Legislature(2003 - 2004)
03/03/2004 03:25 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
HB 464-EXTEND BOARD OF REAL ESTATE APPRAISERS CHAIR ANDERSON announced that the next order of business would be HOUSE BILL NO. 464, "An Act extending the termination date of the Board of Certified Real Estate Appraisers." [HB 464 was sponsored by the House Rules Standing Committee by request of the Joint Committee on Legislative Budget and Audit.] Number 0552 REPRESENTATIVE RALPH SAMUELS, Alaska State Legislature, spoke as chair of the Joint Committee on Legislative Budget and Audit. He explained that HB 464 is the result of a legislative audit which recommended that the Board of Certified Real Estate Appraisers be extended into the future. The board's functions are to set standards for appraisers in the real estate industry, oversee examinations by which appraisers are certified, and adopt regulations to make sure that state and federal requirements are satisfied. REPRESENTATIVE SAMUELS noted that the bill extends the board's sunset date to June 30, 2008. He said there were no recommendations from the legislative auditor. He apologized for having to leave the meeting, but noted that Rick Urion or Pat Davidson could answer questions. CHAIR ANDERSON said he was willing to offer an amendment that had been recommended. He asked who could speak to that. REPRESENTATIVE SAMUELS indicated Rick Urion or someone else from the Division of Occupational Licensing could do so. Number 0659 REPRESENTATIVE LYNN disclosed that he is a licensed real estate broker in Anchorage and frequently deals with appraisers. CHAIR ANDERSON requested that he vote on the bill nonetheless. Number 0691 RICK URION, Director, Division of Occupational Licensing, Department of Community & Economic Development (DCED), testified: Basically, we don't have a problem with extending the board. But I just want to tell you, one of the things I've learned in my tenure as director of occupational licensing is, one of the biggest drawbacks to licensing has been boards - board actions or inactions. And I don't mean to be critical of this board or any other board or the people who serve on these boards; they're all good people, ... they're volunteers, and they do good work. But when I look at the board of real estate appraisers, I can tell you that it takes a long time to become a real estate appraiser. There are 187 people licensed in this state as real estate appraisers. ... We have what we call trainee licensees. ... For those people that are licensed as trainees, there are very few of them that ever get to be appraisers. And I think this board needs to look at what it can do to help license people in Alaska. ... There are no education courses required to become [an appraiser] offered in Alaska. There's nothing they can do; they can't go on the web and do it, which they should be able to do. ... And there's lots of people in this state that could teach courses, and I'm sure they would be glad to, if we had some sort of program where it said, "Hey, we want somebody to teach courses." It would help people become licensed real estate appraisers. MR. URION said he'd thought about asking for only a two-year extension, to provide a legislative boost to say, "Please come back with a program." The board only meets once a year, sometimes by teleconference, and he suggested perhaps a boost is needed in order to head in a different direction. He said he supports the bill, but wants the legislature to be aware of the problems he sees. Number 0830 MR. URION turned attention to the proposed amendment, which read [original punctuation provided, but some formatting changed]: Page 1, Line 6 insert sections: * Sec. 2 AS 08.01.065(c) is amended to read: (c) 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 collected for an occupation approximately equals the actual regulatory costs for the occupation. If a board regulates more than one occupation, the department shall establish the fee levels so that the total amount of fees collected by that board and the department including fines and penalties imposed in disciplinary actions, approximately equals the total regulatory costs of the department and the board for all occupations regulated by that board. 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 collected by the department for all occupations regulated by the department under that chapter, including fines and penalties imposed in disciplinary actions, approximately equals the total regulatory costs of the department for all of those occupations. The department shall annually review each fee level to determine whether the regulatory costs of each occupation are approximately equal to fee collections related to that occupation. If the review indicates that an occupation's fee collections and regulatory costs are not approximately equal, 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 covered under this chapter, the department shall consider the board's recommendations concerning 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. 3 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 REGISTATION [sic] 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. 