Legislature(1999 - 2000)
04/23/1999 03:25 PM House L&C
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 167 - REGULATION OF MOBILE HOME DEALERS
Number 0964
CHAIRMAN ROKEBERG announced the committee's next order of business
is HB 167, "An Act relating to mobile home dealers."
Number 0972
PETER TORKELSON, Researcher for Representative John Cowdery, Alaska
State Legislature, came forward to present HB 167 on behalf of the
bill sponsor, Representative Cowdery, who was also in attendance.
Mr. Torkelson stated HB 167 was designed to remedy what they
believe is an untenable situation under existing law. Used mobile
home dealers are required to be licensed and bonded. The question
is: To whose benefit? The mobile homes sold by used dealers carry
no warranty; the rule is buyer beware. Mr. Torkelson noted the
committee has been provided with copies of numerous binding
documents that the buyer must sign in order to close the purchase.
In no fewer than five places the buyer is reminded that there is no
warranty on the product he or she is purchasing. It is worth
noting not one claim has been made against a licensee or the
licensee's bond under the existing law. Indeed, it is difficult to
find any compelling reason for regulating a used mobile home dealer
who offers no warranty.
MR. TORKELSON noted they have been informed that most of the used
mobile home dealers are relatively small operators. To these
operators, the cost or perhaps unavailability of bonding can mean
the difference between staying in or going out of business. It can
mean the difference between operating a legitimate business or
operating one that merely exists on the margins. Mr. Torkelson
indicated it a worthy goal to protect small business and promote a
vibrant community of competition, which is what HB 167 does. House
Bill 167 relieves the small operator from the burden of bonding
against a claim that will never come. If the current statutes
suppress competition with burdensome bonding fees, there will
probably be someone who supports keeping the statutes in place.
Mr. Torkelson noted they do not support the current structure; they
have put HB 167 forward to correct this situation and relieve small
business. He asked for the committee's support.
Number 1066
CHAIRMAN ROKEBERG questioned the cost of the $50,000 bond.
MR. TORKELSON noted the cost would vary with the experience of the
person applying for the bond and the risk perceived by the bonding
agent. They have received indication the bond can cost up to
$1,500. Mr. Torkelson commented some people, because of a past
bankruptcy, might not even be able to attain a bond. He asked if
they were going to eliminate some people from this business simply
because they could not attain an affordable bond.
REPRESENTATIVE MURKOWSKI indicated the sponsor statement relates
that there are currently 14 licensed mobile home dealers statewide
and 10 of these would no longer need licensing if this legislation
was passed. She asked if there are only four dealers throughout
the state who sell exclusively new mobile homes.
MR. TORKELSON replied the current wording of the bill would require
those dealers selling both new and used mobile homes to maintain
licensing and bonding. It is their understanding from information
received from the Division of Occupational Licensing that of the 14
licensed mobile home dealers in the state, only 4 of those deal in
new mobile homes.
CHAIRMAN ROKEBERG confirmed there were no further questions for the
sponsor's staff. The committee proceeded to take teleconference
testimony.
Number 1177
GALE KINCAID, Owner/Operator, Triad Sales Company, Incorporated,
testified next via teleconference from Anchorage in support of HB
167. He noted his family has owned and operated Triad Sales
Company in Anchorage for the past 10 years. He asks the
committee's support of HB 167 for the following reasons. All used
mobile homes are sold as is, where is, with no warranty intended or
implied. His company has never had a problem because this clause
is spelled out in several places in its documents. He does not
believe a bond is needed when there is no liability to the dealer
or protection to the consumer. The bond does help reduce
competition because most small dealers cannot obtain one.
Currently the state does not enforce HB 436 and many dealers today
are forced to operate without a bond [HB 436, Nineteenth
Legislature, "An Act relating to purchase and sale of mobile homes
by mobile home dealers; to mobile home titles; and providing for an
effective date." Misstated on tape as "House Bill 346"]. Mr.
Kincaid reiterated his support for HB 167.
REPRESENTATIVE MURKOWSKI noted it was nice to hear Mr. Kincaid's
voice, indicating that they have known each other for a while. She
referred to Mr. Kincaid's statement that all used mobile homes are
sold without a warranty and that with Mr. Kincaid's company they
are always sold as is, where is. Representative Murkowski asked if
anyone selling used mobile homes offered a warranty, to Mr.
