Legislature(1993 - 1994)

02/17/1994 03:00 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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                    HOUSE LABOR AND COMMERCE                                   
                       STANDING COMMITTEE                                      
                        Febraury 17, 1994                                      
                            3:00 p.m.                                          
                                                                               
                                                                               
  MEMBERS PRESENT                                                              
                                                                               
  Rep. Bill Hudson, Chairman                                                   
  Rep. Joe Green, Vice Chair                                                   
  Rep. Brian Porter                                                            
  Rep. Bill Williams                                                           
  Rep. Eldon Mulder                                                            
  Rep. Joe Sitton                                                              
  Rep. Jerry Mackie                                                            
                                                                               
  MEMBERS ABSENT                                                               
                                                                               
  None                                                                         
                                                                               
  COMMITTEE CALENDAR                                                           
                                                                               
  SB 186:   "An Act relating to state agency publications."                    
                                                                               
            PASSED OUT OF COMMITTEE                                            
                                                                               
  *HB 410:  "An Act relating to real estate appraisers and the                 
            Board of Certified Real Estate Appraisers."                        
                                                                               
            PASSED OUT OF COMMITTEE                                            
                                                                               
  (* First public hearing.)                                                    
                                                                               
  WITNESS REGISTER                                                             
                                                                               
  DUGAN PETTY, Director                                                        
  Division of General Services                                                 
  Department of Administration                                                 
  P.O. Box 110210                                                              
  Juneau, Alaska  99811-0210                                                   
  465-2250                                                                     
  Position Statement:  Answered questions on SB 186                            
                                                                               
  RESA JERREL, Lobbyist                                                        
  National Federation of Insurance Brokers                                     
  9159 Skywood Lane                                                            
  Juneau, Alaska  99801                                                        
  789-4278                                                                     
  Position Statement:  Supported SB 186                                        
                                                                               
  WENDY MULDER, Legislative Liaison                                            
  Department of Commerce and Economic Development                              
  P.O. Box 110800                                                              
  Juneau, Alaska  99811-0800                                                   
  465-2500                                                                     
  Position Statement:  Presented HB 410                                        
                                                                               
  ALFRED FERRARA                                                               
  1116 Shady Lane                                                              
  Anchorage, Alaska  99516                                                     
  561-1031                                                                     
  Position Statement:  Supported HB 410                                        
                       (Spoke via teleconference)                              
                                                                               
  CHRIS ANDERSON                                                               
  Real Estate Appraisers Board                                                 
  19220 McCrary Rd.                                                            
  Eagle River, Alaska  99577                                                   
  694-9613                                                                     
  Position Statement:  Supported HB 410                                        
                       (Spoke via teleconference)                              
                                                                               
  CRAIG INGHAM                                                                 
  Alaska Bankers Association                                                   
  P.O. Box 73880                                                               
  Fairbanks, Alaska  99707                                                     
  452-1751                                                                     
  Position Statement:  Supported HB 410                                        
                       (Spoke via teleconference)                              
                                                                               
  TERRY LAUTERBACK, Staff Attorney                                             
  Legislative Affairs Agency                                                   
  130 Seward St., Ste 402                                                      
  Juneau, Alaska  99801-2105                                                   
  465-2450                                                                     
  Position Statement:  Answered questions on HB 410                            
                                                                               
