Legislature(2015 - 2016)BARNES 124

03/30/2016 03:15 PM LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 372 OMNIBUS INSURANCE TELECONFERENCED
Heard & Held
-- Public Testimony <Time Limit May Be Set> --
*+ HB 281 REAL ESTATE BROKER LICENSURE REQS TELECONFERENCED
Heard & Held
-- Public Testimony <Time Limit May Be Set> --
*+ HB 290 EXTENDING THE REAL ESTATE COMMISSION TELECONFERENCED
Moved HB 290 Out of Committee
-- Public Testimony <Time Limit May Be Set> --
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 214 REPEAL WORKERS' COMP APPEALS COMMISSION TELECONFERENCED
Moved CSHB 214(L&C) Out of Committee
-- Public Testimony <Time Limit May Be Set> --
**Streamed live on AKL.tv**
                    ALASKA STATE LEGISLATURE                                                                                  
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                                                                         
                         March 30, 2016                                                                                         
                           3:23 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Kurt Olson, Chair                                                                                                
Representative Shelley Hughes, Vice Chair                                                                                       
Representative Jim Colver                                                                                                       
Representative Gabrielle LeDoux                                                                                                 
Representative Cathy Tilton                                                                                                     
Representative Andy Josephson                                                                                                   
Representative Sam Kito                                                                                                         
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Mike Chenault (alternate)                                                                                        
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 214                                                                                                              
"An Act  repealing the Workers' Compensation  Appeals Commission;                                                               
relating  to   decisions  and  orders  of   the  Alaska  Workers'                                                               
Compensation Board; relating to  superior court jurisdiction over                                                               
appeals  from Alaska  Workers' Compensation  Board decisions  and                                                               
orders; repealing Rules 201.1, 401.1,  and 501.1, Alaska Rules of                                                               
Appellate  Procedure, and  amending Rules  202(a), 204(a)  - (c),                                                               
210(e), 508(g), 601(b),  602, and 603, Alaska  Rules of Appellate                                                               
Procedure; and providing for an effective date."                                                                                
                                                                                                                                
     - MOVED CSHB 214(L&C) OUT OF COMMITTEE                                                                                     
                                                                                                                                
HOUSE BILL NO. 372                                                                                                              
"An  Act   relating  to  insurance;  relating   to  expenses  for                                                               
insurance  examinations; relating  to  regulations for  insurance                                                               
utilization   review,   benefits   determination,   health   care                                                               
insurance grievance resolution  procedures, independent review of                                                               
adverse   determinations   or   final   adverse   determinations,                                                               
independent  review   organizations,  and   continuing  education                                                               
providers;  relating  to  required  provisions  for  health  care                                                               
insurance contracts and policies,  including health care provider                                                               
choice; establishing civil penalties  for insurers for failure to                                                               
provide  requested  records;  amending  the  definition  of  'wet                                                               
marine  and  transportation'  insurance; amending  provisions  on                                                               
limited licenses  to include crop  insurance; relating  to third-                                                               
party  administrator   notification  requirements;   relating  to                                                               
certification   filing  by   reinsurance  intermediary   brokers;                                                               
relating  to  rate filings,  delivery  of  insurance policies  or                                                               
endorsements;  relating to  refunds  of  variable life  insurance                                                               
policies  and  variable  annuities; establishing  limitations  on                                                               
issuance of  long- term care insurance;  relating to requirements                                                               
for group  health insurance policies; amending  the definition of                                                               
'group  health  insurance';  relating to  motor  vehicle  service                                                               
contracts;  relating  to  notice  requirements  for  meetings  of                                                               
stockholders  or members  of a  domestic insurer;  establishing a                                                               
definition of  'bona fide association'; relating  to requirements                                                               
and penalties  for committing a fraudulent  or criminal insurance                                                               
act; updating criteria for examinations;  relating to rate filing                                                               
deviations;  establishing  civil  penalties  for  certain  wilful                                                               
violations; and providing for an effective date."                                                                               
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
HOUSE BILL NO. 281                                                                                                              
"An Act  relating to  real estate  broker licensure;  relating to                                                               
the  real  estate  commission; and  providing  for  an  effective                                                               
date."                                                                                                                          
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
HOUSE BILL NO. 290                                                                                                              
"An  Act  extending  the  termination date  of  the  Real  Estate                                                               
Commission; and providing for an effective date."                                                                               
                                                                                                                                
     - MOVED HB 290 OUT OF COMMITTEE                                                                                            
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 214                                                                                                                  
SHORT TITLE: REPEAL WORKERS' COMP APPEALS COMMISSION                                                                            
SPONSOR(s): REPRESENTATIVE(s) OLSON                                                                                             
                                                                                                                                
01/19/16       (H)       PREFILE RELEASED 1/8/16                                                                                
01/19/16       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/19/16       (H)       L&C, JUD                                                                                               
03/14/16       (H)       L&C AT 3:15 PM BARNES 124                                                                              
03/14/16       (H)       Heard & Held                                                                                           
03/14/16       (H)       MINUTE(L&C)                                                                                            
03/18/16       (H)       L&C AT 3:15 PM BARNES 124                                                                              
03/18/16       (H)       Scheduled but Not Heard                                                                                
03/28/16       (H)       L&C AT 3:15 PM BARNES 124                                                                              
03/28/16       (H)       Scheduled but Not Heard                                                                                
03/30/16       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
BILL: HB 372                                                                                                                  
SHORT TITLE: OMNIBUS INSURANCE                                                                                                  
SPONSOR(s): LABOR & COMMERCE                                                                                                    
                                                                                                                                
03/21/16       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/21/16       (H)       L&C                                                                                                    
03/28/16       (H)       L&C AT 3:15 PM BARNES 124                                                                              
03/28/16       (H)       Heard & Held                                                                                           
03/28/16       (H)       MINUTE(L&C)                                                                                            
03/30/16       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
BILL: HB 281                                                                                                                  
SHORT TITLE: REAL ESTATE BROKER LICENSURE REQS                                                                                  
SPONSOR(s): MUNOZ                                                                                                               
                                                                                                                                
01/29/16       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/29/16       (H)       L&C                                                                                                    
03/30/16       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
BILL: HB 290                                                                                                                  
SHORT TITLE: EXTENDING THE REAL ESTATE COMMISSION                                                                               
SPONSOR(s): LABOR & COMMERCE                                                                                                    
                                                                                                                                
02/01/16       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/01/16       (H)       L&C, FIN                                                                                               
03/30/16       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
LAURA STIDOLPH, Staff                                                                                                           
Representative Kurt Olson                                                                                                       
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  On behalf of Representative Olson, sponsor,                                                              
presented changes in the committee substitute (CS) for HB 214,                                                                  
Version P.                                                                                                                      
                                                                                                                                
