House Insurance and Commerce Committee
Video
Transcript
Bills discussed (7)
| Bill | Title | Sponsor | Status |
|---|---|---|---|
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SB755
· 4 mentions in chapter, transcript
Matched: “SB755”
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Pre-2017 bill | ||
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HB2030
· 2 mentions in transcript, chapter
Matched: “will be House Bill 2030. Okay. Okay. Hold on. Yeah. Where”
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Pre-2017 bill | ||
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HB2137
· 2 mentions in chapter, transcript
Matched: “HB2137”
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Pre-2017 bill | ||
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SB720
· 2 mentions in transcript, chapter
Matched: “Okay. The next item on the agenda is Senate Bill 720.”
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Pre-2017 bill | ||
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HB1795
· 1 mention in chapter
Matched: “HB1795”
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Pre-2017 bill | ||
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HB1986
· 1 mention in chapter
Matched: “HB1986”
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Pre-2017 bill | ||
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SB75
· 1 mention in transcript
Matched: “bill. SB 75. Yeah. 755. 755. 755.”
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Pre-2017 bill |
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Speaker 1
0:00
To run SB 755 without objection. Representative Wayne,
Representative Charolette Wagner
Unverified
0:16
bill. SB 75. Yeah. 755. 755. 755.
Speaker 9
0:30
Let me know when you're ready to take off. Okay. You'll recognize, and please identify your guests. I will. Thank you, Mr. Chairman, colleagues.
Speaker 10
0:45
Representative Tommy Wren will be running Senate Bill 755. And Tim
Representative Tommy Wren
Unverified
0:51
Pickering with AT&T. Great. You'll recognize. Okay. Colleagues, Senate Bill 755 is an act to encourage investment and telecommunications infrastructure by reducing regulatory burdens
and creating regulatory parity for all telecommunications providers and competitive exchanges of electing companies and for other purposes. Right now, of course, with the emergence of technology, we've got three companies in the state, Southwestern Bell, AT&T, CenturyLink, and Windstream that are still being regulated by the PSC. But with the emergence of voice over IP companies and wireless companies, they are not regulated.
And what we're trying to do is to remove that and just level the playing field. So with that being said, I will open it up for any questions at this time. Okay. Representative Weston, do
Chair
Unverified
1:51
you recognize a question? Motion at the proper
Speaker 19
1:54
time, Mr. Chairman. Okay. Are there any questions from
Chair
Unverified
1:56
the committee? Representative Hyatt, you're recognized for a question. Thank you, Mr. Chairman.
Representative Barry Hyde
Unverified
2:06
Is there anybody opposed to leveling the playing field? No, sir. Thank you. Anybody in
Chair
Unverified
2:10
the audience want to speak for or against the bill? Representative Wren, you're recognized to close for your bill. I'm close. Appreciate a good vote. Okay. Do you recognize some motion?
Do pass. Okay. All in favor, let it be known by saying aye. Aye.
Opposed? Congratulations. You passed the bill. The next item
Speaker 8
2:51
will be House Bill 2030. Okay. Okay. Hold on. Yeah. Where
Chair
Unverified
3:03
is he? Okay. Is he ready? Okay. Representative. Okay. You
recognized to present house bill 2137
there's more mark we call we call units
Representative Hyatt, you recognize the presentation bill.
Representative Barry Hyde
Unverified
3:39
Representative Hyatt, thank you, Mr. Chairman, and Mr. Morris, the general counsel for the Insurance Commission is going to join me at the end of the table to answer any questions, if there are any. Members, 2137 is a consumer protection bill which deals with post-claims underwriting. Post-claims underwriting is when an insurance company does not do its due diligence at the it issues a policy to determine whether the questions answered on an insurance application have been answered truthfully by the applicant. Instead, it waits for the policyholder to file a claim
and then decides whether they lied in order to keep from having to pay the claim. Thus, they have collected months and years of premiums from someone who they ultimately deny their claim. This bill only attempts to clarify the original intent of existing law. In 1989, the legislature passed a law which intended to require that in order for a life or health insurance company to deny a claim for a misrepresentation on the application, it would have to show that there was a casual relationship between the loss and the fact misrepresented on the application.
While the emergency clause to that bill made it clear that it was the intent to require a casual connection, a causal connection, excuse me, due to the way the statute was structured, the statute provided a company a loophole which allowed them to continue to deny claims if the company can, in good faith, argue that they would have not issued the policy had the applicant told the truth. The second part effectively negates the intent of the law, which only allowed for denial of a claim under limited circumstances. This bill would amend current law to remove the ability of an insurer
to deny a claim if they can prove that had the insured correctly disclosed the information on the application, they would not have issued the policy. Thus, it would require that there be a causal connection between the misrepresentation and the loss in order to deny a claim as was originally intended. Again, this is a consumer protection bill which will not prevent an insurance company from denying a claim on the basis of a false statement on an application that had nothing to do with the claim that was made.
Chair
Unverified
5:44
Okay. Are you through representing her? We sure are. Okay. Any questions from the committee? I have a motion at
Speaker 42
5:58
the proper time. Okay. Any further questions? Anybody in
Chair
Unverified
6:01
the audience want to speak for or against the bill? Do you recognize for your motion? Okay.
All in favor, let it be known by saying aye. Aye. Opposed? Congratulations. You passed
Speaker 36
6:21
your bill. Thank you, Mr. Chairman. Thank you, committee. Representative Perry. Do
Speaker 47
6:41
you recognize the presidential bill? Thank you, Mr. Chairman, committee members.
Representative Mark Perry
Unverified
6:46
We had two bills, and one was sent to public health. health, the other one to this committee, but they have to do with the same field, engineers and surveyors. And what we're doing is establishing consistency in the laws. And I've got with me Steve Harrelson. I'll let him introduce himself, but he's the executive director of the State Association of Professional Surveyors and Engineers. Okay. You'll recognize them. Good morning, Mr. Chairman,
Steve Harrelson
Unverified
7:15
members of the committee. My name is Steve Harrelson. I'm
Executive Director of the Board of Licensure for Professional Engineers and Professional Surveyors. Okay. Okay.
Representative Mark Perry
Unverified
7:35
Sorry about that. Okay. Are you through? What this bill does is actually bring uniformity in some of the code and the language. They've worked with the association and kind of bring it all along, some of the language adopts from the engineers and surveyors. I'm not an engineer and surveyor. I'm actually
an insurance guy. So I'm going to let Mr. Harrelson explain any of the details if y'all have questions. Okay. Are there
Chair
Unverified
8:07
any questions from the committee members? Do you recognize Representative Murdoch? Yes. Could you have him just to kind of summarize what these changes are? I see lots of deletions and add?
Steve Harrelson
Unverified
8:17
Sure. What we're doing is we have a little bit of an unusual case in that we have two sets
of laws, one that applies to engineers and one that applies to surveyors, and one rule that applies to both. And in the rules, there are several provisions of the rules that treat engineers and surveyors equally, such as continuing education, disciplinary actions. But while the rules apply equally, the laws are a little bit different. So in the two bills that Representative Perry was referring to, we're essentially just taking
parts of the laws and moving some things from the engineer law to replace some things in the survey law so that they read on those issues where the rules treat the two professions equally, the laws will be
Speaker 57
9:12
exactly the same. Okay. Has this been presented to your membership as what
Steve Harrelson
Unverified
9:18
you're going to do and they're okay with it? Yes, sir. We sent out postcards to all our licensees. We put articles in the professional societies' magazines. We had an article in our newsletter that went out describing the changes.
