Legislature(2017 - 2018)SENATE FINANCE 532
03/06/2018 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB155 | |
| HB131 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 155 | TELECONFERENCED | |
| + | HB 131 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
March 6, 2018
9:02 a.m.
9:02:17 AM
CALL TO ORDER
Co-Chair MacKinnon called the Senate Finance Committee
meeting to order at 9:02 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Anna MacKinnon, Co-Chair
Senator Click Bishop, Vice-Chair
Senator Peter Micciche
Senator Donny Olson
Senator Gary Stevens
Senator Natasha von Imhof
MEMBERS ABSENT
None
ALSO PRESENT
Juli Lucky, Staff, Senator Anna MacKinnon; Senator Kevin
Meyer, Sponsor; Edra Morledge, Staff, Senator Kevin Meyer;
Sara Chambers, Deputy Director, Division of Corporations,
Business and Professional Licensing, Department of
Commerce, Community and Economic Development; Laura
Stidolph, Staff, Representative Adam Wool; Heather Fair,
Statewide Right-Of-Way Chief, Department of Transportation
and Public Facilities, Juneau.
PRESENT VIA TELECONFERENCE
David Derry, Chair, Board of Certified Real Estate
Appraisers, Kenai; William Scroggins, Real Estate Valuation
Advocacy Association, North Carolina.
SUMMARY
SB 155 REAL ESTATE APPRAISAL MNGMT. COMPANIES
SB 155 was HEARD and HELD in committee for
further consideration.
HB 131 RELOCATION ASSISTANCE FOR FED. PROJ/PROG
HB 131 was HEARD and HELD in committee for
further consideration.
SENATE BILL NO. 155
"An Act relating to the registration and regulation of
real estate appraisal management companies; relating
to the establishment of fees by the Department of
Commerce, Community, and Economic Development;
relating to the Board of Certified Real Estate
Appraisers; and relating to real estate appraisers."
9:02:52 AM
Vice-Chair Bishop MOVED to ADOPT proposed committee
substitute for SB 155, Work Draft 30-LS1295\D (Radford,
2/28/18).
Co-Chair MacKinnon OBJECTED for discussion.
JULI LUCKY, STAFF, SENATOR ANNA MACKINNON, discussed the
Committee Substitute (CS) for SB 155. She informed that the
changes to the bill were a result of questions that had
arisen related to concerns about the legislation.
Ms. Lucky read from the Explanation of Changes document
(copy on file):
? Increases the limit for the required surety bond to
$50,000 (previous bill limit was $25,000) see page 5,
line 21.
? Removes the fingerprinting requirement for the
"controlling person" - AS 08.87.135 (c) on page 5 of
the previous bill.
? Allows the department to collect fees to cover costs
by removing the specific references to subsection (j)
of AS 08.01.165 on page 4, line 18.
? Adds transition language with an immediate effective
date to allow the department to promulgate regulations
before the effective date of the act, per the
department's request.
? Conforming amendments, as required, including
deletion of:
Previous Section 8 removed due to deletion of
fingerprinting requirement
Previous Section 9 duplicative of language already
appearing in statute is AS 37.05.146(c)(24).
Co-Chair MacKinnon WITHDREW her OBJECTION. There being NO
OBJECTION, the proposed committee substitute was ADOPTED.
9:06:13 AM
SENATOR KEVIN MEYER, SPONSOR, introduced himself.
EDRA MORLEDGE, STAFF, SENATOR KEVIN MEYER, discussed the
bill. She shared that, due to the Dodd Frank Act of 2010,
there was a federal deadline for states to enact
comprehensive regulations regarding appraisal management
companies. The deadline was August 2018. Subsequently, the
department requested a one-year waiver to implement the
program, but there was no notification whether the state
had been granted that waiver. She stated that appraisal
management companies were business entities that
administered networks of independent appraisers to fulfill
real estate appraisal assignments on behalf of lenders. She
noted that the companies would no longer be able to operate
in the state without the comprehensive legislation. She
stated that it would cause problems for realtors, banks,
and other lenders; and have an adverse effect on the
economy. She noted that Alaska was one of four states plus
the District of Columbia that have yet to pass
comprehensive legislation on the subject. Those locations
were currently in the legislative process to address the
subject.
Co-Chair MacKinnon noted that there had been significant
changes to the bill, and there were people ready to answer
questions.
Senator Olson asked if the sponsor was in agreement with
the changes in the CS.
