Legislative Issues

Legislative Issues Committee – Key Working Group

The second session of the 31st Alaska Legislature recessed on March 28, 2020 in anticipation of future legislative actions required as a result of COVID-19 and the CARES Act passed by the U S Congress. The recess by the Legislature kept all filed bills active in their current committees in case one or more needed to be addressed. The Legislature returned to Juneau on May 18th for a two day session where SB 243 was the only bill introduced and adopted. SB243 was an “Act approving and ratifying the actions of the governor and executive branch in expending certain federal receipts and of the Legislative Budget and Audit Committee in approving the expenditure of certain federal receipts during fiscal years 2020 and 2021; and providing for an effective date.” Upon passage, both bodies of the Legislature adjourned the second session and for the balance of the year can only be called back into a special session with a specific agenda established in the call. All remaining bills have expired and must be reintroduced in the first session of the 32nd Legislature.

Here are the major highlights of the funding provided in the CARES Act.

• $1,25 billion to the State of Alaska. The Governor has the authority to spend this as needed to fight the COVID-19 pandemic and offset economic losses.
• Cash payment to many taxpayers, targeted at lower and middle income brackets. Payments are phased out at higher incomes. Alaska real estate licensees are considered self-employed and are eligible to file for benefits under the Payroll Protection Program.
• Expanded unemployment benefits for an additional 13 weeks and increased benefits.
• Loans to small businesses to encourage employers to keep employees hired.
• Financial assistance to fishermen and possibly fishing businesses
• Dollars in assistance to hospitals and other health care providers
• $8 billion for tribes including those in Alaska. Program has been challenged in court and a judge has issued an injunction regarding the eligibility of those tribes in Alaska.

The State is returning to normal business operations starting the first week in June. But there are still requirements for maintaining social distancing, wearing face coverings, frequent washing of hands and testing verification for interstate travel.

REAL ESTATE COMMISSION MEETING

The quarterly meeting of the Alaska Real Estate Commission was held on Tuesday and Wednesday and conducted by remote participation via Zoom The agenda and packet of materials provided to the Commissioners are now available online for the public. Now that the meeting packets are available online, the information can be read at your convenience and my note taking reduced. Here is the link to download the packet:

https://www.commerce.alaska.gov/web/cbpl/ProfessionalLicensing/RealEstateCommission/CommissionInformation/MeetingMinutesandAgendas.aspx In the left box, you can select “Board Packet” which will take you to the 104 pages including the meeting agenda.

The first day was spent on the development of a Strategic Plan and Regulation Review as requested by the Department Director, Sara Chambers. The discussion included but was not limited to information of regulation changes and the work accomplished in the REC committees (communications committee, education, property management versus task forces, etc.) The REC will continue to work on the plan and discuss the progress at the June meeting.

The second day of the meeting covered the regular agenda. A copy of the meeting agenda is available in the link above. Commission actions throughout the meeting were primarily receiving updated reports and providing direction to ongoing projects.

• Shyla Consalo was introduced as the new Executive Administrator for the Alaska Real Estate Commission. Shyla’s previously was the investigator for real estate complaints filed with the State. Shyla announced that Autumn Roark will be the new investigator for all real estate complaints.
• Pearson Vue made a presentation covering their services to the REC. Pearson Vue is the firm that administers the online testing phase of obtaining real estate licenses. The following message was received from Pearson VUE regarding license testing.
  “Due to increasing concern for the health and safety of our candidates and our employees and in response to government guidance and difficulty procuring the critical hygienic products that keep our test centers safe, we are temporarily closing our U.S.-based Pearson VUE-owned and operated Pearson Professional Centers (PPCs) starting Tuesday, March 17. Candidates can reschedule their exams for appointments starting April 16 and beyond, if conditions allow.”
  The Commission will continue to monitor changes to this information and will provide updates on our website and in our List Serv accordingly.
• The investigator reported to the Commission that a new fine chart has been developed but has not been implemented. The proposed fine chart is presented in the meeting packet.
• Commissioner Pruhs continues working on the revisions to the Alaska Residential Real Property Disclosure Statement which was last revised in 2008. Another update will be provided at the June meeting.
• Commission members had discussions on how to improve communications with all licensees about REC activities.
• The remaining quarterly REC meeting dates for 2020 are:
  June 17, 2020
  September 23, 2020
  December 16, 2020

The REC meeting packet is available to the public in an electronic form. I am attaching the packet as an option to going to the link in the address provided above. Please share any comments or suggestions you may have.

