Legislature(2009 - 2010)BARNES 124
03/01/2010 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HCR19 | |
| HB253 | |
| HB287 | |
| HB282 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 253 | TELECONFERENCED | |
| *+ | HB 282 | TELECONFERENCED | |
| *+ | HB 287 | TELECONFERENCED | |
| += | HCR 19 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 253-MECHANIC/MATERIALMEN LIENS
4:15:59 PM
CHAIR OLSON announced that the next order of business would be,
HOUSE BILL NO. 253, "An Act relating to the time periods
affecting certain liens related to providing labor, material,
service, or equipment to real property, including buildings and
other improvements."
4:16:16 PM
REPRESENTATIVE JAY RAMRAS, Alaska State Legislature, speaking as
the sponsor of HB 253, prefaced his presentation by stating that
those living in a diesel-dependent community have more boiler
work done than those who have access to natural gas. Often
boiler work is done in the middle of the night after the boiler
fails during cold weather. He disclosed that his heating
contractor is Rocky's Heating, who brought forth the issue. He
paraphrased the sponsor's statement for HB 253, which read
[original punctuation provided]:
Under current law, contractors, material suppliers,
and service people who have not been paid by property
owner for labor or goods have 90 days from the date of
completion of the work, or from the date the service
ceases, to file a lien on the property to secure
payment of that debt. See AS 34.35.068 (a).
House Bill 253 merely extends the time within which to
file a lien to 120 days. This extra time will give
contractors, material suppliers, and service people an
additional 30 days to work with property owners to
secure payment or to negotiate a reasonable payment
plan between a creditor and debtor. The need for this
bill was brought to Representative Ramras' attention
by small business owners who suggested that it usually
takes two billing cycles to discover that a property
owner may not pay his or her debt, and another billing
cycle to see if a payment plan or other compromise is
working as planned.
All contractors and suppliers are entitled to payment
for services and goods delivered, yet recording a lien
on property is a severe remedy that encumbers a
property owner's interest and that can be costly for
the contractor or supplier to execute. HB 253 affords
more time for the parties to negotiate before this
remedy is employed.
REPRESENTATIVE BUCH thanked the sponsor for bringing this
forward.
4:20:03 PM
CHAIR OLSON, after first determining no one else wished to
testify, closed public testimony on HB 253.
4:20:06 PM
The committee took an at-ease from 4:20 p.m. to 4:26 p.m.
4:26:52 PM
CHAIR OLSON reopened public testimony on HB 253, and apologized.
He stated that due to technical difficulties with the
teleconference network he previously could not hear testifiers
at the Legislative Information Offices. He noted this glitch
has been resolved and began to take public testimony.
SANDRA HEMBREE, Owner, Alaska Best Plumbing and Heating, stated
that Alaska Best Plumbing and Heating is a residential
contractor that provides service, often to provide service on
"frozen houses" and frequently involving insurance situations.
Customers cannot always pay at the time of service and as a
courtesy to their customers her business would like to extend
the customer billing options. This is difficult due to the
current billing cycles. Sometimes, when a customer does not pay
their bill, it is necessary to threaten customers with a lien or
to actually file a lien to ensure receipt of payment. This
situation is damaging to customers and adversely affects their
relationship with customers. This bill would allow businesses
to extend credit to customers for 120 days, instead of the
current 90 days, which will be helpful.
4:29:09 PM
ROCKY PAVEY, Owner, Rocky's Heating Service, outlined a
situation that has arisen during the billing cycle. He stated
that in instances in which work is performed for customers at
the beginning of the month, the customer would receive their
statement at the end of the month. Many customers believe they
have an additional 30 days to make the payment, but in reality
waiting 30 days places them at a timeframe of 60 days from the
date the service was performed. If a customer then experiences
unexpected expenses and cannot pay within the month they will be
delinquent by 90 days. Liens must be filed within a 90-day
period of service. However, filing a lien can damage the
customer's credit history and creates an adversarial
relationship with the customer. Adding an extra 30 days to the
allowable time would extend the lien filing period to 120 days,
which could assist customers and businesses that perform
plumbing and heating services. He said that 120 days would
allow him to "weed out" the good customers, who intend to pay
their bill, from those who do not. He offered his belief that
the current timeframe of 90 days is simply too short, and the
businesses must either file a lien or risk not getting paid. He
strongly encouraged members to support HB 253.
4:32:48 PM
WAYNE LONG, Owner, Wayne's Air Supply, stated he has been in
business for 19 years. He described an instance in which he did
not file a lien, but realizes that he risks not being paid. He
urged members to support HB 253.
MS. HEMBREE asked to point out one additional circumstance that
happens. One of the instances that her company routinely
encounters is "frozen houses." Her company works with insurance
companies, insurance adjusters, and mortgage companies to repair
the damage to the home. She described the process, which she
said is fraught with delays. Her business makes the repairs,
waits for an inspection and for the inspector to send reports to
the insurance company, who then issues the check. Often the
check is made payable to the lien holder, who must then re-
inspect the property. The entire process takes between 60 - 90
days to complete. When the insurance company issues the check
to the homeowner, her business must wait for the payment. She
explained that 90 days is simply not enough to complete this
process. Although infrequent, in instances in which the
homeowner does not pay, her business can suffer losses ranging
from $20,000 - $30,000. She asked members to consider this
matter when deliberating on HB 253.
4:35:31 PM
CHAIR OLSON, after first determining no one else wished to
testify, closed public testimony on HB 253.
4:35:44 PM
REPRESENTATIVE LYNN moved to report HB 253 out of committee with
individual recommendations and the accompanying fiscal notes.
There being no objection, HB 253 was reported from the House
Labor and Commerce Standing Committee.
4:36:10 PM
The committee took an at-ease from 4:36 p.m. to 4:37 p.m.