Legislature(2015 - 2016)BELTZ 105 (TSBldg)
02/09/2016 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SB69 | |
| SB161 | |
| Presentation: Cluster-based Economic Development | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 161 | TELECONFERENCED | |
| *+ | SB 108 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 69 | TELECONFERENCED | |
SB 161-EXEMPTION: LICENSING OF CONTRACTORS
1:35:52 PM
CHAIR COSTELLO reconvened the meeting and announced that the
next order of business would be SB 161. [This is the first
hearing of the bill.]
SENATOR MEYER joined the committee.
1:36:43 PM
WESTON EILER, Staff, Senate Labor and Commerce Committee and
Senator Mia Costello, Alaska State Legislature, explained that
SB 161 provides better protection for consumers who purchase a
home from an unlicensed builder. AS 08.18.116 allows anyone to
build one structure every two years without a license. This was
intended to allow Alaskans to build their own home, but a
growing number of individuals are using this exemption to
operate a construction business. The bill seeks to prevent abuse
of this exemption.
SB 161 requires anyone who builds and sells a home without a
contractor license to disclose that fact to the state within two
years of completing construction. It does not prohibit owner-
builder construction, but calls for a disclosure to the
Department of Commerce, Community and Economic Development
(DCCED). It will not only allow the department to monitor
unlicensed builders, but also allow the freedom for Alaskans to
build their own homes.
He read the legislative intent language in Section 1 of the
bill.
He reported that SB 161 is supported by the Alaska State Home
Builders Associations (ASHBA).
CHAIR COSTELLO requested an explanation by the department and to
know if the administration supports the bill.
1:39:40 PM
JANEY HOVENDEN, Director, Division of Corporations, Business,
and Professional Licensing, Department of Commerce, Community,
and Economic Development, related that SB 161 requires the
owner-builder to file with the division within two years of
completing and selling a home stating that they are not engaged
in business that requires a contractor's license. She said the
bill has no fiscal impact to the division.
1:40:29 PM
CHAIR COSTELLO asked for an explanation of the problem the bill
would solve.
MR. EILER explained that there is a need for consumer protection
when buying homes from individuals other than licensed
contractors.
1:41:41 PM
SENATOR STEVENS asked what difference it makes to the consumer
whether the contractor has a license or not and what protections
are in the bill.
MR. EILER said there would be protections if there are problems.
He recalled the 1980s when there was a housing market crash
after which the legislature raised building standards. The bill
prevents non-contractor builders, who do not have to follow
standards, from acting like licensed builders.
SENATOR STEVENS provided an example of buying a house from
someone who does not have a license and asked how there would be
more consumer protection under this bill.
MR. EILER offered to provide a list of civil remedies after a
sale. He commented on builders not held to construction
standards.
1:44:40 PM
CHAIR COSTELLO clarified that it is a consumer protection bill.
It makes the consumer aware if a house was not build by a
licensed contractor.
1:45:14 PM
SENATOR GIESSEL referred to page 3, lines 4 and 5, that states
"within two years after the period of construction." She
inquired how that time period is defined.
MR. EILER asked for more information.
SENATOR GIESSEL restated her question.
MR. EILER said he did not know and wished to consult with
Legislative Legal Services.
1:46:35 PM
CHAIR COSTELLO opened public testimony.
1:46:44 PM
PAUL MICHELSOHN, General Contractor, Alaska State Home Builders
Association (ASHBA), testified in support of SB 161. He said
ASHBA feels the bill is long overdue. He provided an example of
when he was hired by an investigation company to inspect a
house, built by an unlicensed builder, with a failed septic
system and other flaws. The buyer had no recourse for
mitigation. He shared another example in Sterling, Alaska, where
the home had 22 code infractions and the buyer was not able to
finance it. He maintained that houses built by contractors are
better because the contractor is held responsible through
bonding for 7 years under a structural warranty and must have
continuing education credits.
He pointed out that the bill would have more of an effect in
rural communities where there are fewer licensed builders.
SENATOR STEVENS asked how the previously-mentioned house with
the sewage issue would have looked if Mr. Michelsohn had built
it.
1:51:27 PM
MR. MICHELSOHN said the septic system and the well would have
been registered with the Department of Health and Human Services
and he would have fixed it if it failed. It would not have
failed in the first place.
1:52:03 PM
ANDRE SPINELLI, President, Alaska State Home Builders
Association (ASHBA), testified in support of SB 161. He said
ASHBA has been working on this bill for a long time. He said
ASHBA wanted to see reform and the bill is less than hoped for,
but is a start. He requested support from the committee for the
bill.