NANCY MEADE, General Counsel                                                                                                    
Office of the Administrative Director                                                                                           
Alaska Court System                                                                                                             
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions during the hearing on HB                                                              
214.                                                                                                                            
                                                                                                                                
ANNA LATHAM, Legislative Liaison                                                                                                
Office of the Commissioner                                                                                                      
Department of Labor & Workforce Development                                                                                     
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:   Answered a questions during the hearing on                                                              
HB 214.                                                                                                                         
                                                                                                                                
MARIE MARKS, Director                                                                                                           
Central Office                                                                                                                  
Division of Workers' Compensation                                                                                               
Department of Labor & Workforce Development                                                                                     
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions during the hearing of HB                                                              
214.                                                                                                                            
                                                                                                                                
ANDREW HEMENWAY, Chair                                                                                                          
Workers' Compensation Appeals Commission                                                                                        
Division of Workers' Compensation                                                                                               
Anchorage Office                                                                                                                
Department of Labor & Workforce Development                                                                                     
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions during the hearing of HB                                                              
214.                                                                                                                            
                                                                                                                                
TERRY HARVEY, Staff                                                                                                             
Representative Cathy Munoz                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Speaking on behalf of Representative Munoz,                                                            
sponsor of HB 281, introduced the bill and answered questions.                                                                  
                                                                                                                                
NANCY BLATCHLEY DAVIS, Chair                                                                                                    
Alaska Real Estate Commission                                                                                                   
Sitka, Alaska                                                                                                                   
POSITION STATEMENT:  Testified during the hearing of HB 281.                                                                  
                                                                                                                                
KRIS CURTIS, Legislative Auditor                                                                                                
Legislative Audit Division                                                                                                      
Legislative Agencies and Offices                                                                                                
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered a question during the hearing on                                                                
HB 281.                                                                                                                         
                                                                                                                                
TRACI BARICKMAN, Real Estate Broker                                                                                             
Sutton, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 281.                                                                          
                                                                                                                                
LAURA STIDOLPH, Staff                                                                                                           
Representative Kurt Olson                                                                                                       
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  On behalf  of Representative Olson, chair of                                                             
the  House  Labor  and   Commerce  Standing  Committee,  sponsor,                                                               
introduced HB 290.                                                                                                              
                                                                                                                                
LORI WING-HEIER, Director                                                                                                       
Division of Insurance                                                                                                           
Anchorage Office                                                                                                                
Department of Commerce, Community & Economic Development                                                                        
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions  during the hearing on HB                                                             
290.                                                                                                                            
                                                                                                                                
KRIS CURTIS, Legislative Auditor                                                                                                
Legislative Audit Division                                                                                                      
Legislative Agencies and Offices                                                                                                
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions  during the hearing on HB                                                             
290.                                                                                                                            
                                                                                                                                
ERROL CHAMPION, Chair                                                                                                           
Industry Issue Key Work Group                                                                                                   
Alaska Association of REALTORS                                                                                                  
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions  during the hearing of HB                                                             
290.                                                                                                                            
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:23:23 PM                                                                                                                    
                                                                                                                                
CHAIR KURT  OLSON called  the House  Labor and  Commerce Standing                                                             
Committee meeting to  order at 3:23 p.m.   Representatives Olson,                                                               
Tilton, Kito, Josephson, Hughes,  LeDoux, and Colver were present                                                               
at the call to order.                                                                                                           
                                                                                                                                
         HB 214-REPEAL WORKERS' COMP APPEALS COMMISSION                                                                     
                                                                                                                                
3:23:31 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON announced  that the first order of  business would be                                                               
HOUSE BILL NO.  214, "An Act repealing  the Workers' Compensation                                                               
Appeals  Commission;  relating to  decisions  and  orders of  the                                                               
Alaska Workers'  Compensation Board;  relating to  superior court                                                               
jurisdiction  over  appeals  from  Alaska  Workers'  Compensation                                                               
Board  decisions and  orders; repealing  Rules 201.1,  401.1, and                                                               
501.1, Alaska  Rules of Appellate  Procedure, and  amending Rules                                                               
202(a),  204(a) -  (c),  210(e), 508(g),  601(b),  602, and  603,                                                               
Alaska  Rules  of  Appellate  Procedure;  and  providing  for  an                                                               
effective date."                                                                                                                
                                                                                                                                
3:24:09 PM4                                                                                                                   
                                                                                                                                
LAURA STIDOLPH, staff to Representative  Kurt Olson, Alaska State                                                               
Legislature, speaking on behalf  of Representative Olson, sponsor                                                               
of HB  214, introduced the  proposed committee substitute  for HB                                                               
214,  [labeled  29-LS0854\P], noting  that  the  bill is  at  the                                                               
request  of  the  commissioner  of  the  Department  of  Labor  &                                                               
Workforce Development.   At the previous hearing  on 3/14/16, the                                                               
Alaska Court System requested changes  bringing back the original                                                               
language from  the Workers' Compensation  Act - enacted  prior to                                                               
the   establishment   of   the  Worker's   Compensation   Appeals                                                               
Commission in 2005 - and  adding language related to the transfer                                                               
of files to the Alaska Court System.                                                                                            
                                                                                                                                
3:25:06 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HUGHES  moved  to adopt  the  proposed  committee                                                               
substitute  (CS)  for  HB   214,  labeled  29-LS0854\P,  Wallace,                                                               
3/21/16, as the working document.                                                                                               
                                                                                                                                
3:25:21 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON objected for discussion purposes.                                                                                   
                                                                                                                                
MS. STIDOLPH paraphrased the following  summary of changes for HB                                                               
214,  page  3, lines  6-31,  and  page  4, lines  1-11  [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
     Section 5. AS 23.30                                                                                                        
          Page 3, Lines 6-31 and Page 4, Lines 1-11                                                                             
          Delete all the material and insert original                                                                           
          language from the Workers' Compensation Act (AS                                                                       
          23.30.125) from 2004 prior to the establishment                                                                       
          of the WCAC.                                                                                                          
                                                                                                                                
MS. STIDOLPH  said the proposed  change to  Section 5 was  at the                                                               
request of  the Alaska Court System  to return power back  to the                                                               
superior  court.   She  continued  to page  5,  lines 24-26,  and                                                               
paraphrased  from  the  following summary  of  changes  [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
                                                                                                                                
     Section 12. Transitional Provisions                                                                                        
          Page 5, Lines 24-26 (a)                                                                                               
          Delete all material after "shall" and insert "be                                                                      
          transferred to the superior court in the judicial                                                                     
          district where the original claim was filed,                                                                          
          under AS 22.10.020 and Rules 604(b) and 609,                                                                          
          Alaska Rules of Appellate Procedure.                                                                                  
                                                                                                                                
