Legislature(2001 - 2002)
02/02/2001 03:20 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 27-LICENSE HOME INSPECTORS Number 2108 CHAIR MURKOWSKI said the next bill the committee would consider would be HOUSE BILL NO. 27, "An Act relating to the licensure and registration of individuals who perform home inspections; relating to home inspection requirements for residential loans purchased or approved by the Alaska Housing Finance Corporation; relating to civil actions by and against home inspectors; and providing for an effective date." CHAIR MURKOWSKI said a fair amount of information was received since the committee last took up the bill on January 1, 2001. In addition, she stated that there was an amendment from the sponsor, and three pages of single-spaced comments from Catherine Reardon, Director, Division of Occupational Licensing, Department of Community and Economic Development (DCED). Number 2041 REPRESENTATIVE ROKEBERG, speaking as the sponsor of HB 27, said he would review the information the committee had received and add public testimony. REPRESENTATIVE ROKEBERG stated he had submitted some technical amendments and one substantive amendment to the committee. He said the committee would hear public testimony and hold the bill over while he reviews the information submitted by the Division [of Occupational Licensing]. He said he was upset about the submission and didn't expect the committee to go through it line by line. He said the committee also received a letter of support from State Farm Insurance, and a letter from the Stanley family in Homer, Alaska, which was sent to Bill Pellman at the Alaska Housing Finance Corporation (AHFC). The Stanleys lost $130,000, he noted. Number 1879 TED VEAL, Homer resident, asked about revisions to the bill. He said it appears that it [the bill] is being pursued because the real estate community is having problems with inspectors retained to inspect houses. He asked about the thought process behind putting a "real estate individual" on the inspector board, rather than a residential home building contractor or someone else. MR. VEAL asked who would develop the requirements under the continued competency requirement in Version F [adopted as a work draft on January 31, 2001], page 3, line 25 of the bill, and asked what they would include. He asked if the department would produce the "board and departmental publications and seminars related to this chapter" from page 4, line 15 [of the bill], for licensed inspectors. He said the pre-inspection document required on page 5, line 19 [of the bill] is redundant because when an International Conference of Building Officials (ICBO) inspection is done, the builder requests a particular inspection from the inspector; for the inspector to submit a written document stating that he is coming to do the inspection seems like more paperwork. MR. VEAL said in his experience, once the builder of the project satisfies the particular requirements for the inspection, a summary of building inspections for site-built construction form is signed off [on]; a lengthy report isn't necessarily written about the condition of the sign-off. MR. VEAL referred to proposed amendment F.1 [22-LS0136\F.1, Lauterbach, 2/2/01], which read: Page 1, line 14, following "broker": Insert ", associate broker," Page 3, lines 10 - 13: Delete all material. Insert "examination must include a written portion; the examination may, as determined by the board, (A) use testing methodologies in addition to the written portion; (B) test for competency in relation to Alaska construction techniques and other matters; (C) be based on a recognized national examination or other methodology;" Page 6, line 7: Delete "commission" Insert "board" Page 10, line 6: Delete "interior" Page 12, following line 23: Insert new bill sections to read: "* Sec. 8. AS 18.56.300(c) is repealed. * Sec. 9. The uncodified law of the State of Alaska is amended by adding a new section to read: APPLICABILITY. The change made by sec. 8 of this Act applies to causes of action that accrue on or after July 1, 2003." Renumber the following bill sections accordingly. Page 13, line 19: Delete "or" Insert "and" Page 14, following line 22: Insert a new bill section to read: "* Sec. 15. Sections 8 and 9 of this Act take effect July 1, 2003." Page 14, line 23: Delete "11 and 12" Insert "13 - 15" [End of amendment F.1] MR. VEAL referred to the portion of amendment F.1 that amends page 12, line 23, to insert a new bill section to read: "'*Sec. 8 AS 18.56.300(c) is repealed." MR. VEAL said the proposed amendment limits some of the liability of the inspector unless he or she is grossly negligent. He said if this section were repealed, the inspectors would be subject to an inordinate amount of exposure that could cause many people to cease to perform that function; there may be a problem with having enough inspectors in Alaska, particularly in rural communities. REPRESENTATIVE ROKEBERG, responding to Mr. Veal's question about page 3, line 25, of Version F, said the position [on the board] is [to be] either a real estate appraiser or a real estate broker. He said he has a proposed amendment to expand it to a real estate associate broker. He went on to say the real estate industry has an interest in the issue and [the position] should be on the board. He said the board has five members and an ex officio member, including a representative from AHFC. REPRESENTATIVE ROKEBERG responded to the question of who would be developing the requirements. He referred to [Version