Legislature(2009 - 2010)BARNES 124
02/24/2010 03:15 PM House LABOR & COMMERCE
Audio | Topic |
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Start | |
HB342 | |
HB346 | |
HCR19 | |
Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
*+ | HB 342 | TELECONFERENCED | |
+ | TELECONFERENCED | ||
*+ | HB 346 | TELECONFERENCED | |
*+ | HCR 19 | TELECONFERENCED | |
HB 342-EXTEND BOARD OF REAL ESTATE APPRAISERS 3:32:33 PM CHAIR OLSON announced that the first order of business would be HOUSE BILL NO. 342, "An Act extending the termination date of the Board of Certified Real Estate Appraisers; and providing for an effective date." 3:32:36 PM MICHELLE SIKMA, Staff, Representative T. Wilson, Alaska State Legislature, presented HB 342 on behalf of the prime sponsor, Representative T. Wilson, paraphrased from the sponsor's statement, inserted, as follows [original punctuation provided]: HB 342 extend the termination date of the Board of Certified Real Estate Appraisers (BCREA).Per AS 08.03.010(c)(20), the board will sunset on June 30, 2010. HB 342 extends this date by four years, to June 30, 2014. The BCREA is comprised of a five member board to establish: (1) examination specifications for certification as a real estate appraiser; (2) rules of professional conduct to establish and maintain a high standard of integrity in the real estate appraisal profession; and (3) regulations necessary to carry out the purposes of the statutes. The conclusion of the Legislative Audit is a recommendation to extend the BCREA's termination date by four years. (Report Digest #08-20064-10). 3:34:35 PM REPRESENTATIVE BUCH inquired about the fiscal note. 3:35:01 PM CHRIS CURTIS, Division of Legislative Audit, Legislative Affairs Agency, explained that the Division of Legislative Audit conducted a sunset audit review and issued a report in January 2010. The objective of the audit was to determine whether the termination date should be extended. She reviewed the background information, including that the BCREA's authority originated from an Act that passed the Congress in 1989, the Financial Institutions Reform, Recover, and Enforcement Act (FIRREA). This federal law was intended to ensure that federally regulated real estate transactions appraisals were performed by real estate appraisers who met the minimum qualifications and were conducted in compliance with uniform standards. Under the federal law each state could establish its own agencies to license and certify real estate appraisers. In 1990, the legislature created the Board of Certified Real Estate Appraisers (BCREA). MS. CURTIS stated that the audit recommended that the BCREA be granted an extension until June 30, 2014, which is half of the eight years authorized in statute. The Division of Legislative Audit recommended only a four-year extension of the BCREA, instead of an eight-year extension. This recommendation is based on the Department of Commerce, Community, & Economic Development (DCCED) and the BCREA's failure to address recommendations by the federal Appraisal Subcommittee (ASC). Additionally, the Division of Legislative Audit recommended that the DCCED should improve the administrative support to the BCREA. She remarked that the lack of administrative support is a systematic problem, and is one that the committee may see surface in other audits. Further, the legislative auditors recommended that the Office of the Governor improve its appointments to the BCREA in a more timely fashion. 3:37:05 PM REPRESENTATIVE LYNN asked for clarification of the items the DCCED and the BCREA failed to address. MS. CURTIS responded that the federal ASC review found that the DCCED and the BCREA failed to ensure that two of the 42 certified applicants met the Appraiser Qualifications Board's minimum time period requirements during which experience must be earned. Thus, two of the certified real estate appraiser licensees were not appropriately licensed. The federal ASC recommended that the DCCED request additional documentation, but only one applicant responded. Additionally, the federal ASC asked the department to downgrade the licenses, but no action was taken to do so. She understood the ASC conducted a subsequent review, issued additional findings, and the DCCED and the BCREA are currently working to address any remaining issues. REPRESENTATIVE LYNN acknowledged that the audit reduced the extension period. He asked whether the punishment is commensurate with the findings. MS. CURTIS related that rather than wait eight years to conduct an additional review, an audit could be held in four years to determine whether the DCCED and BCREA are meeting the requirements. One result of the BCREA not meeting the federal licensing criteria is that it could lead to federal lending institutions not accepting appraisals, which is fairly substantial, she stated. REPRESENTATIVE LYNN asked whether any inspections or spot checks would occur. 3:39:31 PM MS. CURTIS related that she does not believe any oversight is currently in place except for the federal review. REPRESENTATIVE LYNN recalled his own military service and offered his belief that surprise inspections are worthwhile, so periodic inspections should happen. 