Legislature(2017 - 2018)BARNES 124

04/02/2018 03:15 PM LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 108 MEDICAL CARE/LICENSING/MEDICAL BOARD TELECONFERENCED
Heard & Held
-- Public Testimony --
+ SB 155 REAL ESTATE APPRAISAL MNGMT. COMPANIES TELECONFERENCED
Moved HCS CSSB 155(L&C) Out of Committee
-- Public Testimony --
+ HB 136 MOTOR VEHICLE DEALER FRANCHISES TELECONFERENCED
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
          SB 155-REAL ESTATE APPRAISAL MNGMT. COMPANIES                                                                     
                                                                                                                                
3:18:58 PM                                                                                                                    
                                                                                                                                
CHAIR KITO  announced that the  first order of business  would be                                                               
CS  FOR  SENATE  BILL  NO.  155(FIN), "An  Act  relating  to  the                                                               
registration and  regulation of real estate  appraisal management                                                               
companies;  relating   to  the  establishment  of   fees  by  the                                                               
Department  of  Commerce,  Community, and  Economic  Development;                                                               
relating  to  the  Board of  Certified  Real  Estate  Appraisers;                                                               
relating  to  real  estate  appraisers;   and  providing  for  an                                                               
effective date."                                                                                                                
                                                                                                                                
3:19:17 PM                                                                                                                    
                                                                                                                                
SENATOR KEVIN  MEYER, Alaska State Legislature,  presented SB 155                                                               
as  prime   sponsor.    He  paraphrased   the  sponsor  statement                                                               
[included in committee packet],  which reads as follows [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
     An  Appraisal   Management  Company,  or  AMC,   is  an                                                                    
     independent  entity  through   which  mortgage  lenders                                                                    
     order  residential real  estate valuation  services for                                                                    
     properties  on  which  they are  considering  extending                                                                    
     loans  to homebuyers.  AMCs  fulfill an  administrative                                                                    
     function in the  appraisal process, including selecting                                                                    
     an  appraiser and  delivering the  appraisal report  to                                                                    
     the  lender. Individual  appraisers who  work for  AMCs                                                                    
     provide the actual property valuation services.                                                                            
                                                                                                                                
     AMCs  existed well  before  the  2008 global  financial                                                                    
     crisis, and  today they play an  increasingly important                                                                    
     role as a third-party  service provider in the consumer                                                                    
     mortgage   process.  AMCs   have  become   increasingly                                                                    
     popular  by  lenders  across   the  country  to  ensure                                                                    
     federal   and    state   regulatory    compliance   and                                                                    
     independence   between   lenders  and   appraisers   as                                                                    
     required  by  the  Dodd-Frank Wall  Street  Reform  and                                                                    
     Consumer  Protection Act  of 2010.  Dodd-Frank requires                                                                    
     that  states that  choose to  regulate  this sector  of                                                                    
     industry   enact   comprehensive  AMC   oversight   and                                                                    
     registration   programs  with   an  August   10,  2018,                                                                    
     deadline.                                                                                                                  
                                                                                                                                
     SB  155  aims  to  promote public  trust  and  consumer                                                                    
     protection  and  establish  oversight  and  enforcement                                                                    
     where there is none today.                                                                                                 
                                                                                                                                
SENATOR  MEYER added  that  Alaska  is one  of  only four  states                                                               
without  the legislation  in place.    He said  that states  vary                                                               
regarding the  surety bond.  He  added that due to  the deadline,                                                               
the department requested  a waiver.  The original  version of the                                                               
proposed  bill contains  contingency language  in the  event that                                                               
the  waiver  was  not  granted.   He  stated  the  version  would                                                               
establish  a  firm  effective  date  on 1  January  2019,  and  a                                                               
registration date of 1 March 2019.                                                                                              
                                                                                                                                
3:24:11 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STUTES stated there  is confusion over whether the                                                               
state will be able to transact  with "Freddie May and Fannie Mac"                                                               
without the proposed legislation in place.                                                                                      
                                                                                                                                
SENATOR MEYER  said there  is some concern  that it  would impact                                                               
some of the loans.                                                                                                              
                                                                                                                                
3:25:00 PM                                                                                                                    
                                                                                                                                
CHAIR KITO stated the difference in  the CS is only to update the                                                               
effective date.                                                                                                                 
                                                                                                                                
3:25:13 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  WOOL moved  to adopt  House committee  substitute                                                               
(HCS)  for CSSB  155(FIN),  Version R  as  the working  document.                                                               
There being  no objection, Version  R was adopted as  the working                                                               
document.                                                                                                                       
                                                                                                                                
