HOUSE LABOR AND COMMERCE STANDING COMMITTEE March 19, 1997 3:27 p.m. MEMBERS PRESENT Representative Norman Rokeberg, Chairman Representative John Cowdery Representative Bill Hudson Representative Jerry Sanders Representative Joe Ryan MEMBERS ABSENT Representative Tom Brice Representative Gene Kubina COMMITTEE CALENDAR CS FOR SENATE BILL NO. 75(STA) "An Act relating to the regulation of accountants; and providing for an effective date." - MOVED CSSB 75(STA) OUT OF COMMITTEE * HOUSE BILL NO. 140 "An Act relating to the Board of Public Accountancy; extending the termination date of the Board of Public Accountancy; and providing for an effective date." - MOVED CSHB 140(L&C) OUT OF COMMITTEE * HOUSE BILL NO. 133 "An Act relating to regulation of architects, engineers, and land surveyors; extending the termination date of the State Board of Registration for Architects, Engineers, and Land Surveyors; and providing for an effective date." - MOVED HB 133 OUT OF COMMITTEE (* First public hearing) PREVIOUS ACTION BILL: SB 75 SHORT TITLE: REGULATION OF ACCOUNTANTS SPONSOR(S): RULES BY REQUEST JRN-DATE JRN-PG ACTION 02/03/97 211 (S) READ THE FIRST TIME - REFERRAL(S) 02/03/97 211 (S) L&C, STA 02/11/97 (S) L&C AT 1:30 PM FAHRENKAMP RM 203 02/11/97 (S) MINUTE(L&C) 02/12/97 307 (S) L&C RPT CS 4DP SAME TITLE 02/12/97 307 (S) DP: LEMAN, KELLY, MACKIE, HOFFMAN 02/13/97 334 (S) ZERO FN TO SB & CS (DCED) 02/25/97 (S) STA AT 3:30 PM BELTZ ROOM 211 02/25/97 (S) MINUTE(STA) 02/26/97 516 (S) STA RPT CS 3DP SAME TITLE 02/26/97 516 (S) DP: GREEN, MILLER, WARD 02/26/97 516 (S) PREVIOUS ZERO FN APPLIES TO CS (DCED) 03/05/97 (S) RLS AT 11:52 AM FAHRENKAMP RM 203 03/05/97 (S) MINUTE(RLS) 03/06/97 592 (S) RULES TO CALENDAR 3/6/97 03/06/97 597 (S) READ THE SECOND TIME 03/06/97 597 (S) STA CS ADOPTED UNAN CONSENT 03/06/97 597 (S) ADVANCED TO THIRD READING UNAN CONSENT 03/06/97 597 (S) READ THE THIRD TIME CSSB 75(STA) 03/06/97 598 (S) PASSED Y20 N- 03/06/97 598 (S) EFFECTIVE DATE(S) SAME AS PASSAGE 03/06/97 607 (S) TRANSMITTED TO (H) 03/07/97 577 (H) READ THE FIRST TIME - REFERRAL(S) 03/07/97 577 (H) LABOR & COMMERCE 03/19/97 (H) L&C AT 3:15 PM CAPITOL 17 BILL: HB 140 SHORT TITLE: BOARD OF PUBLIC ACCOUNTANCY SPONSOR(S): RULES BY REQUEST OF BUDGET AND AUDIT COMMITTEE JRN-DATE JRN-PG ACTION 02/14/97 358 (H) READ THE FIRST TIME - REFERRAL(S) 02/14/97 358 (H) LABOR & COMMERCE 03/19/97 (H) L&C AT 3:15 PM CAPITOL 17 BILL: HB 133 SHORT TITLE: ARCHITECTS, ENGINEERS & SURVEYORS SPONSOR(S): RULES BY REQUEST OF BUDGET AND AUDIT COMMITTEE JRN-DATE JRN-PG ACTION 02/13/97 333 (H) READ THE FIRST TIME - REFERRAL(S) 02/13/97 333 (H) LABOR & COMMERCE 03/19/97 (H) L&C AT 3:15 PM CAPITOL 17 WITNESS REGISTER TIM BENINTENDI, Legislative Assistant to Senator Tim Kelly Alaska State Legislature Capitol Building, Room 101 Telephone: (907) 465-3770 POSITION STATEMENT: Presented sponsor statement for CSSB 75(STA). CHARLES GRIFFIN, Chairman Alaska State Board of Accountancy; Certified Public Accountant P.O. Box 670 Palmer, Alaska 99645 Telephone: (907) 745-3239 POSITION STATEMENT: Testified in support of CSSB 75(STA). BRADLEY SHAFFER, Member Alaska State Board of Accountancy 479 Katlian Street Sitka, Alaska 99835 Telephone: (907) 747-6984 POSITION STATEMENT: Testified in support of CSSB 75(STA). RANDY WELKER, Legislative Auditor Legislative Audit Division Legislative Affairs Agency P.O. Box 113300 Juneau, Alaska 99811-3300 Telephone: (907) POSITION STATEMENT: Presented HB 140 and HB 133. ANNETTE KREITZER, Legislative Assistant to Senator Loren Leman Alaska State Legislature Capitol Building, Room 113 Juneau, Alaska 99801 Telephone: (907) 465-3973 POSITION STATEMENT: Commented on HB 140 and HB 133. BYRON HAYNES, Vice Chairman Board of Registration for Architects, Engineers and Land Surveyors P.O. Box 196612 Anchorage, Alaska 99519-6612 Telephone: Not provided. POSITION STATEMENT: Testified on HB 133. PATRICK KALEN, Chairman Alaska Section American Congress on Surveying and Mapping 1041 Chena Ridge Road Fairbanks, Alaska 99709 Telephone: (907) 479-2628 POSITION STATEMENT: Testified on HB 133. ACTION NARRATIVE TAPE 97-25, SIDE A Number 001 CHAIRMAN NORMAN ROKEBERG called the House Labor and Commerce Standing Committee to order at 3:27 p.m. Members present at the call to order were Representatives Rokeberg, Cowdery, Ryan and Sanders. Representative Hudson arrived at 3:27 p.m. CSSB 75(STA) - REGULATION OF ACCOUNTANTS Number 044 CHAIRMAN ROKEBERG announced the committee would hear CSSB 75(STA), "An Act relating to the regulation of accountants; and providing for an effective date." Number 067 TIM BENINTENDI, Legislative Assistant to Senator Tim Kelly, Alaska State Legislature, came before the committee to present the sponsor statement which follows: "Senate Bill 75 would strengthen the application criteria for taking the Alaska CPA (certified public accountant) examination, which is given each May and November. It would not change the test nor the licensing requirements. It is needed because of the dramatic increase of foreign nonresident applicants who come to take the test, but do not intend to live or practice in our state. Many have no background