01/29/2018 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB278 | |
| HB279 | |
| HB280 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 278 | TELECONFERENCED | |
| *+ | HB 279 | TELECONFERENCED | |
| *+ | HB 280 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
January 29, 2018
3:21 p.m.
MEMBERS PRESENT
Representative Sam Kito, Chair
Representative Adam Wool, Vice Chair
Representative Andy Josephson
Representative Louise Stutes
Representative Chris Birch
Representative Gary Knopp
Representative Colleen Sullivan-Leonard
MEMBERS ABSENT
Representative Mike Chenault (alternate)
Representative Bryce Edgmon (alternate)
COMMITTEE CALENDAR
HOUSE BILL NO. 278
"An Act extending the termination date of the Board of Certified
Real Estate Appraisers; and providing for an effective date."
- HEARD & HELD
HOUSE BILL NO. 279
"An Act extending the termination date of the Real Estate
Commission; and providing for an effective date."
- HEARD & HELD
HOUSE BILL NO. 280
"An Act extending the termination date of the Board of Marital
and Family Therapy; and providing for an effective date."
- HEARD & HELD
F
PREVIOUS COMMITTEE ACTION
BILL: HB 278
SHORT TITLE: EXTEND:CERT. REAL ESTATE APPRAISERS BOARD
SPONSOR(s): REPRESENTATIVE(s) JOSEPHSON
01/16/18 (H) READ THE FIRST TIME - REFERRALS
01/16/18 (H) L&C, FIN
01/29/18 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 279
SHORT TITLE: EXTEND: REAL ESTATE COMMISSION
SPONSOR(s): REPRESENTATIVE(s) JOSEPHSON
01/16/18 (H) READ THE FIRST TIME - REFERRALS
01/16/18 (H) L&C, FIN
01/29/18 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 280
SHORT TITLE: EXTEND: BOARD OF MARITAL & FAMILY THERAPY
SPONSOR(s): REPRESENTATIVE(s) JOSEPHSON
01/16/18 (H) READ THE FIRST TIME - REFERRALS
01/16/18 (H) L&C, FIN
01/29/18 (H) L&C AT 3:15 PM BARNES 124
WITNESS REGISTER
MEGAN HOLLAND, Staff
Representative Andy Josephson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 278 on behalf of
Representative Josephson, prime sponsor.
KRIS CURTIS, Legislative Auditor
Legislative Audit Division
Legislative Agencies and Offices
Juneau, Alaska
POSITION STATEMENT: Presented audit findings and
recommendations and answered questions during the discussion of
HB 278.
DAVID DERRY, Chair
Board of Certified Real Estate Appraisers
Kenai, Alaska
POSITION STATEMENT: Testified in support of HB 278.
WILLIAM "BILL" BARNES, President
Appraisal Institute, Alaska Chapter
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 278.
MEGAN HOLLAND, Staff
Representative Andy Josephson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 279 on behalf of the prime
sponsor, Representative Josephson.
KRIS CURTIS, Legislative Auditor
Legislative Audit Division
Legislative Agencies and Offices
Juneau, Alaska
POSITION STATEMENT: Presented audit findings and
recommendations and answered questions during the discussion of
HB 279.
TRACI BARICKMAN, Chair
Real Estate Commission
Sutton, Alaska
POSITION STATEMENT: Testified in support of HB 279.
MARK MASLEY, President-Elect
Alaska Association of Realtors
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 279.
MEGAN HOLLAND, Staff
Representative Andy Josephson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 280 on behalf of
Representative Josephson, prime sponsor.
KRIS CURTIS, Legislative Auditor
Legislative Audit Division
Legislative Agencies and Offices
Juneau, Alaska
POSITION STATEMENT: Presented audit findings and
recommendations during the discussion of HB 280.
NICOLE JENKINS, Member
Board of Marital and Family Therapy
Division of Corporations, Business and Professional Licensing
Department of Commerce, Community, and Economic Development
Palmer, Alaska
POSITION STATEMENT: Testified in support of HB 280.
