Legislature(2017 - 2018)BARNES 124

01/25/2017 03:15 PM LABOR & COMMERCE

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Audio Topic
03:15:47 PM Start
03:16:38 PM Presentation on Residential Building Codes By: Andrew Spinelli, Ak State Home Building Association; John Anderson, Ak Housing Finance Corp
03:59:13 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Residential Building Codes by: TELECONFERENCED
Andrew Spinelli, AK State Home Building Assoc.;
John Anderson, AK Housing Finance Corp
-- Testimony <Invitation Only> --
                    ALASKA STATE LEGISLATURE                                                                                  
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                                                                         
                        January 25, 2017                                                                                        
                           3:15 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Representative Sam Kito, Chair                                                                                                  
Representative Adam Wool, Vice Chair                                                                                            
Representative Andy Josephson                                                                                                   
Representative Louise Stutes                                                                                                    
Representative Chris Birch                                                                                                      
Representative Gary Knopp                                                                                                       
Representative Colleen Sullivan-Leonard                                                                                         
MEMBERS ABSENT                                                                                                                
Representative Bryce Edgmon (alternate)                                                                                         
COMMITTEE CALENDAR                                                                                                            
PRESENTATION ON RESIDENTIAL BUILDING CODES BY: ANDREW SPINELLI,                                                                 
AK STATE HOME BUILDING ASSOCIATION; JOHN ANDERSON, AK HOUSING                                                                   
FINANCE CORP                                                                                                                    
PREVIOUS COMMITTEE ACTION                                                                                                     
No previous action to record                                                                                                    
WITNESS REGISTER                                                                                                              
ANDRE SPINELLI, Co-Chair                                                                                                        
Legislative Committee;                                                                                                          
Past President                                                                                                                  
Alaska State Home Building Association (ASHBA)                                                                                  
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Gave a presentation on building codes in                                                                 
JOHN ANDERSON, Director                                                                                                         
Research & Rural Development                                                                                                    
Alaska Housing Finance Corporation (AHFC)                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Offered details on residential building                                                                  
ACTION NARRATIVE                                                                                                              
3:15:47 PM                                                                                                                    
CHAIR  SAM KITO  called  the House  Labor  and Commerce  Standing                                                             
Committee meeting  to order at  3:15 p.m.   Representatives Wool,                                                               
Knopp,  Sullivan-Leonard,   Stutes,  Josephson,  and   Kito  were                                                               
present at  the call to  order.  Representative Birch  arrived as                                                               
the meeting was in progress.                                                                                                    
^PRESENTATION ON RESIDENTIAL BUILDING  CODES BY: ANDREW SPINELLI,                                                               
AK  STATE HOME  BUILDING ASSOCIATION;  JOHN ANDERSON,  AK HOUSING                                                               
FINANCE CORP                                                                                                                    
PRESENTATION ON RESIDENTIAL BUILDING CODES BY: ANDREW SPINELLI,                                                             
 AK STATE HOME BUILDING ASSOCIATION; JOHN ANDERSON, AK HOUSING                                                              
                          FINANCE CORP                                                                                      
3:16:38 PM                                                                                                                    
CHAIR KITO announced  that the only order of business  would be a                                                               
presentation about residential building codes.                                                                                  
CHAIR KITO stated that at  the Governor's Housing Summit in 2015,                                                               
there  was a  conversation about  statewide residential  building                                                               
codes.  Currently in Alaska,  some delegated jurisdictions accept                                                               
responsibility  for  administering  building codes  within  their                                                               
municipal boundaries.   In the  rest of  the state there  are not                                                               
any  enforced building  codes, unless  enforced by  organizations                                                               
that fund,  grant, or  construct facilities.   He stated  that if                                                               
someone wants  to build  his/her own house,  that would  still be                                                               
possible, but if  the house is being sold,  mortgage lenders lack                                                               
confidence,  assurance,  or  knowledge that  the  electrical  and                                                               
plumbing work has  been done in accordance with  a building code.                                                               
In order  to offer a  loan for  a property, the  mortgage lenders                                                               
must know that information.                                                                                                     
