Legislature(2017 - 2018)SENATE FINANCE 532

04/03/2018 09:00 AM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 76 MARICULTURE REVOLVING LOAN FUND TELECONFERENCED
<Bill Hearing Postponed until 1:30 p.m.>
+ HB 128 SHELLFISH ENHANCE. PROJECTS; HATCHERIES TELECONFERENCED
<Bill Hearing Postponed until 1:30 p.m.>
+= HB 286 APPROP: OPERATING BUDGET/LOANS/FUNDS TELECONFERENCED
Scheduled but Not Heard
<Pending Referral>
+ HB 273 EXTEND: MARIJUANA CONTROL BOARD TELECONFERENCED
Heard & Held
+ HB 274 EXTEND: BD OF PSYCHOLOGISTS/PSYCH ASSOC. TELECONFERENCED
Moved HB 274 Out of Committee
+ HB 275 EXTEND: BOARD OF MASSAGE THERAPISTS TELECONFERENCED
Heard & Held
+ HB 278 EXTEND:CERT. REAL ESTATE APPRAISERS BOARD TELECONFERENCED
Heard & Held
+ HB 279 EXTEND: REAL ESTATE COMMISSION TELECONFERENCED
Heard & Held
+ HB 280 EXTEND: BOARD OF MARITAL & FAMILY THERAPY TELECONFERENCED
Moved HB 280 Out of Committee
+ HB 302 EXTEND: BOARD OF PROFESSIONAL COUNSELORS TELECONFERENCED
Moved HB 302 Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
HOUSE BILL NO. 278                                                                                                            
                                                                                                                                
     "An Act extending the termination date of the Board of                                                                     
     Certified Real Estate Appraisers; and providing for an                                                                     
     effective date."                                                                                                           
                                                                                                                                
9:47:38 AM                                                                                                                    
                                                                                                                                
MEGAN   HOLLAND,  STAFF,   REPRESENTATIVE  ANDY   JOSEPHSON,                                                                    
discussed  HB 278.  She stated  that the  bill extended  the                                                                    
termination  date  of the  Board  of  Certified Real  Estate                                                                    
Appraisers.  She shared  that  the Board  of Certified  Real                                                                    
Estate Appraisers came to be  after the housing market crash                                                                    
in the  early 2000s. There  was a federal  mandate requiring                                                                    
states  to regulate  real estate  appraisers,  so the  state                                                                    
board served  to fulfill the federal  requirement. The board                                                                    
was  responsible for  licensing,  training, regulating,  and                                                                    
license enforcement of real estate  appraisers in the state.                                                                    
She stated  that the board currently  managed 261 licensees.                                                                    
The  board received  a full  eight-year recommendation  from                                                                    
Legislative  Audit.  Additionally,   there  were  additional                                                                    
audits from the federal audits  in 2005 and 2007. She stated                                                                    
that she had received no opposition to the board extension.                                                                     
                                                                                                                                
KRIS  CURTIS,   LEGISLATIVE  AUDITOR,  ALASKA   DIVISION  OF                                                                    
LEGISLATIVE AUDIT,  addressed the document "A  Sunset Review                                                                    
of  the  Department  of Commerce,  Community,  and  Economic                                                                    
Development,  Board  of  Certified  Real  Estate  Appraisers                                                                    
(board),"  (copy  on  file).   She  stated  that  the  audit                                                                    
included a background information  section beginning on page                                                                    
3, which  explained the  regulatory oversight  structure for                                                                    
the   appraisal   industry   established  by   the   federal                                                                    
government.  The framework  involved  private entities  that                                                                    
set  appraisal  standards  and  qualification  criteria  for                                                                    
licensing.  It  included  state boards  that  certified  and                                                                    
licensed  real estate  appraisers, and  it included  federal                                                                    
entities that  regulated the industry.  She stated  that the                                                                    
Federal   Appraisal   Subcommittee   was   responsible   for                                                                    
monitoring state  licensing boards and  enforcing standards.                                                                    
She  explained  that the  information  was  included in  the                                                                    
background section  of the audit,  because it  was important                                                                    
to  highlight  that  the  board   was  subject  to  external                                                                    
oversight  outside  of  the  sunset  process.  The  external                                                                    
oversight included  onsite compliance reviews of  the board.                                                                    
She stated  that the additional oversight  factored into the                                                                    
recommended term  of extension. She  noted that page  7 held                                                                    
the report  conclusions. She stated  that it was  found that                                                                    
the board  was serving  the public's interest  by monitoring                                                                    
certificate  holders and  licensees; and  working to  ensure                                                                    
that only qualified individuals  were practicing. She stated                                                                    
that it was also found  that the board developed and adopted                                                                    
regulations to  comply with federal requirements  to improve                                                                    
the real  estate appraisal industry  and better  protect the                                                                    
public.  She  stated  that there  were  two  recommendations                                                                    
beginning page  16. The first  recommendation was  that that                                                                    
the director  continue to improve administrative  support to                                                                    
the  board.  She  shared  that  through  the  testing,  some                                                                    
challenges  were   found  to  administrative   support.  She                                                                    
explained that there was an  examination of the entry of the                                                                    
certificate holders into the national  registry, which was a                                                                    
federal requirement. The audit  found that three certificate                                                                    
holders were  entered into  the registry  incorrectly. Those                                                                    
entries were correctly, when the  division was notified. She                                                                    
stated that there were five  investigative cases tested, and                                                                    
three  of  the  five  had extended  unjustified  periods  of                                                                    
inactivity. She stated  that the periods ranged  from 130 to                                                                    
203  days, so  there were  some improvements  needed in  the                                                                    
timeliness of  the investigative process. She  remarked that                                                                    
there was  not proof  of whether three  of the  eleven board                                                                    
meetings held  during the audit period  were public noticed.                                                                    
She  felt   that  those   findings  were   not  individually                                                                    
significant,  but when  considered together  it indicated  a                                                                    
need for improved administrative support to the board.                                                                          
                                                                                                                                
