HB 279-EXTEND: REAL ESTATE COMMISSION  2:22:10 PM CHAIR COSTELLO announced the consideration of HB 279. 2:22:16 PM MEGAN HOLLAND, Staff, Representative Andy Josephson, Alaska State Legislature, Juneau, Alaska, said the Real Estate Commission received an eight-year extension recommendation from Legislative Audit. The commission oversees brokers, associate brokers, and sales licensees. The commission is responsible for regulating supervisors of licensees and enforcing their requirements through their investigations unit. The commission oversees [2,510] licensees. There was one letter of opposition to the extension. It was determined that the complaint was not within the purview of the commission because the expectations of the author of the letter did not align with the functions of the commission. 2:23:59 PM KRIS CURTIS, Legislative Auditor, Legislative Audit Division, Alaska State Legislature, Juneau, Alaska, reviewed the June 2017 audit findings related to HB 279. She said the audit concludes the commission is serving the public's interest by effectively licensing and regulating real estate licensees and offices. The commission monitored licensees and worked to ensure only qualified individuals practice in Alaska. Furthermore, the commission developed and adopted regulations to improve the real estate industry and better protect the public. Legislative Audit recommends the full eight-year extension. MS. CURTIS said the committee might have noticed that the audit covers less than two years. That is because the prior sunset was dated July of 2015. That audit noted that the commission had failed to obtain a master insurance policy. A 2008 law required that the commission obtain an errors and omissions master insurance policy and make it available to licensees. Licensees were required either to obtain the insurance through an independent policy or through the master policy made available. Statute stated that if there was no master policy, then no licensee needed to obtain the insurance. Subsequently, the legislature gave the commission a two-year extension and changed the statute to require all licensees to obtain the insurance regardless of whether a master policy was available. The commission worked with the Division of Corporations, Business, and Professional Licensing (DCBPL) to change regulation that facilitated a successful procurement and a contract for the insurance policy was signed in June 2017. Consequently, Legislative Audit is recommending an eight-year extension. MS. CURTIS said there is one repeat recommendation on page 17 of the audit: Recommendation 1: DCBPL's chief investigator should continue to improve oversight to ensure cases are actively investigated and completed timely. MS. CURTIS said management had introduced a dashboard to monitor case resolution and internal benchmarks to create timeliness goals for investigators, but they tested seven cases and three had periods of inactivity. The periods were shorter and the percentage of errors was smaller, but improvements still need to be made. The department, board, and governor concurred with the recommendations. 2:26:51 PM SENATOR GARDNER recalled receiving comments that the E&O [errors and omissions] insurance was onerously expensive. Since she hasn't heard any complaints for a while, she assumes that having the master policy solves that. MS. CURTIS said they found no complaints about the cost of the insurance. The intent was to find a cost-effective way for all licensees to obtain the insurance. SENATOR MICCICHE referenced the letter of complaint that Ms. Holland described in her introduction. He said he is aware of the struggles of the property owner and asked why the situation wasn't a responsibility of the Real Estate Commission. MS. CURTIS deferred to the chair of the commission. 2:28:21 PM TRACI BARICKMAN, Chair, Alaska Real Estate Commission, Palmer, Alaska, said complaints go through the division's investigative process where jurisdiction is first determined. This was not jurisdictional to the Real Estate Commission, and the individual was notified. Public commission meetings are not the appropriate forum for hearing complaints. SENATOR MICCICHE asked if there is a clear path to jurisdiction for this case if it is not the Real Estate Commission. MS. BARICKMAN said it's in the statute. CHAIR COSTELLO asked if the individual was pointed in the right direction. MS. BARICKMAN said that would be a division question. MS. BARICKMAN testified in support of HB 279 on behalf of the commission. She said the Real Estate Commission operates well within its budget provided by licensing fees. As a commissioner, she works with the state investigator to review complaints that are a result of a real estate transaction or licensee's interaction with the public. Most complaints have a legitimate foundation, and in many cases, licensees are disciplined through education, fines, and sometimes revocation of their license. Without this process the only recourse for the public would be litigation. By modifying and adopting regulations, the commission constantly improves industry practices in a changing industry. The commission is an important guard for consumer protection. [Note: At 2:33:42 PM Joanne Blackburn gave testimony on HB 278 and Chair Costello directed that it be placed in the minutes with the proceedings for HB 278.] 2:37:03 PM CHAIR COSTELLO closed public testimony on HB 279. 2:37:15 PM SENATOR MICCICHE moved to report HB 279, version 30-LS1161\D, from committee with individual recommendations and attached fiscal note(s). 2:37:29 PM CHAIR COSTELLO announced that without objection, HB 279 moved from the Senate Labor and Commerce Standing Committee.