Legislature(2019 - 2020)BARNES 124


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* first hearing in first committee of referral
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= bill was previously heard/scheduled
Moved CSHB 81(CRA) Out of Committee
-- Testimony <Invitation Only> --
Heard & Held
-- Invited & Public Testimony <Time Limit> --
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
    HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE                                                                   
                         April 25, 2019                                                                                         
                           8:02 a.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Representative Harriet Drummond, Co-Chair                                                                                       
Representative Sara Hannan, Co-Chair                                                                                            
Representative Matt Claman                                                                                                      
Representative Jonathan Kreiss-Tomkins                                                                                          
Representative Steve Thompson                                                                                                   
MEMBERS ABSENT                                                                                                                
Representative Sharon Jackson                                                                                                   
Representative Josh Revak                                                                                                       
COMMITTEE CALENDAR                                                                                                            
HOUSE BILL NO. 81                                                                                                               
"An Act prohibiting disposable plastic shopping bags; and                                                                       
providing for an effective date."                                                                                               
     - MOVED CSHB 81(CRA) OUT OF COMMITTEE                                                                                      
HOUSE BILL NO. 76                                                                                                               
"An Act relating to a state residential code, the Alaska Housing                                                                
Finance Corporation, and municipal building codes."                                                                             
     - HEARD & HELD                                                                                                             
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: HB  81                                                                                                                  
SHORT TITLE: PROHIBIT PLASTIC RETAIL BAGS                                                                                       
SPONSOR(s): REPRESENTATIVE(s) JOSEPHSON                                                                                         
03/06/19       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/06/19       (H)       CRA, L&C                                                                                               
04/04/19       (H)       CRA AT 8:00 AM BARNES 124                                                                              
04/04/19       (H)       Heard & Held                                                                                           
04/04/19       (H)       MINUTE(CRA)                                                                                            
04/09/19       (H)       CRA AT 8:00 AM BARNES 124                                                                              
04/09/19       (H)       Heard & Held                                                                                           
04/09/19       (H)       MINUTE(CRA)                                                                                            
04/25/19       (H)       CRA AT 8:00 AM BARNES 124                                                                              
BILL: HB  76                                                                                                                  
SHORT TITLE: RESIDENTIAL BUILDING CODE; AHFC; MUNIS.                                                                            
SPONSOR(s): REPRESENTATIVE(s) RASMUSSEN                                                                                         
02/27/19       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/27/19       (H)       CRA, L&C                                                                                               
04/25/19       (H)       CRA AT 8:00 AM BARNES 124                                                                              
WITNESS REGISTER                                                                                                              
ELISE SORUM-BIRK, Staff                                                                                                         
Representative Andy Josephson                                                                                                   
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions on behalf of                                                                          
Representative Josephson, prime sponsor of HB 81.                                                                               
REPRESENTATIVE ANDY JOSEPHSON                                                                                                   
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  As prime sponsor, answered questions                                                                     
pertaining to HB 81.                                                                                                            
REPRESENTATIVE RASMUSSEN                                                                                                        
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  As prime sponsor, presented HB 76.                                                                       
MARY APAREZUK, Staff                                                                                                            
Representative Sarah Rasmussen                                                                                                  
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions during the hearing on HB                                                              
76 on behalf of Representative Rasmussen, prime sponsor.                                                                        
JOHN ANDERSON, Director                                                                                                         
Research & Rural Development                                                                                                    
Alaska Housing Finance Corporation (AHFC)                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions during the hearing on HB                                                              
STACEY BARNES, Director                                                                                                         
Governmental Relations and Public Affairs                                                                                       
Alaska Housing Finance Corporation (AHFC)                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions during the hearing on HB                                                              
RICHARD CARR, President                                                                                                         
Alaska State Home Building Association (ASHBA)                                                                                  
Wasilla, Alaska                                                                                                                 
POSITION STATEMENT:  Testified in support of HB 76.                                                                           
JOHN BITNEY, Lobbyist                                                                                                           
Alaska State Home Building Association (ASHBA)                                                                                  
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions during the hearing on HB                                                              
CHRIS ROSE, Executive Director                                                                                                  
Renewable Energy Alaska Project (REAP)                                                                                          
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 76.                                                                           
PAUL GROSSI                                                                                                                     
Alaska State Pipe Trades                                                                                                        
(No address provided)                                                                                                           
POSITION STATEMENT:  Testify during the hearing on HB 76.                                                                     
BRAD AUSTIN, Training Coordinator                                                                                               
Alaska State Pipe Trades                                                                                                        
(No address provided)                                                                                                           
POSITION STATEMENT:  Testified during the hearing on HB 76.                                                                   
TERRE GALES, Deputy Director                                                                                                    
Division of Labor Standards and Safety                                                                                          
Department of Labor & Workforce Development (DLWD)                                                                              
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions during the hearing on HB                                                              
VICTOR BANASZAK                                                                                                                 
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 76.                                                                           
ACTION NARRATIVE                                                                                                              
8:02:57 AM                                                                                                                    
CO-CHAIR  SARA HANNAN  called the  House  Community and  Regional                                                             
Affairs  Standing  Committee  meeting   to  order  at  8:02  a.m.                                                               
Representatives  Drummond,  Thompson,  Claman,  and  Hannan  were                                                               
present  at the  call  to order.   Representative  Kreiss-Tomkins                                                               
arrived as the meeting was in progress.                                                                                         
               HB 81-PROHIBIT PLASTIC RETAIL BAGS                                                                           
8:04:15 AM                                                                                                                    
CO-CHAIR HANNAN announced that the  first order of business would                                                               
be  HOUSE BILL  NO. 81,  "An Act  prohibiting disposable  plastic                                                               
shopping bags; and providing for an effective date."                                                                            
8:04:55 AM                                                                                                                    
REPRESENTATIVE CLAMAN  noted that  a National Public  Radio (NPR)                                                               
article had  been circulated regarding the  economics of plastic,                                                               
paper,  and  cloth   bags,  as  well  as  the   issue  of  carbon                                                               
footprints.  He asked for the bill sponsor's response.                                                                          
8:05:37 AM                                                                                                                    
ELISE  SORUM-BIRK, Staff,  Representative Andy  Josephson, Alaska                                                               
State Legislature,  on behalf of Representative  Josephson, prime                                                               
sponsor of HB 81, said the  sponsor's staff looked into the issue                                                               
once  that article  had been  brought  to their  attention.   She                                                               
stated  that plastic  bags  being less  expensive  and easier  to                                                               
produce  does not  eliminate the  issue that  plastic bags  are a                                                               
major source of marine debris and  pollution.  She added that the                                                               
smaller carbon  footprint involved  in the production  of plastic                                                               
versus cloth  bags does not  "eliminate why we should  be getting                                                               
rid of them."                                                                                                                   
8:06:50 AM                                                                                                                    
CO-CHAIR HANNAN handed the gavel to Co-Chair Drummond.                                                                          
8:06:55 AM                                                                                                                    
CO-CHAIR HANNAN moved to adopt Amendment  1 to HB 81, labeled 31-                                                               
LS0205\A.1, Nauman, 4/17/19, which read as follows:                                                                             
     Page 2, lines 19 - 27:                                                                                                     
          Delete all material and insert:                                                                                       
               "(2)  "retail seller" includes a market,                                                                         
     grocery store, convenience store, drug store, or other                                                                     
     retail establishment that                                                                                                  
               (A)  sells goods to consumers; and                                                                               
     (B)  is located in a permanent building;"                                                                                  
8:07:04 AM                                                                                                                    
REPRESENTATIVE THOMPSON objected for purposes of discussion.                                                                    
CO-CHAIR HANNAN spoke  to Amendment 1.  She said  under HB 81, "a                                                               
retail establishment selling over  $250,000 worth of goods" would                                                               
have to  "comply with  the law."   Amendment  1 would  bring that                                                               
threshold  down so  that any  retail establishment  located in  a                                                               
"permanent building" would have to comply with the law.                                                                         
8:08:22 AM                                                                                                                    
REPRESENTATIVE  ANDY  JOSEPHSON,  Alaska  State  Legislature,  as                                                               
