Legislature(2017 - 2018)BELTZ 105 (TSBldg)

02/08/2018 01:30 PM LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SB 155 REAL ESTATE APPRAISAL MNGMT. COMPANIES TELECONFERENCED
Moved SB 155 Out of Committee
-- Public Testimony --
*+ SB 116 EDUCATION TAX CREDITS;SUNSET;REPEALS TELECONFERENCED
Moved SB 116 Out of Committee
-- Public Testimony --
+ HB 126 ORGANIZED MILITIA: WORKERS COMPENSATION TELECONFERENCED
Moved CSHB 126(MLV) Out of Committee
-- Public Testimony --
*+ SJR 12 CONGRESS REVERSE FCC ON NET NEUTRALITY TELECONFERENCED
Moved SJR 12 Out of Committee
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= SB 105 MARITAL & FAMILY THERAPY LIC. & SERVICES TELECONFERENCED
Moved CSSB 105(L&C) Out of Committee
         SB 155-REAL ESTATE APPRAISAL MNGMT. COMPANIES                                                                      
                                                                                                                                
1:53:43 PM                                                                                                                    
CHAIR  COSTELLO   reconvened  the   meeting  and   announced  the                                                               
consideration of SB 155.                                                                                                        
                                                                                                                                
SENATOR KEVIN  MEYER, Alaska  State Legislature,  Juneau, Alaska,                                                               
sponsor  of SB  155,  said  he introduced  SB  155  after it  was                                                               
brought to his  attention that the Dodd-Frank  Wall Street Reform                                                               
and Consumer  Protection Act of  2010 imposed a  federal deadline                                                               
for   states  to   adopt   comprehensive  regulations   regarding                                                               
appraisal management companies. That deadline is August 2018.                                                                   
                                                                                                                                
He explained  that an  appraisal management  company (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. Unless                                                               
this or similar  legislation passes, these companies  will not be                                                               
able  to do  residential appraisals  in Alaska  after August  20,                                                               
2018. Alaska  is one  of four  states that  have not  passed this                                                               
legislation.                                                                                                                    
                                                                                                                                
SENATOR  MEYER said  SB 155  seeks  to promote  public trust  and                                                               
consumer  protection  and  establish  oversight  and  enforcement                                                               
where there is none today.                                                                                                      
                                                                                                                                
1:55:55 PM                                                                                                                    
EDRA  MORLEDGE,   Staff,  Senator   Kevin  Meyer,   Alaska  State                                                               
Legislature Juneau,  Alaska, directed attention to  a letter from                                                               
Sara  Chambers, Deputy  Director of  the Department  of Commerce,                                                               
Community   and  Economic   Development  (DCCED)   requesting  an                                                               
extension of the implementation  period to establish an appraisal                                                               
management company (AMC) program until  August 10, 2019. She said                                                               
the  federal government  also established  minimum standards  for                                                               
appraisal  management companies  and those  are contained  in the                                                               
bill.                                                                                                                           
                                                                                                                                
1:57:23 PM                                                                                                                    
MS.  MORLEDGE provided  the following  sectional analysis  for SB
155:                                                                                                                            
                                                                                                                                
     Section  1: Adds  a  new subsection  (j)  to allow  the                                                                
     Department   of   Commerce,  Community   and   Economic                                                                    
     Development  to establish  a fee  for regulatory  costs                                                                    
     and a mechanism for reporting those fees.                                                                                  
                                                                                                                                
     Section  2:  Requires  the department  to  establish  a                                                                  
     registry fee as required  by the federal government and                                                                    
     permits  the  department to  remit  those  fees to  the                                                                    
     federal government.                                                                                                        
                                                                                                                                
     Section 3:  Amends the powers  and duties of  the Board                                                                  
     of   Certified  Real   Estate  Appraisers   to  require                                                                    
     regulations for Appraisal Management Companies.                                                                            
                                                                                                                                
     Section 4:  Authorizes the Board to  examine records of                                                                  
     AMCs,  requires those  companies to  submit information                                                                    
     to  the Board,  and  allows  investigations of  alleged                                                                    
     violations.                                                                                                                
                                                                                                                                
     Sections 5  and 6:  Adds a new  section to  the statute                                                                  
     regarding  Appraisal   Management  Companies  including                                                                    
     provisions   for    registration,   reporting   records                                                                    
     retention,  and  inspection  requirements,  exemptions,                                                                    
     prohibited practices, and disciplinary proceedings.                                                                        
                                                                                                                                
     Section   7:   Definitions      "appraisal   management                                                                  
     services,"  "appraisal  panel,"  "company,  controlling                                                                    
     person," and "principal dwelling."                                                                                         
                                                                                                                                
