Legislature(2017 - 2018)BARNES 124
04/02/2018 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SB155 | |
| SB108 | |
| HB136 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 108 | TELECONFERENCED | |
| + | SB 155 | TELECONFERENCED | |
| + | HB 136 | TELECONFERENCED | |
| + | TELECONFERENCED |
SB 155-REAL ESTATE APPRAISAL MNGMT. COMPANIES
3:18:58 PM
CHAIR KITO announced that the first order of business would be
CS FOR SENATE BILL NO. 155(FIN), "An Act relating to the
registration and regulation of real estate appraisal management
companies; relating to the establishment of fees by the
Department of Commerce, Community, and Economic Development;
relating to the Board of Certified Real Estate Appraisers;
relating to real estate appraisers; and providing for an
effective date."
3:19:17 PM
SENATOR KEVIN MEYER, Alaska State Legislature, presented SB 155
as prime sponsor. He paraphrased the sponsor statement
[included in committee packet], which reads as follows [original
punctuation provided]:
An Appraisal Management Company, or AMC, is an
independent entity through which mortgage lenders
order residential real estate valuation services for
properties on which they are considering extending
loans to homebuyers. AMCs fulfill an administrative
function in the appraisal process, including selecting
an appraiser and delivering the appraisal report to
the lender. Individual appraisers who work for AMCs
provide the actual property valuation services.
AMCs existed well before the 2008 global financial
crisis, and today they play an increasingly important
role as a third-party service provider in the consumer
mortgage process. AMCs have become increasingly
popular by lenders across the country to ensure
federal and state regulatory compliance and
independence between lenders and appraisers as
required by the Dodd-Frank Wall Street Reform and
Consumer Protection Act of 2010. Dodd-Frank requires
that states that choose to regulate this sector of
industry enact comprehensive AMC oversight and
registration programs with an August 10, 2018,
deadline.
SB 155 aims to promote public trust and consumer
protection and establish oversight and enforcement
where there is none today.
SENATOR MEYER added that Alaska is one of only four states
without the legislation in place. He said that states vary
regarding the surety bond. He added that due to the deadline,
the department requested a waiver. The original version of the
proposed bill contains contingency language in the event that
the waiver was not granted. He stated the version would
establish a firm effective date on 1 January 2019, and a
registration date of 1 March 2019.
3:24:11 PM
REPRESENTATIVE STUTES stated there is confusion over whether the
state will be able to transact with "Freddie May and Fannie Mac"
without the proposed legislation in place.
SENATOR MEYER said there is some concern that it would impact
some of the loans.
3:25:00 PM
CHAIR KITO stated the difference in the CS is only to update the
effective date.
3:25:13 PM
REPRESENTATIVE WOOL moved to adopt House committee substitute
(HCS) for CSSB 155(FIN), Version R as the working document.
There being no objection, Version R was adopted as the working
document.
3:25:52 PM
DAVID DERRY, Chair, Alaska Board of Real Estate Appraisers,
testified in support of SB 155. He said the board thinks it is
a key to have the maximum available mortgage for residents in
Alaska, and it provides a basis for oversight of AMCs operating
in Alaska. He said the board requests a change on page 5 line
25 about the control person is effectively established as the
responsible person. The board requesting it be changed to a
certified appraiser in the state of Alaska. He indicated the
original bill version had contained the detail, but it had been
changed. He said the objection to the change is that other
states don't make that requirement. He suggested the mortgage
meltdown 2010 had created problems in other states, while Alaska
wasn't hit with the meltdown. He added it may be why there was
no AMC legislation enacted in the state previously.
REPRESENTATIVE JOSEPHSON asked whether the federal subcommittee
expressed a preference that the designated controlling person be
in Alaska.
MR. DERRY answered that the term controlling person is not even
addressed by the federal subcommittee, so there was no
preference expressed.
REPRESENTATIVE JOSEPHSON asked for confirmation that the federal
subcommittee could not take a position on it in any case.
MR DERRY answered that is correct.