in accounting. Concerns for the integrity of our exam process and for the security of the exam itself necessitates changes in our application criteria, currently the lowest in the nation. Recently the state of Montana changed its minimal requirements to eliminate the same problem." MR. BENINTENDI explained that in the committee file is a summary sheet showing the numbers of applicants, for the past two years, who have taken the May and November tests. He noted there is an unusual increase in applicants for the November, 1996, test. Where usually there might be a few dozen who might take the test, it increased to 506 for November of last year. He pointed out that the state doesn't make money on the exams, but tries to break even, so there is no real incentive for Alaska to be the testing center of the world. MR. BENINTENDI said the bill would add to the current requirement of merely having a baccalaureate degree in any subject in order to take our CPA exam, by adding a minimum of academic course work in college level accounting or one year of public accounting experience under the direct supervision of a CPA, or the near completion of a degree program if the applicant is majoring in accounting. All this is found in Section 1 of the bill. He said they had originally hoped to address this problem in order to head off the anticipated large number of applicants for the May, 1997 exam; however, in discussions with the Division of Occupational Licensing and the Senate Labor and Commerce Committee, they concluded it would be more prudent to address the problem in time for November, 1997. Therefore, the Senate Labor and Commerce Committee substitute shows the effective date changed to June 1, from an immediate effective date. He noted that is located in Section 5. Number 280 MR. BENINTENDI explained in the Senate State Affairs CS, they simply provided for those who have already passed at least two components of the test to go ahead and finish their remaining parts under the old criteria. That basically applies to instate residents. Those provisions are found in Section 3 and Section 4. MR. BENINTENDI said another provision of SB 75, unrelated to the testing issue, is to allow the professional use of the designation "E A" by enrolled agents. They are unlicensed accountants or tax practitioners who are enrolled by the Internal Revenue Service (IRS) to engage in tax related business. He noted that is in Section 2. MR. BENINTENDI stated the bill is supported by the State Board of Accountancy, the State Society of CPAs and the Alaska Society of Independent Accountants. He said it was his understanding that Chuck Griffin, Chairman, State Board of Accountancy, is on-line and also, Bradley Shaffer who is a member of the board. Number 369 CHAIRMAN ROKEBERG referred to information in his file and said, "I looked at the November, 1996, examinations where it had 392 foreigners and then 21 out of state. Many times in statute a foreigner can mean, particularly in insurance law for example, mean somebody just out of state, for example. Is that actually off- shore aliens?" MR. BENINTENDI said it is nonresidents. He noted the Division of Occupational Licensing anticipates as many as 800 or more applicants this May. Number 493 CHARLES GRIFFIN, Chairman, Alaska State Board of Accountancy, Certified Public Accountant, testified via teleconference. He said the bill is needed to do an end-run around any residency requirements which we cannot impose. We cannot require people to live, work or attend school in Alaska, so they have increased the qualification requirements thus most of the foreign applicants won't qualify. He noted the requirements aren't so high that they would disqualify our Alaskan candidates. He said there isn't a fiscal note for the exam as it is self supporting and is paid for by costs of application and examination fees. The board supports the bill as does the License Accounting (indisc.), the State Society of CPAs, as well as the unlicensed accountants. Mr. Griffin urged the committee to pass the legislation. Number 607 CHAIRMAN ROKEBERG said he had indicated that the increased requirements wouldn't be a burden to state residents. MR. GRIFFIN said that is correct. He explained both at the University of Alaska, Anchorage and University of Alaska, Fairbanks most of the professional candidates are accounting majors have a minimum of 24 hours, and in most cases closer to 36 hours, in accounting. This bill would establish a minimum of 15 semester hours. He noted most of the foreign candidates aren't even business or accounting majors. Someone at University of Alaska in the general business program will still have that accounting and business course curriculum to meet the requirement. Number 666 REPRESENTATIVE JOHN COWDERY asked what the difference is in the requirements of a CPA and regular public accountant. MR. GRIFFIN pointed out there currently is no provision in statute for a public accountant. There have been provisions for CPAs since about 1960. The "E A" class of accountants is a grandfathered group which will some day be extinct. There are unlicensed accountants and they are people