3:19:24 PM                                                                                                                    
ANDRE SPINELLI, Co-Chair,  Legislative Committee; Past President,                                                               
Alaska   State  Home   Building  Association   (ASHBA),  gave   a                                                               
presentation on building codes in  Alaska.  He stated residential                                                               
business codes  encompass all  aspects of  building construction,                                                               
from  simple  plumbing  standards to  complex  energy  efficiency                                                               
upgrades. The problem  is that Alaska currently  has no statewide                                                               
residential  building  codes.   Alaska's  structure  of  building                                                               
codes  is confusing;  multiple agencies  adopt  parts of  various                                                               
building  codes and  energy standards,  but  there are  overlaps,                                                               
gaps, and  conflicts.   There is  no single  place where  you can                                                               
find a comprehensive overview.  He remarked:                                                                                    
     At present  time the [Department  of Labor  & Workforce                                                                    
     Development]   adopts    commercial   and   residential                                                                    
     electrical and  plumbing codes,  but the  Department of                                                                    
     Public Safety adopts  fire, life-safety, and mechanical                                                                    
     codes  for  commercial  structures, and  establishes  a                                                                    
     residential fire  alarm and carbon monoxide  code.  The                                                                    
     Department   of  Education,   Alaska  Housing   Finance                                                                    
     Corporation    (AHFC),    and   the    Department    of                                                                    
     Transportation and  Public Facilities (DOT&PF)  are all                                                                    
     tasked  with adopting  and  applying energy  efficiency                                                                    
     standards   for   either  commercial   or   residential                                                                    
     buildings  that fall  under their  jurisdiction.   Many                                                                    
     municipalities adopt  comprehensive sets of  codes that                                                                    
     apply  to both  residential  and commercial  buildings,                                                                    
     however, there is no  formal mechanism for coordination                                                                    
     between  these entities  to ensure  that codes  are not                                                                    
     duplicative [or do not] have gaps or conflicts.                                                                            
He stated that  as a result, government agencies  must spend more                                                               
time and  expense developing their  own codes,  while contractors                                                               
and citizens face  the burden of navigating  the resulting tangle                                                               
of regulations.  He offered an  example of building a fourplex in                                                               
Palmer or  Anchorage, and wanting  to build the same  fourplex in                                                               
Wasilla, where there  is not a building code,  then falling under                                                               
the  state Fire  Marshall's jurisdiction,  which does  not accept                                                               
the International  Residential Code  (IRC).   Therefore identical                                                               
buildings would fall under separate codes.                                                                                      
3:22:56 PM                                                                                                                    
MR. SPINELLI offered  a solution supported and  encouraged by the                                                               
Alaska State  Home Building Association for  several years, which                                                               
is  for the  State  of  Alaska to  adopt  a baseline  residential                                                               
building  code.   He stated  the recommendation  is to  model the                                                               
implementation and  enforcement of a statewide  code after AHFC's                                                               
use of the IRC.  The AHFC  adopts the IRC but adds amendments for                                                               
local conditions.   The IRC  has one  book that contains  all the                                                               
codes  required for  one- and  two-family  homes and  townhouses.                                                               
The energy  chapter in the  IRC book  is the same  energy wording                                                               
that AHFC adopts  and uses for its current energy  code for homes                                                               
that  must  meet the  AHFC  code.    He  said that  builders  are                                                               
familiar  with this  system and  its track  record of  addressing                                                               
different costs  and circumstances  in all the  different regions                                                               
across the entire  state.  AHFC uses inspectors that  do the plan                                                               
review and inspect  the construction of the building  - a process                                                               
that  has been  in place  for  many years.   He  stated that  the                                                               
process works well and allows  for the amount of flexibility that                                                               
Alaskans seem to require.  He remarked:                                                                                         
     When it  comes to applying residential  building codes,                                                                    
     the AHFC model acknowledges that  one size does not fit                                                                    
     all in Alaska.  Most of  the members of the House Labor                                                                    
     & Commerce  [Standing] Committee  represent communities                                                                    
     that  have  municipal  governments  that  have  adopted                                                                    
