Legislature(2019 - 2020)BARNES 124
04/25/2019 08:00 AM House COMMUNITY & REGIONAL AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| HB81 | |
| HB76 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 81 | TELECONFERENCED | |
| *+ | HB 76 | TELECONFERENCED | |
| + | TELECONFERENCED |
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
earthquakes."
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
requirements."
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
properties.
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
powers.
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
code.
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
by?"
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
areas.
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
Alaska."
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
follows:
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
financing.
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
testimony.
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
seller.
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
grandfathered.
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
codes.
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
research.
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
statute."
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
above.
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
code.
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
continued:
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.
| 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 |