Legislature(2009 - 2010)BELTZ 211

04/17/2009 01:30 PM Senate JUDICIARY

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
Moved SCS CSHB 102(JUD) Out of Committee
Moved CSHB 129(RLS) Out of Committee
Moved CSHB 201(JUD) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
          HB 129-POWER TO REVOKE REAL ESTATE LICENSES                                                                       
1:57:39 PM                                                                                                                    
CHAIR FRENCH announced  the consideration of HB  129. [Before the                                                               
committee  was  CSHB  129(RLS).]  He welcomed  the  sponsor,  his                                                               
counterpart in  the House, and  apologized that he didn't  have a                                                               
cookie to offer.                                                                                                                
REPRESENTATIVE  JAY   RAMRAS,  sponsor  of  HB   129,  introduced                                                               
Margaret Dowling who will explain the details of the bill.                                                                      
CHAIR  FRENCH  asked  for  the record  to  reflect  that  Senator                                                               
Therriault brought Representative Ramras a cookie.                                                                              
MARGARET  DOWLING, staff  to Representative  Jay Ramras,  said HB
129 makes a  simple, but needed, correction to  existing law that                                                               
says  that the  Alaska  Real Estate  Commission  must revoke  the                                                               
license of a real estate broker  or associate broker who has been                                                               
convicted  of forgery,  theft, extortion,  conspiracy to  defraud                                                               
creditors,  or  fraud.  The  commission can  refuse  to  grant  a                                                               
license or  deny renewal of  a license  on the same  grounds. The                                                               
problem  is  that  the  law  does not  apply  to  Alaska's  1,460                                                               
licensed  sales people;  it  applies only  to  the 411  associate                                                               
brokers and 483 brokers in the state.                                                                                           
This issue  was brought  to the sponsor's  attention by  the Real                                                               
Estate  Commission.  She  opined  that  this  is  a  field  where                                                               
customers  place  faith  in  an  agent's  trustworthiness;  these                                                               
people have unfettered  access to clients' homes,  and they often                                                               
assist  clients  with   sometimes  complicated  negotiations  and                                                               
financial  transactions.  HB 129  will  empower  the Real  Estate                                                               
Commission to appropriately regulate  this profession, which will                                                               
protect both the profession and the public.                                                                                     
2:01:28 PM                                                                                                                    
CHAIR FRENCH disclosed  that his wife is a  real estate licensee.                                                               
He remarked that  he thought that in the recent  past real estate                                                               
agents, brokers and sales persons  were renamed as licensees, but                                                               
he now sees that pertains to  a different part of the real estate                                                               
statutes. He asked for enlightenment.                                                                                           
MS. DOWLING responded  she only knows is that  under this section                                                               
the individuals  are referred to  as sales persons,  brokers, and                                                               
associate brokers.                                                                                                              
2:03:13 PM                                                                                                                    
SENATOR  THERRIAULT   pointed  out   that  bills   typically  are                                                               
prospectively  applicable,  but  this  bill  is  applicable  both                                                               
prospectively and retrospectively.                                                                                              
MS. DOWLING said  that clarifies the intent, which  is to protect                                                               
the public.  It enhances the  regulatory scheme so that  the Real                                                               
Estate Commission can police the profession.                                                                                    
SENATOR THERRIAULT asked if this would  affect a person who had a                                                               
felony conviction 10 years ago.                                                                                                 
MS. DOWLING  explained that  the existing  statute states  that a                                                               
person who  is convicted of a  felony is barred from  receiving a                                                               
license  for  seven  years  from the  date  they  complete  their                                                               
2:04:44 PM                                                                                                                    
SENATOR   MCGUIRE   asked   if    she   has   looked   into   the                                                               
constitutionality of that provision because  she recalls that you                                                               
can place  terms on or  after the  effective date, but  you can't                                                               
reach back to prior criminal acts.                                                                                              
MS. DOWLING  said she would  defer questions about ex  post facto                                                               
laws to  Gayle Horetski,  but it's the  sponsor's view  that this                                                               
does  not  increase punishment  for  a  crime. This  enhances  an                                                               
existing  regulatory  scheme  so  that the  state's  interest  in                                                               
protecting  the public  can  be met.  She  reiterated that  sales                                                               
people have unfettered  access to peoples' homes  and they assist                                                               
in  sometimes  complicated  financial  transactions.  The  public                                                               