3:25:52 PM                                                                                                                    
                                                                                                                                
DAVID  DERRY,  Chair, Alaska  Board  of  Real Estate  Appraisers,                                                               
testified in support of  SB 155.  He said the  board thinks it is                                                               
a key  to have  the maximum available  mortgage for  residents in                                                               
Alaska, and it  provides a basis for oversight  of AMCs operating                                                               
in Alaska.   He said the board  requests a change on  page 5 line                                                               
25 about  the control  person is  effectively established  as the                                                               
responsible  person. The  board  requesting it  be  changed to  a                                                               
certified appraiser  in the  state of Alaska.   He  indicated the                                                               
original bill version  had contained the detail, but  it had been                                                               
changed.   He  said the  objection to  the change  is that  other                                                               
states don't  make that requirement.   He suggested  the mortgage                                                               
meltdown 2010 had created problems  in other states, while Alaska                                                               
wasn't hit with the  meltdown.  He added it may  be why there was                                                               
no AMC legislation enacted in the state previously.                                                                             
                                                                                                                                
REPRESENTATIVE JOSEPHSON  asked whether the  federal subcommittee                                                               
expressed a preference that the  designated controlling person be                                                               
in Alaska.                                                                                                                      
                                                                                                                                
MR. DERRY answered  that the term controlling person  is not even                                                               
addressed  by   the  federal  subcommittee,   so  there   was  no                                                               
preference expressed.                                                                                                           
                                                                                                                                
REPRESENTATIVE JOSEPHSON asked for  confirmation that the federal                                                               
subcommittee could not take a position on it in any case.                                                                       
                                                                                                                                
MR DERRY answered that is correct.                                                                                              
                                                                                                                                
3:32:18 PM                                                                                                                    
                                                                                                                                
MARK  SCHIFFMAN,  Real   Estate  Valuation  Advocacy  Association                                                               
(REVAA), testified  in support of SB  155.  He stated  that there                                                               
is  not  a uniqueness  to  Alaska  that  would require  that  the                                                               
designated person be in Alaska.                                                                                                 
                                                                                                                                
REPRESENTATIVE WOOL  mentioned hiring  an extra person  and asked                                                               
for confirmation that the cost would be spread around programs.                                                                 
                                                                                                                                
3:34:47 PM                                                                                                                    
                                                                                                                                
SARA   CHAMBERS,   Deputy   Director,  Division   of   Insurance,                                                               
Department   of  Commerce,   Community  &   Economic  Development                                                               
(DCCED),  answered questions  in  the  hearing on  SB  155.   She                                                               
stated  there would  be a  new  person required,  but their  time                                                               
would be charged on a 15-minute  increments to this program.  She                                                               
added that they  may work part-time on another  program, and that                                                               
program would cover those costs.                                                                                                
                                                                                                                                
3:35:42 PM                                                                                                                    
                                                                                                                                
CHAIR KITO opened public testimony  on SB 155.  Upon ascertaining                                                               
that  no  one   was  available  to  testify,   he  closed  public                                                               
testimony.                                                                                                                      
                                                                                                                                
3:36:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  STUTES asked  whether not  enacting the  proposed                                                               
legislation would prohibit all institution  from giving FHA loans                                                               
or  prohibit only  certain  institutions  from providing  federal                                                               
loans to Alaskans.                                                                                                              
                                                                                                                                
MR.  DERRY answered  the  loans  could still  be  carried out  by                                                               
lenders.   He named  banks that  don't use AMCs.   He  said there                                                               
would   be   complications   with  handling   federally   related                                                               
transactions.                                                                                                                   
                                                                                                                                
REPRESENTATIVE  STUTES asked  whether not  enacting the  proposed                                                               
legislation  would  prohibit   certain  lending  institutes  from                                                               
lending Freddie Mac, Fannie May, and FHA funds to buyers.                                                                       
                                                                                                                                
MR.  DERRY  said  the  question   is  what  a  federally  related                                                               
transaction is.   He said that without AMC  legislation, a lender                                                               
would not be prohibited from working through a federal loan.                                                                    
                                                                                                                                
3:40:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL  asked whether it  is up to the  bank whether                                                               
to  use AMCs  or not.   He  asked whether  an appraiser  can work                                                               
independently and for an AMC at the same time.                                                                                  
                                                                                                                                
MR. DERRY  answered in  the affirmative.   He said  it is  more a                                                               
matter of convenience.   He said an appraiser could  sign up with                                                               
an AMC and also serve as an independent appraiser.                                                                              
                                                                                                                                
