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CSHB 9(JUD): "An Act relating to the registration of individuals who perform home inspections; relating to regulation of contractors; relating to registration fees for specialty contractors, home inspectors, and associate home inspectors; relating to home inspection requirements for residential loans purchased or approved by the Alaska Housing Finance Corporation; relating to civil actions by and against home inspectors and to civil actions arising from residential unit inspections; and providing for an effective date."

00                        CS FOR HOUSE BILL NO. 9(JUD)                                                                     
01 "An Act relating to the registration of individuals who perform home inspections;                                       
02 relating to regulation of contractors; relating to registration fees for specialty                                      
03 contractors, home inspectors, and associate home inspectors; relating to home inspection                                
04 requirements for residential loans purchased or approved by the Alaska Housing                                          
05 Finance Corporation; relating to civil actions by and against home inspectors and to                                    
06 civil actions arising from residential unit inspections; and providing for an effective                                 
07 date."                                                                                                                  
08 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
09    * Section 1.  AS 08.01.010(12) is amended to read:                                                                 
10                 (12)  regulation of construction contractors and home inspectors under                              
11       AS 08.18;                                                                                                         
12    * Sec. 2.  AS 08.01.065(c) is amended to read:                                                                     
13            (c)  Except as provided in (f) - (i) [(f) - (h)] of this section, the department shall                   
01       establish fee levels under (a) of this section so that the total amount of fees collected                         
02       for an occupation approximately equals the actual regulatory costs for the occupation.                            
03       The department shall annually review each fee level to determine whether the                                      
04       regulatory costs of each occupation are approximately equal to fee collections related                            
05       to that occupation. If the review indicates that an occupation's fee collections and                              
06       regulatory costs are not approximately equal, the department shall calculate fee                                  
07       adjustments and adopt regulations under (a) of this section to implement the                                      
08       adjustments.  In January of each year, the department shall report on all fee levels and                          
09       revisions for the previous year under this subsection to the office of management and                             
10       budget.  If a board regulates an occupation covered by this chapter, the department                               
11       shall consider the board's recommendations concerning the occupation's fee levels and                             
12       regulatory costs before revising fee schedules to comply with this subsection.  In this                           
13       subsection, "regulatory costs" means costs of the department that are attributable to                             
14       regulation of an occupation plus                                                                                  
15                 (1)  all expenses of the board that regulates the occupation if the board                               
16       regulates only one occupation;                                                                                    
17                 (2)  the expenses of a board that are attributable to the occupation if the                             
18       board regulates more than one occupation.                                                                         
19    * Sec. 3.  AS 08.01.065 is amended by adding a new subsection to read:                                             
20            (i)  Notwithstanding (c) of this section, the department shall establish fee levels                          
21       under (a) of this section so that the total amount of fees collected by the Department of                         
22       Community and Economic Development for specialty contractors, home inspectors,                                    
23       and associate home inspectors approximately equals the total regulatory costs of the                              
24       department for those three registration categories.  The department shall set the fee                             
25       levels for the issuance and renewal of a certificate of registration issued under                                 
26       AS 08.18 so that the fee levels are the same for all three of these registration                                  
27       categories and so that the fee level for a home inspector with a joint registration is not                        
28       different from the fee level for a home inspector who does not have a joint                                       
29       registration.  In this subsection, "joint registration" has the meaning given in                                  
30       AS 08.18.171.                                                                                                     
31    * Sec. 4.  AS 08.18.011 is amended to read:                                                                        
01            Sec. 08.18.011.  Registration required.  (a)  A person may not submit a bid or                             
02       work as a contractor until that person has been issued a certificate of registration as a                     
03       contractor by the department.  A partnership or joint venture shall be considered                             
04       registered as a contractor if one of the general partners or venturers whose name                             
05       appears in the name under which the partnership or venture does business is registered                            
06       as a contractor.                                                                                              
07            (b)  A general contractor may not use a bid or proposal from, award a bid or                                 
08       proposal to, contract with, or allow a person required to be registered under this                                
09       chapter to work for the general contractor as a specialty contractor unless the person is                         
10       registered as a specialty contractor under this chapter.                                                      
11    * Sec. 5.  AS 08.18.011 is amended by adding new subsections to read:                                              
12            (c)  Unless exempt under AS 08.18.156 or serving lawfully as an associate                                    
13       home inspector under (d) of this section, an individual may not perform a home                                    
14       inspection                                                                                                        
15                 (1)  for a residence not previously occupied as a residence unless that                                 
16       individual is registered as a home inspector for new homes under this chapter;                                    
17                 (2)  for a residence previously occupied as a residence unless that                                     
18       individual is registered as a home inspector for existing homes under this chapter.                               
