01/21/2005 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB47 | |
| HB81 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 47 | TELECONFERENCED | |
| *+ | HB 64 | TELECONFERENCED | |
| *+ | HB 81 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
January 21, 2005
3:22 p.m.
MEMBERS PRESENT
Representative Tom Anderson, Chair
Representative Pete Kott
Representative Gabrielle LeDoux
Representative Bob Lynn
Representative Harry Crawford
Representative David Guttenberg
MEMBERS ABSENT
Representative Norman Rokeberg
COMMITTEE CALENDAR
HOUSE BILL NO. 64
"An Act extending the termination date for the Board of Public
Accountancy; and providing for an effective date."
- MOVED HB 64 OUT OF COMMITTEE
HOUSE BILL NO. 47
"An Act extending the termination date of the Board of Certified
Real Estate Appraisers."
- MOVED HB 47 OUT OF COMMITTEE
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."
- HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 64
SHORT TITLE: EXTEND BOARD OF PUBLIC ACCOUNTANCY
SPONSOR(S): REPRESENTATIVE(S) HAWKER
01/12/05 (H) READ THE FIRST TIME - REFERRALS
01/12/05 (H) L&C, FIN
01/21/05 (H) L&C AT 3:15 PM CAPITOL 17
BILL: HB 47
SHORT TITLE: EXTEND BOARD OF REAL ESTATE APPRAISERS
SPONSOR(S): REPRESENTATIVE(S) SAMUELS
01/10/05 (H) PREFILE RELEASED 12/30/04
01/10/05 (H) READ THE FIRST TIME - REFERRALS
01/10/05 (H) L&C, FIN
01/21/05 (H) L&C AT 3:15 PM CAPITOL 17
BILL: HB 81
SHORT TITLE: CONTRACTOR LICENSE ENFORCEMENT
SPONSOR(S): REPRESENTATIVE(S) ANDERSON
01/19/05 (H) READ THE FIRST TIME - REFERRALS
01/19/05 (H) L&C, JUD, FIN
01/21/05 (H) L&C AT 3:15 PM CAPITOL 17
WITNESS REGISTER
JULIE LUCKY, Staff
for Representative Mike Hawker
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 64 on behalf of the sponsor,
Representative Hawker.
PAT DAVIDSON, Legislative Auditor
for the Legislative Audit Division
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 64 and HB 47 on
behalf of the sponsor Representative Hawker.
DON RULIAN, Chairman
of the Legislative Committee;
past President, Alaska State CPA Society
POSITION STATEMENT: Testified in support of HB 64.
LALANYA SNYDER, Staff
for Representative Ralph Samuels
Alaska State Legislature
POSITION STATEMENT: Testified on behalf of Representative
Samuels, sponsor of HB 64.
JEFF DE SMET, Owner and Contractor
J. De SMet Construction
POSITION STATEMENT: Testified on HB 81.
ALAN WILSON, Legislative Co-Chair
Alaska State Home Building Association
POSITION STATEMENT: Testified on HB 81.
MIKE MUSICK, President
Interior Alaska Building Association;
Member, Alaska State Home Building Association
POSITION STATEMENT: Testified on of HB 81.
TOM GERVAIS, Owner
Alkota Plumbing and Heating
POSITION STATEMENT: Testified on HB 81.
DAVE OWENS, Owner
Owens Inspection Service;
President of Mat-Su Home Builders Association
POSITION STATEMENT: Testified on behalf of HB 81.
RICK URION, Director
Division of Occupational Licensing
Department of Commerce, Community, & Economic Development
POSITION STATEMENT: Testified on HB 81.
GREY MITCHEL, Director
Division of Labor Standards and Safety
Department of Labor & Workforce Development
POSITION STATEMENT: Testified on HB 81.
ACTION NARRATIVE
CHAIR TOM ANDERSON called the House Labor and Commerce Standing
Committee meeting to order at 3:22:00 PM. Representatives Kott,
LeDoux, Lynn, Crawford, and Guttenberg were present at the call
to order.