     building  codes, but  there  are  many legislators  who                                                                    
     represent regions  where there are no  local codes, and                                                                    
     there  is   an  attitude  that  they   don't  want  the                                                                    
     government to tell them whether  and/or how they should                                                                    
     build a house.                                                                                                             
MR. SPINELLI stated that the  membership of the Alaska State Home                                                               
Builders  Association appreciates  the sentiment  of not  wanting                                                               
government to  force anything  on anyone,  and clarified  that is                                                               
not the objective of the association.  He remarked:                                                                             
     Adopting   a   statewide   building   code   is   about                                                                    
     recognizing   the   importance  of   building   safely,                                                                    
     effectively,  and  efficiently.     When  there  is  no                                                                    
     building  code,   homeowners  are  left  to   fend  for                                                                    
     themselves in a buyer-beware market.                                                                                       
3:26:20 PM                                                                                                                    
MR. SPINELLI asked the committee  members to help the association                                                               
with the  proposed legislation.   He stated the current  and past                                                               
administrations have stated they  support the concept but thought                                                               
the   legislation  wouldn't   pass  the   legislature;  and   the                                                               
legislature has stated concern for  introducing a bill that won't                                                               
get support from the administration.                                                                                            
He asked the committee to work  with AHFC and all stakeholders to                                                               
develop a  reasonable proposal to  adopt a  statewide residential                                                               
building code  and energy  efficiency standard.   He  stated that                                                               
the association would like to see  a move towards the drafting of                                                               
legislation, and  he recognized  it might  take longer  than this                                                               
session.   In the past,  ASHBA created  a board with  builders as                                                               
members,  adopted a  code,  and set  up a  website  to apply  for                                                               
building  permits  and  choose   inspectors.    This  shoestring,                                                               
voluntary program was aimed to keep things minimal.                                                                             
3:28:01 PM                                                                                                                    
REPRESENTATIVE BIRCH  asked if the  standard would  carry through                                                               
rural and urban  areas of the state, and if  the objective of the                                                               
proposal is  to adopt a  code at the state  level to fill  in the                                                               
voids of areas with no applicable overarching code.                                                                             
MR. SPINELLI  stated that  he knows that  Alaskans can't  be told                                                               
that every  shelter built must meet  a building code.   The final                                                               
outcome hasn't  been determined.   The  idea is  for homes  to be                                                               
financed by a bank that looks  to a standard; in some areas there                                                               
is no  standard.  Certain agencies  see a gap in  enforcement and                                                               
are operating  beyond the  legal scope  of what  their department                                                               
should be doing.  The proposal  would establish a baseline to say                                                               
if  a  person is  building  a  house  in  Alaska and  is  getting                                                               
financing or  going through an  inspection process, then  this is                                                               
the code that should be met.                                                                                                    
3:30:41 PM                                                                                                                    
REPRESENTATIVE SULLIVAN-LEONARD  asked if the committee  will see                                                               
legislation  coming forward  on this  issue and  what the  fiscal                                                               
note would look like.                                                                                                           
3:31:03 PM                                                                                                                    
CHAIR KITO  responded that this  meeting is for the  committee to                                                               
collect  information on  the situation  and problem,  and see  if                                                               
there  is something  to be  done through  legislation.   Then the                                                               
committee   will  discuss   if  it   is  worthwhile   to  provide                                                               
legislation to support  this idea.  He expressed  hope that there                                                               
will be a bill at some point,  but he hopes to get information in                                                               
the current meeting to drive the direction of such legislation.                                                                 
3:31:43 PM                                                                                                                    
REPRESENTATIVE  JOSEPHSON  asked  about the  National  Electrical                                                               
Contractors  Association (NECA)  electrical standards,  which are                                                               
usually used as a model.                                                                                                        
MR. SPINELLI responded  that what gets adopted is  confusing.  He                                                               
