ALC-Occupational Licensing Review Subcommittee

Occupational licensing commission to to in order. Our first. Item on the agenda is the Arkansas ABSTRACTERS' board would somebody come forward please fuel. Introduce yourself the record you're welcome to present. Mr chairman members of the committee thank you so much my name is Denise Oxley I'm general counsel for the department of labor and licensing. And. Steve Gunthorpe department labor licensee. It helped to have gone through this last year so I hope I can give you some brief comments that will answer some questions and then I will be happy to to address any other questions that you have now. But the licensing law for ABSTRACTERS' the president licensing law was initially passed in nineteen sixty nine it underwent some major revisions in two thousand seven. In twenty nineteen as a part of transformation it was transferred to the department of labor and licensing. At that time the board had one part time employee who operated out of her home in north Arkansas she resigned And we have since. The board has not had an employee. Of the board has never paid rent your operating the operating budget I think it's five thousand dollars for operating expenses. The board had an income for fiscal year twenty twenty one totaling thirteen thousand six hundred sixty five dollars. Excuse me it has a fine balance of approximately a hundred and twenty thousand dollars it has a budget of thirty three thousand dollars for fiscal year twenty twenty two. As I indicated the board does not pay rent it has no employees administrative support for the licenses it had been issued by the board for the first year of transformation were handled by general revenue paid employees at the division of labor last year pursuant to memo or memorandum of understanding between the real estate commission and ABSTRACTERS' licensing board Real estate commission ploys perform that work and build the. ABSTRACTERS' board for those administrative services in a sense in the interest of full disclosure there was a question raised at your committee on Monday concerning the statutory authority for that and that's currently under review nail and is scheduled for a L. C. tomorrow it's on the agenda. Just so you know. As of August twelfth twenty twenty one the Board had eighty five certified. Individual ABSTRACTERS' licensed forty two businesses were licensed. based on our research Arkansas is one of seven states that currently licensed ABSTRACTERS'. A fewer states than that actually require abstracts for real estate transactions those that is Oklahoma Iowa in certain areas of the Dakotas I don't know what only applies to certain areas of the cat the code is but that's my understanding. it is clearly an occupation with dwindling numbers both nationally and in Arkansas. I ask and hope that you have a letter from a board member Trey waiver to be distributed to members of the subcommittee addressing the need for continued licensure. And I hope that the members have that. In terms of consumer complaints I can tell you that in the past two years there have been no formal consumer complaints filed. In fact there has not even been a consumer phone call made to the department of labor in licensing with respect to ABSTRACTERS'. I cannot be certain that we have the complete records of the ABSTRACTERS' licensing board prior to twenty nineteen but we have gone through the records we have and find no record of any formal consumer complaint. and I think I can list I think you already have the fee information from what we've had on the portal but I will be happy to address any other questions that the committee may have. Thank you this I will take some questions I know we. Got at least one here senator garner you're recognized for a question. Thank you Mr chairman of. So. Roughly five forty five hundred to five thousand dollars a year is collected through these fees. You said you had a hundred twenty thousand dollars to sit in a kennel. What is that money being used for if you have no employees no rent no overhead and could you explain a hundred twenty thousand dollars I misunderstand that wise that you sit in an account it is the fund balance for that board because it's a cash fund agency so it carries over so what's not spent is just carried over in the fund balance for the account of now there are some expenses of the board the board did not meet for a while they have they met a couple times last year we anticipate a meeting next month to approve rules a draft rules but there will there are operating expenses in terms of mailing out renewal notices and printing licenses and sending those out. So there are operating expenses but yeah but obviously your cost did you take from the people exceeds that because you have a hundred twenty thousand dollars in cash balance what's the worst the purpose to have a hundred twenty thousand just sitting there I mean is there any kind of liability have to pay for a meeting now we have licensing boards with much more cash fund balances that a hundred twenty thousand dollars. So we have a bunch Board facilities. Okay interesting thank you. Thank you senator and you did say that your expenses were about thirty three thousand a year that's what's budgeted but yes okay yes Sir okay. Any other questions from the membership of the I'm going to mention this now members if we have any recommendations that members have based on our presentations today at before the next meeting if you will get those to staff will make sure we can share those with everybody as we start working over the next sixty twelve to fifteen months to prepare our report will increase incorporate all those into the