Legislature(2003 - 2004)
03/24/2004 01:39 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 464
An Act extending the termination date of the Board of
Certified Real Estate Appraisers.
PAT DAVIDSON, LEGISLATIVE AUDITOR, LEGISLATIVE AUDIT
DIVISION, explained that the Division has done a review of
the Board and has recommended its extension for a period of
four years, to June 30, 2008. The Division has no
operational recommendations for the Board. She noted that
the licensing for real estate appraisers is found in the
federal regulations in response to the congressional 1989
Financial Institutions Reform Recovery and Enforcement Act.
The intent of the Act was twofold: to ensure that federally
related transactions, or mortgages having involvement by
Freddie Mac and Fannie Mae, would be completed by real
estate appraisers who met minimum qualifications; and
secondly, that the appraisals were conducted in compliance
with uniform standards.
Representative Foster asked how often the Board meets. Ms.
Davidson was unsure, but thought it was twice a year.
Representative Foster asked if the fiscal note reflected the
Board's travel and per diem. Ms. Davidson explained that
the Board's costs include licensing, the licensing examiner,
travel and per diem, and costs related to investigative
functions. Representative Foster asked if appraisers pay a
licensing fee each year. Ms. Davidson answered that fees
for occupational licensing are on a biannual basis.
Representative Fate questioned why the revenue of the Board
dropped from $77 thousand to $18 thousand in the year
spanning 2001-2002. Ms. Davidson replied that it reflects
the biannual licensing. The big influx of revenues during
the year of licensing drops during the year it's carried
forward. The Division has analyzed the Board on the
cumulative 2-year basis when considering if the fee covers
its costs. She referred to page 12 of the report (copy on
file), noting that the schedule shows a cumulative deficit
for the Board. Ms. Davidson pointed out that the renewal
fees have been increased, which is expected to increase
revenues by 45% to sufficiently address the deficit.
RICK URION, DIRECTOR, DIVISION OF OCCUPATIONAL LICENSING,
DEPARTMENT OF COMMERCE & ECONOMIC DEVELOPMENT, commented
that the bill extends the Board. He brought up a
housekeeping amendment for the committee's consideration.
Co-Chair Harris pointed out that only the Co-Chairs had
copies of the amendment. Co-Chair Williams advised that
amendments must be provided to the committee the day before
the hearing on a bill.
Mr. Urion explained that the bill's sponsor didn't know that
the bill would be heard in the committee today.
Co-Chair Harris MOVED to ADOPT Amendment 1. Co-Chair
Williams OBJECTED.
Co-Chair Williams announced that HB 464 would be moved to
the bottom of the calendar.
HOUSE BILL NO. 464
An Act extending the termination date of the Board of
Certified Real Estate Appraisers.
Co-Chair Williams noted the previous motion on Amendment #1,
and he asked Mr. Urion to explain the amendment.
RICK URION, DIRECTOR, DIVISION OF OCCUPATIONAL LICENSING,
DEPARTMENT OF COMMERCE & ECONOMIC DEVELOPMENT, explained
that the proposed amendment attempts to solve a long-
standing issue with the Department. The amendment was in a
bill that the Governor intended to introduce last session
before other legislation assumed priority. The amendment is
not currently in a bill. Mr. Urion said that the Division
of Occupational Licensing is mandated by law to charge fees
for any profession that it licenses, and the fees cover the
costs of regulation. It has been assumed that fines for
professional violations are included in those fees, but Mr.
Urion pointed out that the law does not allow for this.
Although the collected fines have always been divided among
occupations, the Division has been told that it cannot use
those fines under the current ethics law, and that it may be
in violation of that law.
Mr. Urion continued explaining that the proposed amendment
allows the division to continue its practice, and every
licensed professional in the state supports it. He
explained that disciplinary action involving hearing
officers, investigators and attorney generals is one of the
biggest expenses borne by each profession. He said that it
only seems fair that the professions should also reap the
benefits of the fines arising from those actions. He noted
that the annual average is $66 thousand, and the licensing
of thousands of people reaps a tiny benefit. The amendment
would allow the Division to take the fines it collects from
a profession and add them to the fees charged for the
license.