ACTION NARRATIVE
3:22:54 PM
CHAIR SAM KITO called the House Labor and Commerce Standing
Committee meeting to order at 3:22 p.m. Representatives Knopp,
Sullivan-Leonard, Stutes, Josephson, Wool, Birch, and Kito were
present at the call to order.
HB 278-EXTEND:CERT. REAL ESTATE APPRAISERS BOARD
3:24:20 PM
CHAIR KITO announced the first order of business would be HOUSE
BILL NO. 278, "An Act extending the termination date of the
Board of Certified Real Estate Appraisers; and providing for an
effective date."
3:24:41 PM
MEGAN HOLLAND, Staff, Representative Andy Josephson, Alaska
State Legislature, presented HB 278 on behalf of Rep. Josephson,
prime sponsor. She stated that the proposed bill would extend
the termination date for the Certified Real Estate Appraisers
Board by eight years. She stated the extension was recommended
by the Legislative Budget and Audit Division (LB&A). After the
housing market crash in the 2000s, there was a federal mandate
to regulate real estate appraisers. The state board serves to
fulfill that federal requirement. She stated the board is
responsible for licensing, license enforcement, training, and
regulating real estate appraisers. The board currently manages
261 licensees.
3:26:30 PM
KRIS CURTIS, Legislative Auditor, Legislative Audit Division,
Legislative Agencies and Offices, reported on HB 278. She
reminded that the purpose of the sunset audit was to determine
whether the board was serving the public interest and should be
extended.
MS. CURTIS gave background information, explaining that a
regulatory oversight structure for the appraisal industry had
been established by the federal government. The framework
includes private entities that set appraisal standards and
qualification criteria for licensing; the state licensing boards
that certify; and federal entities that regulate the industry.
The federal appraisal subcommittee is responsible for monitoring
the state licensing boards and ensuring they keep in line with
standards. She highlighted that the board is subject to
external oversight outside of the sunset process, which factored
into the division's recommended term of extension. The federal
oversight includes on site compliance reviews of the board as
well as the Division of Corporations, Business and Professional
Licensing (DCBPL). She stated the conclusion that the board was
serving the public interest by efficiently licensing and
regulating certificate holders and licensees.
MS. CURTIS read from a document entitled, "A Sunset Review of
the Department of Commerce, Community, and Economic Development,
Board of Certified Real Estate Appraisers (board)" [included in
the committee packet], as follows:
Overall, the audit concludes the board is serving the
public's interest by certifying and licensing real
estate appraisers.
The board monitored certificate holders and licensees
and worked to ensure only qualified individuals were
issued certificates and licenses in Alaska.
Furthermore, the board developed and adopted
regulations to comply with federal requirements,
improve the real estate appraisal industry, and better
protect the public.
3:28:09 PM
MS. CURTIS gave the audit's two recommendations. The first
recommendation was that the DCBPL director continue to improve
administrative support to the board. She pointed to page 16 of
the audit document as follows:
The audit found inadequate board support by DCBPL
staff in the following areas:
1. Due to general oversight, three certificate holders
were incorrectly reported in the Appraisal
Subcommittee (ASC) national registry, which is
required by federal and state laws. Upon
identification by auditors, the errors were promptly
corrected by DCBPL staff. Incorrect status in the
registry may result in financial institutions
rejecting qualified appraisers or selecting
unqualified appraisers. Additionally, noncompliance
with federal requirements puts the board at risk of
more frequent ASC reviews that may increase board
administrative costs.
2. Auditors reviewed five investigative cases over 180
days old, and identified three cases with periods of
inactivity without justification ranging from 130 to
203 days. Management reported that investigators have
varying caseloads, priorities, and case management and
investigative skills that affected timeline goals.
Alaska Statute 08.01.050(a)(19) requires the
department to provide inspection, enforcement, and
investigative services to the boards. Cases that are
not actively investigated increase the risk of
incompetent or unlawful licensees providing services
to consumers.
3. Due to staff turnover, DCBPL management could not
provide evidence that three of 11 board meetings held
between July 1, 2014, and March 31, 2017, were public
noticed. Alaska Statute 44.62.310(e) requires board
meetings be publicly noticed and AS 08.01.050(a)(6)
requires the department to provide administrative and
budgetary services to the board, which includes
noticing board meetings. Failure to publish meeting
dates may limit public participation in board
proceedings.
