. She elaborated that some people
did not remember that things happened after awhile when an
experience was traumatizing. She explained they may be
triggered by something in the future that may cause them to
seek out the information. She appreciated the troopers and
others who had taken time to speak to her on the important
issue.
Vice-Chair Bishop reviewed a new zero fiscal note from the
Department of Public Safety for statewide support of the
training academy (OMB Component Number 524) He read from
the second paragraph of the fiscal note's analysis:
The Alaska Law Enforcement Training (ALET) is a
sixteen week course providing instruction in criminal
investigation, police procedure, laws, and physical
skills. Instruction comes primarily from commissioned
Alaska State Troopers stationed in Sitka. The ALET
program fulfills the requirements to be certified as a
municipal police officer or an Alaska State Trooper.
The ALET program currently exceeds the number of hours
of instruction and training in sexual assault laws,
response, and investigation as proposed by this
legislation so there would be no fiscal impact to the
DPS Training Academy should it pass. Therefore, a zero
fiscal note is being submitted.
10:18:43 AM
Senator von Imhof noted that Representative Tarr had
indicated there were currently about 3,000 untested rape
kits in the backlog. She remarked that the fiscal note was
zero and she believed it specified the department would
absorb the cost to address the backlog. She asked for the
accuracy of her statements.
Representative Tarr responded that currently the funding
used to address the backlog had been provided through two
federal Department of Justice grants. The kits were being
tested in batches - once those funds were gone, if an
additional grant was not awarded, the state would have to
figure out how to pay for the cost through appropriations
in the capital budget or other. There was no appropriation
with the current legislation or linked to testing the
backlog. She stated, "this is other policy changes, so, the
actual testing is a separate issue."
Co-Chair MacKinnon relayed she had met with a group of
individuals including John Skidmore with the Attorney
General's Office, Diane Casto, Executive Director, Council
on Domestic Violence and Sexual Assault, Department of
Public Safety, Orin Dym with the state DPS Crime Lab, and
others. There were about 3,400 untested kits, 114 of which
had been reported anonymously. She noted the numbers had
been rounded. There was a possibility for a bare-bone DNA
analysis at $1,000 per kit. She wanted to understand what
the bare essential analysis provided - she considered
whether it was sufficient information compared to the
$2,300 cost for prosecuting a kit under some of the current
grants. She noted there was a range in cost. She added that
it was possible to identify gender DNA differently. The
majority of sexual assaults in Alaska were perpetrated by
men on women. Tests had been developed that could go back
for almost one week instead of 72 hours, which had been
best practice when she had been the director of Standing
Together Against Rape. She continued that science was
taking leaps and bounds forward, but the tests were
expensive as they tried to recoup the research and
development to get the tests on the market. She expounded
they could highlight the male's DNA when searching for
matches.
10:21:32 AM
Senator von Imhof asked how far the current grant funding
would stretch to cover the 3,400 untested kits.
Representative Tarr answered that the first grant was
$100,000 for testing and additional training. She relayed
that Mr. Dym was online and may be able to provide further
detail related to the training component. The second grant
was largely to develop new systems; it was more about the
reform aspects and less about dollars going towards
testing. She relayed she would need to double check the
figures she had provided. A handful of kit batches were
being sent out under the first grant. Additionally, a new
grant was available that she had encouraged APD to apply
for because some of [the kits] were in its possession. She
speculated that several thousand kits would remain once the
grant funds had been used. She used 1,500 as a rough
average and reported the cost was in the millions of
dollars. She explained that every kit would not be tested
because in some cases an individual would not want to move
forward (there was an anonymous reporting option). She
believed it would be a multiyear process to determine how
to address the issue. As people were identified and linked
to other crimes, there would be prosecution as well.
Senator Micciche appreciated the sponsor's work have the
kits processed and evaluated. He noted there was
information in member's packets that was informative on
understanding the funding options.
Senator Stevens referenced the anonymous reporting option.
He asked if the anonymous kits went to the bottom of the
queue.
Representative Tarr replied there were two groups of kits.
There were cases that were far more recent, which totaled
about 70 at the lab currently. The queue was not based on
whether a kit was anonymous but was mostly about the timing
of the prosecution and when the information was requested.
She elaborated when a case came up for consideration the
lab was contacted to process the kit. She explained that a
victim could chose to move forward at any time with an
anonymous report and it would put the kit in the queue. She
explained the kit was not ranked at the bottom because it
was anonymous, but if a person had done the kit anonymously
it meant they specified they were not presently interested
in moving forward with testing. Until that changed, it
remained in the anonymous pile.
10:25:27 AM
Senator Stevens asked for verification that if a kit
remained anonymous it would not be tested.
Representative Tarr answered in the affirmative. She
remarked it could be hard to accept because if it had the
potential to get a dangerous person off the streets it
would be desirable to move forward; however, the white
paper referenced by Senator Micciche from the Department of
Justice outlined the victim centered approach, which
recommended not moving forward unless the victim was
comfortable with that.
10:25:59 AM
Co-Chair MacKinnon listed individuals available online for
questions.
Vice-Chair Bishop MOVED to REPORT SCS CSHB 31(STA) from
committee with individual recommendations and accompanying
fiscal notes. There being NO OBJECTION, it was so ordered.