prime  sponsor  of  HB  81,  said he  would  not  be  opposed  to                                                               
Amendment 1.   He  surmised that  "some accommodations  like this                                                               
will have  to be made" as  the bill moves forward.   He indicated                                                               
that the  [reason] for the  $250,000 threshold  had to do  with a                                                               
colleague from the  North Slope who had expressed  that "it might                                                               
be better for small communities"  because of "the practicality of                                                               
enforcement and the size of some of these businesses."                                                                          
8:09:08 AM                                                                                                                    
REPRESENTATIVE THOMPSON  withdrew his  objection to  Amendment 1.                                                               
There being no further objection, Amendment 1 was adopted.                                                                      
8:09:31 AM                                                                                                                    
CO-CHAIR  HANNAN  moved to  report  HB  81,  as amended,  out  of                                                               
committee  with individual  recommendations and  the accompanying                                                               
zero  fiscal note.   There  being no  objection CSHB  81(CRA) was                                                               
reported  out  of  the  House   Community  and  Regional  Affairs                                                               
Standing Committee.                                                                                                             
8:10:00 AM                                                                                                                    
The  committee  took an  at-ease  from  8:10  a.m. to  8:12  a.m.                                                               
[During the at-ease,  Co-Chair Drummond handed the  gavel back to                                                               
Co-Chair Hannan.]                                                                                                               
         HB 76-RESIDENTIAL BUILDING CODE; AHFC; MUNIS.                                                                      
8:12:13 AM                                                                                                                    
CO-CHAIR HANNAN announced that the  final order of business would                                                               
be HOUSE  BILL NO. 76,  "An Act  relating to a  state residential                                                               
code,  the  Alaska  Housing Finance  Corporation,  and  municipal                                                               
building codes."                                                                                                                
8:13:08 AM                                                                                                                    
REPRESENTATIVE  RASMUSSEN,  Alaska  State Legislature,  as  prime                                                               
sponsor of  HB 76, said the  legislation was brought to  her as a                                                               
priority  by the  Alaska State  Home Building  Association.   She                                                               
said  standardized  residential  codes are  helpful  in  numerous                                                               
ways,  including "public  health, safety,  cost-savings, quality,                                                               
insurance,  and   protection."     She  said  as   a  residential                                                               
appraiser, she  strongly supports  a statewide  residential code.                                                               
She  said  the  November  30,   2018,  7.1  magnitude  earthquake                                                               
resulted in a loss of  property for some Anchorage residents, and                                                               
Alaska's natural  disasters illustrate  the need for  a statewide                                                               
residential code.   She indicated it was the  strict standards of                                                               
the Municipality of Anchorage that  prevented loss of life during                                                               
the aforementioned  earthquake, illustrating why the  rest of the                                                               
state  should adopt  such  standards.   Representative  Rasmussen                                                               
said in adopting  statewide standard codes, Alaska  would join 41                                                               
states,  Washington, D.C.,  and two  territories.   She indicated                                                               
that  the code  that would  be adopted  would be  a "well-vetted,                                                               
international" one.                                                                                                             
8:15:01 AM                                                                                                                    
REPRESENTATIVE CLAMAN said he supports  having a [statewide] code                                                               
for both residential and commercial  buildings, and he noted that                                                               
HB 76 mentions only a residential code.                                                                                         
REPRESENTATIVE RASMUSSEN  answered that the code  [proposed under                                                               
HB  76] would  apply to  properties financed  through the  Alaska                                                               
Housing Finance  Corporation (AHFC) that are  single family homes                                                               
and duplexes, not anything larger.                                                                                              
REPRESENTATIVE CLAMAN  asked if  that means that  currently there                                                               
is no  code for commercial  buildings and anything larger  than a                                                               
duplex.   He noted  that the bill  language takes  out "building"                                                               
and  replaces  it  with  "residential";  therefore,  he  said  he                                                               
wonders what happens to codes for [other] buildings.                                                                            
REPRESENTATIVE RASMUSSEN deferred to a representative of AHFC.                                                                  
8:16:49 AM                                                                                                                    
MARY  APAREZUK,  Staff,  Representative Sarah  Rasmussen,  Alaska                                                               
State Legislature,  on behalf of Representative  Rasmussen, prime                                                               
sponsor  of HB  76,  offered her  understanding  that "there  are                                                               
statewide standards for commercial codes."                                                                                      
8:17:09 AM                                                                                                                    
JOHN  ANDERSON, Director,  Research &  Rural Development,  Alaska                                                               
Housing    Finance   Corporation    (AHFC),   in    response   to                                                               
Representative   Claman's   questions,    stated   that   current                                                               
commercial  codes   exist  within  the  Department   of  Labor  &                                                               
Workforce Development (DLWD) and  the Department of Public Safety                                                               
(DPS) and would not be affected under HB 76.                                                                                    
REPRESENTATIVE CLAMAN asked, "Are  those international codes, ...                                                               
so that  the building  code for a  five-story building  in Juneau                                                               
would  be the  same building  code for  a five-story  building in                                                               
Anchorage and in Fairbanks?"                                                                                                    
MR.  ANDERSON  answered,  "Yes, those  codes,  ...  with  certain                                                               
specific  amendments  for  the  authorities  having  jurisdiction                                                               
would apply to  those areas, but yes, the base  code would be ...                                                               
the IVC, and  in some cases other appropriate codes  ... that are                                                               
in place now."                                                                                                                  
REPRESENTATIVE   CLAMAN  offered   his  understanding   that  the                                                               
baseline   code   for   residential   building   would   be   the                                                               
international   building  code,   but  municipalities,   such  as                                                               
Anchorage,  could decide  to have  "higher standards  relating to                                                               
MR.   ANDERSON  answered   that  is   correct.     He  said   his                                                               
understanding of  [HB 76] is  that it  would set the  standard of                                                               
the international residential code for the base.                                                                                
REPRESENTATIVE CLAMAN asked why this has not been done before.                                                                  
MR. ANDERSON replied that he does  not know why this has not been                                                               
done  before,  but  he  expressed  that "this  has  been  a  very                                                               
complicated issue for  25-plus years."  He  said, "AHFC currently                                                               
has these  codes and  standards in process  due to  our statutory                                                               
8:19:13 AM                                                                                                                    
REPRESENTATIVE  THOMPSON noted  he  was previously  the mayor  of                                                               
Fairbanks, which is  a home rule, first class city.   He said two                                                               
codes  were put  in place,  one  of which  was the  international                                                               
building code.   He asked whether [HB 76] would  cover areas that                                                               
are unincorporated.                                                                                                             
MR.  ANDERSON answered  yes.   He indicated  that currently  AHFC                                                               
accepts the "CO" of 14 jurisdictions  in lieu of its own process.                                                               
He offered  his understanding that  the intent  of [HB 76]  is to                                                               
"establish our current process, but  on a statewide level outside                                                               
of those authorities having jurisdiction."                                                                                      
REPRESENTATIVE  THOMPSON asked  how  the provisions  under HB  76                                                               
would be monitored and administered and at what cost?                                                                           
MR. ANDERSON responded that AHFC  does not envision [the proposed                                                               
legislation] as requiring "any type  of enforcement process."  He                                                               
added,  "AHFC  currently does  this  right  now."   He  said  the                                                               
corporation  does think  there would  be "quality  assurance over                                                               
the inspection process and the authorities having jurisdiction."                                                                
REPRESENTATIVE  THOMPSON clarified  his concern  is in  regard to                                                               
unincorporated areas  and whether there would  be inspections and                                                               
associated costs during the building processes.                                                                                 
MR.  ANDERSON  explained that  that  is  AHFC's current  process.                                                               
There are  forms 101 and  102 for the building  energy efficiency                                                               
standard and  the inspection processes.   He said the  process is                                                               
easy,  and although  there  is some  cost  involved, AHFC  allows                                                               
remote video monitoring.   He added, "But you still  have to be -                                                               
outside  of  those  areas  -   a  certified  [International  Code                                                               
Council] (ICC) inspector."                                                                                                      
8:23:03 AM                                                                                                                    
CO-CHAIR HANNAN asked  for confirmation that "that  would only be                                                               
for properties that AHFC is financing."                                                                                         
MR. ANDERSON answered that is correct.                                                                                          
CO-CHAIR HANNAN,  to the  prime sponsor,  asked, "Outside  of the                                                               
four  home  rule  and municipal  governments  that  already  have                                                               
inspection  codes and  authorities, how  will the  enforcement be                                                               
done if it is not an AHFC property?"                                                                                            
8:23:38 AM                                                                                                                    
REPRESENTATIVE RASMUSSEN answered that HB  76 would apply to AHFC                                                               
CO-CHAIR HANNAN asked if that meant only AHFC properties.                                                                       
8:23:49 AM                                                                                                                    
MS. APAREZUK  said, "This  is a statewide  building code  for all                                                               
buildings to  standardize code ...."   She said that is  what the                                                               
Alaska Home Building] Association  is requesting.  She concluded,                                                               
"But yes, this bill addresses AHFC-funded buildings."                                                                           