MS. CURTIS stated the second recommendation was that the
director work with the board to reduce fees to address the
surplus of over $165,000 at the end of March [2017]. The
board had requested a fee analysis, but it was not carried
out. The licensees paid a higher than justified fee as a
result.
MS. CURTIS listed the audit findings in the analysis. The
report noted that the board planned to move forward with the
regulation of appraisal management companies (AMC), expanding
the board's duties for the future. The division was
recommending an eight-year extension in recognition that the
board is subject to external oversight by the federal appraisal
subcommittee. These reviews are done on site at least every
other year.
3:30:25 PM
MS. CURTIS turned to the responses to the audit. She stated
that the department did concur with the findings and
recommendations. The board chair noted in his response that
they had received an attorney general's opinion that concluded
that a statutory change would be needed in order to regulate
AMCs. She underlined that the division did not agree with that
interpretation and offered additional comments outlining
specific federal and state laws that allow the regulation of
AMCs.
3:31:10 PM
REPRESENTATIVE JOSEPHSON cited a letter from LB&A that describes
the state's authority to regulate AMCs. He asked whether, if
there were clearer express authority, there would be any harm in
it.
MS. CURTIS stated that there is no harm in clarifying the
statutes.
3:31:32 PM
REPRESENTATIVE SULLIVAN-LEONARD asked whether, since the
Certified Real Estate Appraisers Board had excess funding, it
would consider refunding some of the appraisers' money that they
[paid in fees] the past years.
MS. CURTIS deferred to the department.
REPRESENTATIVE SULLIVAN-LEONARD queried whether the Certified
Real Estate Appraisers Board "is charging so much and all of a
sudden there was such a surplus, maybe there could be
consideration, especially if there's a particular complaint from
appraisers that they are paying a significant amount of money."
MS. CURTIS answered that most of the 11 boards they had audited
in the current year have maintained a surplus. The DCCED
response to LB&A is that maintaining a surplus of a year's
expenses will help prevent the spiking of fees. She added that
technically the statutes do not provide for that and instead say
that fees should be set to cover the cost of the occupation.
3:32:52 PM
CHAIR KITO stated that "if the department is doing that, it
doesn't seem like they have the statutory authority to be able
to do that. Whether or not it's a good idea, it seems like it
would require some legislative action."
3:33:08 PM
REPRESENTATIVE KNOPP asked Ms. Curtis to confirm the fund
balance of $165,000.
MS. CURTIS confirmed that at the end of March 2017 the board had
a balance of $165,609.
REPRESENTATIVE KNOPP referred to a letter he received in the
prior year from board member David Derry indicating that the
board had a balance of around $415,000. He asked about the
discrepancy between the board numbers and the audit numbers.
MS. CURTIS answered that the numbers were as of March. She said
she guessed the renewal period was at the end of summer, as FY
15 revenues were $279,000 through March 31, and in [FY] 17 it
was $35,000. She stated at the end of fiscal year 2017 (FY 17)
it could be a much higher amount. She suggested the department
may have current surplus amounts.
3:34:37 PM
REPRESENTATIVE KNOPP asked if the board had reduced its fees.
MS. CURTIS stated she did not have an answer. She reiterated
the report was dated Summer 2017.
REPRESENTATIVE WOOL pointed out that the FY 14 revenues were
$57,050, then went up to $279,000 and back down to $49,000. He
asked whether that was because the board had raised its rates
and lowered them back down again.
MS. CURTIS answered that every board had biennial licensing
meaning that every other year the members pay a renewal fee.
She added that in the off years there would also be revenue from
new applicants, so the boards did have revenue in the off year
but most revenue would be seen every other year.
REPRESENTATIVE WOOL surmised that in 2017 the revenue would jump
up again. He cited the audit and suggested the board had extra
cash and an adjustment of rate "could be tapered out over a
while."
