Legislature(2005 - 2006)CAPITOL 17
01/26/2005 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| [the Recording Begins Here] | |
| HB81 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 46 | TELECONFERENCED | |
| *+ | HB 35 | TELECONFERENCED | |
| = | HB 81 | ||
HB 81-CONTRACTOR LICENSE ENFORCEMENT CHAIR ANDERSON announced that the next order of business would be HOUSE BILL NO. 81, "An Act establishing an administrative fine and procedure for construction contractors in certain circumstances; increasing the amount of a civil penalty for persons acting in the capacity of contractors or home inspectors; modifying the elements of a crime involving contractor registration and residential contractors; and exempting the administrative hearings for imposing an administrative fine on construction contractors from the hearings conducted by the office of administrative hearings in the Department of Administration." CHAIR ANDERSON recalled that at a prior hearing, there was a suggestion to delete sections referring to home inspectors. This is not going to happen because it would create a title change. However, he noted that there is an amendment that he would like to have explained. JOHN BITNEY, Lobbyist, Alaska State Home Builders Association (ASHBA), said that ASHBA is introducing a conceptual amendment, which he said was located on page 5, line 2 of [Version Y]. The language on this page is in response to the existing language in owner/builder language in statute. MR. BITNEY explained that the existing statutes broadly exempts owner/builders from building a single family multiplex every year. The time limit is very ill defined. He recalled that the testimony talked about each member of a family running a contract business and building several buildings, not to live in, but for resale value. The aforementioned act, he said, violated the law. CHAIR ANDERSON provided clarity by stating that a family has several children who each build homes and they are able to do this under the stipulation of the statute. REPRESENTATIVE ROKEBERG moved that the committee adopt CSHB 81, Version 24-LSO144\Y, Mischel, 1/26/05, as the working document. There being no objection, Version Y was before the committee. 4:07:31 PM CHAIR ANDERSON asked if Mr. Bitney could briefly describe each section of Version Y. MR. BITNEY explained that in Version Y, Section 1 addresses the enforcement statutes. Section 2 is the heart of the bill, since it deals with the fines. Section 3 takes the existing penalty and increases it to the new penalty phase being added. Section 4 defines the violation and Section 5 is the long list of exemptions. Section 6, he said, is the conforming section. MR. BITNEY continued by stating that Sections 7 and 8 are transitional sections that ensure this is not retroactive. DAVE OWENS, Representative, Mat-Su Homebuilders Association, Matanuska- Susinita, answered yes and that he gives full support of this bill and agree with the previous speaker, Mr. Bitney. 4:11:06 PM REPRESENTATIVE GUTTENBERG asked whether there is a quantifiable number of fines or complaints that would illustrate that there is a problem. GREY MITCHEL, Division Director, Labor Standards and Safety, Department of Labor and Workforce Development, answered that the number of violations range from 130 to 150. There have been 85 violations in this fiscal year so far. CHAIR ANDERSON clarified that Mr. Mitchel's numbers refer to people who are not authorized or licensed to operate as a contractor but are doing so. REPRESENTATIVE ROKEBERG inquired as to the level of the current sanction. MR. MITCHEL stated that the current sanction is a criminal penalty, a misdemeanor. Therefore, the department is required to take the case to the district attorney. Since these are low- level cases for the DA, it is difficult to pursue these cases. CHAIR ANDERSON asked if it is a class B misdemeanor. MR. MITCHEL agreed and said that this was correct: "I think that the current criminal citation is being listed in section 4 of the bill as it is in statute now". REPRESENTATIVE ROKEBERG surmised then that the goal is to have the civil penalties and administrative fines as a tool, rather than going through a criminal prosecution. MR. MITCHEL agreed and said this was correct. REPRESENTATIVE ROKEBERG chortled that an offender could ostensibly receive a injunction, get a civil penalty, administratively fine him, and get a class B misdemeanor case. He then asked if there is a conflict of laws here. REPRESENTATIVE KOTT agreed that there may be a problem with the bill if it allows three avenues of prosecution to exist. He asked Mr. Mitchel to produce a scenario in which a violation could be detected and no fine imposed. Ostensibly, the inspector does not have to give a fine and the fine could be anything between $1 and $1,000. He pointed out that there is a lot of wiggle room here. MR. MITCHEL posed a situation in which someone has been caught with an expired license. In such a situation the DLWD would issue a civil fine, especially if the individual comes in and shows that he has been reissued a current license and has current bonding. The department, in such a case wouldn't pursue a criminal prosecution. REPRESENTATIVE KOTT indicated that it sounded like one could be guilty of noncompliance and not be punished. He then suggested that the level of the fine could be adjusted in cases such as these. He further stated that there is no knowledge of the offender's intention and thus there is the possibility that there could be felonious intent. CHAIR ANDERSON said that it always a dilemma. REPRESENTATIVE LEDOUX referred to Section 5, the exemptions section, paragraph 12, and asked how the figure of three years was determined. 4:18:14 PM JOHN BITNEY, Lobbyist, Alaska Home Builders Association, explained that the idea to specify a bright line level amount for enforcement. The discussions thus far have agreed upon the minimum of two years and a maximum of three years. The idea was that it had to be more than one year. This enabled the department to truly determine that it was an owner/builder situation. REPRESENTATIVE LEDOUX inquired as to when enforcement action would occur enforcement take place. She offered an example of a person building a home and two years later selling the same home. She then asked if this is when the department got involved. CHAIR ANDERSON offered that the department would be involved when there had been a violation detected. MR. BITNEY related his understanding of the applicability and that this would be applied not when one sells the home, but when one begins to act like a general contractor for the construction of the next new home, not when the old home is sold. CHAIR ANDERSON stated that Representative LeDoux was actually trying to ask what would happen if a owner/builder sold the home after two years, which would be in violation of the three-year occupancy requirement. 