We've also had them posted on our website now for probably about four months, and we We haven't had any negative comments about this. Okay. Thank you. Representative Hyatt, do you recognize? Thank you, Mr.
Representative Barry Hyde
Unverified
9:48
Chairman. Representative Perry, am I confused or did we have this bill or a very similar bill in public health the other day?
Representative Mark Perry
Unverified
9:57
On engineers. Yes. So we didn't get assigned to the same committee.
Speaker 61
10:04
So we had one committee do the engineers. One did the engineer side of this compilation, so to speak, and one did the surveyor
Representative Barry Hyde
Unverified
10:12
side of the compilation or the aligning of these laws and regs, and it went to two
Chair
Unverified
10:22
different ones. Yes, sir. Okay. Thank you.
Representative Bruce Westerman
Unverified
10:25
Representative Westerlin, you recognize the question? Thank you, Mr. Chair. I know to get a PE license you have to graduate from an ABET accredited school, and as I read
on the requirements for surveying, it just says providing proof of graduation with a board approved associate of science or associate of applied science degree. Can you elaborate on
Steve Harrelson
Unverified
10:48
what kind of training requirements? Sure. In the last legislative session, there was a bill, an act that pretty drastically changed the licensing requirements for surveyors. Prior to that, you could get a license without a degree, and the bill in the 2009 session
made it mandatory, beginning in 2017, that education will be required, and the bill was written so that you could get either an associate's degree or a four-year degree. In Arkansas, there are two programs that are recognized by the board. One's at U of A Community College at Marlton. There's a two-year degree there. And then at University of Arkansas at Monticello, there's a four-year degree. So
Representative Bruce Westerman
Unverified
11:39
we're transitioning to, in 2017, it will require a four-year degree then?
Steve Harrelson
Unverified
11:44
Well, it will still allow the two-year degree in 2017. There are significantly different experience requirements for a four-year degree as for the two-year degree. for the four-year degree, it will be three years of experience. For the two-year degree, it will be six years of experience. Okay.
Chair
Unverified
12:08
Thank you. Any further questions from the committee members? Is there anyone in the audience
that wants to speak for or against the bill? What's the pleasure of the committee? Okay.
Okay. Motion do pass. All in favor let it be known by saying aye. Aye. Opposed? Congratulations. You passed the
Speaker 69
12:38
bill. Thank you, Mr. Chairman. Thank you, Committee. Ingram's not running. Okay.
Chair
Unverified
12:41
Okay. The next item on the agenda is Senate Bill 720.
Speaker 71
12:48
All right. Okay. I got to go around the bill. You need me to hang around? No, I'm going around the bill. Thank you,
Representative Mark Perry
Unverified
13:01
Mr. Chairman, committee members. I'm just going to put aside
Senator Jonathan Dismang
Unverified
13:06
my notes. I know most of you guys have received a bunch of e-mails and calls on both sides of this issue. One thing I want you to know that I have diligently went through this bill,
and I think we have a very good bill in front of us. We've made amendments that probably didn't even have to be made in an attempt to satisfy those that were opposed to the bill. I think you'll hear in a little bit that those attempts in our negotiations and our good faith negotiations had fallen through, and that will be expressed in their opposition to the bill. But let me quickly say what this bill does. This bill, right now, currently in the state of Arkansas, BPOs are allowed to be performed by realtors. However, there is no regulatory body, there are no rules, and there are no regulations
in regards to the issuance of those BPOs. This bill simply sets out and allows the Real Estate Commission to establish a set of guidelines, establish rules and regulations in regards to BPOs, which is a consumer protection issue and something that I think needs to be done in the state of Arkansas. This bill in no way oversteps what is allowed to be or what a BPO is allowed to be used for on the federal level. And so with that, I'll take any questions. Okay. Thank you, Senator. Are there any questions from the committee?
Mr. Viviano, you're recognized for a question. Thank you, Mr. Chairman. Senator Dishmane, is there any way, this is
consumer protection law, is there any way that they can use this for the primary funding
Senator Jonathan Dismang
Unverified
14:46
for a bank? No, they cannot. I mean, in the bill, it even says they cannot use it for loan origination. And loan origination, just to clarify, includes refinance, and it also includes seconds.
And so as far as being able to use this to obtain funding, primary funding, the answer is no. We cannot overstep what is allowed for a BPO on the federal level, and this
bill does not do that. Okay. In our industry today, in fact, these are done. Won't
this legislation, in fact, bring more oversight into the real estate market? Absolutely, and I think it's
Senator Jonathan Dismang
Unverified
15:23
oversight that's needed. Again, I mean, I think this is a consumer protection bill.
I don't believe it allows, I mean, if a BPO is used out of the scope of what a BPO should be used for based on the guidelines and regulations established by the Real Estate Commission, then there will be a punishment for that individual that
Chair
Unverified
15:45
overuses or misuses a BPO. So we're not, this shouldn't be confused
Senator Jonathan Dismang
Unverified
15:49
with an actual appraisal. I don't think it can be confused with an appraisal in any way. I mean, I think you'll even see in the amendment that you have, or the legislation was amended to specifically not allow a BPO to contain the language appraisal or appraised value.
Okay. So brokers are not using this in place of a certified appraisal ordered by a bank for a primary loan? No, and they cannot.
Representative Keith M. Ingram
Unverified
16:28
Okay. Thank you. Representative Ingram, you're recognized for a question. Thank you, Mr. Chairman. Senator, talking about the oversight, the one thing that I've gotten a lot of questions about
was the Arkansas Real Estate Commission may prescribe rules instead of making them comply. Would you address that, please? I sure can. I
Senator Jonathan Dismang
Unverified
16:46
think if you look at the legislation that enables the creation of the appraisals, rules, and regulations, it also says may. And there's a reason for that and a very good reason. And that is that allows this legislative body to have the oversight over those rules and regulations to have the final say.
If that said shall, there could be a conflict of interest between what this legislative body approves in the oversight committee and what's actually in the language. And so that gives us a little bit more influence and power legislatively to have the words may instead
Representative Keith M. Ingram
Unverified
17:23
of shall. Follow-up? Go right ahead, sir. So you feel like that this will be addressed through the Real Estate Commission, that there will be, if it is abused, there will be some form of punishment that will be? Absolutely. Absolutely.
Senator Jonathan Dismang
Unverified
17:34
We've got a commitment from the Commission to do that.
Chair
Unverified
17:37
Thank you, Mr. Chairman. Thank you, Mr. Ingram. Any more questions from
Representative Tommy Wren
Unverified
17:51
Representative Wren? You recognize for a question. Thank you, Mr. Chair. Senator Dispain, I just want to get all the facts out on the table. And I've got three or four questions that I think you can answer, and I apologize if they're repetitive questions.
But currently, BPOs are being done in Arkansas, and they can charge for those right now. Is that right? That's correct. And nothing's changing there. That's correct. Okay. My second question is, why did the Real Estate Commission in Arkansas feel like that they, if the brokers and realtors in Arkansas are already able to do BPOs and they're able to charge a fee for them to garner listings, foreclosure companies, relocation companies, divorces,
you know, some of the different things that I've heard BPOs are used for, why do you feel like this legislation is necessary? Well, in
Speaker 83
18:50
part, it's necessary to mirror what's allowed on the federal
Senator Jonathan Dismang
Unverified
18:54
level by the Dodd-Frank Act. And then also, again, I mean, I think that they're being done with no regulation. I believe there's really very little reference in statute in regards to BPOs. And so, I mean, we're doing it as a consumer protection issue. I mean, there has to be guidelines that need to be put in place
and what even a standard BPO should look like and how it should be issued and when it can and cannot be used, which, again, is what the purpose of this
Representative Les "Skip" Carnine
Unverified
19:23
legislation is. And you may not have
Representative Tommy Wren
Unverified
19:26
this answer, but is the Real Estate Commission here in Arkansas going to come up with a template that all brokers and licensed real estate agents are going to use? Is it going to be the same template, or are they able to use whatever they want to? I mean, is there going to be kind of something that everybody's going to use, you know, kind of across the board?