19            (d)  Notwithstanding (c) of this section, an individual who is not registered as a                           
20       home inspector under this chapter may perform a home inspection as an associate                                   
21       home inspector if the individual                                                                                  
22                 (1)  is employed by a registered home inspector who supervises the                                      
23       associate's work and the inspection is of the type that the supervising individual is                             
24       authorized to perform; and                                                                                        
25                 (2)  is registered with the department as an associate home inspector.                                  
26            (e)  A registered home inspector who employs an associate home inspector                                     
27       under (d) of this section is liable for the work done by the associate home inspector.                            
28            (f)  An individual who holds a joint registration for home inspection is                                     
29       considered to be registered as both a home inspector for new homes and a home                                     
30       inspector for existing homes.                                                                                     
31    * Sec. 6.  AS 08.18.021(a) is amended to read:                                                                     
01            (a)  An applicant for registration as a contractor or home inspector shall                               
02       submit an application under oath upon a form to be prescribed by the commissioner                                 
03       and that [WHICH] must include the following information pertaining to the applicant:                          
04                 (1)  the applicant's [EMPLOYER] social security number;                                             
05                 (2)  if applying to be a registered contractor, the type of contracting                             
06       activity, whether a general or a specialty contractor and, if the latter, the type of                         
07       specialty;                                                                                                        
08                 (3)  if applying to be a registered home inspector, whether the                                     
09       applicant is applying to inspect new homes or existing homes, or both;                                        
10                 (4)  if applying to be a registered contractor, the name and address of                             
11       each partner if the applicant is a firm or partnership, or the name and address of the                            
12       owner if the applicant is an individual proprietorship, or the name and address of the                            
13       corporate officers and statutory agent, if any, if the applicant is a corporation; and                        
14                 (5)  if applying to be a registered home inspector, the name and                                    
15       address of the applicant.                                                                                     
16    * Sec. 7.  AS 08.18 is amended by adding new sections to read:                                                     
17            Sec. 08.18.022.  Home inspectors; associate home inspectors.  (a)  The                                     
18       department shall issue a certificate of registration as a home inspector for new homes,                           
19       existing homes, or both, as appropriate, to an individual who                                                     
20                 (1)  passes the appropriate home inspection examination; for purposes                                   
21       of this paragraph, the appropriate home inspection examination for an individual who                              
22       applies to be registered for inspection of                                                                        
23                      (A)  existing homes is the examination offered by the American                                     
24            Society of Home Inspectors, American Home Inspectors Training Institute, or                                  
25            National Association of Home Inspectors;                                                                     
26                      (B)  new homes or for a joint registration is the examination                                      
27            offered by the International Conference of Building Officials;                                               
28                 (2)  meets the educational and experience requirements adopted by the                                   
29       department in regulations for the type of registration applied for;                                               
30                 (3)  submits a complete application for registration within one year                                    
31       after passing the examination required under (1) of this subsection;                                              
01                 (4)  within the seven years preceding the date of application, has not                                  
02       been under a sentence for an offense related to forgery, theft in the first or second                             
03       degree, extortion, or defrauding creditors or for a felony involving dishonesty;                                  
04                 (5)  has not had the authority to perform home inspections revoked in                                   
05       this state or in another jurisdiction;                                                                            
06                 (6)  is not the subject of an unresolved criminal complaint or                                          
07       unresolved disciplinary action before a regulatory authority in this state or in another                          
08       jurisdiction related to real estate or home inspection matters; and                                               
09                 (7)  pays the appropriate fees.                                                                         
10            (b)  An individual may register with the department as an associate home                                     
11       inspector upon application, payment of the required fee, and determination by the                                 
12       department that the individual                                                                                    
13                 (1)  within the seven years preceding the date of application, has not                                  
14       been under a sentence for an offense related to forgery, theft in the first or second                             
15       degree, extortion, or defrauding creditors or for a felony involving dishonesty;                                  
16                 (2)  has not had the authority to perform home inspections revoked in                                   
17       this state or in another jurisdiction; and                                                                        
18                 (3)  is not the subject of an unresolved criminal complaint or                                          
19       unresolved disciplinary action before a regulatory authority in this state or in another                          
20       jurisdiction related to real estate or home inspection matters.                                                   
21            Sec. 08.18.023.  Pre-inspection documents and inspection reports.  (a)                                     
