Legislature(2001 - 2002)
02/12/2001 03:20 PM House L&C
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* 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 0417 CHAIR MURKOWSKI announced that the final bill to be heard today 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." REPRESENTATIVE ROKEBERG, sponsor of HB 27, stated that he believed public testimony was closed. He said committee members should have received proposed Version L of HB 27, and an explanation of the changes between Version F and Version L. Number 0365 CHAIR MURKOWSKI asked if there was a motion to adopt Version L [22-LS0136\L, Lauterbach, 2/8/01] as a work draft. She then announced that Version L was adopted. REPRESENTATIVE ROKEBERG thanked Representatives Hayes and Crawford for taking an interest in this legislation and working with his office in trying to overcome some of their concerns. REPRESENTATIVE ROKEBERG said the liability issue still needs to be "tackled" but asked the committee to indulge him since the bill has two other committees of referral, the House Judiciary and House Finance Committees. He intends to resolve the liability issue, he added, and gave his word to Chair Murkowski that he would run it past her. REPRESENTATIVE ROKEBERG directed the committee to the two-page memorandum with the changes. He said he had discussions with committee members about some of the changes, such as the "oral" [versus written inspection report]. He had worked with Ms. Reardon from the Division of Occupational Licensing, and said she had been very helpful. Number 0244 REPRESENTATIVE ROKEBERG pointed out that the chief executive officer (CEO) of the Alaska Housing Finance Corporation had a change in the last version, from an ex officio member of the board to a voting member of the board for a two-year period, to help form the regulations. Subsequent to that, [Terri Lauterbach] of Legislative Legal and Research Services ("Legislative Legal"), Legislative Affairs Agency, had said: By memorandum, [in the] Bradner v. Hammond case, Alaska 1976, ... because of the appointment of confirmation powers, et cetera, et cetera, Ms. Lauterbach thought it would be a potentially unconstitutional appointment of a confirmation to a board and commission without the confirmation of the legislature. REPRESENTATIVE ROKEBERG further explained that these boards and commissions constitutionally need to be confirmed by the legislature. He went on to say that there is another minor technical amendment that was offered by the department. Number 0125 CHAIR MURKOWSKI referred to page 4, [line 1], paragraph (6), Version L, Sec. 08.57.060, Qualifications. She said it was new language that was not included in Version F. She said she understands the rationale behind wanting to keep out those who have been involved in unresolved complaints or disciplinary actions. She noted that it is written in such a way that it doesn't appear that it has to be an unresolved complaint or disciplinary action related to home inspection. For example, if someone was a commercial fisherman on the side, and was involved in some kind of regulatory action or discipline, under this, even though it is not related to home inspection, it may be grounds for denial of licensure. REPRESENTATIVE ROKEBERG said he thought it was true. JANET SEITZ, Staff to Representative Norman Rokeberg, Alaska State Legislature, said she had asked the drafter, Ms. Lauterbach, who didn't see a problem with the way it was written. TAPE 01-16, SIDE A Number 0048 CHAIR MURKOWSKI stated, "With these qualification[s], ... the board shall authorize the department to issue them for these following things." She said the board doesn't have the discretion to look at [paragraph] (6) " and say, "Well it related to a fishing regulation." She said the way she sees it, one has to be "clean" on all of them. She asked Ms. Reardon if she was correct. Number 0070 CATHERINE REARDON, Director, Division of Occupational Licensing, Department of Community and Economic Development (DCED), said she believed one needed to be "clean" on all of them, although, it may be that the courts and the Department of Law would expect the board to read [the statute] as it relates to home inspections. It could be that they would expect some connection in how it is actually applied. For example, if a person's license was turned down because he or she was being investigated by the Alaska Public Offices Commission (APOC), that wouldn't be the kind of thing that would hold up during a hearing because "they" would expect some logical connection to the type of license. Number 0136 REPRESENTATIVE ROKEBERG said: Unless there was another licensed activity that they were doing, ... like [being] a real-estate appraiser, there wouldn't be any jurisdictional issue. Right now there is absolutely no jurisdiction over ... home inspection activity, so there is no way they could be involved in a disciplinary [action] for home inspection. CHAIR MURKOWSKI commented that perhaps someone from the Department of Law could enlighten the committee. Number 0203 GAYLE HORETSKI, Assistant Attorney General, Civil Division, Commercial Section, Department of Law, specified that she does occupational licensing. She said the way the language is drafted is broad enough to include complaints that are not, in the least bit, related to home inspections. She referred to paragraph (5) [page 3, Section 08.57.060, Qualifications], where it says, "has not had the authority to perform home inspections revoked in this state or in another jurisdiction". The legislature wants to tie a factor to performing home inspections, she said, which was done in paragraph (5). MS. HORETSKI commented that the legal effect of that is that qualifications have been subject to constitutional challenge if a person can say that "that factor has absolutely nothing to do with being a good barber, or a good this or that." But if an argument can be made that there is a rational relationship between the factor and the ability to perform that task, then the Department of Law would attempt to defend against a challenge and enforce an actual practice of the statutory requirements. MS. HORETSKI