The Alaska Senate by unanimous vote has passed HB124 

HUD issued a statement halting all tenant evictions and foreclosures nationwide, the link is: https://www.hud.gov/press/press_releases_media_advisories/HUD_No_20_042

NAR supported the HR6021 Bill – here is information on the impact of the bill : https://www.nar.realtor/political-advocacy/impact-of-h-r-6201-families-first-coronavirus-response-act-on-nar-members

Legislation is being worked on for a National Online Notarization Bill that they expect to come out in the 3rd stimulus package to help ensure the continued successful sale of real estate. More to come on this

Legislation is working on student debt relief and FICO score impacts due to job loss and delinquent note, bills, etc. during this time.  I know that local governments and state governments are doing the same.

Virtual mid year Meetings – as sent out yesterday, the Mid Year Meetings are going virtual, this will include a platform for voting for the NAR Directors to vote for elections. I have added this link again for your reference: https://www.nar.realtor/nar-to-deliver-virtual-solutions-for-2020-realtors-legislative-meetings-and-trade-expo

Grant programs are working to accommodate the virtual progression of the current climate

Legislative Issues Committee Report

The first hearing on the amended bills HB 124 was held on February 24^th in House Judiciary.  Errol testified in support and responded to several good questions from the committee members. The bill was passed out of the committee on Wednesday and moved to House Finance. This is the legislation to allow for electronic notarization as requested by the Land Title offices and the Mortgage Bankers Association.

The Governor has introduced SB 157 & HB 216 which are legislation to provide reciprocating validation of certain professional licenses held by individuals who have moved to Alaska.  The two bills received four committee referrals. Several professional groups have expressed concern over intent language and the results if they became law in their present format.

The Governor has introduced SB 204 & HB 258 which are bills relating to state land sales and the effort to fast track the disposal of certain tracts by the Dept. of Natural Resources.  The source of funds by a successful bidder could be linked to use the permanent fund dividend payment converted to a purchaser credit.  There have been no hearings scheduled but concerns are being mentioned within municipalities and boroughs.

 Senator Coghill has requested an updated option on the status of Legislative Legal opinion regarding whether Alaska is a non-disclosed state regarding real property transaction prices.  A written response will be available during this legislative session.

Prepaired by:

Errol Champion, Chair

On February 4 & 5, over twenty AAR members traveled to Juneau to visit with Legislators in person on the Hill.  Appointments had been arranged by Heather Brakes, our Lobbyist, and we made out the scheduled visits and reviewed the legislation AAR is following this session.  Here is a list of the bills that have been filed and are being followed by the KWG.

1. Electronic voting for non-profit organizations

• Status of drafting of Bill for introduction
• Will provide non-profit organizations to conduct voting electronically

1. Electronic Notarization Bill HB 124 & SB 109 status

• First hearing is yet to be scheduled.
• Still awaiting the latest version of the bills with language added by Lt Governor Meyers.   

1. An Act relating to professional licensing: relating to temporary licenses for some professions.

• SB157 & HB216 were introduced by the Governor
• Dept of Commerce Commissioner states it will affect almost all professional licensees.
• The bill is 23 pages in length and is complex to review. Many Legislators expressed concerns with the legislation as written.

It is early in the year for the second session of the 31^st Legislature so we are certain to see the introduction of more legislation.  However, the main topic with every Legislator this past week was adopting an affordable spending and revenue plan for out Alaska Government.  The Legislative Committee has scheduled teleconference meetings every other week on Wednesdays starting at 10 am.  The third teleconference will be held on February 12^th.

The Legislative Session convened on January 15th in Juneau. The Senate quickly organized, swearing in its newly elected members, and seating its Committees. However, the body is only partially functional as the House is mired in a complete stalemate with (1) 20 Republicans in one Caucus; (2) 19 in another Caucus – 16 Democrats, 2 Republicans, and one Independent; and (3) one Republican choosing not to join either group at this point. Twenty-one members are required to elect a Speaker, seat Committees, and conduct any business. Meanwhile, the Senate Finance Committee has been holding hearings to hear from the Administration on forecasted revenues, expenditures, oil production, the Permanent Fund, state debt, and retirement systems unfunded liability.

The Governor is not waiting on the House to organize instead moving full steam ahead on his agenda. He ran on (1) reducing state spending to balance the budget; (2) strengthening public safety including repealing SB 91; (3) providing a fully funded dividend payment annually and repaying the dividends that had been reduced by Governor Waller and the previous Legislature over that past three years.