22       Before performing a home inspection, a registered home inspector or associate home                                
23       inspector shall provide to the person on whose behalf a home is inspected a written                               
24       document specifying                                                                                               
25                 (1)  the scope of intended inspection; the scope of the intended                                        
26       inspection may include systems and components that are not listed in                                              
27       AS 08.18.171(12); and                                                                                             
28                 (2)  that the inspector will notify in writing the person on whose behalf                               
29       the inspection is being made of defects noted during the inspection along with a                                  
30       recommendation, if any, that experts be retained to conduct further evaluation through                            
31       examination and analysis by a qualified professional, tradesperson, or service                                    
01       technician beyond that provided by the home inspection to determine the extent of                                 
02       defects and corrective action necessary to address the defects.                                                   
03            (b)  After performance of a home inspection, a registered home inspector or                                  
04       associate home inspector shall give a written home inspection report to the person                                
05       requesting the inspection.  The written report must include a review of the condition of                          
06       each system and component identified as being within the scope of the intended                                    
07       inspection under (a) of this section except that a home inspector's written report for                            
08       new construction that is the subject of a loan by the Alaska Housing Finance                                      
09       Corporation or another lender may be in the form required by the corporation or other                             
10       lender, as appropriate.                                                                                           
11            (c)  In addition to the written inspection report required under (b) of this                                 
12       section, an oral inspection report may be given by the inspector during or after the                              
13       inspection.                                                                                                       
14            (d)  A home inspection report is valid for 180 days after the date the home                                  
15       inspector signs and dates the report.                                                                             
16    * Sec. 8.  AS 08.18.031(a) is amended to read:                                                                     
17            (a)  Except as provided in (c) of this section, a  [A] certificate of registration                       
18       shall be renewed under the same requirements as for an original registration, and the                         
19       [.  THE] commissioner shall issue to the applicant a certificate of registration upon                             
20       compliance with the registration requirements of this chapter.                                                    
21    * Sec. 9.  AS 08.18.031 is amended by adding a new subsection to read:                                             
22            (c)  A certificate of registration as a home inspector may not be renewed unless                             
23       the home inspector has complied with the continuing competency requirements                                       
24       established by the department.  The department shall adopt regulations establishing the                           
25       continuing competency requirements.  The department shall require at least eight                                  
26       hours of continuing competency activity for each licensing period.  The regulations                               
27       must provide that a continuing competency activity approved by one of the following                               
28       entities satisfies the continuing competency requirements of this subsection if the                               
29       activity meets the requirements established by the department in regulations adopted                              
30       under this subsection:                                                                                            
31                 (1)  Alaska Housing Finance Corporation;                                                                
01                 (2)  University of Alaska;                                                                              
02                 (3)  American Society of Home Inspectors Alaska Chapter;                                                
03                 (4)  a chapter of the International Conference of Building Officials                                    
04       Alaska;                                                                                                           
05                 (5)  Alaska State Homebuilders Association; or                                                          
06                 (6)  a state agency that offers an activity that meets the requirements set                             
07       by the department.                                                                                                
08    * Sec. 10.  AS 08.18.041 is amended to read:                                                                       
09            Sec. 08.18.041.  Fees.  (a)  The department shall set fees under AS 08.01.065                              
10       for                                                                                                               
11                 (1)  registration and renewal of registration for all categories of                                     
12       contractors;                                                                                                      
13                 (2)  registration and renewal of registration for a home inspector                                  
14       qualified to inspect new homes;                                                                               
15                 (3)  registration and renewal of registration for a home inspector                                  
16       qualified to inspect existing homes;                                                                          
17                 (4)  joint registration and renewal of joint registration for home                                  
18       inspectors;                                                                                                   
19                 (5)  registration and renewal of registration as an associate home                                  
20       inspector;                                                                                                    
21                 (6)  examinations for applicants for home inspector registration;                                   
22                 (7)  examination, issuance of initial endorsement, and renewal of active                            
23       or inactive endorsements for residential contractors; and                                                         
24                 (8) [(3)]  departmental publications and seminars related to this chapter.                          
