Legislature(1997 - 1998)

01/27/1998 01:38 PM Senate L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
         SENATE LABOR AND COMMERCE COMMITTEE                                   
                   January 27, 1998                                            
                      1:38 P.M.                                                
MEMBERS PRESENT                                                                
Senator Loren Leman, Chairman                                                  
Senator Jerry Mackie, Vice Chairman                                            
Senator Tim Kelly                                                              
MEMBERS ABSENT                                                                 
Senator Mike Miller                                                            
Senator Lyman Hoffman                                                          
COMMITTEE CALENDAR                                                             
SENATE BILL NO. 235                                                            
"An Act extending the termination date of the Board of Certified               
Real Estate Appraisers."                                                       
     HEARD AND HELD                                                            
SENATE BILL NO. 195                                                            
"An Act relating to common law liens, to remedies, costs, and fees             
imposed for the registration, filing, or recording of certain                  
nonconsensual common law liens, and to penalties for recording                 
common law liens."                                                             
     MOVED SB 195 OUT OF COMMITTEE                                             
PREVIOUS SENATE COMMITTEE ACTION                                               
SB 235 - No previous action to consider.                                       
SB 195 - No previous action to consider.                                       
WITNESS REGISTER                                                               
Ms. Catherine Reardon, Director                                                
Division of Occupational Licensing                                             
Department of Commerce and Economic Development                                
P.O. Box 110806                                                                
Juneau, AK 99811-0806                                                          
POSITION STATEMENT: Supported SB 235.                                          
Mr. John B. Wolfe, Chairman                                                    
Board of Certified Real Estate Appraisers                                      
P.O. Box 240365                                                                
Douglas, AK 99824                                                              
POSITION STATEMENT: Supported SB 235.                                          
Mr. Tim Benintendi, Staff                                                      
Senator Tim Kelly                                                              
State Capitol Bldg.                                                            
Juneau, AK 99811-1182                                                          
POSITION STATEMENT: Commented on SB 195.                                       
Mr. Doug Wooliver, Administrative Attorney                                     
Alaska Court System                                                            
820 W. 4th Ave.                                                                
Anchorage, AK 99501                                                            
POSITION STATEMENT: Supported SB 195.                                          
Mr. Cliff John Groh, Atty.                                                     
Municipality of Anchorage                                                      
P.O. Box 196650                                                                
Anchorage, AK 99519                                                            
POSITION STATEMENT: Supported SB 195.                                          
Ms. Sharon Young, State Recorder                                               
3601 C Street, #1180                                                           
Anchorage, AK 99503                                                            
POSITION STATEMENT: Supported SB 195.                                          
ACTION NARRATIVE                                                               
TAPE 98-2, SIDE A                                                              
Number 001                                                                     
        SB 235 - BOARD OF CERTIFIED REAL ESTATE APPRAISERS                     
CHAIRMAN LEMAN called the Senate Labor and Commerce Committee                  
meeting to order at 1:38 p.m. and announced SB 235 to be up for                
MS. CATHERINE REARDON, Director, Division of Occupational                      
Licensing, supported SB 235.  She noted there was a $0 fiscal note,            
although there is a cost of $35,500 for the Board of Real Estate               
Appraisers that is already built into their budget.  They agreed               
that it is in the public's interest and necessary due to federal               
requirements to have licensing of real estate appraisers.                      
SENATOR LEMAN asked if there were other issues regarding real                  
estate appraisers that she would like to mention.                              
MS. REARDON answered not at this time.                                         
Number 63                                                                      
MR. JOHN WOLF, Chairman, Real Estate Appraisers Board, supported SB
235.  He said the Board has identified three areas that would                  
require statutory change.  The first in priority is to license                 
trainees.  Currently it's just an option. The change would be to AS            
08.87.310 (a).  The reason is that now there are only five                     
certified trainees in Alaska and there are many more than that who             
are working as appraisal assistants.  They are unlicensed and under            
the supervision of a certified appraiser, but there is no                      
requirement for them to have any training whatsoever.  Board                   
members know of some people who function in this capacity for three            
or four years and actually complete appraisal reports and have it              
co-signed by the supervising appraiser. Approximately half of the              
United States require licensing of trainees now.                               