report that we completed that time so if you can just send us the staff before next meeting any other questions representative Ladyman you're recognized for a question thank you Mr just a quick question how many members are on this board who appoints them. There's five in the governor appoints them up at the time of transformation twenty nineteen that board was empty and it has now since got full appointment and other terms. That is a good question Sir and I do not know off the top of my head if I could I'll be happy to send that to me is area where the subcommittee it would you please yes Sir thank you. Any other questions from members on this presentation. Seeing none thank you for your time we appreciate it thank you very much. Next on the agenda we have the C. division of the Arkansas state plant board. If each of you would introduce yourself for the record you are recognized to make your presentation. Wait Hodges chief counsel for the department of agriculture. Scott Brady a division director planning streets division department of agriculture. Mike stage Agra division manager of quality control and compliance which is over the C. section. Thank you Mr chairman have a few different programs that we're going to discuss with with you today do we start with the help program. That's fine it's okay all right I thank thank you all familiar with With the progress of the hemp program twenty sixteen farm bill allowed states to establish research programs for industrial him so in twenty seventeen you established one for us in our department and in twenty eighteen farm bill. Changed that a little bit and it moved it from purely a research program to more of a regulated agricultural entity and so this past legislative session you Amended the state law regarding him to establish more of an agricultural production act and so will be seeking approval from USDA this fall to change our program from a research program to that as required by the twenty eighteen farm bill and a I think you're probably all familiar with him what what him is it's the plant cannabis sativa The marijuana is also the plant cannabis sativa so what's the difference help is cannabis sativa that has point three percent or less THC content T. H. C. as the. Active ingredient in the plant that produces the high so you can see the need to have a regulatory program over something like this because if you miss your production by a tenth of a percent you're producing a controlled substance and so that's kind of the background of the hemp program will be happy to answer any questions. Senator garner you're recognized for a question. I thank Mr so I'm just doing the math if I was going to apply for Justin does remember where I mean my less than one acre I still be paying six seven hundred dollars and fees initially and then an annual fee as well where's that calls going causing pretty extensive is that being used to. Inspected is there a reason why that fees so high initially yes Sir Senator but using. that cost goes to support the program within the program to each licensed individual we provide a site. Verification where we have an inspector that actually goes out GPS verifies of growing site then we have inspectors that provide of sampling we actually sample for them we provide us sample analysis through our lab. and is there anything else marketing thing but they're paying for that service corrected that is through this licensing yes yeah there okay. But I'm just saying that's a pretty extensive amount of money is there reason this act Senate going back into the program is just pay for those inspectors B. USAF yes the license fees cover our cost of offering program providing that oversight sampling verification Those things yes okay thank you. Senator Elliot you're recognized for a question. Thank you Mr chair of have you had any feedback from farmers of happy about any of the fees and costs that are represented here on the sheet. Overwhelmingly the feedback has been positive I don't have the details mark or cable could but we have not had any real serious feedback opposing those fees in fact most supported the fees when the program initially started it had had no fees we funded it for the first year ourself we went the department of agriculture okay and then after a year one maybe year to I'm not positive we were able three ruled incorporate the fees to bring some funding into the program to help cover costs. And when these things were said did you take a look at around other states secede if we're doing anything commensurate with what others are doing yes ma'am we do it within their their competitive with other state programs surrounding states as well particular Kentucky which is one of the leading for states to implement him programs okay all right thank you this state that. This number at the top that twenty two so that's the number of licensure licenses that we currently have is that correct the top of the page number of an individual's regulated says it yes Mister chairman I believe you're looking at of the number of licenses we have for for what we call a processor license I've got submitted two reports one is for a human grower and the number of licensees we indicated there's forty nine and the number of processors it is twenty two okay how does that compare to some peer states that have started down this path process as far as the numbers are we on tract similar to what other states are seeing It It out varies quite a bit from state to state for instance the state of Kentucky at currently probably has thousand growers in their program but there are a few more years down the road and we are and last year we had about two hundred and