          Page 5, Line 30                                                                                                       
          After "June 1, 2016" insert "within 30 days after                                                                     
          the date that the board decision becomes final."                                                                      
                                                                                                                                
          Page 6, Lines 1-17                                                                                                    
          Delete all material in (c) and (d) and replace                                                                        
          with new language.                                                                                                    
                                                                                                                                
REPRESENTATIVE COLVER asked  for the time period  available for a                                                               
party to appeal after a decision is made.                                                                                       
                                                                                                                                
MS.  STIDOLPH said  on  or  [before December  1,  2016], a  party                                                               
seeking review  may file  an appeal or  petition for  review with                                                               
the supreme court as stated in [Section 12, subsection (c)].                                                                    
                                                                                                                                
3:29:40 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE COLVER  asked for clarification that  an appeal of                                                               
a decision  by the Workers'  Compensation Board (board)  would be                                                               
filed within 30 days.                                                                                                           
                                                                                                                                
3:29:52 PM                                                                                                                    
                                                                                                                                
MS. STIDOLPH said, "It's ... thirty  days after the date that the                                                               
board decision  becomes final."   She continued  to page  6, line                                                               
22,  and   paraphrased  the  summary  of   changes,  as  follows:                                                               
[original punctuation provided]                                                                                                 
                                                                                                                                
     Section 13. Terms of Commissioners                                                                                         
          Page 6, Line 22                                                                                                       
          Remove "February 20, 2017" and insert "December                                                                       
          31, 2016."                                                                                                            
                                                                                                                                
     Section 14. Conditional Effect                                                                                             
          Page 6, Line 25                                                                                                       
          Insert "CONDITIONAL EFFECT. This Act takes effect                                                                     
          only if secs. 8 and 10 of this Act receive the                                                                        
          two-thirds majority vote of each house required                                                                       
       by art. IV, sec. 15, Constitution of the State of                                                                        
          Alaska.                                                                                                               
                                                                                                                                
                                                                                                                                
REPRESENTATIVE LEDOUX  questioned whether HB 214  exactly returns                                                               
legislation to the language before changes were made in 2005.                                                                   
                                                                                                                                
MS. STIDOLPH said yes.                                                                                                          
                                                                                                                                
3:31:13 PM                                                                                                                    
                                                                                                                                
CHAIR  OLSON  removed his  objection.    There being  no  further                                                               
objection, Version P was before the committee.                                                                                  
                                                                                                                                
REPRESENTATIVE  HUGHES asked  why the  act takes  effect June  1,                                                               
2016.                                                                                                                           
                                                                                                                                
MS. STIDOLPH was unsure.                                                                                                        
                                                                                                                                
3:32:08 PM                                                                                                                    
                                                                                                                                
NANCY  MEADE, General  Counsel, Administrative  Staff, Office  of                                                               
the Administrative  Director, Alaska  Court System,  informed the                                                               
committee  the bill  reverts  the appeals  procedure  to that  in                                                               
2005,  and the  Alaska Court  System sought  the same  wording as                                                               
existed  in  2005,  so  that all  case  precedents  would  remain                                                               
applicable,  and   to  streamline   case  decision-making.     In                                                               
addition,  the  transitional  provisions ensure  that  the  files                                                               
transferred from the Department  of Labor & Workforce Development                                                               
(DLWD) are in the proper format.                                                                                                
                                                                                                                                
3:34:05 PM                                                                                                                    
                                                                                                                                
ANNA  LATHAM, Legislative  Liaison, Office  of the  Commissioner,                                                               
DLWD, in  response to Representative Hughes'  question, responded                                                               
that DLWD  requested the effective  date to  be June 1,  2016, so                                                               
that  the Workers'  Compensation Appeals  Commission (commission)                                                               
would have until November 1, to finalize cases.                                                                                 
                                                                                                                                
REPRESENTATIVE  JOSEPHSON questioned  whether an  aggrieved party                                                               
would have  until November to  file an appeal to  the commission,                                                               
or if they could wait and appeal to the superior court.                                                                         
                                                                                                                                
MS.  MEADE  stated that  after  June  1,  an  appeal of  a  final                                                               
decision of  the commission  would be  submitted to  the superior                                                               
court;  furthermore,  anything  pending with  the  commission  in                                                               
November will  be transferred to  the court.   In response  to an                                                               
earlier  question from  Representative  Colver,  she pointed  out                                                               
that proposed Section  5, page 3, lines 6-10,  clarifies that the                                                               
decision of the  commission becomes final on its  31st day, after                                                               
which an appeal  can be accepted.  In  response to Representative                                                               
Josephson, she  said the commission  will not accept  new appeals                                                               
after June 1.                                                                                                                   
                                                                                                                                
REPRESENTATIVE  COLVER   assumed  filed  decisions   are  written                                                               
orders.                                                                                                                         
                                                                                                                                
MS. MEADE said yes.                                                                                                             
                                                                                                                                
REPRESENTATIVE COLVER suggested that during  the 31 days there is                                                               
an opportunity  for a  party to  ask for  partial reconsideration                                                               
before the order is final.                                                                                                      
                                                                                                                                
3:38:31 PM                                                                                                                    
                                                                                                                                
MARIE  MARKS,  Director,  Central Office,  Division  of  Workers'                                                               
Compensation,  DLWD, answered  that  a decision  by the  Workers'                                                               
Compensation  Board is  issued in  a written  format and  becomes                                                               
effective when signed  and served on all parties.   At that time,                                                               
a  prospective  appellant  has  14  days to  ask  the  board  for                                                               
reconsideration, and 30  days to appeal its decision  to a higher                                                               
power.   If the board  takes no  action, the power  to reconsider                                                               
ends, and she opined that in  the proposed version, "if you don't                                                               
reach that 30-day window by June  first, you need to go ahead and                                                               
seek appeal  with the superior court.   So, it's June  first, and                                                               
you have  to reach your  30-day window before June  first, that's                                                               
my understanding of the working draft."                                                                                         
                                                                                                                                
REPRESENTATIVE   COLVER  questioned   if   a   party  asked   for                                                               
reconsideration  within the  14-day  period,  whether that  would                                                               
stay the 30-day period for appeal.                                                                                              
                                                                                                                                
MS. MARKS  said no,  the periods  proceed at the  same time.   In                                                               
further  response to  Representative Colver,  she said  the board                                                               
must take action  on reconsideration within the  14-day period by                                                               
contacting the  parties, and  if no  action is  taken, that  is a                                                               
denial of reconsideration.                                                                                                      
                                                                                                                                
REPRESENTATIVE  COLVER   observed  that  the  board   process  is                                                               
unchanged,  except  that the  appeal  would  go to  the  superior                                                               
court.                                                                                                                          
                                                                                                                                