that provide bookkeeping and income tax services. Number 752 REPRESENTATIVE COWDERY asked if someone becomes a CPA is he/she always a CPA. MR. GRIFFIN explained there is required continued education. He said he believes it 60 hours every two years. Beginning in January, 1998, it will increase to 80 hours every two years. Number 789 CHAIRMAN ROKEBERG asked if the influx in applicants for license exams has been a burden to the board. He also asked if the fee schedule has been adjusted so they can at least make sure the costs have been covered. MR. GRIFFIN explained the impact hasn't been so much financial because they charge each person an application and examination fee. So if they don't show, they make a little more on somebody who doesn't show up and it offsets the costs of greater facilities. Mr. Griffin informed the committee that he thinks the biggest burden that is placed on the board is they have a single licensing examiner in the division. He devotes about two-thirds of his time to the Board of Accountancy and, unfortunately, he has been busy with 500 to 600 foreign applications every six months. Number 886 REPRESENTATIVE BILL HUDSON asked if it is required to have a baccalaureate degree in order to be a CPA in Alaska. MR. GRIFFIN indicated it is required and currently, that is their only requirement. It can be a baccalaureate degree in any subject. REPRESENTATIVE HUDSON indicated he has a friend who is a CPA and he also has a son who has been working for him for a number of years without a degree. He asked if he will have to go back to college to meet that requirement. MR. GRIFFIN said that is correct. He noted that is the situation as it exists today. Since 1991, there has been that requirement. Number 1016 BRADLEY SHAFFER, Member, Alaska State Board of Accountancy, testified via teleconference from Sitka. He noted he has been on the board since approximately 1990. Mr. Shaffer said he had the opportunity to (indisc.) the uniform exam last November in Juneau. He said there were three instances where the American Institute of CPAs felt there were indications of cheating. One circumstance was in a group of 30 people. He said when there is such a volume of people, you can lose control. Mr. Shaffer said Alaska, as a state, could possibly lose the confidence of the American Institute of CPAs and lose the opportunity to administer the test by the state. Mr. Shaffer said what is being asked for is not unique when it is compared with the other jurisdictions in the United States. It is part of a national process of all jurisdictions hoping to have similar requirements. CHAIRMAN ROKEBERG said Mr. Shaffer indicated that we could possibly lose the confidence of the American Institute of CPAs and lose the opportunity to administer the test by state. He asked him to clarify that. Number 1241 MR. SHAFFER said Alaska, as a state, has to provide assurance that we're administering the examination to the standards that are required by the American Institute of CPAs. If we don't meet those requirements, their action would be to say, "You're no longer eligible to administer it." Mr. Shaffer said they do not want jurisdiction to look at the CPA exam as an enterprise fund where they are making money for the department. Number 1148 CHAIRMAN ROKEBERG indicated there were no further witnesses to testify and closed the public hearing. Number 1248 REPRESENTATIVE COWDERY made a motion to move CSSB 75(STA) out of committee with the attached zero fiscal note. CHAIRMAN ROKEBERG asked if there was an objection. Hearing none, CSSB 75(STA) was moved out of the House Labor and Commerce Committee. HB 140 - BOARD OF PUBLIC ACCOUNTANCY Number 1295 CHAIRMAN ROKEBERG announced the committee would hear HB 140, "An Act relating to the Board of Public Accountancy; extending the termination date of the Board of Public Accountancy; and providing for an effective date." Number 1311 RANDY WELKER, Legislative Auditor, Legislative Audit Division, Legislative Affairs Agency, explained the bill was introduced on behalf of the Legislative Budget and Audit Committee. It is a sunset bill relating to the Board of Public Accountancy. He noted the committee members have the copy of their audit report. Mr. Welker explained Section 1 extends the Board of Accountancy from its current termination date of 1997 to the year 2003, which is a six year renewal period. MR. WELKER explained Section 2 deletes conflicting language. The language being deleted in lines 11 through 14 basically says that a person who has served for two complete terms can't be reappointed. There are some general licensing statutes that apply to all boards that say you can only serve two terms, whether they are two complete terms or not. If you're appointed mid-term to replace somebody and you complete that term, you're eligible for a second term and then that's it. He said they felt for administrative ease with boards and commissions that the general statute is adequate, so they are recommending that this language be deleted from the Board of Accountancy. Number 1396 CHAIRMAN ROKEBERG asked if this particular section, Title 08.04.030, is part of the accountancy