REPRESENTATIVE  RASMUSSEN,  regarding  cost, clarified  that  the                                                               
forms  101  and  102,  to   which  Mr.  Anderson  had  previously                                                               
referred, are "considered closing  costs within the transaction."                                                               
She said  home inspections  are part  of a  transaction typically                                                               
covered by  buyers.  She stated,  "In my mind, this  is just part                                                               
of a buyer  protection, and they are paying a  ... couple hundred                                                               
dollars in  transaction for  peace of mind  and protection  and a                                                               
property that's built to code."                                                                                                 
8:24:58 AM                                                                                                                    
REPRESENTATIVE  KREISS-TOMKINS,  referring to  Co-Chair  Hannan's                                                               
question,  asked for  confirmation  that HB  76  relates only  to                                                               
AHFC-financed properties.                                                                                                       
8:25:17 AM                                                                                                                    
MS. APAREZUK answered that is correct.   She added that AHFC is a                                                               
quasi-state  agency;  therefore,  it does  not  have  enforcement                                                               
8:25:34 AM                                                                                                                    
REPRESENTATIVE CLAMAN  provided a hypothetical scenario  in which                                                               
Representative Thompson and  his neighbor each want  to build new                                                               
homes  on side-by-side  lots,  and  only Representative  Thompson                                                               
finances through  AHFC.  Representative  Claman surmised  that in                                                               
this  scenario, both  Representative  Thompson  and his  neighbor                                                               
would have to follow the  standardized building code that applies                                                               
to every building in Fairbanks.                                                                                                 
MS. APAREZUK  responded that HB  76 would  require municipalities                                                               
to adopt the  international code.  She  offered her understanding                                                               
that four  of Alaska's largest  cities have already  adopted that                                                               
code.  She concluded, "So, essentially, yes."                                                                                   
REPRESENTATIVE  CLAMAN  said in  a  similar  scenario, where  the                                                               
place is changed to a remote  area [that does not already require                                                               
the international  building code], only the  person financing his                                                               
new home  build would  be required,  under HB  76, to  follow the                                                               
8:27:24 AM                                                                                                                    
REPRESENTATIVE RASMUSSEN  answered yes; however, she  said if the                                                               
person who  self-financed and chose  not to comply with  the code                                                               
wanted to sell the house "through  an AHFC program where a person                                                               
had to  acquire a loan,"  he/she would  have a problem  doing so.                                                               
She concluded that it would not  be a wise decision not to follow                                                               
code at the start because of the hardship in selling later.                                                                     
REPRESENTATIVE  CLAMAN responded  that it  may not  be wise,  but                                                               
other   than  repercussions   in   the  future,   "Representative                                                               
Thompson's neighbor could build anything he wants."                                                                             
8:28:33 AM                                                                                                                    
REPRESENTATIVE  KREISS-TOMKINS,  in   response  to  the  previous                                                               
answer that HB 76 would  relate only to AHFC-financed properties,                                                               
asked if Section 3 would relate only to AHFC properties.                                                                        
MS. APAREZUK answered that is correct.                                                                                          
8:29:25 AM                                                                                                                    
REPRESENTATIVE  THOMPSON, to  Representative Claman's  example of                                                               
the person  who paid  cash for  a home  to be  built and  did not                                                               
follow code requirements,  stated that when that  person wants to                                                               
sell the house, the person buying  may have to get financing.  He                                                               
stated, "Whatever  financial institute that  they go to  is going                                                               
to require  an engineering  report be  done, and  the engineering                                                               
report would  have to  go back and  take a look  at what  was the                                                               
code, and  does it meet the  code that it should  have been built                                                               
8:30:03 AM                                                                                                                    
CO-CHAIR HANNAN commented that she  thought Mr. Anderson had said                                                               
that  AHFC already  "does this";  therefore, she  asked if  HB 76                                                               
would merely, via statute, "be  backing up" that which is already                                                               
practiced  or whether  the  proposed  legislation would  actually                                                               
change "who would be covered by the code."                                                                                      
8:30:40 AM                                                                                                                    
MR.  ANDERSON answered  that "the  sponsor is  out front  on this                                                               
one."  He said, "The way we  read it does apply to Alaska Housing                                                               
Finance  [Corporation] properties  in reference  to mortgages  or                                                               
anything that  we purchase."   He  further remarked,  "Outside of                                                               
that, there may be a little bit of confusion, but I'm not sure."                                                                
CO-CHAIR  HANNAN  rephrased  her  question to  ask  whether  AHFC                                                               
currently holds  all construction  of all properties  it finances                                                               
anywhere in  Alaska -  inside or outside  of municipalities  - to                                                               
the international building residential code.                                                                                    
MR. ANDERSON responded that is correct.                                                                                         
8:31:31 AM                                                                                                                    
REPRESENTATIVE DRUMMOND  said she  was trying to  understand what                                                               
the problem was that HB 76 would solve.                                                                                         
8:31:46 AM                                                                                                                    
MS.  APAREZUK answered  that  although  some municipalities  have                                                               
adopted a building code, the rest  of the state has not; under HB                                                               
76 there would be a statewide building code.                                                                                    
8:32:09 AM                                                                                                                    
REPRESENTATIVE  THOMPSON  offered  his  understanding  that  AHFC                                                               
hires  Cold Climate  Housing [Research  Center] (CCHRC)  in rural                                                               
MR. ANDERSON answered that is  correct.  He said AHFC administers                                                               
a grant  through capital appropriations,  and through  that grant                                                               
there are "certain projects that  benefit statewide processes and                                                               
building  techniques and  cold climate  applications."   He  said                                                               
AHFC  also  involves  CCHRC  in many  other  projects  through  a                                                               
request for  proposal (RFP) process.   He said CCHRC  is "heavily                                                               
involved  in  the  research  and the  ...  building  dynamics  of                                                               
REPRESENTATIVE THOMPSON  noted that  CCHRC had been  removed from                                                               
the budget, and he asked, "Is that  going to put a little kink in                                                               
the works if we end up with that big cut through AHFC?"                                                                         
MR. ANDERSON  said he is not  sure.  He said,  "We currently have                                                               
the ability  to continue  with a  lot of the  things that  we are                                                               
working on.  They are a great  partner for us, and they have been                                                               
for many, many years.  We're  not sure what their operation looks                                                               
like moving forward."                                                                                                           
8:34:06 AM                                                                                                                    
REPRESENTATIVE   KREISS-TOMKINS   asked    what   percentage   of                                                               
residential properties statewide are financed by AHFC.                                                                          
8:34:23 AM                                                                                                                    
STACEY  BARNES,  Director,   Governmental  Relations  and  Public                                                               
Affairs,  Alaska  Housing  Finance Corporation  (AHFC),  answered                                                               
that approximately  20 percent of  the residential  properties in                                                               
the state of Alaska are financed through AHFC.                                                                                  
REPRESENTATIVE KREISS-TOMKINS surmised that  that would mean that                                                               
under HB 76,  a statewide building code would be  created "for 20                                                               
percent  of Alaska's  residential  properties, but  the other  80                                                               
percent -  unless they're  in a municipality  that already  has a                                                               
building code - are unaffected."                                                                                                
MS. BARNES  offered her understanding  that [under HB  76], "this                                                               
building  code would  apply  to new  construction  that would  be                                                               
financed in Alaska."                                                                                                            
8:35:25 AM                                                                                                                    
MR.  ANDERSON,  in  response  to  Representative  Kreiss-Tomkins,                                                               
clarified that under current statute,  AHFC has a higher standard                                                               
than [the  Federal National Mortgage Association]  ("Fannie Mae")                                                               
or [Federal Home Loan Mortgage  Corporation] ("Freddie Mac").  He                                                               
said those entities  do not have to "follow  that process" unless                                                               
they are working within one  of the municipalities that currently                                                               
"have that  process or a  standard that is equivalent  and/or ...                                                               
greater than ours."  Outside  of the areas using the standardized                                                               
coding, he explained, Fannie Mae and  Freddie Mac can use its own                                                               
financing "and don't really have to do anything."                                                                               
REPRESENTATIVE KREISS-TOMKINS  clarified that  he wanted  to know                                                               
whether  the 80  percent of  properties  in Alaska  that are  not                                                               
financed  by AHFC  and do  not  fall within  a municipality  that                                                               
already has a building code would be affected under HB 76.                                                                      
8:36:32 AM                                                                                                                    
MS. BARNES  answered that  HB 76 would  apply to  all communities                                                               
across Alaska.                                                                                                                  
REPRESENTATIVE  KREISS-TOMKINS  asked  the bill  sponsor  if  she                                                               
could reconcile  that testimony with her  previous statement that                                                               
HB 76  would apply only  to AHFC-financed properties.   He added,                                                               
"I guess  on a  very basic level,  I want to  know what  the bill                                                               
does, and there seems to be disparate understanding."                                                                           
