HB 243-COMMON INTEREST COMMUNITIES; LIENS  SB 143-COMMON INTEREST COMMUNITIES; LIENS  9:33:18 AM CO-CHAIR HANNAN announced that the next order of business would be HOUSE BILL NO. 243, "An Act relating to horizontal property regimes and common interest communities; and relating to mortgages, deeds of trust, and other property liens." and SENATE BILL NO. 143, "An Act relating to horizontal property regimes and common interest communities; and relating to mortgages, deeds of trust, and other property liens." CO-CHAIR HANNAN noted that HB 243 and SB 143 are companion pieces of legislation, and she explained that today the committee would focus primarily on SB 143. 9:33:48 AM REPRESENTATIVE DAVID NELSON, Alaska State Legislature, as prime sponsor of HB 243, gave a brief introduction to companion bill SB 143, which he said would help over 250 homeowner and condominium associations formed prior to 1986 collect dues and amend their governing documents. 9:34:55 AM SENATOR JOSH REVAK, Alaska State Legislature, as prime sponsor, presented SB 143. He said the issue was brought to his office by a constituent; [the bill] has been legally vetted; and thus far there has been no opposition. He explained that in 1986, the Uniform Common Interest Ownership Act (UCIOA) made major revisions to Alaska statutes governing homeowners associations (HOAs) and condominium owners associations (COAs) in Alaska. The amendment process created by UCIOA requires that homeowners associations receive written consent from all loan holders before the association can make amendments to its governing document, and associations have found it nearly impossible to obtain written responses and have, therefore, been left with outdated rules they find impossible to legally change. He noted that Susan Jensen, a manager of a homeowners association in Anchorage was available to speak on how this issue has been a problem in her community. SENATOR REVAK discussed the two changes that would be made under SB 143. First, SB 143 would not repeal the current process but would create an alternative: If homeowners associations provide the required notice to lien holders, then the lien holder will be considered to have approved the notice if the association does not receive a response within 60 days. Second, SB 143 would clarify language already in statute to assure pre-1986 associations will be able to collect unpaid dues just like their counterparts since 1986 have are able to do. The clarification would provide consistency in how liens are handled for both pre- and post-UCIOA communities. 9:40:00 AM CO-CHAIR HANNAN opened [invited] testimony on SB 143. 9:40:28 AM SUSAN JENSEN, Manager, Bayshore Owners Association, said Bayshore was founded in 1974 and has been unable to make amendments. As an example of the negative impact, she said the association had been offered $100,000 to create a safe walking path for children in a greenbelt area, but it could not proceed because the required written consent was not possible to obtain. She gave other examples, including the issue of foreclosures and bad debt being passed on from previous owners, all a result of this issue. She urged the committee to pass SB 143. 9:43:34 AM SARAH BADTEN, Attorney at Law, Birch Horton Bittner & Cherot, noted she has been practicing community association law in Alaska for over 15 years. The focus of her work has been to assist associations in interpreting and enforcing their governing documents. She emphasized the numerous times she has seen associations wishing to amend their governing documents be unable to do so "because of this burdensome requirement that they get mortgage lender approval in writing." She emphasized how wonderful SB 143 would be in addressing the two major issues faced by the older associations. She gave examples. She said the banks are "apathetic" and will not take action without approval in writing, and many simple progressive changes go unmade because of this. She said the issue effects not only associations, but the homeowners, as well. The only option is for associations to operate in violation of their documents, which she said she cannot advise. She pointed out another positive result of SB 143 would be equitable treatment of both older and newer associations, especially regarding "the super priority lien." 9:48:42 AM REPRESENTATIVE PRAX asked whether the bill sponsor had reached out directly to the banking community regarding SB 143. 9:49:02 AM CO-CHAIR SCHRAGE responded yes. He said he had spoken directly with banking lobbyists, who are aware of the goal of SB 143 and have "zero opposition." 9:49:25 AM CO-CHAIR HANNAN asked for affirmation that SB 143 would establish neither a new super lien procedure nor a new way to amend association documents; rather, the proposed legislation would simply allow the older associations into current operational standards. 9:50:09 AM EMMA TORKELSON, Staff, Senator Josh Revak, Alaska State Legislature, on behalf of Senator Revak, prime sponsor of SB 143, confirmed that Co-Chair Hannan was correct. She indicated that new language would allow action if the association does not hear back [from the homeowner within 60 days]. 9:51:35 AM CO-CHAIR SCHRAGE, in response to a question from Representative Prax, reemphasized that the only change created under SB 143 would be the provision that no response after 60 days equals consent. MS. TORKELSON, in response to a follow-up question from Representative Prax, explained that SB 143 would not affect "the two-thirds requirement" for changes; it is just about lien holders. 9:53:13 AM MS. BADTEN, in response to a question from Co-Chair Hannan, provided information about the amendment process of homeowners associations. In response to Representative Prax, she clarified that currently there must be an affirmative vote to change bylaws, and the vote can be made in person or by proxy. 9:56:45 AM CO-CHAIR HANNAN announced that SB 143 [and HB 243] were held over.