Legislature(2005 - 2006)CAPITOL 120
02/09/2005 01:00 PM House JUDICIARY
| Audio | Topic |
|---|---|
| Start | |
| HB81 | |
| HB99 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 81 | TELECONFERENCED | |
| *+ | HB 99 | TELECONFERENCED | |
HB 81 - CONTRACTOR LICENSE ENFORCEMENT 1:32:11 PM CHAIR McGUIRE announced that the first order of business would be HOUSE BILL NO. 81, "An Act establishing an administrative fine and procedure for construction contractors in certain circumstances; increasing the amount of a civil penalty for persons acting in the capacity of contractors or home inspectors; modifying the elements of a crime involving contractor registration and residential contractors; and exempting the administrative hearings for imposing an administrative fine on construction contractors from the hearings conducted by the office of administrative hearings in the Department of Administration." [Before the committee was CSHB 81(L&C).] 1:32:22 PM JON BITTNER, Staff to Representative Tom Anderson, Alaska State Legislature, sponsor, said on behalf of Representative Anderson that HB 81 changes the way the state deals with unregistered contractors. Currently, Alaska exempts individuals from getting a contractor's license if they're working on a job that costs less than $5,000 in materials and labor. This has resulted in about 1,600 unregistered handymen operating in Alaska today, representing about 23 percent of the "contractor market." This exemption category is by far the largest category of any contractor category, he noted. Under current statutes, the Department of Labor & Workforce Development (DLWD) and the Department of Commerce, Community, & Economic Development (DCCED) handle violations of work performed by unlicensed contractors by issuing citations, which are left to the Department of Law (DOL) to prosecute; enforcement of these citations, he remarked, is extremely difficult. MR. BITTNER explained that HB 81 will allow the DLWD and the DCCED to issue civil fines for violations - $1,000 for the first violation, and $1,500 for subsequent violations - and the fines can be appealed to an administrative officer. The benefit of this proposed system, he posited, is that it allows the DLWD and the DCCED to quickly and effectively prosecute violators in way that is currently unavailable. In conclusion he mentioned that the violations "in this section" won't be applied to communities of less than 1,000 people not connected by road or rail to Anchorage or Fairbanks - roughly 232 communities. 1:34:13 PM REPRESENTATIVE DAHLSTROM, referring to those 232 communities, asked whether the DOL has raised any concerns regarding equal protection. MR. BITTNER offered his understanding that the DOL has seen the bill and has not raised any such concerns. CHAIR McGUIRE noted that the language in question can be found on page 2, in subsection (e) of Section 2. She asked what the rationale was for such an exemption. MR. BITTNER suggested that industry representatives might be better able to address that question. 1:35:38 PM AL NAGEL, Supervisor, Mechanical Inspection, Division of Standards & Safety, Department of Labor & Workforce Development (DLWD), relayed that he did not know the rationale for that language. 1:37:41 PM JEFF DeSMET, President, Southeast Alaska Building Industry Association (SABIA), testified in support of HB 81. Referring to an e-mail he sent to Chair McGuire, he paraphrased as follows: As a member of the construction industry in Alaska for 30 years, I urge you, Madame Chairman and your committee, to support HB 81. As you are aware, there are problems with unlicensed contractors building homes in Alaska. These people continue to ignore the current statutes and thumb their noses at licensed professional builders and remodelers. Your support of HB 81 would go along way to protect Alaskan consumers from illegal contractors and help [the DLWD and the Division of] Occupational Licensing enforcement officers pressure these individuals into current statute compliance. As a member of the board of directors for the Alaska State Home Builders [Association] as well, representing over 250 licensed general contractors, we strongly would urge your consideration of HB 81. 1:39:44 PM JOHN BITNEY, Lobbyist for Alaska State Home Builders Association (ASHBA), relayed that HB 81 is the product of an industry work group. One of the issues raised in putting the bill together pertained to the ability of those living in rural Alaska to obtain a licensed contractor, and although HB 81 doesn't change current standards for licensure, it does attempt to recognize that it is difficult to hire licensed contractors in very small communities due to economies of scale. For example, there might no be enough work in a community to make it worthwhile for a carpenter to go get registered [with the state]. He pointed out, however, that subsection (e) of Section 2 merely provides an exemption from the civil penalties proposed in the bill; violations of AS 08.18 in such communities would still be subject to citation. REPRESENTATIVE KOTT mentioned that he'd heard the bill in the House Labor and Commerce Standing Committee. 