Legislature(2005 - 2006)
05/05/2005 04:55 PM Senate FIN
| Audio | Topic |
|---|---|
| Start | |
| HB61 | |
| HB149 | |
| HB169 | |
| HB211 | |
| HB225 | |
| HB123 | |
| HB215 | |
| SB46 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CS FOR HOUSE BILL NO. 169(FIN)
"An Act relating to the educational requirements for certain
real estate brokers, associate brokers, and salespersons with
new or suspended licenses; relating to review of real estate
transactions by attorneys or associate brokers; relating to
the requirements for a real estate broker license and an
associate real estate broker license; and providing for an
effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
HEATHER NOBREGA, Staff to Norm Rokeberg, the bill's sponsor, stated
that this bill would require newly licensed real estate
professionals to undergo 20 hours of practical education courses,
as determined by the Alaska Real Estate Commission, during the
first year after they receive their license. The bill would also
allow a real estate broker to retain an attorney or associate
broker to assist in reviewing each real estate transaction before
the transaction closed, as reflected in Sec. 12 page seven lines 25
through 28. This would assist larger brokerage firms with the
onerous "duty" of having to review each file before it closes.
5:46:56 PM
Co-Chair Green understood that in that case, the primary broker
would still be responsible.
Ms. Nobrega affirmed.
Senator Olson asked regarding the current continuing education
requirements.
Ms. Nobrega responded that the current continuing education
requirement is 20 hours every two years. That requirement would
continue unaffected. The 20 hours of practical education that newly
licensed real estate professionals must undergo during their first
year of practice would involve such things as contract writing and
client interaction. Currently, the broker assists with teaching the
everyday practices. There is no established education guideline for
new realtors, and each firm differs in its actions in this regard.
PEGGY ANN MCCONNOCHIE, Representative, Alaska Association of
Realtors, explained that a person endeavoring to receive their real
estate license must undergo 20 hours of prescribed pre-licensing
education. After receiving the license, the individual must take 20
hours of specified education courses and an additional 12 hours
chosen from a list of course options developed by the Commission.
Ms. McConnochie noted that 18 other states have adopted similar
post-licensing legislation, boosted by the concern that the newly
licensed realtors should "have actual practical education as to how
to do the job they are supposed to do". The states that have
implemented the post-licensing regulations have experienced a
dramatic reduction in public complaints caused by the realtor's
lack of experience. The industry has determined that this action
would improve the industry overall. The new regulations would also
require that an associate broker who upgrades to a broker take the
20 hours of practical education during their first year as a
broker.
Senator Olson ascertained therefore that the real estate industry
is supportive of the legislation, even though taking the additional
courses would incur an expense.
Ms. McConnochie affirmed the industry's support of the additional
education requirement.
Co-Chair Green asked for confirmation that Legislators would not
receive complaints from those affected by the legislation.
Ms. McConnochie shared that 95-percent of the respondents to a
survey of both long and short-term realtors that was conducted by
the Alaska Association of Realtors "wholeheartedly" supported the
bill. The other five percent indicated acceptance of the
requirement. She shared that while she, a broker, had been
initially concerned about having to provide the additional
education to new licensees she is now convinced of its merit. "No
phone calls will come your way."
Co-Chair Green asked regarding the schedule of the post-licensing
requirement, specifically if it would typically occur over two
weekends.
Ms. McConnochie responded that the schedule would be dependent on
the needs specific to the licensee or an area as well as the
instructor. The training could be delivered in a variety of
formats, including via the Internet, in order to insure that new
licensees had access to the required courses. The courses would
require a minimum of three days. That time could be stretched out
over several weeks.
5:51:59 PM
Senator Stedman understood therefore that individuals would not be
required to travel to a central location such as Anchorage.
Ms. McConnochie stated that that is "correct"; there would be no
desire "to burden people with the cost of a plane trip". The only
requirement is that the education be received. The courses would be
available throughout the State. She informed that in her role as an
educator she has conducted training by correspondence. "Quality
education would transpire no matter where the licensee practices."
Senator Stedman asked for further information as to how the
distance delivery would be accomplished.
Ms. McConnochie expressed that there would be a variety of delivery
systems, including "face to face" or correspondence courses. The
licensee could choose the method they preferred.
