SB 189-EXEMPTION: LICENSING OF CONTRACTORS  1:31:08 PM CHAIR DUNLEAVY announced the consideration of SB 189. "An Act relating to an exemption from the regulation of construction contractors." He noted that this was the third hearing and there was a committee substitute (CS). 1:31:15 PM SENATOR MICCICHE moved to adopt the work draft CS for SB 189, labeled 28-LS1322\O, as the working document. CHAIR DUNLEAVY objected for discussion purposes. 1:31:43 PM STEVE RICCI, Aide, Senate Labor & Commerce Committee, presented the changes in Version O for SB 189. He explained that the changes to the exemption of who is a contractor in AS 08.18.161(12) are confined to those who live in a home rule, first class, or second class borough, or unified municipality. The language in this paragraph was further amended to recognize that it's not unusual for Alaskans to leave a portion of a project unfinished. The phrase "after the period of construction ends" was amended to say "after the structure is completed for its intended purpose" thereby removing the ambiguity as to whether construction is complete. If the person is occupying the home, the assumption is that it's being used for its intended purpose regardless of the fact that the home may still be covered in Tyvek instead of siding. CHAIR DUNLEAVY removed his objection. MR RICCI reminded members of the purpose of SB 189. It addresses the issue that a growing number of individuals are exploiting the owner-builder exemption in AS 08.18.161 to avoid the licensing, bonding, and insurance requirements that apply to contractors. Under current statute the exemption under paragraph (12) provides that an owner who acts as their own contractor may construct one home, duplex, triplex, four-plex, or commercial building every two years. The bill refines this by adding that someone can sell earlier if they demonstrate to the satisfaction of the [Department of Commerce, Community and Economic Development (DCCED)] that an earlier sale is not intended to circumvent the requirements under this chapter. The intention is to capture those who are building for income purposes. SENATOR OLSON asked about the unorganized borough. MR. RICCI replied there will be not changes for the individuals living in unorganized boroughs. CHAIR DUNLEAVY opened public testimony. 1:36:38 PM JAMES SQUYRES, representing himself, Delta Junction, Alaska, stated that he and a number of others just received a copy of the most recent version of SB 189 and there wasn't much time to review it. He noted that this bill was just scheduled today and a lot of people who might want to testify either couldn't arrange their schedule on such short notice or didn't have time to prepare an appropriate response. He requested the committee allow more time for people to understand the bill and how it would affect them. MR. SQUIRES expressed concern about the unintended consequences because he reads the exemption in paragraph (12) to now apply to homes in the unorganized borough and not in the organized borough. He also pointed out that owner-builders invest their own capital which is a different relationship than a contractor who is using capital from another source. This burdens the owner-builder. He suggested that this matter should be handled at the borough level and further suggested that the bill raises constitutional issues. 1:40:43 PM PAMELA GOODE, representing herself, Delta Junction, stated agreement with Mr. Squire that the bill was noticed at the 11th hour and for that reason alone it should be postponed. She described some of the language in the sponsor statement as offensive and questioned the notion of the state protecting consumers. She offered her perspective that the government should stay out. 1:43:07 PM JEFF HALL, representing himself, Palmer, Alaska, said he's a homebuilder in Palmer who supports the original version of SB 189. He maintained that the owner-builder exemption should be applied statewide. 1:44:32 PM PATRICK DALTON, representing himself, Delta Junction, Alaska, expressed concern that SB 189 limits a person's free use of their private property when it sets parameters on when they can sell their home. He questioned the broad application because many people in the organized areas of the state are in very remote locations living out the Alaskan dream of building their own home. He concluded that this matter should be addressed at the borough level. 1:49:02 PM SENATOR MICCICHE asked Mr. Ricci to clarify that the unorganized borough is no longer included in this exemption. MR. RICCI stated that the limitation to selling one home every two years, only applies to construction in a home rule, first class, or second class borough or unified municipality. The additions to the exemption in paragraph (12) only apply in those specific areas. Owners in the unorganized borough are held to existing statute. SENATOR MICCICHE summarized that licensing and bonding are a state responsibility as opposed to building codes that are adopted by a municipality. MR. RICCI confirmed that the [Department of Commerce, Community and Economic Development (DCCED)] does set licensing and bonding requirements. 1:50:55 PM SARA CHAMBERS, Director, Division of Corporations, Business and Professional Licensing, Department of Commerce, Community and Economic Development (DCCED), clarified for the record that the Department of Commerce, Community and Economic Development (DCCED) handles licensing and bonding matters. SENATOR MICCICHE asked Ms. Chambers to confirm that this is a state agency. MS. CHAMBERS explained that the legislature establishes statewide licensing and bonding requirements and DCCED implements these through regulations. MR. RICCI, responding to a question from the Chair, confirmed that the CS was delivered to committee members a few hours ago and it was posted on BASIS. Staff was informed of the changes before Version O was released. CHAIR DUNLEAVY found no further questions or comments and solicited a motion. 1:52:31 PM SENATOR MICCICHE moved to report CS for SB 189, Version O, from committee with individual recommendations and attached fiscal note(s). CHAIR DUNLEAVY announced that without objection CSSB 189(L&C) moved from the Senate Labor & Commerce Standing Committee.