05/02/2003 04:10 PM House JUD
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= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE JUDICIARY STANDING COMMITTEE
May 2, 2003
4:10 p.m.
MEMBERS PRESENT
Representative Lesil McGuire, Chair
Representative Tom Anderson, Vice Chair
Representative Jim Holm
Representative Dan Ogg
Representative Ralph Samuels
Representative Les Gara
Representative Max Gruenberg
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
CS FOR SENATE BILL NO. 49(STA)
"An Act making corrective amendments to the Alaska Statutes as
recommended by the revisor of statutes; and providing for an
effective date."
- MOVED CSSB 49(STA) OUT OF COMMITTEE
SENATE JOINT RESOLUTION NO. 8
Relating to the division of the Ninth Circuit Court of Appeals.
- MOVED HCS SJR 8(JUD) OUT OF COMMITTEE
HOUSE BILL NO. 257
"An Act relating to the disclosure requirements for real estate
licensees, to disciplinary action against real estate licensees,
to private actions against real estate licensees, and to real
estate licensee agency relationships, fiduciary duties, and
other duties; and providing for an effective date."
- MOVED CSHB 257(JUD) OUT OF COMMITTEE
HOUSE BILL NO. 245
"An Act relating to certain suits and claims by members of the
military services or regarding acts or omissions of the
organized militia; relating to liability arising out of certain
search and rescue, civil defense, homeland security, and fire
management and firefighting activities; and providing for an
effective date."
- SCHEDULED BUT NOT HEARD
SENATE BILL NO. 87
"An Act relating to principal and income in the administration
of trusts and decedents' estates and the mental health trust
fund; adopting a version of the Uniform Principal and Income
Act; and providing for an effective date."
- SCHEDULED BUT NOT HEARD
HOUSE JOINT RESOLUTION NO. 4
Proposing an amendment to the Constitution of the State of
Alaska relating to the duration of a regular session.
- SCHEDULED BUT NOT HEARD
HOUSE BILL NO. 145
"An Act relating to public interest litigants and to attorney
fees; and amending Rule 82, Alaska Rules of Civil Procedure."
- BILL HEARING POSTPONED TO 5/5/03
HOUSE JOINT RESOLUTION NO. 20
Proposing amendments to the Constitution of the State of Alaska
repealing the prohibition on dedicated funds.
- BILL HEARING POSTPONED TO 5/5/03
SENATE JOINT RESOLUTION NO. 10
Relating to the Pledge of Allegiance.
- BILL HEARING POSTPONED TO 5/5/03
PREVIOUS ACTION
BILL: SB 49
SHORT TITLE:2003 REVISOR'S BILL
SPONSOR(S): RLS BY REQUEST OF LEGISLATIVE COUNCIL
Jrn-Date Jrn-Page Action
01/31/03 0087 (S) READ THE FIRST TIME -
REFERRALS
01/31/03 0087 (S) STA, JUD
02/20/03 (S) STA AT 3:30 PM BELTZ 211
02/20/03 (S) Moved CSSB 49(STA) Out of
Committee
02/20/03 (S) MINUTE(STA)
02/24/03 0256 (S) STA RPT CS 5DP SAME TITLE
02/24/03 0256 (S) DP: TAYLOR, HOFFMAN, COWDERY,
02/24/03 0256 (S) DYSON, GUESS
02/24/03 0257 (S) FN1: ZERO(S.STA)
03/17/03 (S) JUD AT 1:30 PM BELTZ 211
03/17/03 (S) Heard & Held
MINUTE(JUD)
04/07/03 (S) JUD AT 1:30 PM BELTZ 211
04/07/03 (S) Moved CSSB 49(STA) Out of
Committee
MINUTE(JUD)
04/08/03 0745 (S) JUD RPT CS(STA) 2DP 2NR
04/08/03 0745 (S) DP: SEEKINS, THERRIAULT;
04/08/03 0745 (S) NR: ELLIS, FRENCH
04/08/03 0745 (S) FN1: ZERO(S.STA)
04/09/03 0783 (S) RULES TO CALENDAR 4/10/2003
04/10/03 0783 (S) READ THE SECOND TIME
04/10/03 0783 (S) STA CS ADOPTED UNAN CONSENT
04/10/03 0783 (S) ADVANCED TO THIRD READING
UNAN CONSENT
04/10/03 0784 (S) READ THE THIRD TIME CSSB
49(STA)
04/10/03 0784 (S) PASSED Y19 N- E1
04/10/03 0784 (S) EFFECTIVE DATE(S) SAME AS
PASSAGE
04/10/03 0794 (S) TRANSMITTED TO (H)
04/10/03 0794 (S) VERSION: CSSB 49(STA)
04/11/03 0925 (H) READ THE FIRST TIME -
REFERRALS
04/11/03 0925 (H) STA, JUD
04/22/03 (H) STA AT 8:00 AM CAPITOL 102
04/22/03 (H) Heard & Held
MINUTE(STA)
04/24/03 1109 (H) STA REFERRAL WAIVED
04/24/03 (H) STA AT 8:00 AM CAPITOL 102
04/24/03 (H) Waived out of Committee to
JUD
04/24/03 (H) MINUTE(STA)
04/30/03 (H) JUD AT 1:00 PM CAPITOL 120
04/30/03 (H) Heard & Held Mtg. Postponed
to after Maj. Caucus
MINUTE(JUD)
05/02/03 (H) JUD AT 1:00 PM CAPITOL 120
BILL: SJR 8
SHORT TITLE:DIVISION OF 9TH CIRCUIT CT OF APPEALS
SPONSOR(S): SENATOR(S) SEEKINS
Jrn-Date Jrn-Page Action
02/28/03 0298 (S) READ THE FIRST TIME -
REFERRALS
02/28/03 0298 (S) JUD
03/12/03 (S) JUD AT 1:30 PM BELTZ 211
03/12/03 (S) Moved Out of Committee
MINUTE(JUD)
