ALASKA STATE LEGISLATURE
SENATE JUDICIARY STANDING COMMITTEE
May 1, 2004
5:12 p.m.
TAPE(S) 04-57
MEMBERS PRESENT
Senator Ralph Seekins, Chair
Senator Scott Ogan, Vice Chair
Senator Gene Therriault
Senator Hollis French
MEMBERS ABSENT
Senator Johnny Ellis
COMMITTEE CALENDAR
SENATE JOINT RESOLUTION NO. 33
Urging our United States Senators to work to allow a timely vote
on the floor on all judicial nominations.
SCHEDULED BUT NOT HEARD
CS FOR SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 29(JUD) am
"An Act relating to real estate licensees and real estate
transactions; and providing for an effective date."
MOVED SCS CSSSHB 29(JUD) OUT OF COMMITTEE
CS FOR HOUSE BILL NO. 15(FIN) am
"An Act relating to fair trade practices and consumer
protection, to telephone solicitations, to charitable
solicitations; and providing for an effective date."
MOVED SCS CSHB 15(JUD) OUT OF COMMITTEE
CS FOR HOUSE BILL NO. 514(FIN) am
"An Act relating to child support modification and enforcement,
to the establishment of paternity by the child support
enforcement agency, and to the crimes of criminal nonsupport and
aiding the nonpayment of child support; amending Rule 90.3,
Alaska Rules of Civil Procedure; and providing for an effective
date."
MOVED SCS CSHB 514(JUD) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 29
SHORT TITLE: REAL PROPERTY TRANSACTIONS/LICENSEES
SPONSOR(s): REPRESENTATIVE(s) ROKEBERG
01/21/03 (H) PREFILE RELEASED (1/10/03)
01/21/03 (H) READ THE FIRST TIME - REFERRALS
01/21/03 (H) L&C, JUD
01/20/04 (H) SPONSOR SUBSTITUTE INTRODUCED
01/20/04 (H) READ THE FIRST TIME - REFERRALS
01/20/04 (H) L&C, JUD
02/04/04 (H) L&C AT 3:15 PM CAPITOL 17
02/04/04 (H) Moved CSSSHB 29(L&C) Out of Committee
02/04/04 (H) MINUTE(L&C)
02/05/04 (H) L&C RPT CS(L&C) 6DP 1NR
02/05/04 (H) DP: CRAWFORD, LYNN, GATTO, ROKEBERG,
02/05/04 (H) DAHLSTROM, ANDERSON; NR: GUTTENBERG
02/18/04 (H) JUD AT 1:00 PM CAPITOL 120
02/18/04 (H) Heard & Held
02/18/04 (H) MINUTE(JUD)
02/20/04 (H) JUD AT 1:00 PM CAPITOL 120
02/20/04 (H) Moved CSSSHB 29(JUD) Out of Committee
02/20/04 (H) MINUTE(JUD)
02/26/04 (H) JUD RPT CS(JUD) 4DP 2NR
02/26/04 (H) DP: SAMUELS, ANDERSON, OGG, MCGUIRE;
02/26/04 (H) NR: GARA, GRUENBERG
03/04/04 (H) TRANSMITTED TO (S)
03/04/04 (H) VERSION: CSSSHB 29(JUD) AM
03/05/04 (S) READ THE FIRST TIME - REFERRALS
03/05/04 (S) L&C, JUD
04/15/04 (S) L&C AT 1:30 PM BELTZ 211
04/15/04 (S) Heard & Held
04/15/04 (S) MINUTE(L&C)
04/22/04 (S) L&C AT 1:30 PM BELTZ 211
04/22/04 (S) UNIV. STUDENT PRACTICUM LIABILITY/WAGES
04/23/04 (S) JUD AT 8:00 AM BUTROVICH 205
04/23/04 (S) <Pending Referral>
04/27/04 (S) L&C AT 1:30 PM BELTZ 211