Senator Stedman understood that each real estate office would
continue to be limited to having one broker. Therefore, he
understood that other brokers in that office would be deemed
associate brokers.
Ms. McConnochie affirmed. She noted that while there could only be
one broker, there could be any number of associate brokers. Rather
than setting up their own real estate office, these individuals
have chosen to associate with another broker. The allowance of only
one broker would assure that there was one person responsible for
the proceedings at that particular office.
5:53:56 PM
Senator Stedman opined that there is a difference between 20 hours
conducted in a classroom setting and 20 hours conducted via
correspondence.
Ms. McConnochie understood Senator Stedman's position because, in
her role as an educator, she has conducted both face-to-face and
correspondence formatted courses. The Real Estate Commission would
be responsible for developing, reviewing, and approving the
courses. As she also serves as chair of the Commission's education
subcommittee, she shared that the subcommittee is developing
"matrixes for the Real Estate Commission" that would enable them to
determine what hands-on material should be addressed in, for
example, a Contracts class. This effort would assist in developing
a program that would meet the spirit and purpose of the statutes
and regulations.
5:55:25 PM
Senator Stedman noted that there are national firms that could
provide continuing education correspondence courses for a variety
of professions. Those firms utilize computerized test forms. He
asked whether such firms would be utilized or whether the
Commission would develop its own program.
Ms. McConnochie stated that the Commission would be developing its
own program. Individuals could not enroll with a national company
to meet the 20-hour requirement, as the goal would be to develop a
program specific to the needs of, for instance, the real estate
market in Juneau. National courses would not address issues
associated with the various parts of the State. For instance, the
Juneau course would address such local issues as avalanche or
hazard zones, and a course in Fairbanks would address issues
related with ice conditions. In general, continuing education
courses would "assume" that one would already possess the basic
knowledge of the field. Therefore, the effort would be "to improve
upon those skills" and provide a "better class" of realtors. This
would further protect the public.
Senator Stedman asked for further clarification regarding the
frequency of the 20-hour requirement proposed in this bill. In
addition, he asked whether the requirement would apply to all
licensed realtors.
5:58:06 PM
Ms. McConnochie clarified that all licensed realtors must take 20-
hours of continuing education courses every two years. This
legislation would specifically require that, within the first year
of a new realtor acquiring his or her license, they must take an
additional one-time only 20-hour post-licensing practical education
course. This would also be a requirement were a licensed realtor to
upgrade to an associate broker position or were an associate broker
to upgrade to a broker position. The industry's belief is "that
everything changes" and it is the industry's "responsibility to
keep up on new information" in order for provide quality service to
clients.
Senator Stedman asked for confirmation that all brokers, regardless
of how long they had their broker's license, must undergo
continuing education courses every two years.
Ms. McConnochie affirmed that there were "no exclusions". All
licensed realtors, associate brokers, and brokers must take 20
hours of continuing education courses every two years.
Senator Olson asked regarding the cost of the course.
Ms. McConnochie responded that the cost could not be determined
until the program was developed. "A variety of different types of
courses" would be anticipated. Major brokerage firms in large
communities such as Anchorage and Fairbanks would likely provide
"in-house post licensing education". How much or whether they would
charge their agents is an unknown. The price would depend on what
the market would bear, and what the licensees would be willing to
pay. The bill would allow the Commission to have until January 1,
2006 to develop the program. This time would be sufficient.
6:00:34 PM
Senator Hoffman ascertained that the 20-hour course would not be a
pass/fail type of program.
6:00:49 PM
Ms. McConnochie responded that the State's Real Estate Commission
currently requires that an individual must pass a correspondence
course with at least a 75 percent or better test grade; testing in
a face-to-face course is determined by the instructor. The
Commission's education subcommittee would be recommending to the
Commission that, in order to pass the practical post-licensing
course, the individual must demonstrate the ability to complete the
work taught.
Co-Chair Wilken moved to report the bill from Committee with
individual recommendations and accompanying fiscal notes.
There being no objection, CS HB 169(FIN) was REPORTED from
Committee with previous zero fiscal note #1 dated April 6, 2005
from the Department of Commerce, Community and Economic
Development.
6:02:01 PM
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