Legislature(2007 - 2008)CAPITOL 17
02/25/2008 03:00 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB413 | |
| HB379 | |
| HB350 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 413 | TELECONFERENCED | |
| *+ | HB 350 | TELECONFERENCED | |
| *+ | HB 379 | TELECONFERENCED | |
HB 413-EXTENDING THE REAL ESTATE COMMISSION 3:04:13 PM CHAIR OLSON announced that the first order of business would be HOUSE BILL NO. 413, "An Act extending the termination date for the Real Estate Commission; and providing for an effective date." ELEANOR WOLFE, Staff, to Representative Kurt Olson, Alaska State Legislature, explained that HB 413 would extend the Real Estate Commission until June 30, 2016. 3:04:49 PM PAT DAVIDSON, Legislative Auditor, Division of Legislative Audit, Alaska State Legislature, stated that the audit recommends extending the termination date of the Real Estate Commission until June 30, 2016. The report contained several recommendations. Although one recommendation is more related to finance, she pointed out one fiscal change that affected the recommendation to increase license fees. The auditors concluded the field audit work in May and recommended increasing fees. However, due to subsequent fiscal activity, it is no longer a valid recommendation. The board is licensing and regulating real estate professionals in a manner to serve the public. The division recommends extending the termination date of the Real Estate Commission. 3:06:06 PM REPRESENTATIVE BUCH inquired as to recommendation two, which identified that a board member had been appointed to the commission without having met the professional experience requirements. MS. DAVIDSON explained that the audit identified that the experience requirement for board member was not met. The statute requires three years of experience and the board member only had two years of experience at the time of appointment. The division addressed a recommendation to the governor's office, who agreed all members of the board should meet statutory requirements and appreciated the division bringing this matter to their attention. She offered that the passage of time has remedied the problem. REPRESENTATIVE BUCH inquired as to whether any legislation passed during the time period when the board member was not eligible to serve, or were any decisions made that are moot. MS. DAVIDSON answered that all formal actions taken by the board would have to be reviewed to determine if the individual's vote mattered. The auditors did not find anything in particular, she related, but that brings up the core of the problem. 3:08:25 PM REPRESENTATIVE GARDNER referred to the audit's prior findings with respect to the Real Estate Surety Fund (RESF). She inquired as to whether pending legislation that would replace the surety fund with a recovery fund would be in keeping with the division's recommendations. MS. DAVIDSON offered she is aware that there is a bill before the legislature, but that she has not done in-depth review of it. In the course of audit, the auditors reviewed the RESF with reference to whether it duplicates activities. The division's concern is whether there is private insurance available for approximately the same value that is available to members. Of 11 western states surveyed, seven states had surety funds and did not require professional liability insurance, she noted. Another two states did not have surety funds nor required professional liability insurance. The remaining two states did not have surety funds but did require professional liability. Annual premiums on these Errors and Omissions (E&O) insurance policies can range from $500 to $5,000 for coverage equal to or more than the coverage provided by the RESF. The auditors did not find a ready market for that type of insurance for the same cost. If you increase the cost to the licensees, that cost is typically passed on to consumers, she opined. The sunset legislation surrounds public interest. Thus, the auditors examined duplicate activity and concluded there is none. She reaffirmed she has not reviewed pending legislation that affects the RESF. REPRESENTATIVE GARDNER inquired as to whether the surety fund is the recourse when the claim is not an error or omission, but is the result of fraud or misrepresentation. 3:12:02 PM MS. DAVIDSON answered that the division examined the cost of a surety bond and cost of E&O insurance as a benchmark. CHAIR OLSON noted that HB 413 extends the Real Estate Commission. Another bill, HB 357 -CLAIMS AGAINST REAL ESTATE LICENSEES is currently before the House Labor and Commerce Standing Committee, but is being held pending additional committee work on issues, he noted. He offered to have Ms. Davidson testify on the other bill when HB 357 is heard. 3:12:43 PM MS. DAVIDSON, in response to Representative Neuman, stated that board membership information is posted to the Department of Commerce, Community, & Economic Development web site, as well as individual professionals who are licensed. However, she was uncertain whether their credentials are also listed. In further response to Representative Neuman, Ms. Davidson offered that the governor's office, Boards and Commissions would have information. Additionally, confirmation hearings are held on appointees to boards, so there may be credential information contained in the committee minutes. She explained that the Real Estate Commission licenses and regulates the occupation, but that there are also professional organizations. 3:15:30 PM CHAIR OLSON, after first determining no one else wished to testify, closed public testimony on HB 413. 3:15:48 PM REPRESENTATIVE NEUMAN moved to report HB 413 out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, HB 413 was reported from the House Labor and Commerce Standing Committee.
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