Legislature(1999 - 2000)
02/18/2000 03:25 PM House L&C
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 207-LICENSE HOME INSPECTORS Number 0089 CHAIRMAN ROKEBERG announced that first order of business before the committee is HOUSE BILL NO. 207, "An Act relating to the registration of persons who perform home inspections; and providing for an effective date." He informed the committee that there is a proposed committee substitute (CS), Version LS0132\S, Chenoweth/Lauterbach, 2/9/00 which will be adopted as a working draft as soon as there is a quorum. There are also some proposed amendments. He noted that the latest version makes some changes with regard to professional civil engineers and engineers both of which are part of the exemptions of the bill. TOM MANNINEN, Staff to Representative Rokeberg, informed the committee that the changes made in HB 207 were few; however, some of the changes were substantial. He pointed out that on page 2, lines 3-4 of Version S the following text was inserted: "the requirements established by the board must include Alaska or northern education or experience in Arctic construction or building". Number 0306 MR. MANNINEN then turned to page 6, lines 15-20, which specifies the parameters by which legal actions can be taken against a home inspector. He pointed out that with regards to enforcement, on page 5, lines 17-31, the Department of Labor was dropped from that section. Therefore, the Department of Community & Economic Development (DCED) and the board will continue to have the enforcement responsibilities. Section 08.57.820(c), on page 7 of Version S, specifies that the provisions of Section 08.57.820 only apply to a residence that is: "(1) a single-family home; (2) a duplex, triplex, or four-plex; or (3) a townhouse or condominium unit." He moved on to Section 2 on page 9 of Version S, which adds the Board of Home Inspectors to the list of boards and commissions covered by the central licensing statutes, AS 08.57.010. On page 9, line 11, Section 3 of Version S it sets forth the June 30, 2004 sunset date. Number 0530 REPRESENTATIVE HALCRO asked if he was reading the fiscal note (FN) correctly and that the licensing fees are going to be $2,220 per two years. CHAIRMAN ROKEBERG said that is based on only 50 licensees, and therefore will be revised. REPRESENTATIVE HALCRO inquired as to the meaning of the language "adjusted actual cost based on positive time keeping for the first renewal." CHAIRMAN ROKEBERG deferred that question to Catherine Reardon, Director, Division of Occupational Licensing, DCED. He noted that she would be available to answer later. Chairman Rokeberg noted that Representative Brice had arrived, and therefore a quorum was present. REPRESENTATIVE HALCRO moved that the committee adopt the proposed CS, Version LS0132\S, Chenoweth/Lauterbach, 2/9/00, as the working draft. There being no objection, it was so ordered. Number 0718 DAN HAWKINS, Ameron Incorporated, testified via teleconference from Anchorage. He referred to the amendment labeled LS0132\S.1, Lauterbach, 2/17/00, in the committee packet that inserts the language "relating to home inspection requirements for residential loans purchased or approved by the Alaska Housing Finance Corporation;" on page 1, line 2, following "inspections;". From that he had the impression the Alaska Housing Finance Corporation [AHFC] would be the only entity writing mortgages for the State of Alaska. CHAIRMAN ROKEBERG explained that the amendment to which Mr. Hawkins referred pertains to the statutory language that authorizes the operation of Alaska Housing [AHFC]. Therefore, it only applies to those properties under the jurisdiction of Alaska Housing [AHFC] and has no effect in general law. He indicated that it should only expand the ability of Alaska Housing [AHFC] to bring more people into authorization of performing inspections for financing purposes for AHFC. MR. HAWKINS then referred to page 3, line 7 which seems to imply that only representatives of the construction industry be consulted, which he hoped was not the case. He asked if the language on page 4, lines 27-31, applied to one man shops of which there are many. CHAIRMAN ROKEBERG specified that the language on page 4, lines 27-31, [only requires that one have workers' compensation if one is already required to have it under the law]. He said that he would check with workers' compensation on that matter. MR. HAWKINS inquired as why home inspectors would be prohibited from advertising as specified on page 5, lines 11-13. REPRESENTATIVE BRICE commented that the language is not a prohibition of advertising. CHAIRMAN ROKEBERG clarified that the language on page 5, lines 11-13, means that a home inspector cannot advertise he/she is insured merely because he/she has met the insurance requirements of this chapter. MR. HAWKINS pointed out that people in other occupations advertise that they are insured. Why should home inspectors be any different? Number 0909 CATHERINE REARDON, Director, Division of Occupational Licensing, Department of Community & Economic Development, suspected that language is taken from the construction contractor licensing law which she believed was the template for this [bill]. MR. HAWKINS then turned to page 6, lines 19-20, and said that he was happy that language was included. However, he wondered if it would survive the process through a Democratic governor. He referred to page 7, lines 4-6, and inquired as to who would inspect those residences that are five plus. He also asked if anything over a four-plex would be considered a commercial unit. CHAIRMAN ROKEBERG clarified that this legislation/licensure does not apply to commercial inspections. MR. HAWKINS surmised then that a five-plex is considered a commercial residence. CHAIRMAN ROKEBERG replied yes and clarified that one would not need a license to do it, which is consistent with other real estate statutes throughout the state. MR. HAWKINS directed the committee's attention to page 7, lines 29-31. He asked if that language could be interpreted to mean that [home inspectors] are not allowed to be paid at closing. Mr. Hawkins informed the committee that he has accepted payment of close of escrow, which he had difficulty collecting. CHAIRMAN ROKEBERG explained that the language on page 7, lines 29-31, says that [a home inspector] cannot do a performance-based inspection. He said, "In other words, you [a home inspector] are prohibited from accepting any compensation if you have a preordained conclusion." This language is intended to prohibit unethical inspections like appraisals. MR. HAWKINS turned to page 8, lines 13-14, and commented that the language seems to speak to appraisers, especially since AHFC has been pressuring appraisers to perform inspection-type work included in their appraisals. CHAIRMAN ROKEBERG said that Mr. Hawkins' had a good point. He informed everyone that the language on page 8, lines 13-14, would either be eliminated or further clarified. In part the language was included because it dealt with professional engineers and architects. Chairman Rokeberg stressed that he wanted to avoid confusion. MR. HAWKINS pointed out that the language on page 9, lines 18-19, seems to be a contradiction to the language on page 2, lines 11-31. CHAIRMAN ROKEBERG clarified that Mr. Hawkins was in the Section, Section 4, which only relates to AHFC. MR. HAWKINS referred to page 11, line 1. He informed the committee that the International Conference of Building Officials (ICBO) recommends the combination dwelling inspector exam. He said that the ICBO told him that the building inspector exam includes commercial [residences]. CHAIRMAN ROKEBERG asked if Mr. Hawkins supported this legislation. MR. HAWKINS replied yes. Number 1251 DON SHEPPARD, Housemaster Home Inspection Service, testified via teleconference from Anchorage. He expressed confusion with regard to what is being done with the ICBO's versus the home inspector's inspection. He turned to page 3, lines 1-3, which says, "The board shall authorize the department to issue a home inspector license for new construction". What about the ICBO, which is really the new construction aspect. He further asked if the ICBO would have to carry the mandatory insurance that the home inspector will under these licensure provisions. The difference between the two are vague. CHAIRMAN ROKEBERG commented that Mr. Sheppard had a good question. Under the drafting of the bill, he believed both would be covered. However, he acknowledged that there may be circumstances when that is not appropriate. MR. SHEPPARD clarified that the question is whether an ICBO, without insurance, perform a standard home inspection. CHAIRMAN ROKEBERG answered that if this bill was in place, then "you" would have to have licensure and immediate (indisc.) insurance. MR. SHEPPARD surmised then that the ICBO would have to come under this law. CHAIRMAN ROKEBERG