Kincaid's knowledge.
Number 1266
MR. KINCAID replied none he knew of. He indicated the only one
that might is Carey Homes, Incorporated; they sell new and used,
and are probably one of the best in town.
REPRESENTATIVE MURKOWSKI asked if he knew whether or not Carey
Homes included a warranty with those used mobile homes the company
sold.
MR. KINCAID answered that he believes Carey Homes usually owns and
finances the product itself, noting Representative Murkowski could
ask Mr. Carey. He commented this is a lot different than himself
or other used dealers who are selling the mobile homes for
individuals.
REPRESENTATIVE COWDERY asked Mr. Kincaid if he had ever had any
claims or problems, for example, from a buyer for a refrigerator
failing in two days or two months.
MR. KINCAID responded they have never had a claim. They state it
very well: they sell a used mobile home, they never owned it,
never lived in it, they don't guarantee it. They only guarantee
that when the buyer opens the door and moves in, all the appliances
will be working. After that there is no guarantee because "you
can't tell on used."
CHAIRMAN ROKEBERG asked if Mr. Kincaid took an earnest money or
down payment when someone buys a used mobile ["motor"] home from
his business.
Number 1355
MR. KINCAID answered in the affirmative, noting it starts the
contract: earnest money, deposit to purchase based on terms or
conditions of the purchase.
CHAIRMAN ROKEBERG noted this is similar to a real estate deal.
MR. KINCAID agreed; earnest money is received and then typing the
contracts and closing the sale proceeds.
CHAIRMAN ROKEBERG questioned how the financing is usually handled
for those kind of homes.
MR. KINCAID commented that although the banks in Anchorage say they
finance mobile homes, most don't. Ninety percent of his company's
sales are owner-financed.
CHAIRMAN ROKEBERG questioned how this works: Does Mr. Kincaid take
his goods on consignment or something?
MR. KINCAID answered they consign it like a real estate company:
They find a buyer, go to the owner of the mobile home, the owner
accepts the deal, Mr. Kincaid's company types the contracts,
follows with a bank escrow, the new buyer pays the bank. He
continued, "The bank pays you, and you, as an owner and financer."
Mr. Kincaid noted that is 98 percent of their business.
CHAIRMAN ROKEBERG said his reason for the questions is that a bond
is one of the provisions of this licensing law. Usually the bond
is a surety bond to protect against the breach of fiduciary duty.
Number 1434
MR. KINCAID noted most banks handle the money. They have an escrow
account, naturally, but it is all spelled out in their paperwork:
the money goes for down payment and it is refundable if it is not
financed. Mr. Kincaid commented he has never gone to court over
this problem in 35 years in this business. He does not know of any
other used mobile home dealers who have had the problem. They used
to be required to have a $10,000 DMV [Department of Motor Vehicles]
bond.
CHAIRMAN ROKEBERG questioned what this was about.
MR. KINCAID replied they handled titles - they had a $10,000 DMV
bond to transfer titles, et cetera. They are no longer required to
have this bond because they cannot transfer titles since DMV does
not recognize them as a dealer.
REPRESENTATIVE COWDERY confirmed that they were speaking of only
mobile homes, not motor homes.
Number 1529
GEORGE REED, Co-Owner, Lov-Bud Homes, testified next via
teleconference from Anchorage. He noted he was co-owner of his
company with his wife. They sell approximately 12 used mobile
homes a year. Mr. Reed commented, as Mr. Kincaid had said, they
sell the homes for people like a Realtor. They advertise and sell
people's homes, handle the paperwork and try to make a business out
of it.
REPRESENTATIVE MURKOWSKI repeated her previous question to Mr.
Kincaid. She asked Mr. Reed if his company has any warranties on
any of the used mobile homes they sell.
MR. REED answered in the negative. Their paperwork stipulates that
the home is sold without guarantee/warranty. There is a comment on
the contract which says that the appliances will be working at the
day of closing; they do not warranty that the appliances will work
the next day.
REPRESENTATIVE MURKOWSKI asked how long he has been in this
business.
MR. REED replied he has been selling mobile homes in Anchorage
since 1985. In response to Representative Murkowski's further
question, he confirmed they had had no claims on their business.
