Legislature(1995 - 1996)
04/09/1996 01:35 PM L&C
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE LABOR AND COMMERCE COMMITTEE April 9, 1996 1:35 p.m. MEMBERS PRESENT Senator Tim Kelly, Chairman Senator John Torgerson, Vice Chairman Senator Mike Miller MEMBERS ABSENT Senator Jim Duncan Senator Judy Salo COMMITTEE CALENDAR HOUSE BILL NO. 478 "An Act allowing licensed real estate brokers, associate real estate brokers, and real estate salespersons to prepare certain documents; and providing for an effective date." CS FOR HOUSE BILL NO. 319(FIN) "An Act relating to the regulation of small loan and retail installment transactions; and providing for an effective date." SENATE BILL NO. 316 "An Act relating to the use of the terms `health' and `disability' in the context of insurance coverage." CS FOR HOUSE BILL NO. 359(JUD) am "An Act relating to the appointment and confirmation process for members of certain boards, commissions, and similar bodies; relating to terms of certain appointees; and providing for an effective date." PREVIOUS SENATE COMMITTEE ACTION HB 478 - No previous Senate committee action. HB 319 - No previous Senate committee action. SB 316 - No previous Senate committee action. HB 359 - No previous Senate committee action. WITNESS REGISTER Norman Rokeberg State Capitol, Juneau, AK 99801-1182¶(907)465-4968 POSITION STATEMENT: prime sponsor of HB 478 Joan Sheppard 6000 Yukon Road, Anchorage, AK 99516¶(907)346-2017 POSITION STATEMENT: supports HB 478 Craig Johnson 218 Center Street, Kodiak, AK 99615¶(907)486-2000 POSITION STATEMENT: supports HB 478 Sherman Ernouf, Aide Senate Labor & Commerce Committee State Capitol, Juneau, AK 99801-1182¶(907)465-3844 POSITION STATEMENT: testified on HB 319 Marianne Burke, Director Division of Insurance Department of Commerce & Economic Development P.O. Box 110805, Juneau, AK 99811-0805¶(907)465-2515 POSITION STATEMENT: supports SB 316 Representative Brian Porter State Capitol, Juneau, AK 99801-1182¶(907)465-4930 POSITION STATEMENT: prime sponsor of HB 359 Jim Baldwin, Assistant Attorney General Civil Division Juneau Department of Law P.O. Box 110300, Juneau, AK 99811-0300¶(907)465-3600 POSITION STATEMENT: ACTION NARRATIVE TAPE 96-25, SIDE A HB 478 REALTORS MAY PREPARE CERTAIN LEGAL DOCS Number 001 CHAIRMAN KELLY called the Senate Labor and Commerce Committee meeting to order at 1:35 p.m. and brought up HB 478 as the first order of business before the committee. He called the prime sponsor to testify. Number 015 REPRESENTATIVE NORMAN ROKEBERG, prime sponsor of HB 478, informed the committee that he has been a licensed real estate broker in the State of Alaska for twenty-five years. Therefore, he is intimately aware of the circumstance surrounding the necessity of this legislation. He made it clear that he has an inherent conflict of interest, because he could benefit by the bill. However, the bill was introduced at the request of the Alaska Real Estate Association, the Alaska Association of Realtors, and some local real estate boards. He thanked the committee for developing a senate committee substitute removing the words and concepts of deeds of trust and mortgages. That is the only difference between the bill passed by the house and the scs. He recommended that language be removed due to recent conversations he's had with the Real Estate Bar, which thinks that the administration of documents performed by a real estate professional does not specifically include deeds of trust and mortgages, which are more typically drafted by counsel at the request of title companies or clients of title companies for the conveyance and alienation of real property interests. Real estate brokers do not normally draft, or even fill in the blanks, of deeds of trust and mortgages. SENATOR KELLY asked if all that is being accomplished by removing deeds of trust and mortgages then is to keep the status quo. REPRESENTATIVE ROKEBERG replied that is correct. SENATOR KELLY asked, since that language was deleted, what is left? REPRESENTATIVE ROKEBERG responded that what is left are the documents normally prepared and used by real estate brokers, associate brokers, and agents throughout the state. The reason for the bill is that the Alaska Bar Association drafted a new bar rule, 33.3, that was transmitted last October to the Supreme Court. The adoption of this new bar rule would redefine the scope of the practice of law in the State of Alaska. He is concerned that the new bar rule could affect members of the real estate industry. The real estate industry has been concerned with this for the past five years or so, because there is a feeling that there is no clear demarcation between standard real estate practices and practices conducted by members of the legal profession. This law is necessary to keep from impeding the typical bargaining process. A strict interpretation of the bar rule would require that all forms of bargaining be approved by an attorney, which could mean that even every