                                                                               
  PREVIOUS ACTION                                                              
                                                                               
  BILL:  SB 186                                                                
  SHORT TITLE: STATE AGENCY PUBLICATIONS                                       
  SPONSOR(S): SENATOR(S) FRANK                                                 
  JRN-DATE    JRN-PG                     ACTION                                
  04/07/93      1221    (S)   READ THE FIRST TIME/REFERRAL(S)                  
  04/07/93      1221    (S)   STATE AFFAIRS                                    
  04/14/93      1354    (S)   STA RPT  3DP                                     
  04/14/93      1354    (S)   ZERO FISCAL NOTE (ADM)                           
  04/14/93              (S)   STA AT 09:00 AM BUTROVICH                        
                              ROOM 205                                         
  04/14/93              (S)   MINUTE(STA)                                      
  04/14/93              (S)   MINUTE(RLS)                                      
  04/26/93      1761    (S)   RULES 4 CALENDAR   4/26/93                       
  04/26/93      1762    (S)   READ THE SECOND TIME                             
  04/26/93      1762    (S)   AM NO  1  ADOPTED UNAN CONSENT                   
  04/26/93      1763    (S)   AM NO  2  ADOPTED UNAN CONSENT                   
  04/26/93      1764    (S)   AM NO  3  FAILED  Y10 N10                        
  04/26/93      1764    (S)   ADVANCE TO THIRD READING                         
                              FAILED Y11 N9                                    
  04/26/93      1764    (S)   THIRD READING 4/27 CALENDAR                      
  04/27/93      1842    (S)   READ THE THIRD TIME SB 186 AM                    
  04/27/93      1842    (S)   PASSED Y20 N-                                    
  04/27/93      1842    (S)   DONLEY NOTICE OF RECONSID                        
                              ERATION                                          
  04/28/93      1891    (S)   RECONSIDERATION NOT TAKEN UP                     
  04/28/93      1893    (S)   TRANSMITTED TO (H)                               
  05/06/93      1661    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  05/06/93      1661    (H)   L&C, STATE AFFAIRS,JUDICIARY,                    
                              FINANCE                                          
  02/17/94              (H)   L&C AT 03:00 PM CAPITOL 17                       
                                                                               
                                                                               
  BILL:  HB 410                                                                
  SHORT TITLE: REAL ESTATE APPRAISERS                                          
  SPONSOR(S): LABOR & COMMERCE BY REQUEST                                      
  JRN-DATE    JRN-PG                     ACTION                                
  01/28/94      2177    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  01/28/94      2177    (H)   L&C, STATE AFFAIRS, FINANCE                      
  02/17/94              (H)   L&C AT 03:00 PM CAPITOL 17                       
                                                                               
                                                                               
  ACTION NARRATIVE                                                             
  TAPE 94-13, SIDE A                                                           
  Number 001                                                                   
                                                                               
  SECRETARY'S NOTE:  DUE TO TECHNICAL DIFFICULTIES THE FIRST                   
  10 MINUTES OF THIS MEETING WAS NOT RECORDED.                                 
                                                                               
  CHAIRMAN HUDSON convened the meeting at 3:10 p.m.                            
  SB 186 - STATE AGENCY PUBLICATIONS                                           
                                                                               
  DUGAN PETTY, Director, Division of General Services,                         
  Department of Administration, testified that the Department                  
  had no problem with SB 186.                                                  
                                                                               
  RESA JERREL, National Federation of Independent Business,                    
  testified of her associations support for SB 186.                            
                                                                               
  REP. MULDER moved SB 186 with individual recommendations and                 
  fiscal note.  No objections were heard; it was so ordered.                   
  HB 410 - REAL ESTATE APPRAISERS                                              
                                                                               
  Number 100                                                                   
                                                                               
  WENDY MULDER, Legislative Liaison, Department of Commerce                    
  and Economic Development, read a sponsor statement for the                   
  record as follows:                                                           
                                                                               
  The U.S. statutes enacted the Financial Institutions Reform,                 
  Recovery and Enforcement Act of 1989 (FIRREA).  This act                     
  requires federal lending programs to have the appraisal                      
  certified by a state certified appraiser.                                    
                                                                               
  Initially, FIRREA set the number of classroom instruction                    
  hours required for residential appraisers at 75.  In 1990,                   
  the Alaska Legislature enacted legislation which complied                    
  with FIRREA standards.  However, in 1992 FIRREA increased                    
  the minimum required classroom hours to 105.  Again in 1994                  
  they increased the minimum number of hours to 120.                           
                                                                               
