03/03/2016 01:30 PM Senate LABOR & COMMERCE

           SB 161-EXEMPTION: LICENSING OF CONTRACTORS                                                                       
                                                                                                                                
1:51:00 PM                                                                                                                    
CHAIR   COSTELLO    reconvened   the   meeting    and   announced                                                               
consideration  of SB  161. She  relayed that  this is  the second                                                               
hearing,  public  testimony is  open,  and  there is  a  proposed                                                               
committee substitute (CS).                                                                                                      
                                                                                                                                
1:51:27 PM                                                                                                                    
JAMES  SQUYRES,  representing  himself,  Rural  Deltana,  Alaska,                                                               
testified in  opposition to  SB 161.  He said  the bill  tries to                                                               
close   a  contractor   loophole,  but   it  has   an  unintended                                                               
consequence. Many  people living in  rural areas build  their own                                                               
homes and move  in before they are finished. Should  SB 161 pass,                                                               
an owner/builder who  wants or needs to sell  within the two-year                                                               
timeframe  would   have  to   demonstrate  to   the  department's                                                               
satisfaction that  they are not  a contractor. He  described this                                                               
new burden  as a liberty  bite. He  maintained the bill  does not                                                               
fix  the  problem;  it  does  unintentionally  affect  one  man's                                                               
liberty;  and it  will impact  state finances.  He suggested  the                                                               
bill needs a fiscal note  because new regulations and enforcement                                                               
will be  needed. He mentioned  previous versions of the  bill and                                                               
claimed  that it  keeps  coming up  because  of the  contractor's                                                               
lobby that  tenaciously chips  away at the  people. He  urged the                                                               
committee to hold SB 161.                                                                                                       
                                                                                                                                
CHAIR COSTELLO told  the committee that SB 161  is different than                                                               
the   versions  just   described.  Additionally,   the  committee                                                               
substitute  clarifies the  two-year timeframe  and the  period of                                                               
construction.                                                                                                                   
                                                                                                                                
1:56:03 PM                                                                                                                    
PAM   GOODE,  representing   herself,   Rural  Deltana,   Alaska,                                                               
testified in  opposition to SB  161. She  said this is  the third                                                               
year  in a  row she  has had  to testify  against this  bill. She                                                               
noted  this is  a Labor  and Commerce  Committee bill  and listed                                                               
entities that may  be pushing it. She maintained  that the people                                                               
of Alaska  should not  have to  file anything  with the  state in                                                               
order to sell  their homes. It goes against  an individual right.                                                               
She urged the committee to hold SB 161.                                                                                         
                                                                                                                                
1:58:44 PM                                                                                                                    
RICHARD CARR,  BEMA Construction,  Wasilla, Alaska,  testified in                                                               
support of  SB 161. He said  he is a homebuilder  who specializes                                                               
in  disaster  restoration  and  remodeling so  he  has  a  better                                                               
perspective than  most about  the need  for this  legislation. He                                                               
frequently  receives  calls from  homeowners  who  are upset  and                                                               
heartbroken  that   their  new   home  has  faulty   plumbing  or                                                               
electrical breakers  that keep tripping. Sometimes  the homeowner                                                               
is  unable to  find  out who  built  the home.  SB  161 does  not                                                               
prohibit  someone  from building  their  own  home, but  it  will                                                               
impede unscrupulous builders and protect Alaska consumers.                                                                      
                                                                                                                                
2:00:31 PM                                                                                                                    
CHAIR COSTELLO closed public testimony  on SB 161 and solicited a                                                               
motion to adopt the committee substitute (CS).                                                                                  
                                                                                                                                
SENATOR GIESSEL  moved to adopt  the CS  for SB 161,  labeled 29-                                                               
LS1319\W as working document.                                                                                                   
                                                                                                                                
CHAIR COSTELLO objected for an explanation of the changes.                                                                      
                                                                                                                                
WESTON  EILER,   Staff,  Senate   Labor  and   Commerce  Standing                                                               
Committee and  Senator Costello,  explained that the  CS replaces                                                               
the  term "ends"  with "begins"  in two  places. These  appear on                                                               
page 1, line 11  and page 3, line 4, of the  CS. The consensus of                                                               
the Department  of Commerce,  Community and  Economic Development                                                               
and stakeholders is  that two years after construction  ends is a                                                               
more  nebulous  timeframe  than   two  years  after  construction                                                               
begins.  The practical  implication is  that the  two year  clock                                                               
begins  when  the  foundation  and   footings  of  a  residential                                                               
structure are put in place.                                                                                                     
                                                                                                                                
CHAIR COSTELLO  asked if  an owner/builder  would be  affected by                                                               
the bill  if it takes  him/her four  years from the  beginning to                                                               
the end of construction.                                                                                                        
                                                                                                                                
MR. EILER  answered no; it  only affects individuals who  build a                                                               
home and  advertise to sell it  within two years of  the start of                                                               
construction.  In   that  situation,  the  individual   would  be                                                               
required to file  a form to satisfy the department  that they are                                                               
not  a  contractor.  The  intent   is  to  provide  oversight  of                                                               
individuals  who  are  taking   advantage  of  the  owner/builder                                                               
exemption provided in state law.                                                                                                
                                                                                                                                
CHAIR COSTELLO asked why there is no fiscal note.                                                                               
                                                                                                                                
MR. EILER explained that DCCED  issued a zero fiscal note because                                                               
they   don't   anticipate   that  processing   the   forms   that                                                               
owner/builders file will have a fiscal impact.                                                                                  
                                                                                                                                
CHAIR COSTELLO  asked him to speak  to the public value  the bill                                                               
intends to promote.                                                                                                             
                                                                                                                                
MR. EILER explained  that this is a consumer  protection bill for                                                               
those who are  buying homes in Alaska. The  legislative intent is                                                               
to  maintain  the  owner/builder exemption  while  ensuring  that                                                               
individuals that should have a  contractor license aren't able to                                                               
take advantage of the exemption.                                                                                                
                                                                                                                                
CHAIR COSTELLO  removed her objection  to the adoption of  the CS                                                               
and solicited a motion.                                                                                                         
                                                                                                                                
SENATOR GIESSEL  moved to report the  CS for SB 161,  labeled 29-                                                               
LS1319\W,  from  committee  with individual  recommendations  and                                                               
attached zero fiscal note.                                                                                                      
                                                                                                                                
CHAIR COSTELLO  announced that  without objection,  CSSB 161(L&C)                                                               
is  reported   from  the  Senate  Labor   and  Commerce  Standing                                                               
Committee.