3:41:46 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON moved Amendment 1.                                                                                     
                                                                                                                                
     Page 5, line 25:                                                                                                           
     Delete "a state"                                                                                                           
     Insert "the state under this chapter"                                                                                      
                                                                                                                                
3:42:45 PM                                                                                                                    
                                                                                                                                
THOMAS ATKINSON, Staff,  Representative Andy Josephson, presented                                                               
Amendment 1  on behalf  of Representative  Josephson.   He stated                                                               
there  are no  homegrown  AMCs.   He said  the  suggestion is  to                                                               
support  small  Alaska  businesses rather  than  larger  national                                                               
businesses.                                                                                                                     
                                                                                                                                
CHAIR KITO  asked whether the  amendment would  prohibit national                                                               
businesses from using their AMC in Alaska.                                                                                      
                                                                                                                                
MR. ATKINSON answered that it would  not.  He underlined that the                                                               
provision  would not  require that  the designated  person be  in                                                               
Alaska, only  that they be  certified as an appraiser  in Alaska.                                                               
He added this could be done through reciprocity.                                                                                
                                                                                                                                
CHAIR KITO suggested  if someone is working on  a lending project                                                               
and the appraiser  does not meet the  licensure requirements, the                                                               
loan   would  be   on  hold   until  the   appraiser  met   those                                                               
requirements.                                                                                                                   
                                                                                                                                
MR. ATKINSON  answered in  the affirmative.   He deferred  to the                                                               
invited testimony.                                                                                                              
                                                                                                                                
3:45:47 PM                                                                                                                    
                                                                                                                                
CHAIR KITO asked  whether passing the amendment  would impede the                                                               
ability of  the state to  allow appraiser to provide  services in                                                               
the state.                                                                                                                      
                                                                                                                                
MS.  CHAMBERS  answered  that the  amendment  would  require  the                                                               
controlling person  - the person  the board would work  with that                                                               
is in a management roll -  to have understanding and awareness of                                                               
Alaska.   She  explained that  person would  have decision-making                                                               
authority, but  that person may or  may not be the   boots on the                                                               
ground  appraiser.   She said  the board stated it  was important                                                               
to  them  because of  Alaska's  unique  geography. She  clarified                                                               
that,  should  this  amendment be  adopted,  it  wouldn't  change                                                               
anything for the boots on the ground appraiser.                                                                                 
                                                                                                                                
CHAIR KITO  asked whether it  is anticipated that a  large number                                                               
of individuals would want licensure through reciprocity.                                                                        
                                                                                                                                
MS.  CHAMBERS said  it was  estimated about  200 AMCs  and it  is                                                               
expected  the  controlling  person  for each  of  them  would  be                                                               
seeking licensure to operate in the state.                                                                                      
                                                                                                                                
3:50:06 PM                                                                                                                    
                                                                                                                                
EDRA  MORLEDGE,   Staff,  Senator   Kevin  Meyer,   Alaska  State                                                               
Legislature,  answered questions  in  the hearing  on  SB 155  on                                                               
behalf of  Senator Meyer, prime  sponsor. She stated  the sponsor                                                               
was not supportive of the amendment.                                                                                            
                                                                                                                                
3:51:10 PM                                                                                                                    
                                                                                                                                
A roll call  vote was taken.   Representatives Stutes, Josephson,                                                               
and Knopp voted  in favor of Amendment 1.   Representatives Wool,                                                               
Birch, Kito,  and Sullivan-Leonard voted against  it.  Therefore,                                                               
Amendment 1 failed by a vote of 4-3.                                                                                            
                                                                                                                                
3:52:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON offered Amendment 2.                                                                                   
                                                                                                                                
     Page 9, line 31:                                                                                                           
     Delete "includes"                                                                                                          
     Insert "means"                                                                                                             
                                                                                                                                
     Page 10, lines 2 - 3:                                                                                                      
       Delete "or an officer or director of a real estate                                                                       
     appraisal management company"                                                                                              
                                                                                                                                
     Page 10, following line 3:                                                                                                 
     Insert a new subparagraph to read:                                                                                         
        "(B)  is an officer or director of a real estate                                                                        
     appraisal management company;"                                                                                             
                                                                                                                                
     Reletter the following subparagraphs accordingly.                                                                          
                                                                                                                                
     Page 10, line 7:                                                                                                           
     Delete "and"                                                                                                               
     Insert "or"                                                                                                                
                                                                                                                                