Senator Jonathan Dismang
Unverified
19:50
I mean, you know, as an accountant, you have compilation reviews and audits in which each one of those don't have to necessarily look exactly the same, but they have to contain particular language, and it only can be used for certain circumstances. And so I can't speak for the commission, but I would think that, and I think it would be common sense, would dictate that, yes, there will be some type of uniform language that must be required to be in a BPO and also probably a standard format of some kind to make sure that, I mean,
there's consistency in what these look like for
Representative Tommy Wren
Unverified
20:25
a consumer. My last question is, you know, I know in the state of Arkansas now that we have brokers, real estate brokers and real estate agents that are licensed certified residential or certified general appraisers. And I just happen in my area, my competency area, I have worked with a real estate broker. He owns a Century 21 office in Batesville, Arkansas, and he's a certified general appraiser.
And I know him and I have worked on commercial projects before because of my limitations. And he signed off on those appraisals. And one thing that him and I have talked about, when he goes to list a property as a real estate broker or he goes and looks at a property to do an appraisal, there's two totally different templates. I mean, he doesn't look at them the same way. So my question is, there is a difference between the way that a property is looked at to sell
and then the market value of that subject property at that time. And so my question would be, do you feel like that these appraisers or these brokers or licensed agents that are licensed, that are certified appraisers, are just going to drop their licenses because he might be able to do a commercial project now based on a BPO and not as a certified general appraiser?
Senator Jonathan Dismang
Unverified
21:51
Does that make sense? Well, it makes sense, but I think that we probably both realize that appraisals are required for certain transactions.
And this is in no way going to be able to replace an appraisal in those transactions. I believe a BPO has a purpose. I believe the federal government told us that it did have a purpose. It is something that's less costly. It can help out very much in the foreclosure process and also the listing process. Again, I mean, we've talked before of even how our businesses use it in our own companies, not for loan origination but for loan renewal. That is where the terms of note are not to change. Property values, I mean, the properties are not to change in that mortgage.
And it's just a nice backup for the bank to have as far as a low-cost determination factor for the properties that we are collateralizing. So, but again, very clear on that, that is not loan origination, that's loan renewal. And so I think it's something that will help our individuals, businesses, consumers, realtors, and then also I think you guys are overworked. And so maybe if someone wants to use a BPO in the process that we just talked about,
which, you know, are allowed fairly, then I think
Representative Les "Skip" Carnine
Unverified
23:10
that will be a good circumstance for everyone involved. Okay. Well, I appreciate Senator Dismaying
Representative Tommy Wren
Unverified
23:15
and Representative Williams, y'all answering my questions. This is something that the three of us have worked on for the last five weeks, and I commend your efforts on trying to meet with me as a certified residential appraiser in the state to do the right thing and to look at this wholeheartedly. So I do commend you
Speaker 83
23:33
both on those efforts. Thank you, sir. We enjoyed the dialogue very much.
Chair
Unverified
23:39
Thank you, Representative. Representative Carnine, you have him recognized for
Representative Les "Skip" Carnine
Unverified
23:44
a question. MR. Thank you, Mr. Chair. If I may direct my question to Representative Williams on this as an attorney, as you looked at that, are you convinced then that this is not only positive for the buyer, the seller, the lender, and all those that are involved in the transaction? MR. Absolutely, Mr.
Representative Darrin Williams
Unverified
24:04
Carnine. This is, in addition to being an attorney, you know, I spent four years in the attorney
General's Office and protecting consumers is most important to the AG. I think this is very much a consumer protection issue. I think this language mirrors Dodd-Frank. I actually happen to have the Dodd-Frank language in front of me. It mirrors that, and I think this is quite appropriate. CHAIRMAN BRYANT- Thank you for
Representative Les "Skip" Carnine
Unverified
24:27
your response, and I think that, you know, obviously is very appropriate, and I do have a motion at the proper time, Mr. Chair. CHAIRMAN BRYANT-
Chair
Unverified
24:35
Thank you, Representative Carnine. Any more questions from the Committee? Thank you, Mr. Chairman.
Senator Dishman, isn't it true that one of the benefits of this legislation, obviously it's a bringing under
guidance of the Real Estate Commission, and one of the values of allowing this is what happens in the industry today is anytime a consumer has no idea what value of their property is going to be, and they engage a real estate professional that's gone through license training in school in order to be educated on that process,
and they're able to give them an opinion or a value of their property for a list or sell and guidance. In many cases, perhaps allow them to get more value out of their property than perhaps they would if they didn't have that expertise. Absolutely. Thank you. Thank you. All right, any more questions from
Chair
Unverified
25:39
the committee? Representative Wren. Thank you, Mr. Chairman.
Representative Tommy Wren
Unverified
25:45
This is just kind of a question in concerns to Mr. Biviano's, to his question to you, Senator Dismayne. As a licensed real estate broker and agent, do you feel that real estate agents and brokers give opinions of value for a property differently than what maybe a licensed certified real estate appraiser would at the current market time?
Do you feel like there's a disparity at all in maybe how they view that property compared to what it might sell for based on a percentage as compared to what an appraiser might appraise that property based on current trends in the market? As you know, we've had a huge foreclosure epidemic here in the United States, and a lot of times an appraiser has to look at what those properties are selling for now compared to what a real estate agent or broker might get for the property six months from now.
Senator Jonathan Dismang
Unverified
26:51
Could you comment on that? Well, I'm not a real estate agent. But, I mean, sure, I'm assuming that there is a difference in value, and I think there's a definite difference in how that value is determined. But I don't think that there's anything wrong with that. Okay. All
right. Thank you. All right. Any more questions from the committee? All right, seeing
none, I'm going to take testimony from anyone who want to speak for the bill from the audience.
I think we have Tim Grooms down to speak for the bill. I think
Senator Jonathan Dismang
Unverified
27:35
we'll pass on that at this time. I think we've adequately described the bill
for the committee. All right, anyone who want to speak against the bill, Thomas Riff. Rife. I
apologize. Please have a seat. Make sure the microphone has got the little green light, and introduce yourself, please.
Jim Martin
Unverified
28:03
Mr. Chairman, members of the committee, my name is Jim Martin. I'm the executive director for the Arkansas Appraiser Licensing Board, And we're here today to render our position as being in opposition to this legislation. And I have with me Mr. Tom Reif, who is the board's chairman. Can you – mic working? Yes, sir. From the director's point of view, I would just make this comment that I appreciate the work that Senator Desmayne
and Representative Williams have done in accepting an amendment that helped make this bill a little more palatable. However, it has still left out some language that we had hoped to be in there that would avoid some confusion down the road between the Real Estate Commission and the Appraiser Licensing Board as we seek to administer our respective laws as it relates to the issue of value opinions, a broker's opinion of value is of some concern.
Also we stand in opposition based upon the way this bill opens the door for mortgage lending purposes and not only commercial properties but refinance and so forth. One of the issues that we have is that we have, in recent years, have seen brokers' opinions being utilized in condemnation proceedings, a very serious area wherein the local attorneys
would use a broker's opinion to establish a value for a taking on condemnation cases. We see this opening the door for that area that's going to cause some problems as to the valuation services that they would be providing in that area. So I would relinquish the floor to Mr. Reif to further explain the Board's position. Mr. Reif, you recognize.