4 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 the section [FOR THE ISSUANCE AND RENEWAL OF LICENSES UNDER AS 08.11] so that the fee levels are the same for all occupations regulated by the department under AS 08.11 *Sec. 5 AS 08.01.065(i) is amended to read: (h) [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 DEPATMENT [sic] FOR THOSE THREE REGISTRATION CATAGORIES [sic].] The department shall set [THE] fee levels under (a) of this section [FOR THE ISSUANCE AND RENEWAL OF A CERTIFICATE OF REGISTRATION ISSUED UNDER 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 CATAGORIES [sic]] 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. *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 civil fines and penalties collected in license disciplinary actions for occupations listed in AS 08.01.010 [AS 08.01.065(a), (c), and (f)]. MR. URION explained that a number of years ago, the Division of Occupational Licensing was directed that all of its licensing programs pay for themselves. Its accounting system is such that whatever the total cost to license any profession is divided by the number of people getting a license. He remarked, "We're a self-sustaining group." He explained: A lot of the cost in licensure is disciplinary actions. Sometimes it's a very high cost for disciplinary actions for the lawyers involved and all the time involved. So that can make the cost of licenses go up. ... And [from] our disciplinary actions, we get fines. ... The people in the profession are charged what it takes to get those fines, but when the fine is collected, ... this amendment before you will let that money be credited to their account. We've been doing this since the beginning of time. But it's been pointed out to us by those legal experts ... that we shouldn't be, because it's not legal to do that. And this merely ... makes legal what ... has been done forever, and lets us take the fines and put them into the pot ... toward the profession ... that regulates that profession that paid the fine. It looks like a long amendment, but that's simply all it does. Number 0940 CHAIR ANDERSON related his understanding that this changes the procedure for fine collection for all state's boards and commissions, not just this bill. He asked whether a fee that's collected goes into a kitty, for example. MR. URION replied that currently it goes into a kitty and then is divided up. He said it's like the license fees, and the fines will all go into that pot. REPRESENTATIVE GATTO asked what the alternative would be, and how it would balance out unless that is done. MR. URION replied that some say the fines should go into the general fund. REPRESENTATIVE GUTTENBERG asked if the Board of Architects, Engineers and Land Surveyors currently has the same fees for all three [professions]. MR. URION answered in the affirmative. REPRESENTATIVE GUTTENBERG said that board has had problems in the past with regard to wanting to raise its own fees in order to pay for things it wants to be done. He asked whether there had been complaints during Mr. Urion's tenure in this regard. MR. URION said no, not that he knew of. REPRESENTATIVE GATTO conveyed his understanding that if excessive fees were collected, they could apply to the following year, thus lowering the cost of licenses. MR. URION agreed that a balance is carried forward, using a two- or three-year average; this might bring the cost of a license down [in a given year]. Number 1143 CHAIR ANDERSON returned attention to the amendment. REPRESENTATIVE LYNN asked if this is an example of "Christmas treeing" whereby an amendment for all licensees in the state [is tacked] onto a bill that addresses only real estate appraisers. MR. URION reiterated that it's a sort of a housekeeping measure that codifies how work has been done for years and will be absolutely nothing new. CHAIR ANDERSON requested that Representative Rokeberg review Sections 3-6 of the bill, in light of his legislative experience, and make sure they are concurrent with the idea of putting fines into an account. Number 1258 REPRESENTATIVE ROKEBERG concurred with the concept. He asked how many boards and commissions would be affected by this provision. He noted that all aren't mentioned. MR. URION replied that 20 licensing boards would be affected. He emphasized the need to overhaul all of the licensing statutes at some point. He said this is a piece of that major project. In response to further questions from Representative Rokeberg, he said the board of real estate appraisers is an example of a board that licenses only one occupation. He also agreed there needs to be a title amendment. REPRESENTATIVE ROKEBERG pointed out what he considered key language in subsection (c) [of the amendment], relating to Section 2 of the bill. Number 1435 CHAIR ANDERSON asked Mr. Urion if the committee could have the legislative drafters provide [a formal version of] the amendment and a title change. He committed to bringing the bill back before the committee on Friday, March 5, 2004. MR. URION agreed. REPRESENTATIVE GATTO asked about the validity of previous appraisals done by an appraiser who is subsequently sanctioned by the board. Can a complaint nullify an appraisal? Number 1522 STEVE TURNER, Chair, Board of Certified Real Estate Appraisers, said he was speaking on his own behalf