replied yes. MR. SHEPPARD related his understanding that when AHFC initially required inspectors and set up the ICBO program in Alaska, their insurance requirements were waived by the state. He did not believe that the ICBO carries any insurance requirements in the state. CHAIRMAN ROKEBERG clarified that the legislation is drafted to that and the ICBO inspectors are to be qualified for AHFC as well as licensed under this statute. He explained that the attempt has been to bifurcate and provide two paths from which the new board would develop two different types of licenses. He acknowledged that it might be, particularly in rural areas, appropriate to reexamine some of those things. Number 1425 VINCE MEURLOTT, Building Consultants, testified via teleconference from Fairbanks. Mr. Meurlott read from an e-mail he sent to committee members, which is as follows: Your efforts to protect the home buyer are commendable. However, I do not believe that the bill will provide the protection desired. Instead it will raise the cost of inspections and perhaps give a false sense of security to the potential home buyer. I am a professional civil engineer working for a municipality and also in the private sector outside where there is no authority having jurisdiction. I have performed over a thousand inspections and reports for home buyers in the Fairbanks area over the last eight years. I am also familiar with the home buying process and inspection practices in other states. I believe that HB 207 should be shelved for the following reasons. 1. It raises the cost of government. Setting up a board to police this area is more difficult and expensive than most people think. There is a wide range of expectations among buyers and sellers in the home market in Alaska just as there is an equally wide range of housing stock. At present you are free to select an inspector or engineer to suit your needs. The problem can be dealt with more effectively by the market and free enterprise. Good inspectors can be found through realtors and lending institutions. Home buyers can check with the Better Business Bureau and other places to avoid bad inspectors. 2. The program would be difficult to administer. I support the existing voluntary AHFC program for inspection on new residences even though it may be flawed for a lack of requirement consideration of soils and engineering. The AHFC program is a start in the right direction and has raised the quality of home construction in Alaska significantly, but my experience with the program shows that they lack direction in the interpretation and enforcement when the "rules" are clear as stated in the most recent addition of the code. The codes change every three years and many "problems" identified in existing construction can be very subjective. The problem with the majority of the housing stock in Alaska is the lack of enforcement in building codes in residential construction outside of the cities or municipalities. Other states start by adopting and enforcing the codes during the construction process. Inspection of residences inside cities or municipalities where codes are enforced is less problematic. Most of them have been built to reasonable standards and municipal inspectors can even be hired to ascertain the condition of the home. Number 1551 MR. MEURLOTT continued: However, please contrast this with the Lower 48 construction. ... We are part of the last frontier. That mentality breeds ingenuity, creativity and the use of a wide variety of construction materials and methods not approved by the mainstream. Sometimes this is good, but in many instances the construction is not safe. We are confronted with substandard construction with regard to the major components. We deal with expansive soils, permafrost, foundations that are not property reinforced, improperly constructed foundations of wood and roof that are not designed or constructed for our snow load on a regular basis. Proper evaluation and design of remedies for these problems ... more often than not what we can encounter should be performed by an engineer if a permanent solution is sought rather than a Band-Aid. 3. The public may be given a false sense of security that "licensed" home inspectors can properly find all the problem areas simply because they have a license. I am an ICBO [International Conference of Building Officials] certified Plans Examiner, Building Inspector, Combination Inspector; Electrical, Fire, Mechanical and Plumbing Inspector through the testing process. I have seen many individuals pass the written exam but still seem to be incompetent as an inspector and they can't properly identify problems and specify a practical solution. It is experience and engineering that make the difference. 4. The cost of inspections will go up due to licensure and insurance requirements. Subjective areas will be most likely contested for settlement under E and O [errors and omissions] insurance claims simply because these inspectors have insurance. Many people coming from the Lower 48 think that the homes that they are buying are constructed and inspected per code. More emphasis should be placed on the education process of buyers and disclosure laws to inform the buyers of homes. 5. Qualifications of the inspector according to the proposed bill includes showing competence in Arctic structural and thermal construction techniques. This is most effectively done through the existing AELS [State Board of Registration for Architects, Engineers and Land Surveyors] registration board. Professional engineers have demonstrated the competence desired through rigorous testing and completion of course work in Arctic engineering which also considers thermal considerations. The scope of work for engineers includes investigation, identification and providing a remedy for the problems most homeowners are concerned most about. Number 1670 MR. MEURLOTT continued: 6. Under qualified home inspectors without training in engineering cannot often properly identify problem areas or do not understand the processes or modes of failure for the construction materials used. The result may be a failure to identify a significant structural problem or geologic hazard. This is the primary service the inspector was hired to provide. 7. Under qualified home inspectors without training in engineering often cannot prescribe a complete or cost effective remedy for problems they may identify because to do so involves the services of an engineer. They cannot specify a repair because it is beyond the scope of their expertise. Therefore, the unqualified inspector has two difficult choices: a. To provide a service without the proper qualifications; or b. Insist that the buyer hire an engineer at additional expense. Neither choice is palatable. Engineering judgement is required to remedy some of the problems in most of the houses under consideration. In summary, this legislation will raise the cost of home inspections, raise the cost of government to monitor inspectors, encourage less qualified inspectors to perform work beyond their capabilities relying on their insurance to cover their mistakes. Please rely on the existing licenses and registration of engineers to perform the services desired. The home buyer or public will not be well served by this legislation as it is written. Thank you for your time and work in this area. Please feel free to contact me for clarifications or questions if I can be of service. I am eager to hear your concerns and will attempt to provide my insight to the process under consideration. Thank you. Number 1745 CHAIRMAN ROKEBERG asked if Mr. Meurlott was aware that civil engineers are exempt under the latest version of HB 207. MR. MEURLOTT said that he was not sure that civil engineers were exempt from all considerations or just under the qualifications. CHAIRMAN ROKEBERG clarified that civil engineers can conduct their home inspections without being licensed. MR. MEURLOTT stated that he could understand that, but the other concerns he mentioned remain. CHAIRMAN ROKEBERG pointed out that anyone can call themselves a home inspector. In fact, there are many in Anchorage who perform home inspections, but are not certified engineers. REPRESENTATIVE HALCRO asked if Mr. Meurlott had an association of home inspectors to which he belonged. MR. MEURLOTT answered that there is no such local association. Number 1817 BILL BRADY, Agent, RE/MAX Properties; Chairman, Anchorage Board of Realtors Legislative Committee, testified via teleconference from Anchorage. He began by thanking [the sponsor] in regards to how far the bill has come in the last year. In contrast to Mr. Meurlott's testimony, Mr. Brady felt that this legislation is a consumer protection bill as does the Anchorage Board of Realtors and the state association. It is time that home inspectors are licensed and based on the same requirements. Therefore, he strongly objected with