HB 64-EXTEND BOARD OF PUBLIC ACCOUNTANCY
CHAIR ANDERSON announced that the first order of business would
be HOUSE BILL NO. 64, "An Act extending the termination date for
the Board of Public Accountancy; and providing for an effective
date."
JULIE LUCKY, Staff for Representative Mike Hawker, Alaska State
Legislature, explained that the extension of the board of public
accountancy is to June 30, 2009, following approval. This board
she said, protects public interest by ensuring that only
qualified people are licensed as accountants and that
appropriate standards are enforced. The board's fees cover the
cost of regulatory costs. The board is actively working on the
number one recommendation which is giving additional test sites
for uniform CPA examinations.
PAT DAVIDSON, Legislative Auditor, Legislative Audit Division,
indicated that indeed the recommendation of the legislative
audit was to make a four-year extension for this board. The
division made an additional recommendation with regard to
changing the CPA exam from a manual model to a computer model.
The CPA exam used to be offered twice a year, and now its
offered four times a year. The division also asked that
financial barriers to the profession be eliminated.
CHAIR ANDERSON asked whether or not there had been any
legislation that changed the testing procedures.
MS. DAVIDSON replied yes, there were changes made last year.
REPRESENTATIVE GUTTENBERG asked what the relationship between
the board and Culmetrix and how well they get along and if there
is any way that the board is moving to take this over.
MS. DAVIDSON explained that it is a nationalized test. Culmetrix
is a contractor with a nationwide organization. The board is
allowed to use this test to test participants and all the
candidates get their license from this test. This means that it
is not realistic to move away from the nationwide test. Alaska
is working with a contractor and is trying to expand the number
of sites.
REPRESENTATIVE LYNN asked how long it will be [for the
expansion] and who determines this.
MS. DAVIDSON reported that the normal limit in statute is set at
four years. If recommendations are made for something further
out, the [division] specifies why. For the sunset process in
total, [the division] is recommending that the Board of Public
Accountancy be extended to eight years.
REPRESENTATIVE LEDOUX asked how long the Board of Accountancy
has been in existence and how long have the legislature has been
going through the sunset reviews.
MS. DAVIDSON answered that the board has been in existence for a
long time. She added that for the record she and the division's
staff are all CPA's, and therefore are not without review.
Anytime something occurs that is not in accordance with
standards is always noted.
DON RULIEN, Chairman, Legislative Committee; past President,
Alaska State CPA Society, outlined a letter he had written
previously and stated that he wanted the continuance of the
board. He announced that his group is currently working on the
same bill being discussed.
REPRESENTATIVE LYNN moved to report HB 64 out of committee with
individual recommendations and the accompanying fiscal notes.
There being no objection, HB 64 was reported from House Labor
and Commerce Standing Committee.
HB 47-EXTEND BOARD OF REAL ESTATE APPRAISERS
3:32:42 PM
CHAIR ANDERSON announced that the next order of business would
be HOUSE BILL NO. 47, "An Act extending the termination date of
the Board of Certified Real Estate Appraisers."
LALANYA SNYDER, Staff for Representative Ralph Samuels, Alaska
State Legislature, announced that HB 47 is the result of a
legislative audit and that the boards function is to set
standards for the real estate industry, and oversee the
examinations by which appraisers are certified, and adopt
regulations to ensure that state and federal regulations are
satisfied. She concluded by stating that the bill extends the
board until June 30, 2010.
3:33:52 PM
PAT DAVIDSON, Legislative Auditor, Legislative Audit Division,
announced that the division conducted an audit of the Board Of
Real Estate Appraisers and recommend an extension.
MS. DAVIDSON continued by saying that the use of state certified
real estate appraisers will be a continuing requirement for
Alaska financial institutions to qualify for federal deposit
insurance and participate in the selling of mortgage loans to
federal government sponsor entities like Sallie Mae and Freddie
Mac. As a result they believe that the board should be extended.
CHAIR ANDERSON closed public testimony on HB 47.
REPRESENTATIVE KOTT moved to report HB 47 out of committee with
individual recommendations and the accompanying fiscal notes.
There being no objection, HB 47 was reported from the House
Labor and Commerce Standing Committee.