Senator Meyer answered in the affirmative. He continued
that he had wanted an immediate effective date, which would
allow for compliance by August 2018 without the need for an
extension. He thought there might be a difference of
opinion on the effective date, as well as with the bond
requirements.
9:10:31 AM
Co-Chair MacKinnon advised that the bill would not be
moving from committee in the current meeting. The committee
was working with the sponsor to address issues with due
consideration.
Co-Chair MacKinnon stated that the meeting would continue
with invited testimony.
DAVID DERRY, CHAIR, BOARD OF CERTIFIED REAL ESTATE
APPRAISERS, KENAI (via teleconference), spoke in support of
the bill. He stated that the Board of Certified Real Estate
Appraisers was ready to assume oversight of appraisal
management companies. He appreciated the changes identified
in the committee substitute. He spoke in support of the
amendments, except for the bond amount. He recalled that he
had originally requested that the bond amount be increased
from $25,000 to $150,000. He pointed out that the
Washington had a bond amount of $100,000. He felt that
since the appraisal management companies were all lower 48-
based companies, and that the board had fiduciary
responsibilities, the bond amount would provide some
coverage and protection. He reported that there was an
opinion that the $150,000 would be too costly, and he
disagreed. He remarked that, currently, Alaska real estate
appraisers currently paid a recertification fee of $1,130.
He furthered that all appraisers that worked for them, were
usually required to carry insurance, which could cost
between $1000 and $2500 per year. He shared that the
defense of keeping the bond amount low, was that it would
affect competition and result in higher consumer fees. He
disagreed with that argument. He pointed out that some of
the larger Alaska-based lenders did not use a third-party
mortgage initiator. He felt that it would not affect the
consumer.
9:15:02 AM
Co-Chair MacKinnon noted that she had a list of states with
bonding fees of $25,000. She queried a nationwide average
to consider.
Mr. Derry did not have an average, but had a list of states
that had the legislation enacted, but stated other states
had a $50,000 bonding amount.
Senator von Imhof wondered how the bill sponsor had chosen
the amount of $50,000.
Senator Meyer was not sure what the right amount should be.
He used the example of Hawaii, which would have a similar
geographical circumstances. He observed that the State of
Washington was at $100,000, but of the states he had
researched, most were lower than $100,000.
Co-Chair MacKinnon asked if there had been an average of
surety bond rates.
Ms. Morledge had found in her initial research that the
average was approximately $33,000.
9:19:14 AM
Senator Micciche asked Mr. Derry what costs would not be
covered by a $50,000 surety bond, and what other
protections would be available if there was a claim or
appraisal problem above that amount.
Mr. Derry replied that there may be a default payment from
an out of business appraisal company. He remarked that many
appraisals servicing rural areas must charge airfare, in
addition to the appraisal fee, which often exceed the fee
itself.
Senator Micciche asked if Mr. Derry was more concerned
about a collective cost rather than a single company
defaulting and having exposure on several appraisals.
Mr. Derry answered in the affirmative.
Co-Chair MacKinnon asked whether a company had had to use
its share of surety bonds.
Mr. Derry stated that he had no oversight
Co-Chair MacKinnon wondered whether there was anything
prohibitive in the bill that would restrict a company from
going above the $50,000 proposed limit.
Mr. Derry replied in the affirmative. He stated that they
could set any appraisal amount. He felt that normal
business practices would at least push to meet the minimum.
9:23:52 AM
Co-Chair Hoffman shared that he had several appraisals done
in rural Alaska. He noted that appraisers had not come to
the area unless there were multiple appraisals to complete.
He thought the practice was working well currently in
Western Alaska.
Co-Chair MacKinnon asked about the amount of the surety
bond.
Senator Meyer thought the amount of the surety bond was a
policy call by the committee. He thought if the amount was
set too high, it might dissuade some appraisers
Ms. Morledge reminded that the surety bond was a recurring
cost.
Co-Chair MacKinnon had no issue with the $50,000 surety
limit. She noted that the lending agencies were referred to
within the bill.
Ms. Morledge replied that the appraisal management
companies were standalone agencies. She stressed that
lending institutions would contact the individual agencies.
Vice-Chair Bishop thought the bill sponsor had made a
reasonable compromise.
