CS FOR SENATE BILL NO. 80(FIN) "An Act extending the termination date of the Big Game Commercial Services Board; extending the termination date of the Board of Massage Therapists; extending the termination date of the Alaska Commission on Aging; extending the termination date of the Marijuana Control Board; and providing for an effective date." 3:45:53 PM Co-Chair Foster turned to the next item on the agenda. SAVAYA BIEBER, STAFF, SENATOR JESSE BJORKMAN, communicated the sponsor's apologies for not being present; he was currently in another bill hearing. She reviewed the bill with prepared remarks: This bill extends the sunset date of four boards, the Board of Massage Therapy, Marijuana Control Board, Alaska Commission on Aging, and the Big Game Commercial Services Board. SB 80 is a cleanup bill from last year, it backdates these board extensions back to June of 2024, and extends them again as amended in the bill. The Board of Massage Therapists is comprised of five members that examine applications and issue licenses, adopt, and enforce regulations, and establish standards of professional competence. The Marijuana Control Board is comprised of five members that control the cultivation, manufacture, and sale of marijuana in the state. Alaska Commission on Aging is comprised of eleven members who help seniors lead dignifies lives, provide recommendations to Alaska House Finance Corp, and make recommendations to the Governor and Legislature. The Big Game Commercial Services Board is comprised of nine members who prepare, and grade written and practical guiding examinations, issue guide license, adopt regulations, and assist DPS and DCCED in big game investigations. All four 2023 board audits concluded that the board operated in the public's interest by actively amending regulations, conducting meetings in an effective manner, and enhancing public safety. 3:49:00 PM Co-Chair Foster asked the legislative auditor to provide any comments. KRIS CURTIS, LEGISLATIVE AUDITOR, DIVISION OF LEGISLATIVE AUDIT, introduced herself and relayed that the Division of Legislative Audit conducted sunset audits of all four of the boards being extended via SB 80. She planned to explain the recommended extensions and would review audit recommendations. She provided prepared remarks: The first sunset report is on the Marijuana Control Board. We recommended a three year extension. The three-year extension recommendation is made in recognition that a report issued by the governor's Advisory Task Force on Recreational Marijuana was expected lead to significant changes to board and the Alcohol and Marijuana Control Office's duties, and a new information system, was expected to significantly change the board's licensing and enforcement processes. A three-year extension would allow for a timely evaluation of these substantial changes and align the board's next sunset review with the Alcoholic Beverage Control Board's sunset and allow a comprehensive review of AMCO's support to both boards. The audit includes four recommendations that begin on page 20. First, we recommend AMCO's director establish procedures to ensure the marijuana handler permit documentation is properly maintained. Second, we recommend that the board and the AMCO director continue to implement a new license and enforcement information system. Lastly, recommendation 3 on page 21, we recommend the legislature consider requiring Marijuana board regulation changes be approved by a majority of board members. 3:50:50 PM Representative Stapp thanked Ms. Curtis for her work. He asked about the problems identified with making cash deposits and enforcement issues with illegal grow operations. He asked for comment. Ms. Curtis replied that the audit did not look at cash transportation. The audit simply looked at the board functions. She requested clarification on his second question. Representative Stapp thought the issue was likely outside the purview of the board. He related that many individuals in the industry were perturbed by the lack of enforcement with black market grow operations. He asked if the issue was addressed in the audit. Ms. Curtis cited page 13 of the audit and noted enforcement was addressed. The page contained a snapshot of how much enforcement happened during the audit period. She did not believe it would include criminal black market activity as it was a law enforcement issue. Representative Galvin referenced audit recommendation 3 that recommend the legislature consider requiring marijuana board regulation changes be approved by a majority of board members. She asked for more context on the recommendation. Ms. Curtis replied that page 9 of the audit contained a summary of all the meetings that were held. She informed the committee that for regulation changes the board required a majority vote with a quorum present. She relayed that on June 2021, the board passed an increase on the level of THC in edibles with 3 votes present but had one nay vote by public safety and its rural members were absent. She indicated that the action was legal however, the audit questioned whether it was in the public's best interest. She noted that licensing actions required a vote by the majority of board members while regulation changes required a simple majority of members present. The audit merely wanted to bring awareness to the situation. 