03/13/03 0491 (S) JUD RPT 5DP
03/13/03 0491 (S) DP: SEEKINS, ELLIS, FRENCH,
03/13/03 0491 (S) OGAN, THERRIAULT
03/13/03 0491 (S) FN1: ZERO(S.JUD)
03/26/03 0592 (S) RULES TO CALENDAR 3/26/2003
03/26/03 0592 (S) READ THE SECOND TIME
03/26/03 0592 (S) ADVANCED TO THIRD READING
UNAN CONSENT
03/26/03 0592 (S) READ THE THIRD TIME SJR 8
03/26/03 0593 (S) PASSED Y18 N1 A1
03/26/03 0593 (S) HOFFMAN NOTICE OF
RECONSIDERATION
03/28/03 0615 (S) RECON TAKEN UP - IN THIRD
READING
03/28/03 0615 (S) PASSED ON RECONSIDERATION Y16
N3 A1
03/28/03 0617 (S) TRANSMITTED TO (H)
03/28/03 0617 (S) VERSION: SJR 8
03/31/03 0702 (H) READ THE FIRST TIME -
REFERRALS
03/31/03 0702 (H) JUD
03/31/03 0722 (H) CROSS SPONSOR(S): LYNN,
STOLTZE,
03/31/03 0722 (H) SAMUELS
05/02/03 (H) JUD AT 1:00 PM CAPITOL 120
BILL: HB 257
SHORT TITLE:DISCLOSURES BY REAL ESTATE LICENSEES
SPONSOR(S): REPRESENTATIVE(S)ROKEBERG
Jrn-Date Jrn-Page Action
04/10/03 0912 (H) READ THE FIRST TIME -
REFERRALS
04/10/03 0912 (H) L&C, JUD
04/14/03 (H) L&C AT 3:15 PM CAPITOL 17
04/14/03 (H) Moved Out of Committee
MINUTE(L&C)
04/15/03 0984 (H) L&C RPT 1DP 5NR
04/15/03 0984 (H) DP: ROKEBERG; NR: LYNN,
CRAWFORD,
04/15/03 0984 (H) GUTTENBERG, DAHLSTROM,
ANDERSON
04/15/03 0984 (H) FN1: ZERO(CED)
04/28/03 (H) JUD AT 1:00 PM CAPITOL 120
04/28/03 (H) Heard & Held -- Meeting
Postponed to 2:00 PM --
MINUTE(JUD)
05/02/03 (H) JUD AT 1:00 PM CAPITOL 120
WITNESS REGISTER
PAM FINLEY, Revisor of Statutes
Legislative Legal Counsel
Legislative Legal and Research Services
Legislative Affairs Agency
Juneau, Alaska
POSITION STATEMENT: During discussion of SB 49, spoke as the
revisor of statutes and responded to questions.
BRIAN HOVE, Staff
to Senator Ralph Seekins
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented SJR 8 on behalf of Senator
Seekins, sponsor.
HEATHER M. NOBREGA, Staff
to Representative Norman Rokeberg
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: During discussion of HB 257, presented
Version U on behalf of the sponsor, Representative Rokeberg, and
responded to questions.
DAVE FEEKEN, Legislative Chair
Alaska Association of Realtors (AAR)
Kenai, Alaska
POSITION STATEMENT: During discussion of HB 257, suggested a
change to Version U, recommended passage of the bill, and
responded to questions.
LINDA S. GARRISON, Broker
AAR #1 Buyer's Agency
Anchorage, Alaska
POSITION STATEMENT: During discussion of HB 257, expressed her
concerns about the bill.
DAVID A. GARRISON, Associate Broker
AAR #1 Buyer's Agency
Anchorage, Alaska
POSITION STATEMENT: Provided comments during discussion of HB
257 and suggested changes.
REPRESENTATIVE NORMAN ROKEBERG
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of HB 257.
ACTION NARRATIVE
TAPE 03-49, SIDE A
Number 0001
CHAIR LESIL McGUIRE called the House Judiciary Standing
Committee meeting to order at [4:10 p.m., stated as 5:10 p.m.].
Representatives McGuire, Holm, Ogg, Samuels, Gara, and Gruenberg
were present at the call to order. Representative Anderson
arrived as the meeting was in progress.
SB 49 - 2003 REVISOR'S BILL
Number 0079
CHAIR McGUIRE announced that the first order of business would
be CS FOR SENATE BILL NO. 49(STA), "An Act making corrective
amendments to the Alaska Statutes as recommended by the revisor
of statutes; and providing for an effective date."
Number 0118
PAM FINLEY, Revisor of Statutes, Legislative Legal Counsel,
Legislative Legal and Research Services, Legislative Affairs
Agency, noted that she prepares a revisor's bill every year, and
mentioned the sectional analysis in members' packets. She
remarked that while most of the changes come from Legislative
Legal and Research Services' periodic review of the statutes,
sometimes corrections come from the executive branch or members
of the public. When an error comes to her attention, she
explained, she researches the issue to try to find out how and
why the error was made, so that she feels confident about
correcting it. She noted that if she is not confident about
correcting a particular error, she does not use the revisor's
bill to fix it.
CHAIR McGUIRE, after ascertaining that no one else wished to
testify on SB 46, closed public testimony.
Number 0235
REPRESENTATIVE HOLM moved to report CSSB 49(STA) out of
committee with individual recommendations and the accompanying
zero fiscal note. There being no objection, CSSB 49(STA) was
reported from the House Judiciary Standing Committee.