8:37:05 AM                                                                                                                    
MS.  APAREZUK  responded  that according  to  a  memorandum  from                                                               
Legislative  Legal and  Research  Services, "it  applies to  AHFC                                                               
buildings,  but  it also  extends  to  municipal governments  and                                                               
requires  that they  adopt  the  same code."    She continued  as                                                               
     But,  as  I said  earlier,  not  having an  enforcement                                                                    
     agency,   ...   does  not   -   in   the  example   ...                                                                    
     Representative  Claman  stated  earlier and  also  John                                                                    
     Anderson  -  [that]  people  building  outside  of  the                                                                    
     construct  may  or  may  not  follow  the  code.    So,                                                                    
     essentially  ... I  would say  that  there's much  more                                                                    
     far-reaching    ...   than    the    20   percent    of                                                                    
     municipalities, et  cetera, ...  but I would  say there                                                                    
     are  some  untouched,   unaffected  areas  without  the                                                                    
REPRESENTATIVE  KREISS-TOMKINS said  he  had follow-up  questions                                                               
but could save them for later.                                                                                                  
8:38:29 AM                                                                                                                    
REPRESENTATIVE  THOMPSON  opined  that  "this is  good,"  but  he                                                               
wishes  it was  farther reaching.   He  remarked that  during the                                                               
building of the  Alaska Pipeline, there was a  lot of substandard                                                               
housing  built, which  came  to light  several  years later  when                                                               
people tried  to sell  the housing.   He indicated  some military                                                               
housing would  be going up,  and concern has been  expressed that                                                               
there  will again  be  substandard  housing built.    He said  he                                                               
wished there  was a way  to enforce that  and expand the  area in                                                               
which the code  is required.  He said the  new houses in question                                                               
are not  going to  be financed  by AHFC.   He reiterated  that he                                                               
would  like  the  bill  to reach  farther,  but  recognized  that                                                               
"you're going  to hire inspectors  and all that," which  would be                                                               
expensive.   He thanked the bill  sponsor and posited that  HB 76                                                               
is "a good bill."                                                                                                               
8:39:52 AM                                                                                                                    
REPRESENTATIVE  RASMUSSEN  stated that  she  thinks  part of  the                                                               
problem  with a  widespread code  "outside of  our jurisdiction,"                                                               
like Fannie Mae and Freddie Mac,  is that "we'd step into federal                                                               
territory  where we  wouldn't have  jurisdiction on  certain loan                                                               
programs."   She said she  has seen questionable  buildings while                                                               
inspecting them,  and has "no  idea how  a bank can  finance that                                                               
property."   She said  her intent is  "to protect  consumers from                                                               
poorly built property."   She said she is open  to ideas to amend                                                               
the  bill to  make  it stronger  and  further protect  consumers.                                                               
That said,  she advised that she  does not want to  take away the                                                               
ability of someone  to "cash build a property  for themselves" if                                                               
they are  not choosing to  finance through  the state.   She said                                                               
this is an internal struggle for her.                                                                                           
8:41:20 AM                                                                                                                    
REPRESENTATIVE  CLAMAN  said  he  is a  fan  of  building  codes,                                                               
because he doesn't  like the idea of entering a  house that might                                                               
fall on  him.   He set  up a scenario  wherein Wells  Fargo would                                                               
loan  money  for  someone  to  build in  a  city  that  does  not                                                               
currently have a  code.  He asked, "Do they  require some kind of                                                               
a building code when they're loaning on new construction?"                                                                      
8:42:17 AM                                                                                                                    
REPRESENTATIVE  RASMUSSEN said  the  answer  varies greatly  from                                                               
loan  company to  loan company.   She  surmised that  Wells Fargo                                                               
would buy  a mortgage that is  then sold on the  market, but "for                                                               
new  construction  you're still  required  to  do certain  things                                                               
during the process."                                                                                                            
REPRESENTATIVE CLAMAN clarified that  his question is specific to                                                               
an  unregulated part  of  Alaska, and  in  that circumstance,  he                                                               
asked, "What's a bank going to do?"                                                                                             
REPRESENTATIVE RASMUSSEN replied that  an appraisal would have to                                                               
be  done on  the property,  but appraisers  are not  certified in                                                               
building code.  She said there  would not be "any safeguarding on                                                               
a home inspector," because a home inspection is optional.                                                                       
8:44:01 AM                                                                                                                    
CO-CHAIR HANNAN announced the committee would hear invited                                                                      
8:45:04 AM                                                                                                                    
RICHARD CARR,  President, Alaska State Home  Building Association                                                               
(ASHBA), testified  in support  of HB  76.   He thanked  the bill                                                               
sponsor for  HB 76 and all  legislators for their service  to the                                                               
state.  He continued as follows:                                                                                                
     The  Alaska  State  Home   Building  Association  is  a                                                                    
     member-driven  organization  comprised   of  six  local                                                                    
     homebuilding associations spread  throughout the state.                                                                    
     We monitor  and engage in the  legislative process, any                                                                    
     bills  and  public  policies  that  impact  residential                                                                    
     construction  and   housing.    Establishing   a  state                                                                    
     residential code  has been a  growing priority  for our                                                                    
     members.   Alaska is  a state  that currently  does not                                                                    
     have a  residential building  code.   A lot  of thought                                                                    
     and  discussion has  gone  into ...  this  in order  to                                                                    
     bring us here today.  Here's why we support HB 76:                                                                         
     It benefits the state  of Alaska and local communities.                                                                    
     A statewide code can reduce  insurance costs across the                                                                    
     state    as   communities    benefit   from    improved                                                                    
     [International Organization  for Standardization] (ISO)                                                                    
     readings.   Having a  code adopted  at the  state level                                                                    
     saves  resources  at  the local  level,  as  individual                                                                    
     entities  will not  have to  spend  time and  financial                                                                    
     resources  going   through  a  separate   code  review,                                                                    
     amendment, and adoption process.                                                                                           
     There  is  also  increasing pressure  to  link  federal                                                                    
     mitigation grants  and disaster assistance  through the                                                                    
     adoption of  building codes.   If  such a  linkage were                                                                    
     established,  states with  a  statewide  code would  be                                                                    
     eligible  for  more  grant funding  and  more  disaster                                                                    
     assistance than states without [a] statewide code.                                                                         
     We support  HB 76  also because it  benefits consumers.                                                                    
     Having one statewide  code allows product manufacturers                                                                    
     to  benefit  from  economies  of  scale,  as  the  same                                                                    
     product and set  of products will comply  with the code                                                                    
     in all  parts of the  state.   This can result  in cost                                                                    
     savings,  which  can  be passed  on  to  the  consumer.                                                                    
     Also,  homebuyers would  have the  security of  knowing                                                                    
     any home  built in  the state  meets a  widely accepted                                                                    
     minimum standard  for construction.   As  new additions                                                                    
     of  a code  are  adopted  statewide, consumers  benefit                                                                    
     from homes  that can incorporate new,  improved, and/or                                                                    
     innovative building products  and materials and methods                                                                    
     of construction.                                                                                                           
8:48:39 AM                                                                                                                    
     The  November  thirtieth earthquake  also  demonstrated                                                                    
     the difference between homes  built with building codes                                                                    
     and those without.                                                                                                         
     There ...  [are] also benefits  to builders.   Builders                                                                    
     who work  in multiple cities and  boroughs benefit from                                                                    
     the consistency in requirements  provided by adopting a                                                                    
     statewide code.   When code  adoption happens  at local                                                                    
     level, a  builder working  in multiple  communities and                                                                    
     jurisdictions  may  end  up having  to  comply  with  a                                                                    
     patchwork   of  codes,   code   additions,  and   local                                                                    
     amendments.   This  can  lead to  more  rounds of  plan                                                                    
     review and  debates with building officials  over local                                                                    
     interpretations.     A  consistent  set   of  statewide                                                                    
     building codes can lead  to more consistent enforcement                                                                    
     across  the  state  and thus  fewer  conflicts  between                                                                    
     builders and building  officials.  In a  word, it would                                                                    
     be more efficient.                                                                                                         
     In  conclusion,  HB  76  is a  good  bill,  because  it                                                                    
     creates   a  starting   point.     Adopting  the   2018                                                                    
     International  Residential Code  as the  statewide code                                                                    
     within   AHFC   provides   a  benchmark   for   housing                                                                    
     construction.    ...   The  bill  does not  create  any                                                                    
     enforcement measures  or penalties.   Instead,  we will                                                                    