section. MR. WELKER said that is correct. This deletes language out of the Accountancy Act. He noted AS 08.01 is the general licensing statutes of the Division of Occupational Licensing that provides a variety of general provisions relating to licensing of all professions. CHAIRMAN ROKEBERG asked if there is anything in AS 08.01 that provides for a standard removal of members of any boards or commissions. MR. WELKER said he doesn't believe there is. He said what was identified was that there is a conflict in the reappointment language. Number 1452 MR. WELKER informed the committee that Sections 3, 4, 5 and 6 all primarily deal with one aspect. He said in each one of those sections they are deleting the reference to an annual fee, annual registration or an annual licensing fee. Mr. Welker said the general licensing statutes of occupational licensing allows the division to establish fees on a biannual basis. The language is being changed to comport to actual practice where they do not collect an annual fee, it is biannual. He said they are replacing "annual fee" with "required fee." He said also in Section 3 they have deleted the word "permit." The Accountancy Act, in general, is in need of a serious rewrite because of the reference to permits. The statutes reference "a license" and "a permit." The board only actually issues a license and they don't issue permits. He said it will take some thought by the board to make sure that the rewrite gets the reference to permits out of the statute. It would be best done by the board and an overall rewrite of the Accountancy Act. Mr. Welker said that it was inserted in Section 3, but not throughout the rest of the statutes. Number 1548 MR. WELKER referred to Section 7 and said it is a repealer of a section in the Accountancy Act. This section related to the issuance of a temporary certificate which has never been used. Mr. Welker said he believes basically the qualifications that were identified for a temporary certificate would enable you to get a license anyway, so that has never been in effect. MR. WELKER explained Section 8 makes the act effective July 1. The Board of Accountancy is set to expire June 30, 1997. Without extending the lapse date, they would have one year to conclude their affairs. Number 1595 REPRESENTATIVE JOE RYAN asked if the department is anticipating increasing the fee. MR. WELKER responded in the negative. He said it is the Legislative Audit Division's proposed change to make the Accountancy Act statutes comport to practice. It is across the board. They went to a biannual fee for administrative efficiencies of collecting license fees every two years. Mr. Welker informed the committee that the division is under a mandate to be self- supporting. On occasion, there are adjustments to the various licenses and fees of all boards to keep in balance. He noted there are a variety of boards that are satisfied and dissatisfied with their fees at any one point in time because the costs vary depending on the regulation writing and the investigations that are going on at any given time. Number 1663 REPRESENTATIVE HUDSON asked if the fee increases are submitted to the legislature for approval or is there blanket approval. MR. WELKER responded that the statutes give the Division of Occupational Licensing blanket authority to set the fees by regulation for all professions. CHAIRMAN ROKEBERG asked Mr. Welker if during his audit he came across any instances of complaints. He also asked if there were any license revocations in the immediate past. MR. WELKER said he isn't aware of any serious concerns or issues that are before the board. He noted he is sure there are ongoing investigations as there are in virtually all professions. He said Mr. Griffin or staff from the Division of Occupational Licensing might be better able to speak to that. CHARLES GRIFFIN, Chairman, Alaska State Board of Accountancy; Certified Public Accountant, testified via teleconference. He said the board is appreciative that there is recognition that they are meeting the public's interest and are pleased the Legislative Budget and Audit Committee and the Labor and Commerce Committee is considering extending the board. He said he would note that he believes the extension date was amended to 2001 in the Senate Labor and Commerce Committee's version. The board has obviously been involved in the sunset audit process. Mr. Griffin referred to fee increases, complaints, revocations and some of the uncertainties as to permits, certificates and licenses, and said he believes there are a number of people on the board who would seek to rewrite and possibly restructure the Board of Accountancy. He said they have been struggling to accommodate all of their exam candidates and "fight fires." He said, "We, as a board, have some comments about the finances and stewardship of the division and some of the investigation and complaint results, but those unfortunately aren't on the table today." Mr. Griffin said they agree with an extension of the board. Number 1990 CHAIRMAN ROKEBERG asked Mr. Griffin if he has a preference for the expiration date being 2003 or 2001. MR. GRIFFIN said