     Section 8:  Allows for fingerprinting of  a controlling                                                                  
     person of  an Appraisal Management Company  through the                                                                    
     Department of Public Safety.                                                                                               
                                                                                                                                
     Section  9:  Allows  real estate  Appraisal  Management                                                                  
     Company registry fees to be  included in the definition                                                                    
     of  program  receipts   and  non-general  fund  program                                                                    
     receipts.                                                                                                                  
                                                                                                                                
     Section 10: Applicability clause    this act applies to                                                                  
     a  person offering  or  providing appraisal  management                                                                    
     services on or after the effective date of this Act.                                                                       
                                                                                                                                
1:59:30 PM                                                                                                                    
SENATOR STEVENS asked if there was any indication that the                                                                      
requested extension would be granted.                                                                                           
                                                                                                                                
MS. MORLEDGE deferred the question to Ms. Chambers.                                                                             
                                                                                                                                
2:00:12 PM                                                                                                                    
SARAH  CHAMBERS,  Deputy   Director,  Division  of  Corporations,                                                               
Business  and  Professional  Licensing, Department  of  Commerce,                                                               
Community and Economic Development  (DCCED), Juneau, Alaska, said                                                               
she sent the letter to Mr.  Parks this morning and believes it is                                                               
likely  to  be  approved.  The  state  meets  the  threshold  for                                                               
receiving an  extension and  the Alaska  Board of  Certified Real                                                               
Estate Appraisers knows  about the situation and  agrees with the                                                               
extension request.                                                                                                              
                                                                                                                                
CHAIR  COSTELLO asked  if the  extension would  be needed  if the                                                               
bill were to pass.                                                                                                              
                                                                                                                                
MS.  CHAMBERS  said  yes.  There isn't  time  to  promulgate  and                                                               
implement the required regulations by August.                                                                                   
                                                                                                                                
SENATOR MEYER asked  why the department or  governor didn't bring                                                               
the bill forward if the looming deadline was known.                                                                             
                                                                                                                                
MS. CHAMBERS said  she didn't know but it's  fairly typically and                                                               
healthy for  boards to  identify their own  needs and  seek their                                                               
own  legislation. She  offered to  follow up  and provide  a more                                                               
definitive answer.                                                                                                              
                                                                                                                                
SENATOR MEYER questioned  whether it was healthy  since Alaska is                                                               
one  of the  last states  to  pass the  enabling legislation.  He                                                               
referenced  the fiscal  note and  questioned the  need to  hire a                                                               
full time occupational licensing examiner.                                                                                      
                                                                                                                                
MS. CHAMBERS said  she hoped that Mr. Derry, Chair  of the Alaska                                                               
Board of  Certified Real Estate  Appraisers was online  and could                                                               
speak to the  timeliness. The department does  not anticipate the                                                               
need for  a fulltime  examiner but  is unable  to request  half a                                                               
person  through   a  fiscal  note.   The  request   reflects  the                                                               
anticipated time  needed and any  work the examiner  does outside                                                               
this  program  will  be  billed  to any  of  the  other  receipt-                                                               
supported program they might work on.                                                                                           
                                                                                                                                
2:04:56 PM                                                                                                                    
SENATOR MEYER said he wouldn't quibble over the fiscal note.                                                                    
                                                                                                                                
2:05:17 PM                                                                                                                    
CHAIR COSTELLO opened public testimony on SB 155.                                                                               
                                                                                                                                
DAVID  DERRY,  Chair,  Alaska  Board  of  Certified  Real  Estate                                                               
Appraisers, Kenai, Alaska, said the  board supports SB 155 and is                                                               
ready  to assume  oversight  of  appraisal management  companies.                                                               
Speaking  to  the timeline,  he  said  that  in 2014  the  Alaska                                                               
Chapter of  the Appraisal Institute proposed  legislation similar                                                               
to SB 155  but was unable to get support  from the legislature to                                                               
introduce the bill. The matter died  at that point but since 2016                                                               
the board  has been working  to get this  legislation introduced.                                                               
He said  he recently became  aware of  the extension to  2019 and                                                               
the legislation is important to  show the state is working toward                                                               
that deadline.                                                                                                                  
                                                                                                                                