3:32:18 PM
MARK SCHIFFMAN, Real Estate Valuation Advocacy Association
(REVAA), testified in support of SB 155. He stated that there
is not a uniqueness to Alaska that would require that the
designated person be in Alaska.
REPRESENTATIVE WOOL mentioned hiring an extra person and asked
for confirmation that the cost would be spread around programs.
3:34:47 PM
SARA CHAMBERS, Deputy Director, Division of Insurance,
Department of Commerce, Community & Economic Development
(DCCED), answered questions in the hearing on SB 155. She
stated there would be a new person required, but their time
would be charged on a 15-minute increments to this program. She
added that they may work part-time on another program, and that
program would cover those costs.
3:35:42 PM
CHAIR KITO opened public testimony on SB 155. Upon ascertaining
that no one was available to testify, he closed public
testimony.
3:36:20 PM
REPRESENTATIVE STUTES asked whether not enacting the proposed
legislation would prohibit all institution from giving FHA loans
or prohibit only certain institutions from providing federal
loans to Alaskans.
MR. DERRY answered the loans could still be carried out by
lenders. He named banks that don't use AMCs. He said there
would be complications with handling federally related
transactions.
REPRESENTATIVE STUTES asked whether not enacting the proposed
legislation would prohibit certain lending institutes from
lending Freddie Mac, Fannie May, and FHA funds to buyers.
MR. DERRY said the question is what a federally related
transaction is. He said that without AMC legislation, a lender
would not be prohibited from working through a federal loan.
3:40:08 PM
REPRESENTATIVE WOOL asked whether it is up to the bank whether
to use AMCs or not. He asked whether an appraiser can work
independently and for an AMC at the same time.
MR. DERRY answered in the affirmative. He said it is more a
matter of convenience. He said an appraiser could sign up with
an AMC and also serve as an independent appraiser.
3:41:46 PM
REPRESENTATIVE JOSEPHSON moved Amendment 1.
Page 5, line 25:
Delete "a state"
Insert "the state under this chapter"
3:42:45 PM
THOMAS ATKINSON, Staff, Representative Andy Josephson, presented
Amendment 1 on behalf of Representative Josephson. He stated
there are no homegrown AMCs. He said the suggestion is to
support small Alaska businesses rather than larger national
businesses.
CHAIR KITO asked whether the amendment would prohibit national
businesses from using their AMC in Alaska.
MR. ATKINSON answered that it would not. He underlined that the
provision would not require that the designated person be in
Alaska, only that they be certified as an appraiser in Alaska.
He added this could be done through reciprocity.
CHAIR KITO suggested if someone is working on a lending project
and the appraiser does not meet the licensure requirements, the
loan would be on hold until the appraiser met those
requirements.
MR. ATKINSON answered in the affirmative. He deferred to the
invited testimony.
3:45:47 PM
CHAIR KITO asked whether passing the amendment would impede the
ability of the state to allow appraiser to provide services in
the state.
MS. CHAMBERS answered that the amendment would require the
controlling person - the person the board would work with that
is in a management roll - to have understanding and awareness of
Alaska. She explained that person would have decision-making
authority, but that person may or may not be the boots on the
ground appraiser. She said the board stated it was important
to them because of Alaska's unique geography. She clarified
that, should this amendment be adopted, it wouldn't change
anything for the boots on the ground appraiser.
CHAIR KITO asked whether it is anticipated that a large number
of individuals would want licensure through reciprocity.
MS. CHAMBERS said it was estimated about 200 AMCs and it is
expected the controlling person for each of them would be
seeking licensure to operate in the state.
3:50:06 PM
EDRA MORLEDGE, Staff, Senator Kevin Meyer, Alaska State
Legislature, answered questions in the hearing on SB 155 on
behalf of Senator Meyer, prime sponsor. She stated the sponsor
was not supportive of the amendment.
