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Once sleepy Sunset meetings now have ‘different attitude’

There’s a new focus when it comes to lawmakers’ examination of how boards that license and regulate dozens of professions in the state spend the licensure fees they collect from thousands of Alabama workers.

Joint Sunset Committee meetings used to be sleepy and low-profile, as members would routinely rubber stamp the required reauthorizations of boards and commissions. Not so anymore.

Co-chair Sen. Will Barfoot, R-Pike Road, told Alabama Daily News there’s a “different attitude” now on the board that will meet again Wednesday.

“I think that is a recognition or an attempt to really dig into each one of these boards, agencies and commissions to figure out where the money is being spent, is it being spent appropriately, is it being spent in accordance with the law?” Barfoot said. 

The boards regulate professions from barbers to athletic trainers to electricians to counselors and their members are generally appointed by Gov. Kay Ivey or other elected officials, but they can be run with outsourced management. They’re funded through the licensing fees they collect, which are set by state statute.

During a July meeting of the committee that every year extends for several years the authority of 30 or so boards, member Rep. Matt Simpson, R-Daphne, asked multiple licensing agencies about how much money they collect in fees, how much of that goes to administrators and what they do in return.

In a particularly heated exchange with contracted staff for the Board of Electrical Contractors, Simpson, also questioned why it was continuing to collect a $75 provisional licensing fee, one of more than a dozen it administers to contractors, after being told years ago it didn’t have the legal authority to do so.

In 2022, the board collected $825,880 in fees. It pays Keith Warren, whose Smith Warren Management Services currently manages 15 boards, $420,000 per year. An outside attorney has a contract for up to $110,000.

“We’re talking professional services of about $530,000, which is over half of what the board (collects),” Simpson said. “…You know and you have known since 2012 that statutorily the board did not have the legal authority for the $75 fee …

“Yet as you stand here today, you are still offering a fee and taking a fee from electrical contractors that you have no statutory authority to do and over half of the money that this board receives goes to professional services …”

Simpson said the committee’s responsibility is to look out for the law, “that is clearly not being followed in this case,” and the people of Alabama to make sure “there is not some rogue board charging some rogue fee that they don’t have the authority for that the board and the administration for the board puts into their pocket.” 

Warren told the Sunset Committee last month and Alabama Daily News last week that the board had been trying for years to pass legislation legalizing that provisional license that allows contractors to work in specific regions.

“The board never decided to stop the fee because of legislative attempts to correct it,” he told ADN. “… We’ve never been told to stop until now.” 

The fee has since been eliminated, Warren said.

Barfoot said if a board has been previously told to clean up an issue, Sunset doesn’t want them to continue to kick the can down the road, he said.

“Obviously, there are some that do a really good job, there are some that you know, may have a legitimate excuse as to what happened and why it happened,” Barfoot said.

Sunset started getting more attention in the spring when Sens. Garlan Gudger, R-Cullman, and Chris Elliott, R-Josephine, questioned the spending and action of the State Massage Board, of which Warren is the executive director, and threatened to end its authority.

Gudger told ADN Sunset is “cracking down” on board management because it represents and is the voice of licensees. Gudger led the springtime fight that required a reduction in fees by the massage board.

In April, Elliott sponsored Senate Bill 156, which he said would streamline some of the work of the boards, save money and make an easier process for licensees. It didn’t pass and Elliott this week said it would be back in 2024.

“I’m going to try to consolidate some of these occupational boards,” he said.

When the Sunset Committee meets again later this week, Warren will again be before it. 

Over almost 25 years, Warren has grown his niche company to now manage 15 boards, all of which he is the executive director, with a combined about 29,000 license holders. In exchange, his company with a staff of 15 was paid a combined about $1.6 million in 2022.

He’s not the only one in Montgomery managing multiple boards, but that $1.6 million catches attention. He said when he explains the staff, from investigators who look into licensing complaints to legal assistants, the fees make sense.

Warren last week said Sunset’s new questions are fair.

“Part of their job is to make sure the board or agency they’re reviewing is doing their job, and they’re doing it cost effectively and they’re not being a burden in the licensing process and licensing fees to those professions,” Warren said. “They are legitimate questions. They could be asked in a different way.” 

In advance of Sunset meetings, members receive audits on organizations from the Alabama Department of Examiners of Public Accounts. They include fee and spending information and any outstanding issue with a board. Warren said he hopes sunset members will start asking questions in advance of their public meetings.

“We work for the Legislature,” he said. “We are entities created by the Legislature.

Sunset co-chair Rep. Margie Wilcox, R-Mobile, said the new scrutiny isn’t limited to board management. Lawmakers want apples-to-apples comparisons on what boards are doing with their funding, including expenditures like legal services.

“There are some perceptions out there that some boards spend too much, but we also have examples of some boards who can really do a lot with a little bit of money,” Wilcox said.

“… We’re finding some dramatic differences among some boards and what they spend.” 

Sen. Keith Kelley, R-Anniston, said last month the committee is “looking for efficiencies and we’re looking for ratios that are acceptable by normal business means, especially when you’re dealing with the money and the fees that we are.” 

About the possibility of consolidations, Warren said some makes sense as more professional boards are created legislatively and license small numbers of professionals, Warren said.

“I understand (Elliott’s) concept, I don’t think you could house all boards,” Warren said. He said more states have independent boards than an umbrella regulatory office.

For that $420,000 a year the Board of Electrical Contractors pays, Warren’s firm processes licenses and renewals in a timely manner, coordinates examines, responds to complaints the board receives and has staff to answer calls.

“Could the state do it? Yes,” Warren said. “Could the state do it for ($420,000)? No. It would require more staff, and then you have state benefits, retirement. We don’t have state vehicles.” 

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