sixteen growers in the program and but that fell off the due to different reasons but we expect after we move into under the USDA program and get certified there that are number of growers will increase okay and you said that their fee structures fairly similar to what our side and that right model in general from state to state we certainly aren't anymore more or any less than most states okay aren't representative Ladyman you're recognized for a question thank you Mr what is your you have an annual budget and this is the program self sustaining yet. Richard I do not have numbers for you I can see if we can work on and get that back to you but no not in front of me I do not have a output versus input numbers for you as far as what we put into the program and what it generates back out of my guess is this year with forty at with the lower numbers we might be still supporting the program someone from other funding areas through the department I'd be interested in seeing those numbers if you can send the yes are also office if you could just for those to staff that would be good I think it would be beneficial for the entire subcommittee to have yes thank you. Any other questions from the members of the sun. Okay if you will move on to the next one thank you yes the remainder of our programs are in our seed program thank you wrecker Bray will discuss that with you. Yes thank you Wayne so within our state program what we have before you today and exhibit two is three different license slash registration categories the first one we we look at is called a plant breeder. And just through terminology within our program in our rule we call that a licensing program but it's actually more registration program it has no fee it is basically a permanent. A registration SLAS slash Lysons it is for the purpose to ensure consumer protection and quality of breeder in foundation seed it's produce for growers. So in short a plant breeder is someone that has to meet a certain very high level of education PhD in agronomy some experience and background in the plant and seed production and what they do they typically work with you obey and other producers and they develop Breeder seed which is used to produce foundation seed which is commercially sold out to the farmers to grow. And if anyone has any questions on plant breeders I can pause there or I can keep going way beyond. I don't see many queue right now so if you want to continue they might jump in here in a minute so the next category we have a four U. S. R. C. dealer slash labeler and actually that's just one and the same in most instances and the purpose for that that is an actual license it is an annual renewed license the license to the entity slash dealer is two fifty annually and if some of the large a C. dealers that have multiple locations where they commercially distribute their seed will also have those substitute subsidiary locations annually Lysons and that is two fifty annually as well the reason for that is again it's back to consumer protection and ensuring of providing oversight and ensuring the quality of the C. that's commercially distributed throughout the state and basically that the seed meets the label guarantee that comes with. And if we have questions we can pause there again are we can move on to the the last I see no other questions at this time thank you Sir the last one is a C. treatment plan and that is simply a facility that commercially tree seed up for pesticides with pesticides A private farmer that wants to treat their own seat is not required to be licensed this simply applies to commercial providers of treated seeds other facility has to be licensed and again that just brings them into a quality control oversight from us we do sampling and ensure that basically the customer the farmer is getting what they are paying for and what the labels say is in a C.. And that is a two hundred and fifty dollar license and that is paid once. And that's it from the C. program if anybody has any questions. I think we got a couple here lined up. I have one Senator Elliot you're recognized for a question our I thank you Mr chairman so when a farmer treats his or her own seeds do they use on themselves or are they allowed to sell them to anybody else they use them themselves if they turn around and sell it then they become a commercial C. provider and they fall under this license requirements okay all right thank you yes ma'am. Thank you senator representative Ladyman you're recognized for a question. Thank you Mr or these entities that are licensed or they typically the the largest seed companies that we see around the state or. Typically yes there are some smaller seed dealers but and they very from large and summer large out of state C. dealers that have a subsidiary locations within the state where they sell C.. Thank you. Senator Clark recognized for a question. Thank you Mr chair of. Could you of. The I'll start with the The first one so we set the record PhD of. The. Just of a version for dummies. What a. What the licensing and the oversight. What do you all do. On the first one on the plant breeder. Our oversight applies there on the front end we ensure they have the level of education and background to be eligible for that license last registration and from there were pretty much done with them they are registered and licensed as a C. breeder we have some that have been in the system for years and years and years and there's no cost associated with that too that breeder. So are oversight there is just on the front end to ensure they are L. they're educated and they have the background to to go into it in the in the first place. And our benefit