Legislature(1993 - 1994)
02/17/1994 03:00 PM House 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
HOUSE LABOR AND COMMERCE
STANDING COMMITTEE
Febraury 17, 1994
3:00 p.m.
MEMBERS PRESENT
Rep. Bill Hudson, Chairman
Rep. Joe Green, Vice Chair
Rep. Brian Porter
Rep. Bill Williams
Rep. Eldon Mulder
Rep. Joe Sitton
Rep. Jerry Mackie
MEMBERS ABSENT
None
COMMITTEE CALENDAR
SB 186: "An Act relating to state agency publications."
PASSED OUT OF COMMITTEE
*HB 410: "An Act relating to real estate appraisers and the
Board of Certified Real Estate Appraisers."
PASSED OUT OF COMMITTEE
(* First public hearing.)
WITNESS REGISTER
DUGAN PETTY, Director
Division of General Services
Department of Administration
P.O. Box 110210
Juneau, Alaska 99811-0210
465-2250
Position Statement: Answered questions on SB 186
RESA JERREL, Lobbyist
National Federation of Insurance Brokers
9159 Skywood Lane
Juneau, Alaska 99801
789-4278
Position Statement: Supported SB 186
WENDY MULDER, Legislative Liaison
Department of Commerce and Economic Development
P.O. Box 110800
Juneau, Alaska 99811-0800
465-2500
Position Statement: Presented HB 410
ALFRED FERRARA
1116 Shady Lane
Anchorage, Alaska 99516
561-1031
Position Statement: Supported HB 410
(Spoke via teleconference)
CHRIS ANDERSON
Real Estate Appraisers Board
19220 McCrary Rd.
Eagle River, Alaska 99577
694-9613
Position Statement: Supported HB 410
(Spoke via teleconference)
CRAIG INGHAM
Alaska Bankers Association
P.O. Box 73880
Fairbanks, Alaska 99707
452-1751
Position Statement: Supported HB 410
(Spoke via teleconference)
TERRY LAUTERBACK, Staff Attorney
Legislative Affairs Agency
130 Seward St., Ste 402
Juneau, Alaska 99801-2105
465-2450
Position Statement: Answered questions on HB 410
PREVIOUS ACTION
BILL: SB 186
SHORT TITLE: STATE AGENCY PUBLICATIONS
SPONSOR(S): SENATOR(S) FRANK
JRN-DATE JRN-PG ACTION
04/07/93 1221 (S) READ THE FIRST TIME/REFERRAL(S)
04/07/93 1221 (S) STATE AFFAIRS
04/14/93 1354 (S) STA RPT 3DP
04/14/93 1354 (S) ZERO FISCAL NOTE (ADM)
04/14/93 (S) STA AT 09:00 AM BUTROVICH
ROOM 205
04/14/93 (S) MINUTE(STA)
04/14/93 (S) MINUTE(RLS)
04/26/93 1761 (S) RULES 4 CALENDAR 4/26/93
04/26/93 1762 (S) READ THE SECOND TIME
04/26/93 1762 (S) AM NO 1 ADOPTED UNAN CONSENT
04/26/93 1763 (S) AM NO 2 ADOPTED UNAN CONSENT
04/26/93 1764 (S) AM NO 3 FAILED Y10 N10
04/26/93 1764 (S) ADVANCE TO THIRD READING
FAILED Y11 N9
04/26/93 1764 (S) THIRD READING 4/27 CALENDAR
04/27/93 1842 (S) READ THE THIRD TIME SB 186 AM
04/27/93 1842 (S) PASSED Y20 N-
04/27/93 1842 (S) DONLEY NOTICE OF RECONSID
ERATION
04/28/93 1891 (S) RECONSIDERATION NOT TAKEN UP
04/28/93 1893 (S) TRANSMITTED TO (H)
05/06/93 1661 (H) READ THE FIRST TIME/REFERRAL(S)
05/06/93 1661 (H) L&C, STATE AFFAIRS,JUDICIARY,
FINANCE
02/17/94 (H) L&C AT 03:00 PM CAPITOL 17
BILL: HB 410
SHORT TITLE: REAL ESTATE APPRAISERS
SPONSOR(S): LABOR & COMMERCE BY REQUEST
JRN-DATE JRN-PG ACTION
01/28/94 2177 (H) READ THE FIRST TIME/REFERRAL(S)
01/28/94 2177 (H) L&C, STATE AFFAIRS, FINANCE
02/17/94 (H) L&C AT 03:00 PM CAPITOL 17
ACTION NARRATIVE
TAPE 94-13, SIDE A
Number 001
SECRETARY'S NOTE: DUE TO TECHNICAL DIFFICULTIES THE FIRST
10 MINUTES OF THIS MEETING WAS NOT RECORDED.
CHAIRMAN HUDSON convened the meeting at 3:10 p.m.
