Legislature(2003 - 2004)
05/04/2004 01:55 PM Senate L&C
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CSHB 418(FIN)-REAL ESTATE COM'N/LICENSEE/HOME INSPECT
CHAIR CON BUNDE announced CSHB 418(FIN) to be up for
consideration. He moved to adopt Amendment 1 and objected for
discussion purposes and explained that Legislative Audit had
suggested having mobile homes fall under real estate licenses,
but that issue is currently under discussion by the Real Estate
Board and doesn't need to be addressed now.
23-LS1548\I.3
A M E N D M E N T
OFFERED IN THE SENATE BY SENATOR BUNDE
TO: CSHB 418(FIN)
Page 3, following line 11:
Insert a new bill section to read:
"*Sec. 6. AS 08.88.470 is amended to read:
Sec. 08.88.470. Findings and payment. At the
conclusion of the commission's consideration of a claim
made under AS 08.88.460, it shall make written findings and
conclusions on the evidence. If the commission finds that
the claimant has suffered a loss in a real estate
transaction as a result of fraud, misrepresentation,
deceit, or the conversion of trust funds or the conversion
of community association accounts under the control of a
community association manager on the part of a real estate
licensee, the commission may award a claimant reimbursement
from the real estate surety fund for the claimant's loss up
to $20,000 [$10,000]. Not more than $20,000 [$10,000] may
be paid for each transaction regardless of the number of
persons injured or the number of parcels of real estate
involved in the transaction."
Renumber the following bill sections accordingly.
SENATOR HOLLIS FRENCH arrived at 1:55 p.m.
CHAIR BUNDE continued explaining that the other concern was
raising the loss limit from $10,000 to $20,000.
MS. JANET SEITZ, staff to Representative Rokeberg, sponsor, said
that he did not support raising the limit because it could
impact the licensing fees for the real estate agents and also he
believes that anything above $10,000 should be taken to court.
SENATOR RALPH SEEKINS asked how many past claims above $10,000
had been taken to court.
MS. SEITZ said that the audit indicated that recent payments
were all above $10,000 and more into the $20,000 range.
CHAIR BUNDE showed the committee a list of states that
administer a real estate recovery fund and Alaska at $10,000 is
joined by four other states. The rest of the states are at
$15,000 - $50,000.
MS. PAT DAVIDSON, Division of Legislative Audit, explained that
her audit found five disbursements out of the surety fund over
the last four years. All the actual claims reported and
substantiated by the hearing officers were in excess of $10,000
and one was in excess of $20,000, which is one of the main
reasons she recommended changing the threshold.
SENATOR SEEKINS asked what the size of the fund is now.
MS. DAVIDSON answered that it was $467,000 at the end of FY03.
It has a floor of $250,000 and was supposed to have a cap of
$500,000 originally. Statute also provides a $125 cap that could
be paid into the surety fund per licensee. Right now it is $60.
In summary, the fund is close to its cap and licensees are
making substantially less than the maximum contributions to the
fund.
SENATOR SEEKINS noted that there didn't seem to be any
foreseeable shrinkage of the size of the fund based on the last
four years history.
MS. DAVIDSON responded that the funds appear to be adequate, but
individual claims run differently and don't have a predictable
nature.
CHAIR BUNDE asked when the $10,000 cap was set.
MS. DAVIDSON answered in 1974 when the fund was first
established in statute. If one used the CPI for inflation, the
cap would be over $30,000.
CHAIR BUNDE asked how much real estate licenses would go up.
MS. DAVIDSON replied that statutes were amended in 1998 limiting
the fee to no more than $125. The current fee is set at $30 per
licensee.
SENATOR FRENCH noted a conflict of interest as his wife is a
real estate professional.
CHAIR BUNDE noted it and then removed his objection to Amendment
1. There were no other objections and Amendment 1 was adopted.
SENATOR SEEKINS moved to pass SCS CSHB 418(L&C) from committee
with individual recommendations and attached fiscal note.
Senators Gary Stevens, Bettye Davis, Seekins and Chair Bunde
voted yea and SCS CSHB 418(L&C) moved from committee.
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