04/27/04 (S) Moved SCS CSSSHB 29(L&C) Out of
Committee
04/27/04 (S) MINUTE(L&C)
04/28/04 (S) JUD AT 8:00 AM BUTROVICH 205
04/28/04 (S) <Pending Referral>
05/01/04 (S) JUD AT 5:00 PM BUTROVICH 205
BILL: HB 15
SHORT TITLE: SOLICITATIONS/CONSUMER PROTECTION
SPONSOR(s): REPRESENTATIVE(s) FATE
01/21/03 (H) PREFILE RELEASED (1/10/03)
01/21/03 (H) READ THE FIRST TIME - REFERRALS
01/21/03 (H) L&C, STA, FIN
01/29/03 (H) L&C AT 3:15 PM CAPITOL 17
01/29/03 (H) <Bill Postponed>
02/07/03 (H) L&C AT 3:15 PM CAPITOL 17
02/07/03 (H) Moved CSHB 15(L&C) Out of Committee
02/07/03 (H) MINUTE(L&C)
02/10/03 (H) L&C RPT CS(L&C) NT 3DP 4AM
02/10/03 (H) DP: CRAWFORD, ROKEBERG, ANDERSON;
02/10/03 (H) AM: LYNN, GATTO, GUTTENBERG, DAHLSTROM
02/18/03 (H) STA AT 8:00 AM CAPITOL 102
02/18/03 (H) Heard & Held
02/18/03 (H) MINUTE(STA)
02/25/03 (H) STA AT 8:00 AM CAPITOL 102
02/25/03 (H) Scheduled But Not Heard
03/11/03 (H) STA AT 8:00 AM CAPITOL 102
03/11/03 (H) Heard & Held
03/11/03 (H) MINUTE(STA)
03/13/03 (H) STA AT 8:00 AM CAPITOL 102
03/13/03 (H) Moved CSHB 15(STA) Out of Committee
03/13/03 (H) MINUTE(STA)
03/26/03 (H) STA RPT CS(STA) NT 3DP 4NR
03/26/03 (H) DP: SEATON, GRUENBERG, WEYHRAUCH;
03/26/03 (H) NR: HOLM, LYNN, DAHLSTROM, BERKOWITZ
02/19/04 (H) FIN AT 1:30 PM HOUSE FINANCE 519
02/19/04 (H) Heard & Held
02/19/04 (H) MINUTE(FIN)
02/23/04 (H) FIN AT 1:30 PM HOUSE FINANCE 519
02/23/04 (H) Moved CSHB 15(FIN) Out of Committee
02/23/04 (H) MINUTE(FIN)
02/24/04 (H) FIN RPT CS(FIN) NT 7DP 3NR
02/24/04 (H) DP: HAWKER, CROFT, CHENAULT, FATE,
02/24/04 (H) MEYER, HARRIS, WILLIAMS; NR: STOLTZE,
02/24/04 (H) JOULE, MOSES
03/03/04 (H) TRANSMITTED TO (S)
03/03/04 (H) VERSION: CSHB 15(FIN) AM
03/04/04 (S) READ THE FIRST TIME - REFERRALS
03/04/04 (S) L&C, JUD
03/25/04 (S) L&C AT 1:30 PM BELTZ 211
03/25/04 (S) Heard & Held
03/25/04 (S) MINUTE(L&C)
04/06/04 (S) L&C AT 2:00 PM BELTZ 211
04/06/04 (S) Heard & Held
04/06/04 (S) MINUTE(L&C)
04/13/04 (S) L&C AT 1:30 PM BELTZ 211
04/13/04 (S) -- Meeting Canceled --
04/20/04 (S) L&C AT 2:00 PM BELTZ 211
04/20/04 (S) Moved SCS CSHB 15(L&C)am Out of
Committee
04/20/04 (S) MINUTE(L&C)
04/22/04 (S) L&C RPT SCS 1DP 4NR SAME TITLE
04/22/04 (S) NR: BUNDE, DAVIS, FRENCH, STEVENS G;
04/22/04 (S) DP: SEEKINS
04/28/04 (S) JUD AT 8:00 AM BUTROVICH 205
04/28/04 (S) Heard & Held
04/28/04 (S) MINUTE(JUD)
05/01/04 (S) JUD AT 5:00 PM BUTROVICH 205
BILL: HB 514
SHORT TITLE: CHILD SUPPORT ENFORCEMENT/ CRIMES
SPONSOR(s): REPRESENTATIVE(s) KOTT
02/16/04 (H) READ THE FIRST TIME - REFERRALS
02/16/04 (H) JUD
02/23/04 (H) JUD AT 1:00 PM CAPITOL 120
02/23/04 (H) Heard & Held
02/23/04 (H) MINUTE(JUD)
02/27/04 (H) JUD AT 1:00 PM CAPITOL 120