3:36:22 PM
DAVID DERRY, Chair, Board of Certified Real Estate Appraisers,
testified in support of HB 278. He pointed to his letter on
page 29 of the audit that addressed the recommendations by the
legislative audit committee. He spoke to recommendation number
2 about reducing fees. He explained the board was on a 2-year
cycle for registering appraisers and recertification fees and
was not able to get the fees reduced in 2017. He added that
based on the accounting dated on November 3, 2017, the fund
balance for the board in the first quarter of FY 18 was
$378,297. The surplus was due to not adjusting fees.
3:38:10 PM
MR. DERRY clarified that the fees, as high as they were, carried
over from a court action that had occurred several years
previously due to legal action brought against one of the
certified appraisers, which ended up going to the Alaska Supreme
Court. That had resulted in increased fees for all certified
appraisers for the state to pay for that cost. The costs were
paid but unfortunately the fees were not analyzed and adjusted.
The board had a meeting in September 2017 at which the board,
with the director of the division, was able to adjust fees. The
fees effective for the 2019 recertifications would be reduced to
$350. That had been conveyed to the board.
MR. DERRY added that regarding the refunds, the board had been
told by the division that under state statutes it could not
extend the refund to anyone, so the balance surplus would carry
forward until it was used up.
MR. DERRY addressed the issue of AMC regulations. Although the
audit staff and some members of the board thought it did have
the authority "to do AMC legislation," the board had been told
by the Attorney General's office that it did not. The board was
currently working with Representative Josephson and Senator
Meyer on AMC legislation and hoped to get it through during the
current legislative session.
3:40:18 PM
REPRESENTATIVE STUTES asked if [the board] had a full
complement.
MR. DERRY answered in the affirmative.
3:40:34 PM
REPRESENTATIVE WOOL drew attention to the form before the
committee and stated it did not list total revenue in 2017
because the date of the audit was March 31. He added in 2015
that figure was $279,000. He asked if Mr. Derry had a number
for the 2017 revenue.
MR. DERRY answered that the accounting dated November 3, 2017,
showed total revenue for FY 17 as $278,417.
3:41:34 PM
WILLIAM "BILL" BARNES, President, Appraisal Institute, Alaska
Chapter, testified in support of HB 278. He gave a brief
history of the Appraisal Institute (AI), founded in 1932 during
the depths of the Depression to enact appraisal standards and
ethics. He noted it was the largest and oldest appraisal
institute in the United States and was also located in 60
countries, with 90 chapters. Alaska had 111 members of the 261
certified appraisers, for 43 percent capture rate of membership.
He continued that the AI writes almost all the [appraiser]
textbooks. He stated the AI believes that the board of
appraisal in the state of Alaska is serving the public interest
as intended and had been since 1991. The institute recommends
that HB 278 pass as intended and extend the board of appraisers
for another eight years.
3:43:33 PM
CHAIR KITO opened public testimony HB 278. After ascertaining
that no one wished to testify, advised that public testimony
would remain open.
CHAIR KITO held HB 278 over.
HB 279-EXTEND: REAL ESTATE COMMISSION
3:43:49 PM
CHAIR KITO announced that the next order of business would be
HOUSE BILL NO. 279, "An Act extending the termination date of
the Real Estate Commission; and providing for an effective
date."
3:44:02 PM
MEGAN HOLLAND, Staff, Representative Andy Josephson, Alaska
State Legislature, on behalf of the sponsor presented HB 279,
extending the termination date of the Real Estate Commission.
She explained that the Alaska Real Estate Commission oversees
brokers, associate brokers, and sales licensees and is
responsible for regulating supervisors and licensees and
enforcing their requirements for the investigation of units.
The commission currently has 567 licensees across the state. It
had received a full 8-year recommendation from LB&A.