9:27:07 AM
AT EASE
9:33:53 AM
RECONVENED
Senator Micciche thought there may have been a
misunderstanding about the need for surety bonds. He
understood that an appraisal management company could hire
the same individual to do multiple appraisals. He did not
know that $50,000 was adequate. He thought he better
understood Mr. Derry's concern.
Co-Chair MacKinnon asked Mr. Derry if Senator Micciche had
accurately reflected his concern.
Mr. Derry answered in the affirmative.
Co-Chair MacKinnon asked Mr. Derry to stay online to
comment on further topics.
Co-Chair MacKinnon referenced a letter dated February 8,
2018 (copy on file). She asked for comments about that
letter.
SARA CHAMBERS, DEPUTY DIRECTOR, DIVISION OF CORPORATIONS,
BUSINESS AND PROFESSIONAL LICENSING, DEPARTMENT OF
COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, relayed that
she had submitted a letter to the appraisal subcommittee
requesting an extension from the 2018 deadline to a 2019
deadline. She stated that the bulletin issued from the
subcommittee stated that draft legislation would be
considered a cause for an extension.
9:39:22 AM
Co-Chair MacKinnon thought the sponsor had indicated the
bill needed to move forward with implementation.
Ms. Chambers answered in the affirmative.
Co-Chair MacKinnon thought the sponsor was concerned that
without implementation, there would be consequences.
Ms. Chambers understood that there may be a period of time
(if Alaska did not receive the extension) that business
could continue. Without state oversight, federally-
regulated companies would still be able to operate. Her
assessment was that there could be a period of time that
non-federally-regulation would be available.
Co-Chair MacKinnon asked if there was an option for
emergency regulations.
Ms. Chambers stated that the Department of Law had advised
that emergency regulations should be reserved for matters
of public emergency, and not for administrative
emergencies.
Co-Chair MacKinnon asked why it would take over a year to
implement regulations for an existing board.
Ms. Chambers informed without the extension, the bill would
take effect and licensure would be required before the 3 to
4 month time period necessary to complete regulations.
Co-Chair MacKinnon surmised that the issue was complex.
Senator von Imhof wondered if the extension was for an
"all-in" scenario.
Ms. Chambers answered in the affirmative.
Vice-Chair Bishop thought Ms. Chambers had provided the
worst case scenario. He asked if there was a better
scenario to consider.
Ms. Chambers stated that what she had described was likely
the best case scenario.
Co-Chair MacKinnon asked when the federal compliance
deadline.
Ms. Chambers stated that the federal compliance deadline
was July 2018; unless an application for extension was
submitted.
Co-Chair MacKinnon felt that there needed to be contingency
language.
9:46:30 AM
Vice-Chair Bishop referenced Ms. Chambers comment regarding
federal loans being currently processed within the state,
and asked for more information about that statement.
Ms. Chambers understood that there were federally-regulated
appraisal management companies currently that would
continue to operate without the legislation.
Senator Micciche wondered why the bill was up against a
deadline.
Ms. Chambers stated that the board worked to secure a
sponsor to accomplish the goal of legislation two years
previously. The board was unable to do so.
9:49:04 AM
Mr. Derry thought there was a question of implementation of
regulations, and recalled that there was effectively only
one or two AMCs that were federally regulated.
Co-Chair MacKinnon asked Mr. Derry to help elucidate the
consequences if regulations were not put into place.
Mr. Derry supported Ms. Chambers. was not aware if either
of the federally-regulated AMCs.
Co-Chair MacKinnon stated that the committee would work
with the sponsor on this particular issue. She stated that
there was an issue about a "controlling person" within the
bill. It had been proposed to remove the requirement that
the controlling person be within the state.
9:55:26 AM
WILLIAM SCROGGINS, REAL ESTATE VALUATION ADVOCACY
ASSOCIATION, NORTH CAROLINA (via teleconference),
association had worked with many states to push forward
legislation to satisfy Dodd-Frank Act requirements. He
viewed $50,000 to be excessive but did not oppose the
provision. He did not want to limit the certification. He
thought it had been a drafting oversight.
Co-Chair MacKinnon asked Mr. Scroggins to be available for
questions later in the meeting.
Co-Chair MacKinnon referenced page 4, lines 28 through 30
of the bill, which talked about uniform standards of
professional appraisal practices. She wondered whether the
standards were "like" or "exact."
Mr. Derry queried the requirement that the controlling
person be within the state.
Co-Chair MacKinnon referenced page 5, line 22.
Mr. Derry supported the bill as it was currently written.