SCS CSHB 31(STA) was REPORTED out of committee with a "do
pass" recommendation and with a new zero fiscal note from
the Department of Public Safety, and a previously published
zero fiscal note: FN3 (DPS).
10:26:54 AM
AT EASE
10:28:11 AM
RECONVENED
HOUSE BILL NO. 121
"An Act relating to occupational safety and health
enforcement penalties; and providing for an effective
date."
10:28:29 AM
Co-Chair MacKinnon reported that the bill had been heard on
April 11, 2018. She asked Vice-Chair Bishop to review the
fiscal note.
Vice-Chair Bishop discussed the fiscal note from the
Department of Labor and Workforce Development (DLWD), OMB
Component Number 970. The note reflected a change in
revenue of $230,200 in FY 19 and $460,400 in FY 20 through
FY 24. He read from the second and third paragraphs in the
analysis on page 2:
The regulations resulting from this legislation will
initially adjust maximum and minimum civil penalties
for inflation going back to 1990, and then adjust
penalties yearly according to changes in the U.S.
Consumer Price Index for All Urban Consumers (CPI-U).
It is anticipated that these changes will result in an
additional $460.4 in revenue to the general fund each
year. Given the length of time it takes to implement
regulations changes, it is anticipated that the
revenue increase will occur about halfway into FY
2019. Therefore, the FY 2019 revenue increase will
only be half of this amount.
10:30:29 AM
Co-Chair MacKinnon asked the bill sponsor and staff to
provide a brief bill overview.
REPRESENTATIVE SAM KITO, SPONSOR, shared that the bill had
been requested by DLWD, which would bring Alaska up to
federal standards for the Alaska Office of Safety and
Health. The bill would allow the department to change fees
with regulation to keep up with a consumer price index
(CPI) increase expected from the federal government on an
annual basis and would avoid the need to return to the
legislature annually to adjust the fees. The bill would
theoretically increase some revenue, but there was also
significant flexibility, so it was not as though penalties
would just increase. He elaborated that if employers were
complying there was a negotiated process by which the fees
could be waived or decreased in order to focus on the goal
of improving worker safety in Alaska. It was not a matter
of being punitive, but of trying to keep up with the
federal requirements; if the state did not keep up with
federal requirements it stood to lose some federal funding
and potentially the ability to implement its own
occupational safety and health office.
10:32:08 AM
Vice-Chair Bishop MOVED to REPORT HB 121 from committee
with individual recommendations and accompanying fiscal
note. There being NO OBJECTION, it was so ordered.
HB 121 was REPORTED out of committee with a "do pass"
recommendation and with one previously published fiscal
impact note: FN2 (LWF).
10:32:46 AM
AT EASE
10:35:11 AM
RECONVENED
Co-Chair MacKinnon handed the gavel to Vice-Chair Bishop.
CS FOR HOUSE BILL NO. 215(FIN)
"An Act relating to program receipts; and relating to
fees for services provided by the Department of Health
and Social Services."
10:35:29 AM
Vice-Chair Bishop detailed that the bill had been heard on
April 11, 2018. He asked the sponsor's staff to provide a
recap of the bill.
ELIZABETH DIAMENT, STAFF, REPRESENTATIVE PAUL SEATON,
detailed the bill would give fee authority to the Division
of Public Health to charge program receipts and fees to
recoup some of its costs for public health related
programs. The bill would expand the department's fee
authority to charge fees by regulation to recoup costs.
Senator Olson asked if there had been any opposition to the
bill from user groups that may be affected by the charges.
Ms. Diament replied that the only reservations had been
from Alaska State Hospital and Nursing Home Association
(ASHNHA) in the House Health and Social Services Committee.
The association's concern had been about public input and
process at the beginning of the regulatory process. She
noted that Section 3 had been added to the bill to address
the concern. The section would require a public scoping
meeting for each regulation in order for the public and
stakeholders to have a chance to comment before something
moved to the regulatory process. She reported the
association was supportive of the legislation after Section
3 had been added.
10:37:40 AM
Senator Olson asked if the sponsor had heard from Native
health corporations in rural areas.
Ms. Diament deferred the question to the Department of
Health and Social Services.
JILL LEWIS, DEPUTY DIRECTOR, DIVISION OF PUBLIC HEALTH,
DEPARTMENT OF HEALTH AND SOCIAL SERVICES, replied that the
division had not heard any opposition from tribal health
corporations.
Senator Olson asked specifically about 638 contractors.
Ms. Lewis replied that the division had not heard any
concerns or opposition except the previous concern by
ASHNHA, which had later provided a letter of support for
the legislation.
10:38:58 AM
Senator von Imhof asked if other state agencies charged
fees for data collection.
Ms. Lewis responded that she could not say definitively.
She believed other agencies charged for data and analysis.
A lengthy fee report was produced annually by the Office of
Management and Budget listing all of the individual fees.
Senator Olson asked if the department had concern it would
miss things like STDs, TB checks and other related items if
a fee to have the checks done was implemented. He wondered
if the department was concerned an epidemic may occur.
Ms. Lewis responded that the types of fees addressed by the
bill were mostly administrative charges and professional
services fees that would be charged to the industry and not
to individuals. There were exceptions in statute, so fees
would not be charged when not in the public interest, when
it did not support public health, and when in response to
communicable disease investigations. The division did not
and would not charge in those situations.