assumes  that   the  person  they   are  dealing  with   will  be                                                               
2:06:12 PM                                                                                                                    
CHAIR FRENCH clarified  that this does not  increase any criminal                                                               
punishment that has already been imposed.                                                                                       
GAYLE   HORETSKI,  Attorney,   Civil  Division,   Commercial/Fair                                                               
Business Section,  Department of Law,  said HB 129 makes  a minor                                                               
change to  existing law. Currently brokers  and associate brokers                                                               
are under  these provisions  and the bill  adds sales  persons to                                                               
the existing law.  The existing law provides that if  a person is                                                               
convicted of  certain offenses the  Real Estate  Commission shall                                                               
revoke  their license.  "So you  have a  revoked license  or this                                                               
doesn't even apply," she said.                                                                                                  
CHAIR FRENCH asked her to say that again.                                                                                       
MS. HORETSKI explained  that this doesn't apply in  and of itself                                                               
to convictions.  It applies  to people  whose licenses  have been                                                               
revoked because of their conviction.  Page 3, paragraph (10) says                                                               
the commission shall revoke the  license of a broker or associate                                                               
broker who  has been convicted  of a  felony or other  crime. You                                                               
have the criminal conviction and  then the commission has to take                                                               
a separate  step to  file an accusation  and revoke  the license.                                                               
Once the license  is revoked based on the  conviction, the person                                                               
cannot get  relicensed until seven  years after they  have served                                                               
their sentence.                                                                                                                 
CHAIR FRENCH posed the circumstance  of someone who was convicted                                                               
five years ago  of a DUI and  asked if this bill  would allow the                                                               
commission to revoke that person's  license if they are currently                                                               
practicing real estate in the state of Alaska.                                                                                  
MS.  HORETSKI directed  attention to  page 3,  line 20,  and said                                                               
only  if it  is the  commission's  judgment that  it affects  the                                                               
ability of that person to practice.                                                                                             
CHAIR  FRENCH observed  that there  is  something of  an ex  post                                                               
facto issue  because it's  a conviction from  the past  for which                                                               
someone is  being repenalized.  He added  that it's  his analysis                                                               
that it's not a criminal penalty so it's not an issue.                                                                          
2:09:30 PM                                                                                                                    
MS. HORETSKI said  from a legal standpoint this is  not a penalty                                                               
issue at all. A person does  not have a constitutional right to a                                                               
license  unless  they meet  the  criteria.  If  a person  gets  a                                                               
license then they would have a property interest.                                                                               
CHAIR FRENCH  said he agrees,  but someone  who is making  a good                                                               
living as a real estate agent might have a different view.                                                                      
MS. HORETSKI added that the  purpose of licensing a profession is                                                               
to  set  a  minimum  standard  below  which  the  public  can  be                                                               
confident that  the person has  not fallen. That doesn't  mean he                                                               
or she will be  any good at what they do, but  if the person does                                                               
not meet the  minimum criteria for initial  licensure or renewal,                                                               
he or  she is not  entitled to  hold the license.  She reiterated                                                               
that  this  isn't  an  issue  of punishment.  This  is  a  public                                                               
regulatory measure.                                                                                                             
2:11:07 PM                                                                                                                    
SENATOR  MCGUIRE  cautioned  that  this is  ripe  for  litigation                                                               
because  revoking  someone's  license is  certainly  an  economic                                                               
penalty. When the legislature wanted  to register all individuals                                                               
in  the  state who  were  prior  sex  offenders, the  court  said                                                               
absolutely not. It  was an ex post facto problem  to try to reach                                                               
back. If  the underlying  statute has  that language  applying to                                                               
brokers she said  she would be curious to know  if the commission                                                               
has had  to address that. If  this were to pass  it's likely that                                                               
sales people in  this state will have their  real estate licenses                                                               
revoked, she said. It's a risk the sponsor takes.                                                                               
2:12:54 PM                                                                                                                    
MS.  HORETSKI offered  the view  that  that exact  reason is  the                                                               
purpose for the language in the  bill that makes it clear that it                                                               