SJR 8 - DIVISION OF 9TH CIRCUIT CT OF APPEALS
Number 0307
CHAIR McGUIRE announced that the next order of business would be
SENATE JOINT RESOLUTION NO. 8, Relating to the division of the
Ninth Circuit Court of Appeals.
Number 0334
BRIAN HOVE, Staff to Senator Ralph Seekins, Alaska State
Legislature, said on behalf of Senator Seekins, sponsor, that
SJR 8 respectfully calls upon Congress to divide the Ninth
Circuit Court of Appeals. This action is necessitated for a
variety of reasons, he opined, not the least of which includes
the vast geographical and philosophical distance separating
Alaska from the San Francisco-based court. The Ninth Circuit
Court of Appeals adjudicates a caseload far beyond that which is
reasonably manageable. In total, there are 11 circuit courts of
appeal throughout the country, yet the Ninth Circuit Court of
Appeals oversees nearly 20 percent of the U.S. population. In
other words, he surmised, the Ninth Circuit Court of Appeals is
twice the ideal size.
MR. HOVE offered that this size disparity is cited as the
principal reason for the relatively high reversal record of the
Ninth Circuit Court of Appeals in cases heard by the U.S.
Supreme Court. Senate Joint Resolution 8 endorses legislation
previously introduced in Congress by Senator Ted Stevens and
then-Senator Frank Murkowski. This legislation would
reconfigure the Ninth Circuit Court of Appeals to encompass
Arizona, California, and Nevada. A new Twelfth Circuit Court of
Appeals would take in Alaska, Hawaii, Idaho, Montana, Oregon,
and Washington. He noted that similar legislation was recently
introduced in Congress by Senator Lisa Murkowski.
MR. HOVE said that SJR 8 simply seeks to accomplish two goals:
one, correct a considerable imbalance in the caseload of the
Ninth Circuit Court of Appeals; and, two, provide the disparate
regions falling within the current purview of the Ninth Circuit
Court of Appeals with a better-informed panel of judges. These
objectives, he opined, are best accomplished by splitting the
Ninth Circuit Court of Appeals.
REPRESENTATIVE GRUENBERG, noting that language in SJR 8 purports
that four justices of the U.S. Supreme Court have endorsed
splitting the Ninth Circuit Court of Appeals, asked who those
four justices are.
MR. HOVE said he could not recall who they were.
REPRESENTATIVE OGG remarked that he applauded "this" effort.
Number 0487
REPRESENTATIVE GARA said that while he does not have a problem
with the resolution, he does not want to say anything [via the
resolution] that could be construed as insulting, at all, to the
people on the Ninth Circuit Court of Appeals, whom he doesn't
know. He said he didn't think anything in the resolution was
intended to do that. But, turning attention to page 2, lines
12-14, he indicated that he would like the committee to consider
taking out the language that says the Ninth Circuit Court of
Appeals produces so many opinions that it is virtually
impossible for each judge to thoroughly review each opinion. He
pointed out that in no federal circuit court does any judge read
all the other judges' opinions. "They just don't, unless the
issue comes up," he added; therefore, the resolution is accusing
the judges in Ninth Circuit Court of Appeals of [failing to do]
something that judges in the other circuit [courts] don't do.
MR. HOVE, in response, offered that the situation is exacerbated
in the Ninth Circuit Court of Appeals by the caseload.
REPRESENTATIVE GARA said he agrees with most of the other points
in the resolution and with the point that the Ninth Circuit
Court of Appeals has too big a caseload. He added, however,
that he didn't feel it is appropriate for him to be criticizing
Ninth Circuit Court of Appeals' judges for behavior that is
consistent with judges' behavior in the other circuit courts.
He reiterated, "They just don't read all of each other's
opinions, in any circuit, unless the issue comes up before
them." "I don't know why I would slap at them for doing that,"
he added.
REPRESENTATIVE SAMUELS said he didn't view that language as a
"slap," but added that perhaps all circuit courts should be
looked at regarding that issue.
REPRESENTATIVE HOLM offered his belief that had each judge in
the Ninth Circuit Court of Appeals read all of the other judges'
opinions, perhaps that court would not have such a high rate of
reversals in the U.S. Supreme Court.
CHAIR McGUIRE said she thinks SJR 8 is good resolution, but
added that she is not sure just how many justices will actually
be reading it.
Number 0671
REPRESENTATIVE GARA noted that although the issue before them is
just a resolution and therefore not binding, he did not want to
have a resolution say things that he does not want to say. He
acknowledged that SJR 8 is intended to send a message that needs
to be sent. However, regardless of whether the Ninth Circuit
Court of Appeals is doing a good job or a bad job, he said his
point in disagreeing with the clause that says it is impossible
for each judge in the Ninth Circuit Court of Appeals to read
every other judges' opinion is that no judge in any circuit
court reads every opinion from that circuit court. Therefore,
he remarked, he did not know what the point is of including that
language, although he does agree that the Ninth Circuit Court of
Appeals has too much work.
REPRESENTATIVE GARA then turned attention to page 3, lines 19-
21, and asked the committee to consider taking out that
language. He said:
I don't know that I know for a fact that the [Ninth
Circuit Court of Appeals] was so unfamiliar with this
Village of Venetie case that that's what caused them
to issue the decision they issued. I assumed they
issued the decision they issued because they believed
that they were right, and that they analyzed the case
law pretty thoroughly. But if you have information
that they really didn't do any work on that case or
they didn't do enough work on that case, I guess I'd
like to hear it, but otherwise I see that as a slap.