Mr. Meurlott that one can purchase a business license and perform home inspections. On one hand, Mr. Meurlott said that the market place will bear weight with regard to whether the inspector is good or not. To that, Mr. Brady inquired as to what happens to the people that are harmed while the home inspector is learning. MR. BRADY informed the committee that the Anchorage Board of Realtors and the state association are not sure that certified engineers should be exempt from HB 207. Perhaps, certified engineers should be under the same guidelines as the home inspectors. He was not sure that an electrical engineer could perform a competent home inspection. With regard to the errors and omissions (E&O) insurance requirement, he was not sure that the minimum amount of $250,000 for each occurrence is adequate because today there are $1 million plus houses on the market. How would the insurance handle a fire that was the liability of the home inspector? MR. BRADY commented that in the year that he has been discussing this legislation with others, those that are opposed seem to be those that should not be in the market place as well as the engineers. CHAIRMAN ROKEBERG informed Mr. Brady that the current version of HB 207, Version S, only exempts civil engineers and architects not the other disciplines. With regard to the E&O insurance requirement, Chairman Rokeberg asked Mr. Brady what he felt it should be. MR. BRADY informed the committee that his E&O at RE/MAX is about $300,000 and he does not have the responsibility of inspecting a home. Number 2012 REPRESENTATIVE HALCRO posed a situation in which a real estate agent suggests to a client that a particular home inspector be hired. The home inspector is incompetent. He inquired as to the type of liability that would exist for the real estate agent. MR. BRADY informed the committee that on the multiple listing service (MLS) form there is a space where the person bringing the offer can specify who will be used as a home inspector. He believes there are six places to specify that. The seller has the opportunity to negotiate that and may say that he/she does not want to work with one of the home inspectors. Mr. Brady said that he only uses licensed and bonded home inspectors with good reputations. Although there is a liability issue, there are many new agents that are entering real estate and do not know the home inspectors. REPRESENTATIVE HALCRO turned to Mr. Brady's comment that there are many new real estate agents. He asked if the board or the association has an education program so that the new real estate agents can be educated with regard to obtaining and identifying a competent home inspector. MR. BRADY informed the committee that in order to become a licensed real estate agent in the State of Alaska, one must have 20 hours of pre-licensing education. However, that pre-licensing education does not address home inspectors. After one is licensed, further education is not necessary save 20 more hours in the next licensing period. Although home inspectors provide education for real estate agents, he was not sure that everyone took that education. Perhaps, the Anchorage Board of Realtors and the state association should review this matter. However, if recognition of a competent home inspector is made mandatory, there are other fields that could tie up the real estate professional. CHAIRMAN ROKEBERG requested that Mr. Brady briefly address the relationship a realtor finds himself/herself in with regard to disclosure statutes and the home inspector. It was felt that the relationship was too difficult to address at this juncture, in this legislation. He asked Mr. Brady to discuss some of the pros and cons with regard to the relationship between the home inspector and the state disclosure statutes. MR. BRADY related his belief that the state's disclosure document is very good and he believes that it helps with the transaction. A home inspector is a valuable component to the transaction as there are many things that are revealed in the home inspection report which are not in the disclosure report. From past experience, Mr. Brady commented that home inspectors have kept his deals together. He pointed out that there are some home inspectors who feel the need to place things, such as minor painting, on paper regardless of whether there is a health or safety violation to the property. On the other hand, some inspectors walk through the house with the buyer and point out things that need to be done at some point, although it is not necessary at the time. MR. BRADY informed the committee that the National Association of REALTORS, under its code of ethics does include a statute saying that realtors will not take kick-backs. Therefore, its not as though realtors are going to funnel business to [a home inspector] and receive kick-backs to push a certain home inspector. He commented that every realtor he knows is looking for a competent home inspector. He reiterated that he believed this legislation protects the consumer. Number 2312 CHARLES JEANNET, Professional Engineer (PE), testified via teleconference from Fairbanks. Mr. Jeannet said that he concurred with the testimony of Mr. Meurlott. He informed the committee that he is a professional engineer who works for Northstar Engineering and Inspection. In his more than 16 years of inspecting for the government sector and the private sector, he has inspected well into the thousands of new and existing homes. He mentioned that he is a supporter and believer in the ICBO inspection program for new construction. However, he noted his grave reservations with regard to HB 207 that targets existing homes. He believes that this legislation is sanctioning inexperienced home inspectors. Mr. Jeannet did not believe that someone coming to town and taking a test before hanging a shingle was any better than the current system. At least now there is reliance on reputation and experience as well as the reliability of the realtor that refers that home inspector. MR. JEANNET turned to the issue of insurance. He said, "I think one of the major concerns Mr. Brady brought out with regard to this insurance issue is that realtors are looking for somebody with a deeper pocket that they can rely on in this transaction." Mr. Jeannet related his belief that this legislation erroneously suggests that these inspectors should have that deep pocket via the insurance. He believes that the home inspectors should be exempt from the liability similar to the ICBO inspectors. Furthermore, he believes that it is inappropriate for the Board of Realtors to be pushing this legislation primarily for that reason [a deeper pocket in the home inspectors]. There are several qualified inspectors available and their inspections speak for themselves. The realtors do not need to recommend those home inspectors that are not believed to be doing a competent job. Mr. Jeannet pointed out that the current licensing provisions of the Board of Architects, Engineers and Land Surveyors prohibits the non-engineers and architects from performing any design repairs or fixes when they note defects in a home. Therefore, he believed that this is going to be problematic in that there will be redundant inspections. TAPE 00-14, SIDE B MR. JEANNET indicated that any problems cannot just be swept under the rug. He said that he had a real problem with underqualified individuals. He noted that he has spent many hours trying to diffuse those type of problems. Like the 1992 ICBO inspection legislation for new residential construction, these inspectors should be exempted from the liability. It is unusual for the state's licensing provisions to require and dictate a minimal level of liability. The subjectivity in the enforcement of the inspection business will always be an inherent part of inspecting existing homes in outlying areas. He suspected that the board's first action will be to create a check list, which he believes will create many problems for the real estate and finance industries. In his opinion, the inspectors [under a check list system] will bring the closing process to its knees. He suspected that numerous deficiencies will be noted that are unnecessary. He posed a situation in which an inspector is in a crawl space that is dry and does not need a ground vapor barrier. The check list will probably include a ground vapor barrier, which would then create a requirement regardless of whether or not a ground vapor barrier is needed. Number 0095 MR. JEANNET commented that he has some grave reservations about this. Furthermore, there will clearly be an added cost. There will be a cost for the additional liability and often there will be the cost for two inspectors. There will be a very large cost for the additional repairs that are going to result from the use of the check list. In summary, Mr. Jeannet predicted that the home buyer and the home seller will pay more, and