He offered suggestions to change  the bill in several areas. Page                                                               
5,  lines [20-21]  states that  an  appraisal management  company                                                               
will post a  surety bond of not more than  $25,000 as required by                                                               
the  board.  He  said  the  board recommends  a  surety  bond  of                                                               
$150,000 because  $25,000 is inadequate  in light of the  cost of                                                               
appraisal  reports,  particularly  in rural  areas.  Some  states                                                               
establish the  bond at  not less  than 150  percent of  the AMC's                                                               
annual billings over the previous  12 months. This board believes                                                               
that is more complex than necessary, thus the $150,000 proposal.                                                                
                                                                                                                                
The second suggestion relates to  fingerprinting on page 6, lines                                                               
4-9.  The board  has received  a determination  from the  federal                                                               
Appraisal Subcommittee  that the  current process  for background                                                               
checks  for appraisers  is  adequate  without fingerprinting  and                                                               
background checks. That would carry  over to appraisal management                                                               
companies so that provision is not necessary.                                                                                   
                                                                                                                                
2:11:22 PM                                                                                                                    
SENATOR GARDNER  said she didn't  understand how  the fingerprint                                                               
and background  check got  in the  bill if  it's not  required by                                                               
Dodd-Frank or some other act.                                                                                                   
                                                                                                                                
MR.  DERRY  said  fingerprinting   was  originally  part  of  the                                                               
requirements under  Dodd-Frank and  subsequently became  a state-                                                               
by-state  determination.   The  process   the  Alaska   Board  of                                                               
Certified   Real    Estate   Appraisers   uses    for   appraiser                                                               
qualifications is satisfactory without fingerprinting.                                                                          
                                                                                                                                
SENATOR  GARDNER asked  if real  estate appraisers  are currently                                                               
required to undergo background checks.                                                                                          
                                                                                                                                
MR. DERRY  answered no; the  process the  board is using  and had                                                               
established  in   the  application  process  for   new  certified                                                               
appraisers is  adequate to meet  the requirement without  doing a                                                               
background check.                                                                                                               
                                                                                                                                
SENATOR MEYER asked for confirmation  that fingerprinting and the                                                               
criminal history check were not required under Dodd-Frank.                                                                      
                                                                                                                                
MR.  DERRY  clarified  that  there was  a  determination  by  the                                                               
federal  Appraisal  Subcommittee  that those  were  not  required                                                               
under Dodd-Frank                                                                                                                
                                                                                                                                
SENATOR MEYER asked what other states require as a surety bond.                                                                 
                                                                                                                                
MR. DERRY  said he didn't know  the fixed bond amounts  for other                                                               
states.                                                                                                                         
                                                                                                                                
2:14:56 PM                                                                                                                    
GREG  DEAL, President,  Wells Fargo  Bank  of Alaska,  Anchorage,                                                               
Alaska, stated  support for  SB 155. He  agreed with  the sponsor                                                               
that  if the  state  does  not set  up  a  regulatory system  for                                                               
Appraisal  Management Companies  by  the  deadline, home  lenders                                                               
like  Wells Fargo  will not  be able  to use  AMCs for  federally                                                               
related  mortgage  loan  transactions. This  includes  government                                                               
sponsored enterprises (GSEs) such as  Fannie Mae and Freddie Mac.                                                               
Wells Fargo values  the services of AMCs to ensure  that there is                                                               
no  direct contact  between a  loan officer  and appraiser.  This                                                               
eliminates  even the  perception of  a conflict  of interest  and                                                               
ensures  an independent  evaluation process.  Customers are  also                                                               
assured that  they are receiving  an accurate valuation  on their                                                               
homes.                                                                                                                          
                                                                                                                                
SENATOR MICCICHE  asked for clarification  that this is  only for                                                               
federally-regulated mortgage loan transactions.                                                                                 
                                                                                                                                
MR. DEAL said that's correct.                                                                                                   
                                                                                                                                
SENATOR MICCICHE asked what percentage  of Wells Fargo home loans                                                               
that represents.                                                                                                                
                                                                                                                                
MR. DEAL  said in Alaska Wells  Fargo has just 10  of 1,471 loans                                                               
that do not fall under the government sponsored enterprise rule.                                                                
                                                                                                                                
2:17:25 PM                                                                                                                    
WILLIAM   SCOGGIN,  Counsel,   Real  Estate   Valuation  Advocacy                                                               
Association  (REVAA),  Raleigh,  North  Carolina,  stated  strong                                                               
support for SB 155. He  described the legislation as important to                                                               
everyone  in the  residential real  estate  industry. He  advised                                                               
that REVAA  has worked carefully  to get this  legislation passed                                                               
in all states. Just four states  and Washington, D.C. have yet to                                                               
pass the legislation.                                                                                                           
                                                                                                                                
SENATOR MEYER asked if the  $150,000 surety bond the Alaska board                                                               
requested is standard.                                                                                                          
                                                                                                                                