Speaker 134
30:23
Introduce yourself again, if you don't mind, sir. Thank you, Mr. Chairman. My name is Tom Reif. I am currently the chairman of the Arkansas Appraisal Licensing and Certification Board. We are here in opposition to Senate Bill 720 as it is written. To give you a little history, when our board was formed in the 1990s, We set aside the BPO for specific purposes from the licensing agreement
because we felt that the BPO, as utilized for listing and gaining and selling purposes for the realtors, it was their domain. But once you start using a BPO as an instrument for making mortgage decisions, we have problems with definitions and language. I have with me a copy, the latest copy, of the Dictionary of Real Estate Appraisal,
and I want to read you the definition of what price might, what definition of
Speaker 135
31:36
price is. Price, the amount offered, asked, or paid for a property. Once stated, price is a fact, whether it is publicly disclosed or retained in private. Because of the financial capabilities, motivations, and special interests of a given buyer or seller, the price paid for a property may or may not have any relation to the value that might be ascribed to that property by others.
Now, let's talk about what value is. Value, the monetary relationship between properties and those who buy, sell, or use those properties. Value expresses an economic concept. Value, it is never a fact but always an opinion of the worth of a property at a given time in accordance with a specific definition of value. In appraisal practice, value must always be qualified as to whether it be market value, liquidation value, or investment value.
Further, value is defined as the present worth of future benefits for real property ownership. The difference between a broker price opinion is what they see the market will pay for that property. The difference with a value of that property, it is an estimate based upon the best judgment of the appraiser.
There's a difference between price and value. And because of that, we feel that the writing of this bill without utilizing the full Dodd-Frank Act is full of holes. And in the Senate meeting, I described it as a piece of Swiss cheese legislation. And it all boils down to the definition between value and price.
We have further requested information from the Appraisal Institute concerning our current bill, Senate Bill 720. And the opinion that we receive from Scott DeBasio from the Appraisal Institute, we received this yesterday, states, provisions contained in Senate Bill 720 would actually contradict several portions of the Dodd-Frank Act and existing federal bank regulatory policies.
In its current form, Senate Bill 720 would contradict the intent of the Dodd-Frank Act as it relates to residential mortgage origination transaction. Second, Dodd-Frank is completely silent as to the issue of commercial BPOs, the use of which could be expanded under Senate Bill 720. 720 would make Arkansas law inconsistent with the Dodd-Frank Act.
Lastly, Senate Bill 720 is not even consistent with the sections of the interagency appraisal in the valuation guidelines as they have been issued by federal bank regulatory agencies. We as the appraisal board requested and received a portion of the amendment that we asked for. If we could substitute a broker's price opinion or market analysis issued in this state shall
not contain the terms appraisal, market value, opinion of value, or appraised value, it would be able to swallow it a little more easily. We can't stop the BPOs. BPOs are out there. It's, from figures that I have read, over 10 million were done
Speaker 134
36:04
last year. It's a profit center. It's a profit center that's eating away at the appraiser's profit center. It
Speaker 135
36:17
needs to be classified as to what it is. It is a broker's price opinion, not a broker's value opinion. And for those reasons, Mr. Chairman, we stand in opposition to Senate Bill 720, and we would hope that you would entertain amendments that would make it meet with the Dodd-Frank Act that was recently passed by the federal government and with
the actual and separate the difference between a broker's price opinion and a market
Speaker 138
36:56
value opinion. All right, sir. Gentlemen, is there any questions from,
Chair
Unverified
37:03
I'm sorry, Mr. Representative Benviano, you are recognized for a question. Thank you, Mr. Chairman. Who
ultimately makes the decision on how much money is loaned on a piece of property? I
Speaker 134
37:19
would say that the underwriters of the bank make the final call.
So in today's time, requirements are much more stringent than they have in the past. Isn't it true that broker price opinions are not used in place of appraisals
Speaker 134
37:41
by banks? Each bank makes up their own rules and regulations, and I can't say that a bank relies, you know, it's an individual bank.
So I'm in the real estate
business, I buy and sell a lot of real estate. I have yet to go
and buy a piece of property that my bank
Speaker 134
38:15
did not require a certified appraisal on. Then you've got a good, strong bank that is following rules and regulations that are needed, instead of becoming more stringent, this loosens the string by allowing the banks
to make a loan based upon a broker's price opinion and not a market value. So you're saying that banks
will make primary loans based on BPOs? I have seen it happen. Yes, sir. No more questions. Representative Wright, you're recognized for a question?
Speaker 127
39:06
Well, this is farther than one of y'all. I'd
Speaker 9
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like to know where that bank is because I would like to use that. Me too. But I just, it seems clear to me in here that it says it cannot be used for a lien holder. So if somebody's going to loan money on that property and be a lien holder, they've got to still
Speaker 7
39:32
have an appraisal. Is that correct? Okay. Thank you.
Chair
Unverified
39:40
Representative Catlett, you're recognized for a question. thank you mr chair um would you say a highly high percentage of realtors also have an appraisal license what would you say is there a
Speaker 134
39:58
certain percentage would you say would be high low it would be low okay because the education requirements for
Speaker 150
40:05
appraisers is much more more stringent than it is for realtors and real estate brokers.
Chair
Unverified
40:11
Okay. Thank you. Representative Murdock, you recognize for a question? Representative Wright, take care of it. Oh,
did he? All right. Representative Barnett, recognize for a question, sir. Good morning, Tom or Mr. Wright. How are you? I'm fine, Jonathan. Nice to see you. Good to see you. I guess my question, I obviously, I've made my livelihood in the construction industry and have bought and sold a lot of real estate and paid for a lot of appraisals and was happy
to do so. I've got the point anymore, I try not to borrow any money and just pay cash so you don't have these kind of problems. You know, I think most people should go to cash, but anyhow, it's whatever you can do there. But anyhow, we're not going to talk about that cash I showed you this morning. But anyhow, I'm just thinking out loud, you know, if this would have been an issue two, three, four, five years ago, you know,
it wasn't an issue back then. But now then we're in a different economic climate today than what we were a few years ago because of some of the concerns where people borrowed too much money. couldn't pay it back, and banks were probably maybe too eager to loan, and the consumer was too eager to receive, and it just created a lot of problems, and we had an oversupply. So I guess my question to you is that do you think that the economic climate that we've
gone through and the hardship that a lot of us have seen, especially in some parts of this state, maybe not in all parts of this state, do you think that this is, with the banking community and the real estate community and the buyer on the market, what effect do you think all this is having on this issue? I mean, could you address that? I mean, I know that there were a lot of appraisals that were, you know, probably overappraised, but, you know, you were looking at market price and conditions, and it's kind of like
the gold rush. You know, everybody got on board, and then it didn't last, but how
Speaker 134
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would you address that? Well, the economic climate has changed significantly. With the passage of the Dodd-Frank Act, it specifically addressed both bank issues and appraisal issues. We have come through and are still suffering from the effects of the recession that, in
my opinion, started in late 2007. And again, we're still suffering from the effects. Any time you have issues like we've gone through, typically the government gets involved and it's like a pendulum. When there's a lot of money and a lot of demand, the rules and regulations swing one way and relax. Now that we've gone through this era of foreclosures and era of property values declining rapidly,
we've gone the other way. We've become more stringent with the Dodd-Frank Act. So, again, it's like a pendulum. And we're at the, I hope, close to the end of the economic crisis that we've gone through. If I had a crystal ball, I could tell you a little more, but I don't have one. So this particular act is one of loosening
Speaker 161
44:08
It's not one of tightening. Representative Barnett, just one more question. Do you
think that, I mean, I haven't seen, unfortunately, I haven't seen too many county assessors decreasing very much the value on the properties. I think that's why we have equalization boards, and I know some people are using that venue, but could you address that? I mean, we obviously know that appraisals are going down and the market has decreased,
but I'm not seeing it being reflected much in the assessor's reflection. How would
Speaker 134
44:48
you address that? In looking at the assessor issue, Benton County has a new assessor, and he is very attuned to the marketplace. And they're on a cycle. Every three years, they look at and revise property values. It's not something that will be affected by Senate Bill 720.