Number 1650
BEN MARSH, Executive Secretary, Alaska Manufactured Housing
Association (AMHA) testified next via teleconference from
Anchorage. The AMHA is an association of businesses that includes
[mobile home] dealers and mobile home courts. Mr. Marsh personally
does not own anything, does not sell mobile homes, and does not own
any mobile home courts. He works for the association and reports
the sense of the association in accordance with the instructions he
receives. At the association's April 15 [1999] meeting, it adopted
a resolution indicating, first, that the association did support
and had requested HB 436 because it was felt in 1996 that there was
no regulatory or control agency overseeing mobile home dealers.
Mr. Marsh noted there is a great deal of control and oversight for
real estate licensees but he indicated there was no such control
over mobile home dealers because mobile homes are not real estate.
Mobile homes are quite different in the sense that a loan on a
mobile home is not guaranteed with a deed of trust. Mr. Marsh
commented a chattel mortgage is used instead, although he is not
very knowledgeable about that. Mr. Marsh said it was felt at that
time [1996], and he guesses the association still feels the same
way, that there needs to be someplace a person who feels wronged in
some way can resort to. The bond would serve that purpose; it
would guarantee ethics and honesty on the part of the dealer. They
recognize, and think everyone does, that there is nothing saying
"Joe Blow can't come in off the street and make himself into a
mobile home dealer by putting an ad in the paper and he may not
know a dog-darn thing about selling mobile homes or protecting
buyers."
Number 1800
MR. MARSH said he knows these gentlemen present do; they protect
the buyers because they are experienced, but there are no
requirements for experience, education, or any knowledge of the
field. Therefore, AMHA thought it was wise to have such
protection. Mr. Marsh indicated the bond is a consumer protection
device, it is not intended to penalize dealers in any way. The
April 15 resolution says it is resolved that AMHA opposes the
adoption of HB 167. The president of the association is there and
can elaborate. Mr. Marsh indicated that concluded his testimony.
[The Alaska Manufactured Housing Association resolution adopted
April 15, 1999, read:
WHEREAS, House Bill 436 was enacted into law in 1996 and
became AS 08.67.010, and was amended by HB 33, Twentieth
Legislature, in 1998, and
WHEREAS, AS 08.67.010 sets forth the requirements for
registration of Mobile Home Dealers, including
application, bond, and fee, and
WHEREAS, AS 08.67.010 was enacted into law as a consumer
protection measure, since mobile home dealers were not
regulated nor licensed as real estate licensed agents are
required to be, and
WHEREAS, Alaska Manufactured Housing Association,
speaking for the mobile home industry, asked for and
supported HB 436 as originally adopted, and
WHEREAS, HB 167 has been introduced in the current
legislative session, and would exempt mobile home dealers
selling used units only from the requirements of AS
08.67.010 and,
WHEREAS, enactment of HB 167 would removed important
consumer protection features from the law,
NOW, THEREFORE BE IT RESOLVED, that AMHA opposes the
adoption of HB 167.]
Number 1882
REPRESENTATIVE BRICE questioned if the association had heard
complaints from people "sort of stuck with bad products" regarding
the used mobile homes.
MR. MARSH replied they have not. He doesn't think the association
is the place where someone would make such a complaint.
REPRESENTATIVE BRICE wondered if Mr. Marsh had heard of anything or
any anecdotal evidence, et cetera, from the association members.
MR. MARSH answered he has not; there has been no such report made
to him.
REPRESENTATIVE HARRIS noted the AMHA resolution says that HB 167
would remove important consumer protection features from the law
and it does not sound like the consumer has had many complaints
over these years regarding mobile homes. Representative Harris
asked Mr. Marsh to elaborate on what kind of consumer protections
would be removed.
MR. MARSH responded it may be that the consumer protections which
are built into the law have headed off complaints from buyers. He
noted that buyers of mobile home are in many cases, he thinks,
unsophisticated and the only source of their loan is the seller.
Mr. Marsh doesn't know if there has been any occasion where people
have been unhappy with their purchases or not. The purpose of HB
436 was to prevent such problems.
Number 2018
CHAIRMAN ROKEBERG noted there are apparently 14 licensees; he
questioned how many are members of AMHA.
