Legislature(2005 - 2006)BELTZ 211
04/07/2005 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB131 | |
| SB108 | |
| SB145 | |
| HB81 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 145 | TELECONFERENCED | |
| + | HB 81 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 108 | TELECONFERENCED | |
| += | SB 131 | TELECONFERENCED | |
| = | SB 139 | ||
CSHB 81(L&C)-CONTRACTOR LICENSE ENFORCEMENT
CHAIR CON BUNDE announced CSHB 81(L&C) to be up for
consideration.
2:41:18 PM
REPRESENTATIVE TOM ANDERSON, sponsor, explained that HB 81 is
intended to help enforce Alaska's current laws that were changed
last session regarding construction contractor licensing and
registration. Section 2 gives the Department of Law (DOL) and
the Division of Occupational Licensing the authority to issue
administrative fines for violations. Currently, violations are
prosecuted by the district attorney through the court system and
many times cases never go to trial because they are prioritized
below other cases like rape and murder. His intent with Section
2 was to streamline enforcement efforts and to help make
government more efficient by not clogging up the judicial system
with cases that are relatively minor compared to other cases it
has to handle.
The bill doesn't change any of the laws affecting handymen who
can work on construction projects less than $5,000 and allows
them work on projects worth more than $5,000 with proper
licensure. It also allows owner-builders to construct a single-
family duplex, triplex, four-plex or commercial building every
two years. Current law states one year. This change was in
response to testimony from a private home inspector who observed
people abusing the current exemption by building units every
year for each member of their family and then selling the units
without being a general contractor.
REPRESENTATIVE ANDERSON related that he has heard complaints
from several individuals about the two-year occupancy
requirements in the owner-builder exemption and he thought the
committee could make an amendment in that regard. He said this
bill is strongly supported by several building associations.
2:43:28 PM
CHAIR BUNDE asked if his experience is that a handyman very
quickly reaches the $5,000 limit.
REPRESENTATIVE ANDERSON replied that he didn't set that limit;
it is in current statute and not enforced.
2:45:11 PM
SENATOR SEEKINS asked if the $5,000 limit was for labor only or
labor and materials.
REPRESENTATIVE ANDERSON replied that he didn't know, but he
thought it was an individual's portion of the contract.
SENATOR SEEKINS asked if he has a $20,000 contract and five
people did $4,000 worth, would they be exempt from the
limitation or is it the job itself.
REPRESENTATIVE ANDERSON answered by reading:
This exemption does not apply when the work is divided
into contracts of amounts less than $5,000 for the
purpose of evasion of the law. For work priced at
$2,500 or more, some public liability and property
damage insurance is required.
2:46:37 PM
SENATOR SEEKINS said he thought that section was confusing and
asked how a person would be assessed a penalty and who would do
it. He said, "I have a natural aversion to having hearing
officers who are employees of the department that's bringing the
action."
REPRESENTATIVE ANDERSON responded that was a fair concern and he
added that the Administrative Regulation Review Committee had
considered Senator Therriault's central panel in this
legislative cycle and explained:
I think, though, that if we were to do that, it
obviously adds a fiscal impact to the legislation and
we've been really proud that there hasn't been such. I
think Greg can add to that, but that's one of the
rationales why we didn't just throw it in that panel.
2:48:00 PM
GREY MITCHELL, Director, Division of Labor Standards and Safety,
Department of Labor and Workforce Development (DOLWD), agreed
with trying to avoid a fiscal note. If the hearings go to the
Office of Administrative Hearings, it would need a fiscal note.
His division already has hearing officers who are trained in
fair hearing procedures. They work in a different section from
enforcement staff, so there is some separation. He would not let
a hearing officer who has any previous knowledge of a case hear
that particular case.
2:49:15 PM
SENATOR SEEKINS explained that he was concerned that all those
people were getting their paychecks from the same department.
CHAIR BUNDE said he had a list of people who wanted to testify
on this issue and if their concerns had been met with previous
testimony, he asked them to indicate their agreement.
2:51:21 PM
MIKE PRAX, North Pole contractor representing himself, said he
opposed HB 81. The sponsor claims that it closes a loophole in
current law and that loop is "a bunch of onerous state
regulations that are creating a noose that is strangling out
society." He pointed out that the department already has the
power to issue a citation on probable cause - a fairly low
standard.
This bill gives them the authority to levy a $1,000
fine on a citizen based on probable cause and then
leaves the citizen to face a complicated
administrative procedure. And if he doesn't fill in an
application and write down his reasons for the
application for review ahead of time in a timely
fashion, he is even denied judicial review of the
fine.
He urged the committee to hold the bill.
PATRICK DALTON, Delta Junction, opposed HB 81 that puts
enforcement teeth into a poor law. Many homeowners have been
victims of slothful craftsmanship, but the other side of the
equation is that a lot of good independent craftsmen can't
afford expensive licensing and bonding. They find it hard to
survive during the long winter slump and when spring arrives and
the building season starts, they face a grim choice - ignore the
regulations and work without a contractor's license or simply
starve. He also pointed out that without these people working,
there would be an acute shortage of small homebuilders.
2:56:09 PM
TERRY DUSZYNSKI, Fairbanks building inspector, supported HB 81.