he doesn't know that the board has addressed it as a whole. He said his personal preference is 2001. Mr. Griffin explained he had heard a rumor that just because of the volume of the audit work, they were thinking of going to ten year cycles. He said he doesn't believe that is fair to the licensees, the public or the board, that they be audited that infrequently to ensure that the structures, finances and policies are in order. Mr. Griffin said his personal opinion is that four years is a good cycle. Number 1966 REPRESENTATIVE RYAN said the Legislative Budget and Audit Report recommends that the legislation extend the board's termination date to June 30, 2003. CHAIRMAN ROKEBERG said the Legislative Budget and Audit Committee recommended that the date be 2003. He said it's his opinion that a lengthier period of sunsetting eases the burden on the various committees in the legislature of having to come back too frequently to revisit these issues. Chairman Rokeberg said there is an issue about auditing and asked Mr. Welker to address it. Number 2010 MR. WELKER since they started doing sunsets in 1978, they have been on a four year cycle. In the early years of sunset, that was valuable as it let them deal with things on the various boards. As time has passed, the benefit gained by a four year cycle seems to be demising. He noted at one time they did propose sweeping legislation to rewrite all the occupational licensing statutes to spread them out over a ten year cycle. That wasn't successful and they have sort of compromised down to about a six year recommendation. Mr. Welker said there are some boards that they do sunsets on and if they think there are significant problems with the board, they would recommend a shorter cycle. He noted with boards, such as the Board of Accountancy, they don't see the problems that they have with other boards. The Senate Labor and Commerce Committee has made it known that they prefer a four year cycle. CHAIRMAN ROKEBERG said if the sunset provisions are an automatic kick-in of an audit, for example, if they go to six years, they are only audited every six years. MR. WELKER said that is correct. CHAIRMAN ROKEBERG asked if there couldn't be an audit every four years and a sunset every six years. MR. WELKER said that language could be worked into the bill. He explained currently, they initiate their own audits based on the termination cycle and the review for the need to continue the existence of the board. He said the four year audit cycle wouldn't benefit him, but it might benefit the legislative process. CHAIRMAN ROKEBERG said when the Legislative Budget and Audit audits the particular boards and commissions, they're merely auditing for the needs for their extensions. He asked if they are actually doing a traditional accounting audit. MR. WELKER said the sunset statutes lay out certain criteria that are to be considered and whether the legislature should continue a board or not. It is not a full blown financial audit of the board. Number 2158 CHAIRMAN ROKEBERG asked Mr. Griffin if that was his understanding. MR. GRIFFIN said he supports retaining the four year cycle with regard to the Board of Accountancy. In the absence of a broader legislative look at the structure of occupational licensing in all of the professions, some of the members of the board have become frustrated with the process. He said they would like a semi- private board operation rather than the existing structure. If audits are every six years, it will only be discussed every six years instead of every four years. Number 2226 REPRESENTATIVE RYAN said he thinks the committee is outvoted on the four year date as it seems to be the will of the people involved. He said he brought up the six year recommendation for the committee's awareness. CHAIRMAN RYAN pointed out that it is in the bill. REPRESENTATIVE RYAN said he would make a conceptual amendment to make it four years, 2001. CHAIRMAN ROKEBERG said he would object for the purpose of discussion. He asked Annette Kreitzer if she could shed some light on the issue. ANNETTE KREITZER, Legislative Assistant to Senator Loren Leman, Alaska State Legislature, referred to testimony in the Senate Labor and Commerce Committee and said there has been several boards where an "old boys network" has formed and there has been concern that if some of these boards aren't looked at every four years, there becomes a situation where members of the profession who are coming in from out of state, for example, may be excluded for reasons that aren't very valid. They wanted an opportunity to hear comments such as the kind Mr. Griffin made regarding fees. They felt that auditor's recommendation was too long. CHAIRMAN ROKEBERG withdrew his objection. There being no further objection, he stated the conceptional amendment to change the date to 2001 has been adopted. Number 2327 REPRESENTATIVE COWDERY made a motion to move HB 140, as amended, out of committee with the accompanying fiscal note. Hearing no objection, CSHB 140(L&C) was moved out of the House Labor and Commerce Committee. HB 133 - ARCHITECTS, ENGINEERS & SURVEYORS Number 2364 CHAIRMAN ROKEBERG announced