HB 81-CONTRACTOR LICENSE ENFORCEMENT
CHAIR ANDERSON announced that the final 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, speaking as the sponsor, said that house bill
was created because individuals in the construction trade were
hiring themselves out as construction contractors when they were
in fact, not registered as such. They were not fulfilling the
licensure aspect as such.
3:35:55 PM
CHAIR ANDERSON paraphrased from his sponsor statement, which
read [original punctuation provided]:
Under current law, the State of Alaska investigates
and enforces violations of construction contractor
laws. Both the Departments of Labor and Commerce,
Community & Economic Development have authority to
pursue violations of work performed by unregistered
construction contractors. For the most part, they
rely upon the public complaints, and follow up with
investigations (depending on the availability of
resources). Under current laws, these agencies
enforce violation by issuing citations. After a
citation is issued, the impetus falls to the
Department of Law as to whether or not to prosecute
the matter in Court.
With over 1,600 unregistered contractors operating
under this exemption, numerous reports have been made
about these unregistered businesses offering
construction services in violation of the laws.
Enforcement efforts have proven to be difficult and
many consumers are unaware their contractor may not be
qualified to provide construction services, and even
worse, have little or no insurance and warranty
protections.
HB 81 would amend the law to allow DCCED of DOL to
issue civil penalties for violations. Instead of
going through the Dept. of Law, a violator would
either pay a fine (proposed at $1,000 for the first
violation and $1,500 for subsequent violations) or
appeal to an administrative hearing officer. This
system would be much more effective toward penalizing
first-time violations quickly and effectively. The
Departments would retain the option of going through
the current criminal violation process if the fines
did not deter a violator.
CHAIR ANDERSON concluded by stating that the bill would allow
better penalization of violators and repeat offenders would
really be scrutinized. He concluded by urging everyone to
support HB 81.
3:38:51 PM
JEFF DE SMET, Owner and Contractor of J. De Smet Construction,
informed the committee that he runs a contracting business here
in Juneau and has been in business for 28 years. He explained
that he is representing the local building industry association
for which he is the president elect. He noted that he is also on
the board of directors of Alaska State Home Builders
Association. Mr. De Smet announced that he is in favor of HB
81, which he said needs to come out of the criminal side of
statutory law and be placed where citations can be given out. He
postulated that it is a budgetary constraint that will motivate
people to be knowledgeable with statutory issues and address
problems.
REPRESENTATIVE GUTTENBERG asked the speaker to talk about the
impact on contractors.
3:40:30 PM
MR. DE SMET explained that over the years, there have been
blatant violations in which people who have no license
whatsoever employ people without workers' compensation or
liability insurance. He went on to say that the legitimate
contractors cannot compete against this because [those working
without a license] are charging the same labor rates without
offering protection for the consumer or the worker.
MR. DE SMET then pointed out that the product problems and
problems with insurance are both local and statewide. The
aforementioned are ongoing problems especially with the crisis
involving workers' compensation rates and the general liability
problems.
MR. DE SMET, in response to Representative Guttenberg, explained
that these rogue handymen are operating outside the bounds of
the law and it wastes a lot of time and money. "We" are trying
to elevate everyone to the same level, he said.
CHAIR ANDERSON reiterated for the record that the three main
things that are at issue here are consumer protection, the
creation of an even playing field, and lastly limiting the
depreciation of a contractors license.
REPRESENTATIVE GUTTENBERG answered that this is the case
absolutely.
REPRESENTATIVE CRAWFORD asked who will enforce the law and the
issuing of the citations.
3:44:10 PM
CHAIR ANDERSON asked the Representative Crawford's question be
addressed later in the discussion.
3:44:28 PM
ALAN WILSON, Legislative Co-Chair, Alaska State Home Building
Association, stated that his group looked at several ways to
enforce this bill. He concurred with Chair Anderson that this
bill is a good fix, although he noted the concern with people
acting like contractors, and owner/builder families. He
indicated that [owner/builder families] are building homes one
after another and current statutes are very vague on this. Mr.