MR. MARSH replied that four [mobile home] dealers are association
members.
MR. KINCAID commented that his company is a member as well,
bringing the total to five.
CHAIRMAN ROKEBERG questioned if they were all present and Mr. Marsh
could count them. The chairman confirmed it is Mr. Marsh's
testimony that five mobile home dealers are members of AMHA. He
questioned if those five mobile home dealers sell new homes, used
homes or a combination.
MR. MARSH answered that the latest member is (indisc.), it is
basically a used dealer. Mr. Marsh noted it is Mr. Kincaid.
MR. KINCAID commented he had just joined again.
CHAIRMAN ROKEBERG questioned if Mr. Kincaid had voted on the April
15 resolution.
MR. KINCAID indicated he had not been present for that meeting
because it had been his wife's birthday.
REPRESENTATIVE HALCRO commented to Mr. Marsh that he would read the
actual statutory language regarding the bond and the action on the
bond [AS 08.67.050 and .060]. Representative Halcro noted, "It
talks about committing fraud or making fraudulent representations
in the course of doing business as a dealer, the person may bring
an action in the appropriate court against the dealer and upon the
bond." Therefore, if a person is selling used mobile homes with no
stated or implied warranty, Representative Halcro concluded there
is really no way a person could be making fraudulent representation
or committing fraud. He asked Mr. Marsh to speak to this point.
MR. MARSH replied he could not speak to that point. Representative
Halcro is speaking of policies the dealers themselves have; Mr.
Marsh is only the association secretary and he just views the
meetings of the members, he does not get involved in the members'
actions.
Number 2190
MAC CAREY, President, Alaska Manufactured Housing Association;
President, Carey Homes, Incorporated, testified next via
teleconference from Anchorage in opposition to HB 167. Mr. Carey
indicated his main reason for opposing the legislation is that it
pretty much eliminates the whole reason why the original law came
into being. He noted Carey Homes was established in 1952; he has
been president for the past nine years. Carey Homes is a fixed
location where people can view new homes. Mr. Carey said he
probably has a very large stock of used homes at any given time -
they sell quite a few used homes. He indicated people find it easy
to locate and contact his business, and have known the business for
quite some time. Mr. Carey noted he is also somewhat associated
with Glencaren Court ["Glencaren Mobile Home Court"] and Nanook
Mobile Home Court. He indicated he has acted as the assistant
manager or property manager for Nanook Mobile Home Court for quite
some time. Mr. Carey commented these places are pretty easy for an
individual to seek out if he/she has complaints and, yes, they have
heard of quite a few complaints in the past. Since the legislation
was passed they have not heard as many complaints, simply because
it is very easy to convey to someone that there is a bond a person
can attach to.
MR. CAREY noted the complaints range from earnest money held to
unpaid taxes to misrepresentation. He does not remember the topic
of warranty being the big issue of the time in the conception of HB
436 because, as was mentioned, it is usually the new homes that
have warranties, not necessarily the pre-owned homes. The big
thing was the accountability of the sales representative. The
other side of that is to be able to obtain such a bond. Someone
has to be in pretty good standing before an insurance company would
actually issue the bond. Currently, Carey Homes pays $1,500 a year
for its bond, and it does not feel it is a big stumbling block for
someone to go into business to sell pre-owned homes. For the most
part, someone can do this straight out of his/her house with a home
phone number, a couple signs and some "yellow pages" advertising.
In some cases, a person could only have business cards. Mr. Carey
said probably the biggest concern is when people close cash
transactions in their own offices. It is true, "buyer beware," but
Mr. Carey said they believe consumer protection ought to be out
there.
Number 2427
REPRESENTATIVE HALCRO noted he would put the same question to Mr.
Carey he had put to Mr. Marsh. He commented, "The statute says
that if the dealer commits fraud or is guilty of making fraudulent
representations, the consumer can take the dealer to court and
force action upon the bond. But if you're selling a used product
that you have no warranty stated or implied, ... in my mind there'd
be no way for fraudulent representation if there's no warranty on
the thing. Can you speak to that?"
MR. CAREY answered, "Sure. You know, we can't take for granted
there won't be any warranty. There may not be a warranty according
to the purchase agreement but a used home is a used home..."