Amendment #1 reads:
23-LS1706\A.1
Mischel
A M E N D M E N T
OFFERED IN THE HOUSE BY REPRESENTATIVE SAMUELS
TO: HB 464
Page 1, line 2, following "Appraisers":
Insert "; and relating to occupational licensing fees
and receipts"
Page 1, following line 3:
Insert new bill sections to read:
"* Section 1. AS 08.01.065(c) is amended to read:
(c) The [EXCEPT AS PROVIDED IN (f) - (i) OF THIS
SECTION, THE] department shall establish fee levels
under (a) of this section so that the total amount of
fees, together with the fines and penalties collected
for all occupations regulated by a board [AN
OCCUPATION] approximately equals the total actual
[REGULATORY] costs of the board and the department for
all occupations regulated by that board [FOR THE
OCCUPATION]. If the department regulates more than one
occupation under another chapter of this title, the
department shall establish the fee levels so that the
total amount of fees, together with the fines and
penalties collected by the department for all
occupations regulated by the department under that
chapter, approximately equals the total actual costs of
the department for all of the occupations regulated by
the department under that chapter. The department
shall annually review each fee level to determine
whether the [REGULATORY] costs for the relevant
occupations [OF EACH OCCUPATION] are approximately
equal to the fines, penalties, and fee collections
related to those occupations [THAT OCCUPATION]. If the
review indicates that the fines, penalties, and [AN
OCCUPATION'S] fee collections [AND REGULATORY COSTS]
are not approximately equal to the costs for the
relevant occupations, the department shall calculate
fee adjustments and adopt regulations under (a) of this
section to implement the adjustments. In January of
each year, the department shall report on all fee
levels and revisions for the previous year under this
subsection to the office of management and budget. If
a board regulates an occupation or group of occupations
covered by this chapter, the department shall consider
the board's recommendations concerning occupational
[THE OCCUPATION'S] fee levels and [REGULATORY] costs
before revising fee schedules to comply with this
subsection. [IN THIS SUBSECTION, "REGULATORY COSTS"
MEANS COSTS OF THE DEPARTMENT THAT ARE ATTRIBUTABLE TO
REGULATION OF AN OCCUPATION PLUS
(1) ALL EXPENSES OF THE BOARD THAT REGULATES
THE OCCUPATION IF THE BOARD REGULATES ONLY ONE
OCCUPATION;
(2) THE EXPENSES OF A BOARD THAT ARE
ATTRIBUTABLE TO THE OCCUPATION IF THE BOARD REGULATES
MORE THAN ONE OCCUPATION.]
* Sec. 2. AS 08.01.065(f) is amended to read:
(f) [NOTWITHSTANDING (c) OF THIS SECTION, THE
DEPARTMENT SHALL ESTABLISH FEE LEVELS UNDER (a) OF THIS
SECTION SO THAT THE TOTAL AMOUNT OF FEES COLLECTED BY
THE STATE BOARD OF REGISTRATION FOR ARCHITECTS,
ENGINEERS, AND LAND SURVEYORS APPROXIMATELY EQUALS THE
TOTAL REGULATORY COSTS OF THE DEPARTMENT AND THE BOARD
FOR ALL OCCUPATIONS REGULATED BY THE BOARD.] The
department shall set [THE] fee levels under (a) of this
section [FOR THE ISSUANCE AND RENEWAL OF A CERTIFICATE
OF REGISTRATION ISSUED UNDER AS 08.48.211] so that the
fee levels are the same for all occupations regulated
by the State Board of Registration for Architects,
Engineers, and Land Surveyors under AS 08.48 [BOARD].
* Sec. 3. AS 08.01.065(g) is amended to read:
(g) [NOTWITHSTANDING (c) OF THIS SECTION, THE
DEPARTMENT SHALL ESTABLISH FEE LEVELS UNDER (a) OF THIS
SECTION SO THAT THE TOTAL AMOUNT OF FEES COLLECTED BY
THE DEPARTMENT FOR ALL OCCUPATIONS REGULATED UNDER
AS 08.11 APPROXIMATELY EQUALS THE TOTAL REGULATORY
COSTS OF THE DEPARTMENT FOR ALL OCCUPATIONS REGULATED
BY THE DEPARTMENT UNDER AS 08.11.] The department
shall set [THE] fee levels under (a) of this section
[FOR THE ISSUANCE AND RENEWAL OF LICENSES ISSUED UNDER
AS 08.11] so that the fee levels are the same for all
occupations regulated by the department under AS 08.11.
* Sec. 4. AS 08.01.065(i) is amended to read:
(i) [NOTWITHSTANDING (c) OF THIS SECTION, THE
DEPARTMENT SHALL ESTABLISH FEE LEVELS UNDER (a) OF THIS
SECTION SO THAT THE TOTAL AMOUNT OF FEES COLLECTED BY
THE DEPARTMENT OF COMMUNITY AND ECONOMIC DEVELOPMENT
FOR SPECIALTY CONTRACTORS, HOME INSPECTORS, AND
ASSOCIATE HOME INSPECTORS APPROXIMATELY EQUALS THE
TOTAL REGULATORY COSTS OF THE DEPARTMENT FOR THOSE
THREE REGISTRATION CATEGORIES.] The department shall
set [THE] fee levels under (a) of this section [FOR THE
ISSUANCE AND RENEWAL OF A CERTIFICATE OF REGISTRATION
ISSUED UNDER AS 08.18] so that the fee levels are the
same for specialty contractors, home inspectors, and
associate home inspectors under AS 08.18 [ALL THREE OF
THESE REGISTRATION CATEGORIES] and so that the fee
level for a home inspector with a joint registration is
not different from the fee level for a home inspector
who does not have a joint registration. In this
subsection, "joint registration" has the meaning given
in AS 08.18.171."