there will also be more bureaucracy between the lenders, underwriters, realtors and attorneys. The only people who will benefit from this [legislation] will be the realtors because they will hopefully deflect some of the liability they currently face. This legislation, HB 207, is not good legislation. CHAIRMAN ROKEBERG commented, "Apparently, you folks up in Fairbanks aren't aware of what's going on in the rest of the state." He informed Mr. Jeannet that 95 percent of all the home inspections in the Mat-Su Valley and the Anchorage area are conducted by nonprofessional engineers. The home inspection rates are $300-$400 per inspection. He inquired as to the cost of a home inspection by a professional engineer in Fairbanks. He also asked if Fairbanks has other inspectors that are not civil engineers. MR. JEANNET answered that the cost of a home inspection by a professional engineer in Fairbanks typically runs between $250-$400. He acknowledged that Fairbanks does have people that are not civil engineers (CEs) performing home inspections. However, the non PEs and PEs that are underqualified have typically not been asked to come back and perform another inspection. Number 0199 REPRESENTATIVE HALCRO asked if Mr. Jeannet felt that home inspectors should be exempt from liability period. MR. JEANNET replied no. He related his belief that home inspectors should be exempt from being required by government to maintain a certain level of insurance. CHAIRMAN ROKEBERG asked if Mr. Jeannet felt that all people driving automobiles should be exempt from having insurance. MR. JEANNET answered that automobiles are a different issue. However, he did not believe other areas of licensure under the state require mandatory insurance. CHAIRMAN ROKEBERG indicated his belief that professional engineers are subject to liability for their work. MR. JEANNET said that professional engineers may well be subject to liability, but the State of Alaska does not require that they be insured. Furthermore, there is no minimum amount established. Number 0258 MARK LEWIS, Registered Civil Engineer; Home Inspector, Home Inspection Service; Alaska Chapter of the American Society of Home Inspectors, testified via teleconference from Anchorage. He informed the committee that the American Society of Home Inspectors is probably the preeminent home inspection society in the United States. The American Society of Home Inspectors is comprised of disciplines ranging from engineers to electricians to contractors. From the testimony, Mr. Lewis surmised that the engineers who have testified would possibly be more accepting of HB 207 if the requirements for home inspectors were more stringent. Furthermore, the history of the development of this legislation suggests that a check list would not be mandatory. MR. LEWIS informed the committee that he has been performing home inspections in Anchorage for about 3.5 years. He also informed the committee that he was not excited about civil engineers and architects being exempt from this licensing because although one may be a good engineer, that does not mean that he/she is a good home inspector. Home inspection is a different discipline. Civil engineering includes many disciplines. He pointed out that the civil engineering test for registration in taking the Arctic engineering course does not test on residential construction. Therefore, he felt that exempting civil engineers and architects is not appropriate. "If anything, the civil engineer being a registered civil engineer carries additional weight and the market will either prefer or not prefer to use that person because of their credentials." He did not agree that a civil engineer would make a good home inspector. MR. LEWIS referred to page 2, line 21, which he interpreted to mean that a licensed home inspector cannot be a qualified supervisor unless that person is also the employer. He asked if that would be a correct interpretation. CHAIRMAN ROKEBERG replied no that is not the intention. MR. LEWIS said that is how the language reads. He understood there to be two requirements to become a qualified supervisor. If there is ever a large firm with four or five inspectors, he read the language to mean that one would have to be the employer in order to be the person's supervisor. Mr. Lewis then referred to page 3, line 5, and inquired as to the meaning of the word "practical" in this context. Does the word "practical" mean "oral" or does it mean "that it must test competence in relation to Arctic structural ...". CHAIRMAN ROKEBERG recalled that the drafters may have had a question at one time with regards to whether there was a physical practicum or if one had to actually perform an inspection on a house. MR. LEWIS commented that if that was the case, the board would have to address it. There are a couple of schools around the U.S. that have houses set up for testing students. The creation of such a house is fairly intensive. CHAIRMAN ROKEBERG announced that he was open to removing or modifying that language in order to provide clarity. He said that he did not want to mandate something to the board [that would create inflexibility] to make sure they comply with the statutory language. Number 0495 MR. LEWIS expressed his belief that the testing and the competence of the home inspector needs to be more rigorous. He informed the committee that the test that he took for home inspectors, which is addressed in the legislation, did not necessarily deal with conditions in Alaska. The test should include an additional module in order to test competence for Alaskan conditions. CHAIRMAN ROKEBERG pointed out that is included in HB 207. This legislation has been drafted with flexibility in mind in order to provide the board with full discretion on that level. MR. LEWIS commented that it would ultimately fall on the board, which seems to be the case with many things [in this legislation]. He then referred to page 4, lines 16-18, which addresses advertising and the preparation of business cards. The legislation requires that all business cards prepared for the home inspector must include the home inspector's name, mailing address and license number. He acknowledged that the argument is that other professionals have to do this. However, upon review of the yellow pages [in the phone book] only 10-20 percent of the contractors actually included an address. Therefore, he asked whether this requirement is necessary, enforceable or is it voluntary. Mr. Lewis agreed that the home inspector's true name and license number should be provided. CHAIRMAN ROKEBERG noted that a license number provides an advantage over a professional engineer, who does not want to be a licensee. MR. LEWIS said that he did not believe that the regulations for professional engineers addressed that at all. He then turned to the errors and omissions insurance and the minimum amount of $250,000, which he believes is low. With regard to what the minimum amount [of insurance for the home inspector], he suggested linking it to the value of a median house price if such a statistic is produced by the state. In the case of negligent home inspection, there is always the possibility that the home inspector could be found to be liable for the death of a family and $250,000 would not even come close to covering that. He informed the committee that on his company's insurance there is a rider that covers the company's client's agent. Number 0660 MR. LEWIS referred to page 7, lines 21-23, and asked if there is the possibility to limit this to a specific period of time. He informed the committee that commonly, [a home inspector] will reinspect homes after a couple of years. That previous report is used as a background that is often more complete than any sellers background, that he had read. That previous report will be reviewed in order to have an idea of where the "hot spots" might be in order to perform a better job for the client. CHAIRMAN ROKEBERG said that could be modified. MR. LEWIS suggested perhaps a time period of 12 months or two years; although he preferred a year. He explained that after a year there are no liability expense (indisc.) at least according to this legislation; the home inspector does not have liability for what's in the report. CHAIRMAN ROKEBERG stated then that it could revert to the home inspector's ownership after a year. MR. LEWIS answered that at least after a year it [the report] could be disclosed as it does not have much value after a year. He continued by referring to page 11, paragraph (2) which refers to the examinations for the ICBO. He asked if it should be the combination dwelling inspection. CHAIRMAN ROKEBERG answered that this was an oversight. MR. LEWIS surmised then that there is clarification with regard to which examinations. With regard to educating realtors, many home inspectors do that and are more than willing to educate anyone. Furthermore, there is some continuing