02/27/04 (H) Moved CSHB 514(JUD) Out of Committee
02/27/04 (H) MINUTE(JUD)
03/03/04 (H) JUD RPT CS(JUD) 5DP
03/03/04 (H) DP: GARA, SAMUELS, GRUENBERG, OGG,
03/03/04 (H) MCGUIRE
03/03/04 (H) FIN REFERRAL ADDED AFTER JUD
03/08/04 (H) FIN AT 1:30 PM HOUSE FINANCE 519
03/08/04 (H) Heard & Held
03/08/04 (H) MINUTE(FIN)
03/23/04 (H) FIN AT 1:30 PM HOUSE FINANCE 519
03/23/04 (H) Moved CSHB 514(FIN) Out of Committee
03/23/04 (H) MINUTE(FIN)
03/24/04 (H) FIN RPT CS(FIN) 4DP 3NR 2AM
03/24/04 (H) DP: HAWKER, FOSTER, FATE, WILLIAMS;
03/24/04 (H) NR: JOULE, CHENAULT, HARRIS;
03/24/04 (H) AM: STOLTZE, CROFT
03/31/04 (H) TRANSMITTED TO (S)
03/31/04 (H) VERSION: CSHB 514(FIN) AM
04/01/04 (S) READ THE FIRST TIME - REFERRALS
04/01/04 (S) JUD, FIN
04/16/04 (S) JUD AT 8:00 AM BUTROVICH 205
04/16/04 (S) Scheduled But Not Heard
04/19/04 (S) JUD AT 8:00 AM BUTROVICH 205
04/19/04 (S) Heard & Held
04/19/04 (S) MINUTE(JUD)
04/20/04 (S) JUD AT 8:00 AM BUTROVICH 205
04/20/04 (S) Heard & Held
04/20/04 (S) MINUTE(JUD)
04/21/04 (S) JUD AT 8:00 AM BUTROVICH 205
04/21/04 (S) Bill Postponed To 4/23/04
04/23/04 (S) JUD AT 8:00 AM BUTROVICH 205
04/23/04 (S) Heard & Held
04/23/04 (S) MINUTE(JUD)
04/29/04 (S) JUD AT 8:00 AM BUTROVICH 205
04/29/04 (S) Scheduled But Not Heard
05/01/04 (S) JUD AT 5:00 PM BUTROVICH 205
WITNESS REGISTER
Ms. Sue Stancliff
Aide to Representative Kott
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Explained amendments to HB 514
Ms. Landa Bailey
Special Assistant
Department of Revenue
PO Box 110400
Juneau, AK 99811-0400
POSITION STATEMENT: Answered questions about HB 514
Mr. John Mallonee
Acting Director
Child Support Enforcement Division (CSED)
Department of Revenue
PO Box 110400
Juneau, AK 99811-0400
POSITION STATEMENT: Answered questions about HB 514
Representative Hugh Fate
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Sponsor of HB 15
Ms. Susan Burke
Gross & Burke
Juneau, AK
POSITION STATEMENT: Explained Amendment 1a to HB 15 and
supported the legislation as amended
Mr. David Marcus
Assistant Attorney General
Department of Law
PO Box 110300
Juneau, AK 99811-0300
POSITION STATEMENT: Supported Amendment 1a to HB 15
Representative Norm Rokeberg
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Sponsor of HB 29
Ms. Peggy Ann McConnochie
Alaska Realtors Association
Juneau, AK
POSITION STATEMENT: Supports SCS CSHB 29(JUD)
ACTION NARRATIVE
TAPE 04-57, SIDE A
CHAIR RALPH SEEKINS called the Senate Judiciary Standing
Committee meeting to order at 5:12 p.m. Senators French, Ogan,
Therriault and Chair Seekins were present. He announced the
committee would also meet at 3:00 p.m. the following day and
that it would first take up HB 514.