It's more of a local issue that the assessors need to address. And maybe, and it's far beyond this committee to consider, but maybe a complete reassessment of the Assessment and Coordination Division. Okay, well, we're going to
try to stay on the bill. Representative Wren, you're recognized.
Speaker 164
45:49
I make a motion. Okay, let's hear your motion. Limit debate. Two? Ten minutes on each side. All right, it's a proper
motion. it's a pleasure to committee all in favor all opposed all right carries 10 minutes on either side and all
Speaker 74
46:20
against the bill all right Mr. Chairman yes If we're going to
Senator Jonathan Dismang
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46:30
have limited debate, I think it might be prudent to have the director for the commission come up and kind of explain what they see for this bill and the outcome of this bill in regards to regulations. Would that be okay if we bring him forward and let him kind of speak to the bill as far as their plans for the bill?
Just a moment, Senator. all right uh yeah that and we we intend to allow to do that that'd be part of the debate on uh on the positive side i assume so we're we're going to go ahead and let uh um the next uh folks come up that uh jonathan whitehead jim martin that was me with the chairman oh okay i'm sorry All right, the next two gentlemen are signed up.
Speaker 143
47:40
I'm assuming you're speaking against the bill? Yes, sir.
Tom First
Unverified
47:48
to go? Go ahead. my name is Tom first all I'm the executive secretary of the Arkansas Appraisers Association I've got mixed emotions on this I've been a realtor broker for 48 years and appraiser for 44 years and a lawyer for 39 years so you know I've got mixed feelings on all this I do know that personally my farm had the fourth best year in 44 years last year because of the bank failures so the
The more you can liberalize the appraisal rules, the more banks fail and the more money I make. But as a taxpayer, I submit that weakening regulatory valuation requirements for banks is not very good public policy, and too often we have to protect the lenders because the last 10 years have shown us that lenders are greed-driven to a great extent and are not going to protect themselves. As a realtor, however, I certainly do not dispute the right of licensees to prepare brokers' price opinions, not at all.
But those broker price opinions need to show on their face that it is not an appraisal and should not be utilized for any purpose requiring an appraisal or an appraised value. The amendments that were made to this bill are fine. The only thing I would add is broker opinion of value needs to be in that terminology also because this is a broker's price opinion, and that's all it is.
And it should not say anywhere on the form that it has anything to do with value. It's a broker's price opinion, period. I'm going to have some of my guys give out our proposed changes on this. I found out since the Senate hearing that there are some very good and excellent rules and regulations recommended for real estate commissions or model legislation for setting up rules and regulations.
I hope that that will happen. These forms that I want to pass out here are our proposed changes to 720, some of which you have already taken care of in your proposed amendment. The thing that bothers me more than anything else is having been a broker for 48 years, I recognize that the Real Estate Commission has never enacted regulations. I don't like this, oh, we're going to enact regulations.
I would like to see it shell or will because that makes them do something. You leave it may, it may or may not happen. The other problem I've had, and we've had two people up here that said it today, that this bill mirrored Dodd-Frank. It does not mirror Dodd-Frank. They left out eight words, but does not include an automated valuation model. And the reason those words are important to Dodd-Frank is that by doing an automated valuation model, you all of a sudden have created an appraisal situation.
That needs to be out of the, if we're going to say we mirror Dodd-Frank, we ought to mirror Dodd-Frank. Every word that's in the definition of BPO for Dodd-Frank. We should not leave out those eight words here in Arkansas when no other state has. And it's in yellow on the first page I gave you. It's in red on the second page. Okay. Obviously, you weren't allowed to see it. But the complete Dodd-Frank broker price opinion ends with these eight words,
but does not include an automated valuation model. That is not in Senate Bill 720. So any statements that it mirrored Dodd-Frank are false because it left out eight words out of the Dodd-Frank definition of BPO. And I submit to you that those should be in there if you're talking about consumer protection and you're talking about we mirrored federal law, then let's mirror federal law. That's all I have to say.
Speaker 181
52:06
All right. Thank you, gentlemen. How much time we got left? Anything's opposing. Go ahead. Okay. All right.
Speaker 164
52:19
Does anyone else want to speak against the bill? Yes, sir. I would
Jonathan Whitehead
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52:27
like to. All right. Go right ahead. Please introduce yourself again, sir, please. My name is Jonathan Whitehead. I'm a certified residential appraiser. I'm also a licensed realtor.
The qualifications for me to become an appraiser were a lot more strenuous than for my qualifications to become a realtor. I think that has a lot to say for our appraisal board and our rules and regulations that we do have to abide by while we are performing an opinion of value. I do not agree that Senate Bill 720 will, as other people have mentioned,
And it does nothing but loosen the governance on the lending, financial lending institutions. It was, what I was told is that it was, it would be in, BPOs would be allowed for refinances, as a bill reads right now, is what I have understood.
I think if I have money in a bank that I'm trusting the bank to loan my money out on to the consumers, I would be very appalled if I found out they did not have an appraisal done and instead performed a BPO for a property that someone was purchasing.
Jonathan Whitehead
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54:19
of you might not be aware of the Financial Institutions Reform, Recovery, and Enforcement Act. It was established in 1989. It was due to the savings and loan crisis. And I feel like if we allow, but that was before appraisers were required to be licensed. In this act, they made where the financial institutions had to have an appraisal.
And you can see on the stuff that the lady passed out, You must be a state licensed or a state certified or certified residential appraiser to perform an appraisal, and that is an opinion of value. And no matter how you want to cut it, that's what the definition is, opinion of value. And for them to be able to use this
Speaker 116
55:14
in a BPO does nothing but kill our industry.
Chair
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55:21
Viviana has a question. Representative Viviano,
are you recognized for a question? Thank you, Mr. Chairman. Based on your experience, have
Jonathan Whitehead
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55:43
you ever confused a BPO with an actual appraisal? I've not had personal experience with very many BPOs. The ones that I have seen did not mirror an appraisal report.
Chair
Unverified
55:56
Do you think lending institutions, mortgage companies, confuse BPOs with appraisals? No, I do not. Do you think
Jonathan Whitehead
Unverified
56:07
brokers confuse BPOs with appraisals? Well, actually, they do, because on the reporting forms, brokers, yes, I have a deal right here, broker's price opinion, summary,
How much time have we got left? I have never known one to actually represent it as an appraisal. or appraisal that is accepted by a bank for financing purposes. I've just never seen that
Chair
Unverified
56:43
ever happen. Thank you. Thank you, Representative Viviano. Representative Westerman, you're recognized for a question. You've got about
Representative Bruce Westerman
Unverified
56:51
a minute left. Thank you, Mr. Chair. I'll try to be quick. I never went through all the training that you guys did or Representative Wren,
but at one time I took the Universal Standards of Professional Appraisal Practice course and got a state-registered appraiser's license. And I was racking my brain here thinking about that USPAP course. Is it – am I remembering correctly that you have to have an appraisal to get a loan from a federally insured institution? Excuse me. Do you not have to have an appraisal to get a loan from a federal – First mortgage loan, yes, sir.