MR. HOVE said he did not have any information on that issue. He
opined, however, that it is not a stretch to suggest that a
three-judge panel that might see an Alaskan case only once every
three years probably wouldn't be up to speed on everything it
needs to know. He remarked that Alaska law is very complex with
regard to Native claims issues, and concluded that the language
on page 3, lines 19-21, is not out of the realm of possibility.
REPRESENTATIVE GARA replied: In reality, in no circuit [court]
does any judge see a particular issue from a particular state so
often that he/she becomes an expert in that state's issue.
CHAIR McGUIRE asked whether the language on page 3, lines 19-21,
is in Senator Lisa Murkowski's legislation.
MR. HOVE said he could not recall. He mentioned, however, that
Senator Lisa Murkowski's legislation proposes to divide the
court in a slightly different manner than is suggested in SJR 8.
Number 0867
REPRESENTATIVE GARA made a motion to adopt Amendment 1, to
delete lines 12-14 from page 2, and delete lines 19-21 from page
3.
Number 0895
CHAIR McGUIRE objected for discussion purposes. She suggested
that the motion be bifurcated.
Number 0937
REPRESENTATIVE GARA withdrew Amendment 1 as previously stated.
He then made a motion to adopt a new Amendment 1, to delete
lines 19-21 from page 3.
CHAIR McGUIRE objected. After noting that she did not
necessarily like the language on page 2, line 14, she said that
she'd written her "comment" on the Village of Venetie case -
referred to on page 3, lines 19-21; had dissected both courts'
opinions; and was surprised to see how much larger the Ninth
Circuit Court of Appeals' opinion was.
REPRESENTATIVE OGG said he has read both [opinions], since
American Indian law is a part of his legal background, and is of
the belief that "there's a difference of opinion, and how you
tip that scale, one way or the other, is such a slight thing,
and it's really reasonable for a court [regardless of its
makeup] to go one way or the other." He opined that the courts'
decisions were well written in both instances, and it is simply
that the U.S. Supreme Court went a different way. He surmised
that any case dealing with "Alaska Native law" is going to
create great turmoil. So, although the statement on page 3,
lines 19-21, may be a fair statement, he remarked, it may cast
unfair aspersions on the Ninth Circuit Court of Appeals that it
does not deserve regarding that particular instance. He said he
would support the removal of that language.
CHAIR McGUIRE agreed.
REPRESENTATIVE SAMUELS offered that the language on page 3,
lines 19-21, ties into the language in the two preceding
paragraphs; all three paragraphs together make a point regarding
familiarity.
REPRESENTATIVE HOLM suggested that removing "great" from line 20
on page 3 might allay members concerns about casting aspersions.
Number 1160
REPRESENTATIVE OGG [made a motion to amend] Amendment 1, to
remove the specific example used on page 3, lines 19-21. He
opined that the Ninth Circuit Court of Appeals was not at all
unfamiliar with the issues in the Village of Venetie case.
REPRESENTATIVE GARA said he considered that to be a friendly
amendment to Amendment 1, and would accept it.
Number 1259
CHAIR McGUIRE stated that the amendment to Amendment 1 would
result in lines 19-21, page 3, reading: "Whereas this
unfamiliarity has resulted in decisions which have caused great
political turmoil in Alaska;". There being no objection,
Amendment 1 was amended.
Number 1292
CHAIR McGUIRE asked whether there were any objections to
Amendment 1, as amended. There being none, Amendment 1, as
amended, was adopted.
Number 1294
REPRESENTATIVE SAMUELS moved to report SJR 8, as amended, out of
committee with individual recommendations and the accompanying
zero fiscal note.
Number 1303
REPRESENTATIVE GRUENBERG objected and then withdrew his
objection.
Number 1329
CHAIR McGUIRE asked whether there were any further objections.
There being none, HCS SJR 8(JUD) was reported from the House
Judiciary Standing Committee.
HB 257 - DISCLOSURES BY REAL ESTATE LICENSEES
Number 1347
CHAIR McGUIRE announced that the final order of business would
be HOUSE BILL NO. 257, "An Act relating to the disclosure
requirements for real estate licensees, to disciplinary action
against real estate licensees, to private actions against real
estate licensees, and to real estate licensee agency
relationships, fiduciary duties, and other duties; and providing
for an effective date." [Before the committee was the proposed
committee substitute (CS) for HB 257, Version 23-LS0893\Q,
Bannister, 4/28/03, which was adopted as a work draft on
4/28/03.]
Number 1376
HEATHER M. NOBREGA, Staff to Representative Norman Rokeberg,
Alaska State Legislature, on behalf of Representative Rokeberg,
sponsor, noted that there was a new proposed CS for
consideration.
Number 1392
REPRESENTATIVE SAMUELS moved to adopt the proposed CS for HB
257, Version 23-LS0893\U, Bannister, 5/1/03, as the work draft.
There being no objection, Version U was before the committee.
MS. NOBREGA explained that Version U no longer has the
commercial [real estate] exemptions, which some realtors
objected to. She relayed that the Alaska Association of
Realtors (AAR) has reviewed Version U and, aside from one
suggestion for change, now fully supports the bill. The AAR's
suggestion is to change, on page 4, line 17, "blanket" to
"written preauthorized", and she said she thought that this was
a good suggestion. This change would occur to proposed AS
08.88.396(d), which is a new provision specific to Version U and
which is intended to reflect current real estate practices. She
elaborated:
The way [subsection (d) is currently] written,
basically, from house to house to house, you have to
have a change in paperwork because there is a change
in your circumstance, and (d) requires, anytime
there's a change [in] circumstance, [that] you get it
in writing. Well, the reality is, a realtor doesn't
go and change their paperwork [for] every house they
go to depending on who is listing the house and who is
... selling the house and what office it is. So this
allows the daily practice of a realtor to show
multiple houses, and not until they decide what a
buyer wants to buy - which house, and what the
relationship is between the buyer and the seller, and
who is the selling agent and who is the listing agent
- once you figure that out, the end, and you're ready
to write an offer, then you know exactly what kind of
relationship you're dealing with, and that's when you
get the final - finalized in writing - "this is our
relationship" [disclosure].