  Officials from the Federal Financial Institutions                            
  Examinations Council (FFIEC) audited the Alaska certifying                   
  program.  They granted the Alaska board an extension to meet                 
  the new requirements through December 31, 1993.                              
                                                                               
  The FFIEC has advised that appraisers who do not meet 120                    
  hours of training will no longer be recognized as certified                  
  appraisers and, therefore, will not be qualified to conduct                  
  appraisals in which federally financed loans are involved.                   
                                                                               
  Examples of federally financed programs include such                         
  programs as federal National Mortgage Association, the                       
  Federal Home Loan Mortgage Corporation, and the Resolution                   
  Trust Corporation.  These requirements may extend to loans                   
  provided through FDIC insured banks and credit unions.                       
                                                                               
  Currently, there are 73 residential real estate appraisers                   
  and 73 general real estate appraisers licensed by the Alaska                 
  Real Estate Appraiser Board.  The general real estate                        
  appraisers do meet FIRREA requirements and are recognized                    
  for federal appraisals; however, general real estate                         
  appraisers work with commercial properties and it is very                    
  unlikely that they will begin conducting residential                         
  appraisals.  The 73 residential appraisers are no longer in                  
  compliance with FIRREA and may not be recognized as                          
  certified appraisers if the FFIEC removes Alaska's                           
  certification.                                                               
                                                                               
  There were approximately 12,000 residential loan closures                    
  this past year in Alaska (this figure includes refinancing).                 
  It is unclear how many of these loans in Alaska do involve a                 
  federal program and it will only take a few loans in this                    
  category to create a statewide crisis.                                       
                                                                               
  The proposed changes in HB 410 will remove the reference to                  
  a specific number of hours required for certification in the                 
  statute and will allow the board to set the minimum                          
  requirements in regulation.  By allowing the minimum number                  
  of hours to be set in regulation, the Alaska Real Estate                     
  Appraiser Board will be able to make changes as they occur                   
  to meet the FIRREA requirements.                                             
                                                                               
  Number 150                                                                   
                                                                               
  REP. MULDER asked Mr. Ferrara if it was true that one of the                 
  requirements of being a trainee was that the applicant must                  
  do two years work in real estate.                                            
                                                                               
  Number 175                                                                   
                                                                               
  ALFRED FERRARA, testifying via teleconference from                           
  Anchorage, clarified that it was actually two years in full                  
  time appraisal work under the supervision of a certified                     
  appraiser.                                                                   
                                                                               
  Number 182                                                                   
                                                                               
  CHAIRMAN HUDSON asked if there was any kind of reciprocity                   
  between the states for real estate appraisers.                               
                                                                               
  Number 200                                                                   
                                                                               
  MR. FERRARA explained that they do have a provision for                      
  licensure by endorsement.  This means that if you are                        
  certified in another state you can provide proof of that                     
  licensure and prove any additional experience necessary to                   
  fulfill Alaska's requirements.                                               
                                                                               
  Number 215                                                                   
                                                                               
  CHRIS ANDERSON, member of the Real Estate Appraisers Board,                  
  testified via teleconference in support of HB 410.  She                      
  emphasized the importance of HB 410 to the banking                           
  community.  Ms. Anderson stated that a majority of the loans                 
  made in Alaska are federal related transactions and the                      
  lending community is in a position of selling these loans on                 
  the secondary market.  The appraisers within the state do                    
  need to be certified in order to be able to deal with                        
  federal loans.                                                               
                                                                               
  Number 255                                                                   
                                                                               
  CRAIG INGHAM, Alaska Bankers Association, testified via                      
  teleconference that his organization supports HB 410 with                    
  the exception of the board having the regulatory powers that                 
  would allow for regulations that would change what was                       
  required by federal law.  Mr. Ingham thought more stringent                  
  regulations would have the effect of cutting down on the                     
  number of appraisers we currently enjoy.                                     
                                                                               
  REP. GREEN asked if there was a possibility that by passing                  
  HB 410 we could be setting up a situation that would allow                   
  the board to further restrict the number of appraisers in                    
  the state.                                                                   
                                                                               