Okay. So does this bill, is it in conflict with USPAP the way it's written? Twenty-five seconds, gentlemen. I hadn't thought about that. I
Tom First
Unverified
57:40
mean, we have to meet USPAP. Obviously, brokers do not. So, you know, there's probably going to be a problem. There will probably
Speaker 180
57:47
be some lawsuits as a result of this legislation, I would suspect. Okay. I haven't got time for my other question. Time's up.
Chair
Unverified
58:04
Thank you, gentlemen. Senator, you recognized to either bring someone to the table to speak for the bill, or you may
close. It's up to you. Well, I think what we need
Senator Jonathan Dismang
Unverified
58:17
to do is just provide a little bit of clarification here because the sky is not falling, and so I think we need to bring it all back to what's really happening inside this bill and what it does. So I guess if I could have Gary Isom come and maybe he can speak a little bit to the commission's intent in regards to this bill
or what they perceive, I guess, our intent for this bill to be.
Speaker 9
58:47
Identify yourself and who you represent. Yes. Thank you, sir. Identify yourself and who you represent. Gary Isom. Thank you. Executive Director of the Arkansas Real Estate Commission. First of all, that's 31 pages of regulations enacted by the Arkansas Real Estate Commission. The Real Estate Commission is a consumer protection agency. I will speak from that perspective. What this bill does, it enables the Real Estate Commission to better establish its jurisdiction over the activity of providing a broker price opinion when a real estate agent does that.
That's what it does. It increases our jurisdiction, our ability to show jurisdiction. Every licensee in Arkansas works under a principal broker, a supervising principal broker. There are about 9,000 licensees and 2,200 principal brokers. They're all supervised. There are brokers responsible. There's protections with a recovery fund, $25,000 per action if something goes wrong
in a real estate transaction, the commission has that fund that the consumers can tap into. Now, the real estate commission will promulgate regulations that are necessary to make sure that broker price opinions are done correctly and certainly are not done counter to any federal law or rule. With that said, we have to be careful about any over-regulation. Regulatory agencies have come under fire by the Department of Justice for overregulation when it does one of two things.
Creates an anti-business environment, anti-competitive environment, and eliminates people from doing business. The other is when it eliminates, when that overregulation eliminates consumer choices. I think that's really important here. We are not talking about first-time homebuyers who are asking for these BPOs who need a lot of guidance and transactions. These are savvy business people. They are asking, they are analyzing their needs based upon the property, the inventory that they have with these asset management companies,
and they are determining that for their purposes, a broker price opinion is better than an appraisal. That is their decision. That's their decision to make, as long as it's not violating any federal law. That's a consumer decision. Consumers should be able to make the decisions that they want to make. And the last thing I will say, I've been with the Real Estate Commission 24 years. We get about 150 to 200 complaints a year.
And there's comparative market analysis. It's a very similar instrument to a broker-prized opinion. In that 24 years, I don't ever remember receiving a complaint about a broker price opinion or a comparative market analysis. Thank you, members of the committee. Thank you, sir. Next,
Chair
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1:01:55
we have Charles Miller. Thank you,
Speaker 198
1:02:05
Mr. Chairman. I'm Charles Miller with the Arkansas Bankers Association.
first of all I want to start by saying I do take exception with one of the previous men that testified saying that bankers are driven by greed I'm glad I don't have a member in here that would respond to that but I think suffice it to say that most of you guys know your local banker and I doubt you would describe him that way also with all due respect to Mr. Reif we'd love it if we wrote our own rules and regs Banks do not write their own rules and regs.
They're written by the Federal Reserve. They're written by the FDIC. They're written by the OCC. They're written by the OTC, the OTS. They're written by state bank departments, and they are written by state legislatures. Clearly, if you pass this bill, the state legislature will have said that BPOs cannot be used in determining the value for the purpose of originating a loan. The bill says that. I don't know how much more clear it can be, and that will be the policy of the state of Arkansas if you pass this bill.
I want to make a couple of comments as far as where we are with the industry. There are over nearly 11 percent of all mortgage loans in Arkansas are currently delinquent. We all know the state of the economy and what effect this has had on foreclosures. The main point that I'd like to make as far as what a bank uses a BPO for doesn't have to do as much with purchasing property
as it does have to do with evaluating their current loan portfolio. Looking at the delinquencies that they have in the bank and making a determination whether or not they're going to do a short sale, whether or not they're going to do a loan modification, and, as a very last resort, looking at foreclosure. It is a tool that they use to help them avoid foreclosure. I know I've talked with several legislators who have talked about buying property from a bank
when the property has been given back in lieu of foreclosure. You're getting a good deal. The bank has made a decision to put that property back on the market, And more than likely, they have used some sort of determination other than a full-blown appraisal to make that determination. Thank you, Mr. Miller. Senator, you've got about three minutes to close.
Chair
Unverified
1:04:41
You may use them any way you want. I'm going to recognize Representative
Senator Jonathan Dismang
Unverified
1:04:47
Williams and let you make a few comments.
Representative Darrin Williams
Unverified
1:04:50
Committee, just a couple of comments. One, there was a lot of discussion about value. It's my understanding, and Mr. Randmay can help us on this, that when appraisers look at value, they use a multi-listing service which is maintained by realtors, the same database that realtors use to make BPO comparisons. Two, many of you all know that I'm a securities litigation and consumer protection attorney, and we bring class action litigation against folks all across the country.
And we're involved in a lot of litigation regarding the subprime mortgage that the meltdown we're talking about here. Let me tell you, we're suing banks and we're suing appraisers. No instinct banks, I might add. We're suing banks and appraisers. We're not suing realtors for BPOs. Also, the statement was made regarding the summary appraisal report on the BPO that the gentleman had on lines 19 through 21 of this bill. That would eliminate a broker from being a realtor from being able to use the word appraisal, so that would be taken care
of. And despite what you have heard in emails and what we've heard in testimony here, this legislation does not intend to and does not regulate banks at all. Thank you. All right, Senator. Appreciate your time. Appreciate
Speaker 82
1:06:06
you guys putting up with this piece of legislation. I hope we've given you all the facts that you need to
Senator Jonathan Dismang
Unverified
1:06:12
make a good decision. I mean, I'll say I'm disappointed a little bit in the process and how it's been carried out. I have worked in full-faith negotiation for about five weeks on this bill,
and I feel like I have been chasing a crawdad down the creek, and I just can't get anything nailed down. We've made some adjustments to this bill. I don't think even we're quite required, but we're trying to do something in good faith. I think what you have in front of you is a good consumer protection bill, and I appreciate a good
vote. Representative Carnot, are you recognized? Thank you, Mr. Chairman. Do pass. We have a
Speaker 164
1:06:47
motion to do pass. All in favor of the motion, signify by saying aye. Aye. All opposed? Thank you, Senator. Your bill has passed the committee.
Chair
Unverified
1:07:11
Patterson's? Representative Patterson, are you here to present a
Speaker 14
1:07:14
bill? Okay. There wasn't any no votes. I mean,
Representative Les "Skip" Carnine
Unverified
1:07:21
it wasn't the fact there was any questions. Are you presenting House Bill 1785? Yes, sir, Mr. Chairman. Okay, you're
Speaker 205
1:07:27
recognized. Could I have Mr. Gary Isom come up here with the real estate commission?
Speaker 208
1:07:34
Mr. Gary? This is. Representative, Mr. Isom, if you would, again,
Chair
Unverified
1:07:44
state your name and who you represent. You didn't know he was going to get a twofer out of this, did you?