     work with  AHFC to  create a  standard code  across the                                                                    
     state for  local governments and  builders to  use when                                                                    
     they establish their own codes and standards.                                                                              
MR. CARR expressed his hope that he could provide the committee                                                                 
with the information necessary to advance HB 76.                                                                                
8:50:33 AM                                                                                                                    
REPRESENTATIVE KREISS-TOMKINS asked where Mr. Carr has seen the                                                                 
greatest need for HB 76.                                                                                                        
MR. CARR said the damage done by the November 2018 earthquake in                                                                
Anchorage did not surprise him, because he had seen construction                                                                
he characterized as "ready  to go any day."  He  said he has done                                                               
a  lot of  inspections;  currently he  builds  in the  Matanuska-                                                               
Susitna (Mat-Su)  Valley.  He said  one home he looked  at had no                                                               
rebar in  the footer  underneath the foundation  stem wall;  as a                                                               
result the  footer cracked, and  the house suffered  great damage                                                               
when  the earthquake  hit.   He  said many  areas  in the  Mat-Su                                                               
Valley do not  have building inspectors and would  benefit from a                                                               
statewide   code.     He  emphasized   the  importance   of  home                                                               
inspections when  closing on a loan.   He emphasized it  is worth                                                               
the cost.                                                                                                                       
REPRESENTATIVE KREISS-TOMKINS  asked Mr. Carr if  there are other                                                               
parts of the state with high rates of shoddy construction.                                                                      
MR.  CARR answered,  "I think  if you  get away  from any  of the                                                               
building department  jurisdictions, you risk the  potential for a                                                               
shoddy  building -  no  one  is watching  it,  and  they have  no                                                               
standard, no benchmark to work by."   He advised that a statewide                                                               
building code  would at  least give a  benchmark for  builders to                                                               
follow.  He  said most of the builders he  surrounds himself with                                                               
are  competent and  honorable,  and they  build  great homes  and                                                               
buildings; however,  he knows a  few that do  not.  He  added, "I                                                               
think a statewide  building code might pitchfork  them into doing                                                               
the right thing."                                                                                                               
REPRESENTATIVE  KREISS-TOMKINS  suggested  that the  builder  who                                                               
erected the  home with no  rebar in the  stem wall may  have been                                                               
lacking in scruples.  He asked  how the existence of the building                                                               
code  proposed  under  HB 76,  without  enforcement,  would  have                                                               
changed that behavior.                                                                                                          
MR.  CARR answered  that as  a businessman,  he would  never risk                                                               
building a  home that would  not meet code, because  if something                                                               
happened, "there would  be lawyers lined up  behind the homeowner                                                               
to get after me."   He said that is not  his reason for [building                                                               
safe structures] - he is  an honorable builder; however, at least                                                               
a benchmark would offer the  homeowner a standard by which he/she                                                               
has regress.                                                                                                                    
REPRESENTATIVE  KREISS-TOMKINS said  what he  is hearing  is that                                                               
the enforcement  mechanism would  be litigatory, and  a statewide                                                               
building code  would provide regress  for homeowners  against any                                                               
builder that did not abide by the  code in the future - even with                                                               
no building inspectors.                                                                                                         
MR. CARR responded yes.                                                                                                         
8:57:14 AM                                                                                                                    
REPRESENTATIVE  CLAMAN asked  which  code Mr.  Carr follows  when                                                               
building outside of Palmer, Alaska.                                                                                             
MR. CARR  answered the he  follows the  International Residential                                                               
Code (IRC).   In  response to  a follow-up  question, he  said he                                                               
thinks Palmer "leans heavily on IRC."                                                                                           
REPRESENTATIVE CLAMAN  surmised, "So,  that would mean  in Palmer                                                               
you're  following  the Palmer  code,  and  if  the IRC  was  less                                                               
stringent than  the Palmer  code, when  you're in  Wasilla, you'd                                                               
build  according  to  the  IRC,  and  then  if  there  were  more                                                               
stringent standards  in Palmer,  you'd follow the  more stringent                                                               
standards in Palmer."                                                                                                           
MR. CARR responded that is correct.                                                                                             
REPRESENTATIVE  CLAMAN asked  Mr.  Carr what  his experience  was                                                               
with  commercial  lenders  and  the  standards  they  require  he                                                               
follows.  He specified that he does not mean AHFC.                                                                              
MR.  CARR answered  that  most lenders  his  customers deal  with                                                               
require  an   [International  Code  Council]   (ICC)  third-party                                                               
inspection report, a PUR 101 or  PUR 102, not only for structural                                                               
integrity but also for energy efficiency.                                                                                       
REPRESENTATIVE  CLAMAN  asked if  the  forms  to which  Mr.  Carr                                                               
referred require adherence to the [IRC].                                                                                        
MR. CARR  answered yes,  as far as  those loan  institutions with                                                               
which  he  has  worked.    In response  to  Co-Chair  Hannan,  he                                                               
explained  that  one of  the  forms  has  to do  with  structural                                                               
integrity and the other applies to energy efficiency.                                                                           
9:00:05 AM                                                                                                                    
JOHN  BITNEY, Lobbyist,  Alaska State  Home Building  Association                                                               
(ASHBA), noted that  he worked as a legislative  liaison for AHFC                                                               
from 1995-2002.  He  said he does not know what  the "PUR" in PUR                                                               
101  and  PUR  102  stands  for, but  said  the  purpose  of  the                                                               
inspection  forms  is  to  guarantee   that  the  building  being                                                               
constructed has met the standards  necessary for AHFC to purchase                                                               
the loan.   These forms  are used by AHFC.   He said  what drives                                                               
lenders  are  the  requirements   of  secondary  mortgage  market                                                               
purchasers.  He  explained that a lender typically  does not hold                                                               
a mortgage  for more  than 30  days; they  "bundle them  and sell                                                               
them to  a secondary."  In  this case, AHFC is  a secondary, just                                                               
like Fannie Mae  and Freddie Mac.  He said  builders will include                                                               
the PUR  101s and 102s with  construction of homes, even  if they                                                               
are not planning  to have a loan purchased  through AHFC, because                                                               
those forms will become necessary to  sell the home in the future                                                               
and qualify for AHFC.                                                                                                           
9:03:15 AM                                                                                                                    
CO-CHAIR HANNAN,  returning to  the example  of the  rich person,                                                               
who paid cash to have his  home built outside of the Municipality                                                               
of  Fairbanks, asked  how a  sale is  made ten  years later  when                                                               
there was never a PUR 101/102 completed originally.                                                                             
9:04:06 AM                                                                                                                    
MR. ANDERSON answered  that there are many ways  to achieve this,                                                               
and  they  are  costly.    One  way  is  through  "deconstructive                                                               
testing," where third party  inspections and possible engineering                                                               
would have to be done.                                                                                                          
9:04:50 AM                                                                                                                    
CO-CHAIR  DRUMMOND requested  Mr.  Carr's  testimony in  writing.                                                               
She asked  how adoption  of the code  would help  in construction                                                               
and in reconstruction of damaged buildings.                                                                                     
9:05:57 AM                                                                                                                    
MR. CARR said the same  codes would apply to remodeling projects,                                                               
small or large.                                                                                                                 
CO-CHAIR DRUMMOND asked for confirmation  that current code would                                                               
be used in  rebuilding rather than code that existed  at the time                                                               
the structure was built.                                                                                                        
MR. CARR answered that was his  understanding.  The cost would be                                                               
passed on to the consumer.                                                                                                      
CO-CHAIR  DRUMMOND asked,  "Do you  have any  idea how  much this                                                               
will cost municipalities and boroughs to implement?"                                                                            
MR. CARR answered no.                                                                                                           
9:07:24 AM                                                                                                                    
REPRESENTATIVE RASMUSSEN offered her  understanding that the cost                                                               
would be minimal.  She  mentioned costs incurred by the consumer,                                                               
home  inspections to  determine the  need to  meet code,  and the                                                               
possibility of having to meet code during refinancing.                                                                          
CO-CHAIR DRUMMOND  clarified that  she wanted  to know  about the                                                               
cost  for municipalities  and boroughs  to replace  whatever code                                                               
they were using with the code proposed under HB 76.                                                                             
REPRESENTATIVE RASMUSSEN  answered that  the code  currently used                                                               
by the Municipality  of Anchorage meets or exceeds the  IRC.  She                                                               
said she  does not know about  "the other three areas"  but could                                                               
find out and return with an answer.                                                                                             
9:09:24 AM                                                                                                                    
REPRESENTATIVE  CLAMAN  observed  there   were  no  letters  from                                                               
municipalities in  the committee  packet.  He  asked if  the bill                                                               
sponsor would  contact Anchorage and other  municipalities to see                                                               
whether they support HB 76.                                                                                                     
REPRESENTATIVE  RASMUSSEN  said  she   would  reach  out  to  the                                                               