is  intended  to  apply  to offenses  that  occurred  before  the                                                               
effective date of the bill. She continued:                                                                                      
     As  you  know  under  our  state  law,  the  idea  that                                                                    
     something is  retroactively or  retrospectively applied                                                                    
     does  not  make it  unconstitutional.  But  there is  a                                                                    
     state statute  that says that  that intent  in intended                                                                    
     that  it  should  be exclusively  stated.  So  it's  an                                                                    
     attempt to  minimize the legal  issues on appeal  or if                                                                    
     it's  challenged  that  that  language  clarifying  the                                                                    
     legislation's intent  was added. And we're  really glad                                                                    
     that that language is in  there because it does clarify                                                                    
     the scopeā€¦                                                                                                                 
MS.   HORETSKI  related   that  this   has  come   up  in   other                                                               
circumstances such as driver's licenses  and situations where the                                                               
licensure criteria for a particular  profession has been upgraded                                                               
or narrowed. There  is an affect and people do  drop out, but the                                                               
courts  have by-and-large  said that  the legislature  can change                                                               
the criteria if it's a  rational requirement. If that weren't the                                                               
case, standards wouldn't rise over the years.                                                                                   
2:14:57 PM                                                                                                                    
SENATOR  MCGUIRE said  that  makes sense,  but  this isn't  about                                                               
raising professional  requirements. This  is about  reaching back                                                               
into someone's criminal record.  Criminal and civil penalties and                                                               
offenses  are  treated  differently.   The  trigger  here  is  if                                                               
additional burden is placed on a person's criminal past.                                                                        
CHAIR  FRENCH  said  he  agrees with  Ms.  Horetski  but  Senator                                                               
McGuire's  point  is valid  because  economic  pain is  real.  He                                                               
suggested the  committee imagine  a somewhat  analogous situation                                                               
of a state  that employs teachers that are only  required to have                                                               
a high school education and  a college degree. Assume that system                                                               
works for  20 years when it  suddenly comes to light  that 50 sex                                                               
offenders  are teaching  in the  schools. A  decision is  made to                                                               
raise the bar and require a  high school education, a degree from                                                               
college, and  a record free of  being a sex offender.  The effect                                                               
of the bill would be to  strip teaching certificates from all the                                                               
sex offenders  and legislators  would readily  sign off  on that.                                                               
The  sex offenders  might  complain, but  they'd  be told  that's                                                               
tough luck. The bar has been raised.                                                                                            
SENATOR MCGUIRE warned that that may work, but they will sue.                                                                   
2:17:22 PM                                                                                                                    
CHAIR FRENCH asked Ms. Walsh  if the Real Estate Commission looks                                                               
at  criminal  histories  of  individuals   who  come  before  the                                                               
commission  seeking sales  person, associate  broker, and  broker                                                               
SHARON  WALSH,   Executive  Administrator,  Alaska   Real  Estate                                                               
Commission, Alaska Association of  Realtors, answered no and they                                                               
don't  do  fingerprinting either.  Applicants  fill  out a  self-                                                               
disclosure form.                                                                                                                
CHAIR FRENCH  asked if she  has any  reason to believe  that this                                                               
would apply to licensees currently  working in the state who have                                                               
disqualifying felony convictions.                                                                                               
MS. WALSH replied she knows of one case.                                                                                        
2:18:23 PM                                                                                                                    
REPRESENTATIVE RAMRAS related  that he believes that  case is the                                                               
reason  the commission  contacted him  asking for  clarification.                                                               
The intent  of the bill is  to give the commission  the authority                                                               
to police their own because this  is a profession that thrives on                                                               
CHAIR FRENCH closed  public testimony. He said  he is comfortable                                                               
with the state of the bill and solicited a motion.                                                                              
2:19:41 PM                                                                                                                    
SENATOR  MCGUIRE  moved to  report  HB  129 from  committee  with                                                               
individual  recommendations and  attached  fiscal note(s).  There                                                               
being  no   objection,  CSHB  129(RLS)  moved   from  the  Senate                                                               
Judiciary Standing Committee.                                                                                                   

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