25            (b)  A person who fails a residential contractor examination or home                                     
26       inspector examination shall pay the examination fee set by the department if the                              
27       person applies to retake an examination.                                                                          
28    * Sec. 11.  AS 08.18.051(a) is amended to read:                                                                    
29            (a)  Except as provided otherwise by law, a person who has registered as a                               
30       contractor under one name as required by this chapter may not act in the capacity of a                        
31       contractor under any other name unless that name also is registered.                                              
01    * Sec. 12.  AS 08.18 is amended by adding a new section to read:                                                   
02            Sec. 08.18.053.  Identification requirements for home inspectors.  (a)                                     
03       Except as provided otherwise by law, an individual who is registered as a home                                    
04       inspector or associate home inspector under this chapter by one name may not act in                               
05       the capacity of a home inspector or associate home inspector under any other name.                                
06            (b)  All advertising and business cards prepared by a registered home inspector                              
07       or associate home inspector for the home inspection business must show the                                        
08       inspector's name, mailing address, and registration number.                                                       
09            (c)  Individual registered home inspectors and partners, associates, agents,                                 
10       salespeople, solicitors, officers, and employees of registered home inspectors shall use                          
11       their true names and addresses and the true name of the home inspecting firm at all                               
12       times while acting in the capacity of a registered home inspector or performing related                           
13       activities.                                                                                                       
14            (d)  Individuals who are exempt from registration under AS 08.18.156(a) or                                   
15       whose actions are not considered to be home inspections under AS 08.18.156(b) may                                 
16       not hold themselves out to be registered home inspectors or use words or titles that                              
17       may reasonably be confused with the title of "registered home inspector" unless they                              
18       are registered as a home inspector under this chapter.                                                            
19    * Sec. 13.  AS 08.18.061 is amended to read:                                                                       
20            Sec. 08.18.061.  Requirements of political subdivision.  A contractor or                               
21       home inspector who is registered with the state under this chapter may not be                                 
22       required to give bond in applying for or holding a license issued by a political                                  
23       subdivision for a similar occupation.                                                                         
24    * Sec. 14.  AS 08.18.071(a) is amended to read:                                                                    
25            (a)  Each applicant shall, at the time of applying for a certificate of registration,                        
26       file with the commissioner a surety bond running to the state conditioned upon the                                
27       applicant's promise to pay all                                                                                    
28                 (1)  taxes and contributions due the state and political subdivisions;                                  
29                 (2)  persons furnishing labor or material or renting or supplying                                       
30       equipment to the applicant; and                                                                                   
31                 (3)  amounts that may be adjudged against the applicant by reason of                                    
01       negligent or improper work or breach of contract in the conduct of the contracting                                
02       business or home inspection activity, as applicable, or by reason of damage to                                
03       public facilities occurring in the course of a construction project.                                              
04    * Sec. 15.  AS 08.18.071(b) is amended to read:                                                                    
05            (b)  If the applicant is a general contractor, the amount of the bond shall be                               
06       $10,000; if the applicant is a mechanical or specialty contractor or home inspector,                          
07       the amount of the bond shall be $5,000. In lieu of the surety bond the applicant may                              
08       file with the commissioner a cash deposit or other negotiable security acceptable to the                          
09       commissioner in the amount specified for bonds.                                                                   
10    * Sec. 16.  AS 08.18.081(a) is amended to read:                                                                    
11            (a)  Except as provided in AS 08.18.085, a [A] person having a claim against                             
12       a contractor or home inspector for any of the items referred to in AS 08.18.071 may                           
13       bring suit upon the bond in the district court of the judicial district in which venue lies.                      