HB 514-CHILD SUPPORT ENFORCEMENT/ CRIMES
CHAIR SEEKINS reminded members that public testimony on HB 514
had been closed and that he is trying to find out how
comfortable committee members are with the bill and what the
committee can do to make sure that the Child Support Enforcement
Division (CSED) "can nab the bad guys but not unnecessarily
make bad guys out of people who have, what we call in this, a
lawful excuse not to have paid child support." He noted that
Senator Ogan has had some legitimate concerns that the committee
is trying to address.
SENATOR OGAN expressed concern that under this bill, 15,000
people could become felons. He said he was considering amending
the prison bill to create a debtors' prison because the state
may need one if it is going to prosecute people under HB 514.
MS. SUE STANCLIFF, staff to Representative Pete Kott, sponsor of
HB 514, pointed out that a new work draft had been provided to
members, labeled version C.
CHAIR SEEKINS moved to adopt version C as the working document
before the committee.
SENATOR FRENCH objected for the purpose of an explanation of the
changes made in version C.
MS. STANCLIFF explained that version C incorporates the three
amendments previously adopted by the Senate Judiciary Committee.
It also contains a couple of conceptual amendments that are
corrective in nature. The first, on page 2, line 5, conforms to
one amendment the committee adopted to increase the debt amount
from $10,000 to $20,000. The second conceptual amendment is on
page 7, line 9: a comma was inserted following the word "year".
SENATOR OGAN moved the two conceptual amendments.
CHAIR SEEKINS designated the two conceptual amendments as
Amendment 4. There being no objection, Amendment 4 was adopted.
SENATOR FRENCH asked where the language came from in Section 12
on page 5 that pertains to the non-cash contribution.
MS. STANCLIFF said that was another change she planned to get to
and explained that language was incorporated from HB 176, which
is currently in the House Finance Committee. That language
allows non-custodial parents to support their children in ways
other than monetary payments, such as providing a winter supply
of firewood or a freezer full of meat. Those non-cash items
would be recognized as support. It is her understanding that
Representative Coghill or his staff spoke to members of the
Senate Judiciary Committee about that change.
SENATOR OGAN said he likes the concept but worries about the
ambiguous nature of valuing those items. He asked if the
Department of Revenue (DOR) could quantify what those items are
worth by regulation. He said if a father remodeled a room in an
ex-wife's home, the wife could get bids from other contractors
to quantify the worth of that project but the concept has many
pitfalls.
CHAIR SEEKINS noted the language says the two parties must
agree.
MS. STANCLIFF responded that Representative Coghill's staff
indicated that the value would be set through a written
agreement between the custodial and non-custodial parents and
that CSED would have a duty to make sure the value is
reasonable. However, the non-cash contributions would not apply
to accounts when the custodial parent is receiving public
assistance because when that occurs, CSED steps in to enforce
the collection of monetary support.
MS. LANDA BAILEY, special assistant, DOR, informed members that
CSED and the Department of Law (DOL) have worked out the
glitches in the process. She deferred to staff from those
agencies to explain that process.
MR. JOHN MALLONEE, acting director of CSED, told members when he
originally looked at this bill and spoke to Representative
Coghill's staff, it had CSED determining the value. That was
cause for concern. That value differs depending on location and
conditions and CSED has no way to monitor it. CSED felt it would
be much more beneficial to all concerned if there was an
agreement between the two parties as to the value of the item.
He noted if the non-cash item is to satisfy the debt between the
two parties and not with CSED, then those parties should be able
to determine the value.
CHAIR SEEKINS asked if a situation arose in which the non-
custodial parent changed a towel bar and was given a $20,000
credit, who the custodial parent would appeal to.
MR. MALLONEE said there would be no ability to appeal at that
point since the two parties would have agreed.
SENATOR FRENCH agreed the concept is a good one but said he has
severe concerns about how it will work in reality. He thought
that getting into the business of valuing non-cash contributions
would be a nightmare for CSED. He pointed out that the language
on page 6, lines 5-6 says the non-cash contribution could be
directed to a creditor of the child's custodian. He said if the
child's custodian owed a $500 bar tab, the non-custodial parent
could deliver moose meat directly to the bar.