  Number 311                                                                   
                                                                               
  MR. INGHAM responded that was one of the Bankers                             
  Association's main concerns.  Depending on the makeup, the                   
  requirements could be tailored to be so stringent to                         
  eliminate many qualified appraisers.                                         
                                                                               
  REP. GREEN suggested that perhaps the bill should be changed                 
  from "required by the board to meet federal standards" so                    
  that the bill just read "required by the board."                             
                                                                               
  Number 315                                                                   
                                                                               
  MR. INGHAM agreed.                                                           
                                                                               
  Number 326                                                                   
                                                                               
  REP. SITTON explained that the regulatory process being a                    
  public process is the arena for this particular discussion.                  
                                                                               
  REP. SITTON indicated his support for HB 410.                                
                                                                               
  Number 331                                                                   
                                                                               
  REP. PORTER asked if there was some balance that could be                    
  reached between not exceeding federal standards but allowing                 
  for some local applications.                                                 
                                                                               
  Number 342                                                                   
                                                                               
  MR. INGHAM answered that he didn't think that was possible.                  
  He stated the reason was that the purpose of an appraisal                    
  was to arrive at a fair market value of a property.                          
                                                                               
  Number 368                                                                   
                                                                               
  REP. PORTER stated his major concern was turning over                        
  control to an agency that is far away from here.                             
  Furthermore, once something is ensconced in federal law, it                  
  is difficult to change it.                                                   
                                                                               
  Number 375                                                                   
                                                                               
  MR. INGHAM responded that if the state doesn't comply with                   
  the minimum federal standards for certification, the                         
  appraisers will no longer be certified and the banks will                    
  not be able to process loans that involve federal money.                     
  This could shut down the real estate market.                                 
                                                                               
  Number 400                                                                   
                                                                               
  CHAIRMAN HUDSON stated that a home that meets the Alaska's                   
  craftsmen standards and is certified through that process is                 
  given a better loan to value rate.                                           
                                                                               
  Number 410                                                                   
                                                                               
  MR. INGHAM stated that as a banker he would look at the                      
  appraisal as well as any unique qualities the home may have,                 
  including energy efficiency.                                                 
                                                                               
  REP. MULDER stated that the committee does not want to limit                 
  the field, so he suggested a conceptual amendment that would                 
  allow some flexibility within the board to structure the                     
  hours to fit the needs and uniqueness of Alaska.                             
                                                                               
  Number 455                                                                   
                                                                               
  TERRY LAUTERBACK, Legislative Legal Counsel, Division of                     
  LEgal Services, Legislative Affairs Agency, asked if the                     
  committee was only talking about classroom hours or were                     
  there other minimum qualifications under federal law we are                  
  concerned about here.                                                        
                                                                               
  Number 457                                                                   
                                                                               
  MR. FERRARA responded that the amendments to the regulations                 
  only deal with classroom hours, no other requirements.                       
                                                                               
  Number 462                                                                   
                                                                               
  MS. LAUTERBACK followed up with her concern about complying                  
  with FIRREA, not with HB 410.                                                
                                                                               
  Number 480                                                                   
                                                                               
  REP. SITTON moved Amendment 1 to HB 410, page 1, line 12, to                 
  read, "adopt regulations necessary to minimally comply with                  
  requirements of," and so forth.                                              
                                                                               
  Number 500                                                                   
                                                                               
  MS. LAUTERBACK pointed out that some other federal agency                    
  may have set out some other qualifications or requirement                    
  higher than FIRREA.  Should the committee guard against this                 
  possibility?                                                                 
                                                                               
  Number 511                                                                   
                                                                               
  REP. MULDER asked Mr. Ferrara if there were other regulatory                 
  agencies affecting our credential procedures.                                
                                                                               
  Number 520                                                                   
                                                                               
  MR. FERRARA stated it does exist in certain agencies that                    
  have some additional experience requirements to suit their                   
  particular needs.                                                            
                                                                               
