Legislature(2013 - 2014)SENATE FINANCE 532

04/12/2014 10:00 AM Senate FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- 15 Minutes Upon Adjournment --
*+ SB 220 PERS/TRS STATE CONTRIBUTIONS TELECONFERENCED
Heard & Held
+ SB 209 REGULATION OF SMOKING TELECONFERENCED
Moved CSSB 209(HSS) Out of Committee
+ SB 193 CONTRACTORS: BONDS; LICENSING TELECONFERENCED
Moved SB 193 Out of Committee
+ SB 141 NATIONAL GUARD ID & VEHICLE FEES TELECONFERENCED
Heard & Held
+= HB 32 LINES OF BUSINESS ON BUSINESS LICENSE TELECONFERENCED
Scheduled But Not Heard
+= HCR 15 TASK FORCE ON UNMANNED AIRCRAFT SYSTEMS TELECONFERENCED
Scheduled But Not Heard
+ Bills Previously Heard/Scheduled TELECONFERENCED
SENATE BILL NO. 193                                                                                                           
                                                                                                                                
     "An Act relating to bonds required for contractors."                                                                       
                                                                                                                                
10:13:54 AM                                                                                                                   
                                                                                                                                
SENATOR  PETER  MICCICHE,  explained  that  the  legislation                                                                    
would increase  the license bond  amounts to  the following:                                                                    
general  contractors,   $25,000;  general   contractors  who                                                                    
perform only  residential, $20,000; mechanical  or specialty                                                                    
contractors,  $10,000;  and  contractor  performing  minimal                                                                    
work,  $5,000.  The  construction industry,  which  will  be                                                                    
impacted   by    the   legislation,   brought    forth   the                                                                    
recommendation to  make an adjustment  in the  bond amounts.                                                                    
given the increase in inflation  over the last 30 years, the                                                                    
industry  felt an  increase was  long overdue.  Purchasing a                                                                    
bond generally costs a small  percentage of the total amount                                                                    
of  coverage, thus  providing a  significant benefit  to the                                                                    
public and  other businesses in  relation to the  small cost                                                                    
increase as a  result of the legislation. He  stated that SB
193  also   corrected  a  loophole   in  the   statute.  All                                                                    
professional  contractors are  required to  be licensed  and                                                                    
file a  bong. A notable  exemption is  that the law  did not                                                                    
intend  to impose  license and  bond requirements  upon non-                                                                    
professional  contractors such  as family  members, friends,                                                                    
or  neighbors who  get  paid  for a  small  amount of  work.                                                                    
Current law allows work under  $10,000 to be exempt and this                                                                    
wording   allowed  individuals   who   sell  themselves   as                                                                    
professionals    to    avoid   the    statutory    licensure                                                                    
requirements.  In these  cases, the  public has  no recourse                                                                    
against unlicensed and un-bonded contractors.                                                                                   
                                                                                                                                
Co-Chair Meyer  stated that he  has some people  online that                                                                    
would  be able  to  testify about  the legislation.  Senator                                                                    
Micciche  stated  that  those  testifiers  may  be  able  to                                                                    
explain how the current bond  rates hamper the Department of                                                                    
Law's  consumer protection  activities. He  stated that  the                                                                    
bill was about modernization and fairness.                                                                                      
                                                                                                                                
Co-Chair  Meyer  wondered  how the  bill  would  impact  the                                                                    
handyman. Senator  Micciche replied that the  bill would not                                                                    
impact  the  handyman.  If that  individual  advertises,  it                                                                    
would not  affect the individual.  The only impact  the bill                                                                    
might   have  is   that  it   would   save  the   individual                                                                    
approximately $250  per year, because that  person currently                                                                    
was bonded at the next highest level of contractor.                                                                             
                                                                                                                                
Senator  Micciche  stressed that  if  someone  chose to  not                                                                    
follow the current law by  not being bonded as a contractor,                                                                    
that person would  still be able to become  bonded. The bill                                                                    
provided  savings  for  the smaller  contractors,  who  were                                                                    
fully bonded, licensed and insured.                                                                                             
                                                                                                                                
10:18:07 AM                                                                                                                   
                                                                                                                                
Senator Dunleavy  remarked that  he had many  questions, but                                                                    
would not know how to  approach the topic without seeing how                                                                    
the legislation  was implemented.  He wondered how  the bill                                                                    
would affect someone who was  providing $5000 worth of work.                                                                    
Senator Micciche  asked if that person  would be advertising                                                                    
that work.                                                                                                                      
                                                                                                                                
