04/08/2015 01:30 PM House FINANCE

HOUSE BILL NO. 81                                                                                                             
                                                                                                                                
     "An Act relating to an exemption from the regulation                                                                       
     of construction contractors."                                                                                              
                                                                                                                                
3:14:10 PM                                                                                                                    
                                                                                                                                
Co-Chair  Thompson  relayed  that   the  committee  had  not                                                                    
previously  heard the  legislation;  therefore,  he did  not                                                                    
intend to report the bill from committee that day.                                                                              
                                                                                                                                
REPRESENTATIVE   CATHY  TILTON,   SPONSOR,   spoke  to   the                                                                    
legislation. She shared that she  had introduced the bill at                                                                    
the  request   of  the   Mat-Su  Homebuilders,   the  Alaska                                                                    
Homebuilders,  and the  Alaska Board  of Realtors.  She read                                                                    
from a prepared statement:                                                                                                      
                                                                                                                                
     After  speaking with  some  contractors, realtors,  and                                                                    
     certain  individuals throughout  our  state, it  became                                                                    
     clear that there are individuals  who are exploiting an                                                                    
     unintended   loophole   in   the   existing   statutory                                                                    
     language.  Thus creating  an uneven  playing field  for                                                                    
     licensed  professionals  who  abide   by  the  law  and                                                                    
     potentially    exposing    unwitting   homebuyers    to                                                                    
     substandard construction.                                                                                                  
                                                                                                                                
     In short,  HB 81 is  really a consumer  protection bill                                                                    
     and is not  a bill to restrict fair trade.  In order to                                                                    
     better understand  HB 81 it is  important to understand                                                                    
     what it is not and what it  does not do. HB 81 does not                                                                    
     prevent Alaskans  from building  their own home,  HB 81                                                                    
     does  not prevent  Alaskans from  ever  selling a  home                                                                    
     that they've  built, and HB  81 does not propose  a new                                                                    
     licensure. It is  not, nor was it ever my  intent to do                                                                    
     any of those things.                                                                                                       
                                                                                                                                
     Under  current   state  law  the   licensed  contractor                                                                    
     exemption  opens up  a  situation  where an  unlicensed                                                                    
     contractor   can   operate   a   substantial   business                                                                    
     enterprise  while  avoiding   licensure,  bonding,  and                                                                    
     insurance  requirements.  HB  81 provides  a  means  of                                                                    
     notifying  the  department  if an  owner/builder  sells                                                                    
     their  home  before  a   two-year  period  in  existing                                                                    
     statute. The department is not  required to take action                                                                    
     on the  notification, but simply  is provided  with the                                                                    
     ability to see if homes  were being built repeatedly by                                                                    
     someone without a licensure.                                                                                               
                                                                                                                                
     The language before  you is a result of  a long process                                                                    
     of  working  with  the Homebuilders'  Association,  the                                                                    
     Department  of  Labor  and Workforce  Development,  and                                                                    
     individual Alaskans that  ally concerns of subjectivity                                                                    
     on the part of the  department, while making violations                                                                    
     to the exemption enforceable.                                                                                              
                                                                                                                                
     I  am  certain that  my  fellow  committee members  can                                                                    
     remember when they purchased their  first home and what                                                                    
     a  financial risk  that  is. It's  one  of the  biggest                                                                    
     financial obligations that  we make in our  life. HB 81                                                                    
     helps  us ensure  those homebuyers  that they  have the                                                                    
     expectations of a  uniform standard of professionalism.                                                                    
     HB   81  simply   seeks  to   reasonably  include   all                                                                    
     individuals engaged  in home construction as  a regular                                                                    
     course of business in the existing residential                                                                             
     contractor licensure.                                                                                                      
                                                                                                                                
3:17:40 PM                                                                                                                    
                                                                                                                                
Representative Gattis  communicated that  she had  signed on                                                                    
as a  co-sponsor during the  bill's early stages.  She noted                                                                    
that there were several things  she had questions about. She                                                                    
shared that  she had been  raised in  a house that  had been                                                                    
built  by  her  father   out-of-pocket.  She  spoke  to  her                                                                    
mother's complaint over  the years that the  house had never                                                                    
been completed. She discussed that  there were many Alaskans                                                                    
who built their own  homes out-of-pocket and sometimes never                                                                    
completed the  project. She  referenced the  two-year period                                                                    
in the bill.  She provided an example of a  family living in                                                                    
and building their  home. She wondered what  happened in the                                                                    
third year  if the  home was  still under  construction. She                                                                    
reasoned  that   some  homes  in   Alaska  had   been  under                                                                    
construction  for 10  to  15 years.  She  believed the  bill                                                                    
still had some struggles related  to the timeline (i.e. when                                                                    
construction   started,   stopped,    etcetera).   She   was                                                                    
supportive  of  the bill's  purpose,  but  wondered at  what                                                                    
point the house became "completed."                                                                                             
                                                                                                                                
HEATH HILYARD, STAFF,  REPRESENTATIVE CATHY TILTON, answered                                                                    
that  language had  been included  in the  most recent  bill                                                                    
version  (Work Draft  29-LS0346\E,  Strasbaugh, 3/19/15)  to                                                                    
ensure  that  Alaskans  were  not  unfairly  prevented  from                                                                    
selling their  home. He addressed questions  related to when                                                                    
a home was determined to be complete.                                                                                           
                                                                                                                                
3:20:24 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
3:22:29 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Thompson  set the  bill aside  [to obtain  the most                                                                    
recent CS].                                                                                                                     
                                                                                                                                
HB  81  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.