Legislature(2023 - 2024)SENATE FINANCE 532
03/06/2024 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB197 | |
| SB183 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 197 | TELECONFERENCED | |
| + | SB 183 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE BILL NO. 197
"An Act relating to residential building codes;
relating to construction contractors and residential
contractor endorsements; establishing the Alaska State
Building Code Council; and providing for an effective
date."
9:07:15 AM
SENATOR JESSE BJORKMAN, SPONSOR, introduced the
legislation. He read from the Sponsor Statement (copy on
file):
SB 197, "An Act relating to residential building
codes; relating to construction contractors and
residential contractor endorsements; establishing the
Alaska State Building Code Council; and providing for
an effective date," would provide Alaskans with more
confidence that their new home is safe and well-built.
When Alaskans are buying a home or selecting a
contractor to build their home it can be difficult for
those without construction experience to know what to
look for. In areas where there isn't a municipal
residential building code, shoddy work done by a
contractor can be hidden behind walls for years before
creating problems. Having a statewide residential
building code will ensure that homes across Alaska are
built to proven safety standards with the appropriate
materials.
SB 197 would require the Alaska Housing Finance
Corporation to adopt the 2018 International
Residential Code published by the International Code
Council (or later versions) through regulation as a
statewide residential building code. The bill would
allow AHFC to amend the code as necessary to adjust
for Alaska's unique environment, allow municipalities
to adopt their own residential building codes, and
would exempt owner-built homes and recreational cabins
from the state residential building code. SB 197 would
also add to the state building code an allowance for
the use of locally graded lumber produced under AS
41.17.630 in residences and create an advisory board
to make recommendations to the Alaska Housing Finance
Corporation regarding the adoption of the statewide
building code and necessary updates.
9:10:54 AM
Co-Chair Olson wondered whether a building that was not
built by a contractor would be unsafe.
9:11:04 AM
Senator Bjorkman replied that the application and design of
the bill was a consumer protection for people who hired a
licensed builder to build them a home. He stated that it
did not apply to owner-builders who built homes. He said
that the provision would be a consumer protection for
people who hired a licensed contractor to build a home.
9:11:51 AM
Co-Chair Olson relayed that his question pertained to the
building of homes in rural areas that did not have access
to contractors.
9:12:14 AM
Senator Bjorkman replied that there was no enforcement
measure in the state that would prevent building a home in
rural areas.
9:12:30 AM
Senator Bishop surmised that, if something failed, the onus
for documentation of the build would be on the homeowner
and the contractor.
9:12:48 AM
Senator Bjorkman agreed. He said that currently, if a home
was found to not reach the residential building code
standard, there was no recourse for the homeowner under
statute to hold the contractor accountable.
9:12:53 AM
Senator Bishop wondered how homeowners would be informed of
their duty to document the process of the build and file
evidence of the process in the event of future litigation.
9:13:22 AM
Senator Bjorkman responded that the court would require
evidence presented that a structure was not up to code. He
said that the current issue was that if a customer hired a
contractor to build a home, that was later found
uninhabitable because it did not meet code, there was no
code in statute to hold the contractor accountable under
the law.
9:14:11 AM
Senator Bishop reiterated his concern that homeowners
should be informed that every step of the building process
should be documented and available in the event of
litigation.
9:14:39 AM
Senator Bjorkman thought that education was available to
homeowners. He noted that home inspections were available.
9:15:07 AM
Senator Kiehl spoke of the interaction of buildings in
communities that were built before the code. He noted that
the code would be tied to a contractor's licensure. He
wondered whether contractors would be held to assuring
buildings that were built before the code existed, but
worked on after the code was established, would be expected
to bring those previously built buildings up to code.
9:15:59 AM
Senator Bjorkman replied that there was a legal opinion on
the matter. He stated that if the home was built prior to
the law being enacted the law would only apply to houses
built after the bills effective date.