MS. NOBREGA said that although, technically, this practice is
not allowed under current statute, as a practical matter it is
what occurs on a daily basis; therefore, [proposed subsection
(d)] is intended to merely reflect current practice.
CHAIR McGUIRE reopened public testimony on HB 257.
REPRESENTATIVE GARA asked for a comparison between Version U and
Version Q, which has already been reviewed by the committee at
the bill's last hearing.
MS. NOBREGA relayed that in addition to amending AS 08.88.396(d)
- found on page 4, lines 14-17 - for the previously stated
purpose, the "legislative findings and intent" language has been
removed, as have the provisions, including their sunset,
pertaining to the exemption of commercial real estate
transactions.
Number 1702
DAVE FEEKEN, Legislative Chair, Alaska Association of Realtors
(AAR), noted that he is a real estate broker in Kenai. He
confirmed that the AAR almost unanimously supports Version U,
recommends the previously mentioned change, and urges passage of
HB 257.
REPRESENTATIVE GRUENBERG turned attention to page 4, lines 8 and
9, and sought confirmation that the addition of "representation"
and the removal of "agency" merely conforms this language to
that of other statutes in Title 8.
MS. NOBREGA confirmed that.
REPRESENTATIVE GARA, noting that the prior version intended to
exempt commercial real estate transactions from the common law
principles of agency, referred to Section 3, page 3, of Version
U and mentioned that he is still uncomfortable with the
possibility that deleting "agency" might also exempt a real
estate licensee from the fiduciary duties that arise from the
common law principles of agency. He asked Mr. Feeken whether
the AAR believes that under the law of agency, fiduciary duties
between real estate agents and the public should be maintained.
MR. FEEKEN opined that because the abrogation of the common law
principles of agency is not included in Version U, a licensee
would still have common law fiduciary duties. Removing
"agency", he posited, will merely standardize the language
throughout the real estate statutes, wherein the licensee is
referred to as a real estate licensee, rather than an agent.
REPRESENTATIVE GARA argued:
I guess I worry; it seems to me ... that if ...
throughout the statutes we take out the words
"agency", and throughout the statutes we indicate that
we as a legislature intend that there's not an agency
relationship, and if it doesn't state anymore anywhere
in the statutes that there is an agency relationship,
I'm worried that what we do could be interpreted as
trying to abrogate the agency relationship. Is there
some other place in the statutes that says there is an
agency relationship if we take ... the word "agency"
out of this section?
Number 1891
MR. FEEKEN said he is not sure on that point. Instead, he
offered that in the practices of real estate agents, fiduciary
duties are governed by the common law of agency, which is not
very simple to abrogate. He noted that although a number of
states have attempted to abrogate portions of common law, none
have them have done so successfully. No matter what the
statutes say, the court system uses the common law of agency as
its "guidance" in a dispute.
REPRESENTATIVE GARA said, "So, if we did something in this bill
just to make sure that ... the common law of agency would
continue, I take it you wouldn't have an objection."
MR. FEEKEN said no, because that's what's in place now.
REPRESENTATIVE GRUENBERG offered that use of the word
"representation" on page 4, lines 8 and 9, has the same effect
as using the word "agency", and suggested that perhaps language
could be added to clarify that point.
CHAIR McGUIRE agreed to return to that issue after others have
had a chance to testify.
REPRESENTATIVE GARA mentioned that there are four points that
still cause him concern. He turned attention to page 4, lines
14-17, and asked Mr. Feeken what the term "written preauthorized
consent" entails and when it would come into play.
MR. FEEKEN explained:
What is common practice in the industry is, when you
take a listing, or someone puts a property on the
market, there's a discussion of agency at that time.
And it's fairly common for the listing agent to obtain
written, preauthorized consent to basically show the
property themselves and enter into the potential dual-
agency, dual-representation situation at that time.
That was not clear in the [current subsection (d)] as
to what happened when ... a particular buyer was
found. The interpretation of the [current subsection
(d)] was that that had to be reestablished in writing
at that point. This [proposed new language] is just
to clarify what's really the practice in the industry.
Number 2028
REPRESENTATIVE GARA replied:
I guess what I'm worried is happening here is -- I
mean, I think we're both on board that we want
customers to know if there's a dual agency at some
point, so we want some sort of disclosure if that
happens. I'm wondering whether this new language, by
allowing a written preauthorized consent, gives the
agent the right to, just at the outset of the
relationship, state to the client, "Look, I'm not
representing anybody else, I'm just representing you,
but would you mind signing this form document that
says you're giving me preauthorization to represent
both sides if that ever occurs in the future." Is
that the kind of document we're talking about?
MR. FEEKEN explained that the document says that the seller
acknowledges - or doesn't acknowledge, if he/she doesn't want it
to happen - that there is a potential for that agent to move
into a neutral position in which he/she will withhold certain
confidential information, for example, what the seller is
willing to take for the property and what the buyer is willing
to pay for the property. These are the most common issues of
confidentiality that the agent would retain. Condition of the
property and "all of that" is still passed freely back and
forth, he assured the committee. The seller, at the time of the
listing, has the ability to reject that option if he/she prefers
the agent to fully represent him/her through the entire process.
He remarked that as a practical matter, such does not happen
very often. He mentioned that this document would be presented
to the client at the outset of the relationship, and he offered
to fax members a copy so they could see the wording.