3:54:40 PM Representative Galvin asked how the audits recommendation fit in with other boards that dealt with health issues. Ms. Curtis replied that she did not know about other boards' participation but thought the vote was concerning. 3:55:40 PM Ms. Curtis addressed the audit recommendation for the Board of Massage Therapists with prepared remarks: The next sunset audit is over the Board of Massage Therapists. We recommended a 6 year extension. The audit includes four recommendations that begin on page 12. First, we recommend the DCBPL's director develop procedures to ensure licenses are not approved based on outdated documentation. Second recommendation we recommend DCCED's commissioner work with policy makers to improve the recruitment and retention of investigators. Recommendation 3 is similar we recommend the commissioner work with policy makers to improve the recruitment and retention of licensing staff. Recommendation 4 is on page 14; We recommend the board and DCBPL director consider increasing licensing fees to cover the cost of regulating the profession. 3:56:24 PM Ms. Curtis addressed the audit recommendations for the Big Game Commercial Services Board: The third sunset audit report you have in your meeting packets is on the Big Game Commercial Services Board. We recommend the legislature extend this board six years. The audit makes 2 recommendations that begin on page 13. Recommendation 1: DCBPL's director should improve oversight procedures to ensure required licensure documentation is obtained and reviewed. Recommendation 2 is on page 14. We recommend the board consider whether two private landholder board seats continue to be necessary for effective regulation. Co-Chair Foster asked for more detail on the second recommendation. Ms. Curtis replied that the audit discovered that one private landholder board seat was vacant for 12 months with unexcused absences for 7 months and the second board seat was vacant for 31 months. The two seats lacked participation for most of the board meetings. A similar finding was made for the 2018 audit. She related that no one on the board seemed concerned about having the private landholder's particular perspective brought to the board. The audit brought it to the board's attention and their response was that the Governor's office should do a better job recruiting for the vacant seats. 3:58:04 PM Ms. Curtis reviewed the eight-year extension recommendation for the Alaska Commission on Aging: The last board extension for your consideration is the Alaska Commission on Aging. We recommend an extension of eight years. The report includes one recommendation which you can find on page 11. We recommend that the commission's chair ensure the annual analysis and evaluation report is complete and provided to the legislature and governor. Co-Chair Foster OPENED public testimony. Co-Chair Foster CLOSED public testimony. 3:59:29 PM Co-Chair Foster request a review of the 3 fiscal notes. Representative Hannan asked if there was no fiscal note for the Big Game Commercial Services Board. BRODIE ANDERSON, STAFF, REPRESENTATIVE NEAL FOSTER, replied that he would double check on the fourth fiscal note, but he believed that only 3 had been submitted. He reviewed the fiscal note from the Department of Commerce, Community and Economic Development (DCCED) (FN3(CED) for the Board of Massage Therapists and the Big Game Commercial Services Board. He reported that the total was $53,000 and the amount was included in the governor's FY 26 budget. He specified that $48.5 thousand was included for travel ($20.3 for 5 members of the Board of Massage Therapists and 1 staff member, and $28.2 for 9 members of the Big Game Commercial Services Board and 2 staff members, to attend four meetings of their respective boards per year). In addition, the fiscal note included $4.5 thousand for services such as advertising of public meeting notices, training and conference fees, and board member stipends. 4:03:03 PM Representative Allard voiced that the state was in a "really bad fiscal crunch. She asked if there was a reason the boards could not hold meetings over Zoom. SYLVAN ROBB, DIRECTOR, DIVISION OF CORPORATIONS, BUSINESS AND PROFESSIONAL LICENSING, DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT (via teleconference), highlighted that all of the spending came from Designated General Funds (DGF) from the boards licensing fees. The Big Game Services Board regulation changes required board members to be in person due to their duty to administer examinations. 