Legislature(2015 - 2016)BELTZ 105 (TSBldg)
02/18/2016 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SB18 | |
| SB158 | |
| SB141 | |
| SB108 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 136 | TELECONFERENCED | |
| *+ | SB 134 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 18 | TELECONFERENCED | |
| += | SB 158 | TELECONFERENCED | |
| += | SB 141 | TELECONFERENCED | |
| += | SB 108 | TELECONFERENCED | |
SB 158-REAL ESTATE BROKER LICENSURE REQS
1:44:07 PM
VICE CHAIR GIESSEL announced the consideration of SB 158. She
noted that this is the first hearing.
WESTON EILER, Staff, Senate Labor and Commerce Committee and
Senator Mia Costello, stated that SB 158 was brought to the
committee by the real estate industry in Alaska. He introduced
the legislation paraphrasing the following sponsor statement:
Senate Bill 158 raises the application requirements
for a real estate broker license in Alaska. The bill
requires applicants seeking to become a real estate
broker to have been a real estate licensee for 48
month rather than 24 months. It also increases the
continuing education requirements for a broker license
applicant from 15 hours to 30 hours. Senate Bill 158
will improve the standards and training necessary to
become a broker and provide the public with better
protection when engaging in real estate transactions.
In Alaska, a real estate licensee is tied to a broker
and works for the broker or an associate broker in a
branch office. The broker is responsible for
supervision of the real licensee and even receives the
employee's license from the Alaska Real Estate
Commission and returns it to the commission if the
relationship with the broker is terminated. Real
estate brokers are responsible for real estate
brokerage trust accounts that include earnest money
deposits, security deposits, collected rental money,
and other money collected in the trust until the funds
are distributed according to the terms of a real
estate transaction.
These are major responsibilities that affect the
public when involved in a real estate transaction.
Added training and experience will help protect the
public as brokers become better prepared to perform
the duties required of a broker.
This bill is supported by the Alaska Real Estate
Commission, Alaska's licensing agency, and the Alaska
Association of Realtors.
MR. EILER noted the letters of support in the packet, and
referenced a spreadsheet of the education and license
requirements in all the states. It shows that the time,
education, and experience required in Alaska is much lower than
other states. SB 158 will bring Alaska into line with national
standards, he said.
SENATOR MEYER asked if this is being done to match other states
or to address a problem.
MR. EILER replied the industry requested this because of
unfortunate consequences when someone perhaps was operating out
of their depth. He added, "It is more being brought forward to
just help rectify and ensure merit and qualification for
brokers."
SENATOR STEVENS asked how and where a licensee gets the
additional education.
MR. EILER offered to provide a list of what is currently
available and suggested individuals in the room could provide
specifics.
1:50:29 PM
SENATOR STEVENS said he'd like to be sure this isn't an onerous
requirement.
VICE CHAIR GIESSEL asked Ms. Hovenden what problem SB 158 seeks
to fix.
1:51:15 PM
JANEY HOVENDEN, Director, Division of Corporations, Business,
and Professional Licensing, Department of Commerce, Community
and Economic Development, related that this is something that
the industry has been requesting for some time. Doubling the
requirement for education and experience will provide more
public safety measures that the industry says are needed.
SENATOR STEVENS asked how and where a licensee gets the
additional education and who pays for it.
MS. HOVENDEN replied the licensees would be required to pay for
the additional education. She offered to follow up with
information about how and where the education would be
delivered.
SENATOR STEVENS asked if individuals would be required to take a
test. If so, who audits the test and where would it be
administered?
MS. HOVENDEN said she'd have to check on that.
1:53:23 PM
VICE CHAIR GIESSEL opened public testimony.
1:53:38 PM
NANCY BLASHLEY DAVIS, Chair, Alaska Real Estate Commission,
Sitka, Alaska, testified in support of SB 158. She related that
the commission received testimony from 15-20 licensees that two
years experience and 15 hours of continuing education does not
necessarily prepare someone to become an associate broker or a
broker. A broker does things like handling trust accounts and
procedure manuals in addition to monitoring the licensees. These
things aren't necessarily learned as a licensee.
She confirmed that Alaska is near the bottom of all 50 states in
the amount of continuing education it requires, and this will
bring Alaska closer to what other states are doing. The bill
also increases from two years to four years the time before a
licensee can become an associate broker or a broker. The
industry feels this will provide better protections for the
public.
MS. DAVIS told the committee that the classes are available
online; they must be presented to the Real Estate Commission and
the topics approved. Individuals must take and pass a test and
fulfill the continuing education requirements in order to get
the broker or associate broker license. She explained that each
real estate business is owned by one broker and can have any
number of associate brokers and licensees. She opined that the
additional knowledge and experience will save time and cost to
the commission because there will be fewer cases to investigate.
She noted the bill has no fiscal impact and reported that each
licensee must pay for their classes. She discussed the
availability of classes highlighting that instructors will
travel to a community if there is sufficient interest in the
class. Larger communities have more options and accredited
classes are also offered at real estate conventions.
She related her personal experience that she had two years
experience before she opened her brokerage and didn't initially
feel qualified to handle trust accounts. She was fortunate to
have a good mentor, but that's not always the case.
2:00:05 PM
SENATOR STEVENS asked for assurance that these additional
requirements don't become onerous for someone living in a rural
area.