explained that there  are electrical and plumbing  codes that are                                                               
adopted by the state that  apply to residential construction, but                                                               
there are  no mechanical or  building codes adopted by  the state                                                               
that  apply  to residential  construction.    Lots of  places  in                                                               
Alaska have a fleet of codes  that apply, but several areas don't                                                               
have  a code,  and  in  areas without  codes  some agencies  have                                                               
adopted some,  but not all  codes.  He stated  there is a  lot of                                                               
confusion and  little to  no enforcement.   He mentioned  that he                                                               
chooses to build to a code because of liability reasons.                                                                        
3:33:36 PM                                                                                                                    
REPRESENTATIVE JOSEPHSON  mentioned House  Bill 81,  sponsored by                                                               
Representative  Tilton  during   the  Twenty-Ninth  Alaska  State                                                               
Legislature,  which  allowed  any  Alaskan  to  build  an  owner-                                                               
occupied  home,  but would  not  allow  two owner-occupied  homes                                                               
within a two or  three year period.  He asked  if that bill might                                                               
be part of the solution to ensure quality.                                                                                      
MR. SPINELLI  stated his belief  that the two issues  are closely                                                               
related.  A  statewide building code and statewide  record of who                                                               
built and inspected  each structure address the same  issue.  Mr.                                                               
Spinelli offered his understanding  that the attorney general has                                                               
said the  current law  is too  vague to enforce.   House  Bill 81                                                               
attempted to clarify that law.   He believes a statewide building                                                               
code could help keep some of that from happening.                                                                               
3:35:25 PM                                                                                                                    
REPRESENTATIVE  KNOPP offered  his recollection  that there  were                                                               
previous codes  he believed everyone  "operated under."  He asked                                                               
if the  nation operates under the  International Residential Book                                                               
MR. SPINELLI  stated he  has worked under  a few  previous codes.                                                               
He detailed the  International Code Council (ICC),  which has the                                                               
international  building   codes  for   commercial,  international                                                               
mechanical, as well  as its own plumbing,  electrical, and energy                                                               
code.  Most  of what is used is the  international building code,                                                               
the international residential code,  and the international energy                                                               
code.    He  offered  his understanding  that  the  plumbing  and                                                               
electrical trades have lobbied to  stick with the preferred older                                                               
codes, the National Electrical Code  (NEC) and Universal Plumbing                                                               
Codes (UPC).  He gave his  understanding that most of the country                                                               
has  switched  to  the  international code,  but  in  some  areas                                                               
plumbing and  electrical trade  unions have  opted out  and stuck                                                               
with a different code.                                                                                                          
3:37:52 PM                                                                                                                    
CHAIR KITO stated  John Anderson from Alaska  Housing Finance can                                                               
answer questions about the codes themselves.                                                                                    
REPRESENTATIVE  KNOPP asked  if  Mr. Spinelli  is advocating  for                                                               
every trade to  adhere to codes or a consolidation  of all codes.                                                               
He asked  if the proposal  is to  ensure that everyone  builds to                                                               
the codes that are in place  today.  He asked if the organization                                                               
wants every municipality to adopt the same code.                                                                                
MR. SPINELLI  stated that  every jurisdiction  he has  dealt with                                                               
has  used the  international code,  and some  jurisdictions might                                                               
use something  else, but the  [ASHBA] supports  the International                                                               
Residential  Code.   The  International  Residential Code  covers                                                               
one-  and two-family  dwellings,  duplexes, and  townhomes.   Mr.                                                               
Spinelli  stated he  ran into  issues with  the Fire  Marshall in                                                               
Wasilla about  the area  of code  that designates  the difference                                                               
between  connected  single  family  homes  and  fourplexes.    He                                                               
emphasized the confusion  is so bad that the  state Fire Marshall                                                               
now has a radio advertisement  stating that builders must talk to                                                               
them before building a fourplex.                                                                                                
3:40:28 PM                                                                                                                    
CHAIR  KITO  asked if  the  aforementioned  volunteer website  is                                                               
still working.                                                                                                                  