  TAPE 94-13, SIDE B                                                           
  Number 001                                                                   
                                                                               
  REP. PORTER moved the following amendment starting on line                   
  12 of page 1, to read "adopt regulations necessary to comply                 
  with but not exceed the requirements of 12 U.S.C. 3331-3351                  
  (Title XI Financial Institutions Reform, Recovery, and                       
  Enforcement Act of 1989 or other Federal Law."                               
                                                                               
  Number 026                                                                   
                                                                               
  MR. FERRARA asked if the committee could include the word                    
  "education" to clarify requirements in the amendment above.                  
                                                                               
  Number 052                                                                   
                                                                               
  REP. PORTER clarified what he thought the previous speaker                   
  wanted.  He                                                                  
                                                                               
  MS. LAUTERBACK suggested the committee leave the language in                 
  the bill as it is presently and add a new sentence to read                   
  on line 1 of page 2, after 1989, "the regulations adopted by                 
  the board for educational requirements under AS 08.87.110                    
  120 and 310 may not be more stringent then the corresponding                 
  minimum requirements for receiving approval of the states                    
  program for certifying real estate appraisers under FIRREA                   
  or other federal law."                                                       
                                                                               
  Number 110                                                                   
                                                                               
  REP. MULDER restated that it was his concern that the                        
  appraiser field was too restrictive due to the number of                     
  years of experience required over and above federal law.                     
                                                                               
  Number 126                                                                   
                                                                               
  MR. FERRARA stated he believes experience is a necessary                     
  component of the overall picture.                                            
                                                                               
  Number 148                                                                   
                                                                               
  MS. LAUTERBACK questioned whether FIRREA had any minimum                     
  requirements for continuing education or only the initial                    
  licensure.                                                                   
                                                                               
  Number 151                                                                   
                                                                               
  MR. FERRARA responded that FIRREA provided that the                          
  Appraisal Qualifications Board would set the requirements                    
  for both prior education and continuing education.  At                       
  present, it's 20 hours per two year period and the Alaska                    
  requirements are 40 hours  per two year period.                              
                                                                               
  Number 156                                                                   
                                                                               
  MS. LAUTERBACK stated her concern was whether we were                        
  drafting this language only to relate to initial licensure.                  
                                                                               
  Number 180                                                                   
                                                                               
  MR. INGHAM stated he feels we should mirror federal law.                     
                                                                               
  Number 190                                                                   
                                                                               
  CHAIRMAN HUDSON clarified the intent is to not exceed the                    
  federal requirements.                                                        
                                                                               
  Number 220                                                                   
                                                                               
  MR. FERRARA stated that the Real Estate Appraisal Board                      
  would be very concerned regarding lowering the number of                     
  hours of continuing education.  He believed the board would                  
  want to keep the 40 hour requirement.                                        
                                                                               
  Number 240                                                                   
                                                                               
  MR. INGHAM stated that there already is more restrictive                     
  statutes regarding experience.  He believed the educational                  
  requirements should not exceed federal standards.                            
                                                                               
  Number 255                                                                   
                                                                               
  REP. SITTON withdrew Amendment 1.                                            
                                                                               
  Number 260                                                                   
  MS. LAUTERBACK repeated the amendment.                                       
                                                                               
  Number 269                                                                   
                                                                               
  REP. MULDER moved the amendment.  No objections were heard;                  
  it was so ordered.                                                           
                                                                               
  Number 282                                                                   
                                                                               
  REP. MULDER moved to amend HB 410 to include the extension                   
  of the board to June 30, 1998.  No objections were heard; it                 
  was so ordered.                                                              
                                                                               
  Number 306                                                                   
                                                                               
  REP. GREEN moved CSHB 410(L&C) with a zero fiscal note and                   
  individual recommendations.  No objections were heard; it                    
  was so ordered.                                                              
                                                                               
  Number 324                                                                   
                                                                               
  CHAIRMAN HUDSON adjourned the meeting at 4:18 p.m.                           

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