10:40:58 AM
Senator Micciche noted in the last meeting on the bill, the
committee had been left with the impression that MRI and CT
imaging equipment was not inspected. He clarified that the
machines were all currently required to be inspected; all
imaging equipment in the state was inspected.
Vice-Chair Bishop added he had also asked to verify that
the equipment was all operating according to the
manufacturers' recommended standards.
Senator Micciche MOVED to REPORT CSHB 215(FIN) out of
committee with individual recommendations and accompanying
fiscal note. There being NO OBJECTION, it was so ordered.
CSHB 215(FIN) was REPORTED out of committee with a "do
pass" recommendation and with one previously published
fiscal impact note: FN2 (DHS).
10:42:17 AM
AT EASE
10:44:37 AM
RECONVENED
CS FOR HOUSE BILL NO. 299(FIN)
"An Act relating to the authority of the director of
the Alcoholic Beverage Control Board; extending the
termination date of the Alcoholic Beverage Control
Board; relating to the application of precedent to
decisions of the Alcoholic Beverage Control Board; and
providing for an effective date."
10:45:37 AM
Vice-Chair Bishop asked the sponsor to provide a brief
overview of the bill.
REPRESENTATIVE ADAM WOOL, SPONSOR, explained that the bill
would extend the Alcoholic Beverage Control (ABC) Board.
The bill had been amended twice in its process through the
House. The ABC Board was a quasi-judicial board made up of
five members including two from industry, one from public
safety, one rural member, and one public member. The bill
included a four-year extension based on the audit
recommendation by the Division of Legislative Audit. The
board regulated almost 2,000 licenses in the alcohol
industry. The division had previously been housed under the
Department of Revenue and had moved to the Department of
Public Safety (DPS) - where individuals had more closely
resembled public safety officers with badges and weapons) -
and then it had moved to the Department of Commerce,
Community and Economic Development (DCCED).
Representative Wool disclosed that he owned a business with
a beverage dispensary license, which was governed by the
board. He added that he had been a license holder when the
division had been under the Department of Public Safety.
Eventually, the legislature had decided to move the
division to DCCED to make it more business friendly and
receptive to the idea of commerce instead of law
enforcement. He noted the division was under DCCED for
administrative purposes only and he acknowledged his
uncertainty about what that meant. He communicated the
audit made five recommendations.
10:48:08 AM
KRIS CURTIS, LEGISLATIVE AUDITOR, ALASKA DIVISION OF
LEGISLATIVE AUDIT, reviewed the findings in the legislative
audit dated November 2017 (copy on file). The audit found
that the board was operating in the public's interest in
all areas except licensing. The audit found the board's
meetings had been conducted in accordance with law, its
investigations were processed timely, and the board
actively developed and adopted regulations necessary to
implement statutes. The audit concluded the board should
improve its procedures for issuing renewals, recreational
site licenses and beverage dispensary licenses that
encouraged tourism. Testing found that the licenses were
not consistently issued in accordance with statutes.
Additionally, operational improvements were needed in
enforcing laws, monitoring board related local law
enforcement activity, and processing refunds to
municipalities. The division recommended an extension of
four years.
Ms. Curtis highlighted report conclusions. She turned to
page 8 of the audit where the division concluded that the
board's enforcement efforts had declined, and operational
improvements were needed. Alcohol and Marijuana Control
Office (AMCO) investigators had stopped conducting
compliance checks as of April 2015. Through AMCO
investigators, the board had historically conducted
compliance checks where investigators employed underage
individuals who attempt to purchase alcohol. When a license
failed a compliance check they were issued a criminal
summons or citation. Federal grant funding for the program
had run out in 2012. Supplemental funding to continue
conducting compliance checks had been received through June
2014. At that point investigators had continued conducting
the checks using program receipts through April 2015.
Ms. Curtis stated that although there was no statutory or
regulatory requirement to conduct compliance checks, AMCO
management had stated it was an integral part of its
enforcement of alcoholic beverage laws and it was
evaluating alternative means of providing enforcement
through shared services with other state agencies. The
audit noted that the board and AMCO management had not
established a written enforcement plan to direct the
limited enforcement resources. Additionally, the control
office did not monitor or track all complaints to ensure
complaints were followed up and investigated timely.
Ms. Curtis turned to page 2, paragraph 2 where the division
concluded the board and control office staff had not
maintained a list of restricted purchasers within the
statewide database of written orders in accordance with
regulation, potentially allowing persons convicted of
illegally selling or manufacturing alcohol to continue
purchasing alcohol via written order. The division made
eight recommendations for improvements. Two of the eight
were repeat recommendations from the prior sunset audit,
beginning on page 12. First, the authority to renew
licenses should be limited to the board. Statutes were very
specific that only the board may issue or renew a license.
There was a statutory provision to temporarily delegate the
authority to the executive director, but the division had
found that the board had permanently delegated the
authority to the executive director, who had in turn
delegated the authority to licensing staff.
Ms. Curtis addressed the second audit recommendation that
the board issue recreational site licenses in accordance
with statutory requirements. The division had tested 10 out
of 29 active recreational site licenses during the audit
period. She elaborated that all 10 licenses had not met the
definition of a recreational site. The statutory definition
was included at the bottom of page 12 of the audit, which
specifically identified what activities qualified including
baseball games, car races, hockey games, dogsled racing
events, or curling matches held during a season. The 10
non-compliant licenses included travel tour companies,
bowling alley, art council, pool hall, movie theater, and a
spa. The same issue had been found in the previous audit
and the same recommendation had been made. Board members
had been aware they were issuing the licenses in violation
with statute but believed it was in the public's best
interest to do so. The board also believed the licenses
would be addressed in a future rewrite of the law.