Senator  Dunleavy stated  that the  individual would  not be                                                                    
advertising  their work.  Senator Micciche  stated that  the                                                                    
legislation  would change  the  bonding for  the few  people                                                                    
that were not advertisement.                                                                                                    
                                                                                                                                
Senator Dunleavy  queried the requirement.  Senator Micciche                                                                    
responded that  the legislation  changed the  requirement at                                                                    
the $5000 level,  and would add about $250 per  year to that                                                                    
person's business cost.                                                                                                         
                                                                                                                                
Senator Dunleavy  wondered how the legislation  would affect                                                                    
a  person  who  advertised. Senator  Micciche  replied  that                                                                    
nothing would change for the person who advertised.                                                                             
                                                                                                                                
Senator Bishop  felt that the  legislation held  a universal                                                                    
benefit, based on the number  of letters of support. He felt                                                                    
that  the legislation  would be  of benefit  to the  smaller                                                                    
contractors,  because   the  creditors  may   have  improved                                                                    
confidence that  the contractor will  complete a  project or                                                                    
receive funding to initiate a project.                                                                                          
                                                                                                                                
Senator  Bishop   queried  the   Department  of   Labor  and                                                                    
Workforce Development's (DLWF) position on the legislation.                                                                     
                                                                                                                                
JAMES  NAGEL, MECHANICAL  INSPECTION MANAGER,  DEPARTMENT OF                                                                    
LABOR    AND   WORKFORCE    DEVELOPMENT,   ANCHORAGE    (via                                                                    
teleconference), stated  that DLWF was neutral  on the bill.                                                                    
He stated that the legislation  provided some benefit to the                                                                    
consumer and  to the current  group of business  people that                                                                    
were  operating  under  the   current  handyman  law.  Those                                                                    
individuals were currently  prohibited from advertising that                                                                    
would lead  a reasonable person  to believe that they  are a                                                                    
contractor. By  requiring bonding, that handyman  would be a                                                                    
licensed  contractor. The  legislation would  open up  their                                                                    
opportunities for business and advertising.                                                                                     
                                                                                                                                
Senator   Dunleavy  queried   the  groups   that  could   be                                                                    
negatively impacted  by the  bill. Mr.  Nagel felt  that the                                                                    
bill would  only increase  the cost by  about $250  per year                                                                    
for  the  individuals  who were  operating  solely  under  a                                                                    
business license, but were not  a licensed contractor. Under                                                                    
current law, if  that individual embarked on  a project that                                                                    
was valued at $2500 or  more, that individual already had to                                                                    
carry the same liability  insurance as a general contractor,                                                                    
which was the largest expense.                                                                                                  
                                                                                                                                
10:23:50 AM                                                                                                                   
                                                                                                                                
Senator  Olson  wondered how  the  bill  would affect  owner                                                                    
builders. Senator  Micciche replied that the  bill would not                                                                    
affect owner builders, unless there was a hired contractor.                                                                     
                                                                                                                                
JOHN  MACKINNON,  EXECUTIVE   DIRECTOR,  ASSOCIATED  GENERAL                                                                    
CONTRACTORS,  ANCHORAGE (via  teleconference), testified  in                                                                    
support of the legislation. He  stated that he began work on                                                                    
the legislation  four years prior,  and engaged  other trade                                                                    
associations.  At that  time, the  home building  market was                                                                    
not very  robust, so there was  not a strong effort  to move                                                                    
the legislation.  The home market had  recently improved, so                                                                    
the  organizations   felt  the   pressure  to   promote  the                                                                    
legislation. He  stated that there  was a focus  on ensuring                                                                    
that the levels  were beneficial to all  involved. The level                                                                    
was ultimately agreed upon, and  the level was close to what                                                                    
the 1983 levels  would have been, if they  had been adjusted                                                                    
for inflation. He  stressed that SB 193  was about increased                                                                    
bond   amounts  for   contractors,   to   ensure  that   the                                                                    
individuals in  the contracting  business receive  a license                                                                    
and  a  bond. He  stressed  that  neighbors, friends,  etc.,                                                                    
could assist  in building, but  if they begin  to advertise,                                                                    
they must obtain a bond.                                                                                                        
                                                                                                                                
Co-Chair Meyer CLOSED public testimony.                                                                                         
                                                                                                                                
Co-Chair   Meyer  wondered   why  the   fiscal  notes   were                                                                    
considered  indeterminate.  Senator  Micciche  replied  that                                                                    
DLWF was  not sure  how the finances  would be  impacted. He                                                                    
stressed that the effects would be negligible, if any.                                                                          
                                                                                                                                