9:16:29 AM
Senator Kiehl asked about financing. He wondered whether a
situation would be created where a homeowner would have to
bring a home built before the enactment of the law up to
code before they could secure financing.
9:16:56 AM
Senator Bjorkman responded that deferred to AHFC.
9:17:26 AM
JIMMY ORD, DIRECTOR OF RESEARCH AND RURAL DEVELOPMENT,
ALASKA HOUSING FINANCE CORPORATION (AHFC), ANCHORAGE (via
teleconference), responded that regardless of the
legislation, AHFC had lending requirements that would need
to be in place.
9:18:16 AM
Senator Kiehl surmised that existing or older homes would
need upgrades to get additional financing and would need to
bring their homes up to code to get financing in the
future.
9:18:46 AM
Mr. Ord replied in the negative. He said that older houses
only had to be brough up to code if a substantial
percentage of the home was being retrofitted.
9:19:17 AM
Senator Kiehl requested a follow up of the percentage and
noted that there were communities in the state that had
building codes and some that did not.
9:19:35 AM
Mr. Ord agreed to provide that information.
9:19:44 AM
Senator Wilson asked for the corporations position on the
bill.
9:20:01 AM
Mr. Ord responded that that AHFC did not have a position on
the bill.
9:20:27 AM
LAURA ACHEE, STAFF, SENATOR JESSE BJORKMAN, spoke to the
Sectional Analysis (copy on file):
Section 1: Amends AS 08.18.025(a) (c) to add to the
requirements for receiving or renewing a residential
contractor endorsement from the Department of
Commerce, Community, and Economic Development to pass
a test of the person's knowledge of the state
residential building code. The bill would also require
this endorsement to build a residence that is subject
to the state residential building code.
Section 2: Would add a new subsection AS 08.18.025(d)
that requires compliance with the state residential
building code to maintain residential contractor
endorsement unless the area where the residence is
being built is governed by a municipal residential
building code.
Section 3: Amends AS 08.18.171(16) to add to the
definition of a "residential contractor" a reference
to dwellings covered by the state residential building
code.
Section 4: Would add a new subsection AS 08.18.171(20)
to define "state residential building code" as the
code adopted under AS 18.60.860(a).
Section 5: Would amend AS 18.56.088(c) to add adoption
and administration of a state residential building
code to the duties of the Alaska Housing Finance
Corporation board.
Section 6: Amends AS 18.56.300(a) to reference the
state residential building code in the requirements
for financing the construction or purchase of a
residence.
Section 7: Amends AS 18.56.300(b) to reference the
state residential building code in the requirements
for a residence to pass a home inspection prior to
purchase or loan approval.
Section 8: Amends AS 18.56.300(e)(3) to change the
definition of "state building code" from the Uniform
Building Code adopted by the Department of Public
Safety to the residential building code adopted by the
Alaska Housing Finance Corporation under AS
18.60.860(a).
Section 9: Adds a new section AS 18.60.860 that
requires the Alaska Housing Finance Corporation to
adopt by regulation as the state residential building
code the 2018 International Residential Code published
by the International Code Council or a later version.
The state residential building code may be amended as
necessary to accommodate Alaska's unique environment
and must allow for the use of locally graded lumber
produced and used under AS 41.17.630. The language
allows municipalities to adopt a residential building
code and provides that other codes in Alaska statutes
supersede the state building code where they conflict.
Exceptions to the state residential building code are
provided for owner-built homes and recreational
cabins. Adds a new section AS 18.60.865 that creates
the Alaska State Building Code Council appointed by
the Board of Directors of the Alaska Housing Finance
Corporation to provide recommendations to the AHFC
Board regarding the adoption of and updates to the
state residential building code.
Section 10: Would add language to the uncodified law
that the provisions amended in AS 08.18.025 and AS
08.18.025(a) in the bill would only apply to
contractors receiving endorsements on or after the
effective date. Also, the state residential building
code adopted in AS 18.60.860 would only apply to new
residences built on or after the effective date.
Section 11: Provides an effective date of January 1,
2025.