9:52:07 AM                                                                                                                    
                                                                                                                                
Ms.  Curtis  looked  at  page   17,  which  was  the  second                                                                    
recommendation.  It   was  recommended  that   the  division                                                                    
director,  in consultation  with the  board, reduce  fees to                                                                    
address the surplus.  She shared that as of  March 2017, the                                                                    
surplus  was  $165,000, however  it  was  expected that  the                                                                    
surplus be  significantly higher  as the renewal  period was                                                                    
June 2017. She  remarked that by the end of  FY 17 there was                                                                    
an expected  significant surplus.  She noted that  the board                                                                    
had asked for  a fee analysis from  the division management,                                                                    
but due to  competing priorities there was  no fee analysis.                                                                    
As a  result, licensees  paid a  higher than  justified fee.                                                                    
She looked  at page 11,  which was the standard  schedule of                                                                    
licensing activity. She noted  that there were 261 licensees                                                                    
as of March 2017. The  schedule of revenues and expenditures                                                                    
was on page  12, and the schedule of licensing  fees on page                                                                    
13. She remarked that on page  14, it was discussed that the                                                                    
board  planned to  move  forward  with regulating  appraisal                                                                    
management  companies.  It  would significantly  expand  the                                                                    
boards duties  in the  future. She  noted that,  despite the                                                                    
change  of duties,  she recommended  the maximum  eight-year                                                                    
extension,  which  was  in  recognition  of  the  additional                                                                    
federal   oversight.   The   Federal   Oversight   Committee                                                                    
performed onsite  reviews every two years.  The department's                                                                    
response  to  the  audit  was   on  page  27,  which  was  a                                                                    
concurrence  of   the  findings  and   recommendations.  The                                                                    
board's  response was  on page  29,  and they  also were  in                                                                    
concurrence. She announced  that on the bottom  page 31, the                                                                    
board  stated that  they had  received  an attorney  general                                                                    
opinion  that  concluded  in  order  to  move  forward  with                                                                    
regulating  appraisal  management   companies,  a  statutory                                                                    
change was  required. She stated that  Legislative Audit did                                                                    
not  agree  with  that   conclusion.  She  noted  additional                                                                    
auditor comments  beginning on page 33,  which described the                                                                    
review of the federal code  and state statutes. She remarked                                                                    
that she  did not  believe that it  was essential  to change                                                                    
statutes,  but felt  that "it  certainly would  not hurt  to                                                                    
clarify them."                                                                                                                  
                                                                                                                                
Co-Chair MacKinnon  noted that page  11 gave the up  or down                                                                    
percentages on  all the other  boards. She  wondered whether                                                                    
the 261  licenses up or  down compared to the  last auditing                                                                    
period.                                                                                                                         
                                                                                                                                
Ms. Curtis  replied that the  prior sunset  audit identified                                                                    
266  licenses  as  of  March  2013, so  that  was  a  slight                                                                    
increase.                                                                                                                       
                                                                                                                                
Co-Chair  MacKinnon  asked  if new  appraisers  were  coming                                                                    
online successfully, or if there were challenges.                                                                               
                                                                                                                                
Ms.  Curtis replied  that there  was no  found challenge  in                                                                    
recruiting and retaining appraisers.                                                                                            
                                                                                                                                
Co-Chair MacKinnon  noted that they were  held constant from                                                                    
the previous audit.                                                                                                             
                                                                                                                                
Ms. Curtis  replied that  there were 266  as of  March 2013,                                                                    
which was relatively stable.                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon asked  if Ms.  Chambers  could speak  to                                                                    
consistent  numbers  for the  board,  as  there had  been  a                                                                    
suggestion that the  board made it difficult  to process new                                                                    
appraisers.   She  wondered   about  what   challenges  were                                                                    
present.                                                                                                                        
                                                                                                                                