CHAIR COSTELLO thanked the testifier.
1:53:28 PM
JEFF TWAIT, Builder, Alaska State Home Builders Association
(ASHBA), testified in support of SB 161. He responded to Senator
Stevens' question by describing how licensed contractors are
mandated to have licensed plumbers and electricians do related
work, whereas, unlicensed builders often try to do it
themselves. He agreed that most problems are in outlying areas.
SENATOR GIESSEL asked Mr. Twait if he knew how one measures the
two years listed in the bill.
MR. TWAIT thought it was when occupancy is taken.
1:55:05 PM
JESS HALL, Builder, Alaska State Home Builders Association
(ASHBA), testified in support of SB 161. He requested that the
bill include provisions that address owner-builders that
construct spec houses. He said the bill does include language
that would address that issue. He discussed the inspection
schedules licensed contractors must adhere to. He said once the
inspection is signed off, their two year date begins. Some
owner-builders also have an inspection signed off, so that would
also be when their two-year period begins. He added that homes
financed by Alaska Housing must go through an inspection.
CHAIR COSTELLO asked about the scope of the problem.
MR. HALL opined that there are many builders that are not
licensed in the Valley. He said if he were a home buyer, he
would like to know a lot more about the builder than most do.
There are few owner-builders in the Lower 48 because most banks
won't finance them; they are unique to Alaska. He described
several scenarios where there were issues when the owner-builder
sells a house.
2:00:59 PM
AARON WELTERLEN, Builder, Alaska State Home Builders Association
(ASHBA), testified in support of SB 161. He agreed that owner-
builders should be allowed, but not allowed to build
commercially. He stressed that licensed builders are held to
much higher standards and are required to fix problems that
should arise.
CHAIR COSTELLO stated that the bill requires that the owner-
builder files with the department.
MR. WELTERLEN said it was a simple one-page form.
2:02:22 PM
PATRICK DALTON, representing himself, testified in opposition to
SB 161. He addressed the economic crisis in Alaska and said it
is not wise for the state to spend money on this licensing. He
discussed privacy rights. He said that "local is better" and
licensing should be done at the borough level. He questioned the
ability to enforce the provisions in the bill in rural areas. He
said private property is the cornerstone of a free society. He
suggested that there are other ways to protect the consumer. It
is the responsibility of the consumer to have the house
inspected when they buy a house. He suggested certifying homes
in a way that does not infringe on privacy.
CHAIR COSTELLO held SB 161 in committee with public testimony
open.
| Document Name | Date/Time | Subjects |
|---|---|---|
| CS SB 69 (L&C).pdf |
SL&C 2/9/2016 1:30:00 PM |
SB 69 |
| CS SB 69 - Updated Fiscal Note DCCED.pdf |
SL&C 2/9/2016 1:30:00 PM |
SB 69 |
| SB 161.PDF |
SL&C 2/9/2016 1:30:00 PM |
SB 161 |
| SB 161 - Sponsor Statement.pdf |
SL&C 2/9/2016 1:30:00 PM |
SB 161 |
| SB 161 - Fiscal Note DCCED.pdf |
SL&C 2/9/2016 1:30:00 PM |
SB 161 |
| SB 161 - Fiscal Note DOLW&D.pdf |
SL&C 2/9/2016 1:30:00 PM |
SB 161 |
| SB 108.PDF |
SL&C 2/9/2016 1:30:00 PM |
SB 108 |
| SB 108 Transmittal Letter.pdf |
SL&C 2/9/2016 1:30:00 PM |
SB 108 |
| SB 108 Hearing Request.pdf |
SL&C 2/9/2016 1:30:00 PM |
SB 108 |
| SB 108 Sectional Analysis.pdf |
SL&C 2/9/2016 1:30:00 PM |
SB 108 |
| SB 108 - Fiscal Note DCCED.pdf |
SL&C 2/9/2016 1:30:00 PM |
SB 108 |
| SB 108 - Fiscal Note DOA.pdf |
SL&C 2/9/2016 1:30:00 PM |
SB 108 |
| SB 108 Supporting Documents - Presentation.pdf |
SL&C 2/9/2016 1:30:00 PM |
SB 108 |
| SB 108 Supporting Documents - Crosswalk.pdf |
SL&C 2/9/2016 1:30:00 PM |
SB 108 |
| SB 108 Supporting Documents - Table of Contents.pdf |
SL&C 2/9/2016 1:30:00 PM |
SB 108 |
| 2016.02.09 C. Ketels Presentation Alaska State Senate .pdf |
SL&C 2/9/2016 1:30:00 PM |