Legislative Finance flags statutory conflict as DCCED proposes shifting professional‑licensing investigation costs

The department told the subcommittee it proposes to replace professional licensing receipts currently used to pay for licensing investigations with a broader funding source drawn from business licensing and corporations receipts.

Administrative Services Director Hannah Lager said investigations are a public protection expense and that using business licensing and corporations receipts spreads the cost across a broader base. She noted excess receipts exist in that source and cited an $11,000,000 lapse to the general fund last year from that receipt base. Lager said the change would better match the public purpose of investigations rather than putting the cost solely on compliant licensees.

Rob Carpenter of Legislative Finance responded that current statute directs professional licensing fees to cover the costs of administering professional licensing, "that includes investigations," and said the governor's proposal "conflicts with statute as it's currently written." Carpenter said while appropriation power allows the Legislature to allocate money as it chooses, Legislative Finance's concern is that using the designated business licensing fund in this way could effectively operate as an unrestricted general fund appropriation and therefore should be coded or cleaned up in statute.

Representative Costello and others asked whether legislation is needed to effect the change or whether it can be done administratively through budget coding; Legislative Finance said the change can be done by appropriation but may conflict with existing statute and recommended follow‑up work to reconcile statutory language and appropriation coding.

The subcommittee asked the department and Legislative Finance to provide additional context and potential statutory language fixes in follow‑up discussions.