Legislature(2017 - 2018)SENATE FINANCE 532
04/03/2018 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB302 | |
| HB280 | |
| HB274 | |
| HB278 | |
| HB273 | |
| HB275 | |
| HB279 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 76 | TELECONFERENCED | |
| + | HB 128 | TELECONFERENCED | |
| += | HB 286 | TELECONFERENCED | |
| + | HB 273 | TELECONFERENCED | |
| + | HB 274 | TELECONFERENCED | |
| + | HB 275 | TELECONFERENCED | |
| + | HB 278 | TELECONFERENCED | |
| + | HB 279 | TELECONFERENCED | |
| + | HB 280 | TELECONFERENCED | |
| + | HB 302 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 278
"An Act extending the termination date of the Board of
Certified Real Estate Appraisers; and providing for an
effective date."
9:47:38 AM
MEGAN HOLLAND, STAFF, REPRESENTATIVE ANDY JOSEPHSON,
discussed HB 278. She stated that the bill extended the
termination date of the Board of Certified Real Estate
Appraisers. She shared that the Board of Certified Real
Estate Appraisers came to be after the housing market crash
in the early 2000s. There was a federal mandate requiring
states to regulate real estate appraisers, so the state
board served to fulfill the federal requirement. The board
was responsible for licensing, training, regulating, and
license enforcement of real estate appraisers in the state.
She stated that the board currently managed 261 licensees.
The board received a full eight-year recommendation from
Legislative Audit. Additionally, there were additional
audits from the federal audits in 2005 and 2007. She stated
that she had received no opposition to the board extension.
KRIS CURTIS, LEGISLATIVE AUDITOR, ALASKA DIVISION OF
LEGISLATIVE AUDIT, addressed the document "A Sunset Review
of the Department of Commerce, Community, and Economic
Development, Board of Certified Real Estate Appraisers
(board)," (copy on file). She stated that the audit
included a background information section beginning on page
3, which explained the regulatory oversight structure for
the appraisal industry established by the federal
government. The framework involved private entities that
set appraisal standards and qualification criteria for
licensing. It included state boards that certified and
licensed real estate appraisers, and it included federal
entities that regulated the industry. She stated that the
Federal Appraisal Subcommittee was responsible for
monitoring state licensing boards and enforcing standards.
She explained that the information was included in the
background section of the audit, because it was important
to highlight that the board was subject to external
oversight outside of the sunset process. The external
oversight included onsite compliance reviews of the board.
She stated that the additional oversight factored into the
recommended term of extension. She noted that page 7 held
the report conclusions. She stated that it was found that
the board was serving the public's interest by monitoring
certificate holders and licensees; and working to ensure
that only qualified individuals were practicing. She stated
that it was also found that the board developed and adopted
regulations to comply with federal requirements to improve
the real estate appraisal industry and better protect the
public. She stated that there were two recommendations
beginning page 16. The first recommendation was that that
the director continue to improve administrative support to
the board. She shared that through the testing, some
challenges were found to administrative support. She
explained that there was an examination of the entry of the
certificate holders into the national registry, which was a
federal requirement. The audit found that three certificate
holders were entered into the registry incorrectly. Those
entries were correctly, when the division was notified. She
stated that there were five investigative cases tested, and
three of the five had extended unjustified periods of
inactivity. She stated that the periods ranged from 130 to
203 days, so there were some improvements needed in the
timeliness of the investigative process. She remarked that
there was not proof of whether three of the eleven board
meetings held during the audit period were public noticed.
She felt that those findings were not individually
significant, but when considered together it indicated a
need for improved administrative support to the board.
9:52:07 AM
Ms. Curtis looked at page 17, which was the second
recommendation. It was recommended that the division
director, in consultation with the board, reduce fees to
address the surplus. She shared that as of March 2017, the
surplus was $165,000, however it was expected that the
surplus be significantly higher as the renewal period was
June 2017. She remarked that by the end of FY 17 there was
an expected significant surplus. She noted that the board
had asked for a fee analysis from the division management,
but due to competing priorities there was no fee analysis.
As a result, licensees paid a higher than justified fee.
She looked at page 11, which was the standard schedule of
licensing activity. She noted that there were 261 licensees
as of March 2017. The schedule of revenues and expenditures
was on page 12, and the schedule of licensing fees on page
13. She remarked that on page 14, it was discussed that the
board planned to move forward with regulating appraisal
management companies. It would significantly expand the
boards duties in the future. She noted that, despite the
change of duties, she recommended the maximum eight-year
extension, which was in recognition of the additional
federal oversight. The Federal Oversight Committee
performed onsite reviews every two years. The department's
response to the audit was on page 27, which was a
concurrence of the findings and recommendations. The
board's response was on page 29, and they also were in
concurrence. She announced that on the bottom page 31, the
board stated that they had received an attorney general
opinion that concluded in order to move forward with
regulating appraisal management companies, a statutory
change was required. She stated that Legislative Audit did
not agree with that conclusion. She noted additional
auditor comments beginning on page 33, which described the
review of the federal code and state statutes. She remarked
that she did not believe that it was essential to change
statutes, but felt that "it certainly would not hurt to
clarify them."
Co-Chair MacKinnon noted that page 11 gave the up or down
percentages on all the other boards. She wondered whether
the 261 licenses up or down compared to the last auditing
period.
Ms. Curtis replied that the prior sunset audit identified
266 licenses as of March 2013, so that was a slight
increase.
Co-Chair MacKinnon asked if new appraisers were coming
online successfully, or if there were challenges.
Ms. Curtis replied that there was no found challenge in
recruiting and retaining appraisers.
Co-Chair MacKinnon noted that they were held constant from
the previous audit.
Ms. Curtis replied that there were 266 as of March 2013,
which was relatively stable.
Co-Chair MacKinnon asked if Ms. Chambers could speak to
consistent numbers for the board, as there had been a
suggestion that the board made it difficult to process new
appraisers. She wondered about what challenges were
present.
SARA CHAMBERS, DEPUTY DIRECTOR, DIVISION OF CORPORATIONS,
BUSINESS AND PROFESSIONAL LICENSING, DEPARTMENT OF
COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, relayed that
appraisals were a fairly stable industry, and she had not
heard of any inherent challenges to getting licensed.
Co-Chair MacKinnon asked why the fees were not considered
sooner.
Ms. Chambers informed that the fees fell at a time when the
department was juggling multiple priorities, and there had
been a lack of resources. She offered to provide an update.
9:58:27 AM
Co-Chair MacKinnon OPENED public testimony.
DAVID DERRY, CHAIR, BOARD OF CERTIFIED REAL ESTATE
APPRAISERS, KENAI (via teleconference), testified in
support of the bill. He commented that the department had
given support that had allowed for the board. He discussed
the board being subject to annual audits.
Mr. Derry addressed Co-Chair MacKinnon's question about the
challenges to becoming certified. He discussed federal
requirements. The new regulations would be effective May
2018.
Co-Chair MacKinnon CLOSED public testimony.
Vice-Chair Bishop discussed the fiscal note.
Co-Chair MacKinnon queried the board's proposed fee
schedule that what was proposed from the department. She
noted that the board proposed $179,923, and the division
proposed $264,823. She wondered why there was a difference
in proposals.
Ms. Chambers wondered whether that query was held in the
audit.
10:04:53 AM
AT EASE
10:05:46 AM
RECONVENED
Co-Chair MacKinnon remarked that Ms. Chambers needed time
to research the difference.
HB 278 was HEARD and HELD in committee for further
consideration.