Legislature(1993 - 1994)
03/11/1993 01:00 PM House CRA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 180: AHFC HOUSING INSPECTION REQUIREMENTS DAVID HARDING, LEGISLATIVE AIDE TO REPRESENTATIVE EILEEN MACLEAN, testified reading from Representative MacLean's sponsor statement. (A copy of this sponsor statement may be found in the House Community and Regional Affairs Committee Room, Capitol Room 110, and after the adjournment of the second session of the 18th Alaska State Legislature, in the Legislative Reference Library.) MR. HARDING added, "The ICBO inspection requirements under consideration we originally put into law in order to address the concerns of some builders in the rail-belt area, and the changes proposed here (in HB 180) would not affect any builders on the road system. House Bill 180 would only adjust the law to address problems that have arisen in rural loan programs, affecting remote areas of the state." Number 247 REPRESENTATIVE TOOHEY asked, "I appreciate the streamlining of this, but why not on a road accessible area? If it's good for the rural area, why can't it be good for Copper Center or Valdez?" MR. HARDING replied, "In some places along the road system I think it would make a lot of sense. I think the intent here is to get at the excessive costs that are associated with having to fly somewhere to a remote location in order to do the inspections. I guess the problem with including parts of the road system in it, is how you would determine which parts of the road system would be eligible and which wouldn't..." REPRESENTATIVE TOOHEY said, "My only comment is that an inspector should be qualified to do everybody - a bank loan or an Alaska Housing Finance Loan, or anything." Number 285 STEVE WISDOM, KENAI PENINSULA BUILDER'S ASSOCIATION, read testimony via teleconference from Homer, as submitted to the committee members. (A copy of this testimony may be found in the House Community and Regional Affairs Committee Room, Capitol Room 110, and after the adjournment of the second session of the 18th Alaska State Legislature, in the Legislative Reference Library.) He said, "We cannot support legislation which would allow inspections by anyone other than an ICBO certified inspectors" and "The Alaska Housing Finance Corporation (AHFC) should be given the authority to deal with isolated problems of residential inspections in rural areas on a case-by-case basis." MR. WISDOM also read similar personal testimony into the record. (A copy of this testimony may be found in the House Community and Regional Affairs Committee Room, Capitol Room 110, and after the adjournment of the second session of the 18th Alaska State Legislature, in the Legislative Reference Library.) Number 345 RON ANDERSON, ICBO INSPECTOR, UNALASKA, testified via teleconference in support of HB 180 saying, "...(Unalaska) is about 800 air miles southwest of Anchorage... It would be about $5,500 inspection to bring an ICBO inspector to Unalaska for an inspection. I happen to be an ICBO inspector and I'm not able to inspect my own work... I go along with Mr. Wisdom's philosophy about the importance of an ICBO inspection. I also go along wholeheartedly that each case should be dealt with on a case by case basis. ...I do have a problem with some of the definitions in the bill (HB 180)...rural would totally accept everybody in Southeast Alaska, except for Haines." MR. ANDERSON continued, "I also agree with a journeyman carpenter conducting inspections. Who decides what a journeyman carpenter is?... Maybe AHFC could come up with a step-by-step procedure to conduct these inspections. So if there was not a qualified individual available, maybe a licenced electrical administrator or a licensed mechanical administrator or a licensed structural engineer could take this list along..." Number 405 JIM MCCORMACK, VICE PRESIDENT, NATIONAL BANK OF ANCHORAGE, testified via teleconference from Anchorage, in support of HB 180. He read from the letter which was provided to the committee. (A copy of this letter may be found in the House Community and Regional Affairs Committee, Capitol Room 110, and after the adjournment of the second session of the 18th Alaska State Legislature, in the Legislative Reference Library.) He added, "We believe the home owners of the rural areas not accessible by road are the most severely impacted in the current legislation. Opposition to parts of this house bill (HB 180) are from persons who do not live in these areas and do not experience the same difficulties. In our conversations with our rural customers, they overwhelmingly support HB 180 in its entirety..." Number 470 TONY DOYLE, STATE HOME BUILDERS ASSOCIATION, testified via teleconference from Soldotna. He said, "We do want to do what's necessary to alleviate these expenses that are astronomical for inspections...case by case basis, how do you write that into law? It might be possible to specifically exempt the Rural Housing Loan Program and draft it right in its legislation because that was the intent. It may be a possibility to exempt communities under a certain population size. Another idea might be that we go ahead and allow non-certified people to