Legislature(2015 - 2016)BARNES 124
04/14/2016 09:00 AM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SB158 | |
| SB165 | |
| Confirmation Hearing(s)|| Confirmation Hearing(s)|| Marijuana Control Board | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 165 | TELECONFERENCED | |
| += | SB 158 | TELECONFERENCED | |
| += | SB 126 | TELECONFERENCED | |
| + | SB 206 | TELECONFERENCED | |
| + | TELECONFERENCED |
SB 158-REAL ESTATE COMMISSION;BROKER LICENSING
9:13:56 AM
CHAIR OLSON announced that the first order of business would be
SENATE BILL NO. 158, "An Act relating to real estate broker
licensure; relating to the real estate commission; and providing
for an effective date."
9:14:40 AM
WESTON EILER, Staff, Senator Mia Costello, stated that SB 158
was brought forward and introduced by the Senate Labor and
Commerce Standing Committee at the request of the Alaska Real
Estate Commission and the real estate industry.
9:14:57 AM
KONRAD JACKSON, Staff, Representative Kurt Olson, stated that on
4/13/16, the committee moved, but did not adopt, the proposed
House committee substitute for SB 158, Version 29-LS1303\H,
Bruce, 4/5/16, which repeals AS 08.88.172(e), and thereby would
require real estate brokers and salespersons to carry errors and
omissions insurance. In addition, Version H changes the
effective date of Section 4 of the bill to 1/1/18, which allows
a broker applicant currently processing an application to
complete that process.
9:16:20 AM
CHAIR OLSON removed his objection stated on 4/13/16, and Version
H was before the committee.
9:16:34 AM
CHAIR OLSON opened public testimony.
9:16:47 AM
ERROL CHAMPION, Chair, Legislative Issues Committee, Alaska
Association of Realtors, expressed his organization's support
for the proposed House committee substitute for SB 158.
REPRESENTATIVE HUGHES asked how long the Alaska Association of
Realtors has been working to support the proposed legislation,
and whether support was found throughout its membership.
MR. CHAMPION responded that the legislation has been a topic of
discussion for the last 3-4 years. In further response to
Representative Hughes, he said the association does not
represent every real estate licensee, however, it does represent
about 1,600 of 2,400 real estate licensees, and all of the
members of the association have been well informed in this
regard.
9:19:40 AM
TRACI BARICKMAN, Commissioner, Alaska Real Estate Commission,
informed the committee she has been a real estate broker for
over 23 years, and has reviewed and supervised thousands of
transactions and hundreds of licensees. She clarified that not
all real estate licensees are Realtors, and the upgrade to
education as referred to in the bill should not be confused with
continuing education; the bill addresses 15 hours of additional
broker education. Ms. Barickman described the differences in
the industry between transactions of 25 years ago and those in
recent years, and also the differences between what is taught a
new licensee and what understanding is required of a broker,
such as business recovery funds, opening a new office, trust
accounts, operating accounts, supervision, and local, state, and
federal law. She advised that the duties of a broker cannot be
taught in 15 hours, or in 24 months of real estate sales.
9:22:14 AM
MATTHEW STEELE, real estate licensee, expressed his support of
the effective date change [within Version H]. He clarified
that there are two licenses issued by the state, that of a
salesperson and that of a broker; however, to become an
associate broker, one must obtain a broker's license. His goal
is not to start his own firm, but to become an associate broker
working under the supervision of a broker.
9:23:58 AM
ELIJAH WAUGH stated that as a lifelong Alaskan he finds
legislation related to occupational licensing, such as SB 158, a
direct infringement on individual liberty. The bill doubles the
amount of time required to become a broker, and he questioned
why that would provide safety to the general public. In
reality, this policy helps very few and is an example of "crony
capitalism" because it creates barriers to entry, and limits
competition to existing brokers. Mr. Waugh referred to a recent
White House report that showed unnecessary occupational
licensing negatively affects low-income families, immigrants,
and military spouses, and leads to higher unemployment [report
not provided]. At this time, Alaska needs leadership and he
expressed his strong opposition to the bill.
REPRESENTATIVE JOSEPHSON inquired as to whether Mr. Waugh would
attribute to the real estate industry any honest motivation or
merit in its support for further education for brokers.