14       A copy of the complaint shall be served by registered or certified mail upon the                                  
15       commissioner at the time suit is filed, and the commissioner shall maintain a record,                             
16       available for public inspection, of all suits commenced.  Two additional copies shall                             
17       be served upon the director of the division of insurance with the payment to the                                  
18       director of a fee set under AS 21.06.250, taxable as costs in the action.  This service                           
19       upon the director shall constitute service on the surety, and the director shall transmit                         
20       the complaint or a copy of it to the surety within 72 hours after it has been received.                           
21       The surety upon the bond is not liable in an aggregate amount in excess of that named                             
22       in the bond, but in case claims pending at any one time exceed the amount of the bond,                            
23       the claims shall be satisfied from the bond in the following order:                                               
24                 (1)  labor, including employee benefits;                                                                
25                 (2)  taxes and contributions due the state, city, and borough, in that                              
26       order;                                                                                                            
27                 (3)  material and equipment;                                                                            
28                 (4)  claims for breach of contract;                                                                     
29                 (5)  repair of public facilities.                                                                       
30    * Sec. 17.  AS 08.18 is amended by adding a new section to read:                                                   
31            Sec. 08.18.085.  Legal actions against home inspector.  (a)  Notwithstanding                               
01       contrary provisions of AS 08.18.081 or AS 09.10, a person may not bring an action                                 
02       against an individual registered under this chapter based on a home inspection report                             
03       unless the action is commenced within                                                                             
04                 (1)  two years after the date of the home inspection report if the report                               
05       related to a new home; and                                                                                        
06                 (2)  one year after the date of the home inspection report if the report                                
07       related to an existing home.                                                                                      
08            (b)  The limitations in (a) of this section apply to all actions based on a home                             
09       inspection report, regardless of whether the action is based on breach of contract,                               
10       personal injury or death, property damage, or another source of liability.  The                                   
11       limitations may not be waived by contract.                                                                        
12            (c)  An individual registered as a home inspector or associate home inspector                                
13       under this chapter is not liable to a person for damages that arise from an act or                                
14       omission relating to a home inspection performed by the individual if the person is                               
15                 (1)  not a party to the transaction for which the home inspection was                                   
16       conducted; or                                                                                                     
17                 (2)  unlawfully in receipt of the home inspection report related to the                                 
18       home inspection.                                                                                                  
19            (d)  Contractual provisions that purport to limit the liability of a home                                    
20       inspector to the cost of the home inspection report are contrary to public policy and                             
21       void.                                                                                                             
22    * Sec. 18.  AS 08.18.111 is amended to read:                                                                       
23            Sec. 08.18.111.  Advertising bond and insurance.  Contractors and home                                 
24       inspectors may not advertise that they are bonded and insured simply because they                             
25       have complied with the bond and insurance requirements of this chapter.                                           
26    * Sec. 19.  AS 08.18.115 is amended to read:                                                                       
27            Sec. 08.18.115.  Return of cash deposit.  (a)  A contractor or home inspector                          
28       who has filed a cash deposit and who ceases doing business as a contractor or home                            
29       inspector may request the return of as much of that cash deposit as is held by the                            
30       commissioner by                                                                                                   
31                 (1)  filing a notarized statement with the commissioner that the                                        
01       contractor or home inspector has ceased doing business as a contractor or home                            
02       inspector, as applicable; and                                                                                 
03                 (2)  filing a notarized statement with the commissioner at least three                                  
04       years after filing the statement in (1) of this subsection that [WHICH]                                       
05                      (A)  requests return of the cash deposit;                                                          
06                      (B)  certifies that the former contractor or home inspector has                                
07            not been engaged in business as a contractor or home inspector, as                                       
08            applicable, for at least three years; and                                                                
09                      (C)  certifies that to the best of the contractor's or home                                    
10            inspector's knowledge no action has been commenced upon the cash deposit                                 
11            that [WHICH] has not been dismissed or reduced to a final judgment that                              
12            [WHICH] has been satisfied.                                                                                  
13            (b)  The commissioner, after paying any judgments against the cash deposit                                   
14       under AS 08.18.081(b), shall return the remainder of a former contractor's or former                          
15       home inspector's cash deposit to the contractor or home inspector, as applicable, if                      
16                 (1)  the former contractor or former home inspector has complied                                    
17       with (a) of this section; and                                                                                     
18                 (2)  no action has been commenced upon the cash deposit that                                        
19       [WHICH] has not been dismissed or reduced to a final judgment that [WHICH] has                                
20       been satisfied.                                                                                                   
21    * Sec. 20.  AS 08.18.116 is amended to read:                                                                       
22            Sec. 08.18.116.  Investigations.  Either the Department of Community and                                   
23       Economic Development or the Department of Labor and Workforce Development                                         
24       may investigate alleged or apparent violations of this chapter relating to contractors.                       