MS. MARKS agreed.   She added that every  decision issued informs                                                               
the  parties  of  their  right  to  ask  for  reconsideration  or                                                               
modification; the  only change made  by the  proposed legislation                                                               
is that  the appeal would  go to  the superior court  rather than                                                               
the commission.                                                                                                                 
                                                                                                                                
3:42:56 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  LEDOUX inquired  as to  how many  cases would  be                                                               
caught in the transition brought about by the legislation.                                                                      
                                                                                                                                
MS. MEADE  was assured  there would  be about  six cases  or less                                                               
pending before the commission, but not resolved.                                                                                
                                                                                                                                
REPRESENTATIVE  LEDOUX posited  if a  case is  not resolved,  the                                                               
parties must submit new briefs.                                                                                                 
                                                                                                                                
MS.  MEADE  acknowledged  there  may be  some  delay  during  the                                                               
transition process;  however, parties would not  have to re-brief                                                               
because  the  commission will  provide  documents  in the  proper                                                               
form.   She said  she anticipates working  with DLWD  to minimize                                                               
delay.                                                                                                                          
                                                                                                                                
REPRESENTATIVE COLVER  inquired as  to whether  there still  is a                                                               
hearing officer  who hears  the initial  request for  benefits or                                                               
compensation.                                                                                                                   
                                                                                                                                
MS. MARKS  explained that  a board  decision is  made by  a board                                                               
panel consisting  of two or three  members:  one chair,  who is a                                                               
staff  attorney;  one  labor  representative;  and  one  industry                                                               
representative.                                                                                                                 
                                                                                                                                
3:46:52 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE COLVER  related his experience that  attorney fees                                                               
were a time-consuming issue.                                                                                                    
                                                                                                                                
MS.  MARKS said  the fees  awarded at  the board  level follow  a                                                               
statute that provides for actual  attorney fees when restrictions                                                               
are met.                                                                                                                        
                                                                                                                                
MS. MEADE directed  attention to the bill on page  4, lines 9-11,                                                               
which read:                                                                                                                     
                                                                                                                                
     (g)  A  court  may  not  make an  award  of  costs  and                                                                    
     attorney  fees against  an  injured  worker unless  the                                                                    
     court  finds that  the  worker's  position on  judicial                                                                    
     review was  frivolous or  unreasonable or  the judicial                                                                    
     review was sought in bad faith                                                                                             
                                                                                                                                
MS. MEADE said subsection (g)  is the statutory guidance given to                                                               
the courts on  how to award attorney fees.   Generally on appeal,                                                               
the court has different provisions than at the board level.                                                                     
                                                                                                                                
MS.  MARKS restated  that  with exceptions,  at  the board  level                                                               
attorney fees are full, actual, and reasonable.                                                                                 
                                                                                                                                
MS. MEADE recalled there was  much litigation about attorney fees                                                               
in workers' compensation  cases at the superior  court level, and                                                               
prior case decisions will be effective.                                                                                         
                                                                                                                                
REPRESENTATIVE  COLVER  stated that  subsection  (g)  was also  a                                                               
protection for the worker.                                                                                                      
                                                                                                                                
MS. MEADE indicated yes.                                                                                                        
                                                                                                                                
REPRESENTATIVE  COLVER gave  an example  of a  case in  which the                                                               
injured  worker  prevailed and  asked,  "and  then the  insurance                                                               
company,  the workers'  comp  carrier, then  would  be liable  to                                                               
cover the injured worker's fees, right?"                                                                                        
                                                                                                                                
MS. MARKS  advised that the  board will award reasonable  fees to                                                               
be paid to the employee's attorney  on the issue(s) on which they                                                               
prevail,  and  those fees  are  a  compensation benefit,  so  the                                                               
entity that pays compensation benefits would be responsible.                                                                    
                                                                                                                                
REPRESENTATIVE  COLVER   asked  for  an  indication   of  whether                                                               
attorney fees are a big issue.                                                                                                  
                                                                                                                                
3:51:36 PM                                                                                                                    
                                                                                                                                
ANDY HEMENWAY,  Chair, Workers' Compensation  Appeals Commission,                                                               
Anchorage  Office,  Division   of  Workers'  Compensation,  DLWD,                                                               
advised that for cases that  were appealed from the commission to                                                               
the supreme court, attorney fees are  a common - but not the most                                                               
common -  subject for litigation  beyond the  appeals commission.                                                               
The experience  at the  appeals commission  is that  it is  not a                                                               
major subject in terms of the amount of fees.                                                                                   
                                                                                                                                
REPRESENTATIVE LEDOUX  asked whether  attorneys are  granted full                                                               
reasonable fees before the appeals commission.                                                                                  
                                                                                                                                
MR.   HEMENWAY  said   the  same   standards  apply   before  the                                                               
commission, as apply before the board.                                                                                          
                                                                                                                                
REPRESENTATIVE  LEDOUX asked  about  attorney  fees garnered  for                                                               
cases before the superior court.                                                                                                
                                                                                                                                
MS. MEADE will provide an answer to the committee.                                                                              
                                                                                                                                
CHAIR  OLSON  said  the  issue  can  be  addressed  in  the  next                                                               
committee of referral, the House Judiciary Standing Committee.                                                                  
                                                                                                                                
REPRESENTATIVE HUGHES asked what  differs between the language in                                                               
HB 214,  and the  related statute  prior to  the changes  made in                                                               
2005.                                                                                                                           
                                                                                                                                
MS. MEADE said Section 5,  subsection (a) provides timelines that                                                               
are slightly different, but clearer.   On page 3, lines 11-31 are                                                               
copied from the  2005 law; on page 4, lines  5-11 are subsections                                                               
which did  not appear  in the  2005 law, and  that were  added by                                                               
DLWD.                                                                                                                           
                                                                                                                                
3:57:51 PM                                                                                                                    
                                                                                                                                
CHAIR   OLSON  opened   public   testimony  on   HB  214;   after                                                               
ascertaining  no  one wished  to  testify,  public testimony  was                                                               
closed.                                                                                                                         
                                                                                                                                
3:58:42 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HUGHES  moved to  report the  committee substitute                                                               
(CS) for  HB 214, Version  29-LS0854\P, Wallace, 3/21/16,  out of                                                               
committee  with individual  recommendations and  the accompanying                                                               
fiscal  notes.   There  being  no  objection, CSHB  214(L&C)  was                                                               
reported out of the House Labor and Commerce Standing Committee.                                                                
                                                                                                                                
3:59:04 PM                                                                                                                    
                                                                                                                                
The committee took an at ease from 3:59 p.m. to 4:01 p.m.                                                                       
                                                                                                                                