municipalities with existing building codes.                                                                                    
REPRESENTATIVE  CLAMAN  asked  for  clarification  regarding  the                                                               
previous answer about code for an  older house that is then sold.                                                               
He  said it  was  his understanding  that there  was  no need  to                                                               
update the code on an older house when it is sold.                                                                              
REPRESENTATIVE RASMUSSEN  responded that zoning  is grandfathered                                                               
but a seller must bring a  house up to certain code when selling.                                                               
Typically, she  said, the  seller would  "meet health  and safety                                                               
items," and other  items may be negotiated between  the buyer and                                                               
REPRESENTATIVE CLAMAN  said the sponsor's reference  to different                                                               
codes is  confusing.   He offered  his understanding  that health                                                               
and  safety  codes  pertain  to   plumbing  and  air  circulation                                                               
systems.   A  house built  to code  25 years  ago may  have studs                                                               
every 24  inches as  required when  the house  was built,  but he                                                               
asked what  would happen in terms  of a sale if  the current code                                                               
requires studs every 16 inches.                                                                                                 
REPRESENTATIVE RASMUSSEN answered  that under HB 76,  if there is                                                               
an AHFC loan involved, and  the house was constructed after 1992,                                                               
"they would have to be in compliance with the IRC."                                                                             
REPRESENTATIVE CLAMAN said  that would mean that  an entire house                                                               
built to code in 1993,  with 24-inch, on-center stud walls, would                                                               
not qualify  for a loan  during a  sale without the  entire house                                                               
being torn  down to update the  studs to current code.   He asked                                                               
Representative  Rasmussen to  confirm that  is how  she read  the                                                               
requirement under HB 76.                                                                                                        
REPRESENTATIVE  RASMUSSEN  answered,  "From my  understanding  it                                                               
would have to meet the IRC code."                                                                                               
REPRESENTATIVE CLAMAN  rephrased his  question to  emphasize that                                                               
under the provisions of HB  76, the house he described previously                                                               
would have  to be  torn down  to qualify  for an  AHFC loan.   He                                                               
asked Representative Rasmussen if that is correct.                                                                              
REPRESENTATIVE RASMUSSEN said, "Correct."                                                                                       
9:13:16 AM                                                                                                                    
REPRESENTATIVE  KREISS-TOMKINS remarked  that  if  HB 76  passed,                                                               
there would  be tens  of thousands  of residential  properties in                                                               
Alaska that are unfinanceable.                                                                                                  
REPRESENTATIVE  RASMUSSEN responded  that  that  is not  correct,                                                               
because there  would still  be Fannie Mae  and Freddie  Mac loans                                                               
"that would  not apply to  this statute."   She added,  "It would                                                               
just eliminate  one of many  loan programs that are  available to                                                               
consumers."  She  clarified that would be AHFC.   She pointed out                                                               
that adoption of  statewide building code would  not only protect                                                               
consumers  but  may  also  protect the  state.    She  explained,                                                               
"Because if Alaska Housing  [Finance Authority] weren't following                                                               
-- you  know, this isn't in  statute, so if they  didn't chose to                                                               
follow the  IRC, they could  potentially loan on a  property that                                                               
isn't  built correctly,  and  if the  borrower  defaulted on  the                                                               
loan, it would become an expense to the state."                                                                                 
REPRESENTATIVE  KREISS-TOMKINS  outlined  a  scenario  wherein  a                                                               
house  was  built  in  the  Mat-Su Valley,  where  there  was  no                                                               
building code, but an honorable  builder, such as Mr. Carr "built                                                               
it to  building code  at the  time."   He asked  for confirmation                                                               
that  that house  would not  be available  for financing  through                                                               
AHFC, because  it was "built  to code at the  time."  He  said it                                                               
seems  unreasonable that  that house  should  not be  financeable                                                               
through AHFC.                                                                                                                   
REPRESENTATIVE  RASMUSSEN  reiterated  that she  was  willing  to                                                               
consider  amendments to  HB  76.   She stated  her  intent is  to                                                               
protect consumers and the state in the best way possible.                                                                       
REPRESENTATIVE KREISS-TOMKINS  responded, "If  that, in  fact, is                                                               
an implication of the bill,  I'm probably not interested in going                                                               
in the  weeds to come  up with an  amendment myself, but  I would                                                               
invite you to do so."                                                                                                           
9:16:07 AM                                                                                                                    
REPRESENTATIVE CLAMAN  said a municipality  has the  authority to                                                               
apply  building codes  to residential  and commercial  buildings.                                                               
He asked  if the state  has that authority  to apply a  code that                                                               
would apply to everything constructed  in Alaska rather than just                                                               
applying  it to  AHFC.   Further, he  queried as  to whether  the                                                               
state could allow for houses  constructed by previous codes to be                                                               
REPRESENTATIVE RASMUSSEN  said she  could check  with Legislative                                                               
Legal and  Research Services  on what  the state's  authority is.                                                               
She said  she thinks enforcement  would be difficult.   She noted                                                               
that at the municipal level,  "the enforcement is through the ...                                                               
permit process that they have to  go through to complete the loan                                                               
9:17:54 AM                                                                                                                    
CO-CHAIR DRUMMOND  asked if the  code required under HB  76 would                                                               
impact  the two  codes used  in  Anchorage and  whether it  would                                                               
"beef  up" the  Eagle River  code, which  has received  attention                                                               
since the earthquake.                                                                                                           
REPRESENTATIVE RASMUSSEN said Anchorage  follows Title XXI, while                                                               
Eagle River and  Chugiak "follow certain parts of  that code, but                                                               
not all of it."  She said  under HB 76, everyone would follow the                                                               
IRC; however, she offered her  understanding that Anchorage could                                                               
choose to  follow "the higher  provisions" in its  building code.                                                               
She added, "It may not equalize  Eagle River in Anchorage, but it                                                               
would bring  Eagle River  up if  they aren't  -- I  would imagine                                                               
that  they're currently  at  the  International Residential  Code                                                               
level, but I can double check on that, as well."                                                                                
CO-CHAIR DRUMMOND responded,  "And yet, they still  had all these                                                               
problems, even  though they're already  following the IRC."   She                                                               
said  she is  having difficulty  figuring out  how [HB  76] would                                                               
improve things  in communities that already  have robust building                                                               
REPRESENTATIVE  RASMUSSEN  noted  that  much of  the  damage  she                                                               
noticed in the  Chugiak and Eagle River areas were  to homes that                                                               
had been built in the 1970s and '80s.                                                                                           
9:20:01 AM                                                                                                                    
REPRESENTATIVE KREISS-TOMKINS said  he likes the thrust  of HB 76                                                               
but  is  concerned  about  the "drag  net"  approach  that  would                                                               
include rural Alaska communities that are off road.                                                                             
REPRESENTATIVE  RASMUSSEN  said  her  husband  has  issued  loans                                                               
through his  work to people  in remote  areas.  She  said through                                                               
AHFC  there are  loans happening  throughout the  state, and  she                                                               
thinks  it is  important  to protect  consumers  in places  where                                                               
there are no building codes.   She reiterated her concern also is                                                               
to protect the state.                                                                                                           
9:21:59 AM                                                                                                                    
CO-CHAIR HANNAN  said she would  like the committee to  return to                                                               
invited  testimony, but  it is  clear  there is  interest in  and                                                               
support for protecting consumers in  Alaska.  She said she thinks                                                               
there would be further answers  to questions through the upcoming                                                               
provided  testimony, while  other  answers may  be found  through                                                               
9:23:07 AM                                                                                                                    
REPRESENTATIVE KREISS-TOMKINS said it  was previously stated that                                                               
there would  be legal  exposure for those  who build  a structure                                                               
that does not comply with code.   He opined that that issue is as                                                               
big  or  bigger  an  implication  of  HB  76  that  needs  to  be                                                               
considered.    He  expressed  interest   in  a  future  testifier                                                               
addressing this concern.                                                                                                        
9:24:02 AM                                                                                                                    
CHRIS ROSE,  Executive Director, Renewable Energy  Alaska Project                                                               
(REAP),  said REAP  is a  statewide nonprofit  coalition of  more                                                               
than  80 organizations  in  support of  HB 76.    He said  REAP's                                                               
interest  is energy  efficiency, and  HB 76  would be  a forward-                                                               
looking bill  that would apply  to new construction.   He offered                                                               
his understanding that the municipalities  to which speakers have                                                               
previously referred  already use IRC standards  as their minimum;                                                               
therefore,  he does  not see  HB 76  has having  a big  impact on                                                               
those municipalities.  He further  offered his understanding that                                                               
HB 76  would be  applied statewide  and "not just  to AHFC."   He                                                               
talked about the  dilemma of builders working  in multiple places                                                               
with a  variety of  standards, and  a statewide  minimum standard                                                               
would  be  helpful.    He  said  HB  76  would  not  set  up  any                                                               
enforcement mechanisms for those  areas outside of municipalities                                                               
that already  have mechanisms  set up.   He indicated  a positive                                                               