3:45:30 PM
KRIS CURTIS, Legislative Auditor, Legislative Audit Division,
Legislative Agencies and Offices, reported on HB 279. The audit
was dated June 2017 and concluded that the Real Estate
Commission did serve the public interest by effectively
licensing and regulating real estate licensees and real estate
offices. The commission ensured that only qualified individuals
practiced and developed and adopted regulations to improve the
industry and better protect the public. Legislative Audit
recommended an 8-year extension. The audit period was less than
two years because the prior sunset audit was dated July 2015 and
had concluded that the commission was not serving the public's
interest by failing to procure a master Errors and Omissions
(E&O) insurance policy. Ms. Curtis said a 2008 law required
that the commission move to maintain a master policy and make it
available to licensees. The licensees were then required by
statute to either obtain their own independent policy or use the
master policy provided by the division. The prior sunset audit
found there were no clear explanations why the division and the
commission had not been able to obtain a policy. After the
audit, the commission was extended only two years and the
statutes were changed. The previous statute stated that if
there were no master policy, then all licensees were exempted
from having to obtain E&O insurance. There was a bit of a
loophole in the statute, so if a master policy was not obtained,
then no one would have to have insurance. Now all licensees had
to have insurance regardless of whether there was a master
policy available. In the present audit, LB&A had found that the
commission had actively worked with the division to change
regulations to help facilitate a successful procurement of a
master E&O insurance policy. They were successful, and a
contract was signed in 2017.
3:47:52 PM
MS. CURTIS stated the legislative audit had one recommendation.
In the prior sunset audit, LB&A had looked at 36 investigative
cases and found that 29 of them had extended periods of
inactivity from 124 days to four and a half years. The present
audit had looked at the current year and tested 7 cases. They
had found 3 of them had unjustified periods of inactivity and
those periods ranged from 72 to 194 days. The audit recommended
DCBPL's chief investigator improve oversight to ensure cases
were investigated timely. The department, the commission, and
the governor's office all concurred with the audit findings and
recommendations.
3:49:08 PM
TRACI BARICKMAN, Chair, Real Estate Commission, spoke in support
of HB 279. She said she had been a licensed professional for
about 25 years and over half of those years as a broker and as a
trainer. She testified as follows:
The real estate commission operates well within its means,
maintaining a cumulative surplus for four years. Licensing
fees adequately cover the operational cost of the real
estate commission and therefore place no burden on the
state's budget. As a commissioner, I work with the state's
investigator to review complaints that come into the
commission as a result of a real estate transaction or a
licensee's interaction with a member of the public. Most
complaints that are filed have a legitimate foundation and,
in many cases, licensees are disciplines through education,
fines, and sometimes through suspension or revocation of
their license. But without this process, the only
resources for the public would be litigation.
In some cases where a licensee violated the law a consumer
may not have the resources or the desire to take their
complaints to court and therefore would allow improper
illegal actions of a licensee to continue. This would not
be in the public's best interest. Additionally, by
modifying and adopting regulations, real estate commission
constantly improves our industry practices and standards.
It takes consistent work by the real estate commission to
keep regulations on track with the constantly changing real
estate industry. This is necessary to keep Alaskans safe
from financial losses associated with their real estate
transactions.
As stated, the recent sunset review concluded that the
commission is serving in the public's best interest. The
review unconditionally recommends that the commission
extend its expiration date to June 30, 2026, with the
recommendation that the chief investigator continue to
improve oversight to ensure investigations are completed
timely. This has been an ongoing process and they are
working on it. Real estate professionals have access to
our consumers' homes. To terminate the commission would be
taking away an important guardian for consumer protection.
That protection is Alaskan consumer protection.
3:52:07 PM
CHAIR KITO remarked the continuing surplus was "fairly high" and
asked whether there was a plan to address reducing fees or
reducing surplus for the board for future years.
MS. BARICKMAN answered that the commission had been able to
reduce licensing fees as a result of that surplus.
3:52:52 PM
MARK MASLEY, President-Elect, Alaska Association of Realtors,
testified in support of HB 279. He stated he had been a
licensed realtor professional in the state since 2001.
3:53:48 PM
CHAIR KITO opened public testimony on HB 279. Upon ascertaining
that no one wished to testify, he stated he would leave public
testimony open.
3:54:00 PM
CHAIR KITO held over HB 279.
HB 280-EXTEND: BOARD OF MARITAL & FAMILY THERAPY
3:54:06 PM
CHAIR KITO announced that the final order of business would be
HOUSE BILL NO. 280, "An Act extending the termination date of
the Board of Marital and Family Therapy; and providing for an
effective date."