F], page 3, line 25, under the continued competency requirement. He said: The level of competency is to be determined by the board created by this legislation. Publications and so forth - seminars [would be determined] by the board. The pre-inspection document, I think, primarily ... [addresses the] standards of practice and the existing home market where there is a clarity as to what the scope of work should be - in case there is an assertion of an omission from an inspection report. In other words, ... [the] level of your roof inspection ... should be in the pre-inspection report to make sure that you can't bring a subsequent cause of action, to claim that you didn't do your job when you should have, because you may have made a comment about it. Like, you think the roof is leaking, you put that on there, and if it wasn't [in] the scope of work, then they should have a cause of action. Number 1625 REPRESENTATIVE ROKEBERG noted that part of proposed F.1 repeals AS 18.56.300(c) effective in 2003, when the transition is complete. He said there is always a risk, when removing blanket liability from the inspectors, to try and protect the public, but those doing shoddy work will get out. He said due to the rural nature of Alaska, minimizing the amount of ICBO inspectors available in rural Alaska could be a problem. He said it's difficult to gauge the effect of it prior to legislation. "We" can just hope that the competency of individuals throughout the state is such that the public will be better served. Number 1472 MR. VEAL concurred with what Representative Rokeberg had said about the pre-inspection document as far as an existing home inspection. He wondered, on new construction where an ICBO inspection is taking place, whether "they" would be required to do the additional paperwork even though it's evidently not necessary. REPRESENTATIVE ROKEBERG said the current bill is drafted this way. He said it might be good to review that particular area and exempt it, if so. Number 1414 FRANKO VENUTI, Homer resident, said he was concerned about a statement made earlier by Representative Rokeberg in reference to a letter from the Stanleys [family in Homer]. The case went to court and the Stanleys argued with the builder over costs, and were found liable. CHAIR MURKOWSKI verified that the committee had received a letter regarding the purchase of the Stanleys' home. MR. VENUTI said he had not seen a copy of the letter addressed to Bill Pellman of AHFC dated January 8, 200,1 but would like to. REPRESENTATIVE HALCRO asked Mr. Venuti to clarify that the Stanleys went to court and eventually lost; the court found their claims had no merit. MR. VENUTI said they were held liable for costs since no merit was found, and he believed they paid the contractor. Number 1257 AMY DAUGHERTY, Lobbyist, Alaska Professional Design Council (APDC), said APDC reviewed the proposed committee substitute (CS) and rewrote the letter to show their support. REPRESENTATIVE ROKEBERG said the proposed amendment, which he discussed with John Bitney, Legislative Liaison, Alaska Housing Finance Corporation, repeals AS 18.56.300(c), which says: A person may not bring an action for damages based on a duty imposed by (b) of this section to inspect a residential unit unless the action is for damages caused by gross negligence or intentional misconduct. REPRESENTATIVE ROKEBERG asked Mr. Bitney if he objected to removing it from AHFC statute, effective July 1, 2003. JOHN BITNEY said he had no objection and wasn't sure what the thought was at the time the bill was drafted. He said it appears that the gross-negligent standard, as written, is a very high standard [in order] to protect the inspector. MR. BITNEY said it doesn't seem to affect AHFC, so they don't have any objection. Number 1101 REPRESENTATIVE ROKEBERG said since it is such a high legal standard, it would allow an inspector working under AHFC to meet their requirements for lending; inspectors have almost unlimited ability to do what they want unless they are grossly negligent. He said it is a tough standard to prove in court. Number 1054 MR. BITNEY said he believed he had reviewed the letter sent to Bill Pellman at AHFC [from the Stanley family]. He said the home was failing, but was hesitant to say much until he could check the status. REPRESENTATIVE ROKEBERG said it is important for the reputations of the Stanley family and Mr. Venuti that there is a clear understanding on public record about what had occurred in the case. He asked Mr. Bitney to add information to the public record, as the bill moves along, to clarify what the position or case was, and what Alaska Housing did. He said the committee doesn't want the public record to unfairly shift the burden on any party involved. Number 0943 CHAIR MURKOWSKI asked Representative Rokeberg if there was a reason why "they" hadn't looked at having a residential contractor [as a designated seat on the board of inspectors]. REPRESENTATIVE ROKEBERG explained that there are three members from the industry: one "realtor type", one "appraiser type", and one public member. "They" had wanted to keep the board small because of costs. He said residential contractors were considered but were rejected. He said it is his belief that home inspectors should have the largest role on the board, and a public member could be a residential contractor. He said: The people in the real estate industry ... have an interest in it - and then we had an ex officio member on the board, presumably from Alaska Housing, ... to make sure