education which is ongoing on a monthly basis for those home inspectors in the local chapters of the American Society of Home Inspectors in Anchorage and Mat-Su Valley. CHAIRMAN ROKEBERG asked if Mr. Lewis supported this legislation with some revisions. MR. LEWIS replied, "Yeah, for the most part. I don't support exemption of civil engineers, other than that I think most all the significant issues have been addressed. But I'm not sure that I would support it if it kept in [the] civil engineer exemption." Number 0891 RON HANSEN, Civil Engineer, informed the committee that he is licensed in Alaska and has performed residential and commercial inspections for the past 10 years. He understood that almost all of the inspections in Juneau are performed by engineers, which he believed to be appropriate. He also understood that in Anchorage and the Mat-Su areas perhaps 95 percent of the inspections are performed by non-engineers some of which may be certified by the ICBO while some merely say they are a home inspector. Mr. Hansen said that he supported the bill as it will protect the consumer. With regard to the proposed amendments, he noted support for all of the proposed amendments save the first one. He understood the first amendment to restrict this legislation to AHFC, which only gives out about one-third of the residential loans. CHAIRMAN ROKEBERG clarified that [the first amendment] only speaks to the one section that speaks to the activities of AHFC. MR. HANSEN said, with that explanation, that he supported the entire bill and the amendments. CHAIRMAN ROKEBERG commented that he is finding himself in a trap between those who believe some professions should be exempt and some should not. He said that he did not want to create a war. However, it was determined that civil engineers with this background should be exempt and now there is testimony from civil engineers that disagree. MR. HANSEN reiterated that he is a licensed civil engineer and has performed home inspections. However, he would not attempt to design a traffic interchange as he is not trained to do so. Similarly, he felt that those that are competent with the construction of suspension bridges and traffic would not become involved with home inspection. CHAIRMAN ROKEBERG asked then if Mr. Hansen would be offended if the legislature mandated that he be licensed [as a home inspector] in order to continue business. MR. HANSEN answered that licensing is appropriate, in engineering as well. He interpreted the exemption of civil engineers to mean that petroleum engineers [could not perform home inspections]. CHAIRMAN ROKEBERG surmised that under the current bill, Mr. Hansen could continue his home inspection business without being licensed. MR. HANSEN agreed. CHAIRMAN ROKEBERG asked if Mr. Hansen would take offense if that were deleted per Mr. Lewis' testimony. MR. HANSEN said that he would take offense because he believes it is appropriate to exempt engineers. CHAIRMAN ROKEBERG related his understanding of Mr. Hansen's testimony that although he is a civil engineer, he would not have the experience and background that a trained home inspector would. He asked, "So, how do you "square" that [with wanting to exempt engineers]?" MR. HANSEN replied, "Just by experience and people wouldn't do it. Like I wouldn't design a traffic or a Golden Gate bridge. I'm licensed, but I'm not competent to do that." CHAIRMAN ROKEBERG commented that the bill may prohibit or create difficulty for Mr. Hansen to advertise himself as a home inspector. MR. HANSEN commented that this [the bill] is a good first step. He indicated that the next steps would be more training and tighter licensing. Number 1141 ROBERT CARL, Representative, Mat-Su Homebuilders Association; Home Inspector, testified via teleconference from the Mat-Su Valley. He informed the committee that the Mat-Su Homebuilders Association supports licensing and qualifications for home inspectors. However, the bill needs some work. MR. CARL specified that he was now speaking as an home inspector. He informed the committee that he is ICBO certified. Mr. Carl read the bill as lumping together new construction inspectors and real estate inspectors into one category. He expressed the need to separate the categories. CHAIRMAN ROKEBERG said that [separation of the two categories] is the intention. There is an ICBO for new construction and home inspection for basically existing structures. MR. CARL reiterated that the language in the bill has some overlap between the two. CHAIRMAN ROKEBERG recognized that could be the case. He said that some overlap is intended. MR. CARL reiterated the need to separate the two. He did not expect a home inspector to perform new construction inspections. Mr. Carl informed the committee that most home inspectors do have insurance. This legislation will hurt the home inspector in a small town, who has five to ten jobs per year; that home inspector will not be able to bear the cost of this [minimum amount of insurance]. He predicted that some home inspectors in the small areas would be lost due to this. MR. CARL noted that he was willing to work on this bill. Although he was approached about this bill, it was during his busiest time. He noted that he has been in business for nine years. Mr. Carl stated that he was personally opposed to HB 207. In response to Chairman Rokeberg, he informed the committee that he had been in construction of 40 years and has been everything from a contractor to superintendent of (indisc.). When AHFC set up its program, Mr. Carl took the ICBO test and passed it. He further informed the committee that he is a certified welding inspector and certified steel inspector, and (indisc.). CHAIRMAN ROKEBERG stated that he would appreciate any suggestions from Mr. Carl that would help gain his support. MR. CARL specified that he supported the general idea. However, he opposed the bill as currently written. Number 1399 WILLIAM BRUU testified via teleconference from the Mat-Su Valley. He noted that he worked extensively on this draft of HB 207, as did Mr. Lewis. He echoed some of Mr. Lewis' concerns. He then referred to page 2, lines 3-4, which refers to the inclusion of northern/Arctic construction. He strongly supported that provision. Currently, there are organizations and educational opportunities within Alaska for individuals who wish to enhance their education. However, he expressed concern with page 3, lines 1-3. He agreed with Mr. Carl that the bill needs more clarification in that there are two tracks: new construction and home inspections. He explained that he would not expect any builder to expect a home inspector to review and certify new construction. Existing statutes specify that review and certification of new construction has to be performed by an ICBO certified combination dwelling inspector. He believed that to be appropriate. CHAIRMAN ROKEBERG agreed that clarification is necessary. MR. BRUU referred to page 4, lines 12-15. He asked if language speaking specifically to corporations should be inserted. He informed the committee that he is established as a subchapter S corporation in his business of which he is an employee and corporate officer. In accordance with state law, Mr. Bruu noted that he does not have to have workers' compensation. He specified that he basically operates under the corporate name versus his own personal name. CHAIRMAN ROKEBERG said that he was not sure that individual meant corporation, although the word "person" means corporation in the drafting manual. Chairman Rokeberg offered to check on that matter. MR. BRUU related his understanding that this legislation would require home inspectors to carry errors and omissions insurance at a minimum amount of a $250,000 for each occurrence. He wondered if civil engineers or engineers of any variety are required to carry errors and omissions insurance in the State of Alaska. CHAIRMAN ROKEBERG responded that he did not think so. However, after the passage of this legislation they will be required to do so [carry errors and omissions insurance at a minimum amount of a $250,000 for each occurrence]. He announced that the bill is going to be amended. MR. BRUU referred to page 6, lines 19-20, and commented that language to be absolutely essential. Without those provisions, liability of these reports is unlimited and would pass from person to person. He agreed that there should be a cap [on the time of liability]. He then turned to the language on page 7, lines 3-6. He pointed out that there are opportunities for home inspectors, civil engineers and engineers to perform inspections on multi-family properties under a program that the Federal Housing Authority (FHA) [in the U.S. Department of Housing and Urban Development (HUD)] has. He expressed concern that this portion of the bill, unless language such as "and other multi-family units" was inserted, would limit home inspectors' access