Legislature(1995 - 1996)

04/09/1996 01:35 PM Senate L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
              SENATE LABOR AND COMMERCE COMMITTEE                              
                         April 9, 1996                                         
                           1:35 p.m.                                           
 MEMBERS PRESENT                                                               
 Senator Tim Kelly, Chairman                                                   
 Senator John Torgerson, Vice Chairman                                         
 Senator Mike Miller                                                           
  MEMBERS ABSENT                                                               
 Senator Jim Duncan                                                            
 Senator Judy Salo                                                             
  COMMITTEE CALENDAR                                                           
 HOUSE BILL NO. 478                                                            
 "An Act allowing licensed real estate brokers, associate real                 
 estate brokers, and real estate salespersons to prepare certain               
 documents; and providing for an effective date."                              
 CS FOR HOUSE BILL NO.  319(FIN)                                               
 "An Act relating to the regulation of small loan and retail                   
 installment transactions; and providing for an effective date."               
 SENATE BILL NO. 316                                                           
 "An Act relating to the use of the terms `health' and `disability'            
 in the context of insurance coverage."                                        
 CS FOR HOUSE BILL NO. 359(JUD) am                                             
 "An Act relating to the appointment and confirmation process for              
 members of certain boards, commissions, and similar bodies;                   
 relating to terms of certain appointees; and providing for an                 
 effective date."                                                              
  PREVIOUS   SENATE COMMITTEE   ACTION                                         
 HB 478 - No previous Senate committee action.                                 
 HB 319 - No previous Senate committee action.                                 
 SB 316 - No previous Senate committee action.                                 
 HB 359 - No previous Senate committee action.                                 
    WITNESS REGISTER                                                           
 Norman Rokeberg                                                               
 State Capitol, Juneau, AK 99801-1182¶(907)465-4968                            
   POSITION STATEMENT: prime sponsor of HB 478                                 
 Joan Sheppard                                                                 
 6000 Yukon Road, Anchorage, AK 99516¶(907)346-2017                            
   POSITION STATEMENT: supports HB 478                                         
 Craig Johnson                                                                 
 218 Center Street, Kodiak, AK 99615¶(907)486-2000                             
   POSITION STATEMENT: supports HB 478                                         
 Sherman Ernouf, Aide                                                          
 Senate Labor & Commerce Committee                                             
 State Capitol, Juneau, AK 99801-1182¶(907)465-3844                            
   POSITION STATEMENT: testified on HB 319                                     
 Marianne Burke, Director                                                      
 Division of Insurance                                                         
 Department of Commerce & Economic Development                                 
 P.O. Box 110805, Juneau, AK 99811-0805¶(907)465-2515                          
   POSITION STATEMENT: supports SB 316                                         
 Representative Brian Porter                                                   
 State Capitol, Juneau, AK 99801-1182¶(907)465-4930                            
   POSITION STATEMENT: prime sponsor of HB 359                                 
 Jim Baldwin, Assistant Attorney General                                       
 Civil Division Juneau                                                         
 Department of Law                                                             
 P.O. Box 110300, Juneau, AK 99811-0300¶(907)465-3600                          
   POSITION STATEMENT:                                                         
  ACTION NARRATIVE                                                             
  TAPE 96-25, SIDE A                                                           
        HB 478 REALTORS MAY PREPARE CERTAIN LEGAL DOCS                       
 Number 001                                                                    
 CHAIRMAN KELLY called the Senate Labor and Commerce Committee                 
 meeting to order at 1:35 p.m. and brought up HB 478 as the first              
 order of business before the committee.  He called the prime                  
 sponsor to testify.                                                           
 Number 015                                                                    
 REPRESENTATIVE NORMAN ROKEBERG, prime sponsor of HB 478, informed             
 the committee that he has been a licensed real estate broker in the           
 State of Alaska for twenty-five years.  Therefore, he is intimately           
 aware of the circumstance surrounding the necessity of this                   
 legislation.  He made it clear that he has an inherent conflict of            
 interest, because he could benefit by the bill.  However, the bill            
 was introduced at the request of the Alaska Real Estate                       
 Association, the Alaska Association of Realtors, and some local               
 real estate boards.  He thanked the committee for developing a                
 senate committee substitute removing the words and concepts of                
 deeds of trust and mortgages.  That is the only difference between            
 the bill passed by the house and the scs.  He recommended that                
 language be removed due to recent conversations he's had with the             
 Real Estate Bar, which thinks that the administration of documents            
 performed by a real estate professional does not specifically                 
 include deeds of trust and mortgages, which are more typically                
 drafted by counsel at the request of title companies or clients of            
 title companies for the conveyance and alienation of real property            
 interests.  Real estate brokers do not normally draft, or even fill           
 in the blanks, of deeds of trust and mortgages.                               
