HOUSE BILL NO. 239 "An Act extending the termination date of the Board of Examiners in Optometry; and providing for an effective date." 9:11:32 AM REPRESENTATIVE LORA REINBOLD, explained that HB 239 would extend the Board of Examiners in Optometry through June 30, 2022. The Division of Legislative audit reviewed the activities of the board and concluded that the board's termination date should be extended the full 8 years. Without the extension optometry licensing would continue under the direction of the division, rather than the board and all costs associated with licensing would continue to be incurred by the division. She explained that the board adopted regulations to carry out laws governing the practice of optometry in Alaska; making final licensing decisions and taking disciplinary action when necessary. The board consisted of 4 optometrists and 1 public member. She spoke to the fiscal note reflected that the board had a current cumulative deficit of $44,755. Fees were raised during the last biennium and a fee analysis would be conducted in spring of 2014 in order to determine whether the fees needed adjustment. She stated that licensees would renew in December 2014 and any fee adjustments would go out for public comment in summer 2015. She noted that the board was working in the best interest of the state to promote health, welfare and safety of Alaskans. 9:13:45 AM Co-Chair Meyer queried the deficit reflected in the fiscal note. 9:14:15 AM Vice-Chair Fairclough announced that there was an issue of indirect costs of investigations, spread across all the professional licensing boards. She stated the division had come before Legislative Budget and Audit (LB&A) in the past requesting help with accounting issues, which resulted in LB&A infusing approximately $1 million in an attempt to assist the various boards with large deficits. She shared that the deficit would be seen in fiscal notes for many of the boards and that LB&A was working to understand how the department was spreading costs. She said that $64 of indirect cost was being spread to every licensee across the state and the subcommittee of LB&A had yet to receive the necessary information to justify the spread. She noted that cost spreading among licensing boards was currently not proportionate. 9:16:02 AM Representative Reinbold noted that a report from the Legislative Budget and Audit Committee (LB&A) (copy on file) that outlined the specifics could be found in member packets. 9:16:36 AM Senator Olson queried why the investigation driven increase in licensing fees should be extended out 8 years, rather than a shorter amount that would reign in the expenditures more quickly. Representative Reinbold deferred the question to the Division of Legislative Audit. Senator Olson asked how many optometrists were licensed in the state, and of those how many had been investigated under licensing action. 9:17:38 AM CRYSTAL KOENEMAN, STAFF, REPRESENTATIVE LORA REINBOLD, deferred to Department of Commerce, Community and Economic Development. 9:17:58 AM Senator Olson asked whether other healthcare providers were governed by the optometrist board. Representative Reinbold replied that the board was limited to the scope of optometry. 9:18:55 AM KRIS CURTIS, DIRECTOR, DIVISION OF LEGISLATIVE AUDIT, explained that the division had conducted a review of the Board of Examiners in Optometry to determine whether the public interest was being served and whether the board should be extended. The division concluded that the board was serving the public interest by effectively licensing and regulating optometrists and recommended that the board's termination date be extended the maximum 8 years, June 30, 2022. The division made one recommendation to the Director of the Division of Corporations, Business and Professional Licensing to continue efforts to improve their case management system integrity and confidentiality. She furthered that in past years detailed information about investigations had been included in audits, but that the practice had been disregarded because the case management system was not reliable. The division had been unable to pull summary investigative information because certain information in the system was unreliable. She noted that Page 12 of the audit provided information on board expenditures and revenues. The licensing fees had been reduced from $420 to $200 in FY07. That decrease had effectively reduced any available surplus at that time. Licensing fees had not been adjusted for the FY11 renewal period which had contributed to a continuing deficit. She stated that she could not speak to the reason why the fees had not been increased. 9:21:06 AM Senator Olson wondered whether the licensing fee had been a factor in whether the number of optometrists in the state was increasing or decreasing. Ms. Curtis directed committee attention to page 14, which listed the information on the licensees. From FY06 through FY12 the board had issued new licenses to 85 applicants. 9:21:37 AM Senator Olson asked how many licenses were withdrawn or not renewed. Ms. Curtis replied that the information was not presented in the report. She said that a count as of February 28, 2013 there were 174 licensed optometrists in Alaska. She noted the chart in the report that allocated the new licenses by fiscal year. She said that the impact of the setting of fees on the surplus and deficit was examined every time the division performed a sunset audit. The division did not issue a recommendation to adjust fees due to the fact that they had been adjusted for the FY13 cycle and that that period was not over; therefore, the division could not gauge how effective the increase in fees was to address the deficit. 9:22:36 AM Senator Olson noted that there were only 174 licensees that were regulated by the board and pointed out that other boards in the state dealt with several thousand licensees. He wondered whether the optometrist board could be absorbed by one of the larger boards. Ms. Curtis replied that the decision would be a policy call that would not be made by the division. 9:23:21 AM Vice-Chair Fairclough stated that the issue of cost being spread over a small group of people would arise during all of the licensing hearings. She said that the policy discussion at LB&A concerned what should be done with investigations and the cost distribution. Ms. Curtis added that in 1992 the governor had a task force to examine boards and commissions, and out of that task force the structure of allocating investigative costs to the board came about. She felt that after 20 years structure should be revisited. 9:25:29 AM Co-Chair Meyer asked how much the fees for the board were. SARA CHAMBERS, DIRECTOR, DIVISION OF CORPORATIONS, BUSINESS, AND PROFESSIONAL LICENSING, DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, responded that the fees were raised in 2013 to $400. 9:25:48 AM Co-Chair Meyer asked if the amount was adequate to cover costs going into the future. Ms. Chambers responded that the department analyzed fees according to statutory requirements and with the partnership of the board with the goal of balancing approximate expenditures and revenues. She believed that $400 was a reasonable amount to anticipate covering future deficit. 9:27:01 AM Co-Chair Meyer OPENED public testimony. Co-Chair Meyer CLOSED public testimony. HB 239 was HEARD and HELD in committee for further consideration.