Speaker 41
1:07:52
I kind of expected that today, actually. Gary Isom, executive director of the real estate commission. Thank you, Mr.
Speaker 205
1:08:00
Chairman, for letting me be here today. House Bill 1791 is not like the bill that you just went over.
This is just a simple bill, and it's to regulate exemptions of the real estate licensing law. And basically what this bill is, it's a cleanup bill to clearly say who can sell real estate with or without a license. And I'm more than happy to answer any
Chair
Unverified
1:08:26
questions. All right, sir. Representative Westerman, you're recognized? I have
Representative Bruce Westerman
Unverified
1:08:29
a question of which bill we're looking at. 1795.
Speaker 79
1:08:32
I apologize. We're a little out of kilter here. Hold on.
Speaker 205
1:08:38
House Bill 1795. This isn't like that last bill, so it shouldn't take but a couple of minutes. All
Chair
Unverified
1:08:57
right. Okay, any questions from the committee? You've got a chance to look at that
Speaker 205
1:09:07
bill. Mr. Chairman, I think most of them read it last night.
Chair
Unverified
1:09:10
Oh, you think? All right, no questions from the committee? Microphone, sir. Thank you. Motion do pass. All right. I've got a motion do pass. What's the pleasure of committee? All in favor, say
aye. Aye. All opposed? Congratulations, Representative. You've passed your bill. Thank you, Mr.
Speaker 205
1:09:32
Chairman. Thank you, committee. Appreciate it. Thank you.
Chair
Unverified
1:09:45
All right. Representative Bibiano, you are recognized to present House Bill 1986. Wasn't a bad
year. We might as well continue the theme of real estate this morning. Might as well.
Before everybody gets out of the room. This bill, 1986, is just an enabling legislation for an appropriation bill that has been drafted but not been passed at this point. But this enabling legislation will allow a – provide funding for a first-time homebuyers program here in the state of Arkansas.
Basically, it allows a $2,500 funding for those that qualify as a first-time homebuyer. They haven't had a personal home in the last three years. Probably the number one asset anybody's going to own in their life is their home, and this is really kind of an economic development effort. When people buy homes, it puts plumbers and carpenters and electricians to work. It creates opportunities for a retail environment to sell goods and services to the homes.
So we're trying to create some economic stimulus. This has got the support of the speaker. And really, if you look at the numbers, the way we've got them broken down, we're going to cap it with 2,800 first-time homebuyers, which would be distributed evenly across the state of Arkansas with 700 each going to each congressional district. So it's not focused on any one particular part of the state,
but gives everybody the opportunity to create opportunity in their regions in this vital activity. If you look at an average home, it may sell for $150,000. This could create over $400 million of economic activity just by giving it a $2,500. The federal program that this kind of mirrors for past years was extremely successful, created a lot of activity at a time when our economy was down,
and I'm hoping this will do the same thing for the state of Arkansas. Again, this is just the enabling legislation. This has to still go through the appropriation process, and it will be debated on its merits at that point. With that, I don't take
Chair
Unverified
1:12:13
any questions. All right. Thank you, Representative Lovell. You're
Representative Buddy Lovell
Unverified
1:12:17
recognized for a question. Thank you, Mr. Chair. Representative Viviano, where the appropriation bill, where is it going to come from?
It's in discussions with Speaker Moore. We're looking at the GIF funds. If the fact that we look at some statewide projects, this is being considered as one of those. Okay.
Chair. Representative Carnine, you're recognized for a
Representative Les "Skip" Carnine
Unverified
1:12:44
question. Thank you. This is just, again, you know I'm pretty positive about your bill, so this is only
on the basis of the fact that the new congressional boundaries would be,
this would be based on those, not the current ones, correct? That's correct. Okay. Thank you very much. Representative Woods,
are you recognized for a question? Motion at the proper
Representative Keith M. Ingram
Unverified
1:13:13
time. Representative Ingram, you're recognized for a question. Representative, I notice this has got a real short fuse on it, 2012, March. Your thoughts
of this? My thoughts is, you know, right now we want to
create as much economic stimulus in the shortest period of time as possible. So hopefully we can get this passed.
Funds will be available. We begin the summer. And, you know, you've got to put an end date on it. Representative Barnett, you're recognized for a
Speaker 221
1:13:37
question? i would um i would think the real estate
community would be really in favor of this bill and they all left the room i just wondered what happened to them they all bailed out on you what happened on the real estate you know i thought since we had the
Speaker 221
1:13:53
theme of real estate today i'd go ahead and run it and get it done okay thank you but we do i will make a comment
Chair
Unverified
1:14:01
But I have – all right. Representative, what are
Speaker 224
1:14:14
you recognized for a question? Microphone, please. Oh, anyway. The $2,500 is simply for new construction, or is
it also just for existing? It's just if they're qualified as a first-time homebuyer. It can be new construction or existing. Thank
Chair
Unverified
1:14:28
you. First time. All right. Representative Murdoch, you're recognized for a question. Your caps, $75,000 minimum for a single individual, is that what it is?
That's correct. It's my experience. I guess that's one of my concerns. In my area, believe it or not, there are houses being built, a lot of them, for less than $75,000. And so they're certainly, as you explained in your bill, those are the type of people that need that type of development and that type of enhancement for sure. Let me explain
that. The $75,000 is not a cap on the price of the home.
It's an income qualification cap. So this is really geared towards the lower-to-middle-income individuals in the state of Arkansas. So if you're single and you make over $75,000, you will not qualify for these funds. Under $75,000, you have the opportunity to qualify for these funds. So it really is a bill geared towards the lower-to-mid-income individuals.
Chair
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1:15:43
All right. Thank you. Any more questions from the committee? Anyone in the audience want to speak against the bill? All right.
You're recognized. You speak against the bill. Please
state your name and who you represent, if any.
Speaker 226
1:16:06
Thank you, Mr. Chairman, members of the committee. I'm Lane Anderson. I'm the general counsel of the Arkansas Development Finance Authority.
This is our enabling legislation that the representative is attempting to rewrite a whole subchapter to, and we were not consulted about it at all. Had we been consulted, we would tell you that ADPA already runs a huge housing program for first-time homebuyers. We have done as much as $150 million in bonds for first-time homebuyers in a single year.
While that has slowed down with the economy, it is picking back up at a great pace. We also offer down payment assistance programs for those who do not have the cash for down payment assistance. We offer ADDI funds from the American Dream Down Payment Assistance Program. We offer numerous programs for first-time homebuyers. We do not know where the money would come from to fund this legislation.
And I would like to point out to members of the committee that the housing trust fund was passed by the 87th General Assembly, which we were very much in favor of and worked with that coalition for the housing trust fund. It was passed, but there was no money to appropriate to the housing trust fund. So if there's going to be $7 million appropriated to this, and I think there are greater needs
out there, for example, the housing trust fund, which is legislation but which has never been funded, instead of a program like this, which ADFA already runs and offers a variety of assistance to first-time homebuyers and low to moderate income families. Thank you very much. All right. Thank you, Ms. Anderson.
Chair
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1:18:39
Representative Murdock, you had a question? Yes. For whom? For Ms. Anderson?
Ms. Anderson from Alpha. All right. Thank you, Ms. Anderson. I'm very familiar with your program and participated from the builder side. Many, many units have we done. I'm familiar. And I think it's a great program. Thank you. It's helped a lot of people specifically in the Delta to have homes, and so it's a great program. What I did not know, and I would have asked, and I will when he comes back, that you had
not been consulted and were not a part of this agreement. I would have assumed that certainly this type of legislation would have first dealt with our current existing entities that are participating in this, and I would have thought that you were part of it. ask that question initially, and I'll visit that with Mr. Biviano when he comes back for the close. But very familiar. It's a great program, and it does everything that you say that it does. Thank you. Thank you very
Speaker 226
1:19:35
much, Representative. I appreciate that. All right. Thank you.