MS. DAVIS explained that the university can proctor the test in
Sitka so travel isn't necessary. She didn't know about smaller
communities farther north but assumed the test could be
proctored at an education facility in the community.
VICE CHAIR GIESSEL asked if anyone had spoken against the bill.
MS. DAVIS answered she is unaware of any opposition.
2:02:34 PM
ERROL CHAMPION, Chair, Legislative Issues Committee, Alaska
Association of Realtors, Juneau, Alaska, noted that his letter
of support was in the packets. Addressing earlier questions, he
clarified that the bill does not change the broker test; it just
changes the required hours of continuing education from 15 hours
to 30 hours and extends the time before a licensee can apply to
take the broker test from two years to four years. He provided
licensure data as of the end of January: 414 broker licenses
were renewed, 361 associate broker licenses were renewed, and
there were 1,630 licensees. He shared his experience with
documents that weren't absolutely correct but didn't rise to the
level where the consumer filed a complaint with the Real Estate
Commission. He knows that the number of complaints is growing
but that's to be expected when the average licensee does fewer
than six transactions per year. This doesn't provide much hands-
on experience, particularly with the advent of foreclosures and
short sales, he said. The broker has much more responsibility
and there should be more training in accounting. The Real Estate
Commission agrees this legislation is needed.
2:06:52 PM
SENATOR MEYER asked the difference between a broker, an
associate broker, and a licensee.
MR. CHAMPION explained that everyone is a licensee and any
licensee can become an associate broker or broker. The statute
provides that there will be only one broker and one broker
license in an office, but there can be any number of associate
brokers. The training and experience requirements are the same.
SENATOR MEYER asked if a broker can have listings.
MR. CHAMPION confirmed that a broker can represent clients that
are either buying or selling. He noted that the statute provides
that only the broker can handle the funds.
SENATOR MEYER asked if someone could build homes and be their
own broker.
MR. CHAMPION clarified that a contractor is able to sell homes
he/she builds without a broker license.
SENATOR MEYER asked if this is all disclosed to the buyer.
MR. CHAMPION answered yes; both parties must sign a consumer
pamphlet that they know who a broker or licensee represents.
SENATOR MEYER asked how the commission is divided.
MR. CHAMPION explained that the listing broker decides how to
distribute the commission. It's negotiable and is paid broker to
broker.
SENATOR STEVENS asked if the broker assumes legal and financial
responsibility for every transaction going through the office.
MR. CHAMPION answered yes; statute provides that the broker is
responsible for the contents and integrity of every file in
every transaction.
2:13:08 PM
VICE CHAIR GIESSEL asked Director Hovenden if she had a sense of
the number of complaints filed with the Real Estate Commission
and the commission's liquidity.
MS. HOVENDEN agreed to follow up and send the numbers to Senator
Costello's office. Her recollection is that the Real Estate
Commission is in good standing.
2:15:47 PM
SENATOR MEYER asked Mr. Eiler the reason that the term "must"
was changed to "shall" on page 1, line 5. He commented that
shall seems to be a weaker terms.
WESTON EILER deferred the question until he talked to
legislative legal.
2:16:43 PM
VICE CHAIR GIESSEL held SB 158 in committee with public
testimony open.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 18 - Version H.PDF |
SL&C 2/18/2016 1:30:00 PM |
SB 18 |
| SB 18 - Fiscal Note.pdf |
SL&C 2/18/2016 1:30:00 PM |
SB 18 |
| SB 18 - Sponsor Statement.pdf |
SL&C 2/18/2016 1:30:00 PM |
SB 18 |
| SB 108 - Fiscal Note DCCED.pdf |
SL&C 2/18/2016 1:30:00 PM |
SB 108 |
| SB 108 - Fiscal Note DOA.pdf |
SL&C 2/18/2016 1:30:00 PM |
SB 108 |
| SB 108 - Testimony - R. Banks - Alaska Securitites Act Reform-Crowdinvesting.pdf |
SL&C 2/18/2016 1:30:00 PM |
SB 108 |
| SB 108 Sectional Analysis.pdf |
SL&C 2/18/2016 1:30:00 PM |
SB 108 |
| SB 141 - Fiscal Note.pdf |
SL&C 2/18/2016 1:30:00 PM |
SB 141 |
| SB 108.PDF |
SL&C 2/18/2016 1:30:00 PM |
SB 108 |
| SB 141 - Sectional Analysis.pdf |
SL&C 2/18/2016 1:30:00 PM |
SB 141 |
| SB 141 - Sponsor Statement.pdf |
SL&C 2/18/2016 1:30:00 PM |
SB 141 |
| SB 141.PDF |
SL&C 2/18/2016 1:30:00 PM |
SB 141 |
| SB 158 - Assoc. Realtor Letter.pdf |
SL&C 2/18/2016 1:30:00 PM |
SB 158 |
| SB 158 - Comparative Education Experience Other States.pdf |
SL&C 2/18/2016 1:30:00 PM |
SB 158 |
| SB 158 - Fiscal Note.pdf |
SL&C 2/18/2016 1:30:00 PM |
SB 158 |
| SB 158 - Real Estate Commission Letter.pdf |
SL&C 2/18/2016 1:30:00 PM |
SB 158 |
| SB 158.PDF |
SL&C 2/18/2016 1:30:00 PM |
SB 158 |
| Public Comment - Concerns with SB 158.pdf |
SL&C 2/18/2016 1:30:00 PM |
SB 158 |