to that business. CHAIRMAN ROKEBERG mentioned the HUD requirements that allow appraisers to perform some home inspections. He noted that work with U.S. Senator Stevens had led to a moratorium in Alaska on that for six months. He asked if there had been any other activity. MR. BRUU answered that he was not aware of any other activity. CHAIRMAN ROKEBERG commented that the aforementioned issue, the performance of a home inspection by an appraiser, was one of the germination features of this legislation. He believes that having licensure of home inspectors in the state helps clarify this issue and promotes commerce and the sale of houses, which is one of the objectives of HB 207. MR. BRUU pointed out that one of the interesting aspects of the HUD regulations is that one set of provisions indicates that the roof is to be clean so that the appraiser could examine the roof in order to determine how much life is left in the roof. However, they would not allow removal of snow from the lawn in order to determine whether the septic system was overflowing. CHAIRMAN ROKEBERG commented that is what happens when laws for Alaska are made in Washington, D.C. Number 1893 JOSEPH NOTKIN, Registered Professional Architect, testified via teleconference from Fairbanks. He recognized that there are problems with certain home inspectors and there is a lack of enforcement. Although Mr. Notkin is an architect, he informed the committee that he does not perform home inspections. The residential and multi-family portion of his practice is less than about 25 percent per year. He did note that he occasionally retains home inspectors and recommends a short list to clients. Mr. Notkin believes it is important to maintain the exemption in this bill for separate examinations for professional architects and engineers. "Basically, I do think that the gentleman's comments about perhaps an electrical engineer might not have the amount of expertise necessary to do an inspection. However, that decision should be left to the individual licensed architect or engineer." He said that the AELS board has enough ability to regulate incompetent and unstandard practices. Therefore, he believed that the architectural engineers (AE) are already held to a higher standard. If an AE feels confident to practice in this area, he/she should not have to take a second license. He noted that most AEs spend four or five years in school, four or five years in a regulated internship program and an exam. Therefore, he felt it was important to leave incompetent practice up to the AELS board. MR. NOTKIN expressed concern with the insurance provisions of the bill. He referred to page 5, line 5, and noted that he had errors and omissions insurance with a large carrier, CNA. He explained that the additional premium for him to have house inspections covered is quite substantial. Therefore, he wondered if the policy being considered here would afford any real protection for the consumer, the realtor or the financial agency. Typically, an errors and omissions policy would fall between 3-5 percent of the annual gross receipts. He asked if a home inspector making $80,000 per year would be willing to pay $2,000-$4,000 for a policy. CHAIRMAN ROKEBERG inquired as to the limit on such a premium. MR. NOTKIN explained that it relates to whether the policy is $250,000 or $400,000. He restated his question with regard to what type of protection and premiums are envisioned with this bill. Typically, when insurance companies write errors and omissions relative to professional actions, they review the standard of care and the experience of the individual. He informed the committee that he had been informed that there is some insurance available through a home insurance club. Therefore, Mr. Notkin encouraged investigation of the premium and coverage envisioned under this. CHAIRMAN ROKEBERG said that it has already been determined that the majority of the non civil engineer groups already have coverage. MR. NOTKIN interjected that typically, A&Es will have coverage if they are doing a government project. CHAIRMAN ROKEBERG clarified that he was referring to non A&Es or mixes of them. MR. NOTKIN reiterated the need to review what sort of premium is envisioned based on a level of income for an individual. Furthermore, what sort of protection and exclusions would the insurance company write into that. With regard to enforcement, he noted that the AELS board has difficulty having enforcement actions taken. The amount of money the [AELS] has budgeted for AG [Attorney General] support is such that something has to be so egregious in order for something to happen within the two year time frame. Therefore, he expressed concern with the fiscal note which only has 30 hours of AG time budgeted. If 30 hours is the amount of support envisioned, not much will be gained in the realm of enforcement. He urged the committee to review that issue. TAPE 00-15, SIDE A CHAIRMAN ROKEBERG commented that as Chairman of the House Labor & Commerce Committee, he viewed himself as the keeper of occupational licensing. He noted that Ms. Reardon is present today and that he had discussed occupational licensing in the budget subcommittee this morning. He further noted that he would try to make an adjustment with regard to how occupational licensing is handled in the budget in order to ameliorate some of the problems. MR. NOTKIN interjected that is great. If the goal is to have real enforcement where it is needed, that should be reviewed. CHAIRMAN ROKEBERG related his understanding that this concern would be taken care of as an amendment to a bill in the Senate. Number 0083 MR. NOTKIN expressed another concern with the fiscal note. He asked if it was correct that the initial expenditures or collection of receipts from examinations and licensures in the first year is projected at $67,000. CHAIRMAN ROKEBERG replied no and stated that would be reviewed and lowered. MR. NOTKIN commented that if the fee ends up being more than several hundred dollars, many people will be lost. CHAIRMAN ROKEBERG said that he was a aware of that. He indicated that testimony had spoken to a prior version. MR. NOTKIN concluded by saying that he was not advocating for a blind acceptance of architects and engineers, but only those architects and engineers who are qualified by means of training and experience. The enforcement of them would really occur in the AELS board. Therefore, he felt it appropriate to exempt architects and engineers in Alaska. CHAIRMAN ROKEBERG announced that he would be considering the nature of commerce and the concept of a level playing field between civil engineers, architects and licensed home inspectors in future versions of the bill. He indicated that if the exemption for architects and civil engineers is maintained, then the legislation would mandate that they be in the same competitive position with other requirements such as errors and omissions insurance. Number 0283 RICK JARVIS, RE/MAX properties, testified via teleconference from Anchorage. Mr. Jarvis supported HB 207 and noted that he has been advocating such legislation for the past three years. He was pleased with the efforts on all levels. He referred to page 2, lines 2-5, and commented that education and continuing education are necessary for general home inspectors, civil engineers and architects if they take on the duties of a home inspector. To give carte blanche to civil engineers is not acceptable. He understood the civil engineer's view that they have a general educational background as well as experience. However, he believes the continuing education of all home inspectors is absolutely necessary for the protection of the home buyer and seller. MR. JARVIS referred to page 5 and the $250,000 cap, which he believes should be raised to perhaps $50 million. He recognized that it would cost a little more. He informed the committee that 15-17 states have similar legislation regulating home inspectors, which he did not believe substantially increased the fees. However, he asked whether the committee in its research had any information regarding whether those states experienced a substantial increase in the fees. Mr. Jarvis said that he opposed the exemption of civil engineers. He recalled hearing that the civil engineers would be required to have insurance. If that is the case, then the civil engineers should also be required to have continuing education. Number 0504 MR. JARVIS recalled an earlier question with regard to how a home inspection affects a home seller or a home buyer. From his perspective, Mr. Jarvis said that a home inspection, good or bad, is attached to the property. There is a strong possibility that the home inspection has to be disclosed to any potential new buyers and would taint the salability of the home. The notion behind regulating home inspectors is to create a level field for the home buyer and seller in order