Chair
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1:19:40
Anyone want to say we're I'm sorry, you're speaking for or against the bill? I'm for the bill.
Tim Grooms
Unverified
1:19:46
Thank you, sir. My name is Tim Grooms, and I'm Counselor of the Arkansas Realtors Association. All right. We appreciate the committee considering this bill. ADFA does have great programs, and they're a great agency for the people across the state of Arkansas, but this is literally a credit that Representative Biaviano is providing a credit and or cash that this may help somebody with down payment assistance, which is something that we presently don't have.
We saw that with the Fed or to my knowledge that we don't have. I can't speak to the interplay between this body and ADFA, but we are certainly in favor of something that allows first-time homebuyers that have a very difficult time coming up with a down payment at the income caps that are set forth in the bill to have the opportunity to satisfy the American dream. And I don't see that it hurts to have an additional program and then let the funding figure out where it goes. The trust fund, the housing trust fund that Lane told you about, Ms. Anderson told you
about, is a great program. And the Realtor Association hope that gets funded also, even though I believe that that program is more for, and please correct me, Ms. Anderson, if I misspeak, because I am certainly not an expert on the housing trust fund, even though I did participate in that process. But I believe that's mostly for multifamily, where I believe Representative Viviano's bill is shooting for people who want to acquire a single-family home of their own. Both excellent projects. I hope there's money for all of them and completely support ADFA and all of its programs,
but hope you give consideration and will pass Representative Viviano's legislation to help those first-time homebuyers who may need this additional program to those that ADFA already has in order to satisfy the American dream.
Speaker 225
1:21:32
Mr. Chairman, may I just refute one thing? We do have, ADFA does currently
Speaker 226
1:21:37
and has had for years, a down payment assistance program. All right.
Chair
Unverified
1:21:42
Thank you very much. anyone else to speak for
or against the bill alright representative Viviano you are recognized for closure thank
you Mr. Chairman as stated the primary objective of this bill was to provide funding for single family homes and there was a great need for assistance in the marketplace some of these other agencies have some different requirements for qualifications some have as stated by Mr. Grooms They're more orientated toward multifamily. My bill is really looking to jumpstart the housing industry
and that low- to middle-income type individuals that want to buy a single-family home. And so I have not spent a lot of time with that agency, but I understand their requirements, and this is something that is a supplement to that. And, you know, the housing industry drives our economy. There's so many areas of opportunity that feed off the housing industry. So I would appreciate a good vote on this. Thank
Chair
Unverified
1:22:50
you. All right. Thank you, Representative.
I think Representative Murdoch has another question for
you. I want to applaud you again, Representative Viviano, because it is a great ideal and concept, again, certainly the collaboration with ADFA, because I think if you collaborate with them that you will find that everything that you're trying to do is already done. Plus, you talk about the qualifications that they may have or requirements. They don't have the credit requirements that many common institutions have. They reduce those.
There are lots of things that I think if you truly are wanting to help jumpstart the housing market, that you could get with them, and I think it would be a very good bill that will help enhance what you're trying to enhance. Secondly, you're possibly relying, or you are relying upon the GIF funding for your funding. We already have this funding, and if GIF is going to be used for a statewide project, if that becomes the choice of the body or the speaker or whomever makes that choice,
then we certainly want to use it in an area where we don't have coverage. We already have coverage in this area. We have a program through ADFA, a home program, and I think if you, because you said you hadn't visited, if you do visit, so it's not against what you're doing, I think it's already there,
and you just need to utilize it. I appreciate that, and like I said, this is an enabling legislation in a different area, and I think there's opportunity for more coverage. I think there's limited limitations based on their program,
and I just do really believe that if this is for an appropriation bill, may or may not pass depending on the will of the body and the speaker, but it's something that's an economic stimulus and it's really geared towards those that want to buy a single home. Last
Speaker 221
1:24:40
question. I'm sorry, Chair. What are the limitations of
Speaker 229
1:24:43
ADFA that you think are there? Well, again, there's a lot of government, I
don't want to say government red tape, but they should go through to qualify. It's geared towards more multifamily.
Speaker 221
1:24:56
But I'm happy to spend time with them. And if before this comes for an appropriation, if we want to amend it, I'd be happy to do that. But I really think this is a driver, an additional driver
incentive for the home market in the
Chair
Unverified
1:25:11
state of Arkansas. Thank you. All right. Representative Biviano has closed for his bill, I assume. Representative Woods, recognize for a motion. I recommend a
Speaker 164
1:25:20
motion do pass. All right. Can a motion do pass? All in favor of the motion, please signify by saying aye.
Speaker 221
1:25:27
Aye. All opposed? Congratulations, Representative Viviano. You have passed your bill. Thank you, Mr. Chairman. Thank you to
the committee. Representative Barnett. I have a motion to make at the proper time, if you would let me please. Okay. Let's show motion. I have a motion that we take House Bill 1450 off of the third list and
Speaker 221
1:25:52
put it back on the active calendar to be brought up on Friday.
Speaker 221
1:26:05
need about three hours of your time on Friday. you sure you want to do
Chair
Unverified
1:26:16
that on friday all we needed was a request a request well
Speaker 221
1:26:23
i request that i make a motion i'll do whatever is necessary but i'd like to to okay can we do that
Speaker 27
1:26:32
please we're if we can get to it on friday
Speaker 221
1:26:35
Okay, so that means I'm back on the active list, yes? Back on
Speaker 98
1:26:42
the active list. Okay. Y'all come prepared, please.
Chair
Unverified
1:26:48
Thank you. Thank you. We don't have any more bills. No further business. We stand adjourned.
Agenda
Call to Order
SB755
HB2137
HB2030
SB720
HB1795
HB1986
Adjournment
Documents
No documents posted.
Speakers
Speaker 1
Chair
Unverified
Representative Charolette Wagner
Unverified
Speaker 9
Speaker 10
Representative Tommy Wren
Unverified
Speaker 19
Representative Barry Hyde
Unverified
Speaker 8
Speaker 42
Speaker 36
Speaker 47
Representative Mark Perry
Unverified
Steve Harrelson
Unverified
Speaker 57
Speaker 61
Representative Bruce Westerman
Unverified
Speaker 69
Speaker 71
Senator Jonathan Dismang
Unverified
Representative Mark Biviano Chair
Unverified
Representative Keith M. Ingram
Unverified
Speaker 83
Representative Les "Skip" Carnine
Unverified
Representative Darrin Williams
Unverified
Representative Allen Kerr Chair
Unverified
Jim Martin
Unverified
Speaker 134
Speaker 135
Speaker 138
Speaker 127
Speaker 7
Speaker 150
Representative Jonathan Barnett Chair
Unverified
Speaker 161
Speaker 164
Speaker 74
Speaker 143
Speaker 175
Tom First
Unverified
Speaker 181
Jonathan Whitehead
Unverified
Speaker 186
Speaker 116
Speaker 103
Speaker 180
Speaker 198
Speaker 82
Speaker 203
Speaker 14
Speaker 205
Speaker 208
Speaker 41
Speaker 79
Representative Buddy Lovell
Unverified
Speaker 216
Speaker 221
Speaker 224
Speaker 226
Tim Grooms
Unverified
Speaker 225
Speaker 229
Speaker 18
Speaker 27
Speaker 98