9:24:50 AM
DAVID BUNTS, PRESIDENT, ALASKA STATE HOMEBUILDERS'
ASSOCIATION (via teleconference), spoke in support of the
legislation. He offered a brief history of the building of
homes during the 1970s and 1980. He offered some background
on the licensing of builders in the 1990s and the
relationship requirements of the AHFC. He relayed that the
code was a minimum standard and not a high bar. He said
that municipalities could add to the code, which could be
considered burdensome by builders. He stated that the bill
would not change how a truly professional builder would
operate. He supported AHFC administering the code. He
stressed that the bill was a consumer protection bill that
protected all stakeholders.
9:29:22 AM
Co-Chair Olson asked about building a house on Sait
Lawrence Island. He spoke of delays in getting inspectors
to remote locations.
9:29:47 AM
Mr. Bunts replied that if AHFC money was not being used the
house did not need inspection.
9:30:28 AM
Co-Chair Olson thought that the bill mandated inspections.
9:30:31 AM
Mr. Bunts disagreed.
9:30:45 AM
Senator Kiehl asked about energy efficiency requirements
versus the residential building code.
9:31:20 AM
Mr. Bunts said that AHFC had essentially a building code if
someone wanted to use AHFC money to build a house.
9:31:49 AM
Co-Chair Olson asked again about inspections in rural
areas.
9:32:09 AM
Senator Bjorkman said that the residential building code
would not change anything for folks that were currently
financing or would finance any building in the future. The
building code provision protected cash buyers who were
paying cash to contractors building a home and did not have
protections in place through a lending institution.
9:34:01 AM
Co-Chair Stedman asked about getting a physical inspector
to rural areas and wondered whether a virtual inspection
could be used.
9:35:03 AM
Senator Bjorkman reiterated that the bill required no
inspection or enforcement of code.
9:36:06 AM
Mr. Ord discussed the requirements for energy and building
standards for residential structures. He furthered that
AHFC could do inspections virtually.
9:37:28 AM
Co-Chair Stedman surmised that there could be a virtual
inspection done in rural areas.
9:37:42 AM
Mr. Ord agreed that AHFC could do virtual inspections video
phonically.
9:37:53 AM
Senator Bishop noted that on page 5, line 13:
When the unit of residential housing is located in a
rural area, the person who makes the inspection may
use methods other than a personal physical inspection
to make the inspection if the method is approved by
the corporation, and variations from the applicable
code may be accepted at the corporations discretion,
if the person authorized to inspect the unit under
this subsection satisfies the corporation that the
variation does not adversely affect the structural
integrity of the unit or the health and safety of the
occupants.
9:38:34 AM
ERIC VISSER, FORMER PRESIDENT, ALASKA STATE HOMEBUILDERS
ASSOCIATION (via teleconference), testified in support of
the bill. He believed that the legislation solved a
critical problem of protecting homeowners from contactors
who operated outside of the building code. He supported the
establishing of the Alaska State Building Code Council,
which would be comprised of 11 members.
9:40:45 AM
Senator Kiehl queried the comparison of current residential
standards held by AHFC to the residential building code
contained in the bill.
9:41:15 AM
Mr. Visser responded that there were ten pages of local
amendments that had been made to the nationally recognized
code.
9:41:55 AM
Senator Bishop wondered whether the bill affected tribal
housing authorities.
9:42:20 AM
Senator Bjorkman replied that he did not know.
9:42:48 AM
Co-Chair Olson asked about the fiscal note.
9:42:58 AM
Mr. Ord replied that the fiscal note, OMB component 110,
provided that AHFC anticipated an annual operating cost of
approximately $250,000, which included personal services
incurred and the implementation of the provisions of the
legislation, including necessary travel, services, and
commodities.
9:43:24 AM
Co-Chair Olson surmised that the funding would not be
undesignated general funds.
9:43:31 AM
Mr. Ord replied in the affirmative and stated that the
funding would be corporate funds.