The budget that the Governor introduced on December 14^th was a status quo placeholder however, it did provide for a fully-funded 2019 permanent fund dividend at $3,000. A fully-funded dividend at approximately $3,000 per person would require approximately a $1.9 billion appropriation.

The Administration has testified that due to less oil revenue coming into state coffers, projected at $2.2 billion for FY 20, a fully-funded dividend, and a status quo budget there is approximately a $1.6 billion deficit.

Two Supplemental Budget requests for the current fiscal year were introduced this week. Supplemental budgets typically address unforeseen, emergency costs, short funding in budgets passed during the prior Session.

SB 38 addresses the November 30 earthquake and disaster funds seeking approximately $30 million in state funds and $46 million in federal receipts.

The notable reallocations in SB 39 Operating Supplemental bill was the proposed reduction of $20 million for the schools approved during last year’s Session and the reallocation of the some rural public safety funds proposed to be reallocated for other public safety services.

The Governor and his new Budget Director, Donna Arduin, have been preparing a new budget reflecting his vision of a slimmer state Operating Budget.The Governor has until February 13^th to present that amended budget to the Legislature. It is expected to have significant reductions to state spending as well accompanying legislation to repeal programs or services, raise user fees, implement enterprise-funding (if its that important to you then you can pay for it), and privatization of assets and services.

The Governor also introduced three Constitutional Amendments this week, indicating they were designed to underpin his long-term fiscal plan by putting decisions into the hands of voters instead of state politicians:

• SJR 4New or any increases to existing taxes will require voter approval and ratification by the Legislature prior to being implemented;
• SJR 4Enshrining the Permanent Fund dividend formula in the Constitution making it a fundamental right of Alaska residents;
• SJR 6Enactment of a spending cap that permits minimal increases.

These Constitutional Amendment proposals require two-thirds of each body (14 in the Senate and 27 in the House) to pass and be placed on the ballot in 2020. It is an extremely high hurdle given the current make-up of the Legislature.

The Governor has introduced four public safety bills to repeal provisions of SB 91 and strengthen penalties and close loopholes in the criminal justice system.

SB 32 repeals provisions of SB 91 related to the classification of crimes, sentencing, and probation of offenders. Measures in this bill will increase sentencing and probation lengths for most offenses, create additional tools allowing the State to identify repeat offenders and those that threaten others, strengthen penalties for drug traffickers that prey on Alaskans through the distribution of drugs, and finally, creates efficiencies within the criminal justice system – giving prosecutors and courts the tools they need.

SB 33 repeals pretrial service provisions of SB 91 and places the authority and discretion back in the hands of the Courts to determine bail and release conditions. Additionally, it authorizes the Commissioner of Corrections to monitor and enforce pretrial conditions as the Department does with probation and parole services, reenacting the third-party custodian system and electronic monitoring systems, which were in place prior to SB 91. It prohibits an individual from obtaining jail credit for time spent on electronic monitoring before trial.

SB 34 repeals provisions of SB 91 dealing with the sentencing caps on technical violations of probation and parole, repealing statutory early termination of probation and parole, reducing earned compliance credits, amending discretionary parole eligibility, and repealing good time credit for time spent on electronic monitoring.

SB 35 makes several amendments to current law to address Alaska’s high rate of sexual assault and sexual abuse of minors, including recognizing changes in technology, clarifying the sentencing ranges for sex offenders, parole eligibility for certain offenders, and tightening sex offender registration requirements.

The Governor introduced two bills proposing to pay prior years’ dividends that were reduced by the Legislature and former Governor in 2016, 2017, and 2018.Senate Bill 23 is the appropriation of the funds while SB 24 proposes the payments be made over three years as to not draw all the funds out of the Permanent Fund Earnings Reserve Account all at once – allowing the funds to continue to be invested by the Permanent Fund Corporation and continue to accrue additional earnings.

The bills propose each resident eligible for a dividend this year and who received a dividend in the prior three years would receive:

$1,061 for the amount not paid out in the 2016 dividend;

$1,289 for the amount not paid out in the 2017 dividend; and

$1,328 for the amount not paid out in the 2018 dividend.

The payment of back dividends is approximately $2.4 billion. Should these bills pass the appropriation would be pulled from the Earnings Reserve Account of the Permanent Fund. The current balance of the Permanent Fund is approximately $60.4 billion:$43.8 billion in the Principal and $16.6 billion in the Earnings Reserve Account.While the Earnings Reserve Account is available for appropriation while the Principal is Constitutionally protected from appropriation requiring a vote of the people to do spend.