02/28/2017 01:30 PM Senate LABOR & COMMERCE

           SB  45-EXEMPTION: LICENSING OF CONTRACTORS                                                                       
                                                                                                                                
1:35:01 PM                                                                                                                    
CHAIR COSTELLO announced  the consideration of SB  45. She stated                                                               
that this is the second hearing and  the intent is to go over the                                                               
answers  to  questions  previously asked,  take  Senator  Hughes'                                                               
question, and move the bill from committee.                                                                                     
                                                                                                                                
1:35:29 PM                                                                                                                    
JULIANA  MELIN,   Staff,  Senate  Labor  and   Commerce  Standing                                                               
Committee,  directed attention  to the  handout that  responds to                                                               
Senator Steven's  request for data  on the number  of contractors                                                               
throughout  Alaska. She  noted that  Senator  Hughes also  wanted                                                               
clarification  about the  implication of  the bill  for Alaskans.                                                               
She deferred  to Ms. Hovenden  to go  over the answers  that were                                                               
asked during the previous hearing.                                                                                              
                                                                                                                                
1:36:37 PM                                                                                                                    
JANEY HOVENDEN, Director, Division  of Corporations, Business and                                                               
Professional  Licensing, Department  of  Commerce, Community  and                                                               
Economic  Development   (DCCED),  Juneau,  Alaska   reviewed  her                                                               
written  response to  the questions  that were  posed during  the                                                               
previous hearing:                                                                                                               
                                                                                                                                
      1. What is the penalty for unlicensed practice by                                                                         
        contractors?                                                                                                            
                                                                                                                                
          AS 08.18.125 allows for  an administrative fine of                                                                    
          $1,000 for  the first  offense and $1,500  for the                                                                    
          second or subsequent offense.                                                                                         
                                                                                                                                
      2. What is the cost to obtain a contractor's license?                                                                     
                                                                                                                                
          Application  fee   for  initial   registration  or                                                                    
          residential endorsement:      $65                                                                                     
          New license         $235                                                                                              
          Renewal license     $235                                                                                              
                                                                                                                                
       3. Is it true that in 2013 almost half of the new                                                                        
        construction home sales in the Mat-Su area were                                                                         
        from unlicensed construction companies as claimed                                                                       
        by the Mat-Su Home Builders Association?                                                                                
                                                                                                                                
          The division  does not track  the number  of homes                                                                    
          built  or  sold.  The   Department  of  Labor  and                                                                    
          Workforce    Development   reported    that   they                                                                    
          conducted 315  inspections to what appeared  to be                                                                    
          new homes in  Mat-Su in calendar year  2013. On 75                                                                    
          of those new homes,  they were unable to determine                                                                    
          who the  builder was. Of the  remaining 240 homes,                                                                    
          they  issued  8  Cease  and Desist  Orders  and  7                                                                    
          Administrative  Fines for  failure to  have proper                                                                    
          licensure. Of those  licensing actions, there were                                                                    
          only  three  instances  where  the  defendant  was                                                                    
          acting   as   an   unlicensed   homebuilder,   the                                                                    
         remaining were for unlicensed sub-contractors.                                                                         
                                                                                                                                
1:38:41 PM                                                                                                                    
SENATOR  HUGHES asked  if a  homebuilder would  be cited  if they                                                               
failed to file  the required form even though  they were honestly                                                               
unaware  of   SB  45  and   the  obligation  it  imposes   on  an                                                               
owner/builder who has to sell  his house within the timeframe set                                                               
out in the bill.                                                                                                                
                                                                                                                                
MS. HOVENDEN clarified that there  is no penalty provision in the                                                               
bill  for not  filling  out and  sending in  the  form. The  only                                                               
potential  penalty would  be trying  to circumvent  the licensure                                                               
requirements. That would fall under unlicensed practice rules.                                                                  
                                                                                                                                
SENATOR HUGHES  summarized that  the only  time someone  would be                                                               
subject  to  a  citation  is  if  they  were  also  found  to  be                                                               
conducting a business without a license.                                                                                        
                                                                                                                                
MS. HOVENDEN agreed with the recap.                                                                                             
                                                                                                                                
CHAIR COSTELLO  thanked Senator Hughes for  bringing that forward                                                               
and making it part of the public record.                                                                                        
                                                                                                                                
1:43:17 PM                                                                                                                    
SENATOR STEVENS  asked if this is  a state licensure issue  or if                                                               
local communities handle this through building codes.                                                                           
                                                                                                                                
MS.  HOVENDEN replied  every municipality  has  its own  building                                                               
codes. She  didn't know  about municipal  licensure requirements,                                                               
but  it is  a statewide  requirement  to be  licensed to  conduct                                                               
business.                                                                                                                       
                                                                                                                                
1:44:05 PM                                                                                                                    
SENATOR  HUGHES  moved  to  report  SB  45  from  committee  with                                                               
individual recommendations and attached fiscal note(s).                                                                         
                                                                                                                                
CHAIR COSTELLO  found no objection  and announced that SB  45 was                                                               
reported from the Senate Labor and Commerce Standing Committee.