4:05:33 PM Mr. Anderson reviewed the second DCCED fiscal note (FN2 CED) for the Alcohol and Marijuana Control Office. He noted that the amount was included in the governor's FY 26 budget. He reported that the personal services line totaled $1.273 million for 10 full time positions: one Special Investigator 2, three Special Investigators 1, three Licensing Examiner 2, one Program Coordinator 2, one Licensing Examiner 3, and one Local Government Specialist 4. The travel line totaled $92.5 thousand broken down by the $62.5 thousand for five board members and two staff members to attend five board meetings per year; $15.0 thousand for enforcement travel for inspections, audits, and investigations; $15.0 thousand for director or staff travel for conferences and or training. He moved to the services line totaling $709.4 thousand for services provided to AMCO through reimbursable services agreements including Department of Law, Administrative Services, Office of Administrative Hearings, Department of Public Safety, Public Notice Advertisements, Postage, Lease Space, and other statewide core services costs. He noted that the Commodities line totaled $62.9 thousand for $17.9 thousand in printing materials - required signs for licensees, licenses, statute books; $25.0 thousand enforcement supplies and ammunition; $20.0 thousand for office supplies; and finally the Capital Outlay was $12.5 thousand for vehicle costs. He also noted the change in revenues of Unrestricted General Fund (UGF) that included $19.100 thousand UGF and $2.131.2 million DGF for a total of $2.150.3 million. He specified that the all the funding was derived from licensing fees collected, required by statute and the small injection of UGF. 4:08:53 PM Mr. Anderson reviewed the Department of Health fiscal note (FN3 (DOH) for the Alaska Commission on Aging. He pointed to the personal services line totaling $336 thousand for two full time positions for the Alaska Commission on Aging to fulfill its statutory responsibilities. The travel line totaled $70.5 thousand and $48.2 thousand in services, and $8 thousand in commodities totaling $462.7 thousand from a combination of $261.3 thousand in Interagency Receipts and $201.4 thousand in Mental Health Trust Receipt Authority (MHTRA). Representative Allard asked for verification that there were no general fund expenditures. Mr. Anderson replied that there was no UGF for the Commission on Aging. Representative Allard asked if there was UGF on any of the other boards. Mr. Anderson replied that there was $19.000 thousand UGF for AMCO. 4:11:21 PM KEVIN RICHARD, DIRECTOR, ALCOHOL AND MARIJUANA CONTROL OFFICE, DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT (via teleconference), would have to follow up with a written response. Representative Allard would appreciate the information. Co-Chair Foster recapped that the bill had passed in the prior year but violated the single subject rule [and was vetoed.] It was heard it the prior year. He asked if it was the will of the committee to move the bill out of committee. Representative Hannan wanted to see the committee move the bill quickly. She noted that one of the fiscal notes only applied to FY 26 and FY 27 and if the legislature did not get the bill passed in the current year there were two boards that would have to go into statutory shutdown. She acknowledged that there was $19.1 thousand in UGF in the AMCO fiscal note, but it would cost that much to wind down the board and restart it. She would like to see the bill moved in the current week. She reminded the committee that if the bill was amended it would push a board into another audit cycle. Representative Allard did not have a problem with moving the bill, but her concern was that the boards were self- funded, and she was trying to determine why the board could not explain why UGF funds were necessary. Co-Chair Foster noted that the bill could be heard the following day with an answer. 4:15:40 PM Ms. Curtis pointed to page 17 of the AMCO audit. She relayed that the fees exceeded the cost of regulation. The legislature included intent language that set the fees to cover the costs of establishing the board that was $5.5 million. Therefore, AMCO was adding money to GF in repayment. She noted that at the end of the audit they still owed $868 thousand and projected that it would be paid off by FY 24. The audit was done in 2023. She pointed out that AMCO fees were consistently set higher than the cost of regulating. Representative Tomaszewski looked at Sections 1 and 2 in the bill and noted the date changes to 2024 and then to 2032. Ms. Bieber replied that when the legislature had passed SB 189 the prior year the dates were extended. She clarified that the bill had not been vetoed but was under litigation and was technically a law. Therefore, SB 80 was backdating what is in current statute in order to "clean the slate. Co-Chair Schrage supported hearing the bill the following day. Co-Chair Foster stated it would be added to an agenda the following day. HB 80 was HEARD and HELD in committee for further consideration. Co-Chair Foster reviewed the schedule for the following day.