the committee would address HB 133, "An Act relating to regulation of architects, engineers, and land surveyors; extending the termination date of the State Board of Registration for Architects, Engineers, and Land Surveyors; and providing for an effective date." Chairman Rokeberg informed the committee there is a proposed committee substitute, 0-LS0545\B, Lauterbach, dated 3/17/97. Number 2420 REPRESENTATIVE COWDERY made a motion to adopt CSHB 133(L&C). Hearing no objection, it was so ordered. RANDY WELKER, Legislative Auditor, Legislative Audit Division, Legislative Affairs Agency, came before the committee to discuss HB 133. He said he would comment on a few of the sections he feels comfortable with and then he will let others testify on other changes. Mr. Welker referred to Section 1 and said it extends the State Board of Registration for Architects, Engineers and Land Surveyors from 1997 to 2001. MR. WELKER referred to Section 2 and said it makes changes to the composition of the board. TAPE 97-25, SIDE B Number 001 MR. WELKER said, "...that is sort of a generic - one engineer from another branch of the engineering profession. So what we've done here is we've taken sort of a broad seat and we've converted into a specific land surveyor seat, and we have increased the board by one member in that action." REPRESENTATIVE RYAN said it has been the policy of most boards to have an odd number of people because of tie votes. He asked if that has been considered. MR. WELKER said that section wasn't amended according to the Legislative Audit Division's recommendation. It was a change in the Senate Labor and Commerce Committee. He said the division's recommendation was to keep the number at nine members. Mr. Welker said the problem the division was trying to address was the statutes provided for a mining engineer to be a member of the board and there is a very small number of mining engineers which makes it difficult to find someone who is willing to serve in that capacity. He said the division has suggested changing the board make up to have three engineers from any other field other than a civil engineer. It would still allow a mining engineer to serve, but it wouldn't be a requirement and keep the board at the same size. The Senate Labor and Commerce added a land surveyor and kept the mining engineer. Number 090 REPRESENTATIVE RYAN asked if there are any engineers on the Senate Labor and Commerce Committee. Number 096 ANNETTE KREITZER, Legislative Assistant to Senator Loren Leman, Alaska State Legislature, indicated there is. CHAIRMAN ROKEBERG noted this is the third year that this issue has come before the House Labor and Commerce Committee. Number 214 MR. WELKER said another section the division dealt with in the original version of the bill shows up as Section 8 of the committee substitute. It is a repealer section. He explained that the Board of Architects, Engineers and Land Surveyors is the only board that has specific language that requires it to produce a report on expenditures and revenues. The Division of Occupational Licensing, as a matter of course each year, produces an annual report on all boards and commissions. In that report, they present revenue and expenditure information. Mr. Welker said it appeared duplicative to have the requirement that the board do it when the division is producing the information anyway. He said, "So we're recommending that the responsibility that's now in statute that the board do it, be repealed and let it as that overall general Occupational Licensing function that they're serving in preparing that information. Let that suffice for the language that is being deleted here." MR. WELKER said they had tried to, through the original bill, limit the number of times an applicant could take the examination without further satisfying some additional training or education. He said he believes that is now reflected in Section 4. Instead of putting those provisions in statute, it appears that they will be given authority to do those type of changes, through regulation, by the language added at the end of Section 4. Number 194 REPRESENTATIVE RYAN referred to examinations and asked Mr. Welker if there is a national engineering organization that has a standardized examination to demonstrate competency by the members being issued a (indisc.). He asked if that is recognized in all the states. MR. WELKER said those are standardized national exams. REPRESENTATIVE RYAN asked if the exams are updated from time to time. MR. WELKER responded that he would assume they relate to the current topics. REPRESENTATIVE RYAN said it would seem to him that if they were using a criteria and everybody had reciprocity among the states, perhaps we should standardize all the people in the professions and facilitate the movement of people from community to community. MR. WELKER said, "I believe that is where we're headed. What you have now though is you have a lot of people out there with licenses that were licensed prior to us -- to the nation and the professions going more to national exams." Mr. Welker stated he believes the current trend is to nationalize the examination