MR. MALLONEE explained that the non-cash item must cover the
basic needs of the children, such as food, heat or housing. A
non-cash payment might be made to a creditor if the non-
custodial parent was unable to make a mortgage payment or pay a
heating bill, for example.
SENATOR FRENCH appreciated the explanation but expressed
continued concern about the difficulty of valuating non-cash
contributions.
SENATOR OGAN maintained that small claims courts are full of
cases and as a contractor, he would refuse to take payments in
advance because he felt waiting for the final payment motivated
him and assured that his client was satisfied. He noted jobs
that he bartered for were often not a priority for him. He
expressed concern that a custodial parent could agree in advance
to a non-cash contribution, such as a remodel project, and then
be dissatisfied with the work and CSED would have to get
involved.
CHAIR SEEKINS asked members if there was objection to adopting
version C.
SENATOR FRENCH noted that he preferred the prior version of the
bill [version X.A].
CHAIR SEEKINS asked Ms. Stancliff if the language change in
Section 12 is the only substantive change in version C.
MS. STANCLIFF verified that it is.
SENATOR FRENCH maintained his objection to adopting version C.
CHAIR SEEKINS asked Ms. Stancliff if the sponsor will have a big
"hiccup" if the committee continues to work on the prior
version.
MS. STANCLIFF said he would not; Section 12 provided an
opportunity to help people who do not have the ability to pay
cash and he was only trying to make a good bill better.
The motion to adopt version C failed with Senators French and
Seekins opposed, and Senator Ogan in favor.
[There was some confusion as to whether the committee was
working from version B or version X.A.]
SENATOR FRENCH moved to adopt version X.A as the working
document before the committee.
CHAIR SEEKINS noted without objection, the motion carried.
CHAIR SEEKINS referred to language on page 3, line 7, and asked
if the 24 months would be consecutive or cumulative.
MR. MALLONEE said it would be 24 consecutive months.
CHAIR SEEKINS moved to adopt Amendment [5], to insert the word
"consecutive" after the number "24" on page 3, line 7, and at
any other appropriate place in the bill [page 2, line 6]. With
no objection, the motion carried.
SENATOR OGAN moved to insert the word "intentionally" on page 1,
line 14, after the word "person" [Amendment 6].
CHAIR SEEKINS suggested placing the word "intentionally" on page
2, line 2, after the word "person" instead.
SENATOR FRENCH objected and said for the sake of consistency,
the word "knowingly" should be used.
SENATOR OGAN agreed with Senator French.
CHAIR SEEKINS suggested inserting the word "knowingly" after the
word "person" on page 2, line 2.
SENATOR OGAN agreed to that language and placement change.
CHAIR SEEKINS announced that without objection, Amendment [6]
was adopted.
Members discussed inserting "knowingly" on page 2, line 29 also,
but decided it was unnecessary.
SENATOR OGAN moved to give the legal drafter authority to make
corrections if he or she finds inconsistencies due to the
previous amendment (Amendment [7]).
MS. BAILEY pointed out that the word "knowingly" is on page 1,
line 9.
CHAIR SEEKINS clarified that without objection, conceptual
Amendment [7] was adopted.
CHAIR SEEKINS repeated that his concern about HB 514 is that
CSED go after the egregious offenders - people who deliberately,
knowingly, and intentionally live large on their children, not
the people who cannot make payments. He would prefer that the
bill contain language that says prior to being able to charge a
person with a felony, CSED have a consultation with that person,
but he was not willing to insert such language in the bill at
this point.
MS. BAILEY pointed out that Section 12 of version X.A is the
forgiveness provision. That provision provides a way for people
who are in arrears in their state-owed debt to resolve the
situation with CSED through a settlement process. She indicated
that even though 15,000 cases are potential felony cases, the
majority of those people simply are unable to pay and those
people cannot be charged with a felony under this provision
unless they have the ability to pay.
SENATOR OGAN said the wording in the bill is good and noble, but
many people do not report their income and work under the table.