3:52:12 PM                                                                                                                    
                                                                                                                                
MR. ATKINSON  explained Amendment  2 on behalf  of Representative                                                               
Josephson.  He  said without the amendment,  a controlling person                                                               
would have to meet all three  definitions.  He said, "It would be                                                               
a strange arrangement to be both the owner and employee."                                                                       
                                                                                                                                
3:53:47 PM                                                                                                                    
                                                                                                                                
MS. MORLEGE stated the sponsor had no opposition to the proposed                                                                
amendment.                                                                                                                      
                                                                                                                                
3:53:58 PM                                                                                                                    
                                                                                                                                
CHAIR KITO removed his objection. There being no other                                                                          
objection, Amendment 2 was adopted.                                                                                             
                                                                                                                                
3:54:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON moved to adopt Amendment 3.                                                                            
                                                                                                                                
     Page 3, line 29, following "chapter":                                                                                      
     Insert ";                                                                                                                  
     (4)  conduct background investigations as provided in                                                                      
     AS 08.87.135(c)"                                                                                                           
                                                                                                                                
     Page 5, line 21:                                                                                                           
     Delete "and"                                                                                                               
                                                                                                                                
     Page 5, line 23, following "$50,000":                                                                                      
     Insert "; and                                                                                                              
       (9)  is owned by persons who meet the requirements                                                                       
     under (c) of this section"                                                                                                 
                                                                                                                                
     Page 5, following line 31:                                                                                                 
     Insert a new subsection to read:                                                                                           
     "(c)  A  person who owns at least 10  percent of a real                                                                    
     estate  appraisal  management  company required  to  be                                                                    
     registered  under this  chapter must  be of  good moral                                                                    
     character as  determined by the board  and shall submit                                                                    
     to a background investigation conducted by the board."                                                                     
                                                                                                                                
     Reletter the following subsections accordingly.                                                                            
                                                                                                                                
     Page 6, line 5:                                                                                                            
     Delete "of (a) and (b)"                                                                                                    
     Insert "under (a) - (c)"                                                                                                   
                                                                                                                                
3:54:13 PM                                                                                                                    
                                                                                                                                
MR. ATKINSON  explained Amendment  3 on behalf  of Representative                                                               
Josephson.  He said  it is clear that if a  person owns more than                                                               
ten percent of an AMC, they  would need a state background check.                                                               
He said he had confirmation that it is required in statute.                                                                     
                                                                                                                                
REPRESENTATIVE WOOL asked about background investigations.                                                                      
                                                                                                                                
MR.  ATKINSON  answered  that the  details  of  what  constitutes                                                               
background checks are not stipulated by the state.                                                                              
                                                                                                                                
REPRESENTATIVE WOOL asked  what the state would plan  on doing if                                                               
it were left to the states.                                                                                                     
                                                                                                                                
MR.  ATKINSON answered  that he  thinks they  would run  the same                                                               
background check that they run on appraisers.                                                                                   
                                                                                                                                
3:56:12 PM                                                                                                                    
                                                                                                                                
MS.  MORLEDGE  stated that  the  sponsor  is  in support  of  the                                                               
amendment.                                                                                                                      
                                                                                                                                
3:56:29 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL suggested  if there were 200  AMCs who wanted                                                               
to do business  in Alaska, all would have  to submit fingerprints                                                               
to the state.                                                                                                                   
                                                                                                                                
MR. ATKINSON answered that he did not know the answer.                                                                          
                                                                                                                                
3:57:32 PM                                                                                                                    
                                                                                                                                
MS. CHAMBERS  answered that currently for  real estate appraisers                                                               
the   department  does   not  have   the  authority   to  require                                                               
fingerprints.  She said the  supposition that those owners of ten                                                               
percent or more of an AMC  would have to submit an application is                                                               
correct.                                                                                                                        
                                                                                                                                
REPRESENTATIVE WOOL spoke  to the fiscal note.   He asked whether                                                               
the  one  person  to  be  hired  would  be  able  to  handle  500                                                               
applications with background checks.                                                                                            
                                                                                                                                
MS. CHAMBERS answered  that, should this amendment  become a part                                                               
of the  bill, the department  may allocate more of  that person's                                                               
time to the program.                                                                                                            
                                                                                                                                
3:59:32 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL objected to Amendment 3.                                                                                    
                                                                                                                                
A roll  call vote was  taken.   Representatives Sullivan-Leonard,                                                               
Stutes, Josephson, Birch,  and Knopp voted in  favor of Amendment                                                               
3.  Representatives  Wool and Kito voted against  it.  Therefore,                                                               
Amendment 3 passed by a vote of 5-2.                                                                                            
                                                                                                                                