to know that they will receive a competent home inspection. CHAIRMAN ROKEBERG inquired as to how home inspections began to impact the Anchorage real estate market; was it the result of the statutory requirement for disclosure or the desire of real estate licensees to protect themselves or shift their liabilities elsewhere? MR. JARVIS stated that the impact on the Anchorage real estate market was none of the notions mentioned by Chairman Rokeberg. He informed that committee that in the late 1980s and the early 1990s, the oil companies coming in requested that employees retain home inspections on homes that they purchased. This was done in order to have a buy out program when they [the oil companies/employees] left. He explained that the company would guarantee the sale or the purchase of that home in order for the employee to be able to move to whatever location the employee was transferred to. The [oil] companies were trying to protect their interest in that property. As that situation grew, the concept of having home inspections grew within the general public as well. He guessed that at least 9 percent of home sales have some sort of home inspection. REPRESENTATIVE CISSNA interpreted testimony to indicate different needs in different portions of the state due to the varying markets across the state. CHAIRMAN ROKEBERG pointed out that financial institutions have picked up on the need, desirability and mandate for home inspections. Therefore, this issue cuts across all kinds of house financing and thus home inspections are a growing portion of the real estate commerce across the state. He informed the committee that in Fairbanks and Juneau civil engineers predominately perform home inspections, which is not the case in the Anchorage and Mat-Su Valley areas. In the rural areas, the ICBO qualified people perform the home inspections. In response to the various requirements across the state, the bill is intended to be two track. He explained that the one track would be the ICBO who would relate to the more rural or new construction track and the home inspections would be the home track. However, it is not entirely clear due to the overlap in the bill. Number 0884 DAVID OWENS, Owner and Operator, Owens Inspection Services, testified via teleconference from Anchorage. He informed the committee that Owens Inspection Services is based in Palmer. He also informed the committee that he has been a building inspector since 1983; he holds nine ICBO certifications, one AIA (ph) certification and one (indisc.) certification. Mr. Owens opposed HB 207 as written. The cart is being placed before the horse in that Alaska does not even have a state building code for residential construction, which he indicated should come first. It seems that the focus is on residential constructions. He noted that he performed residential and commercial work. Specifically, he could inspect a high rise building without any insurance/bonding requirements. However, with HB 207 inspections of a single family home would require Mr. Owens to put out a substantial amount of money for insurance. That discrepancy is of concern. Mr. Owens said that he was in support of the idea of having some regulations for building inspectors, but this seems a bit early. CHAIRMAN ROKEBERG asked if Palmer, Wasilla or the Mat-Su Borough had any building officials or building codes. MR. OWENS answered that City of Palmer has adopted building codes, but Wasilla has not. Basically, Alaska has fragmented building codes spread over 23 different departments of which most applies to commercial work. CHAIRMAN ROKEBERG acknowledged that. He indicated that the cost of implementing a statewide code enforcement program is prohibitive. He noted that [the state] does have building codes in the areas of plumbing, electricity, et cetera. He noted that the state does not have enforcement of the adoption of the primary building codes. He explained that one of the intentions with this legislation is to provide a level of competency, particularly to those in areas without municipal building inspections. This would address areas such as the Wasilla and Mat-Su Valley area from which he has received scores of complaints. Due to the lack of building inspection, the consumers in the Wasilla and Mat-Su Valley area are not being well protected. Chairman Rokeberg likened HB 207 to a "stop-gap measure" because the state cannot afford a full-blown statewide building inspection program. MR. OWENS commented that it is difficult to inspect without a standard. Currently, most inspections are for bank finding purposes. Therefore, he inquired as to what standard he should look to. It would be helpful if something [a building code] was adopted at the state level. Mr. Owens said that it is questionable whether the electrical code and plumbing code all apply to residential construction. Number 1188 RON JOHNSON, Realtor, testified via teleconference from the Kenai. He mentioned the concept of eliminating the board and making everything a civil violation in order that it become a Department of Law enforcement issue. He noted that he did not see any term lengths; is that established elsewhere? CHAIRMAN ROKEBERG said that he believes it is statute. MR. JOHNSON commented that a real estate broker is a necessary part in this because the real estate broker is severely impacted by the actions of the appraiser. He suggested that [the board] should include a real estate broker and a public member or a real estate broker or an appraiser, as a public member. He suggested another alternative of having a board of seven with four members being inspectors, one real estate broker, one real estate appraiser, and one public member. CHAIRMAN ROKEBERG interjected, "Can't afford that." MR. JOHNSON said that he understood that and thus he suggested making it a civil issue rather than a board mandated under the Real Estate Commission. CHAIRMAN ROKEBERG pointed out that the first version of the bill did go that route, but those in the business expressed the need for more control. Therefore, the current more formal board was utilized. MR. JOHNSON said that the idea of the board is great, but the Department of Law blocks the actions of the Real Estate Commission on activities relative to punishment or disciplinary action. Mr. Johnson asked if the members of the board would be appointed from various jurisdictions or randomly appointed. CHAIRMAN ROKEBERG answered that there will be no jurisdictional appointments as that causes problems. In response to an earlier question, Chairman Rokeberg informed everyone that according to statute, AS 08.01.35, the board members would be appointed with staggered four year terms. MR. JOHNSON specified, in response to Chairman Rokeberg, that he supported HB 207 in concept and no one should be exempt. CHAIRMAN ROKEBERG announced that HB 207 would not be moved from committee today and the committee would continue to hear from witnesses. Number 1367 JOHN BITNEY, Legislative Liaison, Alaska Housing Finance Corporation, noted that he would address the amendment. He informed the committee that AHFC does not have a problem with the amendment. The AHFC's support of that [the amendment] is premised on the concept that AHFC is trying to assist the bill as AHFC supports the concept of the bill. In response to Chairman Rokeberg, Mr. Bitney agreed that AHFC had requested that the ICBO instructors be part of the legislation. With regard to the notion that this legislation would negatively impact those in smaller communities, Mr. Bitney said that AHFC has been encouraging ICBO people to become established and licensed in small communities. He stressed that they [ICBO certified inspectors] are not readily available today and thus such people would have to be flown to the rural areas. Through a number of initiatives, AHFC has tried to improve that; however, it is a continuing problem. He did not believe HB 207 makes the situation any worse. He agreed with Chairman Rokeberg that most of the people in the larger population centers are qualified. In these smaller communities, builders are probably building out-of-pocket and thus not having the property inspected during construction. MR. BITNEY replied, in further response to Chairman Rokeberg, that AHFC does require an ongoing inspection during construction in order to obtain a new construction loan. That inspection is done by an ICBO certified inspector. In the case of the small communities, those inspections can be performed by inspectors when in municipalities that have jurisdiction. CHAIRMAN ROKEBERG surmised then that the passage of the amendment would allow inspection by an architect or engineer. MR. BITNEY informed the committee that currently destructive inspections are allowed. The law speaks to buildings that were built after 1992. Therefore, with a building constructed after 1992, the destructive inspection applies. He noted that this