Those people could claim they only earned minimal income and
apply for forgiveness and would be hard to catch. He asked if
the bill contains a provision that would help CSED to prove
fraud in those cases, because those are the people he would like
to charge with felonies.
CHAIR SEEKINS said if CSED could prove that a person
intentionally failed to provide support that would be fraud.
MS. BAILEY informed members that if Diane Wendlandt, Assistant
Attorney General, and the investigators at CSED find criminal
activity, they work hard to prosecute.
CHAIR SEEKINS asked if some prosecuting attorneys in the
district attorneys offices specialize in misdemeanors while
others specialize in felonies.
SENATOR FRENCH said generally the felony DWI cases fall to the
misdemeanor attorneys but one part-time assistant attorney
general handles all the CSED cases. He pointed out that the fact
that no one is willing to expand her work hours will constrain
this law.
MS. BAILEY pointed out that under the current statutory
structure, CSED can only charge people with misdemeanors and one
person in the district attorney's office works on those cases.
CHAIR SEEKINS asked the will of the committee.
SENATOR FRENCH moved SCS CSHB 514(JUD) to the next committee of
referral with its attached fiscal notes.
The motion carried with Senators French, Ogan and Chair Seekins
in favor.
HB 15-SOLICITATIONS/CONSUMER PROTECTION
REPRESENTATIVE HUGH FATE, sponsor of HB 15, said the issue of
written agreements was raised at the last hearing and that Mr.
Pound would elaborate on that.
CHAIR SEEKINS asked if the committee is to look at a negotiated
agreement this afternoon.
REPRESENTATIVE FATE said that is correct and that he has
reviewed and supports it.
CHAIR SEEKINS indicated the committee has been working on
version W.
SENATOR OGAN moved to adopt Amendment 1a, which reads as
follows.
A M E N D M E N T 1a
1. Page 8, lines 13-19, delete all material and insert:
(10) by a person who is primarily soliciting the sale
of a [MAGAZINE, PERIODICAL,] sound recording or [,]
book
(A) if the person
(1) has no minimum purchase requirements,
(2) provides written notice of the buyer's right
to cancel at any time, and
(3) allows the buyer to return the sound
recording or book and obtain a full refund, or
(B) through a [,OR] membership in a book or record
club
(1) [(A)] where the club provides the buyer with
a form that the buyer may use to instruct the club not
to ship the offered merchandise; and
(2) [B] that is regulated by the Federal Trade
Commission as a negative option plan under 16 C.F.R.
[CFR] 425;
2. Page 8, following line 31, add the following:
(C) the provisions of subparagraph (11)(B) do not apply to
a sale of a magazine subscription
(i) where the telephone call is made to a customer to
solicit a subscription renewal; or
(ii) when the telephone call is initiated by the
buyer, payment is made by credit card, and a telephone
number to cancel the subscription is on the credit
card statement description line for that charge;
SENATOR FRENCH objected for the purpose of discussion.
CHAIR SEEKINS asked what Amendment 1a will do.
MS. SUSAN BURKE, representing the Direct Marketing Association
and the Magazine Publishers of America, explained that during a
previous discussion on HB 15 in committee, members talked about
book and record club memberships versus a solicitation received
in the mail for a single book or a single item. Amendment 1a
addresses that problem. The first section deals with a single
sale and says that a company retains its exemption if no minimum
purchase is required. It also requires a written notice of the
buyer's right to cancel at anytime and allows the buyer to
return the item for a full refund. She stated, "And the rest of
it is just the way it was in the original bill."
SENATOR FRENCH asked how the written notice of the right to
cancel on the sale of a single item would work.
MS. BURKE said the buyer would receive the notice in the mail
and could cancel the agreement by returning the item and getting
a refund.
SENATOR OGAN thought it offensive that such a law would even
have to be enacted to protect consumers from themselves.
SENATOR FRENCH asked for an explanation of how the second part
of the amendment would work.
MS. BURKE said a new section 11 was added on page 8 of version W
with introductory language and an A and B section; those would
not change. Amendment 1a adds a new subsection that says a
company does not have to provide written notice under two very
limited circumstances. The first instance is where the publisher
is contacting an existing customer and soliciting a magazine
renewal. The second instance would be when the seller sends a
postcard and the buyer initiates the contact and payment is made
by credit card.