SB 186 - STATE AGENCY PUBLICATIONS
DUGAN PETTY, Director, Division of General Services,
Department of Administration, testified that the Department
had no problem with SB 186.
RESA JERREL, National Federation of Independent Business,
testified of her associations support for SB 186.
REP. MULDER moved SB 186 with individual recommendations and
fiscal note. No objections were heard; it was so ordered.
HB 410 - REAL ESTATE APPRAISERS
Number 100
WENDY MULDER, Legislative Liaison, Department of Commerce
and Economic Development, read a sponsor statement for the
record as follows:
The U.S. statutes enacted the Financial Institutions Reform,
Recovery and Enforcement Act of 1989 (FIRREA). This act
requires federal lending programs to have the appraisal
certified by a state certified appraiser.
Initially, FIRREA set the number of classroom instruction
hours required for residential appraisers at 75. In 1990,
the Alaska Legislature enacted legislation which complied
with FIRREA standards. However, in 1992 FIRREA increased
the minimum required classroom hours to 105. Again in 1994
they increased the minimum number of hours to 120.
Officials from the Federal Financial Institutions
Examinations Council (FFIEC) audited the Alaska certifying
program. They granted the Alaska board an extension to meet
the new requirements through December 31, 1993.
The FFIEC has advised that appraisers who do not meet 120
hours of training will no longer be recognized as certified
appraisers and, therefore, will not be qualified to conduct
appraisals in which federally financed loans are involved.
Examples of federally financed programs include such
programs as federal National Mortgage Association, the
Federal Home Loan Mortgage Corporation, and the Resolution
Trust Corporation. These requirements may extend to loans
provided through FDIC insured banks and credit unions.
Currently, there are 73 residential real estate appraisers
and 73 general real estate appraisers licensed by the Alaska
Real Estate Appraiser Board. The general real estate
appraisers do meet FIRREA requirements and are recognized
for federal appraisals; however, general real estate
appraisers work with commercial properties and it is very
unlikely that they will begin conducting residential
appraisals. The 73 residential appraisers are no longer in
compliance with FIRREA and may not be recognized as
certified appraisers if the FFIEC removes Alaska's
certification.
There were approximately 12,000 residential loan closures
this past year in Alaska (this figure includes refinancing).
It is unclear how many of these loans in Alaska do involve a
federal program and it will only take a few loans in this
category to create a statewide crisis.
The proposed changes in HB 410 will remove the reference to
a specific number of hours required for certification in the
statute and will allow the board to set the minimum
requirements in regulation. By allowing the minimum number
of hours to be set in regulation, the Alaska Real Estate
Appraiser Board will be able to make changes as they occur
to meet the FIRREA requirements.
Number 150
REP. MULDER asked Mr. Ferrara if it was true that one of the
requirements of being a trainee was that the applicant must
do two years work in real estate.
Number 175
ALFRED FERRARA, testifying via teleconference from
Anchorage, clarified that it was actually two years in full
time appraisal work under the supervision of a certified
appraiser.
Number 182
CHAIRMAN HUDSON asked if there was any kind of reciprocity
between the states for real estate appraisers.
Number 200
MR. FERRARA explained that they do have a provision for
licensure by endorsement. This means that if you are
certified in another state you can provide proof of that
licensure and prove any additional experience necessary to
fulfill Alaska's requirements.
Number 215
CHRIS ANDERSON, member of the Real Estate Appraisers Board,
testified via teleconference in support of HB 410. She
emphasized the importance of HB 410 to the banking
community. Ms. Anderson stated that a majority of the loans
made in Alaska are federal related transactions and the
lending community is in a position of selling these loans on
the secondary market. The appraisers within the state do
need to be certified in order to be able to deal with
federal loans.
Number 255
CRAIG INGHAM, Alaska Bankers Association, testified via
teleconference that his organization supports HB 410 with
the exception of the board having the regulatory powers that
would allow for regulations that would change what was
required by federal law. Mr. Ingham thought more stringent
regulations would have the effect of cutting down on the
number of appraisers we currently enjoy.
REP. GREEN asked if there was a possibility that by passing
HB 410 we could be setting up a situation that would allow
the board to further restrict the number of appraisers in
the state.
Number 311
MR. INGHAM responded that was one of the Bankers
Association's main concerns. Depending on the makeup, the
requirements could be tailored to be so stringent to
eliminate many qualified appraisers.
REP. GREEN suggested that perhaps the bill should be changed
from "required by the board to meet federal standards" so
that the bill just read "required by the board."
Number 315
MR. INGHAM agreed.
Number 326
REP. SITTON explained that the regulatory process being a
public process is the arena for this particular discussion.
REP. SITTON indicated his support for HB 410.