process for many professions. To a certain extent, the reciprocity statutes attempts to grandfather people in by saying that the requirements, when a person gets a license, have to be substantially similar to the requirements that we had in place at the time. There is some flexibility to allow that reciprocity to take place without unduly limiting entry into the professions. Number 320 BYRON HAYNES, Vice Chairman, Board of Registration for Architects, Engineers and Land Surveyors, testified via teleconference. He referred to Representative Ryan's question regarding written examinations of surveyors and said there is a national exam given each year by the National Council of Examiners for Engineers and Surveyors. Mr. Haynes noted there is a also a state exam specific to Alaska. He referred to the increase of board members to ten and said the reason for the additional land surveyor is that the board consistently year after year deals with a considerable number of land surveyor issues and when a land surveyor's term expires and another is appointed, there is no transition period. The reason for having two land surveyors with staggered terms is to have a transition period. REPRESENTATIVE RYAN asked Mr. Haynes if he could address the reason for a ten member board. MR. HAYNES indicated he couldn't address the reason for a ten member board. He noted that in the past when there was an even number of members present at a board meeting, they never had a split decision. Number 430 CHAIRMAN ROKEBERG asked Mr. Haynes if could speak to the retention of the one mining engineer. MR. HAYNES said he believes it was brought up because of the few number of mining engineer registrants in the state and the limited number of people willing to serve on the board. Currently, the mining community isn't in favor of getting rid of that position. CHAIRMAN ROKEBERG asked if that could be because of the increase in the amount of mining activity in the state and because a larger pool of mining engineers is becoming available. MR. HAYNES said that assessment could be made CHAIRMAN ROKEBERG asked if there evidence to back it up. MR. HAYNES indicated he doesn't have any evidence in front of him. He said the Division of Occupational Licensing may have the numbers as far as the number of registrants. Number 494 CHAIRMAN ROKEBERG referred to the exemptions and asked if the language is all new language. He noted he isn't real familiar with the statute. MR. HAYNES said he believes Chairman Rokeberg is referring to AS 08.48.331 (9), which is the exemption for postsecondary education. Currently, there is an exemption for a person who is employed by a postsecondary institute to teach engineering, architecture or land surveying. What they are doing is striking the land surveying language. Number 554 PATRICK KALEN, Chairman, Alaska Section, American Congress on Surveying and Mapping, testified via teleconference from Fairbanks. He noted he is the land surveyor representative on the Board of Registration for Architects, Engineers and Land Surveyors. Mr. Kalen referred to the idea of an odd number of members on the board and said the board has had an even number of members in attendance at every board meeting he has attended over the last year. The idea of having an odd number means you have to have perfect attendance of all board members. He noted sometimes people can be absent for a good reason. Mr. Kalen referred to Section 2, where a land surveyor would be added to the board and said the committee has heard testimony that there has been unanimous agreement, on the part of the board, that were the number of land surveyors there are, the amount of business the board deals with and the problem of transition clearly justifies adding the land surveyor to the board. Mr. Kalen referred to the mining engineer position and said, "The board has taken a position of trying to eliminate the mining engineer position, but we also recognize the reality that there are friends and we're attempting to work with industry to get the mining community itself to say that they don't want to keep that position." Until that point is reached, he doesn't think it would be safe to take that position away. Mr. Kalen noted the member that is currently serving in that position is an excellent board member. He said there isn't currently a problem, but there could be the next time a mining engineer needs to be appointed. Number 693 MR. KALEN referred Sections 3 and 5 and said, "Those just basically just arose because of adding the one member to the board that meant that we had to repeal the part of statute that stated that we had five members to have a quorum." MR. KALEN said Section 4 relates to how often the exam is given. The problem is that Section 4 is archaic language that was left over from the time when virtually all the exams were prepared in the state. The architects are probably the most advanced as they have a new computerized type of examination that people take on demand rather than a time scheduled by the board. Mr. Kalen referred to the engineers and said, "All the engineer exams are now national exams and so are most of the surveyor