TAPE 04-57, SIDE B
6:00 p.m.
MS. BURKE said the credit card statement will contain a
telephone number to call to cancel the subscription. All of
those things would have to apply to negate the written notice
requirement. She acknowledged that the amendment does not
address all of the Department of Law's concerns but through the
negotiating process both parties determined they can live with
these changes.
MR. DAVID MARCUS, legislative liaison and assistant attorney
general, DOL, affirmed that Amendment 1a is satisfactory.
REPRESENTATIVE FATE said he also finds the amendment to be
satisfactory.
SENATOR FRENCH withdrew his objection, therefore Amendment 1a
was adopted.
SENATOR OGAN moved SCS CSHB 15(JUD) from committee with
individual recommendations and its attached fiscal notes.
The motion carried with Senators Ogan, French, and Seekins in
favor.
CHAIR SEEKINS thanked participants and announced an at-ease.
6:11 p.m.
HB 29-REAL PROPERTY TRANSACTIONS/LICENSEES
CHAIR SEEKINS informed members that the working document before
the committee was version C and that Senator French had a
proposed amendment.
SENATOR FRENCH moved to adopt Amendment 1, which reads as
follows.
23-LS0189\C.1
Bannister
A M E N D M E N T 1
OFFERED IN THE SENATE BY SENATOR FRENCH
TO: SCS CSSSHB 29(L&C)
Page 5, following line 18:
Insert a new subsection to read:
"(c) Notwithstanding (b)(2) of this section, before a
buyer makes or accepts an offer in a real estate
transaction, a real estate licensee who is handling the
real estate transaction for the buyer shall disclose to the
buyer that a murder or suicide occurred on the real
property that is the subject of the real estate transaction
if
(1) the murder or suicide occurred within one
year before the date that the licensee first showed the
real estate to the buyer; and
(2) the licensee is aware that the murder or
suicide occurred on the real estate."
SENATOR FRENCH then informed members that he wished to amend
Amendment 1 by deleting the language on lines 4 and 5 that
reads, "who is handling the real estate transaction for the
buyer".
CHAIR SEEKINS noted without objection, Amendment 1 was amended.
SENATOR OGAN objected to the adoption of Amendment 1 as amended
for the purpose of discussion. He then asked how much the
disclosure of a murder or suicide could significantly devalue a
property.
MS. PEGGY ANN McCONNOCHIE, Alaska Association of Realtors, said
that is in the eye of the beholder, which is why disclosure is
necessary. She explained:
We're not saying it has to be disclosed in a negative
way but, for example, there are certain cultures whose
culture prohibits them from buying a home in which
there has been a murder or suicide. Other people will
not care. They just want the house. They don't care if
that happens. But the fact is it still needs to be
disclosed and we thank Senator French for helping us
with the wording because we believe that this wording
makes it far more clear since those are the two
problem areas that we feel are material facts and need
to be disclosed if they're known by the licensee
within the past 12 months.
REPRESENTATIVE ROKEBERG, sponsor of HB 29, added that the reason
this issue arose is because of case law and other actions
throughout the country. These circumstances have given rise to
lawsuits because of the psychological impact. Because this bill
will specifically codify more of the duties of realtors, he
believes it is necessary to clarify this matter. He thanked
Senator French.
CHAIR SEEKINS announced with no further objection, Amendment 1
as amended was adopted.
SENATOR FRENCH noted he had a few questions and first asked for
a clear example of a conflict of interest that a real estate
licensee would have if this bill is enacted.
REPRESENTATIVE ROKEBERG pointed out that Section 3, which
pertains to conflicts of interest, is already part of the
statute. He said the other subsections under AS 08.88.391
provide more detail and that it is the relationships that give
rise to a conflict of interest.
SENATOR FRENCH referred to "specific assistance" on page 3, line
10, and throughout the bill, and asked if a realtor can provide
specific assistance to a person without representing that
person.
MS. McCONNOCHIE said the Alaska Realtors Association wanted to
define at what point the services of a real estate licensee are
being used, "And that's when specific assistance happens." She
pointed to the definition of "specific assistance" at the end of
the bill and repeated that realtors need to know when their
services begin and when they do not.