                    HB 372-OMNIBUS INSURANCE                                                                                
                                                                                                                                
4:01:22 PM                                                                                                                    
                                                                                                                                
CAIR OLSON  announced that  the next order  of business  would be                                                               
HOUSE BILL  NO. 372, "An  Act relating to insurance;  relating to                                                               
expenses for insurance examinations;  relating to regulations for                                                               
insurance  utilization  review,  benefits  determination,  health                                                               
care  insurance  grievance   resolution  procedures,  independent                                                               
review    of   adverse    determinations    or   final    adverse                                                               
determinations, independent review  organizations, and continuing                                                               
education providers;  relating to required provisions  for health                                                               
care  insurance contracts  and  policies,  including health  care                                                               
provider choice;  establishing civil  penalties for  insurers for                                                               
failure to provide requested records;  amending the definition of                                                               
'wet  marine and  transportation' insurance;  amending provisions                                                               
on  limited  licenses  to include  crop  insurance;  relating  to                                                               
third-party administrator notification  requirements; relating to                                                               
certification   filing  by   reinsurance  intermediary   brokers;                                                               
relating  to  rate filings,  delivery  of  insurance policies  or                                                               
endorsements;  relating to  refunds  of  variable life  insurance                                                               
policies  and  variable  annuities; establishing  limitations  on                                                               
issuance of  long- term care insurance;  relating to requirements                                                               
for group  health insurance policies; amending  the definition of                                                               
'group  health  insurance';  relating to  motor  vehicle  service                                                               
contracts;  relating  to  notice  requirements  for  meetings  of                                                               
stockholders  or members  of a  domestic insurer;  establishing a                                                               
definition of  'bona fide association'; relating  to requirements                                                               
and penalties  for committing a fraudulent  or criminal insurance                                                               
act; updating criteria for examinations;  relating to rate filing                                                               
deviations;  establishing  civil  penalties  for  certain  wilful                                                               
violations; and providing for an effective date."                                                                               
                                                                                                                                
CHAIR OLSEN advised a committee substitute was forthcoming.                                                                     
                                                                                                                                
[HB 372 was held over.]                                                                                                         
                                                                                                                                
            HB 281-REAL ESTATE BROKER LICENSURE REQS                                                                        
                                                                                                                                
4:01:40 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON  announced that the  next order of business  would be                                                               
HOUSE  BILL NO.  281,  "An  Act relating  to  real estate  broker                                                               
licensure; relating to the real  estate commission; and providing                                                               
for an effective date."                                                                                                         
                                                                                                                                
4:02:30 PM                                                                                                                    
                                                                                                                                
TERRY HARVEY,  staff to Representative Cathy  Munoz, Alaska State                                                               
Legislature, speaking on behalf  of Representative Munoz, sponsor                                                               
of HB  281, provided  background information  on the  real estate                                                               
industry in  Alaska.   The real estate  business was  an industry                                                               
consisting  of  small  local individuals  who  financed  property                                                               
through banks  or local  investors.  Over  time, the  real estate                                                               
business  has become  increasingly  complex involving  contracts,                                                               
documents, orders, sales, trust  accounts, and foreclosures.  The                                                               
bill    addresses   education    requirements   and    experience                                                               
requirements  for  a  licensee  seeking to  apply  for  a  broker                                                               
license.  There is one broker  per real estate firm, whose duties                                                               
include  oversight of  monetary  transactions,  fees, trust  fund                                                               
transactions,  and the  ultimate  responsibility for  all of  the                                                               
licensees associated  with that  firm.   The proposed  bill would                                                               
require additional  education credits and real  estate experience                                                               
of  an applicant,  and  was  brought to  the  legislature by  the                                                               
Alaska  Real  Estate Commission  and  the  Alaska Association  of                                                               
REALTORS.   Mr. Harvey said the  intent of the bill  is to better                                                               
serve   consumers,  ensure   high  quality   transactions,  avoid                                                               
litigation,  and improve  standards  in Alaska.    If passed,  in                                                               
order to  apply for a broker  license, a real estate  licensee or                                                               
associate broker  would have to  complete 30 hours  of education,                                                               
and have 48 months of experience.   He said the industry supports                                                               
the bill.                                                                                                                       
                                                                                                                                
4:06:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   COLVER  asked   if   the  continuing   education                                                               
requirement follows a two-year license renewal cycle.                                                                           
                                                                                                                                
MR.  HARVEY  explained   the  bill  does  not   change  rules  on                                                               
continuing   education,  but   adds   hours   to  the   education                                                               
requirement to apply for a broker license.                                                                                      
                                                                                                                                
REPRESENTATIVE  COLVER  expressed  his concern  about  continuing                                                               
education  that  is  not  relevant  specifically  to  Alaska;  he                                                               
suggested  adding a  local  element to  the  curriculum, such  as                                                               
weatherization.   He  urged the  sponsor to  contact real  estate                                                               
professionals regarding  directing a portion of  the education to                                                               
Alaska issues and laws.                                                                                                         
                                                                                                                                
REPRESENTATIVE  LEDOUX  observed  that   a  bill  that  increases                                                               
regulation on an  industry is suspect.  She pointed  out that the                                                               
bill would benefit  current real estate brokers and  make it more                                                               
difficult for  others to become  brokers; in fact, it  would take                                                               
four years  of practice  to become a  broker, and  she questioned                                                               
the bill's value to public safety.                                                                                              
                                                                                                                                
REPRESENTATIVE COLVER agreed  that professional licensing creates                                                               
protection   for   an   industry,  and   he   cautioned   against                                                               
exclusionary exceptions.   He asked for  additional background on                                                               
why the legislation is necessary.                                                                                               
                                                                                                                                
REPRESENTATIVE  HUGHES   expressed  interest  in   hearing  about                                                               
problems that the bill would address.                                                                                           
                                                                                                                                
4:15:07 PM                                                                                                                    
                                                                                                                                
MR.  HARVEY noted  that testimony  is available  from those  with                                                               
experiences in the  real estate industry which  would provide the                                                               
reasoning behind  HB 281, such as  the growth of the  industry in                                                               
Alaska, the  responsibilities of a  real estate broker,  the lack                                                               
of standards in Alaska, and examples of situations.                                                                             
                                                                                                                                
[The committee treated  the hearing on HB 281 as  open for public                                                               
testimony.]                                                                                                                     
                                                                                                                                
4:16:33 PM                                                                                                                    
                                                                                                                                
NANCY  BLATCHLEY  DAVIS,  chair, Alaska  Real  Estate  Commission                                                               
(AREC), informed the committee the  issue was brought forward not                                                               
by AREC,  but by 25 various  licensees who felt brokers  were not                                                               
sufficiently  knowledgeable  to protect  the  public.   She  said                                                               
Alaska   ranks   in  the   bottom   four   of  broker   licensing                                                               
requirements, and AREC seeks not  to limit the number of brokers,                                                               
but to  protect the public.   Ms. Davis  said AREC sees  cases of                                                               
public harm that  could have prevented with more  education.  Her                                                               
experience  was that  she  needed  a mentor  to  assist with  her                                                               
upgrade to broker.                                                                                                              
                                                                                                                                