that their interests are protected. It's great, but I ... would counsel against extending the board [in order] to keep the fee low. CHAIR MURKOWSKI revisited the issue of the statutes allowing for a home inspection to be either written or oral. She asked for understanding of why a verbal home inspection would be allowed. She said 99 percent of the statutes are only applicable to a written home inspection. She asked why the committee is allowing for a provision that would accommodate an oral home inspection. REPRESENTATIVE ROKEBERG said the provision was put in at the request of the home inspectors because they like to lead clients around the home to point out issues. He said there might be some merit to having a written record. He said in almost all of the cases there would be a written report; allowing for the oral inspection seems problematic. Number 0699 CHAIR MURKOWSKI reiterated that the report done in writing or orally is required, and asked, if it is done orally, "Isn't it just one person's word against another?" She said if the committee is saying that the report must include certain things, how do you know if there is compliance, if it was done orally. REPRESENTATIVE ROKEBERG reiterated that he thought the inspectors wanted to be able to lead people around, and talk to them about it [issues with the house] too. REPRESENTATIVE HALCRO said if the intent of the board is to protect the consumer, he doesn't see how allowing an oral report would accomplish this. He explained that to protect the consumer, they need something in writing. Number 0462 TERRI LAUTERBACH, Legislative Council, Division of Legal and Research Services, said the report referred to in Version F, page 6, could be oral or written - referring to the review of the condition of the systems. She clarified that there is a requirement in Version F, page 5, line 25-30, which says that defects noted will be in a written report. She explained that if the committee is going to take up the issue of oral versus written [reports], they should be aware of this provision too. REPRESENTATIVE HALCRO echoed Chair Murkowski's concern about consumer protection. He said if a report is in writing, the buyer would have something concrete to refer back to, in order to prove his or her point if something goes wrong with the house. MS. LAUTERBACH said based on what is written here [in Version F], there would be no report that said there was a defect. She said this gives some evidence that the inspector didn't point out the defect. She emphasized that she is not saying it would be bad to get rid of the oral report, only that they should keep the provision in mind and keep it consistent. She said if the committee decides to stick with oral [reports], that should go on page 5 too; and if not, then all of them would wind up being written. She said she didn't know if the committee wanted to distinguish between defects and the condition of the house, as to whether [the report] is written or oral, but wants them to be treated together [throughout the bill]. Number 0413 REPRESENTATIVE ROKEBERG said even if there is an oral report, there has to be a written pre-inspection report. He said the committee could amend that portion, so it doesn't preclude oral reports. REPRESENTATIVE CRAWFORD said he noticed similarities between real estate brokers and real estate appraisers. He advocated for consistency when writing laws that deal with virtually the same types of things - such as home buying and consumer protection. Number 0147 CATHERINE REARDON, Director, Division of Occupational Licensing, Department of Community and Economic Development (DCED), said 90 percent of her comments, submitted to the committee, were not policy recommendations. She said her written comments related to inconsistencies between bill language and the goals to be achieved [through the legislation]. MS. REARDON said a policy issue, addressed under number 2 of her comments, says that she recommended that the AHFC board member be paid for by AHFC. She said she knew any increases in the fiscal note would be of consternation - at least to the sponsor. TAPE 01-12, SIDE A MS. REARDON said she assumed in Version F, page 6, line 10, the sponsor of the bill meant "conflict of interest" to be defined as when the licensee has a financial relationship as well as when the relatives have a financial relationship. MS. REARDON asked why a private person shouldn't be able to sue when a conflict of interest is not disclosed. She said she wasn't sure why a potential consumer shouldn't have the right to sue if it was deemed appropriate. MS. REARDON said she agreed that the report should be written because only the board, the courts, or others can examine the written report if the board is to consider the competency. She said she didn't think it would prohibit an inspector from speaking with a consumer, while they walk through a house. She said the only compelling report would be the one in writing. Number 0157 MS. REARDON mentioned a point discussed at the last board meeting: the 180-day limit to sue based on the home-inspection report. She said thinking of an average home owner, six months is not very much time; it is out of step with the litigation limits that other contracts and professionals have. She said there is a two- to ten-year limitation on when one can sue over work. She said the processing time between when a new homeowner buys the house, discovers a problem, and files a lawsuit takes time; meanwhile, the 180-day limit is ticking away. MS. REARDON said her final