SARA  CHAMBERS, DEPUTY  DIRECTOR, DIVISION  OF CORPORATIONS,                                                                    
BUSINESS   AND   PROFESSIONAL   LICENSING,   DEPARTMENT   OF                                                                    
COMMERCE, COMMUNITY  AND ECONOMIC DEVELOPMENT,  relayed that                                                                    
appraisals were  a fairly stable  industry, and she  had not                                                                    
heard of any inherent challenges to getting licensed.                                                                           
                                                                                                                                
Co-Chair MacKinnon  asked why the  fees were  not considered                                                                    
sooner.                                                                                                                         
                                                                                                                                
Ms. Chambers informed that the fees  fell at a time when the                                                                    
department was  juggling multiple priorities, and  there had                                                                    
been a lack of resources. She offered to provide an update.                                                                     
                                                                                                                                
9:58:27 AM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon OPENED public testimony.                                                                                     
                                                                                                                                
DAVID  DERRY,   CHAIR,  BOARD   OF  CERTIFIED   REAL  ESTATE                                                                    
APPRAISERS,   KENAI  (via   teleconference),  testified   in                                                                    
support of  the bill. He  commented that the  department had                                                                    
given support that  had allowed for the  board. He discussed                                                                    
the board being subject to annual audits.                                                                                       
                                                                                                                                
Mr. Derry addressed Co-Chair  MacKinnon's question about the                                                                    
challenges  to  becoming  certified.  He  discussed  federal                                                                    
requirements.  The new  regulations would  be effective  May                                                                    
2018.                                                                                                                           
                                                                                                                                
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
                                                                                                                                
Vice-Chair Bishop discussed the fiscal note.                                                                                    
                                                                                                                                
Co-Chair   MacKinnon  queried   the  board's   proposed  fee                                                                    
schedule  that what  was proposed  from the  department. She                                                                    
noted  that the  board proposed  $179,923, and  the division                                                                    
proposed $264,823.  She wondered why there  was a difference                                                                    
in proposals.                                                                                                                   
                                                                                                                                
Ms. Chambers  wondered whether  that query  was held  in the                                                                    
audit.                                                                                                                          
                                                                                                                                
10:04:53 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:05:46 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair MacKinnon  remarked that  Ms. Chambers  needed time                                                                    
to research the difference.                                                                                                     
                                                                                                                                
HB  278  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                

Document Name Date/Time Subjects
HB273 Legislative Audit 01.19.18.pdf SFIN 4/3/2018 9:00:00 AM
HB 273
HB273 Sponsor Statement 01.19.18.pdf SFIN 4/3/2018 9:00:00 AM
HB 273
HB274 Sponsor Statement 1.29.18.pdf SFIN 4/3/2018 9:00:00 AM
HB 274
HB274 Supporting Document - 2017 Legislative Audit 1.29.18.pdf SFIN 4/3/2018 9:00:00 AM
HB 274
HB 275 01.19.18 Support Letters.pdf SFIN 4/3/2018 9:00:00 AM
HB 275
HB 275 Support Gilmour.docx SFIN 4/3/2018 9:00:00 AM
HB 275
HB275 01.19.18 Opposition Letters.pdf SFIN 4/3/2018 9:00:00 AM
HB 275
HB275 Legislative Audit 10.11.17.pdf SFIN 4/3/2018 9:00:00 AM
HB 275
HB275(FIN) Sponsor Statement.pdf SFIN 4/3/2018 9:00:00 AM
HB 275
HB278 Sponsor Statement 3.31.18.pdf SFIN 4/3/2018 9:00:00 AM
HB 278
HB278 Supporting Document - 2017 Audit 3.31.18.pdf SFIN 4/3/2018 9:00:00 AM
HB 278
HB279 Letter of Opposition 3.31.18.pdf SFIN 4/3/2018 9:00:00 AM
HB 279
HB279 Letter of Support 3.31.18.pdf SFIN 4/3/2018 9:00:00 AM
HB 279
HB279 Sponsor Statement 3.31.18.pdf SFIN 4/3/2018 9:00:00 AM
HB 279
HB279 Supporting Document - 2017 Audit 3.31.18.pdf SFIN 4/3/2018 9:00:00 AM
HB 279
HB280 Sponsor Statement 3.31.18.pdf SFIN 4/3/2018 9:00:00 AM
HB 280
HB280 Supporting Document - 2017 Audit 3.31.18.pdf SFIN 4/3/2018 9:00:00 AM
HB 280
HB302 Sponsor Statement.pdf SFIN 4/3/2018 9:00:00 AM
HB 302
Professional Counselors Audit Report.pdf SFIN 4/3/2018 9:00:00 AM
HB 302
HB 279 Senare Finance Testimony Brollini 2.pdf SFIN 4/3/2018 9:00:00 AM
HB 279
HB 278, 275, 278, 279 DCCED Response - Corporations Buisness, and Professional Licensing 040318.pdf SFIN 4/3/2018 9:00:00 AM
HB 278
HB 76 follow up S FIN (DED).pdf SFIN 4/3/2018 9:00:00 AM
HB 76
HB 279 - Brickman Testimony 4.4.2018.pdf SFIN 4/3/2018 9:00:00 AM
HB 279