 SENATOR KELLY asked if all that is being accomplished by removing             
 deeds of trust and mortgages then is to keep the status quo.                  
 REPRESENTATIVE ROKEBERG replied that is correct.                              
 SENATOR KELLY asked, since that language was deleted, what is left?           
 REPRESENTATIVE ROKEBERG responded that what is left are the                   
 documents normally prepared and used by real estate brokers,                  
 associate brokers, and agents throughout the state.  The reason for           
 the bill is that the Alaska Bar Association drafted a new bar rule,           
 33.3, that was transmitted last October to the Supreme Court.  The            
 adoption of this new bar rule would redefine the scope of the                 
 practice of law in the State of Alaska.  He is concerned that the             
 new bar rule could affect members of the real estate industry.  The           
 real estate industry has been concerned with this for the past five           
 years or so, because there is a feeling that there is no clear                
 demarcation between standard real estate practices and practices              
 conducted by members of the legal profession.  This law is                    
 necessary to keep from impeding the typical bargaining process.  A            
 strict interpretation of the bar rule would require that all forms            
 of bargaining be approved by an attorney, which could mean that               
 even every counter-offer would have to be approved by an attorney.            
 The Alaska Bar Association denies this though, making HB 478                  
 preemptory legislation.                                                       
 Number 120                                                                    
 CHAIRMAN KELLY asked Representative Rokeberg if he is suggesting              
 the Alaska Bar Association's 2,000 members would try to stretch out           
 their ability to generate fees in the State of Alaska.                        
 REPRESENTATIVE ROKEBERG replied he wouldn't suggest that; he would            
 be much more clear about that being probable.  If this law is not             
 passed, real estate commerce could be impeded.                                
 SENATOR KELLY commented there was a statement from the Alaska Bar             
 Association that indicated they weren't trying to do this.                    
 REPRESENTATIVE ROKEBERG stated committee members have in their bill           
 packets a letter from the Alaska Bar Association counsel that is a            
 written response to information requested by Representative                   
 Rokeberg.  The letter indicates that sections 3-e and d of the bar            
 rule specifically exclude members of a profession from using legal            
 proceedings--documents that they prepare.  But he draws committee             
 members' attention to section 3-d, which only addresses filling in            
 forms approved by the court system for use by non-attorneys, or               
 standardized forms prepared and reviewed by counsel.  Every                   
 document used by a real estate professional would have to be                  
 approved on a pre-determined basis.  He thinks that would even                
 include real estate leases.  Real estate agents and brokers do not            
 practice law; that is not the intent here.  All they are asking for           
 is to preserve the status quo and be able to perform their                    
 profession with documentation that has customarily and                        
 traditionally been used.                                                      
 Number 205                                                                    
 CHAIRMAN KELLY asked if there were questions of the sponsor.                  
 Hearing none, he called other witnesses to testify.                           
 Number 210                                                                    
 JOAN SHEPPARD, realtor, testifying from Anchorage, stated she                 
 advises clients to get legal advise.  Realtors currently do not               
 practice law, they are just writing simple contracts negotiated               
 between buyers and sellers.  If it was mandated that these                    
 contracts be written by attorneys, it would be more expensive and             
 take more time to conduct real estate transactions.  She agrees               
 with the deletion of language relating to deeds and mortgages from            
 the legislation.  Ms. Sheppard supports passage of HB 478.                    
