Legislature(2007 - 2008)CAPITOL 17
04/13/2007 03:00 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB205 | |
| HB209|| HB110|| SB16 | |
| HB205 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 110 | TELECONFERENCED | |
| *+ | HB 209 | TELECONFERENCED | |
| *+ | HB 205 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 205-REAL ESTATE BROKERS/SALESPERSONS 3:17:55 PM CHAIR OLSON announced that the first order of business would be HOUSE BILL NO. 205, "An Act relating to real estate broker and real estate salesperson licensing; and providing for an effective date." 3:18:02 PM DAVE FEEKEN, Chair, Industry Issues Working Group, Alaska Association of Realtors (AAR), referring to a committee substitute for HB 205, said that this is a modernization of existing statutes relating to real estate brokerage, and addresses the education of real estate licensees and the supervisory relationship between brokers and licensees. He stated that the real estate industry is "dramatically changing," and the current pre-licensing education requirements are outdated. He explained that nearly 80 percent of current buyers use the internet to search for property. There are also hundreds of loan programs available from around the country. He detailed additional concerns, such as wetland maps, disclosure of property condition, and predatory lending issues. The Real Estate Commission continues to increase the required course material for pre-licensing education, but the hourly requirement has remained the same. He said that HB 205 increases the hourly requirement from 20 hours to 40 hours. He pointed out that even with the hourly increase, Alaska will continue to have the lowest hourly requirements in the country. MR. FEEKEN then stated that the post-licensing education would be increased from 20 to 30 hours. This is necessary to adequately teach the required materials. The AAR supports these increases, in order to meet the public need for competent real estate practitioners. He said that HB 205 clarifies that an individual convicted of a felony must wait seven years after completion of the sentence, prior to obtaining licensure. This gives the Real Estate Commission the ability to protect the public. He then referred to Section 4, and said that this section states that a real estate office must employ an associate broker to directly supervise all licensees. He noted that there have been difficulties between Legislative Legal and Research Services and the Department of Law (DOL) regarding the language in this section. He said that if a single broker owns, operates, or is employed by multiple corporations, HB 205 would require that all of the business organizations share a single physical address. He explained that many brokerage firms are multiple companies for insurance or other reasons. MR. FEEKEN then discussed Section 9. He explained that according to a Supreme Court ruling, the broker is not responsible for conduct that he or she had no knowledge of. He said that HB 205 requires the broker to have a written policy and procedures manual that addresses supervisory issues. The licensee is required to inform the broker of issues regarding the licensee's compliance with state law, and conduct with clients. He said that this would allow complaints to be handled in a more cost-effective manner. The AAR is requesting an implementation date of February 1, 2008, in order to comply with the additional education requirements. 3:24:07 PM REPRESENTATIVE NEUMAN made a motion to adopt CSHB 205(L&C), Version 25-LS0684\M, Bullard, 4/12/07 as the working document. There being no objection, Version M was before the committee. 3:24:26 PM REPRESENTATIVE GARDNER shared her understanding that this would place the responsibility for "good behavior" on the licensee, and inquired as to whether this is a shift of responsibility. MR. FEEKEN replied that the broker has always been responsible for supervising the licensee. He reiterated that following a US Supreme Court ruling in the 1980s, the broker was required to know of the misconduct. This clarifies that a policy manual is required. REPRESENTATIVE GARDNER asked if, in the event of a lawsuit, the broker would be protected, on the basis that the licensee has failed to inform him or her of the misconduct. MR. FEEKEN replied yes. He explained that currently, brokers are not aware of a lawsuit until served with the paperwork. In response to additional questions, he stated that the AAR is in support of the legislation. The AAR is a trade organization, and its membership includes all licensees, whether brokers or sales associates. He said that around 25 percent of members are brokers, and 75 percent are licensees. 3:27:05 PM REPRESENTATIVE NEUMAN referring to Section 2, asked why the education requirement was changed to 40 hours. He noted that the original bill contained a 30 hour requirement, while the existing statute contains a 20 hour requirement. MR. FEEKEN explained that there are two types of education. Pre-licensing education has been changed from 20 hours to 40 hours. Post licensing education has been changed from 20 hours to 30 hours. In response to additional questions, he explained that the cost for pre-licensing education in Anchorage is around $275. He said that it is most likely higher outside of Anchorage, although in Kenai, it is the same. He shared his belief that this cost would not double. He has not heard any quotes from instructors as to what the price would be changed to. He stated that the AAR does not recommend prices, as it is a free market. 3:29:07 PM RUTH BLACKWELL, Chair, Professional Development Working Group, Alaska Association of Realtors, said that she is an associate broker and a certified instructor. She stated that she spent two terms on the Real Estate Commission. During her first term, the current education requirements were implemented. She said that when this occurred, the loan process was not nearly as complicated as it is now. She said that 20 hours is not enough time to get someone started. She urged members to support the increase in both pre-licensing and post-licensing education requirements. 3:30:56 PM RICK URION, Director, Division of Corporations, Business and Professional Licensing, Department of Commerce, Community, & Economic Development (DCCED), said that he agrees with the previous testimony. However, the Department of Law (DOL) feels is concerned with Section 7(e), as it implies that there is a residency requirement in the real estate law, which is incorrect. He explained that the Constitution of the United States does not allow this. The requirements must be the same for both in-state and out-of-state brokers. This section should be deleted, or modified to include both. 3:33:35 PM REPRESENTATIVE NEUMAN shared his understanding that this section should be changed to include the words "in-state", or "may reside out-of-state", or simply be removed completely. MR. URION agreed that this is correct. 3:34:00 PM CHAIR OLSON closed public testimony. REPRESENTATIVE NEUMAN offered Amendment 1, which would delete Section 7. CHAIR OLSON stated his intention to hold the bill over in order to allow specific concerns to be discussed with Legislative Legal and Research Services. REPRESENTATIVE NEUMAN withdrew Amendment 1. [HB 205 was brought up again later during the hearing] HB 205-REAL ESTATE BROKERS/SALESPERSONS 5:03:54 PM CHAIR OLSON announced that as the final order of business, the committee would return to HOUSE BILL NO. 205, "An Act relating to real estate broker and real estate salesperson licensing; and providing for an effective date." REPRESENTATIVE NEUMAN offered Conceptual Amendment 1, which would remove Section 7. There being no objection, Conceptual Amendment 1 was adopted. 5:04:30 PM REPRESENTATIVE NEUMAN moved to report HB 205, as amended, out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHB 205(L&C) was reported from the House Labor and Commerce Standing Committee.
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