[TESTIMONY INTERRUPTED BY TAPE CHANGE]
TAPE 99-45, SIDE A
Number 0001
MR. CAREY continued, "...(indisc.) but the bigger issue is there
could be $2,000 worth of taxes owed, there could be a title that
they haven't - that they didn't produce. And all these things are
very, very important."
REPRESENTATIVE HALCRO noted Mr. Carey had mentioned he was aware of
complaints. He asked Mr. Carey to somewhat summarize those
complaints and perhaps speak to the committee about who those
complaints were directed at. Representative Halcro questioned if
it was Mr. Carey's customers complaining or someone else's.
Number 0055
MR. CAREY responded he most certainly does not "have any wings on
his back;" he would be lying if he said he had not had a customer
call him on an issue or two. Mr. Carey noted they do try to
correct anything they do have out there. He is sure anyone in
business does have a customer who calls after the fact; the
business does have to take care of these customers. However, in
response to who these customers call upon, Mr. Carey said some of
these individuals are not in practice today; some are, but not
necessarily in this room today. With the caveat that when someone
calls or comes into the office, only one side of the story is being
heard, Mr. Carey noted earnest money is a very common complaint.
He added that taxes is a very important issue, as he thinks
everyone there would agree, because the Municipality of Anchorage
["city"] doesn't even file UCC [Uniform Commercial Code] liens to
record their taxes more often then not. He indicated two women had
"mentioned just such" at the recent AMHA meeting. Mr. Carey noted
there are any number of questions on the titling. It is true that
DMV did not title for a short period of time but it does title
presently; Mr. Carey noted it is very common for him to receive
calls from people who say they do not have a title and who were
told there isn't a title. Mr. Carey indicated this was the result
of a very unknowledgeable individual handling the transaction, and
these people are stuck with a $30,000-$40,0000 home they cannot
sell because they do not have title. He commented these people
have to go through the procedure of title search, et cetera.
Number 0194
CHAIRMAN ROKEBERG mentioned the committee would be hearing from Ms.
Reardon and indicated she would be asked this next question as well
[Catherine Reardon, Director, Division of Occupational Licensing,
Department of Commerce and Economic Development]. The chairman
questioned if Mr. Carey thinks AMHA can justify the existence of
Chapter 67 [AS 08.67] and this particular licensure in "this light
of cost reduction." The chairman asked Mr. Carey if he thinks it
has done its intended purpose, noting he takes it that Mr. Carey
opposes the statute's repeal. The chairman clarified he was
referring to the legislation enacted by HB 436, and questioning if
it has done any good.
MR. CAREY indicated he is very much opposed to the repeal of this
chapter. It was a goodwill gesture on the association's part,
which really represents the largest portion of their industry, to
take it upon themselves to contact the state to improve their own
industry in the interests of consumer protection. He noted they
thought it was a good bill then and they feel it is a good bill now
[HB 436, AS 08.67].
REPRESENTATIVE COWDERY, the bill sponsor, informed Chairman
Rokeberg he had to leave to attend another meeting. He noted he
doesn't think he can add much to this and hopes the committee moves
the legislation.
CHAIRMAN ROKEBERG confirmed there were no further questions for Mr.
Carey, noting there is one more witness.
Number 0322
WILLIAM FERGUSON, Owner, Alaskan Discount Mobile Homes, testified
next via teleconference from Anchorage in support of HB 167. His
business is currently in its third year of operation in Anchorage.
They strictly sell used mobile homes and they broker them. He
indicated he feels the existing law hurts the largest group of
employment providers in the public sector, small business, while at
the same time greatly enhancing larger businesses' abilities to
control monopolized bargaining. That begs the question, "What
about the consumer?" Mr. Ferguson said that the bond is in favor
of the state. It should be apparent to voters and legislators
alike that the law in its present form is just for the benefit of
large businesses through the elimination of competition. Mr.
Ferguson said that he enjoys competition because it keeps him and
his sales staff sharp. No claims have been filed since the law was
enacted. He informed the committee he knew of two businesses which
have failed as well as those jobs the businesses provided. The law
as it exists, has not helped and should be changed, as HB 167
suggests. Mr. Ferguson emphasized that protection for the consumer
is provided in the court system. He said, "A $50,000 bond for
taxes, I mean the average tax on a mobile home, for a used one,
a[n] older one is what - $300 a year." Mr. Ferguson did not
believe a $50,000 bond was necessary or relative. As Mr. Kincaid
pointed out, all of their documents specify, "as is", "where is",
"no warranty written or implied," in more than one location.