exams, which would make them -- so that the language wouldn't apply to them." Mr. Kalen said we have a peculiar situation where the statutes singles out the Alaska land surveyors examination. It's a state specific examination and it forces the board to offer it twice a year. We do not have enough land surveyor applicants for the Alaska examination to justify giving it twice a year. He noted they will probably vote to not give it in the fall unless they have ten or more applicants. The Alaska land surveyors examination would probably last for sometime. All 50 states have specific examinations because the field requires extensive knowledge of local law and local customs. Number 816 MR. KALEN referred to Sections 6 and 7 and said these are exemptions in existing statute. He informed the committee that a few years ago, a group of engineers representing the Mechanical Engineering Department at the University of Alaska, Fairbanks, pushed very hard to get an exemption for teaching, citing recruiting problems. A lot of their beginning teachers are (indisc.) Ph.Ds that have difficulties strictly obtaining registration. He said, "At the time, we did not want or need registration, do not have Ph.D programs in the field of land surveying, land surveyors that kind of expect their license to be their evidence of practice." Mr. Kalen referred to Section 7 and said the teaching of land surveying was not included within the practice of land surveying because 20 years ago when that statute was drafted, there were not four degree programs for surveying. Most states now have four degree programs and Alaska has a very strong one. CHAIRMAN ROKEBERG asked how many available mining engineers are in Alaska. MR. KALEN said there are currently about 44 mining engineers and about half of them reside out of state. There are about 20 that are available in the pool of applicants when they look for a mining engineer for the board. CHAIRMAN ROKEBERG asked what the board's opinion is regarding the mining engineer. MR. KALEN responded that the board has voted and gone on record in favor of eliminating the mining engineer over the stringent objection of one of the members of the board who holds that seat. Mr. Kalen said, "There are strong and clear (indisc.) that miners have friends in the legislature and we would expect to have trouble with this bill as we try to delete the mining engineer position at this time. I would like to add that me and Merle Jantz, chairman of the board, have had several meetings with the mining industry and have had surprisingly positive attitude come out of that, but we don't think we're done yet." Number 894 CHAIRMAN ROKEBERG referred to occupational licensing and said the statute requires that a majority of membership of a board constitutes a quorum. He asked if six people would make a quorum. MR. WELKER responded it would be six members. Number 1020 CHAIRMAN ROKEBERG closed the public hearing on HB 133. He informed the committee he has a serious problem with the mining situation. He said this situation has previously been before the committee and he would like to get it resolved one way or another. Number 1050 ANNETTE KREITZER, Legislative Assistant to Senator Loren Leman, Alaska State Legislature, came before the committee to address HB 133. She said this has been a very contentious issue. When the bill was introduced, the Senate Labor and Commerce Committee was aware that various elements of the bill were going to be very controversial. The mining engineer position and the land surveyor amendments in Sections 6 and 7 were expected to be controversial because of the different groups that have been involved. The board members were asked to work very closely with the Teamsters. She noted there is a letter in the committee file from the Teamsters Union. The Teamsters have members who work as land surveyors and Mr. Kalen can speak to that relationship. In the past, not all of the groups have talked about what is best for the board and the professions. Ms. Kreitzer explained the committee substitute is a consensus of the Alaska Professional Design Council, the Architects, Engineers and Land Surveyors Board and the Teamsters. They all worked together and will continue discussions with the mining engineers in the state to talk about whether or not, at some point in the future, it makes sense to replace that mining engineer position. Everyone has agreed to continue talking. Ms. Kreitzer said she agrees that when you have 20 engineers in one specific profession it creates a problem, but when they all live in one area of the state it also creates some problems in trying to possibly change the make up of the board. Number 1155 CHAIRMAN ROKEBERG questioned what area of the state they live in. MS. KREITZER responded Fairbanks. Number 1186 REPRESENTATIVE RYAN made a motion to pass HB 133 out of committee with the accompanying fiscal notes and individual recommendations. CHAIRMAN ROKEBERG asked if there is an objection. Hearing none, HB 133 moved out of the House Labor and Commerce Committee. ADJOURNMENT Number 1218 CHAIRMAN ROKEBERG adjourned the House Labor and Commerce Committee meeting at 4:42 p.m.