pointed out that there is a case right now where a person is charged with wrongdoing that has had no connection with his duties - this person was not a home inspector. The requirement for individual qualifications and disciplinary action is "lack of good moral character," so "we" have said that it doesn't matter that it didn't have to do with his license activities because the theft conviction shows a lack of good moral character. MS. HORETSKI said those issues are raised, that there is no connection with the profession, but obviously "we" would try to enforce such a limitation if it were included in the qualifications. Number 0355 REPRESENTATIVE HALCRO questioned whether paragraphs (5) and (6) could be combined, since (5) outlines that a person can't receive a license if the authority to perform has been revoked in this state or other jurisdiction. It appears that (5) addresses those actions that have been completed against a person and (6) relates to those actions that are under review. Number 0416 MS. HORETSKI said the two paragraphs could certainly be combined; the sponsor would have to decide if what is now paragraph (6) was intended to be restricted only to home inspection-type activity. She added, "Or if you have a barber's license and ... they say you have an unlicensed person in your barber shop, so you're under investigation as a barber, does that come under paragraph (6)? It would right now, yes." Number 0439 REPRESENTATIVE ROKEBERG said the policy call [arises when] a barber, who being thrown out of his or her profession, wants to become a home inspector. REPRESENTATIVE HALCRO said it certainly might speak to the person's capability of performing. REPRESENTATIVE ROKEBERG commented that he believed that was why the drafter put it in there. He said he has no problem leaving it in the bill. The two paragraphs could be combined but are two separate things. He raised the point that this covers a pending action but asked: What if there was a regulatory determination in another state? He said he thought it was [referring to] an unresolved complaint or a disciplinary action. If a person has been subject to any disciplinary action by a regulatory authority, he or she would be subject to non-approval of a license until the complaint is resolved. If it was resolved and the person wasn't found guilty, then there wouldn't be anything (indisc.). He commented that it is a pretty high standard. Number 0551 CHAIR MURKOWSKI said she liked the change that had been made to Version L regarding the oral-versus-written reports, but asked the sponsor about the additional sentence which provides that "an oral inspection report may be given by the home inspector during or after the inspection." She said as she understands it, this lets the home inspector still tell the homeowner that he or she has a problem with the house. She asked if having this language in the bill is allowing (indisc.). Number 0615 REPRESENTATIVE ROKEBERG referred to the proposed amendment, 22- LS0136/L.1, Lauterbach, 2/12/01, which read: Page 3, line 11, following "Qualifications.": Insert "(a)" Page 3, line 26: Delete "section" Insert "subsection" Page 4, following line 3: Insert a new subsection to read: "(b) A person may register with the board as an associate home inspector upon application, payment of the required fee, and determination by the board that the person (1) within the seven years preceding the date of application, has not been under a sentence for an offense related to forgery, theft in the first or second degree, extortion, or defrauding creditors or for a felony involving dishonesty; (2) has not had the authority to perform home inspections revoked in this state or in another jurisdiction; and (3) is not the subject of an unresolved complaint or disciplinary action before a regulatory authority in this state or in another jurisdiction." Page 4, line 16, following ".": Insert "A license that has been suspended expires at the end of the period for which the license was issued, regardless of whether the period of suspension has expired." Page 7, line 3: Delete "An" Insert "In addition to the written inspection report required under this section, an" Page 7, line 16: Delete "AS 08.57.060(4)" Insert "AS 08.57.060(a)(4) or (b)(1)" [The foregoing was adopted later as Amendment 1.] REPRESENTATIVE ROKEBERG referred to the section that refers to page 7, line 3 of HB 27, Version L. He pointed out that a written inspection is mandated. The ambiguity about "written" or "oral" was deleted by mandating "written," and an inspector is not precluded from doing an oral report. He verified that throughout the bill, it refers to written inspection reports. Number 0689 REPRESENTATIVE HALCRO referred to the amount of time that a person has to respond if there is a problem. He asked if the 180 days applies to the oral [inspection report] given to a person when walking through the house. REPRESENTATIVE ROKEBERG replied that he thought any evidence would be on the written report. He said an oral report could have been left out [of the bill], but he wanted to ensure that the people "on the ground" know that it is allowed. The written report is the statutory requirement, and an oral report is permissive by adding the "in addition to". Number 0743 CHAIR MURKOWSKI paraphrased from page 8, [Sec. 08.57.810], the legal actions against home inspector, which read in part: "A person may not bring an action against an individual licensed under this chapter based on a written inspection home report if the report is more than 180 days old". She said it is clear that it's based on the written report. Number 0786 REPRESENTATIVE ROKEBERG reported that he will be taking up the issue of the 180 days in his committee [House Judiciary Standing Committee] because he wants to limit the length of the report, in terms of its validity, but he is reluctant to limit the liability under it, because if there is an omission or an error, there should be liability attached to it. He said there is a distinction between the length of time a report should be valid and the liability. Number 0814 REPRESENTATIVE ROKEBERG went through the rest of proposed Amendment 