SENATOR FRENCH asked why hosting an open house is not included
in that definition.
MS. McCONNOCHIE replied, "Because typically when you're coming
into a house and I am sitting there, intrinsically I'm
representing the owner of the house. Consequently I'm not going
to offer you specific assistance, which could be in fact,
against my client's - the seller's - best interest."
SENATOR FRENCH said he was thinking of it in opposite terms but
realizes that realtor is already representing the seller.
REPRESENTATIVE ROKEBERG indicated that the bill requires a
written disclosure statement about the type of relationship
between the licensee and a prospective buyer or seller. To
provide specific assistance would require the host of an open
house to have any prospective buyer jump up and sign a form
before allowing the person to look around, which is not likely
to happen.
SENATOR FRENCH then referred to lines 23-25 on page 3 and asked
for an explanation.
MS. McCONNOCHIE said an example would be if she represented
Senator French when selling his real estate. If, after the sale,
Senator French did not intend to buy another piece of property
but planed to rent, she could not represent him if she was
representing the owner of a home that he wanted to rent.
CHAIR SEEKINS asked if that would also apply to a home sale
rather than a rental.
MS. McCONNOCHIE explained that she could represent him to sell
his home and buy another home, but she could not do that if she
was also working for the owner of the property for sale or
lease.
SENATOR FRENCH asked about the duties of a neutral licensee
[Sec. 08.88.645].
REPRESENTATIVE ROKEBERG said the former relationship that may
have been created by dual agency is redefined in that section.
He stated, "They are to cover similar situations. They are not -
they may be analogous but they're not the same."
SENATOR FRENCH said his question revolves around the language on
page 9 in subsection (5), which talks about what a realtor can
and cannot do when working as a neutral licensee with a buyer
and seller on either side. He said he finds subsection (5)(b)(2)
to be problematic because it almost allows the realtor to do
what the realtor is prohibited from doing in (5)(A) and (B). He
suggested changing the word "would" to "should" in (5)(b)(2).
MS. McCONNOCHIE clarified that the relationship between the
buyer, seller, and realtor would not be adversarial and the
realtor would not be trying to advocate for either party. The
realtor would, in effect, be working as a go-between for the two
parties. If Senator French was buying a house through her, and
she had prior written permission from both parties to be a
neutral agent and he told her he would pay a certain price and
that she could take that price to the seller, but the seller
gave her permission to offer a lower price, she could inform
Senator French of the lower price.
CHAIR SEEKINS said he understands (5)(B) to say that with
written consent, the neutral agent could "work both sides of the
street."
MS. McCONNOCHIE agreed and repeated that this relationship would
not be adversarial and the realtor would be working to create a
win-win situation for both parties, which this legislation will
allow. She pointed out what is most often more important to both
parties are the terms of the transaction rather than the price.
REPRESENTATIVE ROKEBERG told members this bill is the result of
a significant amount of effort that goes back eight years. He
believes HB 29 is a major consumer protection bill and is an
excellent example of the proper balance between protecting the
consumer and allowing commerce to move forward. He added that in
1992 the fire agency provisions of law were adopted, but they
are broken and the statute has been modified to make the system
work better for all parties. He complimented the people in the
industry for working on consumer protection. For example,
realtors will have to provide a pamphlet to every client of the
rights and obligations of the licensee.
CHAIR SEEKINS asked if anything in the bill will make it
difficult for a person to craft their own documents consistent
with state law to sell or buy a home.
REPRESENTATIVE ROKEBERG said nothing whatsoever. This
legislation only applies to licensees regulated under Title 8,
occupational licensing.
CHAIR SEEKINS asked if HB 29 puts constraints on the licensee
and not on the way a buyer wants to buy.
REPRESENTATIVE ROKEBERG replied, "This regulates the conduct of
a licensee."
SENATOR FRENCH declared a conflict of interest with this
legislation as his wife is a real estate agent.
SENATOR OGAN moved SCS CSHB 29(JUD) from committee with
individual recommendations and its zero fiscal note.
The motion carried with Senators French, Ogan and Seekins in
favor.
CHAIR SEEKINS adjourned the meeting.