He works with a lot of owner-builders and thought they should be
able to continue to build small homes. He has also dealt with a
number of people who are building homes for sale who really
don't know what they are doing and need the education that
licensure provides.
2:57:52 PM
MARY GIRVAN, Delta Junction, wanted to know what the original
legislation is that established the $5,000 limit.
CHAIR BUNDE replied that it was established last year in HB 542.
2:58:46 PM
NANCY DOBBERPUHL, Fairbanks, said that the people from Fairbanks
and Delta Junction have expressed a lot of her concerns. She
spoke for herself, her children, her grandchildren and any
Alaskans who are tired of senseless regulations. She should be
able to hire who she wants and pay them a fair wage for work she
will be able to see if it's good or not. She thought HB 81 was a
bad bill.
3:01:01 PM
JIM CALLAHAN, Fairbanks, said he is a "handyman" and just
realized the upper limit was lowered from $10,000 to $5,000 last
year. He also wants honest business practices and consumer
protection, but at the end of the day the difference between
$5,000 and $10,000 is that contractors will get more of the pie.
He related a story of a licensed person who did shoddy work to
support his position that licensing doesn't necessarily mean a
person does good work.
3:03:28 PM
NELS CHURCH waived his time.
3:04:01 PM
RANDY DOLL, Fairbanks, supported HB 81 and wanted to see even
steeper fines.
3:04:26 PM
SUE ELLISON, ABC Incorporated, Fairbanks, supported HB 81. ABC
is a general contractor licensed for residential endorsement.
She said HB 81 removed a cumbersome and time-consuming process
out of criminal into civil court. She recommended removing the
occupancy limitation because it puts undue stress on some people
and doesn't accomplish anything.
3:05:33 PM
JEFF ALLING, North Pole, said he owns Alcan Builders and does
heavy commercial construction and that he is coming at this from
a whole different angle. It's been his dream to retire in seven
or nine years and shortly after that he wants to perhaps build
one rental unit per year or build a house for one of his kids.
It could be argued under Section 5 (12) that his child is the
owner-builder, but that wouldn't be the case. It could also be
construed that he is acting as a contractor, which he wouldn't
be if he were retired. Also, he would be allowed to build only
one rental unit every two years and he would have to promise to
occupy it or show undue hardship for not occupying it. He came
to Alaska from Connecticut for independence and freedom and he
would like to be able to exercise his ambition when he retires.
3:07:34 PM
CHAIR BUNDE said that the sponsor had indicated interest in
amending that issue and would be back with a CS at a future
date.
3:08:05 PM
ROGER BURGGRAFF, Fairbanks, said the public was unaware of this
bill and he opposed it anyhow as being obnoxious, un-American
and un-Alaskan. It would put the handyman out of business. He
suggested raising the limit requiring a license back to $10,000
or more.
3:11:12 PM
TODD LARKIN, North Pole, said HB 81 would hurt consumers if it
were not amended. He charges $30 per hour for his labor and
works for two categories of people - contractors and every other
kind of customer from homeowners to real estate agents. When he
is serving the homeowners and real estate agents, his time is
broken up into service visits, which means he cannot get eight
billable hours without working 10 or 12 hours. When he works for
contractors on a temporary basis, he is able to string together
40 hours per week or more for one to three weeks at a time
without interruption. This, in effect, subsidizes his rates for
the other customers and allows him to keep rates at the current
level. If the committee doesn't correct HB 81 he will have to
raise his rates to achieve the same income. He noted that he had
offered the committee a conceptual amendment in writing.
3:14:05 PM
SETH CHURCH, Fairbanks, said HB 81 needed an amendment to the
occupancy provision in Section 12. If he currently had a house
under construction, he couldn't sell it without a notice of
completion or undue hardship. It lets the government decide if
he can sell his house.
3:16:32 PM
MIKE MUSICK, Fairbanks, said he is a licensed and bonded
homebuilder and supported HB 81.
3:19:01 PM
JACK HEBERT, Fairbanks, said he is a homebuilder and supported
HB 81. He hated to see the old days go as he has always been a
small builder, but he didn't feel that this bill changes that
much. He supported it because it sends out a message that they
all have to start playing by the same rules.
3:21:24 PM
LISA PEGER, Fairbanks, said she is an apartment owner and that
rentals always need repairs and this would actually drive
handymen away. No one will take small jobs and it would end up
hurting the small business people.
3:22:41 PM
RANDY GRIFFIN, Fairbanks, opposed HB 81, especially the
occupancy requirement in Section 12. He has lived in his house
for years, but it isn't finished and he wondered if he would be
able to sell it. He also suggested that maybe handymen could
hand their customer a notice saying they aren't bonded so the
customer knows that upfront.
3:24:59 PM
ALAN WILSON, Co-chair, Legislative Committee, Alaska State
Homebuilding Association, noted that this bill was introduced at
his request. Basically, he thought most issues would be taken
care of with the amendment that was going to be offered. It
makes it easier for enforcement to cite individuals similar to
parking or speeding tickets. It would simplify what is going on
now and will level the playing field in the construction
industry. He informed the committee that California has a $500
limit; Oregon and Washington both require all individuals to be
registered.
3:28:21 PM
CHAIR BUNDE thanked everyone for being courteous and said he
would hold the bill for further work. He then adjourned the
meeting at 3:28:53 PM.
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