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.