MR.  SPINELLI stated  he  does  not think  the  website is  still                                                               
active; it lasted  for about a year and a  half and then "fizzled                                                               
3:41:30 PM                                                                                                                    
REPRESENTATIVE WOOL  asked if, in  areas that don't have  a code,                                                               
authority defers to  the Fire Marshall's code, and  he asked what                                                               
code the Fire Marshall uses.                                                                                                    
MR. SPINELLI responded that there is  no a code for one- and two-                                                               
family  dwellings.     However,   a  fourplex  is   considered  a                                                               
commercial building  by the local  Fire Marshall's  office, which                                                               
will  regulate  it because  of  that  classification.   In  areas                                                               
outside  the  state  there  is a  building  code  for  commercial                                                               
buildings, but not something for  one- and two family-residential                                                               
3:43:24 PM                                                                                                                    
JOHN  ANDERSON, Director,  Research &  Rural Development,  Alaska                                                               
Housing Finance Corporation (AHFC), stated  that AHFC is a public                                                               
corporation that  provides housing, finance, and  energy programs                                                               
and  pays dividends  back  to  the state.    The  mission of  the                                                               
corporation is to provide Alaskans  with access to safe, quality,                                                               
and affordable  housing.   The expertise  at AHFC  includes bonds                                                               
and  financing,  a  variety of  loan  programs,  distribution  of                                                               
federally funded  tax credits and  state dollars,  public housing                                                               
in  statewide  avenues  regarding  vouchers and  things  of  that                                                               
nature, and energy programs.                                                                                                    
MR.  ANDERSON  referenced  a  PowerPoint  presentation,  entitled                                                               
"Alaska  Building  Codes,"  which   covers  a  brief  history  of                                                               
building codes,  the AHFC's  situation regarding  building codes,                                                               
benefits of building codes for  AHFC and consumers, AHFC building                                                               
code  compliance process,  and previous  work on  building codes.                                                               
Referring  to slide  3 and  4,  he discussed  the housing  market                                                               
crash in  the late  1980s that  resulted in  approximately 25,000                                                               
foreclosures.    Close  to  one  billion  dollars  was  spent  to                                                               
retrofit homes to bring them up  to code, which lead to statutory                                                               
placement  of  standards  regarding  building  codes  and  energy                                                               
efficiency  standards  within  AHFC  under AS  18.56.300  and  AS                                                               
3:45:57 PM                                                                                                                    
MR. ANDERSON stated  AHFC currently operates under  the 2012 IRC,                                                               
which  includes: the  Alaska Housing  Building Energy  Efficiency                                                               
Standard (BEES), which  he said is the same as  Chapter 11 of the                                                               
IRC code,  and Alaska specific  amendments to the code  allow for                                                               
regional and  geographic variability.   As shown  on slide  5, he                                                               
listed  benefits  of  having building  codes,  including:  public                                                               
health  and safety,  quality,  affordability,  cost savings,  and                                                               
investment  value  protection.   He  remarked,  "We believe  that                                                               
building  right at  the beginning  ensures a  building's quality,                                                               
safety, and energy performance for years to come."                                                                              
MR.  ANDERSON  referred to  page  6  of the  presentation,  which                                                               
covers AHFC  Building Code  Compliance Process.   The  forms used                                                               
are called PUR  101 and PUR 102, and Mr.  Anderson noted there is                                                               
no lasting definition  of PUR, just a designation  for the forms.                                                               
The  PUR  101 documents  and  certifies  compliance with  minimum                                                               
energy efficiency standards  and is completed by  an energy rater                                                               
through AHFC's  modeling software.   The PUR  102 relates  to the                                                               
inspections  required   for  compliance  with   minimum  building                                                               
standards -  the structural components  - and are completed  by a                                                               
third party  certified by ICC.   Currently AHFC has  14 different                                                               
jurisdictions that  are approved for authority  that have adopted                                                               
codes equal  to or more  stringent than  AFHC's codes.   In those                                                               
areas,  AHFC  defers to  the  local  jurisdiction and  accepts  a                                                               
certificate of  occupancy (CO) from the  approved jurisdiction in                                                               
lieu of PUR 102.                                                                                                                
MR. ANDERSON  referred to slide 7  and stated that in  the past 5                                                               
years, AHFC  has done  a lot  of work  with Cold  Climate Housing                                                               