take  on  the  proposed  legislation  would  be  the  ability  of                                                               
builders to say they built to code  for resale or in order to get                                                               
financing as the home  is being built.  He said  he does not know                                                               
if  HB 76  has focused  on the  self-builder but  rather is  more                                                               
focused on professional builders.                                                                                               
MR.  ROSE   talked  about  the  weatherization   program  wherein                                                               
homeowners were able  to cut their energy bills by  an average of                                                               
30 percent, which saved the state  and homeowners a lot of money.                                                               
He  said it  makes sense  to continue  that movement  by assuring                                                               
energy efficient homes are built ongoing.                                                                                       
9:27:31 AM                                                                                                                    
REPRESENTATIVE THOMPSON asked if Mr.  Rose works with Alaska Cold                                                               
Climate Housing.                                                                                                                
MR. ROSE answered yes.                                                                                                          
REPRESENTATIVE THOMPSON  asked if the  budget cut to  Alaska Cold                                                               
Climate Housing,  which he had  mentioned before, would  have "an                                                               
effect on their ability to do what you do with them."                                                                           
MR.  ROSE answered  yes, it  would be  a problem,  because Alaska                                                               
Cold Climate Housing provides "an  amazing amount of service, not                                                               
only to AHFC but to the public at large."                                                                                       
9:28:36 AM                                                                                                                    
CO-CHAIR  HANNAN noted  that a  representative  from Alaska  Cold                                                               
Climate Housing was online to testify.                                                                                          
9:29:09 AM                                                                                                                    
PAUL GROSSI,  Alaska State  Pipe Trades, said  he opposes  HB 76,                                                               
"at least in  part."  The first  problem with HB 76,  he said, is                                                               
the  question  of  its  application.   He  explained  that  after                                                               
reading HB 76  a number of times, he could  not determine whether                                                               
it  would apply  just to  AHFC or  statewide; to  all residential                                                               
buildings  or  to fourplexes.    He  expressed concern  that  the                                                               
proposed legislation would  lower the standard for  plumbing.  He                                                               
said there  is already a  statewide plumbing and  electrical code                                                               
and HB  76 would  change that.   Currently, the  Uniform Plumbing                                                               
Code (UPC) applies  to residential and commercial  plumbing.  The                                                               
IRC is a lower standard.                                                                                                        
9:31:32 AM                                                                                                                    
BRAD  AUSTIN, Training  Coordinator,  Alaska  State Pipe  Trades,                                                               
explained   that  the   IRC   contains   chapters  on   plumbing,                                                               
electrical, and mechanical; it is  not just a structural building                                                               
code.   He  said  he sees  this as  "having  two plumbing  codes,                                                               
because there is no carveout for the plumbing code."                                                                            
9:32:13 AM                                                                                                                    
MR. GRASSI said the main issue with  HB 76 is that it would lower                                                               
the  standard for  some structures  in Alaska  for plumbing.   It                                                               
would  not  require a  certificate  of  fitness for  plumbing  or                                                               
electrical, which is  state criteria.  He said he  sees that as a                                                               
safety and health issue.  That  said, he expressed that he thinks                                                               
there is a need for  building codes for buildings themselves, and                                                               
"we  don't have  to  reinvent the  wheel  on this."    He said  a                                                               
cursory  search  showed  that at  least  seven  communities  have                                                               
adopted  the   IRC  but  "have   carved  out  for   plumbing  and                                                               
electrical" so that "those ...  stronger standards would still be                                                               
met."  He said he thinks "there  is a way of doing this," but the                                                               
issue is the  confusion over that to which the  bill would apply.                                                               
He said  all the other building  codes of the state  are in Title                                                               
XVIII,  but "their  laws" are  in  separate sections.   He  said,                                                               
"This is a  subsect in the Alaska  Housing [Finance Corporation],                                                               
so  we couldn't  figure out  what they  were trying  to do."   He                                                               
said, "We  think they're  trying to adopt  a statewide  code, but                                                               
we're not  sure that this does  that."  He said  Mr. Austin could                                                               
explain  for  the  committee  the   ways  municipalities  do  the                                                               
aforementioned  carveouts, the  requirement for  the certificates                                                               
of fitness, and  the differences within the  plumbing sections of                                                               
the code.                                                                                                                       
9:35:12 AM                                                                                                                    
REPRESENTATIVE  THOMPSON said  he  thinks the  City of  Fairbanks                                                               
adopted a  plumbing code, an  electrical code, and  "the building                                                               
side  of  the  code."    He  talked  about  the  requirements  of                                                               
inspectors and  the need to get  permits.  He said,  "That's fine                                                               
within  a  municipality, but  I  think  this  bill is  trying  to                                                               
address outside  of a  municipality where we  have the  Wild West                                                               
going on with building right now."   He said he does not know how                                                               
that would be  separated, and he questioned whether  that was the                                                               
source of Mr. Grossi's confusion.                                                                                               
9:36:13 AM                                                                                                                    
MR.  GROSSI  replied  that  plumbing  and  electrical  codes  are                                                               
statewide already, but not residential building code.                                                                           
9:36:52 AM                                                                                                                    
CO-CHAIR  HANNAN asked  who enforces  the statewide  plumbing and                                                               
electrical codes in remote communities.                                                                                         
MR.  GROSSI answered  that smaller  communities do  not have  the                                                               
inspections.   He  said the  legislature could  choose what  size                                                               
communities to include.   In response to  questions from Co-Chair                                                               
Hannan, he said  the Department of Labor  & Workforce Development                                                               
(DLWD) does the  inspections, and the number  of inspections that                                                               
take place seem to increase when  the state's budget is flush and                                                               
decrease during lean  years.  He added, "But the  law is there to                                                               
protect ... the consumer."                                                                                                      
CO-CHAIR  HANNAN asked  if during  the lean  years, projects  are                                                               
held up waiting for inspections.                                                                                                
MR.  GROSSI  said  he  would   look  into  that  for  an  answer.                                                               
Notwithstanding that, he said when  he was involved in the trade,                                                               
"you pretty much had to wait  until the inspector came - but they                                                               
came."   He  added, "This  was  a long  time ago  when there  was                                                               
plenty  of money  for  these kinds  of things,  but  now I'm  not                                                               
completely sure."                                                                                                               
9:40:10 AM                                                                                                                    
REPRESENTATIVE THOMPSON asked whether  state and local inspectors                                                               
are duplicated.                                                                                                                 
MR.  GROSSI  answered no.    The  inspections done  by  municipal                                                               
inspectors satisfy the state requirement, he explained.                                                                         
9:41:03 AM                                                                                                                    
REPRESENTATIVE KREISS-TOMKINS  said this information  is helpful,                                                               
and he requested  someone from DLWD describe  how the inspections                                                               
work  presently, especially  in the  small communities,  and also                                                               
whether the person who  buys and sells a house that  is not up to                                                               
code is "at legal exposure."                                                                                                    
9:42:06 AM                                                                                                                    
TERRE  GALES, Deputy  Director, Division  of Labor  Standards and                                                               
Safety,  Department  of  Labor  &  Workforce  Development,  ,  in                                                               
response  to  a  request  from Co-Chair  Hannan,  explained  that                                                               
Mechanical  Inspection is  self-funded  through  the issuance  of                                                               
licenses, and inspections are planned  based on "getting the most                                                               
bang for  our buck."   Regarding plumbing,  he said there  are no                                                               
codes for communities  with populations less than  2,500, but all                                                               
communities are held to the electrical standard.                                                                                
CO-CHAIR HANNAN asked  Mr. Gales to confirm  that "the electrical                                                               
code ... is universal to every square inch of Alaska."                                                                          
MR. GALES answered that is  correct.  He added, "The [fourplexes]                                                               
and above is what we inspect  for electrical, and that's based on                                                               
9:43:35 AM                                                                                                                    
REPRESENTATIVE  KREISS-TOMKINS asked  for confirmation  that DLWD                                                               
does not inspect residential homes and duplexes.                                                                                
MR.  GALES answered  correct, "but  the standard  still applies."                                                               
In response to Co-Chair Hannan,  he clarified that the electrical                                                               
standard stills  applies, but DLWD  inspects only  fourplexes and                                                               
9:44:22 AM                                                                                                                    
CO-CHAIR  DRUMMOND asked  who inspects  the single  family homes,                                                               
duplexes, and triplexes in communities of less than 2,500.                                                                      
MR.  GALES  reiterated  that  there   is  no  plumbing  code  for                                                               
communities  of less  than 2,500,  but statute  requires DLWD  to                                                               
inspect electrical for fourplexes and above.                                                                                    
MR. GALES,  in response  to Co-Chair  Hannan, confirmed  that for                                                               
all communities  of 2,500 or  greater, [DLWD] is  responsible for                                                               
inspection of plumbing of all structures, no matter the size.                                                                   
9:45:54 AM                                                                                                                    