from the states benefit from that. It insurers that the the individuals working with various companies and and the you of a for the purpose of developing seed varieties have the background actually in my terminology pull that off I mean they're they're breeding seed farm seeds for various purposes such as to be drought tolerant or to be passed aside tolerant or various other traits that they breed into that see. Okay but nobody's overs you said but once we license that they have the education we're not actually looking at whether they're actually producing a CD does not all well we we that's seated mentally works its way through the program as breeder and foundation seed and when it gets out into the sea dealer and that part of the program we sample we have a lab we maintain where we run analysis we check for those traits we check for the label comparisons so that seed produced by a breeder eventually works its way through the program and any deficiency any problem detected that would be traced back to that reader we would address yes do we ever find one that we address we typically to my knowledge have not found anything that we traced back to a breeder but we have found C. that is out of tolerance to the label and we stop sale that until the label is either change to match up to what actually the seed can produce and and sometimes we have to take it completely off the market if it's contaminated with of weeds or other types of of C. but it has nothing to do with that first Lawson's of at no Sir not to my knowledge we and and I don't remember taking anything for back to the as to the breeder because the image again for dummies the does that does that not kind of take care of itself if you don't. But education or no if you don't produce a good C.. You could certainly make that argument yes Sir again there's no fee to this this is been in place for a long time is just simple another level of oversight on the front end to ensure that anybody that employs or works with a. Breeder has that that that breeder does have the level of education and background that they claimed. Okay what I think that's what we're here is not. Discussed the find out not disclose things have been here for a while but yes they actually do Mr chair if there's other people in line all. Welcome back we have anybody else in the queue right now if you have questions the next one. Again for dummies because I've certainly know very little about C.. So that's this that's the dealer okay so that is the next level be on the breeder and that is where the seat that's been produced at the foundation level enters commercial the commercial chain and and these entities basically you're just selling seeds to farmers this is pretty much all row crop see we're talking about. the license for that is to ensure that the seed that is sold is properly labeled and that it actually holds up to the label guarantee so of one farmers by they're actually going to get the the the germ that it says it has the the pass free the weed free elements to it okay so let me. The. The qualifications for the license there are none they simply have to just apply get the license and then there subject to sampling every year by our inspector so we do quality control sampling of the products that they're moving so that shows part of it is the yes Sir is the the sampling of the seeds yeah sure the. Of. The. and let me ask you some more questions. The with the market aspect not take care of that of if I'm the former. It well there was this guy I'm not gonna buy seed from an if these if I think that he's not. yes Sir the language correctly central the market could make some corrections in this process but I believe those market corrections would probably come after farmers may have invested I don't know how much and an entire growing season in their seats before they figured out that it did it wasn't what they bought so we try to ensure the quality of that seed on the front end. For the former so they don't have a for lack of better word I a wasted growing season where they suffer some losses or no yields sure I can say that I'm just playing devil's advocate yes Sir so do you know of any case where outside this loss in process before this ever started or somewhere where they don't have it for that to happen. I I do not this is been emplaced probably longer than I've been alive but I would be I would bet my next paycheck that the reason this is in place is for that very reason that did happen way back when before this up Plant Board oversight was. Was instituted in again Mr all before there's anybody else in the queue the next one. This is the C. treatment plan and this is basically just a a facility that treats that seed with pesticides before it is sold out to the former. that license Is only applies to commercial C. triggers you know farmers can treat their own seed that they're going to use for their own planning but if an entity's gonna sell it to a former then it's just another level of quality control to ensure that that seat is actually treated for the purpose that that the eight as advertised. We do sampling of that as well. To ensure the quality. We say treated. It's a process where the seat is actually treated with and Mike you might have to jump in here it is not my area of expertise but the seas actually treated with an outer layer of a treatment that actually encapsulates C.. And when it is planted this pesticide or fungicide whatever's treated for is actually becomes part of the plan and it offers a level of pesticide protection a lot of it is geared toward insecticides it's insect protection. So it does not it if treated properly and successful it reduces