HOUSE BILL NO. 290 "An Act extending the termination date of the Real Estate Commission; and providing for an effective date." 3:44:19 PM LAURA STIDOLPH, STAFF, REPRESENTATIVE KURT OLSON, explained that the legislation would extend the termination date of the Real Estate Commission to June 28, 2018. She stated that each year the Division of Legislative Audit reviewed boards and commissions in order to determine whether they should be reestablished per A.S.24.44. The division reviewed the activities of the commission in order to determine whether there was a demonstrated need for the commissions continued existence, and whether it had been operating in an effective manner. She stated that the review of the audit offered the opinion that the board was serving the public interest by effectively by licensing real estate broker, associate brokers, and sales people. She noted that the division had offered two recommendations: 1. The commission's chair and the Department of Commerce, Community, and Economic Development, Division of Administrative Services director should work together to procure a master errors and omissions insurance policy for real estate licensees. 2. The Division of Corporations, Business and Professional Licensing's chief investigator should take action to ensure cases are actively investigated and completed timely. Ms. Stidolph concluded that the commission served an important role by improving operations and industry practices by modifying and adopting regulations. She added that because the commission's ability to obtain Errors and Omissions (E&O) insurance was key to the decision to extend the board, the sponsor felt that the commission should only be extended for two years. She said that the E&O insurance was a significant statutory duty to protect the public that was not being met, and was a problem that had not been solved in 9 years and required further scrutiny by the legislature. 3:46:08 PM KRIS CURTIS, LEGISLATIVE AUDITOR, ALASKA DIVISION OF LEGISLATIVE AUDIT, related that the division had issued a 6 year recommendation for extension under the condition that the commission obtain the E&O insurance by January 2016. She said that if the commission were unable to do so, the division recommended a 4 year extension. She elaborated on the two previously mentioned audit recommendations. 3:48:32 PM Senator Dunleavy wondered whether there the commission should be monitored by the Department of Commerce, Community and Economic Development. Ms. Curtis explained that investigations would still occur regardless of which entity monitored the commission. 3:49:16 PM Co-Chair MacKinnon OPENED public testimony. 3:49:43 PM BUTCH MOORE, SELF, BIG LAKE (via teleconference), spoke to a complaint that he had filed with the commission in 2014. He said that the real estate violations had cost him over $250,000. He relayed his personal story and expressed frustration with the commission. 3:52:50 PM Co-Chair MacKinnon queried whether Mr. Moore was in favor of the bill or in opposition. Mr. Moore did not think the real estate commission needed to be funded. He believed that there was no point in funding the commission if it could not do the job of protecting the public. 3:54:10 PM Co-Chair MacKinnon CLOSED public testimony. 3:54:40 PM JANEY HOVENDEN, DIRECTOR, DIVISION OF CORPORATIONS, BUSINESS AND PROFESSIONAL LICENSING, DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, expressed appreciation for Ms. Curtis' comments and the work of the division. She spoke to the recommendations made by the division of budget and audit. She asserted that the department had endeavored to retain and E&O policy, but had faced challenges at every stage of the process. She relayed that in November 2015, the department had put out information soliciting for bids for the master policy, but there had been no bidders. She said that the department had received feedback that the premiums set in regulation were too low, and that there had not been enough information provided about the risk pool; there were not enough people with E&O insurance to be able to evaluate the risk. She said that the commission was researching additional information that could assist in regulation to address concerns and would soon be putting out another invitation to bid (ITB). She spoke to the problem of files lingering for extended periods of time, and said that solutions were being instituted to deal with the gaps in investigative cases. She noted that the board was operating in the black and had recently experienced a reduction in fees due to a large surplus. She concluded that the commission was necessary for guiding the profession, and the division, in the regulation of the profession. She said that whether or not the board was in existence, the licensing requirements were in statute and people were still required to be licensed and were best served by the board. HB 290 was HEARD and HELD in committee for further consideration.