REPRESENTATIVE  CLAMAN  asked  if  the  legislature  can  pass  a                                                               
building code without requiring inspections.                                                                                    
MR. GALES answered yes.  In  response to a follow-up question, he                                                               
said  because   there  is  no  permitting   process,  a  plumbing                                                               
inspection could  be instigated  if DLWD was  in a  community and                                                               
happened to "stumble upon ...  the building."  He added, "Because                                                               
there's no  ... large  permitting process,  we don't  always know                                                               
where these buildings are being built in communities like that."                                                                
REPRESENTATIVE   CLAMAN   asked   for   clarification   regarding                                                               
electrical  inspections and  what  prompts DLWD  to inspect  "any                                                               
building that's not  in an organized municipality  that has their                                                               
own building code."                                                                                                             
MR. GALES  said DLWD sends  its inspectors throughout  the state,                                                               
and  when those  inspectors come  upon construction,  they ensure                                                               
that the  builders have  proper licensing  and are  following the                                                               
REPRESENTATIVE CLAMAN  asked, "But if for  budget reasons there's                                                               
nobody going to Bethel this  year, [then] there's nobody checking                                                               
in with  the contractors  in Bethel  to see  whether or  not they                                                               
have licenses and whether the work they're doing meets code.?"                                                                  
MR. GALES answered, "That is correct."                                                                                          
9:49:53 AM                                                                                                                    
CO-CHAIR  HANNAN asked  whether  the travel  budget for  upcoming                                                               
school year  for the  Division of Standards  and Safety  has been                                                               
cut in half like other agencies.                                                                                                
MR. GALES answered  that the current proposed budget  has cut the                                                               
budget by 50 percent.  In  response to a follow-up question as to                                                               
whether that  would result  in 50  percent fewer  inspections, he                                                               
said  there would  be an  adjustment,  and while  there would  be                                                               
fewer inspections, the division would strive for efficiency.                                                                    
9:51:07 AM                                                                                                                    
CO-CHAIR DRUMMOND  asked who  pays for the  travel portion  of an                                                               
inspection from DLWD.                                                                                                           
MR.  GALES answered  that the  budget is  based on  "the receipts                                                               
that we receive."                                                                                                               
CO-CHAIR  DRUMMOND said,  "You said  the Mechanical  [Inspection]                                                               
section is  self-funded through licenses,  and I assume  you have                                                               
receipt  authority   for  collection   of  those   funds  through                                                               
licenses."  She  asked, "Is that same fund the  one that pays for                                                               
the travel that is required to inspect in remote places?"                                                                       
MR. GALES answered,  "Yes, it's the designated  general fund, and                                                               
it's the building safety fund, and that's what we use."                                                                         
CO-CHAIR DRUMMOND  reasoned that  the funding  being cut  in half                                                               
would limit the number of inspections that could be made.                                                                       
MR. GALES answered,  "It's not that the funds are  being cut, but                                                               
our budget authorization for travel has been cut."                                                                              
CO-CHAIR  DRUMMOND  stated her  assumption  that  if [the  budget                                                               
authorization] has  been cut in  half, the agency would  be doing                                                               
half as much traveling; therefore,  structures being built may go                                                               
without inspection.                                                                                                             
9:53:37 AM                                                                                                                    
REPRESENTATIVE  CLAMAN   asked  whether  the   revenue  generated                                                               
through licensing fully or partially fund travel and inspection.                                                                
MR. GALES answered  that inspection uses no  general funds, "it's                                                               
all based on receipts."                                                                                                         
9:54:23 AM                                                                                                                    
CO-CHAIR  HANNAN  asked whether  the  Division  of Standards  and                                                               
Safety currently inspects AHFC properties in rural communities.                                                                 
MR. GALES answered in the affirmative.                                                                                          
CO-CHAIR HANNAN then asked whether  HB 76 would expand the number                                                               
of inspections the division would have to do.                                                                                   
MR.  GALES indicated  that  HB 76,  as  currently written,  would                                                               
"eliminate" the ability of the  division "to enforce the plumbing                                                               
code."   He added,  "It may even  eliminate the  [certificates of                                                               
fitness], as well."                                                                                                             
9:55:47 AM                                                                                                                    
CO-CHAIR HANNAN remarked  that there were more  people wishing to                                                               
testify, but time was running out.   For that reason, and because                                                               
of  the questions  the  committee  still had  on  the issue,  she                                                               
assured  everyone  that the  bill  would  not  be passed  out  of                                                               
committee at this hearing.                                                                                                      
CO-CHAIR  HANNAN  [opened  public   testimony]  to  hear  from  a                                                               
testifier who was present in the room.                                                                                          
9:56:57 AM                                                                                                                    
VICTOR  BANASZAK,  related  that  he  is  the  president  of  the                                                               
Southeast Home Builders Association  and vice president of ASHBA,                                                               
but he  is testifying  on behalf  of himself.   He  expressed his                                                               
hope that when  he became president of ASHBA next  year, he would                                                               
have  the  opportunity   to  speak  on  this   issue  before  the                                                               
legislature.   He stated  support of  HB 76.   He said  Alaska is                                                               
only one of 11 states that  does not have a statewide residential                                                               
building code.  The proposed  legislation would adopt a code that                                                               
builders know and  understand, he said.   Consumers would benefit                                                               
from  better   construction  quality,   while  state   and  local                                                               
governments  would  benefit  from having  a  consistent  standard                                                               
statewide.  He  imparted that a major insurance  company has said                                                               
that with a statewide residential  building code, Alaska would be                                                               
eligible  for  25  percent additional  funds,  which  would  help                                                               
during  natural disasters.   Mr.  Banaszak recognized  that there                                                               
are major issues  facing the state at the end  of the legislative                                                               
session;  therefore,  he  expressed   his  appreciation  for  the                                                               
committee's consideration of  HB 76.  He said he  is committed to                                                               
helping to make HB 76 a better bill.                                                                                            
MR. BANASZAK  reported that ASHBA  would like  HB 76 to  apply to                                                               
all new residential construction,  not just [that funded through]                                                               
AHFC.  He said, "Mr. Anderson ...  has made a comment in the past                                                               
that it's  not a level  playing field right now,  because they're                                                               
holding  everybody  to  high  standards, so  people  will  go  to                                                               
somebody from down south who  has a lower standard; therefore, we                                                               
don't  have  equivalent  --  it's  not apples  to  apples."    In                                                               
response to  previous concern about  having to tear a  house down                                                               
that  was not  to code  in order  to sell  it, he  indicated that                                                               
would not be the  case.  The emphasis is on  changes that need to                                                               
be  made to  prevent the  new owner  from getting  hurt, such  as                                                               
stair railings  that are  the right distance  apart to  prevent a                                                               
child from falling through them.   Another concern would be a new                                                               
owner making  a house  "tight" but  without proper  air exchange.                                                               
He  said, "It's  things  like this  we want  to  eliminate."   He                                                               
     We're not  trying to overwrite, for  instance, the UPC,                                                                    
     which  is the  uniform  plumbing code  ...; we're  just                                                                    
     trying   to  establish   a  minimum.     And   all  the                                                                    
     municipalities    that    we   currently    have    are                                                                    
     significantly above  that.  We  just want to  make sure                                                                    
     that where there  is either no code at  all or minimal,                                                                    
     ...  those are  also held  to  some type  of a  minimum                                                                    
     standard.   We're  not trying  to  override or  destroy                                                                    
     anybody else's standard; we just want a minimum.                                                                           
MR.  BANASZAK, regarding  the  aforementioned recent  earthquake,                                                               
noted that it was a 7.2  on the Richter Scale, which exceeded the                                                               
design load  on those houses.   He said  the damage seen  was not                                                               
indicative  of a  subpar  house; it  was a  big  earthquake.   He                                                               
clarified, "The fact  that they stood up shows what  our codes do                                                               
in  Alaska.   The  fact  that they  stood  up  to something  that                                                               
exceeded the design load is pretty impressive."                                                                                 
10:01:31 AM                                                                                                                   
CO-CHAIR HANNAN announced that HB 76 was held over.                                                                             
10:02:13 AM                                                                                                                   
There being no  further business before the  committee, the House                                                               
Community  and Regional  Affairs Standing  Committee meeting  was                                                               
adjourned at 10:02 a.m.                                                                                                         

Document Name Date/Time Subjects
HB081 AMD 1.pdf HCRA 4/25/2019 8:00:00 AM
HB 81
HB076 ver A 3.18.19.PDF HCRA 4/25/2019 8:00:00 AM
HB 76
HB076 Sponsor Statement 3.18.19.pdf HCRA 4/25/2019 8:00:00 AM
HB 76
HB076 Sectional Summary 3.18.19.pdf HCRA 4/25/2019 8:00:00 AM
HB 76
HB076 Fiscal Note-DOLWFD.pdf HCRA 4/25/2019 8:00:00 AM
HB 76
HB076 Fiscal Note-DOR.pdf HCRA 4/25/2019 8:00:00 AM
HB 76
HB076 Additional Documents-Overview of the IRC 3.18.19.pdf HCRA 4/25/2019 8:00:00 AM
HB 76
HB076 Additional Documents-Master I-Code Adoption Chart 3.18.19.pdf HCRA 4/25/2019 8:00:00 AM
HB 76
HB076 Supporting Document-Support Letters 3.18.19.pdf HCRA 4/25/2019 8:00:00 AM
HB 76
HB076 - Letters of Support - 4.11.19.pdf HCRA 4/25/2019 8:00:00 AM
HB 76
HB076 Code Flow Chart.pdf HCRA 4/25/2019 8:00:00 AM
HB 76