1. He said the amendment was offered at the suggestion of Ms. Reardon. He referred to line 8, which refers to page 4, following line 3, paragraphs (1) (2), and (3), of Version L. That section read: Insert a new subsection to read: "(b) A person may register with the board as an associate home inspector upon application, payment of the required fee, and determination by the board that the person (1) within the seven years preceding the date of application, has not been under a sentence for an offense related to forgery, theft in the first or second degree, extortion, or defrauding creditors or for a felony involving dishonesty; (2) has not had the authority to perform home inspections revoked in this state or in another jurisdiction; and (3) is not the subject of an unresolved complaint or disciplinary action before a regulatory authority in this state or in another jurisdiction." REPRESENTATIVE ROKEBERG pointed out that subsection (b) is being added to those who qualify for a license by adding exactly the same thing for the associate home inspector. It clarifies the issue between a home inspector and an associate home inspector. REPRESENTATIVE ROKEBERG referred to line 21 of proposed Amendment 1, which refers to page 4, line 16, Version L, following "." That section read: Insert "A license that has been suspended expires at the end of the period for which the license was issued, regardless of whether the period of suspension has expired." He explained that it is a clarification from Legislative Legal regarding what happens when there's a suspension before expiration. REPRESENTATIVE ROKEBERG said the amendment that refers to page 7, line 16, of the bill is the result of adding the associate home inspector language on the first page of the amendment. That section of the amendment read: Delete "AS 08.57.060(4)" Insert "AS 08.57.060(a)(4) or (b)(1)" REPRESENTATIVE ROKEBERG made a motion to adopt Amendment 1. Number 0925 CHAIR MURKOWSKI announced that Amendment 1 had been moved, and there being no objection, it was adopted. Number 0942 REPRESENTATIVE ROKEBERG pointed out that "we have also extended the date ... that was in question before, to 2004, to make sure that their lack of grandfathering didn't upset people." He clarified that the date had been 2003 and is now 2004, with a time period of implementation for when one has to have a license. Number 0975 MS. SEITZ, referred to the transitional license. She said the transitional license part of the bill starts on page 14, and there are three different licenses. If a person is a home inspector on October 1, 2000, and has passed the International Conference of Building Officials (ICBO) exam, that person can get a joint transitional license that allows him or her to inspect new and existing construction. If a person has just passed either the American Society of Home Inspectors exam or the Examination Board of Professional Home Inspectors, he or she can get a transitional, previously occupied or existing residence [license]. And if a person has passed the ICBO exam, he or she can get a [license to inspect] new construction. MS. SEITZ explained that all of the licenses are valid as transitional licenses until January 1, 2004, which Representative Rokeberg spoke about earlier. She said the previous bill version [F] had it set at 2003, but after discussing the regulatory process, it was decided to extend the date. She said at the end of that period, everyone must comply with the qualifications set forth by the board. Everyone must have certain qualifications by the time the transitional licenses expire because the licenses are not renewable. CHAIR MURKOWSKI reiterated that all of the transitional licenses expire January 1, 2004, and everyone has to take a board- determined examination and will all be on the same track with licensure. Number 1090 REPRESENTATIVE ROKEBERG surmised that the regulations would be grandfathered in, except for continuing education on "Artic conditions" or something like that because of the existing national exams and the desire of the new board to keep the fees down. Number 1118 REPRESENTATIVE ROKEBERG concluded by complimenting Representatives Crawford and Hayes on the amendments that they brought to him. He said Representative Hayes brought him several amendments, two of which have been taken care of by the changes. Representative Hayes had brought up an issue; a constituent in Fairbanks felt that just because a person is an engineer doesn't make him or her a home inspector. Representative Rokeberg said over the years "we" have had a lot of debate about this issue. Having an educational background as an architect or engineer doesn't necessarily mean that a person would have education and training in how to do a home inspection. He agreed with this point. Number 1178 REPRESENTATIVE ROKEBERG recognized that there are engineers and architects that do participate as home inspectors. That particular organization has about 5,000 members, he said, and without the exemption in the bill, he's afraid that any chance of the consumer being protected by passing this bill would be overcome by "the death somewhere in its journey to the third floor." He understood the wisdom of leaving well enough alone and leaving the exemption in. Number 1238 REPRESENTATIVE CRAWFORD commented that he appreciates the changes and considerations that the sponsor made, and he is glad that the bill is "getting through." CHAIR MURKOWSKI said she has Representative Rokeberg's assurance that he is going to deal with the liability issue in the next committee [House Judiciary Standing Committee]. Number 1276 REPRESENTATIVE MEYER stated that this is the first bill he saw, even before being sworn in, and it has come a long way. He said Representative Rokeberg made a lot of concessions, and it merits being passed on at this point. Number 1314 REPRESENTATIVE HALCRO made a motion to move Version 22-LS0136\L, Lauterbach, 2/8/01, from committee with individual recommendations and the attached fiscal notes. There being no objection, CSHB 27(L&C) moved out of the House Labor and Commerce Standing Committee.
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