make inspections for a period of one year and give those people in the rural areas a chance to become certified inspectors. If someone really truly is qualified to inspect residential housing, it should not be that big of a problem to pick up the regular certification..." REPRESENTATIVE TOOHEY asked, "Why can't we have this type of inspector all over the state for Alaska housing?" MR. DOYLE said, "When we initially put this legislation in, we wanted that bench mark of ICBO inspections simply because that's the way to have inspectors know what they're doing." Number 518 REPRESENTATIVE TOOHEY asked, "Is there equal parity as far as pay? Is the rural person going to have to pay more for this inspection or less? If we're keeping them equal then I have no problem with it and I support the bill (HB 180)." MR. DOYLE replied, "Outside of municipalities, a home builder would need to hire an ICBO inspector, and currently that cost from inspections ranges anywhere between 400 and 600 dollars for a home...for your four inspections." Number 526 REPRESENTATIVE BUNDE asked, "How difficult is it and how expensive is it for someone to become an ICBO certified inspector? Is it possible that all communities of any size could have their own resident inspector?" MR. DOYLE said, "Alaska Housing was generous enough last year to hold two week long seminars preparing people to take the ICBO test. It would be my hope that Alaska Housing would be (again) willing to assist, to help these communities out in the rural areas..." Number 548 JIM STEVENS, DEPUTY DIRECTOR, NORTH SLOPE BOROUGH HOUSING DEPARTMENT, testified via teleconference from Barrow, in support of HB 180. He said, "I think it provides the latitude we need up here to hold the inspection costs down" and added, "...The testing date to become an ICBO certified inspector is set nationwide, so it's a very inflexible program, as far as actual dates. ...In addition to this there are many standards in ICBO that don't apply to the Arctic Slope." REPRESENTATIVE BUNDE asked, "As you understand the intent of this bill (HB 180), do you understand it to mean a contractor could inspect and sign off his own work or... a second person to do this?" MR. STEVENS replied, "We would still need a third party to inspect. As much as I like our contractors, I would still require someone else to look at their work." Number 581 CHARLIE WEISS, OUTSIDERS CONSTRUCTION, NOME, testified briefly via teleconference from Nome, in favor of HB 180. REPRESENTATIVE BUNDE asked, "As this expands the pool of inspectors would you anticipate excluding the cost of transportation, that the price of inspections would go down?" MR. WEISS said, "Yes." Number 603 JIM STROER, PRESIDENT, KENAI PENINSULA BUILDERS ASSOCIATION, testified via teleconference from Soldotna saying, "I know that Alaska Housing has merged and that has created a problem, but I think that should be able to be addressed through Alaska Housing in that merge." Number 615 MYRON MCCUMBER, MCCUMBER CONSTRUCTION, BARROW, testified via teleconference from Barrow, in support of HB 180 and added, "We would like to see if this can't be worked out, some kind of an equitable fee structure, maybe a fee pool, administered by the state that would allow every builder to pay the same costs. So that the Kenai and other home builders' associations could subsidize our high expenses in these inspections." Number 625 MARVIN HANEBUTH, HANEBUTH BUILDERS, NOME, testified briefly via teleconference from Nome, in support of HB 180. Number 630 MICHAEL DANNER, LONE ROCK CONSTRUCTION, BARROW, testified via teleconference from Barrow, in support of HB 180 saying, "I am not against inspections of home... However, the big costs related to these inspections seems to be transportation, and in the same way a state road or a subsidized ferry system lowers the cost of inspection in other areas... I think that something needs to be done to either, and I support fully HB 180, either we need to do that or make some other arrangements to pay for the high cost of transporting and putting these inspectors up while they're in the area." Number 648 JIM STIMPFLE, NEW FRONTIER REALTY and PRESIDENT OF THE NOME CHAMBER OF COMMERCE, testified via teleconference from Nome saying, "Basically I support this legislation but I think the operative word is...'or by another person approved by the corporation.' I think that in the rural areas the bottom line is that these inspections are going to cost extra for the builder and the buyer. If there's some way that AHFC can implement a training program or inform rural residents about how this program works so that we can identify either four or five or six other people that may not be exactly ICBO certified...then this program would be very workable for us in Nome." Number 673 ROBERT BREAN, DIRECTOR, RURAL HOUSING LOAN PROGRAM, AHFC, testified from Anchorage via teleconference saying, "On one hand yes, we do agree with the concept that we want quality housing across the state, and the way to do that is through insuring that homes are built to proper code. On the other hand, we do recognize the undue burden placed on rural Alaska and we think HB 180 