3:51:10 PM
A roll call vote was taken. Representatives Stutes, Josephson,
and Knopp voted in favor of Amendment 1. Representatives Wool,
Birch, Kito, and Sullivan-Leonard voted against it. Therefore,
Amendment 1 failed by a vote of 4-3.
3:52:02 PM
REPRESENTATIVE JOSEPHSON offered Amendment 2.
Page 9, line 31:
Delete "includes"
Insert "means"
Page 10, lines 2 - 3:
Delete "or an officer or director of a real estate
appraisal management company"
Page 10, following line 3:
Insert a new subparagraph to read:
"(B) is an officer or director of a real estate
appraisal management company;"
Reletter the following subparagraphs accordingly.
Page 10, line 7:
Delete "and"
Insert "or"
3:52:12 PM
MR. ATKINSON explained Amendment 2 on behalf of Representative
Josephson. He said without the amendment, a controlling person
would have to meet all three definitions. He said, "It would be
a strange arrangement to be both the owner and employee."
3:53:47 PM
MS. MORLEGE stated the sponsor had no opposition to the proposed
amendment.
3:53:58 PM
CHAIR KITO removed his objection. There being no other
objection, Amendment 2 was adopted.
3:54:09 PM
REPRESENTATIVE JOSEPHSON moved to adopt Amendment 3.
Page 3, line 29, following "chapter":
Insert ";
(4) conduct background investigations as provided in
AS 08.87.135(c)"
Page 5, line 21:
Delete "and"
Page 5, line 23, following "$50,000":
Insert "; and
(9) is owned by persons who meet the requirements
under (c) of this section"
Page 5, following line 31:
Insert a new subsection to read:
"(c) A person who owns at least 10 percent of a real
estate appraisal management company required to be
registered under this chapter must be of good moral
character as determined by the board and shall submit
to a background investigation conducted by the board."
Reletter the following subsections accordingly.
Page 6, line 5:
Delete "of (a) and (b)"
Insert "under (a) - (c)"
3:54:13 PM
MR. ATKINSON explained Amendment 3 on behalf of Representative
Josephson. He said it is clear that if a person owns more than
ten percent of an AMC, they would need a state background check.
He said he had confirmation that it is required in statute.
REPRESENTATIVE WOOL asked about background investigations.
MR. ATKINSON answered that the details of what constitutes
background checks are not stipulated by the state.
REPRESENTATIVE WOOL asked what the state would plan on doing if
it were left to the states.
MR. ATKINSON answered that he thinks they would run the same
background check that they run on appraisers.
3:56:12 PM
MS. MORLEDGE stated that the sponsor is in support of the
amendment.
3:56:29 PM
REPRESENTATIVE WOOL suggested if there were 200 AMCs who wanted
to do business in Alaska, all would have to submit fingerprints
to the state.
MR. ATKINSON answered that he did not know the answer.
3:57:32 PM
MS. CHAMBERS answered that currently for real estate appraisers
the department does not have the authority to require
fingerprints. She said the supposition that those owners of ten
percent or more of an AMC would have to submit an application is
correct.
REPRESENTATIVE WOOL spoke to the fiscal note. He asked whether
the one person to be hired would be able to handle 500
applications with background checks.
MS. CHAMBERS answered that, should this amendment become a part
of the bill, the department may allocate more of that person's
time to the program.
3:59:32 PM
REPRESENTATIVE WOOL objected to Amendment 3.
A roll call vote was taken. Representatives Sullivan-Leonard,
Stutes, Josephson, Birch, and Knopp voted in favor of Amendment
3. Representatives Wool and Kito voted against it. Therefore,
Amendment 3 passed by a vote of 5-2.
4:00:27 PM
REPRESENTATIVE STUTES expressed her concerns about increased
costs as a result of the proposed bill.
4:01:23 PM
REPRESENTATIVE BIRCH stated he supports the proposal.
4:01:53 PM
REPRESENTATIVE WOOL moved to report HCS CSSB 155(FIN), Version
R, as amended, out of committee with individual recommendations
and the accompanying fiscal notes. There being no objection, it
was so ordered.