Legislature(1993 - 1994)
04/03/1993 08:00 AM STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 192: ADVERTISING BY UNREGISTERED CONTRACTORS Number 319 CHAIRMAN VEZEY called the committee back to order at 8:54 a.m., read the title to SSHB 192, and called for its sponsor's statement. Number 325 REPRESENTATIVE ELDON MULDER, PRIME SPONSOR OF SSHB 192, stated past regulations prevented unregistered contractors from advertising their services unless they were certified tradesmen, but a subsequent court ruling struck those regulations down. He stated further that HB 192 would put the former regulations into statute, which would protect consumers from unscrupulous contractors. He advised SSHB 192 also tightens the "handyman" provisions in the regulation, which he said accounts for 50% of all unlicensed contractors' violations. REPRESENTATIVE MULDER explained the latest version also was amended to exclude publications from penalties because of periodicals like USA Today and the Wall Street Journal that are brought in from outside. Number 417 REPRESENTATIVE ULMER perceived the law would be unenforceable without the advertising restrictions. Number 440 CHAIRMAN VEZEY declared it did not matter if the state could penalize publishers, because the industry would police itself. He felt it would be in the best interest of licensed contractors to clean up the business, and that they would. He pointed out the latest version of SSHB 192 raised the maximum fine for violations from $1,000 to $10,000. Number 464 REPRESENTATIVE ULMER stated the industry might police itself better if the person turning in a violator was given part of the fine amount. Number 470 CHAIRMAN VEZEY was not adverse to that idea, but would not suggest it himself. Number 473 VICE CHAIRMAN PETE KOTT expressed concern about the $10,000 maximum fines, saying similar violations usually carried an average fine of $300. He was concerned such a high fine would constitute criminality and lead to full jury trials. Number 485 CHAIRMAN VEZEY pointed out it is standard procedure in most commercial law cases to impose large fines, often in the $10,000 range, and felt the state would be able to do so under HB 192. Number 503 REPRESENTATIVE GARY DAVIS had concerns about HB 192, but supported the larger fine. Number 505 CHAIRMAN VEZEY said the $10,000 level ought to be the minimum. Number 510 REPRESENTATIVE OLBERG MOVED ADOPTION of CSHB 192 (STA). There was no objection, and CSHB 192 (STA) WAS ADOPTED. Number 519 KARL LUCK, DIRECTOR, DIVISION OF OCCUPATIONAL LICENSING, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT (DCED), said the DCED supported HB 192, but noted the need for several changes. He suggested changing Section one to include the possibility of municipal licenses being issued, and tightening the use of advertising in the yellow pages, since there was an exemption for directories in the latest version. Number 570 CHAIRMAN VEZEY had no problem with deleting lines five and six of section one. Number 587 REPRESENTATIVE OLBERG agreed with the deletion. He could envision the Yellow Pages with several listings after the exemption was given. Number 592 REPRESENTATIVE G. DAVIS concurred, saying the Yellow Pages would be a key area for small contractors to draw business from. Number 600 MR. LUCK also had concerns about the maximum fine amount, saying an opinion from state attorneys said any fine above the $3,000 amount might be determined as criminal instead of a misdemeanor. Number 620 CHAIRMAN VEZEY felt the legislature is moving toward stiffer penalties and incarceration standards of this magnitude, and the maximum fine is within the guidelines of that philosophy. Number 630 REPRESENTATIVE ULMER agreed with the Chairman, but asked for either a court opinion or an Attorney General's opinion to backup Mr. Luck's statements. Number 640 MR. LUCK stated there was no written opinion, but rather verbal comments from staff lawyers that led him to believe the large fine might be a problem. He went on to detail his concerns with Line 25 on page two of HB 192, in which the sale of non-permanent parts of a structure are permitted. He did not know what that meant. Number 657 CHAIRMAN VEZEY believed that referred to tools and equipment. Number 660 MR. LUCK asked the committee to define those terms in the final version of CSHB 192. He then took issue with paragraph eight of page two, saying the qualification of "handymen" would be hard to define without a contract. He asked for a definition of "minor, inconsequential, or casual" labor as mentioned in CSHB 192. Number 693 CHAIRMAN VEZEY felt it would be hard to legislate common sense of what "minor, inconsequential or casual" labor might be. He stated the idea was to allow small businessmen to get started while maintaining some control over the industry. Number 698 REPRESENTATIVE OLBERG stated if the department sought only minor changes, perhaps the committee should hold HB 192. TAPE 93-38, SIDE A Number 000 MR. LUCK felt the "handyman" work threshold of $2,500 to $5,000 would be hard for the state to enforce with current personnel levels. CHAIRMAN VEZEY felt the state should not be trying to enforce that anyway, because the industry would probably do the enforcement. Number 050 MR. LUCK stated it would still require more people even if the industry policed itself, because complaints would still have to be handled by state commerce officers. He estimated it would take at least 12 people statewide to handle the investigation of complaints. Number 092 CHAIRMAN VEZEY noted Mr. Luck's suggestions, summarized the amendments the committee might want to make, then entertained a motion to formalize the latest version of CSHB 192. (A copy of the amendments may be found in the House State Affairs Committee Room, Capitol Room 102, and after the adjournment of the second session of the 18th Alaska State Legislature, in the Legislative Reference Library.) Number 111 REPRESENTATIVE OLBERG MOVED ADOPTION of the AMENDMENTS. Members took some moments to familiarize themselves with the language changes. Number 182 CHAIRMAN VEZEY MOVED the PROPOSED AMENDMENTS. There were no objections; the AMENDMENTS to CSHB 192 (STA) WERE ADOPTED. REPRESENTATIVE OLBERG MOVED PASSAGE of CSHB 192 (STA) from committee, and asked for unanimous consent. Without objections, THE MOTION CARRIED.