Legislature(2017 - 2018)BARNES 124
03/26/2018 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SB165 | |
| SB45 | |
| SB4 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 165 | TELECONFERENCED | |
| += | HB 379 | TELECONFERENCED | |
| += | SB 4 | TELECONFERENCED | |
| += | HB 374 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | SB 45 | TELECONFERENCED | |
SB 45-EXEMPTION: LICENSING OF CONTRACTORS
3:34:00 PM
CHAIR KITO announced that the next order of business would be
SENATE BILL NO. 45, "An Act relating to an exemption from the
regulation of construction contractors."
3:34:31 PM
SENATOR MIA COSTELLO, Alaska State Legislature, introduced SB 45
as prime sponsor. She paraphrased the sponsor statement
[included in committee packet], which reads as follows [original
punctuation provided]:
Senate Bill 45 provides better protections for buyers
of homes and other buildings by requiring unlicensed
owner-builders to disclose they are selling a newly
built home as an unlicensed builder.
The intent of the legislation, as stated in Section 1,
is to continue to allow individuals to enjoy the
freedom and ability to construct and sell their own
homes.
Following the housing market crash of the 1980's, the
Alaska Legislature raised professional standards for
homebuilders, requiring residential contractors to get
a state license, a residential endorsement, bonding,
and insurance. The Alaska Housing Finance Corporation
was specifically directed by statute to establish
energy efficiency initiatives such as energy ratings
and the Alaska Craftsman Home Program. These efforts
helped Alaska become a place where the home
construction industry provides high quality and
affordable energy-efficient options for buyers.
Construction contractor law has been on the books
since 1968. The current owner-builder exemption, AS
08.18.161(12), was first enacted that year to provide
an exemption that allows individuals to build one home
or commercial building every two years without a
contractor license.
Currently state law provides an exemption that allows
individuals to build structures without a contractor
license. Alaska law AS 08.18.161 allows anyone to
build one structure every two years without a license.
While the exemption was intended to allow Alaskans to
build their own home, the industry is seeing a growing
number of individuals using the exemption to
operate construction businesses.
SB 45 requires anyone who builds and sells a home
without a contractor license within two years of
starting construction to disclose that they do not
have a license. The measure does not prohibit owner-
builder construction. It does not require state
approval for owner-builder construction. Owners have
the right to build their own homes and this bill does
not change that. It requires simple disclosure that
helps home buyers.
3:35:50 PM
NATASHA MCCLANAHAN, Staff, Senator Mia Costello, Alaska State
Legislature, presented the sectional analysis of SB 45 on behalf
of Senator Costello, prime sponsor. She paraphrased the
sectional analysis [included in committee packet], which reads
as follows [original punctuation provided]:
Section 1. Adds legislative intent language to
uncodified law to help assure that changes made by
Section 3 of the bill be construed broadly to allow
individuals the freedom and ability to construct and
sell their own homes based on their own discretion.
Page 1, lines 3-7.
Section 2. Amends AS 08.18.116 to require the
Department of Commerce, Community, and Economic
Development or the Department of Labor and Workforce
Development to investigate and take appropriate action
if an owner-builder tries to sell a structure while
not licensed as a contractor during the time of
constructing the building or two years after
construction begins. Page 1, lines 8-14.
Section 3. Amends AS 08.18.161 to:
• Exempt from construction contractor requirements
those who work on an existing structure on their
own property or their own existing residence.
• Require an owner-builder to notify the Alaska
Department of Commerce, Community, and Economic
Development on a form provided by the agency when
advertising or selling a home built if an owner-
builder tries to sell it while not licensed as a
contractor during the time of constructing the
building or two years after construction begins.
Section 4. Adds applicability language to uncodified
law that would provide clarity on when construction
begins under Section 3: either when the actual
construction starts or when an owner enters into an
agreement with someone to provide labor, act as a
subcontractor, or provide materials for the
construction.
3:37:31 PM
REPRESENTATIVE JOSEPHSON asked the presenters to compare the
proposed bill to that brought forward by Representative Cathy
Tilton in a previous legislature [House Bill 81].
SENATOR COSTELLO answered that the bill to which he referred was
addressing a similar issue.
REPRESENTATIVE JOSEPHSON asked what the remedy for abuse is.
MS. MCCLANAHAN answered it's a notice issue. She deferred to the
department.
REPRESENTATIVE KNOPP commented that SB 45 is simply a consumer
protection bill.
CHAIR KITO shared his understanding that the proposed bill would
not preclude the ability of a city to regulate code enforcement
within its jurisdiction. He said he thinks there are either six
or nine communities in Alaska that have a jurisdiction for
building codes. He surmised the provision is to try and put
some protections in place for those people who don't have a
municipal building code authority in their community.
SENATOR COSTELLO said that was her understanding but deferred to
the division.
3:42:07 PM
JANEY MCCULLOUGH, Director, Division of Corporations, Business
and Professional Licensing (DCBPL), Department of Commerce,
Community & Economic Development (DCCED), answered questions in
the hearing on SB 45. She stated the provision would not have
any effect on local municipalities' ability to enforce building
codes. She underlined it is a consumer protection bill. She
said it would be a requirement to notify the department and
would be another tool in the toolbox for buyers.
3:43:06 PM
REPRESENTATIVE BIRCH asked whether the requirement would be to
disclose within two years of the beginning of construction or
two years from the end.
SENATOR COSTELLO answered the starting point is point in which
the ground is broken. If the home is then completed after two
years and the owner decides to sell it, then notification is
required.
REPRESENTATIVE BIRCH said he thinks there is a federal tax deal
for an owner who lives in the home for a certain amount of time.
SENATOR COSTELLO stated she is not an expert in tax law and
would defer to someone else for an answer.