 Number 230                                                                    
 CRAIG JOHNSON, realtor, testifying from Kodiak, stated he echoes              
 what has already been said.  He hasn't heard any reasons for                  
 opposing HB 478.  The nation-wide trend has been to move away from            
 required attorney involvement.  He asked that the committee release           
 HB 478.                                                                       
 CHAIRMAN KELLY asked if there are any questions.  Hearing none, he            
 asked if there was a motion for the adoption of the Senate Labor &            
 Commerce Committee substitute.                                                
 Number 260                                                                    
 SENATOR TORGERSON made a motion to adopt the committee substitute             
 for HB 478.                                                                   
 CHAIRMAN KELLY, hearing no objection, stated the committee                    
 substitute was adopted.  He asked the pleasure of the committee.              
 SENATOR TORGERSON made a motion to discharge HB 478 from the Labor            
 & Commerce Committee with individual recommendations.                         
 SENATOR KELLY, hearing no objections, stated HB 478 was discharged            
 from committee.                                                               
        HB 319 SMALL LOANS & RETAIL INSTALLMENT SALES                        
 Number 268                                                                    
 CHAIRMAN KELLY brought up HB 319 as the next order of business                
 before the Senate Labor & Commerce Committee.  He asked the                   
 committee aide to explain the difference between HB 319 and the               
 senate version of that bill.                                                  
 SHERMAN ERNOUF, Committee Aide to the Senate Labor & Commerce                 
 Committee, stated that the only difference between the two versions           
 is HB 319 has an immediate effective date.                                    
 CHAIRMAN KELLY asked if there were any questions about HB 319.                
 SENATOR TORGERSON made a motion to discharge HB 319 from the Senate           
 Labor & Commerce Committee with individual recommendations.                   
 CHAIRMAN KELLY, hearing no objections, stated HB 319 was discharged           
 from committee.                                                               
             SB 316 HEALTH INSURANCE NOMENCLATURE                            
 Number 285                                                                    
 CHAIRMAN KELLY brought up SB 316 as the next order of business                
 before the Senate Labor & Commerce Committee.  He called Ms. Burke            
 to testify.                                                                   
 MARIANNE BURKE, Director, Division of Insurance, Department of                
 Commerce & Economic Development, stated SB 316 is a housekeeping              
 bill.  Throughout Alaska Statutes, the word "disability" is used in           
 an obsolete context relating to health insurance.  We want to bring           
 Alaska Statutes into the present day usage of the term "health".              
 Alaska is one of the few states left that still uses the term                 
 "disability" in statute to mean "health".                                     
 Number 305                                                                    
 SENATOR TORGERSON made a motion to discharge SB 316 from the Senate           
 Labor & Commerce Committee with individual recommendations.                   
 CHAIRMAN KELLY, hearing no objection, stated SB 316 was discharged            
 from committee with individual recommendations.                               
         HB 359 APPOINTMENT PROCESS FOR BDS & COMM'NS                        
 Number 310                                                                    
 CHAIRMAN KELLY brought up HB 359 as the next order of business                
 before the Senate Labor & Commerce Committee.  He called the prime            
 sponsor to testify.                                                           
 Number 315                                                                    
 REPRESENTATIVE BRIAN   PORTER, prime sponsor of HB 359, stated HB 359         
 would specify that appointments made during the interim expire the            
 first day of the session and must be reappointed within 30 days of            
 the beginning of session.  Any appointment made after the first 30            
 days of a session must be submitted within 5 days.  Then the                  
 legislature will confirm or reject that appointment.  If the                  
 appointment is rejected, the person may not be reappointed to the             
 same position.  The requirement to reappoint during session                   
 eliminates the carry-over appointments of the lame-duck                       
 appointments.  It moves almost all of the expiration dates of                 
 boards and commissions to March 1, so that there is some                      
 consistency.  It also eliminates a loophole that could possibly               
 allow a governor to appoint someone during the interim, not present           
 them for appointment, recognizing that the appointment would                  
 expire, and then reappointing the same person so as to retain                 
 someone that the legislature never had the opportunity to confirm.            