REPRESENTATIVE GARA said that would be helpful.
Number 2172
LINDA S. GARRISON, Broker, AAR #1 Buyer's Agency, first relayed
that HB 257 would neither hurt nor help her company. She
remarked that although testimony has indicated that the purpose
of HB 257 is to bring statute in line with industry practice,
there has been no mention that the bill would offer any
additional public or consumer protection. She opined that
current statute and common law work well as is. She suggested
that the assertion that new disclosure documentation must
provided to the seller every time a different prospective buyer
looks at a piece of property is inaccurate. The agent has the
option of simply telling prospective buyers that he/she
represents the seller. In conclusion, she said that her concern
centers around the fact that certain members of the industry are
attempting to change the law to conform to how they conduct
business, rather than conforming how they conduct business with
current law, which, she reiterated, works well as is.
Number 2266
DAVID A. GARRISON, Associate Broker, AAR #1 Buyer's Agency, said
that although he could agree with the provision in the bill
pertaining to written preauthorization and with the addition of
"lessee" and "lessor", and would like to see those items move
forward, he thinks that the rest of the bill could be gotten rid
of. He then turned attention to page 3, line 3, and said that
removing "agency" from that provision, which pertains to what
real estate examinations may include, does not make any sense
whatsoever because agency, not "real estate licensee
relationships", is what needs to be taught. He mentioned,
however, that if "real estate licensee relationships" were
followed by ", agency", it might resolve his concern. He
offered his belief that the reason [proponents of HB 257] want
to eliminate "agency" is because "they don't even want to teach
it."
MR. GARRISON mentioned that he was one of the members of the AAR
who voted not to support [the legislation]. He suggested that
the committee keep the word "agency" in this proposed statute:
Why call something, something else if it's still a duck?" He
also mentioned that he would like to see the Real Estate
Commission be responsible for creating the agency [disclosure]
form that's to be presented to buyers and sellers, receipt of
which is to be acknowledged at "first substance contact," just
as it is responsible for creating the disclosure form that's to
be presented to the buyer. On the issue of disclosing one's
representation, that is something that can be added to one's e-
mail messages so that every recipient is informed. In
conclusion, he offered that the bill should be narrowed down to
just fix the perceived problem of the agent having to get
written authorization for each buyer in order to act in a dual-
agency capacity.
TAPE 03-49, SIDE B
Number 2393
REPRESENTATIVE GARA said he still has concerns about the
language contained in what is now proposed AS 08.88.396(e),
which says:
(e) The failure of the licensee to make a written
disclosure as required by this section or to obtain a
written acknowledgment or consent as required by this
section does not give a person a cause of action
against the licensee for the failure. However, this
subsection does not limit a person's ability to take
any other action or pursue any other remedy to which
the person may be entitled under other law to recover
for damages or losses suffered.
REPRESENTATIVE GARA asked Mr. Garrison if it would trouble him,
as an agent, to be held liable for not making written disclosure
of dual representation.
MR. GARRISON, in response, mentioned that the courts have held
that although dual agency is not a good idea in the first place,
it should definitely be disclosed if it is going to be done. He
said he thought there definitely should be some strong
punishment for failure to disclose, and suggested deleting all
of [subsection] (e).
MS. GARRISON added that any time the public's legal recourse is
taken away, it negates the purpose of having checks and
balances.
CHAIR McGUIRE, after determining that no one else wished to
testify on HB 257, closed public testimony.
Number 2295
REPRESENTATIVE SAMUELS made a motion to adopt Amendment 1: page
4, line 17, delete "blanket" and insert "written preauthorized".
There being no objection, Amendment 1 was adopted.
Number 2259
REPRESENTATIVE OGG made a motion to adopt Amendment 2: page 3,
line 3, after "real estate licensee relationships," insert "law
of agency,".
Number 2236
CHAIR McGUIRE objected for the purpose of discussion. She noted
that testimony has indicated that the common law of agency will
apply regardless of whether there is reference to it in statute.
She then invited Ms. Nobrega to comment.
MS. NOBREGA remarked that all last year, an agency task force
has been discussing this issue. "We know that agency exists as
far as real estate goes; whether or not we want it to exist and
have a different type of relationship is something we've been
discussing," she added. House Bill 257 does not abrogate the
common law of agency, she stated. In response to a question,
she said that neither she nor the sponsor object to Amendment 2.
REPRESENTATIVE OGG said that Amendment 2 would merely clarify
that the law of agency is something that a real estate licensee
should know in order to pass a real estate examination.
Number 2164
CHAIR McGUIRE withdrew her objection to Amendment 2, and asked
whether there were any further objections. There being none,
Amendment 2 was adopted.
Number 2155
REPRESENTATIVE GARA made a motion to adopt Amendment 3, to
reinsert "agency" on page 3, lines 13, 17, 19, [and 28]. He
offered that doing so would clarify that the relationship
remains an agency relationship.
Number 2132
CHAIR McGUIRE objected for the purpose of discussion.
REPRESENTATIVE GRUENBERG asked whether the same should be done
on line 22.
CHAIR McGUIRE pointed out that line 22 says "an agent" rather
than "agency".
REPRESENTATIVE GARA said he did not think altering line 22 would
be necessary.
CHAIR McGUIRE surmised that by reinserting "agency" on lines 13,
17, 19, and 28, Representative Gara is simply seeking to amend
the areas of statute that refer to the agency relationship
itself, which is not what the language on line 22 refers to.
MS. NOBREGA indicated that Amendment 3 is acceptable.
Number 2064
CHAIR McGUIRE withdrew her objection to Amendment 3, and asked
whether there were any further objections. There being none,
Amendment 3 was adopted.