counter-offer would have to be approved by an attorney. The Alaska Bar Association denies this though, making HB 478 preemptory legislation. Number 120 CHAIRMAN KELLY asked Representative Rokeberg if he is suggesting the Alaska Bar Association's 2,000 members would try to stretch out their ability to generate fees in the State of Alaska. REPRESENTATIVE ROKEBERG replied he wouldn't suggest that; he would be much more clear about that being probable. If this law is not passed, real estate commerce could be impeded. SENATOR KELLY commented there was a statement from the Alaska Bar Association that indicated they weren't trying to do this. REPRESENTATIVE ROKEBERG stated committee members have in their bill packets a letter from the Alaska Bar Association counsel that is a written response to information requested by Representative Rokeberg. The letter indicates that sections 3-e and d of the bar rule specifically exclude members of a profession from using legal proceedings--documents that they prepare. But he draws committee members' attention to section 3-d, which only addresses filling in forms approved by the court system for use by non-attorneys, or standardized forms prepared and reviewed by counsel. Every document used by a real estate professional would have to be approved on a pre-determined basis. He thinks that would even include real estate leases. Real estate agents and brokers do not practice law; that is not the intent here. All they are asking for is to preserve the status quo and be able to perform their profession with documentation that has customarily and traditionally been used. Number 205 CHAIRMAN KELLY asked if there were questions of the sponsor. Hearing none, he called other witnesses to testify. Number 210 JOAN SHEPPARD, realtor, testifying from Anchorage, stated she advises clients to get legal advise. Realtors currently do not practice law, they are just writing simple contracts negotiated between buyers and sellers. If it was mandated that these contracts be written by attorneys, it would be more expensive and take more time to conduct real estate transactions. She agrees with the deletion of language relating to deeds and mortgages from the legislation. Ms. Sheppard supports passage of HB 478. Number 230 CRAIG JOHNSON, realtor, testifying from Kodiak, stated he echoes what has already been said. He hasn't heard any reasons for opposing HB 478. The nation-wide trend has been to move away from required attorney involvement. He asked that the committee release HB 478. CHAIRMAN KELLY asked if there are any questions. Hearing none, he asked if there was a motion for the adoption of the Senate Labor & Commerce Committee substitute. Number 260 SENATOR TORGERSON made a motion to adopt the committee substitute for HB 478. CHAIRMAN KELLY, hearing no objection, stated the committee substitute was adopted. He asked the pleasure of the committee. SENATOR TORGERSON made a motion to discharge HB 478 from the Labor & Commerce Committee with individual recommendations. SENATOR KELLY, hearing no objections, stated HB 478 was discharged from committee. HB 319 SMALL LOANS & RETAIL INSTALLMENT SALES Number 268 CHAIRMAN KELLY brought up HB 319 as the next order of business before the Senate Labor & Commerce Committee. He asked the committee aide to explain the difference between HB 319 and the senate version of that bill. SHERMAN ERNOUF, Committee Aide to the Senate Labor & Commerce Committee, stated that the only difference between the two versions is HB 319 has an immediate effective date. CHAIRMAN KELLY asked if there were any questions about HB 319. SENATOR TORGERSON made a motion to discharge HB 319 from the Senate Labor & Commerce Committee with individual recommendations. CHAIRMAN KELLY, hearing no objections, stated HB 319 was discharged from committee. SB 316 HEALTH INSURANCE NOMENCLATURE Number 285 CHAIRMAN KELLY brought up SB 316 as the next order of business before the Senate Labor & Commerce Committee. He called Ms. Burke to testify. MARIANNE BURKE, Director, Division of Insurance, Department of Commerce & Economic Development, stated SB 316 is a housekeeping bill. Throughout Alaska Statutes, the word "disability" is used in an obsolete context relating to health insurance. We want to bring Alaska Statutes into the present day usage of the term "health". Alaska is one of the few states left that still uses the term "disability" in statute to mean "health". Number 305 SENATOR TORGERSON made a motion to discharge SB 316 from the Senate Labor & Commerce Committee with individual recommendations. CHAIRMAN KELLY, hearing no objection, stated SB 316 was discharged from committee with individual recommendations. HB 359 APPOINTMENT PROCESS FOR BDS & COMM'NS Number 310 CHAIRMAN KELLY brought up HB 359 as the next order of business before the Senate Labor & Commerce Committee. He called the prime sponsor to testify. Number 315 REPRESENTATIVE BRIAN PORTER, prime sponsor of HB 359, stated HB 359 