REPRESENTATIVE  LEDOUX  restated  her interest  in  examples  [of                                                               
problems].                                                                                                                      
                                                                                                                                
MS. DAVIS  said she  could not provide  an example  because there                                                               
are no issues  in Sitka, but offered to  provide information from                                                               
AREC.                                                                                                                           
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  asked  whether broker  applicants  are                                                               
normally real estate licensees.                                                                                                 
                                                                                                                                
MS.  DAVIS said  yes,  if  upgrading to  an  associate broker  or                                                               
broker, licensees  have been working  for two years.   In further                                                               
response  to   Representative  Josephson,  she   said  currently,                                                               
licensees can  work for two years,  upgrade to a broker  and open                                                               
their own business.   She said the licensees  who approached AREC                                                               
felt there was not sufficient  experience required to protect the                                                               
public.                                                                                                                         
                                                                                                                                
REPRESENTATIVE LEDOUX asked for  examples [of problems] including                                                               
the length of time and experience of those involved.                                                                            
                                                                                                                                
4:21:54 PM                                                                                                                    
                                                                                                                                
KRIS  CURTIS, Legislative  Auditor,  Legislative Audit  Division,                                                               
Legislative  Agencies   and  Offices,   said  an  audit   of  the                                                               
activities of the Alaska Real  Estate Commission did not identify                                                               
a  specific need  to change  the requirements  for licensees,  or                                                               
identify a risk area.  The audit  would have shown if there was a                                                               
problem reported in meeting minutes, and AREC did not respond.                                                                  
                                                                                                                                
4:22:54 PM                                                                                                                    
                                                                                                                                
TRACI BARICKMAN, Real Estate Licensee,  said she was representing                                                               
herself as  a real estate professional  and as an educator.   She                                                               
said she  has been  licensed for over  23 years -  16 years  as a                                                               
broker  -  and  has  supervised  thousands  of  transactions  and                                                               
hundreds of licensees.  She also  serves as a commissioner of the                                                               
Alaska Real Estate Commission, has  served as an educator in real                                                               
estate for 18  years, is a subject matter expert  for real estate                                                               
industry  testing  materials,  both  on  the  state  and  on  the                                                               
national level,  and therefore her  experience gives  her insight                                                               
into the  conduct of licensees.   Ms. Barickman said  real estate                                                               
is not  a "buyer beware" field,  and restraint of trade  does not                                                               
outweigh consumer protection.  A  broker license in Alaska can be                                                               
obtained  with  only  85  hours  of  education  and  2  years  of                                                               
experience, which  is much less than  in other states.   She said                                                               
she  supports HB  281  to  protect the  public,  and related  her                                                               
recent experience  with brokers who  could not resolve  a dispute                                                               
due to lack of an  understanding of contract law, experience, and                                                               
problem-solving skills,  and clients "stood to  lose" $10,000 and                                                               
a $600,000 contract.   Ms. Barickman said in  today's climate she                                                               
would  not  like to  be  in  a  position supervising  those  with                                                               
minimal  education.  Protecting  Alaskans'  homes  and  financial                                                               
future  is the  responsibility of  educators, commissioners,  and                                                               
legislators.                                                                                                                    
                                                                                                                                
4:26:40 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE COLVER inquired as to  whether there is an Alaska-                                                               
based continuing education curricula available.                                                                                 
                                                                                                                                
MS. BARICKMAN said broker upgrade  curriculum covers general real                                                               
estate  knowledge  in  depth,  including  financial  investments;                                                               
however,  a  big  part  is Alaska  law,  disclosures,  and  trust                                                               
accounts specific to Alaska.                                                                                                    
                                                                                                                                
REPRESENTATIVE  COLVER  asked  whether   there  is  a  continuing                                                               
education requirement to renew licenses.                                                                                        
                                                                                                                                
MS. BARICKMAN  said yes, adding  that all licensees  are required                                                               
to have  a minimum of  20 hours  of continuing education  every 2                                                               
years, and  of that, 8  hours is mandated  by AREC to  be Alaska-                                                               
specific,  and 12  hours is  elective.   In  further response  to                                                               
Representative   Colver,  she   confirmed  that   the  continuing                                                               
education requirement is in regulation.                                                                                         
                                                                                                                                
4:30:30 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON announced public testimony would remain open.                                                                       
                                                                                                                                
[HB 281 was held over.]                                                                                                         
                                                                                                                                
          HB 290-EXTENDING THE REAL ESTATE COMMISSION                                                                       
                                                                                                                                
4:30:35 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON announced  that the final order of  business would be                                                               
HOUSE BILL  NO. 290,  "An Act extending  the termination  date of                                                               
the  Real  Estate  Commission; and  providing  for  an  effective                                                               
date."                                                                                                                          
                                                                                                                                
4:31:02 PM                                                                                                                    
                                                                                                                                
LAURA STIDOLPH, staff to Representative  Kurt Olson, Alaska State                                                               
Legislature,  on behalf  of Representative  Olson,  chair of  the                                                               
House Labor and  Commerce Standing Committee, sponsor  of HB 290,                                                               
informed the committee  the bill extends the  termination date of                                                               
the Real  Estate Commission (commission)  to 6/30/18.   Each year                                                               
the   Legislative  Audit   Division,  Legislative   Agencies  and                                                               
Offices,  reviews  state  boards  and  commissions  to  determine                                                               
whether they should be reestablished.   She directed attention to                                                               
a document provided  in the committee packet  entitled, "A Sunset                                                               
Review  of  the  Department  of Commerce,  Community  &  Economic                                                               
Development,  Real Estate  Commission," dated  7/24/15, and  said                                                               
in the opinion of the  auditors, the commission serves the public                                                               
interest  by licensing  real estate  brokers, associate  brokers,                                                               
and   salespeople.      In  addition,   the   auditors   made   a                                                               
recommendation that the legislature  amend the Real Estate Surety                                                               
Fund statutes to provide more  complete, effective, and efficient                                                               
consumer  protection   to  claimants.    Ms.   Stidolph  recalled                                                               
legislation  in 2008  that required  salespersons and  brokers to                                                               
acquire error  and omissions (E&O)  insurance if a  master policy                                                               
held by  the commission  is in  effect.     Therefore,  since the                                                               
commission  has  been  unable  to obtain  a  master  E&O  policy,                                                               
companion  proposed legislation  seeks to  repeal that  provision                                                               
and  establish a  two-year sunset  date.   She  advised that  the                                                               
auditors'  other recommendations  have been  resolved, and  urged                                                               
support for HB 290.                                                                                                             
                                                                                                                                