Ms. Curtis detailed the issuance of the licenses expanded
the number of establishments licensed to sell alcohol over
the number allowed for in statute. The audit's third
recommendation was for the board to issue beverage
dispensary licenses in accordance with statutory
requirements. The division had sampled 16 out of 126
beverage dispensary licenses issued to encourage tourism
and it found 5 were transferred and 6 were renewed despite
not meeting statutory requirements. Page 13 explained that
the statutes gave the board authority to issue a beverage
dispensary license without regard for statutory population
limits if it could be shown a license would encourage
tourism and the statutes provided for a minimum number of
rental rooms that must be met in order to qualify as a
business that encourages tourism. The errors found by the
division were in entities that did not meet the room
requirements. The board believed it was appropriate to
continue to issue the licenses because the original
licenses had been issued prior to 1985 (the year the
statute had been implemented). However, the statute did not
provide for grandfathering of a license as it existed at
the time.
Ms. Curtis moved to the fourth audit recommendation. She
detailed the board, AMCO director, and enforcement
supervisor should work together to establish an enforcement
plan to direct their limited resources. She noted she had
reviewed the same recommendation as part of the Marijuana
Control Board audit. The fifth recommendation was directed
to the Marijuana Control Board to implement a process to
monitor and track all complaints to ensure complaints were
followed up timely.
Ms. Curtis reviewed the sixth audit recommendation on page
15. The division recommended the board and AMCO director
develop written procedures for updating the statewide
database with restricted purchasers. The background
information section of the audit described the database of
written orders. The database was used to control and
monitor the sale of alcohol to restricted areas of the
state. It was also used to provided package store licensees
with a list of individuals who had been convicted of
selling or manufacturing alcohol; the stores were then
prohibited from selling alcohol to the restricted
purchasers. The audit had determined restricted purchasers
had not been entered into the database due to a lack of
procedures. Further, the reports of convictions had not
been consistently provided to the control office by the
Court System.
Ms. Curtis addressed the seventh recommendation on page 16
specifying that the board and AMCO staff should improve
procedures to ensure municipalities reported violations of
alcohol laws. Statute required municipalities to report the
information as a condition of receiving half of the
biennial licensing fees. The audit had found only 4 of the
40 locations had been reporting the information; however,
the fees had been routinely refunded.
Ms. Curtis moved to the eighth recommendation on page 17
specifying the AMCO director should develop and implement
procedures to ensure refunds to municipalities were
appropriately reviewed. Auditors reviewed the process for
calculating the refunds and found there was only one staff
person responsible for calculating and approving the
payments, with no independent review. The lack of review
increased the risk for incorrect payments. The Office of
the Governor agreed the board should be extended and its
response to the audit began on page 27. The department's
response on page 29 concurred with all recommendations
except the first, which was the recommendation to limit
renewal to the board. The department believed the statutes
could be interpreted in a different manner; however, it
agreed that going forward, all renewals would be brought to
the board.
Ms. Curtis detailed that the board's response was on page
33. The board chair agreed with all recommendations except
the third regarding dispensary licenses to encourage
tourism. The board chair felt the grandfathering of
licenses was appropriate. She explained that auditing
standards required the division to address circumstances
when an auditee disagreed with a recommendation. Her
comments were on page 35 where she discussed the board's
disagreements with the third recommendation. She stated
that no additional information had been provided for her
review. She reaffirmed the report conclusions and
recommendations.
Senator Micciche remarked there were issues with the ABC
Board but allowing the board to sunset would not solve the
issues. He supported the bill. He mentioned other
legislation that he believed would simplify management of
the board dramatically and could help with struggles shown
in various audit findings.
10:57:11 AM
Senator Stevens appreciated the comments in the committee
substitute specifying the director was not a member of the
board, could not vote, and could not cast a tie breaking
vote. He thought the board structure was different than
other boards given the term limit members could serve on
the board or as chair. He asked for detail about the
structure in other boards and how the ABC Board differed.
Ms. Curtis answered that page 1 of the audit noted that
statutes did not limit the number of consecutive terms a
member may serve. She continued it was the one difference
the division had noted that there were individuals on the
board that had been there for quite some time. The
Marijuana Control Board was different in its requirement
that a member was required to leave the board for a given
number of years before returning. The ABC Board did not
have the requirement.
Senator Olson asked Representative Wool for his response to
the audit recommendations. He remarked on his respect for
Ms. Curtis and her work.
Representative Wool agreed with the audit recommendations.
He provided a brief overview of some of the issues he saw
with the board decisions. He noted he was not familiar with
all of the board's decisions. He referenced the
recommendation to issue licenses according to statute,
which he believed the board was trying to do. He elaborated
that Alaska Airlines was experiencing a situation with the
board where it was not currently renewing the airline's
licenses. The issue had to do with the fingerprints of all
the airline's vice presidents. Historically, the airline
had provided the information in one way in the past, but
had been told by the board was following statute and the
airline could not longer provide the information in the
same way. He explained that the board was following
statute, but he questioned whether it was in the best
interest of the business, the state, or commerce. He was
not concerned about Alaska Airlines and knew they would
come up with a solution because they had money and
attorneys. He reasoned that did not mean it was a good
solution because many people did not have that option.