Page 1, line 4:
Delete "Section 1"
Insert "Sec. 5"
Page 1, following line 6:
Insert new bill sections to read:
"* Sec. 6. AS 37.05.146(c)(24) is amended to read:
(24) receipts of the Department of Community
and Economic Development under AS 08.01.065 and from
fines and penalties collected in licensing and
disciplinary actions for occupations under AS 08.01.010
[AS 08.01.065(a), (c), AND (f)];
* Sec. 7. AS 08.95.920 is repealed."
Co-Chair Harris questioned how it would differ from the
courts' decision that their collected fines go directly to
the General Fund to be appropriated by the Legislature.
TAPE HFC 04 - 66, Side B
Co-Chair Harris continued, asking for clarification that
when the Division imposed a fine, the fine returns for use
by the Division rather than appropriation by the
Legislature. Mr. Urion affirmed.
PAT DAVIDSON, LEGISLATIVE AUDITOR, LEGISLATIVE AUDIT
DIVISION, replied that Mr. Urion brought up an issue that
concerns the Legislative Audit Division relating to
including the fines. She noted that there are a couple of
boards with fewer than 30 licensees, and a fine of a couple
thousand dollars spread across only 25 or 30 licensees would
mean a benefit of only a couple hundred dollars to the board
which decided to impose the fine. The concern is that a
combination of a certain board and a certain fine could
raise questions about the Executive Branch Ethics Act.
With regard to the concern about other statutes, Ms.
Davidson said it is her understanding that imposing a fine
must take place through a due process conducted by an
unbiased individual. Otherwise, it may end up in court on
the allegation that the board can't impose a fine that is so
high that the board may appear to benefit from it. Ms.
Davidson said that those are the only arguments she has
heard with respect to including the fines in the calculation
of the fees.
Co-Chair Harris asked what the fines are imposed for. Mr.
Urion replied that it's varied and includes unlicensed
practice and drug and alcohol abuse. In response to a
question by Co-Chair Harris, Mr. Urion answered that fines
are not imposed for criminal activity. The people who are
licensed pay enforcement.
Co-Chair Harris asked if there is an unbiased or neutral way
these fines could be appealed. Mr. Urion explained that a
hearing officer makes the decision, the board says "yea" or
"nay," and the defendant can accept it, or reject it and
take it to the next higher court.
Co-Chair Harris asked who pays for the legal fees if it is
taken to the next higher court, and if the state reimburses
the legal costs if the person is found innocent. Mr. Urion
replied that to his knowledge, it has never happened before.
In response to a question by Co-Chair Harris, Mr. Urion
replied that the cases taken to higher court have never
prevailed. The hearing officers' decisions are extremely
well written and thorough. He gave the example of a recent
$20 thousand fine in the real estate industry, and said that
the defendant accepted it. He stated that the infraction
had been going on for years, and it was the highest fine
ever levied.
In response to a question by Co-Chair Harris. Mr. Urion
explained that Amendment #1 applies to all the boards and
commissions of every profession.
Representative Hawker commented that the bill seems to
change the character of how the state assesses occupations,
from the individual to the collective. He asked if that is
the intent. Mr. Urion replied that it is current practice,
and would allow an apprentice to pay less than a licensee.
Representative Hawker thought that the bill indicates that
occupations are regulated by an individual board, and would
have to meet the costs of that board. Mr. Urion said that is
true.
Representative Stoltze expressed concern that the amendment
has merit as a stand-alone bill, and he didn't want to see
the bill extending the real estate appraisers bogged down
with this amendment when the administration has the ability
to introduce it through the Rules Committee. It's a policy
consideration.
Co-Chair Williams stated that it was not his intention to
move the bill today.
Mr. Urion responded to Representative Stoltze, explaining
that he had brought the amendment before Labor & Commerce
Committee, and the Committee wanted to move the bill and let
Finance make the decision. He would have introduced it in a
bill if he could have.
Co-Chair Harris asked how long the bill has been sitting in
Co-Chair Williams's office. Mr. Urion was unsure. Co-Chair
asked why the amendment was not incorporated into a Finance
Committee Substitute through the office of the Co-Chairman.
Mr. Urion apologized, and said that he tried to do it
through the sponsor who was wary of killing the real estate
appraisers bill. He asserted that this is an appropriate
vehicle and title, and that every licensed profession
supports the amendment.
Co-Chair Williams expressed concern that the committee
members did not have the amendment earlier, and he suggested
that Mr. Urion talk to the Finance members individually.
HB 464 was heard and HELD in Committee for further
consideration.
ADJOURNMENT
The meeting was adjourned at 2:40 P.M.
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