Co-Chair MacKinnon stated that the committee would get
legal clarification on the matter.
10:03:02 AM
Ms. Chambers stated that the bill section referenced being
active was the same as Mr. Derry's. She agreed that the
person must be certified, but did not have to be physically
a resident of the state.
Co-Chair MacKinnon stated that she had a comment from an
individual who believed that was a burden for larger out of
state management firms.
Senator Stevens asked Ms. Chambers to comment on
reciprocity with other states.
Ms. Chambers stated that licenses were fairly
transportable. She announced that if a state's requirements
were equal to or greater than Alaska's, there would be an
expedited process to recognize the standards.
Co-Chair MacKinnon relayed that the committee still awaited
a new fiscal note for the bill. The committee would have a
new CS drafted for a future meeting.
SB 155 was HEARD and HELD in committee for further
consideration.
HOUSE BILL NO. 131
"An Act relating to relocation assistance for
federally assisted public construction and improvement
projects and programs; and providing for an effective
date."
10:05:57 AM
Co-Chair MacKinnon directed attention to HB 131.
LAURA STIDOLPH, STAFF, REPRESENTATIVE ADAM WOOL, stated
that Representative Wool was currently unavailable, and she
was working on behalf of the House Transportation
Committee.
Ms. Stidolph addressed the Sponsor Statement (copy on
file):
House Bill 131 would allow an increase of the maximum
relocation benefits available to a person or a
business displaced by federally-funded highway,
bridge, or facilities project. In 2012, Congress
relaxed the eligibility criteria and increased the
maximum reimbursement limits for states' relocation
assistance payment programs when they passed their
transportation authorization and funding bill, the
Moving Ahead for Progress in the 21st Century Act, aka
MAP-21. Prior to MAP-21, the payment rates hadn't been
changed for 30 years.
These changes went into effect October 1, 2014.
Unfortunately, Alaska Statute continues to reflect the
more stringent eligibility criteria and the smaller
maximum reimbursement limits.
HB131 will also protect Alaska's approximately $700
million annual allocation of Federal Highway
Administration and Federal Aviation Administration
funding by bringing the State into compliance.
Having an equivalent state statute is one of the
requirements for a state to receive a delegated
authority to independently administer the federal
program. Additionally, being out of compliance, even
for a short period of time, jeopardizes our
relationship with our funding partners, putting our
entire program at risk.
Further, the bill would provide that a displaced
person or business in the state would be retroactively
eligible for an increased federal maximum benefit for
relocation expenses incurred after October 1, 2014.
10:09:06 AM
Ms. Stidolph discussed the Sectional Analysis (copy on
file):
Section 1 amends AS 34.60.010 to clarify
applicability and intent, adopting and incorporating
by referencing the corresponding federal law's payment
amounts available to displaced persons. Clarifies that
federally assisted programs subject to relocation
assistance and real property acquisition practices
includes public construction and improvement projects.
Section 2 repeals and reenacts AS 34.60.040(c) to
clarify eligibility for displacement payments in
accordance with corresponding federal law, mirror
federal language, and increase the maximum fixed
payment in lieu of itemized reimbursements from
$20,000 to $40,000 for displaced parties.
Section 3 amends AS 34.60.040(d) payment amount in
accordance with corresponding federal law.
Section 4 amends AS 34.60.050(a) payment amount and
dwelling owned/occupied period for eligibility in
accordance with corresponding federal law.
Section 5 - amends AS 34.60.060 payment amounts in
accordance with corresponding federal law.
Section 6 amends uncodified law to establish
retroactive effective date of law to
October 1, 2014 in accordance with corresponding
federal law.
Section 7 provides for an immediate effective date.
10:10:32 AM
Co-Chair MacKinnon asked if the administration was
supportive of the bill.
HEATHER FAIR, STATEWIDE RIGHT-OF-WAY CHIEF, DEPARTMENT OF
TRANSPORTATION and PUBLIC FACILITIES, JUNEAU, answered in
the affirmative.
Vice-Chair Bishop wondered whether the bill could lead to
increased payments to affected parties along the right-of-
way, from an acquisition standpoint.
Ms. Fair replied that it could lead to increased payments
to affected parties. She stated that the intent was to
bring the federal regulations into the present-day costs to
relocate a family. She remarked that the state match was
very small, and would come out of the appropriation. The
state match appropriation was approximately 10 percent of
the total federal appropriation, and was included in the
department's capital budget.