Representative Wool continued that the audit did not
address how the board was making business easier or
unencumbered. He referenced grandfathering in of businesses
that could not renew their licenses suddenly after 25
years. He referenced another bill currently going through
the legislature that would fix the issue. He stated the
board was following statute, but he wondered if there was
another interpretation or another set of eyes. He was
amenable to the audit recommendations.
11:01:00 AM
AT EASE
11:01:39 AM
RECONVENED
Senator Stevens continued his earlier questioning about the
ABC Board compared to other boards. He stated that the
Marijuana Control Board had a limit of three terms for
members. He asked Ms. Curtis if she believed term limits
should be explored.
Ms. Curtis replied that the division used the criteria
found in the back of the audit to conduct an audit. She
explained if there were no criteria to use for a
recommendation, the division did not make a recommendation.
She stated it was a policy call. She did not know what the
legislative intent had been when creating the ABC Board
structure. The division would have to dive into the issue
prior to providing any type of response.
CSHB 299(FIN) was HEARD and HELD in committee for further
consideration.
[Note: CSHB 299(FIN) was heard again at 3:20 p.m. See
below.]
11:02:54 AM
RECESSED
3:14:28 PM
RECONVENED
CS FOR HOUSE BILL NO. 275(FIN)
"An Act extending the termination date of the Board of
Massage Therapists; relating to license renewal and
criminal history record checks for massage therapists;
and providing for an effective date."
3:14:53 PM
Vice-Chair Bishop MOVED to ADOPT proposed committee
substitute for CSHB 275(FIN), Work Draft 30-LS1185\O
(Radford, 4/14/18).
Co-Chair MacKinnon OBJECTED for discussion. She noted the
bill had been heard on April 3, 2018 when public testimony
had been heard and the fiscal note had been reviewed. She
asked her staff to review the changes in the bill.
JULI LUCKY, STAFF, SENATOR ANNA MACKINNON, reviewed the
committee substitute (CS). She referenced a conversation
earlier in the day about a massage therapist bill and
finger printing. The previous version of HB 25 had a very
similar provision that limited the finger printing to once
every three renewals. The bill moved out of the committee
earlier in the day had similar language, which limited
finger printing to once every six years. The committee did
not want to run into a technical problem with passing two
bills that revised the same section of law with different
language; therefore, the CS was a simple, clean board
extension to June 30, 2024 with all of the language
regarding finger printing removed.
Co-Chair MacKinnon asked if the extension was the same year
as the previous bill.
Ms. Lucky affirmed that the bill had the same extension
year as the previous bill that had been presented to the
committee.
Co-Chair MacKinnon WITHDREW her OBJECTION. There being NO
further OBJECTION, it was so ordered.
3:17:19 PM
Co-Chair MacKinnon invited the sponsor's staff to the table
and asked if the sponsor was amenable to the changes in the
CS.
CRYSTAL KOENEMAN, STAFF, REPRESENTATIVE SAM KITO, replied
that the sponsor [Representative Sam Kito] was in full
support of the changes in the CS.
Vice-Chair Bishop MOVED to REPORT SCS CSHB 275(FIN) out of
Committee with individual recommendations and the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
SCS CSHB 275(FIN) was REPORTED out of committee with a "do
pass" recommendation and with one new fiscal impact note
from the Department of Commerce, Community and Economic
Development.
3:18:13 PM
AT EASE
3:20:05 PM
RECONVENED
CS FOR HOUSE BILL NO. 299(FIN)
"An Act relating to the authority of the director of
the Alcoholic Beverage Control Board; extending the
termination date of the Alcoholic Beverage Control
Board; relating to the application of precedent to
decisions of the Alcoholic Beverage Control Board; and
providing for an effective date."
3:20:05 PM
Co-Chair MacKinnon provided a brief history on the bill,
which had been heard earlier in the meeting. She listed
individuals available to testify.
REPRESENTATIVE ADAM WOOL, SPONSOR, reported that HB 299
would extend the Alcohol Beverage Control Board for four
years as recommended by the audit [by the Division of
Legislative Audit]. The committee had reviewed the audit
recommendations previously. He noted there had been an
amendment in the House Labor and Commerce Committee and
another in the House Finance Committee.
Co-Chair MacKinnon asked for a review of the Sectional
Analysis.
LAURA STIDOLPH, STAFF, REPRESENTATIVE ADMAN WOOL, read from
the Sectional Analysis for CSHB 299(FIN), version U (copy
on file):
Section 1. AS 04.06.075 is amended by adding a new
subsection, "(b) The director is not a member of the
board and may not vote on a matter before the board."
Section 2. AS 44.66.010(a)(1) is amended to extend the
Alcoholic Beverage Control Board to June 30, 2022.
Section 3. AS 04.11.437 Application of Precedent "In
determining whether issuance, renewal, transfer,
relocation, suspension, or revocation of a license is
in the best interests of the public, the board need
not conform to or distinguish its decision from any
action it has taken in the past on applications
presenting similar facts, but may instead base its
decision only on the particular facts before it." is
repealed.