MR. WAUGH opined the industry seeks to gain from requiring more
education, and there is no problem with the current system.
9:27:14 AM
MARGARET NELSON, real estate licensee, Alaska Real Estate
Alliance, said she works for a very small brokerage and has
worked in the industry for 12 years. She acknowledged that SB
158 has support of the "Alaska boards of Realtors"; however, she
is not a Realtor, and was unaware of the bill. She said she is
opposed to SB 158 because the real estate industry is a
professional service industry, and individuals distinguish
themselves by providing customer service to their clients.
Large brokerage houses support this bill as it eliminates
competition from new brokerages. Ms. Nelson pointed out that
all licensees are independent contractors who are small business
owners and thus are subject to taxes as a small business. More
time spent on unnecessary training restricts time to earn money,
and every two years repetitive continuing education courses are
required. She noted that some real estate licensees who provide
property management services, and manage homeowner's
associations, will pass the cost of additional training along to
homeowners, and brokers who work for engineering companies will
also pass costs along to consumers. Another point is that some
brokers already have undergraduate degrees. Most important is
the impact of the bill on rural Alaska, where applicants will
have to travel for training and not all are suited for
correspondence classes. Ms. Nelson opined that present-day real
estate is not more complex if one seriously wishes to assist
one's client. She urged for more review of the proposed
legislation.
9:32:38 AM
KELSI PULCZINSKI said she is strongly opposed to SB 158 because
the bill doubles the amount of experience required to become a
licensed real estate broker, and doubles the amount of training
required. She stated that the increased requirements are
unnecessary and create barriers to enter into the field; in
fact, unnecessary occupational licensure requirements infringe
on individual liberties, cripple the free market, and perpetuate
crony capitalism. Ms. Pulczinski opined the legislation
addresses a problem that does not exist, and supporters of the
bill will directly benefit by eliminating competition.
Additionally, supporters are the only sources offering the
training. The proposed legislation hurts small business owners,
low-income individuals, and others. She urged for the committee
to better the lives of Alaskans by protecting their
opportunities.
9:34:57 AM
JEREMY PRICE, State Director, Alaska Chapter, Americans for
Prosperity, said he was speaking on behalf of "thousands of
grass-roots activists across the state" to oppose SB 158. The
legislation reduces competition for big brokerage firms and
creates barriers and unnecessary hurdles for those wishing to
become a broker, by those who will benefit. He noted the
demographics of those most negatively affected are low-income,
immigrants, military spouses, and rural individuals. He read
from a report [report not provided]. Mr. Price read from the
public record of the 9/2[/16] minutes of the Alaska Real Estate
Commission [document not provided]. He concluded that members
of the industry, who are trainers, have put the legislation
forward, which is a conflict of interest that has not been given
full attention. Large brokerage firms support the bill because
it suppresses competition; however, the public benefits from
greater competition, and there is legal recourse to deal with
bad actors.
9:37:56 AM
REPRESENTATIVE JOSEPHSON opined that fifteen hours of additional
education is not very much to ask of brokers. He asked whether
one more year of experience would be satisfactory, rather than
two more years.
MR. PRICE stated that legislation is not the best way to prevent
bad actors from becoming licensed brokers. He supported
Representative Josephson's foregoing proposal.
REPRESENTATIVE JOSEPHSON surmised the intent of the legislation
is to strive for improvement in the industry.
MR. PRICE inquired as to whether the industry provided the
committee with evidence of problems which are addressed by the
legislation.
9:40:09 AM
CHAIR OLSON, after ascertaining no one else wished to testify,
closed public testimony.
9:40:52 AM
REPRESENTATIVE KITO moved to report CS for SB 158 out of
committee with individual recommendations and the accompanying
fiscal notes.
[There followed discussion as to the correct version of the
bill.]
9:41:21 AM
REPRESENTATIVE KITO restated the motion to report [House]
committee substitute for SB 158, Version 29-LS1303\H, Bruce,
4/5/16, out of committee with individual recommendations and the
accompanying fiscal notes.
9:41:38 AM
REPRESENTATIVE JOSEPHSON advised that he would not object to
fifteen hours of additional education, however, he suggested
that members may further consider the extension from two years
to four years.
9:42:08 AM
There being no objection, HCS SB 158(L&C) was reported out of
the House Labor and Commerce Standing Committee.