25       The Department of Community and Economic Development may investigate                                          
26       alleged or apparent violations of this chapter relating to home inspection                                    
27       activities.  These departments, upon showing proper credentials, may enter, during                            
28       regular hours of work, a construction site where it appears that contracting work is                              
29       being done.  The departments may make inquiries about the identity of the contractor                              
30       or the person acting in the capacity of a contractor.  The Department of Community                            
31       and Economic Development may make inquiries about the identity of a home                                      
01       inspector or a person acting in the capacity of a home inspector.  Upon demand, a                             
02       contractor or home inspector or person acting in the capacity of a contractor or home                     
03       inspector, or that person's representative, shall produce evidence of current                                 
04       endorsement, if applicable, and registration.                                                                     
05    * Sec. 21.  AS 08.18.117 is amended to read:                                                                       
06            Sec. 08.18.117.  Issuance of citations.  Either the Department of Community                                
07       and Economic Development or the Department of Labor and Workforce Development                                     
08       may issue a citation for a violation if there is probable cause to believe a person has                           
09       violated this chapter with respect to contractor activities.  The Department of                               
10       Community and Economic Development may issue a citation for a violation if                                    
11       there is probable cause to believe a person has violated this chapter with respect                            
12       to home inspection activities.  Each day a violation continues after a citation for the                       
13       violation has been issued constitutes a separate violation.                                                       
14    * Sec. 22.  AS 08.18.121(a) is amended to read:                                                                    
15            (a)  If the insurance required in AS 08.18.101 ceases to be in effect, the                                   
16       registration of the contractor or home inspector shall be suspended until the insurance                       
17       has been reinstated.                                                                                              
18    * Sec. 23.  AS 08.18.121(b) is amended to read:                                                                    
19            (b)  If a final judgment impairs the liability of the surety upon the bond or                                
20       depletes the cash deposit so that there is not in effect a bond undertaking or cash                               
21       deposit in the full amount prescribed in AS 08.18.071, the registration of the                                    
22       contractor or home inspector involved shall be suspended until the bond liability in                          
23       the required amount, unimpaired by unsatisfied judgment claims, has been furnished.                               