3:40:34 PM REPRESENTATIVE T. WILSON inquired as to whether the BCREA should be extended for only two years instead of four years as recommended by the auditors. MS. CURTIS answered the decision is subjective, that the division thought that it may take some time to address the issues and wanted to allow the DCCED and BCREA time to remedy the problems. She said she thought four years seemed prudent. REPRESENTATIVE T. WILSON wondered whether it would take two years to comply with the audit recommendations. MR. CURTIS responded that it could. She also noted she was unsure it would warrant the resources necessary to conduct a full audit. 3:41:45 PM REPRESENTATIVE BUCH referred to the fiscal note that indicates the licensing program is required to cover its operating costs with licensing fees. The revenue generated by BCREA licensing fees is anticipated to cover the program's full operating costs. Although this fiscal note indicates new funds are not required to implement this bill, the fiscal note impact is approximately $100,000. MS. CURTIS stated that she cannot address the fiscal note, but agreed that the BCREA must assess fees to cover the BCREA's administrative costs. 3:42:43 PM REPRESENTATIVE BUCH asked how often the BCREA meets. MS. CURTIS related that the BCREA has met 11 times in the past 4 years. 3:43:00 PM JENNIFER STRICKLER, Chief, Professional Licensing, Division of Corporations, Business, and Professional Licensing, Juneau Office, Department of Commerce, Community, & Economic Development (DCCED), explained that the fiscal note reflects the direct expenses, but does not include indirect expenses, which includes the overhead of the agency. She explained that the BCREA is not asking for a new appropriation, but is just sharing the cost of operating the board. 3:44:33 PM REPRESENTATIVE BUCH asked for the reason that the fiscal note reflects $100,000 per year. He offered his belief that the language is confusing. REPRESENTATIVE CHENAULT explained the fiscal note. He referred to the funding source as Receipt Support Services (RSS). He explained that RSS represents funds collected from licensees and does not represent general fund expenditures. 3:45:49 PM REPRESENTATIVE CHENAULT asked for the number of certified real estate appraisers. MS. STRICKLER answered that there are approximately 243 licensees. In further response to Representative Chenault, she related that the number of licensees has stayed about the same. 3:46:22 PM BUTCH OLMSTEAD, Vice-Chair, Board of Certified Real Estate Appraisers (BCREA), stated at last BCREA meeting held on February 19th, 2010, the BCREA adopted several changes to its regulations to respond to the audit. The BCREA gave direction to its staff to send certified letters to applicants who had not complied with the continuing education requirements. Additionally, the BCREA accepted a surrendered license from one of three applicants. He related that the BCREA reviewed the Division of Legislative Audit findings and offered his belief that the board has accomplished the audit recommendations. 3:48:24 PM STEPHEN TURNER, Past President, Board of Certified Real Estate Appraisers (BCREA), explained that the federal Appraisal Sub- committee visits the board each year to review procedures. However, the 2007 audit was a more thorough audit than normally conducted. He related that the number of certified real estate appraisers is up considerably from the 2003 - 2004 period, by about 50 additional members. With respect to the fiscal note, since the licenses are biennial, they are renewed every other year. Thus, the cash flow looks uneven with some years reflecting a surplus and alternate years depicting negative figures, but that it nets out at the end of the two-year cycle. 3:49:58 PM CHAIR OLSON, after first determining no one else wished to testify, closed public testimony on HB 342. 3:51:13 PM REPRESENTATIVE LYNN disclosed that he currently holds an Alaska Associate Broker's license. 3:51:22 PM REPRESENTATIVE NEUMAN moved to report HB 342 out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, HB 342 was reported from the House Labor and Commerce Standing Committee. The committee took an at-ease from 3:51 to 3:55 p.m. 3:55:39 PM
Document Name | Date/Time | Subjects |
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HB342 ver A.pdf |
HL&C 2/24/2010 3:15:00 PM |
HB 342 |
HB342 Sponsor Statement ver A.pdf |
HL&C 2/24/2010 3:15:00 PM |
HB 342 |
HB342 Legislative Audit Summary.pdf |
HL&C 2/24/2010 3:15:00 PM |
HB 342 |
HB342-Legislative Audit Report.pdf |
HL&C 2/24/2010 3:15:00 PM |
HB 342 |
HCR19 AIDEA ppt Testimony.pdf |
HL&C 2/24/2010 3:15:00 PM |
HCR 19 |
HB346 Lettter ASMA 2-22-10.pdf |
HL&C 2/24/2010 3:15:00 PM |
HB 346 |
HB346 Lettter ASMA 2-24-10.pdf |
HL&C 2/24/2010 3:15:00 PM |
HB 346 |
HB346 Letter IAIABC 2-23-10.pdf |
HL&C 2/24/2010 3:15:00 PM |
HB 346 |
HB342 Fiscal Note-CED-CBPL-2-18-10.pdf |
HL&C 2/24/2010 3:15:00 PM |
HB 342 |
HB346 Letter NFIB 2-17-10.PDF |
HL&C 2/24/2010 3:15:00 PM |
HB 346 |