4:34:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  asked  why licensees  cannot  get  E&O                                                               
insurance.                                                                                                                      
                                                                                                                                
MS. STIDOLPH explained that licensees  can get E&O insurance, but                                                               
they  are not  required to  by statute  if the  commission cannot                                                               
obtain a master policy.   The  intent is to repeal and sunset the                                                               
requirement related  to the  commission, thus  over the  next two                                                               
years,  licensees will  be required  to obtain  E&O insurance  to                                                               
protect consumers.                                                                                                              
                                                                                                                                
REPRESENTATIVE  JOSEPHSON surmised  that wise  licensees get  E&O                                                               
insurance,  but  not   through  a  master  policy   held  by  the                                                               
commission.                                                                                                                     
                                                                                                                                
MS. STIDOLPH advised that those  who cannot get E&O insurance are                                                               
in a [high-]  risk pool, and were supposed to  be covered through                                                               
the  master  policy.    In  further  response  to  Representative                                                               
Josephson, she  said she was  unsure how a licensee  qualifies as                                                               
high-risk.                                                                                                                      
                                                                                                                                
CHAIR OLSON  recalled that the real  estate [commission] intended                                                               
to create  a group of  real estate  licensees and brokers  in the                                                               
state for the  purposes of insurance, but "then  there was little                                                               
or no  follow-through on it,  which is  why we're where  we're at                                                               
now ...."                                                                                                                       
                                                                                                                                
4:38:39 PM                                                                                                                    
                                                                                                                                
LORI  WING-HEIER,  Director,  Division  of  Insurance,  Anchorage                                                               
Office,   Department   of    Commerce,   Community   &   Economic                                                               
Development,  advised   that  the  related  regulations   set  an                                                               
unrealistic limit  of $300 on the  amount of the premium  [of E&O                                                               
insurance].    In  addition,  at   this  time,  the  Division  of                                                               
Insurance has  incomplete underwriting data for  a master policy,                                                               
a pool, or for a request for proposal (RFP).                                                                                    
                                                                                                                                
REPRESENTATIVE  COLVER noted  that  there are  many obstacles  to                                                               
creating a pool for E&O insurance without a business history.                                                                   
                                                                                                                                
CHAIR OLSON  recalled that  the real  estate industry  proposed a                                                               
bill  based  on the  model  of  a  national program.    Regarding                                                               
insurance  legislation,   he  advised   using  only   model  laws                                                               
sponsored by the National  Association of Insurance Commissioners                                                               
or the National Conference of Insurance Legislators.                                                                            
                                                                                                                                
REPRESENTATIVE  COLVER   stated  his  preference  would   be  for                                                               
individual  licensees   to  disclose   whether  they   carry  E&O                                                               
insurance.  Further,   state  regulations  of  this   type  cause                                                               
opposition,  especially  without  compelling  case  histories  to                                                               
warrant legislation.                                                                                                            
                                                                                                                                
MS.  STIDOLPH advised  that the  real  estate industry  indicated                                                               
that many licensees  and brokers carry E&O  insurance, except for                                                               
the  small pool  who are  unable to  obtain coverage;  the master                                                               
policy would  protect the consumer and  allow affected businesses                                                               
to operate.                                                                                                                     
                                                                                                                                
4:46:31 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  asked  whether licensees  and  brokers                                                               
fail to get coverage because there  is a complaint, or because of                                                               
the cost.   He stressed that businesses should  be fully insured,                                                               
and that this a serious problem.                                                                                                
                                                                                                                                
MS. STIDOLPH stated that data  is unavailable as to which brokers                                                               
and licensees have insurance coverage.                                                                                          
                                                                                                                                
CHAIR OLSON added  that the lack of E&O  coverage and malpractice                                                               
insurance is not limited to the real estate industry.                                                                           
                                                                                                                                
REPRESENTATIVE  COLVER  asked  whether   E&O  coverage  could  be                                                               
established in a manner similar to workers' compensation.                                                                       
                                                                                                                                
MS. WING-HEIER advised an assigned-risk  pool is put to bid every                                                               
four  years   through  the   National  Council   on  Compensation                                                               
Insurance;  the division  rates proposals  that are  submitted to                                                               
the state and  assigns a percentage of  the worker's compensation                                                               
business.                                                                                                                       
                                                                                                                                
REPRESENTATIVE COLVER observed  that E&O coverage is  more like a                                                               
bank  loan and  is based  on professional  expertise, experience,                                                               
and credit, versus "a straight occupational percentage."                                                                        
                                                                                                                                
4:50:20 PM                                                                                                                    
                                                                                                                                
MS. WING-HEIER advised that E&O coverage  is based on a number of                                                               
underwriting  factors related  to  each individual's  experience,                                                               
which is the data the division is lacking.                                                                                      
                                                                                                                                
REPRESENTATIVE  LEDOUX  recalled  previous testimony  that  other                                                               
businesses  - such  as  doctors and  lawyers -  do  not have  E&O                                                               
coverage, and  questioned why the  legislation is focused  on the                                                               
real estate industry.                                                                                                           
                                                                                                                                
MS. STIDOLPH  noted that [House  Bill 357, passed in  the Twenty-                                                               
Fifth Alaska  State Legislature (2008)]  had two parts:   1.) the                                                               
realty  recovery fund  was turned  into the  realty surety  fund,                                                               
which shifted  responsibility from the Real  Estate Commission to                                                               
the court  system to recover  funds; 2.) licensees  were required                                                               
to have E&O insurance.                                                                                                          
                                                                                                                                
CHAIR OLSON, in response to  Representative LeDoux, explained the                                                               
legislation was  sought by  the industry,  and became  statute in                                                               
2008,  but is  not working.   He  described some  of the  ongoing                                                               
problems for the industry and for some consumers.                                                                               
                                                                                                                                
REPRESENTATIVE  LEDOUX questioned  whether the  Legislative Audit                                                               
Division  would  normally  delve  into  the  topic  of  education                                                               
requirements for a certain profession.                                                                                          
                                                                                                                                
4:54:40 PM                                                                                                                    
                                                                                                                                
KRIS  CURTIS, Legislative  Auditor,  Legislative Audit  Division,                                                               
Legislative  Agencies  and  Offices,  responded  that  the  audit                                                               
division  performs  sunset   reviews  following  the  legislative                                                               
oversight process.   She said the division would not  look at the                                                               
education requirements of an occupation,  but at the ability of a                                                               
commission  to  protect  the public  interest  and  regulate  its                                                               
industry.   The audit concluded  that the Real  Estate Commission                                                               
is serving the  public interest generally, and  did not recommend                                                               
termination;  however,   the  audit  did  recommend   a  six-year                                                               
extension if the  commission can obtain E&O  insurance by January                                                               
[2016], and  a four-year  extension if not.   Ms.  Curtis pointed                                                               
out   the  E&O   requirement  became   effective  in   2010,  but                                                               
regulations were not  effective until October 2014,  thus this is                                                               
an extensive lag in response  to the legislation.  Although there                                                               
were many  reasons given for  the delay, the audit  concluded the                                                               
reasons were inadequate.                                                                                                        
                                                                                                                                