3:54:21 PM
MEGAN HOLLAND, Staff, Representative Andy Josephson, Alaska
State Legislature, on behalf of the sponsor presented HB 280,
extending the termination date for the Board of Marital & Family
Therapy. She explained that the board regulates, licenses, and
trains marital and family therapists. It establishes and
enforces training, education and continuing education
requirements for its 85 licensees across the state. The board
had received a full 8-year extension through LB&A.
3:55:30 PM
KRIS CURTIS, Legislative Auditor, Legislative Audit Division,
Legislative Agencies and Offices, reported on HB 280. She spoke
to the May 2017 audit report conclusions that the board was
serving the public interest, effectively licensing and
regulating marital and family therapists and marital and family
supervisors. The board monitors licensees and works to ensure
only qualified individuals practice. Additionally, the audit
found that the board had actively developed and adopted
regulations to improve the profession. Legislative Audit
recommended an 8-year extension. There were no recommendations
made as part of the audit. At 85 licensees as of January 31,
2017, it was one of the smaller boards.
MS. CURTIS indicated the board had a surplus of just over
[$]68,000 as of March 31 and had been operating with the surplus
over the past several years, which had not always been the case
for this board. The Office of the Governor, the department, and
the board all concurred with the conclusions and were all in
favor of an 8-year extension.
3:57:22 PM
NICOLE JENKINS, Member, Board of Marital and Family Therapy,
Boards and Commissions, testified in support of HB 280. She
stated the board had operated under a deficit budget for more
than a decade due to the high cost of a disciplinary
investigation of a license. The board had paid off the debt by
raising licensing fees and was continuing to encourage the use
of any surplus to reduce fees for its licensees. The Board of
Marital and Family Therapy served to protect the public interest
of Alaskans by overseeing the licensing of marital and family
therapists and ensuring that Alaskans received safe and ethical
care.
3:58:39 PM
REPRESENTATIVE WOOL mentioned an investigative action that made
the board "run in the red." He asked whether the board had
enough surplus to cover a similar circumstance.
MS. JENKINS replied in the affirmative. One of the last sunset
audit recommendations in 2014 was to improve the investigative
management system to address any costs that may be incurred.
The board had complied.
3:59:45 PM
CHAIR KITO opened public testimony on HB 280 and ascertained
that no one wished to testify.
CHAIR KITO held over HB 280.
4:00:11 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
4:00 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB278 Sponsor Statement 1.25.18.pdf |
HL&C 1/29/2018 3:15:00 PM |
HB 278 |
| HB278 Fiscal Note DCCED CBPL 1.25.18.pdf |
HL&C 1/29/2018 3:15:00 PM |
HB 278 |
| HB0278 Version D.PDF |
HL&C 1/29/2018 3:15:00 PM |
HB 278 |
| HB278 2017 Audit 1.25.18.pdf |
HL&C 1/29/2018 3:15:00 PM |
HB 278 |
| HB279 2017 Audit 1.25.18.pdf |
HL&C 1/29/2018 3:15:00 PM |
HB 279 |
| HB279 Fiscal Note DCCED CBPL 1.25.18.pdf |
HL&C 1/29/2018 3:15:00 PM |
HB 279 |
| HB0279A Version D.PDF |
HL&C 1/29/2018 3:15:00 PM |
HB 279 |
| HB279 Sponsor Statement 1.25.18.pdf |
HL&C 1/29/2018 3:15:00 PM |
HB 279 |
| HB280 2017 Audit 1.25.18.pdf |
HL&C 1/29/2018 3:15:00 PM |
HB 280 |
| HB280 Fiscal Note DCCED CBPL 1.25.18.pdf |
HL&C 1/29/2018 3:15:00 PM |
HB 280 |
| HB280 Sponsor Statement 1.25.18.pdf |
HL&C 1/29/2018 3:15:00 PM |
HB 280 |
| HB0280 Version D.PDF |
HL&C 1/29/2018 3:15:00 PM |
HB 280 |