 He thinks that the administration generally supports the bill.                
 CHAIRMAN KELLY commented he is still a little confused about the              
 March 1 extension date.  How does it operate now?  Are there                  
 different expiration dates for various boards and commissions?                
 REPRESENTATIVE PORTER responded that as they came on board, they              
 had different dates.  You will notice that HB 359 specifies "except           
 as otherwise provided".  The only one being excluded is the Board             
 of Regents.                                                                   
 CHAIRMAN KELLY asked what extending to March 1 means.  Does that              
 mean the legislature then has the opportunity to look at new                  
 appointees every year?                                                        
 REPRESENTATIVE PORTER replied that is why it's during session.  The           
 debate is just about where in the session you would want to draw              
 that line.                                                                    
 CHAIRMAN KELLY asked if there were questions for Representative               
 Porter.  Hearing none, he called Mr. Baldwin to testify.                      
 Number 360                                                                    
 JIM BALDWIN, Assistant Attorney General, Department of Law,                   
 informed the committee that the Department of Law has been working            
 with Representative Porter on HB 359, and generally, he has                   
 accommodated the department's concerns.  There is one remaining               
 area of concern regarding how the bill would work: all of an                  
 incoming governor's interim appointments would expire on the first            
 day of the session.  The department thinks that would be an                   
 administrative burden on a new governor to have to respond that               
 rapidly when there is so much else going on with the transition.              
 He suggested specifying that the appointments would expire on the             
 date that the name is submitted.  That would give the governor time           
 to handle the transition and would also keep vacancies from                   
 occurring.  He stated that the change could occur, if the committee           
 so desires, to the language on page 5, line 29.  Words could be               
 inserted to the effect that the term would end on the day during              
 the next regular session upon which the appointment is presented.             
 CHAIRMAN KELLY asked if they would lock in how long the governor              
 would have to present those appointments.                                     
 MR. BALDWIN thinks the preceding section of statute specifies 30              
 days; that is existing law.  It is on page 4 of HB 359.                       
 CHAIRMAN KELLY noted that would only be a factor every four years,            
 and perhaps eight years.                                                      
 MR. BALDWIN brought to the committee's attention that there are               
 amendments being made in other sections of the bill to boards or              
 commissions or bodies that, by the executive branch's                         
 interpretation, do not require confirmation.  But for some reason             
 or other the legislature has seen fit to, by statute, make these              
 boards or commissions subject to confirmation.                                
 CHAIRMAN KELLY asked if Mr. Baldwin if there was a problem with               
 specifying the first day of session.  You could essentially have no           
 board for 30 days.  If everybody's term were to end, then you would           
 have a board that could not take action for 30 days.  The chairman            
 asked if he was correct in assuming that might be a possibility.              
 MR. BALDWIN replied that is a possibility under the way the bill is           
 currently written.                                                            
 Number 410                                                                    
 REPRESENTATIVE PORTER thinks that would exist in those situations             
 where a governor would make the lame-duck appointments.  What he is           
 trying to do with HB 359 is take away the motivation to do that.              
 If it was worded so that it was clear that the next governor's                
 appointments had to be made within the confines of the new language           
 of the bill, he would not have great objection to it.                         
 Number 435                                                                    
 CHAIRMAN KELLY thinks staff can work out that problem.  You could             
 just specify every fourth year, just as we do for the start of                
 legislative sessions.  He asked staff to work out that problem                
 between the administration and the sponsor, and the bill will be              
 brought up again first thing on Thursday.  He asked Mr. Baldwin if            
 the governor will sign the bill with that correction, not                     
 withstanding the other objections.                                            
 MR. BALDWIN responded he will have to reply to that question on               
 Thursday.  There has been a meeting with the governor about the               
 CHAIRMAN KELLY, hearing no other comments, adjourned the Senate               
 Labor & Commerce Committee meeting at 2:05 p.m.                               

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