Senator von Imhof stressed that relocating was different
than compensating market value for the land loss.
Ms. Fair answered in the affirmative, and noted that market
value minimum was first paid for the acquisition of the
property for a project. Additionally, relocation assistance
was paid where applicable.
Senator von Imhof recalled that there was previously a
$20,000 maximum to relocate a farm, business, or family.
That number would be changed to $40,000, which was the
federal government's maximum.
Ms. Fair stated that there were different numbers available
for families versus businesses and farms. She agreed that
the numbers had increased, and in some cases the numbers
had been doubled.
Senator Micciche asked if the numbers provided were for
non-residential properties.
Ms. Fair agreed. She noted that the federal government had
not increased those amounts in over thirty years.
Senator Micciche queried the process of determining the
escalation number.
Ms. Fair replied that they used historical data of actual
relocations. She remarked that the numbers were still set
based on actual expenses.
10:15:25 AM
Co-Chair MacKinnon explained that the fiscal note did not
reflect cost to the state, although the bill had
retroactive costs dating to 2014. She queried the
accumulated additional GF spend or federal spend would be
on those retroactive costs. She stressed that the date was
used, because that was the point of authorization.
Ms. Fair affirmed that the date was based on the
authorization from the federal government under the Moving
Ahead for Progress in the 21st Century (MAP 21) Act. She
remarked that the federal regulations were not yet
finalized and updated, so those would have the retroactive
number. She noted that there were no estimated retroactive
payments owed for past payments. She stated that there was
only a small amount estimated for the upcoming four years.
Co-Chair MacKinnon estimated that there would be $100,000
given to property owners along rights-of-way.
Mr. Fair answered in the affirmative, and the number was
federal funds.
Senator von Imhof asked how the option would be
communicated to alert those that were affected since 2014.
Ms. Fair replied that the option was already communicated.
She stated that in order to exceed state maximums, there
was a complex progress process called the Housing of Last
Resort, with participation from the federal government.
Senator von Imhof wondered there were individuals who felt
they were uncompensated in 2016, and whether they would
know that the option was available.
Ms. Fair stated that there were no affected parties that
would qualify, because there were very few relocations.
Senator von Imhof surmised that the lookback was
immaterial, because there were no affected parties.
Ms. Fair replied in the affirmative.
Co-Chair MacKinnon OPENED public testimony.
Co-Chair MacKinnon CLOSED public testimony.
Vice-Chair Bishop addressed the fiscal note.
Co-Chair MacKinnon commented that that the estimates would
be absorbed in the State Transportation Improvement Plan
(STIP).
Senator Micciche understood that there was estimate on
future costs in the upcoming four years in STIP.
Ms. Fair answered in the affirmative.
10:21:00 AM
Co-Chair MacKinnon pointed out that a similar bill had been
considered by the committee in a previous legislature. She
felt that it was troublesome to link with a federal
statute, because there was little control over what the
federal government would communicate.
Ms. Fair acknowledged Co-Chair MacKinnon's concern about
the link to the federal regulation. She noted that the
state was buffered from the risk, because of the large
federal percentage. She felt that it allowed for
flexibility in prioritizing projects.
Co-Chair MacKinnon wondered whether there could be a fixed
number as opposed to an open statutory amount.
Ms. Fair replied in the affirmative.
Co-Chair MacKinnon highlighted committee business.
HB 131 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
10:24:10 AM
The meeting was adjourned at 10:24 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB131 Sectional Analysis.pdf |
SFIN 3/6/2018 9:00:00 AM |
HB 131 |
| HB131 Sponsor Statement .pdf |
SFIN 3/6/2018 9:00:00 AM |
HB 131 |
| HB131 Supporting Documents-Rellocation Assistance Program Q&A.pdf |
SFIN 3/6/2018 9:00:00 AM |
HB 131 |
| SB 155 CS v. D Explanation.pdf |
SFIN 3/6/2018 9:00:00 AM |
SB 155 |
| SB 155 CS work draft version D.pdf |
SFIN 3/6/2018 9:00:00 AM |
SB 155 |
| SB 155 Sectional Version D.pdf |
SFIN 3/6/2018 9:00:00 AM |
SB 155 |
| SB 155 AK Board AMC extension request - Bulletin 2017-02 Extension of Implementation Period.pdf |
SFIN 3/6/2018 9:00:00 AM |
SB 155 |