The Board's next concern is mandatory state certification of all               
real estate appraisers.  Currently State law says you must be a                
certified appraiser only for federally related transactions.  This             
means any privately funded sales transactions can be done by                   
someone who is not certified.                                                  
Finally, the Board would like to increase the continuing education             
requirements to 40 hours for each biannual renewal period.                     
Currently the number of hours required is in regulation, but under             
AS 08.87.020 (3) there is a requirement that we not exceed the                 
federal minimums in education and training experience.  So we are              
capped at whatever the federal minimum is.                                     
MR. WOLF said that currently there are 174 certified appraisers -              
83 of them are general appraisers who appraise commercial                      
properties and 84 residential appraisers. There are five trainees              
and two courtesy licenses issued to out-of-state appraisers.                   
SENATOR KELLY asked if a general appraiser could appraise                      
residential property.                                                          
MR. WOLF answered yes, but a residential appraiser can appraise                
anything up to 10 units as long as the income is not required in               
the appraisal.                                                                 
CHAIRMAN LEMAN asked if there was consensus on these issues within             
the profession.                                                                
MR. WOLF replied that all of these things were approved by the                 
Board unanimously, but there are probably differing opinions within            
the industry.  He hasn't found anyone against the licensing of                 
CHAIRMAN LEMAN commented he couldn't see why anyone would care                 
about being licensed if they were already doing work under a                   
certified appraiser.                                                           
MR. WOLF replied there is a quality issue in terms of the report               
that is completed by someone who is not certified competing with a             
report by someone who is fully certified.                                      
CHAIRMAN LEMAN asked if they had a professional society that                   
discussed this issue like engineers have.  He would never think of             
signing off on someone else's work unless he was integrally                    
involved in preparing it.                                                      
MR. WOLF responded that they both work to higher standards than                
some other people.                                                             
CHAIRMAN LEMAN asked if charges had ever been brought against                  
anyone who is operating this way.  MS. REARDON resounded from the              
audience  negatively.                                                          
CHAIRMAN LEMAN asked the committee if they had any problems with               
amending the bill to include these changes if they had support from            
within the profession.                                                         
SENATOR KELLY replied that one of his concerns is not if they have             
support in the profession, but from people who are trying to join              
the profession.  In his experience, these types of boards tend to              
try to raise the gates on new entries creating monopolies for a                
small group of people.                                                         
SENATOR MACKIE agreed with Senator Kelly and suggested leaving the             
bill as it is and dealing with the other issues in separate                    
legislation.  He moved SB 235 from committee with individual                   
CHAIRMAN LEMAN objected for purposes of discussion.                            
MR. WOLF responded that the Board had no problem with the bill                 
going through in its current form.  He was merely expressing three             
items that they recently adopted.  He explained that the mandatory             
licensing would affect some people who are doing appraisals and are            
not involved in a federally related transaction, but it wouldn't               
change any current standard or requirements for becoming an                    
appraiser.  It's just that during that period of time when you're              
gaining experience, the required 1,500 hours in a 24-month period,             
you would be a trainee rather than unlicensed appraiser.                       
SENATOR KELLY asked what the advantage was if you are putting in               
the same amount of time.                                                       
MR. WOLF answered that there are people functioning as an assistant            
who have absolutely no intention of ever becoming an appraiser and             
have never taken any training or education.                                    
SENATOR KELLY asked if they want to license trainees, were they                
talking about adding some kind of educational requirement.                     
MR. WOLF responded that there is now a 75-hour requirement in                  
place.  They are not adding a trainee classification.                          
CHAIRMAN LEMAN asked if a trainee could not engage in the practice             
of real estate appraisal under the direct supervision of a                     
certified real estate appraiser unless they were a registered                  
trainee.  MR. WOLF said that is correct.                                       
CHAIRMAN LEMAN said he would like to see these ideas written down              
before they pass the bill from committee.                                      
SENATOR KELLY requested that Ms. Reardon look at the proposed                  
amendments also and submit a position paper on what the Division               
thinks at that stage.                                                          
CHAIRMAN LEMAN affirmed that request and said they would hold the              
SENATOR MACKIE withdrew his motion.                                            
Number 409                                                                     
                    SB 195 - COMMON LAW LIENS                                  
CHAIRMAN LEMAN announced SB 195 to be up for consideration and that            
it was introduced by request through the Rules Committee.                      