Section 4. 3 AAC 304.025(c) is annulled.
Section 5. Section 2 of this Act takes effect
immediately under AS 01.10.070(c).
Ms. Stidolph elaborated that Section 4 annulled AAC
304.025(c), which was a regulation that allowed the
director to be a voting member of the board.
3:23:47 PM
Senator Stevens assumed the executive director was hired by
the board. He asked if the five-member board selected its
own chair.
Representative Wool replied that the board chair was
selected by the governor.
Senator Stevens asked whether the board director was
appointed by the board.
Representative Wool stated that the director of the Alcohol
and Marijuana Control Board (AMCO) was appointed by the
governor and technically worked for the board.
Co-Chair MacKinnon looked at [page 1] line 7 of the bill
and wondered if there had been an issue regarding the
director voting. She asked for history on the matter.
Ms. Stidolph reported that in 2012 the statute that allowed
the director to be a voting member was repealed, but it had
been left in regulation. The regulation had been noted in a
January board meeting that in the case of a tie the
director would cast the tie breaking vote. She noted that
the director's vote had not ultimately been needed. She had
been told the situation was the first time in a decade that
the director may have been asked to cast the tie breaking
vote. The bill only repealed the regulations (the provision
had already been repealed in statute).
3:25:59 PM
Co-Chair MacKinnon asked about the composition of the
current board.
Ms. Stidolph replied that the ABC Board made up of five
members including two from industry, one from public
safety, one rural member, and one public member.
Senator von Imhof considered the numerous letters (copy on
file) pertaining to the bill, which alleged the regulations
were not clear. She highlighted that local establishments
were in danger of being shut down. She noted a grandfather
clause dovetailed on the issue. She stated the bill was
merely a board extension, but there seemed to be concern
about existing regulations. She asked how the pieces all
fit together.
Ms. Stidolph responded that the auditors had found that
there were 34 businesses in noncompliance that had tourism
beverage dispensary licenses. The businesses had all been
operating since 1985 with the belief they had been
grandfathered in since the last rewrite. There had been a
couple of board meetings that had determined a legislative
fix was needed. She noted Representative Wool was
sponsoring separate legislation that would provide the
legislative fix. She summarized the issue had arisen in an
audit finding that was currently being resolved by the
legislature.
3:28:19 PM
Senator von Imhof asked about the bill being referenced.
Ms. Stidolph specified that HB 301 was currently in the
Senate Labor and Commerce Committee.
Senator Stevens asked for detail on the current board in
terms of the number of appointments members had and when
the appointments had occurred. He was interested in the
information broken out by the four board appointee
categories.
Co-Chair MacKinnon replied that the requested information
could be provided. She understood there were not term
limits on the board. She had seen the chair of the board
multiple times during her service in the legislature. She
considered whether the audit included the information.
3:30:01 PM
AT EASE
3:30:31 PM
RECONVENED
Co-Chair MacKinnon referenced page 1 [of the audit], which
included a list of the board member representation
including one rural member, one public member, one public
safety member, and two industry members. She asked Senator
Stevens for verification he was interested in the longevity
of each board member.
Senator Stevens replied in the affirmative. He requested
the dates of each appointment and whether multiple
appointments had occurred.
Co-Chair MacKinnon agreed and noted there may be someone
available online to provide the information.
Senator von Imhof thought the bill was important. She
wanted to read through the audit and provide questions to
Co-Chair MacKinnon.
Co-Chair MacKinnon agreed. She planned to set the bill
aside to address some questions and intended to hear it
again as quickly as possible.
3:32:04 PM
Co-Chair MacKinnon OPENED and CLOSED public testimony.
Vice-Chair Bishop discussed FN 2 from the Department of
Commerce, Community and Economic Development, OMB Component
Number 3119. The annual cost was $1,660,000 in designated
general funds. He read from the page 2, paragraph 3 of the
fiscal note:
If the bill passes the following expenses will be
incurred: Personal Services: $765.5 (eight full time
agency staff: 3 Special Investigator I, Records and
Licensing Supervisor, 2 Occupational Licensing
Examiner, Administrative Assistant I, Criminal Justice
Technician I)
3:33:45 PM
AT EASE
3:33:54 PM
RECONVENED
Vice-Chair Bishop continued to read from the fiscal note
analysis:
Travel: $73.5 (board members attend at least five
board meetings per year; board is required to meet in
each judicial district at least once per year; agency
director and occasionally board chair or other agency
management staff travel for conferences and/or
training; enforcement staff travel throughout state
for inspections and investigations)
Services: $750.0 (includes information technology and
department support for deleted positions; support from
the Department of Law; hearing services; building
leases; meeting advertising; meeting space rental; and
other reimbursable services agreements with other
agencies)
Commodities: $71.6 (supplies including printing
statute/regulation books; required signs for
licensees; ammunition and other enforcement training
supplies; office supplies)
The ABC Board's work is funded by program receipts.
Fees for applicants and licensees for new licenses,
renewal of licenses, or transfer of licenses include
an application fee set in regulation, a license fee
mostly set in statute (a few license types are
established in regulation along with their license
fee), and a background check fee set by the Department
of Public Safety. Permit fees are set in statute for
permits established in statute, and set in regulation
for permits established in regulation. The total
amount of revenue collected approximately equals the
actual regulatory costs.