would specify that appointments made during the interim expire the first day of the session and must be reappointed within 30 days of the beginning of session. Any appointment made after the first 30 days of a session must be submitted within 5 days. Then the legislature will confirm or reject that appointment. If the appointment is rejected, the person may not be reappointed to the same position. The requirement to reappoint during session eliminates the carry-over appointments of the lame-duck appointments. It moves almost all of the expiration dates of boards and commissions to March 1, so that there is some consistency. It also eliminates a loophole that could possibly allow a governor to appoint someone during the interim, not present them for appointment, recognizing that the appointment would expire, and then reappointing the same person so as to retain someone that the legislature never had the opportunity to confirm. He thinks that the administration generally supports the bill. CHAIRMAN KELLY commented he is still a little confused about the March 1 extension date. How does it operate now? Are there different expiration dates for various boards and commissions? REPRESENTATIVE PORTER responded that as they came on board, they had different dates. You will notice that HB 359 specifies "except as otherwise provided". The only one being excluded is the Board of Regents. CHAIRMAN KELLY asked what extending to March 1 means. Does that mean the legislature then has the opportunity to look at new appointees every year? REPRESENTATIVE PORTER replied that is why it's during session. The debate is just about where in the session you would want to draw that line. CHAIRMAN KELLY asked if there were questions for Representative Porter. Hearing none, he called Mr. Baldwin to testify. Number 360 JIM BALDWIN, Assistant Attorney General, Department of Law, informed the committee that the Department of Law has been working with Representative Porter on HB 359, and generally, he has accommodated the department's concerns. There is one remaining area of concern regarding how the bill would work: all of an incoming governor's interim appointments would expire on the first day of the session. The department thinks that would be an administrative burden on a new governor to have to respond that rapidly when there is so much else going on with the transition. He suggested specifying that the appointments would expire on the date that the name is submitted. That would give the governor time to handle the transition and would also keep vacancies from occurring. He stated that the change could occur, if the committee so desires, to the language on page 5, line 29. Words could be inserted to the effect that the term would end on the day during the next regular session upon which the appointment is presented. CHAIRMAN KELLY asked if they would lock in how long the governor would have to present those appointments. MR. BALDWIN thinks the preceding section of statute specifies 30 days; that is existing law. It is on page 4 of HB 359. CHAIRMAN KELLY noted that would only be a factor every four years, and perhaps eight years. MR. BALDWIN brought to the committee's attention that there are amendments being made in other sections of the bill to boards or commissions or bodies that, by the executive branch's interpretation, do not require confirmation. But for some reason or other the legislature has seen fit to, by statute, make these boards or commissions subject to confirmation. CHAIRMAN KELLY asked if Mr. Baldwin if there was a problem with specifying the first day of session. You could essentially have no board for 30 days. If everybody's term were to end, then you would have a board that could not take action for 30 days. The chairman asked if he was correct in assuming that might be a possibility. MR. BALDWIN replied that is a possibility under the way the bill is currently written. Number 410 REPRESENTATIVE PORTER thinks that would exist in those situations where a governor would make the lame-duck appointments. What he is trying to do with HB 359 is take away the motivation to do that. If it was worded so that it was clear that the next governor's appointments had to be made within the confines of the new language of the bill, he would not have great objection to it. Number 435 CHAIRMAN KELLY thinks staff can work out that problem. You could just specify every fourth year, just as we do for the start of legislative sessions. He asked staff to work out that problem between the administration and the sponsor, and the bill will be brought up again first thing on Thursday. He asked Mr. Baldwin if the governor will sign the bill with that correction, not withstanding the other objections. MR. BALDWIN responded he will have to reply to that question on Thursday. There has been a meeting with the governor about the bill. CHAIRMAN KELLY, hearing no other comments, adjourned the Senate Labor & Commerce Committee meeting at 2:05 p.m.