Number 2055
REPRESENTATIVE GRUENBERG made a motion to adopt Amendment 4, on
page 4, lines 8 and 9, to [insert] "agency" in front of
"representation".
Number 2020
CHAIR McGUIRE objected for the purpose of discussion.
MS. NOBREGA indicated that Amendment 4 is acceptable.
Number 2011
CHAIR McGUIRE withdrew her objection to Amendment 4, and asked
whether there were any further objections. There being none,
Amendment 4 was adopted.
REPRESENTATIVE GRUENBERG turned attention back to Section 4,
which adds new subsection (e) to AS 08.88.396. He suggested
that if the intent of that language is to excuse an agent from
providing written disclosure at a particular point in time such
as when a buyer first views the property, it might be helpful to
have a conceptual amendment that specifies exactly that.
Number 1971
REPRESENTATIVE GRUENBERG made a motion to adopt Conceptual
Amendment [5]: [on page 5, lines 19-20] replace "as required by
this section" with something like "at the time the person viewed
the property".
Number 1959
CHAIR McGUIRE objected. She posited that the goal of Section 4
is to clear up some misunderstandings that have occurred due to
perceptions of what's required at what time. She opined that
[Conceptual Amendment 5] would muddle the issue more.
REPRESENTATIVE GRUENBERG replied that he merely wants to make
Section 4 more specific than what is done by use of the term "as
required by this section", which, he suggested, refers back to
page 3, lines 14-15, which says: "at the time that the licensee
begins to provide specific assistance to locate or acquire real
estate for the buyer [or lessee]".
Number 1901
REPRESENTATIVE GRUENBERG, after indicating a desire to change
[Conceptual Amendment 5], made a motion to word it such that it
would replace "as required by this section" with "at the time
that the licensee begins to provide specific assistance to
locate or acquire real estate for the buyer [or lessee]".
Number 1881
CHAIR McGUIRE objected for the purpose of discussion.
Number 1874
REPRESENTATIVE NORMAN ROKEBERG, Alaska State Legislature,
sponsor, noted that there are other points in time to be
considered; aside from that which is specified on page 3, lines
14-15, another point in time, for example, is referenced on page
3, lines 25-26. He offered that by using the term "as required
by this section", the drafter is simply economizing on language,
and thus [Conceptual Amendment 5] is redundant. He assured the
committee that Section 4 will not abrogate the duties required
by Section 3.
Number 1802
REPRESENTATIVE GRUENBERG withdrew [Conceptual Amendment 5].
REPRESENTATIVE OGG suggested, however, that perhaps some
standard language from the Uniform Commercial Code could be used
to clarify the issue. For example, in dealings between
individuals and/or business entities, the term "within a
reasonable time" is used.
Number 1759
REPRESENTATIVE OGG [made a motion to adopt Conceptual Amendment
6], to alter page 4, lines 19-20, so that it would read: "The
failure of a licensee to make a written disclosure within a
reasonable time as otherwise required by this section". He
suggested that [Conceptual Amendment 6] would provide some
clarity as to when written disclosure must occur, while still
ensuring that someone making his/her best effort to comply will
not be penalized.
REPRESENTATIVE ROKEBERG argued, however, that Section 4 merely
provides for a "licensing action," rather than a cause of action
for damages. He said that although he appreciates
Representative Ogg's concern, timeliness per se should not be
grounds for a cause of action for damages; by inserting a
specific time, the issue would then be raised to a level where
it would have to be decided by the courts.
CHAIR McGUIRE opined that the "reasonable time" standard would
not engender a cause of action because it does not describe a
specific time. She indicated that such language wouldn't be
either confusing or burdensome. From the consumer's
perspective, she added, timing is a part of meaningful
disclosure; for example, if disclosure of agency representation
occurs three months into the relationship, that disclosure is
meaningless.
REPRESENTATIVE ROKEBERG offered, however, that the language on
page 3, lines 14-15, which says, "at the time the licensee
begins to provide specific assistance", raises questions of what
that is and when it occurs. Therefore, adding the phrase
"within a reasonable time", would make the issue convoluted, he
remarked.
MS. NOBREGA added the comment that because the timing issue has
become a subject of debate, staff in the attorney general's
office is working on changes to the regulations in an effort to
define what timeliness means. She suggested that at this point,
nothing more should be added [to the language in Section 4];
instead, it would be better to allow the issue to be addressed
via regulation.
REPRESENTATIVE ROKEBERG said he would be happy to provide
members with a draft copy of those [proposed forthcoming]
regulations.
CHAIR McGUIRE said she agrees that statute should not be written
so specifically that it results in the micromanaging of
activities over the long term. She said that upon further
consideration, it is clear that Section 4 does refer back to and
is triggered by the language on page 3, lines 14-15, which says,
"at the time that the licensee begins to provide specific
assistance to locate or acquire real estate for the buyer [or
lessee]". She remarked that making changes to regulations
sounds like a better way to address this issue.
Number 1530
CHAIR McGUIRE said she would maintain an objection to
[Conceptual Amendment 6].
REPRESENTATIVE GARA offered that there are two different
problems being discussed. He elaborated:
You're supposed to give written disclosure, and we
want real estate agents to give written disclosure of
a conflict. The question is, when do you give the
written disclosure. And, generally, I don't think
people really have a hard time with that: it's when
you contract to do the work for the party. But if at
some point somebody wants to better define that time
period by regulation, that's fine - or even by
statute, that's fine. So that's a separate problem.
The problem raised by Representative Ogg is, should we
let real estate agents off the hook when they don't
give written disclosure of a conflict. And I ...
recall the testimony the same way as related by
[Representative Ogg], it was that ... we, as real
estate agents, don't want to be held liable for
failing to give somebody written disclosure on Monday,
when we started the relationship, when in fact we gave
it to them Tuesday or Wednesday or Thursday. And I
understand that.