Co-Chair MacKinnon asked to hear from the ABC Office
director. She referenced an earlier question [from Senator
Stevens] regarding the longevity of the members currently
serving on the board.
ERIKA MCCONNELL, DIRECTOR, ALCOHOL AND MARIJUANA CONTROL
OFFICE, ANCHORAGE (via teleconference), stated that not all
the five members listed in the audit were current board
members; two of the members had been replaced. She did not
have precise numbers but reported that the chair (Mr. Bob
Klein) had been serving for a long period of time - she
estimated his service at 20 years. She believed Mr. Evans
had been serving for around 5 years; Mr. Rex Leath was a
new public safety member and had been serving for about 1
year (the public safety seat had been established by the
legislature in the past year), the remaining public and
industry members had recently been replaced.
Co-Chair MacKinnon asked Senator Stevens if limiting the
information request regarding the length of service to Mr.
Klein and Mr. Evans was acceptable.
Senator Stevens replied in the affirmative.
Co-Chair MacKinnon would contact the administration to
receive the information. She appreciated the longevity and
the perspective of industry and rural representation on the
board.
3:38:08 PM
Vice-Chair Bishop how many of the eight full-time agency
staff carried firearms. Ms. McConnell answered all eight
investigators throughout the state carried firearms.
Vice-Chair Bishop asked whether all the staff were trained
in Sitka. Ms. McConnell responded that all the staff had
previously been police officers. She assumed they had all
been through the appropriate police academies.
Co-Chair MacKinnon asked Representative Wool to repeat a
disclosure he had provided earlier in the meeting.
Representative Wool declared a conflict of interest because
he was the owner of a beverage dispensary license governed
by the board.
Ms. McConnell asked to provide testimony on the bill.
Co-Chair MacKinnon asked Ms. McConnell to proceed.
Ms. McConnell provided testimony with prepared remarks:
This testimony relates to Section 3 of HB 229, which
repeals AS 04.11.537 application of precedent. This is
a very short section and it says, "in determining
whether issuance, renewal, transfer, relocation,
suspension, or revocation of a license is in the best
interest of the public, the board need not conform to
or distinguish its decision from any action it has
taken in the past on applications presenting similar
fact, but may instead base its decision only on the
particular facts before it."
On April 10th the ABC Board voted to recommend to the
legislature that this section be retained within Title
IV. This section of statute allows the board to make
decisions based on the facts and the particular
circumstances of each case that comes before it
without being bound by how the board treated a similar
case in the past. This section does not allow the
board to make random decisions based on whims. The
board works hard to be consistent so that it can
properly discharge its authority under statute and
maintain credibility and predictability for the public
including licensees. However, the flexibility allowed
by this section of statute is vital to the board's
requirement to act in the public's interest.
The board is required by AS 04.06.050 to travel to the
four judicial districts in the state at least once per
year to modify the existing board regulations in light
of statewide and local problems. This acknowledgement
of the particular challenges that face the varied
communities in the state, along with the local option
provisions and the broad opportunity for local
government protests on licenses recognizes that
different situations exist in different communities
within the state with respect to the manufacture,
barter, possession, and sale of alcoholic beverages.
Consequently, the board may be faced with applications
presenting similar facts in different communities and
need to take different actions based on the public
input from those communities. The board must be free
to conclude that what is in the public interest may
differ in different parts of the state and be
different over time.
My speculation on why this amendment was offered is
that Representative Wool is attempting to address very
real frustrations with situations where licensees or
board staff has followed certain practices or taken
certain actions, sometimes over a period of months or
years, some of which were unknown to the board or to
the director and which did not necessarily have
statutory support.
3:42:37 PM
Ms. McConnell continued with her prepared testimony:
Representative Wool this morning mentioned the
situation with Alaska Airlines. While there are very
valid frustrations with this type of situation,
removing the board's flexibility to address individual
circumstances as described above will not guarantee
against human error either on part of the board staff
or licensees and errors where they are consistent with
statute should be corrected. In summary, the Alcoholic
Beverage Control Board recommends retaining AS
04.11.537 in Title IV. Thank you.
3:43:14 PM
Senator Stevens understood Ms. McConnell's comments on
flexibility and versus consistency and following rules. He
asked for provide an example of why the board would not be
consistent with following the rules.
Ms. McConnell stated that the section did not allow the
board to be inconsistent in following the rules set forth
in statute and regulations. The section specified that when
the board had acted in a certain manner for a license
application in Juneau for example, the board could face a
similar license application in Bethel where there was not
public or local government support. In that case the board
may act differently on a similar license application in
Bethel and in Juneau because of the different situations in
the two communities, the different public input, and the
different interests of the local governments.
Co-Chair MacKinnon asked for verification that Ms.
McConnell was referencing regulation and not statute.
Ms. McConnell replied that she was referencing the
statutory section the bill proposed to delete. The board
worked to implement statute and regulation.
Co-Chair MacKinnon asked if Ms. McConnell was speaking to
Section 4. Ms. McConnell clarified that she was speaking to
Section 3 of the bill.
3:45:25 PM
Senator Micciche thought the issue might be related to a
problem occurring in Alaska where individuals who had
invested their savings in a business that was license
premised were subject to the decision by the board and
staff to evaluate renewal differently than they had in the
past. He asked how Ms. McConnell would feel if the bill
only allowed the decision to change in a different
geographic location as opposed to particular licensed
premise.