the need for the actual over the top spraying of a pesticide where is the pesticide protection element is already basically incorporated plant sale the that sounds like this sounds like technology that would be patented and will is not Mike. Some of it may be but at some of the things that happened with this with the seed treatments are also treated for like to protect against predation by predators such or such as birds and mice before the seed has a chance to sprout it provides protection against a mold so that the city doesn't kill before it ever has a chance to sprout and then there's also insecticides and included in it to avoid a basically anything trying to protect that seed before it has a chance to sprout this is the main if any particular experience to get this Lawson's all right well I they do have to a. As far as US experience I believe the and I'll probably have to get a good answer back to you on this they do have to pass a test to become a to get the license Boden let me write that down and get that answer back to the board yeah okay I would be interested in that as a. As a person has a commercial building contractors license. I'm not impressed but this so I'm test taker does mean I can build anything but. So of but in the old role in that is. Testing is the. What we have is this far as the this particular license goes we would do the initial qualification and then the renewal for each year. Okay but do you do you do anything to make sure thirty thousand I make whether at the cedar tree to correct one that what our inspectors go out in there either asked to or they randomly inspect and take samples of seed it could be treated or untreated if they bring in treated see the by the coatings are checked and to make sure that the those like if the farmer requested these seven herbicides insecticides that they were actually applied to the seed are there any ramifications of or not that's certainly if they if they were missing or if they were a not then you know if the farmers putting out CD thought he didn't need to follow up on that he could have a failed crop okay. The ramifications back to the entity would be stop sales on the products. Is is the last one these the seller. The retail. The less Lawson's but that was the last license we just we just talk about what your yeah thank you very much thank you Mr yes Sir thank you. Thank you senator representative Ladyman you're recognized for a question so just curious so could the see provider in the trigger to be the same entity they have both license yes I think back to the days when we raise cotton on the farm in the cottonseed we we get seat and then the Jan would treat the cottonseed before we got it back so that would accommodate you step process yes Sir and they could all be the same entity you would inspect on with we don't raise cotton up in my part of state much anymore but they still do that the usual inspected unions inspect what they put on the seed we do yes. Thank you. Thank you representative. I don't see any other questions from the members at this time so thank you for your presentation thank you Mr chairman thank you appreciated by. We have a members we have one less person that signed up to Provide testimonial Mr Zachary Burke is that correct if you'll come forward. To this hit that button to turn on the microphone introduce yourself to the record you're recognized to make a statement. Thank you I'm Zachary Burke from the Arkansas center for research in economics. I have a short statement prepared. the Arkansas center for research in economics is a university based research center housed in the college of business at U. C. our research has found that the agricultural seed dealer and label their license constitutes a fee only license essentially tax on licensees there are no other qualifications for the license applicants simply pay the annual fees additionally the licensing fee scale up depending on the volume of seeds that licensees of soul during the previous year. many states including Georgia Kansas Kentucky North Carolina and Virginia charge a flat annual fee instead of scaling it based on sales and eleven states including taxes do not Lysons C. dealers at all they simply use inspections as a regulatory tool. The the fee only license doesn't really serve to protect the public it's a tax on people who are working in this profession the scaling of the fee especially as an impediment to the growth of businesses in the rural parts of the state and based on our understanding at acre either of these are are either of these options that is charging a flat annual fee or the licensing it completely would be preferable alternative to the status quo in Arkansas moving from a sliding fee based on sales to a flat fee would be an improvement but we would encourage the committee to recommend a limiting the license and allow for verify verification of C. quality through other means and I'm happy to answer any questions. Okay. Senator Elliot you're recognized for a question. Yep four in in cases where there is no such thing as a seed Board how long has that been the case and where. and. Has that worked all right do we know. Any concerns about any kind of control of the to speak about please. I can't speak to how long it's been the case in the states where they're not licensed the two states I know off the top of my head where they're not ease Texas and Michigan and in those states seed sellers are still subject to periodic inspections as simply are not paying this annual fee. To sell seeds. so there is still some sort of oversight there the seller's just are being charged for it. What I am I am I still on okay I'm in in those in those