Number 331
REP. PORTER asked if there was some balance that could be
reached between not exceeding federal standards but allowing
for some local applications.
Number 342
MR. INGHAM answered that he didn't think that was possible.
He stated the reason was that the purpose of an appraisal
was to arrive at a fair market value of a property.
Number 368
REP. PORTER stated his major concern was turning over
control to an agency that is far away from here.
Furthermore, once something is ensconced in federal law, it
is difficult to change it.
Number 375
MR. INGHAM responded that if the state doesn't comply with
the minimum federal standards for certification, the
appraisers will no longer be certified and the banks will
not be able to process loans that involve federal money.
This could shut down the real estate market.
Number 400
CHAIRMAN HUDSON stated that a home that meets the Alaska's
craftsmen standards and is certified through that process is
given a better loan to value rate.
Number 410
MR. INGHAM stated that as a banker he would look at the
appraisal as well as any unique qualities the home may have,
including energy efficiency.
REP. MULDER stated that the committee does not want to limit
the field, so he suggested a conceptual amendment that would
allow some flexibility within the board to structure the
hours to fit the needs and uniqueness of Alaska.
Number 455
TERRY LAUTERBACK, Legislative Legal Counsel, Division of
LEgal Services, Legislative Affairs Agency, asked if the
committee was only talking about classroom hours or were
there other minimum qualifications under federal law we are
concerned about here.
Number 457
MR. FERRARA responded that the amendments to the regulations
only deal with classroom hours, no other requirements.
Number 462
MS. LAUTERBACK followed up with her concern about complying
with FIRREA, not with HB 410.
Number 480
REP. SITTON moved Amendment 1 to HB 410, page 1, line 12, to
read, "adopt regulations necessary to minimally comply with
requirements of," and so forth.
Number 500
MS. LAUTERBACK pointed out that some other federal agency
may have set out some other qualifications or requirement
higher than FIRREA. Should the committee guard against this
possibility?
Number 511
REP. MULDER asked Mr. Ferrara if there were other regulatory
agencies affecting our credential procedures.
Number 520
MR. FERRARA stated it does exist in certain agencies that
have some additional experience requirements to suit their
particular needs.
TAPE 94-13, SIDE B
Number 001
REP. PORTER moved the following amendment starting on line
12 of page 1, to read "adopt regulations necessary to comply
with but not exceed the requirements of 12 U.S.C. 3331-3351
(Title XI Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 or other Federal Law."
Number 026
MR. FERRARA asked if the committee could include the word
"education" to clarify requirements in the amendment above.
Number 052
REP. PORTER clarified what he thought the previous speaker
wanted. He
MS. LAUTERBACK suggested the committee leave the language in
the bill as it is presently and add a new sentence to read
on line 1 of page 2, after 1989, "the regulations adopted by
the board for educational requirements under AS 08.87.110
120 and 310 may not be more stringent then the corresponding
minimum requirements for receiving approval of the states
program for certifying real estate appraisers under FIRREA
or other federal law."
Number 110
REP. MULDER restated that it was his concern that the
appraiser field was too restrictive due to the number of
years of experience required over and above federal law.
Number 126
MR. FERRARA stated he believes experience is a necessary
component of the overall picture.
Number 148
MS. LAUTERBACK questioned whether FIRREA had any minimum
requirements for continuing education or only the initial
licensure.
Number 151
MR. FERRARA responded that FIRREA provided that the
Appraisal Qualifications Board would set the requirements
for both prior education and continuing education. At
present, it's 20 hours per two year period and the Alaska
requirements are 40 hours per two year period.
Number 156
MS. LAUTERBACK stated her concern was whether we were
drafting this language only to relate to initial licensure.
Number 180
MR. INGHAM stated he feels we should mirror federal law.
Number 190
CHAIRMAN HUDSON clarified the intent is to not exceed the
federal requirements.
Number 220
MR. FERRARA stated that the Real Estate Appraisal Board
would be very concerned regarding lowering the number of
hours of continuing education. He believed the board would
want to keep the 40 hour requirement.
Number 240
MR. INGHAM stated that there already is more restrictive
statutes regarding experience. He believed the educational
requirements should not exceed federal standards.
Number 255
REP. SITTON withdrew Amendment 1.
Number 260
MS. LAUTERBACK repeated the amendment.
Number 269
REP. MULDER moved the amendment. No objections were heard;
it was so ordered.
Number 282
REP. MULDER moved to amend HB 410 to include the extension
of the board to June 30, 1998. No objections were heard; it
was so ordered.
Number 306
REP. GREEN moved CSHB 410(L&C) with a zero fiscal note and
individual recommendations. No objections were heard; it
was so ordered.
Number 324
CHAIRMAN HUDSON adjourned the meeting at 4:18 p.m.
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