Wilson related that [owner/builder families are allowed to
build] one single family building per year. However, the
definition of "year" is unclear and needs to be resolved in the
statute. This [vagueness] makes it difficult for the department
to enforce. Therefore, he requested the opportunity to address
this issue in the bill. He suggested that perhaps the matter can
be addressed by defining the start date or limiting those who
are building multiplex structures to make money. He opined that
the penalty, a fine of $250, is not stiff enough to make the
violation one to worry about.
3:49:11 PM
REPRESENTATIVE LEDOUX questioned whether there is any
requirement in regard to selling the home after building the
home.
MR. WILSON answered that it is not clear, but indicated that
there is no requirement.
3:50:14 PM
MIKE MUSICK, President, Interior Alaska Building Association;
Member, Alaska State Home Building Association, said that after
[the associations] met and discussed the handyman issue, they
came to a consensus that some legislation should be put into
place to address these unlicensed contractors who are working as
general contractors. Licensed builders must have 16 hours of
building science classes, relative to the Alaskan environment.
He related that this bill should be passed.
3:52:18 PM
TOM GERVAIS, Owner, Alkota Plumbing and Heating, announced that
he has seen a great deal of abuse of the handyman license in
this industry over the years. One of the big issues in Anchorage
is the rise in carbon monoxide poisoning deaths, which are
attributable to poor installation. All appliances, he said, are
accompanied by manuals that are very specific. Furthermore, the
appliances must be installed in accordance with local and state
guidelines. He said that this problem is rampant and it's hard
to identify [offenders]. To remedy this, he suggested requiring
a physical license on the vehicle or on the person. He furthered
this idea by adding that at the point of sale, the permit should
be sold. This would ensure that a licensed individual would be
looking at the installation. He concluded by reiterating his
support of this bill.
REPRESENTATIVE LYNN stated that as he understood it, the line
between handyman and licensed worker is delineated by the amount
of the contract, that is that handymen can do work amounting to
less than $5,000.
MR. GERVAIS informed the committee that one has to be a
certified plumber to perform any task in plumbing systems, waste
systems, and natural gas systems. Although $5,000 is still the
demarcating amount, he contended that there are skilled aspects
of the profession that are valued at lower than $5,000.
REPRESENTATIVE LYNN posed a situation in which a job estimate is
$4,500, but increased to $5,500 as problems arise.
MR. GERVAIS answered that if the job estimate is $4,500, the job
is way beyond the handyman specialty.
3:55:52 PM
CHAIR ANDERSON asked if this is an anomaly that doesn't happen
very often.
MR. DE SMET postulated that this problem happens frequently. By
statute, plumbers and electricians have to have a certification
of fitness to do the job. By contrast, carpenters don't. He
noted that contractors have to have a license that ensures the
contractor has the proper education and background to do the
job.
MR. DE SMET went on to say that the general public has to accept
some of the responsibility and seek out a licensed, bona fide
skilled worker. [The associations] are trying to work with the
public to educate them regarding who to hire and who not to
hire.
CHAIR ANDERSON suggested that people employing handymen are not
watching the limit and saying that a contractor needs to come in
when that limit is reached. He further suggested that when the
handyman breaches this limit, the employing people contact the
department.
MR. DE SMET related his personal experience in which handymen
have gotten into situations beyond their capability. He said
that the state needs to educate consumers on this matter.
4:00:26 PM
DAVE OWENS, Owner, Owens Inspection Service; and President,
Mat-Su Home Builders Association, stressed that he and his group
very much appreciate the new legislation. He announced that he
has a few comments with regard to the owner/builders and said he
has seen an abuse of the law. For instance, whole families who
build and sell homes with the intention of never occupying them.
He requested that this breach of the law be fine tuned to
mitigate the problem. Mr. Owens expressed his hope that this
legislation would not become a home inspector bill, and
therefore he asked that the term referring to home inspectors be
replaced with "specialty contractor". This language, he
clarified, can be found on page 1, line 4. He explained that
home inspectors are contractors just like all specialty
contractors.