Cases where they are they're not being charged such as being absorbed by some of those kind of central agency somewhere I assume but we don't know who would watch that is. No not off the top of my head I I don't know I don't. My educated guess would be that it's the state's department of agriculture handling that yes and do you know when these changes were made in these two states if the issue was just a matter of this was seen as a tax so was there something else going on I can't speak to the situation in the other states on what happened okay all right thank you appreciate your testimony. Thank you senator Senator Clark you're recognized for a question. Yes thank you Mr of of Mr was it Mr Burke yes I appreciate what you do. appreciate your testimony the but. always have. Questions for everyone the. You senator operates just as a tax. Yes Sir but there are inspections correct. Yes Sir I understand and so there's a cost to state government for inspections. Yes Sir is what and keep in mind I'm a retailer don't sell seeds by a retailer. Is there a reason why the cost of that should not be bored at that retail level. our our reason why we feel it should not be is that it's just it's an unfair burden on the. on the retailers on the seller's. Okay can you explain that to me because it would have to it has to be paid somewhere it unless we don't think it needs to be inspected needs to be paid somewhere and so where would it if I am the since I'm a retailer if I wore the C. retailer where would be a more fair place then me who has decided to sell C.. I think the just allocations from the general fund will be the most fair. Okay but again the seats we can argue. For the most part going to food and affects everyone but a lot of things would not so why should somebody over here that has absolutely nothing to do with this industry. Would be more fair for them to pay it then for the retailer who then is going to pass it on to the people who are buying the seeds. Her than going to pass it on two of the people who buy the cross why is that not the most fair. it's just the difference of opinion Sir okay on the the plant board does collect a lot of money in the twenty nineteen to twenty twenty fiscal year they collected eight point six million dollars I can't say how much of that was from C. dealer licensing but there's only a couple hundred licensee dealers in the state so and with the fees we charge it can't be a great proportion of that incident there you may have an argument there you may have an argument that you have presented that baby that it's a tax because we're we're collecting more. Than what it cost in which case it may very well be a tax but we don't have those numbers before us to look at but again I very much appreciate what you're what you're doing and the U. looking into these kind of things hope you'll be back on other matters with more facts thank you for being here thank you. Thank you. Senator Irvin recognized for a question. Thank you at first I just want to thank everybody that serves on the subcommittee for the work you're doing I was I chaired the the subcommittee For a when when it first started and but two years ago and work through the different groupings of license and we had some good legislation that came out of the work that we did so and they are up to the task to do that and one of the things that I think is important is to have the ability for the plant board to respond and then also it is important for you to look at these fees and how they're collected and how they're spent needs for because I could be a recommendation that they be reduced and At the end and that's that's I think an appropriate thing but you may need additional information which at which time you know that can if your request if you request that it can be provided to you by the the individuals that come before you That that provide for each specific licensing subgroup that you are working with so it's really just a matter of being able to talk through that and and then being able to hear the different opinions I think it's important to have a full dialogue and discussion about it and to look at all aspects of it because we did actually through discovery there were some groups that came to us and said you know we'd never really analyzes before or looked at this and we realized we think we can eliminate this licensing fee over here because it's really not necessary for us to have that or there's just not enough for us to even and administer this and so it's not really worth our time to do it so sometimes it was just a matter of self discovery so I would challenge any of the entities that come before you know to take a real deep dive and look at their own structure and to revisit that and bring their own suggestions to you as well and just as a as an additional tool for us to be able to clean clean some of the stuff up because sometimes these things haven't been looked at in a long long time and so it's good to look at them and analyze them and go is this continues to be necessary if it doesn't continue to be necessary or you know we're not really spending the money where we need to be spending the money then that's an opportunity for the subcommittee make those recommendations thank. Thank you senator. I see no other questions from the membership this time so thank you for your testimony thank you members I don't see any other business on our agenda right now so if you got any other recommendations based on the presentation today please for those two staff. if you have any questions or concerns about the process don't hesitate to do the same as well appreciate your time efforts today with that we are adjourned.