4:22:07 PM REPRESENTATIVE ROKEBERG stated that the question from Representative LeDoux is germane in terms of the slight ambiguity that is created by inserting this clause into the document. He stated that we have a three-year standard by adopting the CS, but we still retain a one-year standard within the same sentence. He pointed out that within the same sentence there are three different tests of the bill's legitimacy. CHAIR ANDERSON stated that the recommendation could be to tweak page 5, line 6, so that it is in parity with page 5, beginning of Section 12, lines 2-3. REPRESENTATIVE ROKEBERG answered that it is a matter of drafting. 4:23:22 PM CHAIR ANDERSON asserted that he wants this clean and unambiguous. REPRESENTATIVE ROKEBERG pointed out that if an owner/builder builds something, occupies it, and then builds something else, this legislation disallows the sale of the prior property. He asserted that this constrains trade. CHAIR ANDERSON declared that the only difficulty he has with this idea is the possibility of having a commercial building versus a home and reconciling the two. REPRESENTATIVE ROKEBERG affirmed that the owner/builder can reside in both concurrently. The owner/builder would have to show external evidence for his occupancy in one or both residencies. CHAIR ANDERSON supposed there was the possibility of ambiguity. REPRESENTATIVE ROKEBERG moved that the committee adopt Conceptual Amendment [1 inserting language] such that 'you can only privately build a house every three years' be added. CHAIR ANDERSON announced that this suggested language would be added to page 5, lines 2-7, subsection 12. REPRESENTATIVE GUTTENBERG asked if the three consecutive calendar years could be interpreted as 14 months or is the intent to have 36 months. 4:26:10 PM MR. BITNEY said he thought that either way it's saying the same thing. CHAIR ANDERSON stated that Legislative Legal and Research Services could review it. REPRESENTATIVE ROKEBERG inquired as to the rationale behind selecting three consecutive years. CHAIR ANDERSON related that the legislative intent of the bill is to discourage builders from acting like a private homebuilder in order to fall undetected within this requirement. The intent is to keep them from building homes and not occupying them. It is also discourages the practice of family building activities which also circumvents the core of the bill. Three years is an arbitrary number and has no judicial principal behind it, but is long enough to show proof of residency and intentions to build and occupy. MR. BITNEY agreed that three years is long enough to determine occupancy, which is the term being used by his organization since it really gets to the heart of the matter, and provides a brighter line on which to judge cases. 4:28:50 PM REPRESENTATIVE LEDOUX posed a situation in which someone builds his own home, and then sells it after two years, and then doesn't build another house. She asked if that owner/builder would be liable if he held off on building another house right away. CHAIR ANDERSON reiterated that the owner must occupy the residence for three consecutive years. Once construction is completed, the owner/builder must move in and reside there for three years, or the contractor licensure is violated. MR. BITNEY clarified that the language speaks to when the owner/builder can start construction on the next new home. REPRESENTATIVE LEDOUX expressed concern in a situation in which someone builds a home and for some reason he moves someplace else. Theoretically, such an individual would be in violation of the law. She asked if such a person could be prosecuted. REPRESENTATIVE GUTTENBERG reiterated that the intent is not to stop the owner/builders who build one home every four to five years. The legislation attempts to catch those people that are trying to stay under the radar. REPRESENTATIVE ROKEBERG suggested that the test could be whether the owner/builder is the bona fide owner/occupant. 4:33:36 PM REPRESENTATIVE ROKEBERG went on to say that the committee could even talk about restricting family members. The legislation could be worded in such a way that would prohibit various members of a family from qualifying. CHAIR ANDERSON said that although he liked what Representative Rokeberg suggested about making it more definitive in terms of the differences, but that expands the bill enough in Conceptual Amendment 1, that it has become a concern. He suggested that the legislation as amended by and with the stated legislative intent be moved. REPRESENTATIVE ROKEBERG expressed concern regarding whether the previous motion provided the drafter with enough flexibility. Therefore, Representative Rokeberg withdrew Conceptual Amendment 1. There being no objection, it was so ordered. REPRESENTATIVE ROKEBERG moved that the committee adopt Conceptual Amendment 2, as follows: The number of building units will be consistent with any length of prohibition and additionally consider the builder and his bona fide use of the property. If the person who builds the building and the person is a bona fide user of the building there will be no three- year restriction. REPRESENTATIVE ROKEBERG continued by stating that there cannot be restrictions on the movement and mobility of people. We need another criteria which is a bona fide residency and the restriction of numbers of people within a family that would qualify for building. MR. BITNEY suggested that the language on page 5, lines 2-3, which read, 'occupies the property after construction for not less than two consecutive years', would be better within the limitation on page 5, line 6. This is opposed to having it placed at the beginning of the paragraph. This is more contextual to the idea trying to be conveyed. CHAIR ANDERSON noted that there was no objection to Conceptual Amendment 2. Therefore, Conceptual Amendment 2 was adopted. REPRESENTATIVE ROKEBERG moved to report CSHB 81, Version 24- LSO144\Y, Mischel, 1/26/05, as amended, out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHB 81(L&C) was reported from the House Labor and Commerce Standing Committee.
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