MR. TIM BENINTENDI, Staff to the Senate Rules Committee, explained             
that SB 195 addresses the emerging problem of filing of nuisance               
liens in this State with the intention of retribution.  Such liens             
have been filed against property owned by public officials and                 
others who have fallen in disfavor with certain groups or                      
individuals who embrace an opposing philosophical or political                 
view.  The liens rarely have true commercial foundation, but are               
used as a harassment tactic.  The practice has now surfaced in                 
Alaska as several municipal officials can attest from the                      
Municipality of Anchorage.                                                     
SB 195 makes it a misdemeanor to record a non-consensual common law            
lien without court approval.  It would ease the process of                     
releasing a lien and would provide for filing a notice of invalid              
lien by attorneys of public officials.  It would also set out                  
penalties against those who file such nuisance liens.  It has two              
$0 fiscal notes and has a wide variety of support in the public                
CHAIRMAN LEMAN asked if the Department of Law would represent                  
someone in the legislative branch of government.                               
MR. BENINTENDI said that the Legislative Legal Department would                
represent them.  He understands that municipal attorneys would                 
represent their people.                                                        
MR. WOOLIVER, Alaska Court System, testified that the court system             
asked for this bill to be introduced to address this growing                   
problem of recording common law liens against real and personal                
property in Alaska which is an enormous problem in some other                  
states.  Although these liens are meaningless, they still cloud                
title that is typically discovered when someone goes to sell or                
borrow against their property.  Typically these liens are for                  
several hundred thousand, if not millions, of dollars.  No action              
can be taken on a property until this lien is cleared up.                      
In the past generally one has to file a lawsuit to get these                   
resolved.  Suing someone for a common law lien can be frustrating              
experience because they don't believe they are subject to the                  
jurisdiction of the court and you end up in a paper war in addition            
to trying to get a lien removed, Mr. Wooliver said.                            
Under current law there are several ways people can legitimately               
file liens and this bill doesn't seek to frustrate those.  For                 
example there are material liens, mechanics liens, fishermen liens,            
etc. and all of these liens are typically tied to a specific piece             
of property for work done on the property.  There is an actual tie             
between the lien and what the person has done.                                 
Common law liens are not accompanied by any kind of valid court                
judgement and aren't tied to work done or goods or services                    
provided. They are typically filed against public officials who                
have run afoul of someone who has recorded the lien.                           
SB 195 seeks to address this problem in three ways.  First there               
are expedited procedures to have a lien removed or declared invalid            
if one is filed against a person.  There are two aspects to that.              
An attorney representing an official could record a notice of                  
invalid lien and it would become invalid and not have to go to                 
court.  The second option is for someone who is not an official who            
can petition the court and attach an affidavit explaining the                  
predicament.  The the court can have a hearing within 20 days.  If             
the person doesn't show up, the court enters a notice of invalid               
lien and records that.  If a person does show up and the court                 
finds this is an invalid lien, then court records a notice of                  
invalid lien and the person who is the lien claimant would pay                 
costs and actual and reasonable attorney fees.                                 
The second prong is that it provides for civil damages and third,              
it makes the filing of a bogus common law lien a class A                       
Number 525                                                                     
MR. CLIFF JOHN GROH, Municipality of Anchorage, strongly supported             
this bill.  He explained there have been 43 false liens filed                  
against municipal officials in Anchorage.  These filings are                   
getting to be more common.  He explained some of the financing                 
problems one can run into with liens filed on their properties.                
MS. SHARON YOUNG, State Recorder, testified in addition to Mr.                 
Groh's testimony that these types of liens are definitely becoming             
more frequent in Alaska as everywhere else in the United States.               
They are definitely becoming a tool with which people are using the            
public record to get at people they are discontent with.                       
She definitely supports this bill from the standpoint of the                   
recording system in general.                                                   
TAPE 98-2, SIDE B                                                              
MS. YOUNG said she did not want recorders placed in the role of                
having to review documents for substantive content or validity.                
That concern is resolved with this bill.                                       
CHAIRMAN LEMAN asked if her office sends a notice to an owner when             
a lien is filed.                                                               
MS. YOUNG replied that there is no notice provision by her office.             
SENATOR MACKIE moved to pass SB 195 out of committee with                      
individual recommendations.  There were no objections and it was so            
CHAIRMAN LEMAN adjourned the meeting at 2:25 p.m.                              

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