goes a long way to find that middle ground and create that flexibility for the rural borrower that would allow us to do the right thing in rural Alaska and ensure that quality housing is still there." TAPE 93-13, SIDE A Number 000 ROBIN HARRISON, VICE PRESIDENT, BARROW BRANCH - NATIONAL BANK OF ALASKA testified in favor of HB 180 via teleconference from Barrow saying, "I do agree with the inspection process, however, there is one basic problem that cripples rural housing development, it's the strict criteria set out to become an inspector. Because of the ICBO criteria to become eligible, we have very few inspectors readily available...and because there are four minimum visits required... This winter, we had five construction loans, five construction projects on hold, loan commitments hanging, contractors holding back and, of course, the borrowers bouncing off the walls..." Number 052 MITCH ERICKSON, ASSISTANT VICE PRESIDENT AND BRANCH MANAGER, NATIONAL BANK OF ALASKA, NOME, concurred with Ms. Harrison's testimony via teleconference from Nome. Number 062 RUDY RUDISEL, ARCHITECT, testified via teleconference from Nome saying, "I'm in favor of this HB (HB 180) especially expanding the pool of inspectors. It costs so much to build buildings down here, and transportation of the ICBO inspectors adds quite a bit to the cost of the building. Our material costs are more than double what they are in Anchorage..." REPRESENTATIVE BUNDE asked why there were no inspectors locally in Nome. MR. RUDISEL said, "Nobody has the training right now for that." Number 092 MR. ANDERSON of Unalaska confirmed his earlier support for HB 180 and reminded the committee he would like the AHFC to have "case-by-case" discretion. He said, "Look at this testimony, and realize that you can fly to Seattle and back cheaper than we can fly to Anchorage one way." MR. DOYLE testified again saying, "I do support the intent of (HB) 180 in that we do want to get this problem rectified for the folks out in these outlying areas. Alaska Housing invested about $150,000 having ICBO come up and run testing last year. So ICBO has some flexibility built in their program, and it might be possible...they'd be willing to do some sort of correspondence work with these outlying areas." Number 129 REPRESENTATIVE SANDERS asked, "Would it be acceptable... if we enacted this... for two years?" MR. MCCORMACK via teleconference pointed out, "The AHFC found there's not enough volume in some of these smaller areas, the rural areas, as far as home building volume, to really justify having a resident home building industry to begin with... The intent of HB 180 is not to exempt any of the rural areas from inspections... We're not in favor of that." Number 176 CHAIRMAN OLBERG said, "I didn't understand that anybody was talking about exempting particular areas, I think we understand this is a means by which extremely rural areas might derive some economic benefits as it relates to inspections associated with AHFC loans." REPRESENTATIVE BUNDE said, "Obviously, I don't live in these areas and haven't built in those areas and would like to allow them as much flexibility as possible, as long as it's in line with good building practices, safe building practices. I hear too many horror stories about substandard housing being built in the Bush, and that is my only caveat. ...I certainly wouldn't want anybody to think that one contractor would inspect the other contractor, it would be just too cozy." CHAIRMAN OLBERG said, "It appears to me the intent is...it has to be either an architect, an engineer, or another person approved by the corporation. I can tell you from my personal experience, having banked in Tok and Delta which are relatively next door compared to many parts of the state, that it's still tough, even being on the road system, it's very difficult, and I sympathize with these remote areas." REPRESENTATIVE DAVIES said, "I certainly support the thrust of HB 180... I am a little bit concerned though about the standard that we would be setting here. So I would, just for purposes of discussion, strike the architect and engineer language on line 12 (page 2) and just leave it 'another person' and then insert after the word 'person', 'certified' so it would be another person certified and approved by the corporation. ...It would allow the corporation to establish an alternate certification program... I don't believe that the licencing provisions under AS 08.48 really assure us that an architect, for example, is qualified to make these inspections." Number 262 CHAIRMAN OLBERG said, "I would expect that Alaska Housing would have fairly stringent standards for people who do not meet the existing standards." REPRESENTATIVE TOOHEY PROPOSED an AMENDMENT and WITHDREW her proposal. ANNOUNCEMENT CHAIRMAN OLBERG said, "This bill certainly doesn't have to move today." He offered to bring up HB 180 again on Tuesday, March 16, 1993. REPRESENTATIVE WILLIAMS reminded Mr. Harding to address the questions the committee raised today, on Tuesday, March 16, 1993. Number 316 ADJOURNMENT CHAIRMAN OLBERG adjourned the meeting at 3:03 p.m.
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