and noted that he has been an appraiser for the past 27 years. He answered Representative Gatto's question as follows: In our view, one bad appraisal is one bad appraisal. It doesn't negate the other work any more than a physician ... makes a surgical error on one patient, and all of his other patients that he's done surgery on ... have been permanently injured in some way. So it's somewhat the same way. ... His other ... appraisals may be just fine. The state has, on a number of occasions, investigated; in fact, even now I have an ongoing ... review of one appraiser's work because of mistakes they found in some of his work. So ... they do random samplings ... to see that he's [doing] a good job. Number 1580 MR. TURNER turned to the bill itself and said: The governor had his Conference of Alaskans, where he turned to the citizens of the state to provide input into the state's current fiscal crisis. And I think state boards serve that same function. We are a resource available to the state. And this board serves at no cost. At the last meeting, I got an $11 check from the state, and parking cost me [$]10 and I bought my own lunch. And it was an all-day meeting. And we take our job seriously. We, in fact, in the last two years, have revised a number of regulations addressing distance education and online education. And we serve at the request of the governor, and we are volunteers who want to do a good job for the state. And I think it's a resource that should ... continue to be utilized. REPRESENTATIVE ROKEBERG noted a letter in the file from Mr. Turner regarding licensure versus certification. MR. TURNER said that's the response to the audit. He said the office had determined that there were references to "licensed appraisers", when it's actually "certified". He remarked that it's "a bit of a complication in the sense that ... we certainly function under the licensing laws of the state," but said the technical term for licensing appraisers in this state is "certification", which comes from the federal guidelines because there is some federal oversight as to how states set up their regulations. Explaining that there are two categories of appraisers - "licensed" and "certified" - he said: It was determined when this law was written - and I wasn't part of that process - that they would just go with the certification of appraisers, rather than licensing, because it was a higher standard. And rather than have two standards out there, one lower than the other, ... they just settled on the certification ... terminology. REPRESENTATIVE ROKEBERG asked if this caused problems or was simply a case of lack of consistency in the statute. MR. TURNER offered his belief that it was just a lack of consistency. REPRESENTATIVE ROKEBERG asked whether the board wants an amendment to the statute. MR. TURNER said he couldn't speak for the board, but when he'd brought it up to the board, they were supportive of changing the terminology in the statute to "certification". "But we were cautioned that that was (indisc.) with the law, and that we should maybe find a Representative who would propose that for us," he added. "So maybe this is the time." Number 1734 REPRESENTATIVE ROKEBERG agreed it is the time, but expressed the need to know what the board wants. He suggested that the board be polled, for example. MR. TURNER answered, "Technically, because of ex parte communications, I don't know how far I can go with this. I do know that we discussed this and we were in agreement with the change." Acknowledging this caught him off guard, he suggested that the terminology be changed as the audit recommends. CHAIR ANDERSON asked Mr. Turner to analyze it, talk to the board members, and then contact Representative Samuels' office. He read from page 16 of the audit, which stated in part: During our review of the board's composition, we noted AS 08.87.010 requires two of the board members to be "licensed" real estate appraisers in the State of Alaska. In the statutes, real estate appraisers are referred to as being certified, but state law does not use the term licensed. We encourage the department, when proposing sunset extension legislation, to consider amending AS 08.87.010 and make the nomenclature consistent within the statute. CHAIR ANDERSON asked, "Is that something that we should do now?" MR. TURNER answered that if he met with the board, they would just be addressing that issue. "And we did agree that that change should occur," he added. CHAIR ANDERSON again asked Mr. Turner to look into it and get back to Representative Samuels. Number 1829 REPRESENTATIVE ROKEBERG remarked that the statute could provide that "certification of licensure" and "certification" are interchangeable for purposes of qualifying for federal loans, for example. MR. TURNER pointed out that it's a different set of educational standards, however. CHAIR ANDERSON indicated he'd provided a note to Representative Samuels requesting a committee substitute or amendment with a sectional analysis and title change for the committee to look at. He said on its face, he supports it, but it would be nice to have the sectional analysis. CHAIR ANDERSON announced that HB 464 would be held over.
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