Research Center (CCHRC), Renewable  Energy Alaska Project (REAP),                                                               
and the  federal Department  of Energy.   This work  includes new                                                               
documents  regarding a  strategic plan,  a construction  code gap                                                               
analysis,  and a  state-wide code  analysis of  existing statutes                                                               
and regulations.  He summarized  his presentation as an update of                                                               
where AHFC  exists within the codes  as required by statute.   He                                                               
remarked,  "This is  only in  effect when  it pertains  to Alaska                                                               
Housing [Finance Corporation] financing,  and our programs and/or                                                               
our projects."                                                                                                                  
3:50:29 PM                                                                                                                    
CHAIR KITO asked  if AHFC requires the 2012  residential code for                                                               
anything funded  through AHFC.  He  also asked if that  creates a                                                               
disparate  system  where some  houses  are  being constructed  in                                                               
accordance  with   the  2012  code   outside  of   the  delegated                                                               
jurisdictions and some are not.                                                                                                 
MR. ANDERSON  stated that is  correct, but  he is not  certain of                                                               
the number.   There is  construction happening outside  of AHFC's                                                               
knowledge,  some of  which is  following the  process for  future                                                               
sale.  Following  the process now is a lot  easier than coming in                                                               
after and trying to meet the standard.                                                                                          
3:51:48 PM                                                                                                                    
REPRESENTATIVE BIRCH asked for Mr.  Anderson's sense of the costs                                                               
associated  with inspection  and  compliance with  the code,  and                                                               
asked if inspections are administered through AHFC.                                                                             
MR.  ANDERSON   stated  that  AHFC   does  not   administer  [the                                                               
inspections]; AHFC  has a "private  public partnership"  with the                                                               
entity  that  performs  the inspections.    That  entity  charges                                                               
market  value for  its services.   He  offered his  understanding                                                               
that the  process to  receive certification  through the  PUR 101                                                               
costs  roughly  between  $500  and  $1,000; PUR  102  or  the  CO                                                               
inspection  process  costs  roughly  $2,000-$3,000  and  involves                                                               
multiple visits throughout the building process.                                                                                
REPRESENTATIVE BIRCH  responded that  he thinks the  objective is                                                               
well intended.  He stated his concern for the cost.                                                                             
3:54:48 PM                                                                                                                    
REPRESENTATIVE JOSEPHSON  asked if this proposal  has been vetted                                                               
enough  that [legislation]  should be  prepared this  session, in                                                               
Juneau, by Legislative Legal and Research Services attorneys.                                                                   
MR. ANDERSON stated his belief that  a lot of work has been done.                                                               
Notwithstanding that, he said he is  not sure if there is a black                                                               
and  white  answer.   The  governor's  housing  summit  presented                                                               
solutions  for consideration.   He  stated  he is  unsure if  the                                                               
issue is simple enough to have a  bill drafted.  The AHFC has not                                                               
been involved  in any  discussions about what  a bill  would look                                                               
REPRESENTATIVE JOSEPHSON  stated that policy calls  must be made.                                                               
He gave an example: If someone  built something way off the grid,                                                               
then  there might  be a  different expectation  of conformity  to                                                               
standards than elsewhere.                                                                                                       
MR.  ANDERSON agreed.   He  stated that  considerations would  be                                                               
made  for remote,  extreme remote,  and recreational  properties,                                                               
and all variables need to be discussed.                                                                                         
3:57:36 PM                                                                                                                    
CHAIR  KITO asked  if there  is an  upcoming plan  to update  the                                                               
residential code adopted by AHFC from 2012.                                                                                     
MR. ANDERSON responded that AHFC  reviewed the 2015 IRC code, and                                                               
the board  elected not  to update [the  standards] until  2018 at                                                               
the earliest.                                                                                                                   
3:59:13 PM                                                                                                                    
There being no  further business before the  committee, the House                                                               
Labor  & Commerce  Standing Committee  meeting  was adjourned  at                                                               
3:59 p.m.                                                                                                                       

Document Name Date/Time Subjects
Residential Building Codes Presentation-AHFC 1.25.17.pdf HL&C 1/25/2017 3:15:00 PM