4:00:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  STUTES  expressed  her concerns  about  increased                                                               
costs as a result of the proposed bill.                                                                                         
                                                                                                                                
4:01:23 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BIRCH stated he supports the proposal.                                                                           
                                                                                                                                
4:01:53 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL  moved to report  HCS CSSB  155(FIN), Version                                                               
R, as  amended, out of committee  with individual recommendations                                                               
and the accompanying fiscal notes.   There being no objection, it                                                               
was so ordered.                                                                                                                 

Document Name Date/Time Subjects
SB108 Power Point vsn I 3-29-18.pdf HL&C 4/2/2018 3:15:00 PM
SB 108
SB108 Supporting Document Flow Chart 2016.pdf HL&C 4/2/2018 3:15:00 PM
SB 108
SSSB108 Version U 1-18-18.PDF HL&C 4/2/2018 3:15:00 PM
SB 108
SB108 Supporting Document Backlog Stats DCCED 2-13-18.pdf HL&C 4/2/2018 3:15:00 PM
SB 108
CSSSSB108(FIN) Explanation of Changes 3-14-18.pdf HL&C 4/2/2018 3:15:00 PM
SB 108
CSSSSB108(FIN) Fiscal Note DCCED 3-14-18.PDF HL&C 4/2/2018 3:15:00 PM
SB 108
CSSSSB108(FIN) Sectional Analysis 3-14-18.pdf HL&C 4/2/2018 3:15:00 PM
SB 108
CSSSSB108(FIN) vsn I 3-14-18.pdf HL&C 4/2/2018 3:15:00 PM
SB 108
CSSSSB108(FIN) Sponsor Statement 3-13-18.pdf HL&C 4/2/2018 3:15:00 PM
SB 108
CSHB136 Ver. R 3.23.18.pdf HL&C 4/2/2018 3:15:00 PM
HB 136
HB136 Additional Documents-AADA Provisions and List of Alaska Businesses 3.6.17.pdf HL&C 4/2/2018 3:15:00 PM
HB 136
HB136 Additional Documents-AADA Why Franchise Laws 3.6.2017.pdf HL&C 4/2/2018 3:15:00 PM
HB 136
HB136 Additional Documents-NADA Alaska 2016 Annual Contribution 3.23.18.pdf HL&C 4/2/2018 3:15:00 PM
HB 136
CSHB136 Sectional Analysis 03.23.18.pdf HL&C 4/2/2018 3:15:00 PM
HB 136
HB136 Fiscal Note LAW-CIV 3.10.17.pdf HL&C 4/2/2018 3:15:00 PM
HB 136
SB155 Supporting Document - AMC Registry Fees - Lexology Article.pdf HL&C 4/2/2018 3:15:00 PM
SB 155
CSHB136 Sponsor Statement 3.23.18.pdf HL&C 4/2/2018 3:15:00 PM
HB 136
SB155 Supporting Documents - State AMC Bond Requirements.pdf HL&C 4/2/2018 3:15:00 PM
SB 155
SB155 Version O.PDF HL&C 4/2/2018 3:15:00 PM
SB 155
SB155 Suuporting Document - AMC Framework - Lexology Article.pdf HL&C 4/2/2018 3:15:00 PM
SB 155
SB155 Version R.pdf HL&C 4/2/2018 3:15:00 PM
SB 155
SB155 DCCED AMC Extension Request.pdf HL&C 4/2/2018 3:15:00 PM
SB 155
SB155 Explanation of Changes V.A to V.O.pdf HL&C 4/2/2018 3:15:00 PM
SB 155
SB155 Fical Note DCCED-CBPL 3.5.18.PDF HL&C 4/2/2018 3:15:00 PM
SB 155
SB155 Sectional Summary CSSB 155 (FIN).pdf HL&C 4/2/2018 3:15:00 PM
SB 155
SB155 Sponsor Statement V.O.pdf HL&C 4/2/2018 3:15:00 PM
SB 155
SB155 Support Letters 3.31.18.pdf HL&C 4/2/2018 3:15:00 PM
SB 155
SB155 Amendment R.2.pdf HL&C 4/2/2018 3:15:00 PM
SB 155
SB155 Amendment R.3.pdf HL&C 4/2/2018 3:15:00 PM
SB 155
SB155 Amendment R.1.pdf HL&C 4/2/2018 3:15:00 PM
SB 155