9:44:15 AM
SYLVAN ROBB, DIRECTOR, DIVISION OF CORPORATIONS, BUSINESS
AND PROFESSIONAL LICENSING, DEPARTMENT OF COMMERCE,
COMMUNITY AND ECONOMIC DEVELOPMENT, (DCCED) explained that
the fiscal note, OMB component 2360, was a zero fiscal note
as the department would absorb the minimal costs associated
with the bill.
9:44:54 AM
Co-Chair Olson understood that the department handled the
licensing of building contractors.
9:45:00 AM
Ms. Robb agreed.
9:45:06 AM
Co-Chair Olson wondered whether claims against building
contractors would be of cost to the department.
9:45:13 AM
Ms. Robb responded that the intent of the bill was that the
enforcement would be a persons ability to sue a builder.
She said that current costs were borne by the licensees.
9:46:00 AM
Senator Bjorkman agreed with Ms. Robb's assessment.
9:46:13 AM
Senator Wilson thought that general funds were used for
investigations against licensees.
9:46:27 AM
Ms. Robb responded that the governor's FY24 budget had
proposed a change of fund source to the general fund, which
had not ben accepted by the legislature, although the
governor had asked again in FY25.
9:47:03 AM
Senator Kiehl spoke to AHFCs fiscal note. He wondered why
the council was necessary when the work was already being
done.
9:47:41 AM
Senator Bjorkman responded that he was not certain that the
council would cost what was currently stated in the
legislation.
SB 197 was HEARD and HELD in committee for further
consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB197 Sponsor Statement Ver S.pdf |
SFIN 3/6/2024 9:00:00 AM SL&C 2/12/2024 1:30:00 PM |
SB 197 |
| SB197 Sectional Analysis Ver S.pdf |
SFIN 3/6/2024 9:00:00 AM SL&C 2/12/2024 1:30:00 PM |
SB 197 |
| SB197 Supporting Documents-IRC Use in US.pdf |
SFIN 3/6/2024 9:00:00 AM SL&C 2/21/2024 1:30:00 PM |
SB 197 |
| SB197 Supporting Documents-Legal Opinion on Professsional Certificates.pdf |
SFIN 3/6/2024 9:00:00 AM SL&C 2/21/2024 1:30:00 PM |
SB 197 |
| SB 197 support letter.pdf |
SFIN 3/6/2024 9:00:00 AM |
SB 197 |
| SB183 Sponsor Statement verA.pdf |
SFIN 3/6/2024 9:00:00 AM SL&C 2/12/2024 1:30:00 PM |
SB 183 |
| SB183 Sectional Analysis ver A.pdf |
SFIN 3/6/2024 9:00:00 AM SL&C 2/12/2024 1:30:00 PM |
SB 183 |
| SB183 Supporting Documents-AWCB Letter to Claimant.pdf |
SFIN 3/6/2024 9:00:00 AM SL&C 2/12/2024 1:30:00 PM |
SB 183 |
| SB183 Supporting Documents-AWCB_Resolution 23-01.pdf |
SFIN 3/6/2024 9:00:00 AM SL&C 2/12/2024 1:30:00 PM |
SB 183 |
| SB183 Supporting Documents-Overview and History of WCBG Fund.pdf |
SFIN 3/6/2024 9:00:00 AM SL&C 2/12/2024 1:30:00 PM |
SB 183 |
| SB 197 2024-01 Building Code Support (completed-Adobe Sign).pdf |
SFIN 3/6/2024 9:00:00 AM |
SB 197 |
| SB 197 2024_CCHRC Board of Directors.pdf |
SFIN 3/6/2024 9:00:00 AM |
SB 197 |
| SB 197 Support KPBA.pdf |
SFIN 3/6/2024 9:00:00 AM |
SB 197 |
| SB 197 AAHA SB197 Response Senate Finance Committee 3-11-24.pdf |
SFIN 3/6/2024 9:00:00 AM |
SB 197 |