Ms. McConnell asked if Senator Micciche was suggesting that
the application of precedent section be more specific with
regard to location and time.
Senator Micciche stated he had assumed Ms. McConnell was
concerned the board could be locked into a decision made in
Juneau, which may be a very different situation than an
issue the board may be dealing with in another community.
He posed a scenario where the board was protected against
having the same decision throughout the state. He asked if
there was a way to protect the board from a decision based
on geographic location versus a different reading as a
license regarded as grandfathered in one location.
Ms. McConnell expected there were many ways to phrase the
bill to try to accommodate the board's concerns with regard
to acting in the public interest and the types of concerns
raised by the committee. She did not have a specific
suggestion at present.
Co-Chair MacKinnon CLOSED public testimony.
3:48:21 PM
AT EASE
3:49:34 PM
RECONVENED
Co-Chair MacKinnon referenced a document entitled
"Alcoholic Beverage Control Board," which listed current
board members and detailed board information (copy on
file). She stated that the committee would persevere to
obtain additional information.
Senator Micciche requested to from the sponsor pertaining
to Section 3.
Representative Wool referenced a memorandum authored by
legislative counsel Linda Bruce with Legislative Legal
Services dated April 3, 2018 on the subject of application
of precedent (copy on file). The memo noted that no other
board had the provision, including the Marijuana Control
Board. The memo stated that the language could present due
process and equal protection problems by treating similarly
situated licenses differently and potentially giving
different punishments for similar violations. He understood
the regional differences and applauded the board for
considering the situations differently. He explained the
removal of the section did not mean the board had to adhere
to precedent. The section specified that the board could
ignore precedent, which he found troubling. He continued
that Ms. McConnell was correct that he felt some
frustration from hearing from different parties, including
licensees with licenses that were not being renewed after
35 years due to a law change. He referenced frustration
expressed by Alaska Airlines and other anecdotal stories
from licensees he had spoken with.
Representative Wool explained that Section 3 had come from
Legislative Legal Services. He believed it would help in
looking at situations he had been made aware of regarding
board decisions in the past. He mentioned that Alaska
Airlines had been treated one way for a decade or more and
had suddenly been asked to provide 22 sets of finger
prints. He and the industry found the situation cumbersome.
He wondered whether the board could come to a solution
without going through its normal process involving an
administrative law judge and state superior court. He
reiterated his earlier testimony that the situation was a
little more doable for a big corporation but may be
impossible for a small business (especially if they were
facing closure). He was trying to remove road blocks to
making good decisions.
3:53:20 PM
Senator von Imhof recalled that Alaska Airlines had gone
from a requirement of 5 sets of finger prints to 22 sets.
She gleaned that the board was adhering to statutes more
literally than in the past, which was the reason for the
requirement for the additional finger prints. She asked
whether Alaska Airlines could go back to providing 5 sets
of finger prints if Section 3 was repealed.
Representative Wool stated that he was not suggesting the
action mentioned by Senator von Imhof. He explained it was
a legal question. The ABC Board had a lawyer who had
communicated the requirement for the 22 sets of finger
prints, even though it had not been the requirement in the
past. The audit requested that the board adhere to statute.
He reiterated that he was trying to remove potential
obstacles to using evidence that could make the board more
amenable to removing road blocks in situations like the one
facing Alaska Airlines. He explained Alaska Airlines had
been presented with providing 22 sets of finger prints or
creating a corporation within Alaska for the sole purpose
of holding liquor licenses it used in Alaska. He surmised
that the issue was manageable for large companies like
Alaska Airlines, but not all companies could handle the
burdensome needs required to adhere to the statute. He
reiterated that no other board had the provision and it
could be a due process problem.
3:55:14 PM
Co-Chair MacKinnon reported that amendments were due the
following day by noon. She discussed the schedule for the
following meeting.
CSHB 299(FIN) was HEARD and HELD in committee for further
consideration.
Co-Chair MacKinnon asked if members wanted to hear from
anyone else in the future regarding CSHB 299(FIN).
Senator von Imhof thought it could be helpful to hear from
the Department of Law.
Co-Chair MacKinnon provided additional closing remarks
regarding the schedule.
ADJOURNMENT
3:57:59 PM
The meeting was adjourned at 3:58 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| CSHB299 (HFIN) Explanation of Changes ver A to ver U 4.9.18.pdf |
SFIN 4/14/2018 10:00:00 AM |
HB 299 |
| HB 299 - Additional Backup - Precedent Alaska Airlines.pdf |
SFIN 4/14/2018 10:00:00 AM |
HB 299 |
| HB 275 Work Draft Version O.pdf |
SFIN 4/14/2018 10:00:00 AM |
HB 275 |
| HB 299 Alcoholic Beverage Control Board Fact Sheet and Roster - with Source.pdf |
SFIN 4/14/2018 10:00:00 AM |
HB 299 |
| HB 215 DPH response SFIN 4-11-2018.pdf |
SFIN 4/14/2018 10:00:00 AM |
HB 215 |
| HB 299 ABC Board Resolution re amendment to HB 299.pdf |
SFIN 4/14/2018 10:00:00 AM |
HB 299 |
| HB299_ABC Board Resolution.pdf |
SFIN 4/14/2018 10:00:00 AM |
HB 299 |