Legislature(2017 - 2018)BARNES 124

01/29/2018 03:15 PM LABOR & COMMERCE

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

Document Name Date/Time Subjects
HB278 Sponsor Statement 1.25.18.pdf HL&C 1/29/2018 3:15:00 PM
HB 278
HB278 Fiscal Note DCCED CBPL 1.25.18.pdf HL&C 1/29/2018 3:15:00 PM
HB 278
HB0278 Version D.PDF HL&C 1/29/2018 3:15:00 PM
HB 278
HB278 2017 Audit 1.25.18.pdf HL&C 1/29/2018 3:15:00 PM
HB 278
HB279 2017 Audit 1.25.18.pdf HL&C 1/29/2018 3:15:00 PM
HB 279
HB279 Fiscal Note DCCED CBPL 1.25.18.pdf HL&C 1/29/2018 3:15:00 PM
HB 279
HB0279A Version D.PDF HL&C 1/29/2018 3:15:00 PM
HB 279
HB279 Sponsor Statement 1.25.18.pdf HL&C 1/29/2018 3:15:00 PM
HB 279
HB280 2017 Audit 1.25.18.pdf HL&C 1/29/2018 3:15:00 PM
HB 280
HB280 Fiscal Note DCCED CBPL 1.25.18.pdf HL&C 1/29/2018 3:15:00 PM
HB 280
HB280 Sponsor Statement 1.25.18.pdf HL&C 1/29/2018 3:15:00 PM
HB 280
HB0280 Version D.PDF HL&C 1/29/2018 3:15:00 PM
HB 280