3:45:00 PM
ALAN WILSON, Owner, Alaska Renovators, testified in support of
SB 45. He said he is a member of Alaska State Homebuilders
Association (ASHA). He said the proposed legislation was an
effort to ensure that homebuyers had some information about who
built a home. He identified that there are no penalties
provided for in the bill.
3:46:25 PM
JIM DUNLAP, President, Alaska State Homebuilding Association
(ASHA), testified in support of SB 45. He stated his
organization would continue to work on community building codes.
He said SB 45 attempts to protect consumers. He underlined the
initiative does not involve penalties.
3:48:51 PM
CHAIR KITO opened public testimony on SB 45.
3:49:04 PM
RICHARD CARR testified in support of SB 45. He spoke to his
experience as a remodeler and shared an example of poor
workmanship he had observed. He said he believes SB 45 would
help provide critical information for consumers when they are
seeking a home.
REPRESENTATIVE SULLIVAN-LEONARD asked Mr. Carr to give testimony
on Mat-Su Homebuilder's position on the proposed bill.
MR. CARR answered the organization is "100 percent in favor of
SB 45." He said they think it would improve the Valley a great
deal.
REPRESENTATIVE SULLIVAN-LEONARD asked how many home builders are
in Mat-Su Homebuilders Association.
MR. CARR answered there are 145 members.
3:52:47 PM
REPRESENTATIVE JOSEPHSON asked whether Mr. Carr is currently
required to submit paperwork to the department stating he is
constructing a home for sale.
MR. CARR answered not in the Mat-Su Borough.
REPRESENTATIVE JOSEPHSON asked who in government knows when he
is building a home.
MR. CARR answered no one that he knows of. He added that the
Alaska Housing Finance Corporation (AHFC) would know.
3:53:50 PM
PATRICK DALTON testified in opposition of SB 45. He said a few
years ago there was a similar bill which exempted builders in
the rural unorganized boroughs. He quoted from a study by the
Cato Institute from an article entitled, "Zoning, Land-Use
Planning, and Housing Affordability,Policy Analysis No. 823,
October 2017, by Vanessa Brown Calder.
3:57:50 PM
REPRESENTATIVE JOSEPHSON asked why the provision would be such a
burden. He pointed out the requirement involves a form.
MR. DALTON answered that the article addresses that regulations
in any form create paperwork which creates uncertainty in the
building market. He said businesses always pass the cost on the
consumer. He added uncertainty is created over whether the
application will be accepted.
REPRESENTATIVE JOSEPHSON asked why the legislature should not
exercise caution on behalf of consumers in the unorganized
boroughs.
MR. DALTON asked whether the legislature was protecting the
homebuilder from increased prices. He said that houses in his
area are cheaper than houses in Fairbanks, Alaska.
4:01:51 PM
REPRESENTATIVE BIRCH asked whether Mr. Dalton is aware of any
outside financing in Delta Junction.
MR. DALTON answered he is a specialty contractor and can't
answer questions on financing. He said people move to his area
of the state to be free from the regulations in organized
boroughs. He said they want fewer regulations.
REPRESENTATIVE BIRCH asked Mr. Dalton whether he has a business
license.
MR. DALTON answered in the affirmative.
REPRESENTATIVE BIRCH said he did not see the proposed bill as
more complicated than acquiring a business license.
MR. DALTON asked how the legislature is protecting the rights of
a homebuilder.
REPRESENTATIVE BIRCH shared his understanding that there is no
prohibition on building one's own home.
MR. DALTON shared his understanding that the proposed bill would
require paperwork. He said he thinks it is an infringement on
private property rights.
4:08:37 PM
REPRESENTATIVE KNOPP commented that the proposed bill has
nothing to do with planning or zoning. He added that it does
not require seeking permission. He said the proposed bill would
require that the homeowner notify the prospective buyer that the
house was not built by a licensed contractor. He noted that a
young builder may not know all the regulations. He opined it
doesn't limit rights in any shape or form. He stated where he
lives the borough has not adopted codes but the cities within
the borough have.
4:11:15 PM
CHAIR KITO held over SB 45.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB004 Sectional Analysis ver. N 3.19.2018.pdf |
HL&C 3/26/2018 3:15:00 PM |
SB 4 |
| SB004 ver N.pdf |
HL&C 3/26/2018 3:15:00 PM |
SB 4 |
| SB004 Explanation of Changes ver. U.A to ver. N 3.19.2018.pdf |
HL&C 3/26/2018 3:15:00 PM |
SB 4 |
| SB004 Legal Memo Tattooing.pdf |
HL&C 3/26/2018 3:15:00 PM |
SB 4 |
| SB045 Sectional Analysis.pdf |
HL&C 3/26/2018 3:15:00 PM |
SB 45 |
| SB045 Sponsor Statement.pdf |
HL&C 3/26/2018 3:15:00 PM |
SB 45 |
| SB045 Support Letters 3.22.18.pdf |
HL&C 3/26/2018 3:15:00 PM |
SB 45 |
| SB045 Ver. O.PDF |
HL&C 3/26/2018 3:15:00 PM |
SB 45 |
| SB45 Opposition Letter 3.23.18.pdf |
HL&C 3/26/2018 3:15:00 PM |
SB 45 |
| SB045 Fiscal Note DCCED-CBPL 2.3.17.pdf |
HL&C 3/26/2018 3:15:00 PM |
SB 45 |
| SB045 Fiscal Note DCCED-CBPL 3.15.18.pdf |
HL&C 3/26/2018 3:15:00 PM |
SB 45 |
| SB004 ver N.pdf |
HL&C 3/26/2018 3:15:00 PM |
SB 4 |