Legislature(2011 - 2012)BELTZ 105 (TSBldg)
02/02/2012 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB122 | |
| SB138 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 122 | TELECONFERENCED | |
| *+ | SB 138 | TELECONFERENCED | |
| + | TELECONFERENCED |
SB 122-REAL ESTATE TRANSFER FEES/TITLE PLANTS
1:41:45 PM
CHAIR EGAN announced SB 122 to be up for consideration.
1:41:56 PM
DANA OWEN, staff to the Senate Labor and Commerce Committee,
said they received a committee substitute (CS) for SB 122 from
the Community and Regional Affairs Committee, which contains
only the second section of the original bill. So, he wanted to
explain what that was about.
He explained that currently in Alaska law it is possible to have
a transfer fee covenant when a title is exchanged on a piece of
land. These kinds of covenants have been outlawed in 41 other
states. Interestingly the first instance he could find of that
being prohibited is in New York where the courts outlawed it and
termed it "a vestige of feudalism."
MR. OWEN said a real estate transfer fee covenant is a
covenant attached to a deed that mandates a fee be paid back to
that first owner who put the requirement into the title every
time the title changes hands. It seems like good public policy
to outlaw them, and that's what this bill would do.
He said the title community in Alaska is deeply divided over the
provisions in the first section of the bill, and he is still
searching for the answer. Linda Hall, the Division of Insurance
director had been in conversations with them and himself to try
and find some kind of accommodation, but they were not ready for
that today.
SENATOR GIESSEL asked if they are dealing with version B and had
referenced the original bill as well.
MR. OWEN answered yes.
1:44:53 PM
SENATOR MENARD joined the committee.
1:45:00 PM
At ease from 1:45:00 to 1:45:44 p.m.
1:45:44 PM
SENATOR GIESSEL moved to adopt CSSB 122(CRA), version 27-
LS0789\B.
CHAIR EGAN objected for discussion purposes.
SENATOR DAVIS asked Ms. Hall to explain the bill to her.
1:47:30 PM
MR. OWEN clarified that the bill before the committee is the
Senate Community and Regional Affairs (CRA) version that took
out the first section of the original bill. The reason he
brought it up is that changes would be forthcoming, but he
didn't know what they would be.
LINDA HALL, Director, Division of Insurance, Department of
Commerce, Community and Economic Development (DCCED), explained
that the CS, version B, is identical to section 2 in version A.
That made a difference in the length of time title records have
to be kept. There is some discussion going on about what an
appropriate amount of time is, so section 1 was removed leaving
only section 2 at this point. She thought section 2 was good
public policy, because it does away with what would be an
additional cost for certain consumers every time a property
changes hands.
MS. HALL said she supported this version of the bill, but if it
changes again she would have to reconsider.
CHAIR EGAN, on behalf of the entire Labor and Commerce
Committee, thanked Ms. Hall for all her years of service to the
State of Alaska and said they really hate to see her announce
her retirement.
MS. HALL thanked him for the compliment.
1:50:53 PM
CRYSTAL PELTOLA, Vice President and General Manager, Alaska USA
Title Agency, Anchorage, said they started the company four
years ago and have five branches throughout the state. She
supported CSSB 122 (CRA) as written. She said prohibiting the
transfer fee tax is good for consumers.
SENATOR GIESSEL asked if she was revoking her letter of January
24 that expressed concerns and opposition to SB 122, the first
version.
MS. PELTOLA replied yes, and added if section 1 is reinserted
she would still oppose it.
1:52:51 PM
RAYMOND DAVIS, Vice President, Old Republic National Title
Insurance Company, Seattle, Washington, supported CSSB 122(CRA).
He said Old Republic is licensed to do business in Alaska and
works with Title agencies such as Alaska USA Title Agency and
others. He agreed with Ms. Peltola that prohibiting transfer
fees is good public policy, and a bill like this has been
adopted in most states in the last couple of years. He explained
that for lack of a better phrase, it was kind of a "scheme"
created several years ago by an organization back East that put
packages together for real estate developers who developed some
properties and sold the lots; in fine print the deed said any
time that property was sold in the future they would get
anywhere from .5 percent to 1 percent of the sales price back.
It was "sneaky and unfair."
MR. DAVIS said the current title licensing laws "work just fine
now." Their concern was that any industry proponents of the
legislation were seeking to restrict competition and potentially
put current companies out of business. He said they support open
markets, and licensing should be restricted to issues that
protect the public and not to protect the guys in business
against other people that want to come in.
CHAIR EGAN asked, "So, you're not opposed to us eliminating
section 1 out of the bill?"
MR. DAVIS replied no, section 1 should be eliminated.
1:57:18 PM
SENATOR DAVIS said people who testified are in agreement and
asked if anyone opposed this legislation.
CHAIR EGAN replied there was no opposition right now; but the
committee normally holds a bill after hearing it the first time
and he was going to hold SB 122 for now.