Co-Chair Kelly MOVED to REPORT  SB 193 out of committee with                                                                    
individual  recommendations  and   the  accompanying  fiscal                                                                    
notes. There being NO OBJECTION, it was so ordered.                                                                             
                                                                                                                                
SB  193 was  REPORTED  out  of committee  with  a "do  pass"                                                                    
recommendation and  with previously  published indeterminate                                                                    
fiscal notes: F1(CED) and F2(LWF).                                                                                              
                                                                                                                                
10:29:00 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:33:47 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                

Document Name Date/Time Subjects
SB 141 - Sponsor Statement.pdf SFIN 4/12/2014 10:00:00 AM
SB 141
SB 141 - Supporting - AK National Guard Benefits Summary.pdf SFIN 4/12/2014 10:00:00 AM
SB 141
SB 141 - Supporting - Legislative Research Report.pdf SFIN 4/12/2014 10:00:00 AM
SB 141
SB209 House Bill 360_SB 209 Resolution of Support.pdf SFIN 4/12/2014 10:00:00 AM
SB 209
SB209 Public Testimony - Rathkopf.msg SFIN 4/12/2014 10:00:00 AM
SB 209
SB209 Public Testimony - Shuey.pdf SFIN 4/12/2014 10:00:00 AM
SB 209
SB209 Public Testimony - Smalley.pdf SFIN 4/12/2014 10:00:00 AM
SB 209
SB209 Resolution of Support for Smokefree Alaska copy.pdf SFIN 4/12/2014 10:00:00 AM
SB 209
SB209 Vaping community - Jacobs.msg SFIN 4/12/2014 10:00:00 AM
SB 209
SB209 Public Testimony - Olendorff.pdf SFIN 4/12/2014 10:00:00 AM
SB 209
SB209 Mat-Su Health Foundation support of SB209 - Ripley.msg SFIN 4/12/2014 10:00:00 AM
SB 209
SB220 Request concerning Unfunded Pension Liability - Lucas.msg SFIN 4/12/2014 10:00:00 AM
SB 220
SB220 Please support Governor Parnell's 3B infusion to the retirement fund - Rice.msg SFIN 4/12/2014 10:00:00 AM
SB 220
SB220 Public Testimony - Keffer.msg SFIN 4/12/2014 10:00:00 AM
SB 220
SB220 Pension Liability Solution - Wilson.msg SFIN 4/12/2014 10:00:00 AM
SB 220
SB220 SFin Committee Testimony - RPEA - Dulany.doc SFIN 4/12/2014 10:00:00 AM
SB 220
SB220 Public Testimony - Wilki.msg SFIN 4/12/2014 10:00:00 AM
SB 220
SB220 Opposition - Garrett.pdf SFIN 4/12/2014 10:00:00 AM
SB 220
SB220 Concerned retiree urges support if SB 220 - Fleischer.msg SFIN 4/12/2014 10:00:00 AM
SB 220
SB220 Public pension liability - Sather.msg SFIN 4/12/2014 10:00:00 AM
SB 220
SB220 Unfunded PERS Liability - Walker.msg SFIN 4/12/2014 10:00:00 AM
SB 220
SB220 Unfunded PERS Liability - Millard.msg SFIN 4/12/2014 10:00:00 AM
SB 220
SB220 Responsible and Intelligent Funding of Retiree Trusts - Coti.msg SFIN 4/12/2014 10:00:00 AM
SB 220
SB220 Public Testimony - Gilman.msg SFIN 4/12/2014 10:00:00 AM
SB 220
SB220 Public Testimony - Johnson.msg SFIN 4/12/2014 10:00:00 AM
SB 220
SB220 Alaska_Fiscal Note_Governor's Proposal SB 220 041214.pdf SFIN 4/12/2014 10:00:00 AM
SB 220
SB220 PersTers Testimony - Lynch.msg SFIN 4/12/2014 10:00:00 AM
SB 220
SB 209 Public Testimony Vapor - Blondeau.msg SFIN 4/12/2014 10:00:00 AM
SB 209
SB209 Public Testimony - Akelkok.msg SFIN 4/12/2014 10:00:00 AM
SB 209
SB220 Legislative Pres V6.pdf SFIN 4/12/2014 10:00:00 AM
SB 220
SB 220 - Sectional Analysis.pdf SFIN 4/12/2014 10:00:00 AM
SB 220