MR. SCOGGIN  said he didn't  recall the surety provisions  in all                                                               
other  states but  $150,000  would  be on  the  high side.  REVAA                                                               
believes  the  current drafting  is  probably  adequate. What  is                                                               
important is to pass the bill this legislative session.                                                                         
                                                                                                                                
SENATOR  MEYER  asked if  it's  his  understanding that  criminal                                                               
background checks and fingerprinting are unnecessary.                                                                           
                                                                                                                                
MR. SCOGGIN  said it  depends on whether  the licensing  board in                                                               
the  state is  able to  satisfy the  requirements of  the federal                                                               
Appraisal  Subcommittee. REVAA  is comfortable  with whatever  is                                                               
established, he said.                                                                                                           
                                                                                                                                
2:19:39 PM                                                                                                                    
CHAIR  COSTELLO closed  public  testimony on  SB  155 and  voiced                                                               
support  for moving  the  bill. She  said  the finance  committee                                                               
could address  the surety bond  issue and she's  comfortable with                                                               
the fingerprinting as written in the bill.                                                                                      
                                                                                                                                
SENATOR  MICCICHE asked  Ms. Chambers  about  the possibility  of                                                               
managing  the additional  workload  through  contract instead  of                                                               
adding a new state position.                                                                                                    
                                                                                                                                
MS.  CHAMBERS said  that would  be precedent  setting and  may be                                                               
opposed  by employment  unions. She  explained that  the protocol                                                               
typically  used is  to request  a receipt-supported  position (no                                                               
UGF involved)  to fulfill the  requirements of the bill  and then                                                               
allocate  time  to  the other  licensing  programs.  Because  the                                                               
component  level is  at  the  division and  not  each board,  the                                                               
appraisal board  would not see  the entire $80,000  plus increase                                                               
listed in the fiscal note. It is  her hope that the other half of                                                               
the  position   could  assist   with  applications   for  massage                                                               
therapist  licenses  because  the  division has  seen  twice  the                                                               
number applications  as anticipated  since the program  was added                                                               
in 2015.                                                                                                                        
                                                                                                                                
CHAIR  COSTELLO  suggested  that  as  a  member  of  the  finance                                                               
committee  Senator  Micciche  could  look into  the  hurtle  that                                                               
prevents the department from asking for a part-time position.                                                                   
                                                                                                                                
SENATOR  MEYER  agreed  and  expressed   hope  that  the  finance                                                               
committee  closely   analyze  the   request  for   an  additional                                                               
position.                                                                                                                       
                                                                                                                                
2:23:18 PM                                                                                                                    
SENATOR  MEYER  moved  to  report  SB  155  from  committee  with                                                               
individual recommendations and attached fiscal note(s).                                                                         
                                                                                                                                
2:23:24 PM                                                                                                                    
CHAIR  COSTELLO found  no  objection and  announced  that SB  155                                                               
moves from the Senate Labor and Commerce Standing Committee.                                                                    