1:42:27 PM DAVE DILLARD, President, Alaska State Home Builders Association (ASHBA), relayed that the ASHBA, via HB 81, is looking for ways to protect the consumer. He noted that [licensed] contractors must satisfy bonding, insurance, and continuing education requirements, and that there is a growing concern regarding persons acting as contractors without having satisfied those requirements. The ASHBA recognizes that there is a great need for the handyman, but wants to make sure that the people who are doing small jobs are staying within the handyman category; therefore, if a job goes over $2,500, the ASHBA wants to make sure that the person doing that job is qualified. MR. DILLARD remarked that the other part of the equation is that people want to build their own homes, and the ASHBA feels that that should be possible. However, there are a lot of people who say they are building a home for themselves but are really just building a house for the purpose of selling it within a year. Therefore the bill proposes a requirement that a person has to wait two years before selling a home he/she has built. The goal of the bill, he indicated, is to afford people protection against unlicensed contractors. 1:45:36 PM CHAIR McGUIRE surmised that the bill is intended to address situations wherein people are representing themselves as qualified to build/repair homes but are doing so without the proper knowledge, insurance, and bonding and are thus leaving consumers without recourse for jobs done poorly. MR. DILLARD concurred. REPRESENTATIVE ANDERSON said he wants those who've satisfied bonding, insurance, and continuing education requirements to be on an equal playing field with those [who haven't]. He mentioned that there is also the issue of safety when homes are being built or repaired by unqualified contractors, as well as the fear that the work of licensed contractors will be devalued. Referring to the aforementioned two-year requirement, located on page 5, he explained that this language is intended to preclude someone from claiming that he/she is building a home for living in, in order to get around licensing requirements, when really he/she is building the house with the intention of selling it right away. He noted that this two-year requirement can be waived on a case-by-case basis if the person can demonstrate that waiting two years will cause an undue hardship. 1:48:34 PM REPRESENTATIVE COGHILL referred to page 4, lines 15-25, and expressed concern that he might run afoul of that stipulation when he gets paid more than $5,000 for labor and materials on jobs he is doing for friends. CHAIR McGUIRE pointed out that that language is part of current statute. REPRESENTATIVE KOTT mentioned that the legislature changed that amount from $10,000 to $5,000 just last year. REPRESENTATIVE COGHILL indicated that although he doesn't want to run afoul of the law, he also doesn't want to have to give away his labor when helping out a friend. REPRESENTATIVE KOTT pointed out that this language is intended to ensure that handymen aren't holding themselves out as qualified to do jobs so big that they ought to be done by licensed contractors rather than handymen. REPRESENTATIVE COGHILL mentioned that he's done jobs over the stipulated amount several times for friends and as a church volunteer without thinking that he needed to be a licensed contractor. CHAIR McGUIRE suggested to Representative Coghill that he consider proposing an amendment addressing the issue of volunteer work. REPRESENTATIVE COGHILL indicated that he's done such jobs for money, although not as his primary vocation, but hasn't gone out and solicited such work. 1:55:37 PM CHAIR McGUIRE, after ascertaining that no one else wished to testify, closed public testimony on HB 81. REPRESENTATIVE KOTT opined that with the changes made in the House Labor and Commerce Standing Committee, the bill is a good piece of legislation. CHAIR McGUIRE suggested that the committee request a legal opinion regarding any potential equal protection issues being raised because of [subsection (e) of Section 2]. REPRESENTATIVE ANDERSON indicated that he would be willing to work with Representative Coghill regarding his concerns, and expressed a desire to move the bill along quickly because the construction season will be starting soon. REPRESENTATIVE KOTT surmised that there may not be any equal protection issues raised, since the proposed civil penalties are not mandatory. 1:57:39 PM REPRESENTATIVE ANDERSON moved to report CSHB 81(L&C) out of committee with individual recommendations and the accompanying zero fiscal notes. There being no objection, CSHB 81(L&C) was reported from the House Judiciary Standing Committee.
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