Number 0522
CHAIRMAN ROKEBERG questioned the cost of Mr. Ferguson's bond.
MR. FERGUSON answered that the cost of his bond is $2,400 per year.
He noted that he has not been in business long enough nor is his
business large enough to receive a lower rate.
CHAIRMAN ROKEBERG also asked the cost of Mr. Kincaid's and Mr.
Reed's bonds.
MR. KINCAID stated that his bond costs $1,500 per year.
MR. REED thinks his bond cost is quoted at $2,000.
MR. KINCAID commented, "If you look at the licensees you won't find
too many people licensed and bonded."
CHAIRMAN ROKEBERG announced that concluded the teleconference
testimony and invited Ms. Reardon forward.
Number 0611
CATHERINE REARDON, Director, Division of Occupational Licensing,
Department of Commerce and Economic Development came forward. She
informed the committee the division administers this licensing
program directly; it is one of the programs without a licensing
board. The program has been in effect for only two years. Ms.
Reardon explained that this law went into effect as the result of
legislation that passed very rapidly; she had not had the
opportunity to become as familiar with some of the issues. She
commented that although it is true that the bond is in favor of the
state, her interpretation of the statute is that the bond is for
judgments against the licensee. It is one of the two things that
the bond is for, judgments entered against the applicant. Ms.
Reardon assumes that to mean that the state holds the bond, but
would give it to someone who proves that there has been a judgment
- that the court has rendered a judgement against the dealer.
Number 0720
MS. REARDON expressed concern with a program that would be left
with four licensees. The program would still operate under the
state's self-sufficiency mandate. She explained this is the reason
there is a zero fiscal note. The division's costs would not be
affected; the same amount of revenue would be raised from fewer
people. Ms. Reardon informed the committee that the cost to
operate the program during fiscal year (FY) 1999 to date, April 1,
was $500. Last year, FY 1998 , the program's first year, the cost
was $4,900. However, she noted that ordinarily there are higher
costs the first year because staff time is spent doing
applications, advertising, et cetera. Although Ms. Reardon
expected the costs to remain low - around $1,000 to $2,000 - the
exception would occur when someone appealed a license denial or
action was taken against a person. This results in legal costs
which could become a pressing issue since there would only be four
people to spread the costs among. On the other hand, 14 people to
spread the costs among is not very many either. Ms. Reardon noted
that if a new mobile home has a warranty, the owner of that mobile
home would have less need for the bond than the owner of a used
mobile home. Ms. Reardon commented that if there is not a purpose
for the bond, perhaps no one should have to obtain one; new mobile
homes are probably sold with warranties. On the other hand,
perhaps the purpose of the bond was aimed more at title and escrow
theft. In that case, Ms. Reardon did not know whether the new or
used mobile homes posed the most risk.
Number 0891
REPRESENTATIVE MURKOWSKI asked if the division managed any other
licenses with as few as four licensees.
MS. REARDON replied no. There are two programs with fewer than 20
licensees.
REPRESENTATIVE MURKOWSKI commented, then, this would be a departure
to maintain something for so few entities.
MS. REARDON replied yes, although a program without a board that
has fewer than 20 licensees is almost the same. She pointed out
that it is dependent upon whether there is legal action. She noted
that not having a license is a Class A misdemeanor.
Number 0940
REPRESENTATIVE HALCRO noted mention of the title and indicated it
is possible that is where some of the problems may occur when a
mobile home is sold. He questioned that when a dealer sells a
mobile home, the dealer would not receive payment until the bank
receives the title, if the sale is financed. He asked if there are
normal checks and balances in place there.
MS. REARDON said she was not certain that there are. If a bank is
loaning money, the bank would look out for its own interests and
would probably provide checks and balances. The testimony seems to
indicate that in the mobile home industry there are cash
transactions. She compared it more to buying an expensive used
car.
CHAIRMAN ROKEBERG clarified the testimony was that on used mobile
homes most are either self-financed or cash [transactions]. That
means they have separate escrow accounts and there is a promissory
note involved in the chattel mortgage.