Document Name Date/Time Subjects
SB 155 Version A.PDF SL&C 2/8/2018 1:30:00 PM
SB 155
SB 155 Sponsor Statement (1).pdf SL&C 2/8/2018 1:30:00 PM
SB 155
SB 155 Legal Sectional Summary.pdf SL&C 2/8/2018 1:30:00 PM
SB 155
SB 155 Enacted State AMC Laws.pdf SL&C 2/8/2018 1:30:00 PM
SB 155
SB 155 AMC Framework - Lexology Article.pdf SL&C 2/8/2018 1:30:00 PM
SB 155
SB 155 AMC Registry Fees - Lexology Article.pdf SL&C 2/8/2018 1:30:00 PM
SB 155
SB 116 ver U.PDF SL&C 2/8/2018 1:30:00 PM
SB 116
SB 116 Sponsor Statement .pdf SL&C 2/8/2018 1:30:00 PM
SB 116
SB 116 Sectional Analysis.pdf SL&C 2/8/2018 1:30:00 PM
SB 116
SB 116 Summary of Changes .pdf SL&C 2/8/2018 1:30:00 PM
SB 116
SB116 - Supporting Document - Education Tax Credit - Sumitomo Metal Mining Polo LLC .docx.pdf SL&C 2/8/2018 1:30:00 PM
SB 116
SB 116 - Supporting Document - CY2017 Education Tax Credit Report.pdf SL&C 2/8/2018 1:30:00 PM
SB 116
SB116 - Supporting Document - Education Tax Credit - Council of Alaska Producers.pdf SL&C 2/8/2018 1:30:00 PM
SB 116
SB 116 - Supporting Document - Kawerak Inc.pdf SL&C 2/8/2018 1:30:00 PM
SB 116
SB155-DCCED-CBPL-02-02-18.pdf SL&C 2/8/2018 1:30:00 PM
SB 155
SB 116 FN.pdf SL&C 2/8/2018 1:30:00 PM
SB 116
HB126 version J.PDF SL&C 2/8/2018 1:30:00 PM
HB 126
HB126 Sponsor Statement 2.28.17.pdf SL&C 2/8/2018 1:30:00 PM
HB 126
HB126 Memo of Changes L&C 2.28.17.pdf SL&C 2/8/2018 1:30:00 PM
HB 126
HB126 Supporting Document-Letter Adjutant General Hummel 2.28.17.pdf SL&C 2/8/2018 1:30:00 PM
HB 126
HB126CS(MLV)-DOLWD-WC-02-02-18.pdf SL&C 2/8/2018 1:30:00 PM
HB 126
HB126CS(MLV)-DOA-DRM-02-02-18.pdf SL&C 2/8/2018 1:30:00 PM
HB 126
HB126-MVA-COM-1-22-18.pdf SL&C 2/8/2018 1:30:00 PM
HB 126
SJR 12 power point .pptx SL&C 2/8/2018 1:30:00 PM
SJR 12
SJR 12 VER SJR012A.PDF SL&C 2/8/2018 1:30:00 PM
SJR 12
SJR 12 Sponsor Statement.pdf SL&C 2/8/2018 1:30:00 PM
SJR 12
SJR 12 Sectional analysis.pdf SL&C 2/8/2018 1:30:00 PM
SJR 12
SJR 12 Supporting Doc 1 FCC decision to end net neutrality.pdf SL&C 2/8/2018 1:30:00 PM
SJR 12
SJR 12 Supporting Doc 1.1 Preemption of state regulation.pdf SL&C 2/8/2018 1:30:00 PM
SJR 12
SJR 12 Supporting Doc 2 Congressional review act.pdf SL&C 2/8/2018 1:30:00 PM
SJR 12
SJR 12 Supporting Doc 3 paid prioritization.pdf SL&C 2/8/2018 1:30:00 PM
SJR 12
SJR 12 Supporting Doc 4 FCC net neutrality Regulation.pdf SL&C 2/8/2018 1:30:00 PM
SJR 12
SJR 12 Supporting Doc 5 repeal will Hurt Small Businesses.pdf SL&C 2/8/2018 1:30:00 PM
SJR 12
SJR 12 Supporting Doc 6 Net Neutrality Survey.pdf SL&C 2/8/2018 1:30:00 PM
SJR 12
SJR 12 Supporting Doc 7 Fraud Comments.pdf SL&C 2/8/2018 1:30:00 PM
SJR 12
SJR 12 Supporting Doc 8 Gov. Walker letter.pdf SL&C 2/8/2018 1:30:00 PM
SJR 12
SJR 12 Supporting Doc 9 Tech Companies opposition.pdf SL&C 2/8/2018 1:30:00 PM
SJR 12
SJR 12 Supporting Doc 10 Diverse Group opposition.pdf SL&C 2/8/2018 1:30:00 PM
SJR 12
SJR 12 Supporting Doc 11 FCC fraud comments.pdf SL&C 2/8/2018 1:30:00 PM
SJR 12
SJR 12 Supporting Doc 12 FCC violations.pdf SL&C 2/8/2018 1:30:00 PM
SJR 12
SJR 12 Supporting Doc 13 ISP fact sheet reply.pdf SL&C 2/8/2018 1:30:00 PM
SJR 12
SJR 12 Supporting Doc 14 Letters of support.pdf SL&C 2/8/2018 1:30:00 PM
SJR 12
02.01.18 ABA Support for SB155 letter to Senator Costello.pdf SL&C 2/8/2018 1:30:00 PM
SB 155
SB 116 Education Tax Credit 2.8.18.pptx SL&C 2/8/2018 1:30:00 PM
SB 116
SJR12-LEG-SESS-02-07-18.pdf SL&C 2/8/2018 1:30:00 PM
SJR 12
01.30.18 SB 155 - REVAA Letter of Support.pdf SL&C 2/8/2018 1:30:00 PM
SB 155
02.08.18 SB 155 - Alaska Chamber letter of Support.pdf SL&C 2/8/2018 1:30:00 PM
SB 155
01.29.18 SB 155 Wells Fargo Letter of Support.pdf SL&C 2/8/2018 1:30:00 PM
SB 155