is an expensive process. CHAIRMAN ROKEBERG asked if that was for financing existing homes. MR. BITNEY responded yes and specified that it would apply to homes built after 1992. With regard to Chairman Rokeberg's question, Mr. Bitney said that a pre-certified engineering report for a house built after 1992 would be acceptable. CHAIRMAN ROKEBERG said that Mr. Bitney is sending a message to everyone in the state. If one wants to build outside a jurisdiction with a building official and municipal building code and inspector, then there should be an engineering report and/or an ICBO inspection that is certified in order to have a marketable home. MR. BITNEY agreed. Number 1617 MS. REARDON informed the committee that she believed this is a good idea. However, she expressed concern with the examination. She informed the committee that the development of examinations specific to Alaska is very expensive because there are not many license holders to spread the cost among. Therefore, she encouraged the committee to delete the descriptive examination on page 3. The board would then, through regulation, have the ability to choose one of the examinations that is already available. With that option, the applicants would pay directly to the organization. Although that may not be the ideal, she hoped that the training requirements on page 2, line 4, might cover some of the Alaska concerns. CHAIRMAN ROKEBERG said that he understood that there is a course given under the auspices of the (indisc.). MS. REARDON explained that in order to obtain an engineering or architectural license in Alaska, one must have taken a course in Arctic engineering. She pointed out that there is another suitable model, to become a residential contractor requires a special contracting license and that person must have passed an Alaska craftsman construction course or the Arctic engineering. She suggested review of requiring training versus an exam. She said that she had reviewed the ICBO materials and the other two organizations. It seems that they all offer exams through ASI, a testing service which does offer exams in Anchorage. If there is going to be an Alaskan test, Ms. Reardon requested that there be two test models. She explained that the person could take a national exam along with an Alaskan test that could be open book or written by the board. CHAIRMAN ROKEBERG indicated agreement with Ms. Reardon's two test model suggestion. MS. REARDON pointed out that when it is a board written exam, that is a challenging exam that people may fail. Those exams are not very legally defensible. She noted that part of this will be merely reviewing tests that already exist and determining whether it should be left to the board or the legislature to decide. MS. REARDON referred to page 2, line 25, which speaks to an associate. She assumed that the intent was to make the registration valid for two years not that registration is not available to someone who has worked this year and next year unlicensed, before the licensing law goes into effect. Therefore, she suggested the following statement: "This registration is valid for two years and may not be renewed." MR. BRUU informed the committee that AHFC should have a bank of questions that specifically address Alaska's building conditions. Those were part of the initial ICBO certifications; it was called the Alaska module. He believes that it still exists. MS. REARDON commented that this version is clearer than the first with regard to whether the legislation licenses individuals versus their business. Still, there are some confusions on that topic, most of which deal with the insurance requirement. She referred to page 4, workers' compensation, and pointed out that it is usually purchased by a partner and/or corporation, and the business receives the workers' compensation insurance. However, the remainder of the bill makes it look as if two home inspectors were in a partnership, it seems to say that each would need workers' compensation insurance or the errors and omissions insurance. Therefore, she suggested clarification in that regard. CHAIRMAN ROKEBERG said that the business would have the errors and omissions insurance. MS. REARDON then suggested language that such as, "a home inspector must work for a business that has errors and omissions insurance." She indicated that the workers' compensation section may need to be deleted entirely because the state law will require workers' compensation. In that case, the home inspector would not have to illustrate that he/she has workers' compensation to the Division of Occupational Licensing. Number 2010 MS. REARDON referred to page 5, line 16, and suggested the insertion of the word "immediately" before "suspended." Otherwise, she believed that the division would have to go through the exercise of charging someone and proving that he/she did not have insurance before suspending that person's license. Ms. Reardon turned to page 7, lines 3-6, and asked if that language is only intended to apply to the inspection report or the entire bill. She had the sense that it referred to the entire bill in which case she believes the language "the provisions of this chapter" would be appropriate. She pointed out that the issue of individuals versus the company the individual works for arises again on page 7, line 7. She expressed the need to review how these companies or corporations that employee home inspectors would be controlled. MS. REARDON turned to page 9, the AHFC section. She pointed out that when the law goes into effect, the two options on lines 17 and 18 look as if they will not really exist any longer. Since the division's licensing law will say that it will no longer be legal to be a home inspector without a license. Although AHFC statute says that an inspection by an unlicensed ICBO person or by an individual from the International Association of Electrical Inspectors (IAEI) is acceptable, the division will say that it is against the law for those people to perform that inspection. Therefore, she suggested the deletion of lines 18 and 19 on page 9. MR. BITNEY pointed out that he referenced this situation in his testimony. "At some point in time, I don't know if we would want to exclusively just recognize the individuals that are licensed by the state and eliminate ICBO from Alaska Housing or whether we would just exempt ICBOs." CHAIRMAN ROKEBERG said that the inspections performed by the International Association of Electrical Inspectors would be for electrical inspections. MR. BITNEY stated that he was not aware of where IAEIs were being used. He offered to review whether any IAEI reports had been accepted. He informed the committee that currently, AHFC almost exclusively accepts ICBOs. MS. REARDON pointed out that if ICBOs are exempted from licensure, then most of the licensees are probably lost. CHAIRMAN ROKEBERG commented that "we" have to have them and the agency wants ICBOs too. He agreed that one section could be deleted; however, their scope of work goes back to page 8, lines 13-14. That is problematic. MS. REARDON said that she did like Chairman Rokeberg's idea to be specific. CHAIRMAN ROKEBERG interjected that he was not sure that could happen without placing "ourselves" in a box. He did agree that some clarification is necessary. MS. REARDON suggested that the committee consult with the legislative drafters because she believes that there is a legal principle "that if another licensing law allows you to do it, then you're still allowed to do it." CHAIRMAN ROKEBERG said, "Do we want to allow them to do the job ... under the scope of their licensure, but by definition of home inspection as provided for in this chapter." MS. REARDON commented that she felt that if you look to the scope of architecture and engineering, especially with architects [,engineers] and land surveyors issues, people may well be able to say that home inspection falls within their realm. CHAIRMAN ROKEBERG clarified that is why their exemption would be maintained. Number 2286 MS. REARDON inquired as what the different statutory references were on page 11, Section 10. She suggested that the bill become effective July 1, 2002, in order to give people a year to comply and obtain licenses. She felt that the current effective date of July 1, 2001, would be the date that the board would get its regulations in place. CHAIRMAN ROKEBERG pointed out that there is a transition provision in the bill. MS. REARDON acknowledged that, but pointed out that it spoke to existing people. Still, she expressed the need for new people coming in to be ready. She suggested maybe [an effective date] that provided another six months. Again, she said that it would probably take a year from the passage of this bill for regulations governing new entrants to the profession to be set up. CHAIRMAN ROKEBERG announced that HB 207 would be held over.
| Document Name | Date/Time | Subjects |
|---|