concern is the grandfathering or transitional license provision. She wanted to make sure the committee was aware of how the current bill would play out. She said because of all of the interrelations in effective dates and transitional license provisions, it isn't always easy to see. She said this isn't complete grandfathering; a current home inspector can get a transitional license if he or she has taken certain exams, but the licenses cannot be renewed. She said usually with grandfathering, one meets certain qualifications, and a license is renewed for the rest of one's career. She said with other legislation, they decided there wouldn't be any grandfathering. She said this was the case with the manicurist licensing, taken up [by the legislature] last year. MS. REARDON said [according to the bill], a person will be grandfathered under certain conditions; those conditions will expire six months later and can't be renewed. And upon renewal, a person has to meet whatever basic licensure requirements the board has established. She said she wanted to make sure the committee was aware that after January 1, 2003, the same people were going to have to meet the new requirement - whatever it ends up being. She said it may be good public policy, but she didn't want to take anyone by surprise when it was carried out. MS. REARDON said if "they" require everyone to meet the basic education and training requirements set forth by the board, it might be best to spell out what will be required to get a license by January 1, 2003. She said there might not be much benefit to having a grandfathered license for [just] six months. Number 0448 MS. REARDON said the biggest issue that would be heard after the bill passes, besides the length of time for being able to sue, would be the issue of who did and didn't get grandfathered. She said people currently in business feel very strongly about this issue. She said since the board has not established the qualifications for licensure, she didn't know whether most of the current home inspectors would be able to qualify in January 2001. MS. REARDON said if everyone who is currently practicing automatically gets a license, none of the bad actors would be eliminated. She said it is worth thinking about what will happen to the current inspectors, so there isn't an unintended consequence. REPRESENTATIVE ROKEBERG said he viewed the memorandum from Ms. Reardon as the most insulting thing that he has had presented to him in his six years in the legislature. He said she has had two years to do this memorandum, and said: There is possibly one section of this bill that is different than the legislation ... [that was before] her division previously. And that is the 180-day ... liability issue. And you have the temerity to comment on it. It is a matter of judicial or legal liability - it has nothing to do with occupational licensing. I find this wholly insulting. I feel appreciative that there was a hearing, and you came up with a memorandum on recommendations two days later. But to do this ... just before the committee hearing, and you had two years ... I really take exception to that. ... That is not how business should be done, as a matter of courtesy, and not how it's done in this legislature. Number 0621 MS. REARDON said she understands that Representative Rokeberg is very angry but there were a fair number of comments that she believes she made last year when the bill came up - some of them with a different staff person, and some of them in public comment. She referred particularly to the issues of grandfathering and required examinations. MS. REARDON said her concern and comment about the 180-day liability was an area which, in the earlier bill, had been pointed out to her as an area of proper concern - she wasn't sure it was inappropriate for her to comment on the potential affect on the consumer. MS. REARDON said she understood that it would have been more helpful to Representative Rokeberg if she had brought them up sooner. She emphasized that her comments were not things that the division needs, but were generated from reading the bill carefully. REPRESENTATIVE ROKEBERG said [Ms. Reardon] and her staff have had meetings [with him], and the bill is now three years old. He asked Ms. Reardon why she is introducing these suggestions now. CHAIR MURKOWSKI said she appreciates new information - that the bill is still being worked on. She agreed with Representative Rokeberg that this is an area where everyone cannot be pleased. She said if the committee can make the bill a little better, then the committee would have accomplished what "they" set out to do. CHAIR MURKOWSKI said she had heard that Ms. Reardon was not entirely comfortable with the version [Version F]. She said Ms. Reardon's comments on Wednesday, January 31, 2001, were very general. She had asked her staff to call Ms. Reardon to make sure she would be here today, so the committee members could find out what her concerns were. REPRESENTATIVE ROKEBERG said he has worked with Ms. Reardon for six years and said, "I was really surprised by it and very disappointed. I would be happy to work with her in clearing this up." REPRESENTATIVE HALCRO said if the concerns [brought forth by Ms. Reardon] have substance, then it is the committee's responsibility to address them. He said he thought Ms. Reardon had a good point about the 180-day limit, and the process people go through in finding a problem with a recently purchased house. [HB 27 was held over.]
| Document Name | Date/Time | Subjects |
|---|