REPRESENTATIVE HALCRO questioned the average cost of a used mobile
home.
MR. CAREY said that the typical mobile home in Anchorage, a 1976-
78 model, would sell for about an average of $22,000. Of course
there are mobile homes at the lower and higher ends of the scale.
In response to the chairman's question, Mr. Carey said an average
mobile home is roughly 900 square feet.
Number 1065
MR. REARDON commented she is unsure of the committee's intent. If
HB 167 is not going to move out of the committee that day, the
other two pages of statute could be reviewed to determine that they
cover what was intended. Ms. Reardon indicated that perhaps an
attorney could determine if the bond is protecting what it is
intended to protect, if there is a concern regarding whether the
bond is really there to cover items like escrow and title problems.
She further indicated it might be fine, since the division has
never had an action. Ms. Reardon explained the division's job with
the existing law is not to take away a license from anyone who
might be operating unfairly. The division's job is simply to hold
the bond and give it over once a court judgment has been provided.
Therefore, there has not been much exploration under what
conditions someone might lose in court and the bond would have to
be given over.
CHAIRMAN ROKEBERG asked how many mobile home dealers there are in
Alaska.
MS. REARDON answered that she only knows how many mobile home
dealers are licensed, the 13 or 14 which have been discussed here.
Noting the division had done newspaper advertising, she strongly
suspects there are people out there who are not licensed.
Number 1142
CHAIRMAN ROKEBERG commented that testimony on HB 33 [Twentieth
Legislature] when they received the exemption from this indicated
there are many who are not registered. He asked how many people
had licenses in the first year.
MS. REARDON said that she believes there were under five - two or
three.
CHAIRMAN ROKEBERG commented the division spent $4,900 and had two
or three licensees in 1998. He asked if that was correct.
MS. REARDON said, "I believe, at the end of '98, that sounds likely
to me; [a] $500 license fee."
CHAIRMAN ROKEBERG indicated he appreciated Ms. Reardon noting how
little was spent, but the division had not done anything.
MS. REARDON pointed out that this fiscal year would be the year in
which 10 more are licensed by only spending $500.
Number 1200
REPRESENTATIVE CISSNA asked if Ms. Reardon saw value to licensing
the mobile home dealers.
MS. REARDON indicated her initial orientation had been in favor of
eliminating the licensing program. Although after hearing the
testimony, she is no longer sure. She said that she always wishes
that there are consumer groups to be at the table to testify as to
whether the protection is desired or necessary, but she knows that
is not really practical. Ms. Reardon concluded, "But I kind of
feel like either don't have any licensing or have licensing for all
the mobile home dealers."
CHAIRMAN ROKEBERG commented he thinks that is really the primary
issue before the committee. He believes that passage of HB 167
would destroy the entire license; then the issue becomes whether
the program should even exist. The chairman indicated he had had
some question about HB 436, the existing law, when it originally
passed. He noted he is concerned, particularly because of past
testimony that very few people had signed up, although it sounds
like more are. The chairman asked if there have been any
complaints filed or claims against the bonds.
MS. REARDON stated that they have not received any judgments to pay
the bond on.
CHAIRMAN ROKEBERG questioned that there is no sunset provision on
this chapter.
MS. REARDON said that is correct because only licensing board
programs have sunsets. The programs the division manages are never
examined.
CHAIRMAN ROKEBERG informed the teleconference participants, the
committee and the committee, that he would give everyone the
weekend to justify the existence of the entire chapter. House Bill
167, if passed, would destroy the licensing. The chairman
indicated the teleconference participants should work together to
assist the committee on this issue. If this issue cannot be
settled by the committee's next meeting on Monday afternoon [April
26], the sponsor would be asked to modify the bill and repeal the
entire chapter because that has the same effect. Chairman Rokeberg
questioned if the teleconference participants understood.
MR. MARSH answered that they understand very well.
CHAIRMAN ROKEBERG indicated he would appreciate any other comments
from the committee members and hopes the sponsor's representative
understands what the chairman is attempting to do here.
MR. TORKELSON indicated he believes the sponsor would be in
agreement with "shaving the whole head." [HB 167 WAS HELD]
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