REPRESENTATIVE LEDOUX remarked:                                                                                                 
                                                                                                                                
     I was  just trying  to figure out  whether I  should be                                                                    
     reading anything  into the fact that  legislative audit                                                                    
     hadn't   recommended   an   increase   of   educational                                                                    
     requirements or an increase of  the amount of time that                                                                    
     somebody has to serve as  a licensee before they became                                                                    
     a broker. ... And it sounds like you're saying "no."                                                                       
                                                                                                                                
4:58:08 PM                                                                                                                    
                                                                                                                                
MS. CURTIS  directed attention  to page  5 of  the aforementioned                                                               
audit that was provided in  the committee packet, and said [House                                                               
Bill  357 in  2008] changed  a  consumer protection  that was  in                                                               
place.   In  the  past,  the division's  sunset  audits had  been                                                               
critical of the  real estate recovery fund,  which limited claims                                                               
awards by  the Real  Estate Commission to  $15,000, and  in 2007,                                                               
the division  recommended improving  the surety  fund.   In 2008,                                                               
the  law was  changed -  which made  it harder  for consumers  to                                                               
collect on  a claim -  because they had  to gain a  costly ruling                                                               
through  the  court  system;  however,  the  bill  also  required                                                               
insurance  to better  protect the  public.    Ms.  Curtis advised                                                               
that in  the matter  of providing  insurance, the  commission has                                                               
failed  to serve  the public  interest.   Another finding  of the                                                               
audit was  that the investigations  conducted by the  Division of                                                               
Corporations, Business and  Professional Licensing, Department of                                                               
Commerce, Community  & Economic  Development were  not done  in a                                                               
timely manner; there were long  delays and some cases were closed                                                               
without sufficient  reason.  Therefore, two  recommendations were                                                               
made:  1.)  procure E&O insurance; 2.) improve  the timeliness of                                                               
the  investigations.     Ms.   Curtis  restated   the  division's                                                               
recommendation of  a shorter extension, and  asked the commission                                                               
to demonstrate its ability to obtain E&O insurance.                                                                             
                                                                                                                                
REPRESENTATIVE JOSEPHSON  asked for the  source of the  monies in                                                               
the real estate recovery fund.                                                                                                  
                                                                                                                                
MS. CURTIS directed  attention to page 15 of the  audit, and said                                                               
the fund  comes from a fee  per licensee, which is  currently set                                                               
at $30,  and changes biannually  according to the balance  in the                                                               
fund.   In fiscal years  2011 (FY 11) and  FY 12, no  claims were                                                               
paid.                                                                                                                           
                                                                                                                                
5:03:38 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  COLVER  asked  how  difficult  it  is  for  small                                                               
brokers to obtain E&O insurance.                                                                                                
                                                                                                                                
5:04:05 PM                                                                                                                    
                                                                                                                                
ERROL  CHAMPION, chair,  Industry  Issue Key  Work Group,  Alaska                                                               
Association   of  REALTORS,   said   licensees  are   independent                                                               
contractors,  so there  are differing  operating policies  in how                                                               
each office  conducts business.  A  licensee may elect to  stay a                                                               
licensee, or to  advance to the position of  associate broker and                                                               
then to  a broker,  and only  one broker  is allowed  per office.                                                               
Mr. Champion  said because of the  independent contractor status,                                                               
brokers should  have E&O  insurance as  there are  no performance                                                               
reviews,  and  the right  to  terminate  someone's employment  is                                                               
stipulated by  the Real Estate  Commission.  He opined  those who                                                               
do  not  have E&O  insurance  generally  work  alone in  a  small                                                               
community,  and it  is difficult  to qualify  for insurance,  but                                                               
most large brokerage houses have insurance.                                                                                     
                                                                                                                                
5:06:44 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HUGHES  moved to  report HB  290 out  of committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
notes.  There being no objection,  HB 290 was reported out of the                                                               
House Labor and Commerce Standing Committee.                                                                                    
                                                                                                                                
5:07:06 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Labor and  Commerce Standing Committee  meeting was  adjourned at                                                               
5:07 p.m.                                                                                                                       

Document Name Date/Time Subjects
HB290 ver W.pdf HL&C 3/30/2016 3:15:00 PM
HB 290
HB290 Sponsor Statement.pdf HL&C 3/30/2016 3:15:00 PM
HB 290
HB290 Fiscal Note-DCCED-CBPL-03-25-16.pdf HL&C 3/30/2016 3:15:00 PM
HB 290
HB290 Supporting Documents-2015 Sunset Audit.pdf HL&C 3/30/2016 3:15:00 PM
HB 290
HB290 Supporting Documents-2015 Audit Summary.pdf HL&C 3/30/2016 3:15:00 PM
HB 290
HB281 ver A.pdf HL&C 3/30/2016 3:15:00 PM
HB 281
HB281 Sponsor Statement.pdf HL&C 3/30/2016 3:15:00 PM
HB 281
HB281 Sectional Analysis.pdf HL&C 3/30/2016 3:15:00 PM
HB 281
HB281 Fiscal Note-DCCED-CBPL-02-19-16.pdf HL&C 3/30/2016 3:15:00 PM
HB 281
HB281 Supporting Documents-Letter Alaska Real Estate Commission 01-15-15.pdf HL&C 3/30/2016 3:15:00 PM
HB 281
HB281 Supporting Documents-Letter Alaska Real Estate Commission 10-27-15.pdf HL&C 3/30/2016 3:15:00 PM
HB 281
HB281 Supporting Documents-Letter Alaska Association of Realtors.pdf HL&C 3/30/2016 3:15:00 PM
HB 281
HB281 Supporting Document-Pre-licensing Ed and Experience Matrix.pdf HL&C 3/30/2016 3:15:00 PM
HB 281
HB281 Opposing Documents-Letter Matt Steele.pdf HL&C 3/30/2016 3:15:00 PM
HB 281
HB281 Opposing Documents-Email Matt Steele 03-14-16.pdf HL&C 3/30/2016 3:15:00 PM
HB 281
HB281 Draft Proposed Amendment (AS08.88.172(e)).pdf HL&C 3/30/2016 3:15:00 PM
HB 281
HB281 Draft Proposed Amendment A.2.pdf HL&C 3/30/2016 3:15:00 PM
HB 281