4:03:47 PM
RICK URION, Division of Occupational Licensing, Department of
Commerce, Community, & Economic Development, asserted that the
bill is a good step. He related the [division's] frustration
with this issue and related the good work being done to deal
with it.
REPRESENTATIVE GUTTENBERG referred to page 2, lines 24-26, which
read:
The department may not impose an administrative fine
on a person who is acting as a contractor or home
inspector in an area with a population of 1,000 or
less that is not connected by road or rail to
Anchorage or Fairbanks.
REPRESENTATIVE GUTTENBERG asked how that related to people
living in cities that require licensing and going out to
rural areas where there is no requirement for licensing. He
noted that these places were not exempt from this.
MR. URION declared that he did not write this particular phrase
and is surprised. He said he supports the [Representative
Guttenberg's] assertion that the language seems to exempt people
in the Bush. He also said that people in the Bush deserve the
same kind of protection as those in urban areas.
4:06:18 PM
GREY MITCHEL, Director, Labor Standards and Safety, Department
of Labor and Workforce Development, announced that the
[department] did the majority of enforcement for contractor
licensing. He then described these inspections as being done
with staff who are doing this work on the side from their normal
ascribed duties. The problem here is making transitions from
these normal duties to the more 'police' side of inspection
duties. In offering his support, he said that this proposal will
create a streamlined enforcement process by which one will be
able to issue an administrative fine and the alleged violator
will have the opportunity to request a hearing.
MR. MITCHEL said that currently, when one writes a citation, it
has to be presented to the district attorney, who then decides
whether to take the case. He went on to say that one of the
problems is whether his division could show that the person knew
he/she was supposed to be licensed. He explained that when the
department goes to the work site a cease and desist order is
issued, which most often results in the offender stopping the
activity. However, the offender might have several jobs and
these don't always get inspected. This bill will allow the
department to do a better job when it comes to enforcing the
licensing rules ubiquitously.
CHAIR ANDERSON pointed out that now is the time for the
technical questions.
REPRESENTATIVE GUTTENBERG asked what happens if a person acting
as a contractor in Juneau goes to Halibut Cove where he/she
doesn't act under his contractor's license and thus walks away
from his liability [in Halibut Cove].
MR. MITCHEL answered that [the legislation] created an exemption
from the administrative fine component should [an individual]
operate in areas that require licensing. However, licensing is
still required, he stated.
MR. MITCHEL stated that his group believes that having this be
an administrative fine, the potential for extra work in the
administrative hearing side is going to be made up on the
efficiency side with the inspectors not having to spend so much
time on the work up of the citations. He announced that [the
department] has a proposed amendment. Essentially, the bill in
Section 2, on page 2, line 17, allows someone to request a
hearing over the telephone. Although there is no real time
period in which to do so, the law stipulates that it be done in
a timely manner.
MR. MITCHEL offered a proposal allowing 30 days for someone to
request a hearing. Afterwards there is no alternative. It sets
the stage for efficient handling of fines. With regard to the
telephone request, he suggested that this should be done in
writing to address the why a hearing is required.
CHAIR ANDERSON closed public testimony on HB 81.
REPRESENTATIVE GUTTENBERG moved to report HB 81 out of committee
with individual recommendations and the accompanying fiscal
notes.
REPRESENTATIVE LYNN referring to the second paragraph, line 17,
made a motion to adopt [Conceptual Amendment 1], which would
eliminate the dangling preposition "to".
CHAIR ANDERSON agreed to Conceptual Amendment 1.
REPRESENTATIVE GUTTENBERG questioned whether 30 days is enough
time.
MR. MITCHEL stated that the time limit was arrived at through
the standard civil rules for response to court filings.
REPRESENTATIVE LEDOUX questioned whether these [requests] out
through certified mail.
MR. MITCHEL answered that they are delivered through restricted
delivery.
CHAIR ANDERSON added that someone will know because he/she will
have to sign for the letter.
CHAIR ANDERSON announced that Conceptual Amendment 1 was adopted
and that public testimony was still open, though limited.
[HB 81 was held over.]
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
4:19:49 PM [stated as 4:17 p.m.].
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