So, I think that ... the suggestion by Representative
Ogg - to insert somewhere in Section 4 that ... the
written disclosure is provided within a reasonable
time - is a good one, [although] we'd have to sit down
and scratch out the language. But the moment you
remove liability for not revealing a conflict is the
moment you make the duty meaningless to a consumer.
So, I think we can achieve the intentions of those
who've requested this protection, but also do it
carefully so that we're not throwing the baby out with
the bathwater.
Number 1447
REPRESENTATIVE OGG said that regardless of whether language such
as is found page 3, lines 14-15, is placed in regulation, also
altering Section 4 of HB 257 is not going to complicate the
provision on page 3. All [Conceptual Amendment 6] will do, he
opined, is to say that if and when regulations are changed to
stipulate when that trigger is, then a licensee must make
written disclosure within a reasonable time from that point in
time stipulated by regulation. He posited that if [Conceptual
Amendment 6] is not adopted, it exempts a licensee from ever
providing written disclosure, regardless of what point in time
is later stipulated by regulation.
REPRESENTATIVE GRUENBERG remarked that his concern centers on
the fact that "as" - which is used on page 4, line 20 - can be
read in two ways. It can be read to mean either "at the time"
or "in the manner." Thus line 20 could be read to mean "obtain
a written acknowledgement or consent 'at the time' required by
this section" or "obtain a written acknowledgement or consent
'in the manner' required in this section." He offered his
belief that the intent was to have "as" mean "at the time," and
suggested changing the language to that effect.
REPRESENTATIVE ROKEBERG argued that the phrase, "at the time" is
the crux of the problem "in the field, out there in the real
world." When is that time?
REPRESENTATIVE GRUENBERG, in response, pointed out that the
remainder of HB 257 makes certain requirements. "And what we're
doing here," he remarked, "is creating additional confusion by
the way ... we're (indisc. - voice faded away) because of the
word 'as'."
REPRESENTATIVE ROKEBERG said he respectfully disagrees with
Representative Gruenberg. "What we're talking about here is,
what's the remedy; if there is a failure on the part of this
type of a disclosure, and it's in the main a technical problem,
then ... the bill provides for a lesser remedy than another type
of cause of action," he added, "unless there was actual damages
that occurred."
CHAIR McGUIRE noted that the issue before the committee is
whether to adopt [Conceptual Amendment 6]. She indicated that
she is still maintaining her objection.
Number 1187
REPRESENTATIVE GRUENBERG offered a conforming amendment to
Conceptual Amendment 6 such that line 20 would read: "obtain a
written acknowledgement within a reasonable time as required by
this section".
REPRESENTATIVE OGG indicated that he would accept that amendment
to Conceptual Amendment 6. [No objection was stated, and the
amendment to Conceptual Amendment 6 was treated as adopted.]
REPRESENTATIVE GARA sought confirmation that Conceptual
Amendment 6 [as amended] would mean that liability should attach
if no written consent is provided within a reasonable time.
REPRESENTATIVE OGG agreed.
Number 1139
REPRESENTATIVE GARA made what he called a friendly restatement
of Conceptual Amendment 6 [as amended]: "There should still be
a cause of action unless the real estate agent fails to provide
written disclosure within a reasonable time."
CHAIR McGUIRE asked Representative Ogg if he accepts
Representative Gara's [restatement] that "there should be a
cause of action".
REPRESENTATIVE OGG said he accepts.
Number 1070
A roll call vote was taken. Representatives Ogg, Holm, Gara,
and Gruenberg voted in favor of Conceptual Amendment 6, as
amended. Representatives Samuels, Anderson, and McGuire voted
against it. Therefore, Conceptual Amendment 6, as amended, was
adopted by a vote of 4-3.
The committee took an at-ease from 5:20 p.m. to 5:22 p.m.
[during which Representative Holm indicated a desire to change
his vote].
Number 1022
REPRESENTATIVE HOLM [moved that the committee rescind its action
in adopting Conceptual Amendment 6, as amended].
Number 0977
A roll call vote was taken. Representatives Holm, Samuels,
Gara, Anderson, Ogg, and McGuire voted in favor of the
committee's rescinding its action in adopting Conceptual
Amendment 6, as amended. Representative Gruenberg voted against
it. Therefore, the committee rescinded its action by a vote of
6-1.
Number 0952
A roll call vote was taken. Representatives Gara, Gruenberg,
and Ogg voted in favor of adopting Conceptual Amendment 6, as
amended. Representatives Samuels, Anderson, Holm, and McGuire
voted against it. Therefore, Conceptual Amendment 6, as
amended, failed by a vote of 3-4.
Number 0939
REPRESENTATIVE GARA made a motion to adopt Amendment 7, to
delete Section 5. He said he didn't think that [HB 257] should
be applied retroactively.
Number 0928
CHAIR McGUIRE objected.
Number 0832
A roll call vote was taken. Representatives Gara, Gruenberg,
and Ogg voted in favor of Amendment 7. Representatives Anderson
Holm, Samuels, and McGuire voted against it. Therefore,
Amendment 7 failed by a vote of 3-4.
Number 0822
REPRESENTATIVE HOLM moved to report the CS for HB 257, Version
23-LS0893\U, Bannister, 5/1/03, as amended, out of committee
with individual recommendations and the accompanying [zero]
fiscal note. There being no objection, CSHB 257(JUD) was
reported from the House Judiciary Standing Committee.
ADJOURNMENT
Number 0815
There being no further business before the committee, the House
Judiciary Standing Committee meeting was adjourned at 5:33 p.m.
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