24    * Sec. 24.  AS 08.18.121(c) is amended to read:                                                                    
25            (c)  If a bonding company cancels its bond of a contractor or home inspector,                            
26       the contractor's or home inspector's registration shall be revoked.  The contractor or                    
27       home inspector may again obtain registration by complying with the requirements of                            
28       this chapter.                                                                                                     
29    * Sec. 25.  AS 08.18.121(d) is amended to read:                                                                    
30            (d)  If a registered contractor or registered home inspector fails to fulfill the                        
31       contractor's or home inspector's obligations as set out in AS 08.18.071, the                              
01       contractor's or home inspector's registration shall be suspended for a period of time                         
02       the commissioner determines is appropriate.  After three suspensions, the contractor's                        
03       or home inspector's registration may be permanently revoked.                                                  
04    * Sec. 26.  AS 08.18.121(f) is amended to read:                                                                    
05            (f)  If the Department of Community and Economic Development or the                                          
06       Department of Labor and Workforce Development determines that a contractor or [A]                                 
07       person acting in the capacity of a contractor [,] is in violation of this chapter, that                           
08       department may give written notice to the person prohibiting further action by the                                
09       person as a contractor.  If the Department of Community and Economic                                          
10       Development determines that a home inspector or a person acting in the capacity                               
11       of a home inspector is in violation of this chapter, the department may give                                  
12       written notice to the person prohibiting further action by the person as a home                               
13       inspector.  The prohibition in a notice given under this subsection continues until                       
14       the person has submitted evidence acceptable to the appropriate [THAT] department                             
15       showing that the violation has been corrected.                                                                    
16    * Sec. 27.  AS 08.18.123 is amended to read:                                                                       
17            Sec. 08.18.123.  Denial, suspension, and revocation of endorsement or                                    
18       home inspector registration.                                                                                  
19            (a)  The department may suspend, revoke, or refuse to grant or renew a                                       
20       residential contractor endorsement, a home inspector registration, or an associate                            
21       home inspector registration upon a finding that                                                               
22                 (1)  the application is fraudulent or misleading;                                                       
23                 (2)  the endorsement holder or registrant [CONTRACTOR] has                                          
24       knowingly violated this chapter or a lawful order or regulation of the department;                                
25                 (3)  the endorsement holder or registrant [CONTRACTOR] is                                           
26       incompetent or has engaged in fraudulent practices.                                                               
27            (b)  Proceedings for the denial, suspension, or revocation of residential                                    
28       contractor endorsement, home inspector registration, or associate home inspector                              
29       registration are governed by AS 44.62 (Administrative Procedure Act).                                         
30    * Sec. 28.  AS 08.18.131 is amended to read:                                                                       
31            Sec. 08.18.131.  Injunction; civil penalty.  In an action instituted in the                              
01       superior court by the Department of Community and Economic Development or the                                     
02       Department of Labor and Workforce Development, the court may enjoin a person                                      
03       from acting in the capacity of a contractor in violation of this chapter.  In an action                       
04       instituted in the superior court by the Department of Community and Economic                                  
05       Development, the court may enjoin a person from acting in the capacity of a                                   
06       home inspector in violation of this chapter.  In addition to other relief, the court may                      
07       impose a civil penalty of not more than $250 for each violation.  Each day that an                                
08       unlawful act continues constitutes a separate violation.                                                          
09    * Sec. 29.  AS 08.18.141(a) is amended to read:                                                                    
10            (a)  A contractor, home inspector, or [A] person acting in the capacity of a                             
11       contractor or home inspector who knowingly violates  AS 08.18.011 or 08.18.025 is                             
12       guilty of a class B misdemeanor.  A person who violates another provision of this                                 
13       chapter is guilty of a violation punishable under AS 12.                                                          
14    * Sec. 30.  AS 08.18.151 is amended to read:                                                                       
15            Sec. 08.18.151.  Legal actions by contractor or home inspector.  A person                                
16       acting in the capacity of a contractor or home inspector may not bring an action in a                         
17       court of this state for the collection of compensation for the performance of work or                             
18       for breach of a contract for which registration is required under this chapter without                            
19       alleging and proving that the contractor or home inspector was a registered contractor                        
20       or registered home inspector, as applicable, at the time of contracting for the                               
21       performance of the work.                                                                                          
22    * Sec. 31.  AS 08.18 is amended by adding new sections to article 4 to read:                                       
23            Sec. 08.18.152.  Prohibited acts for home inspectors.  An individual                                       
24       registered under this chapter as a home inspector or associate home inspector may not                             
25                 (1)  perform or offer to perform, for an additional fee, repairs to a                                   
26       subject property on which the home inspector or the home inspector's company has                                  
27       prepared a home inspection report in the past 12 months;                                                          
28                 (2)  inspect for a fee any property in which the home inspector or the                                  
29       home inspector's company has a financial interest or an interest in the transfer of the                           
30       property;                                                                                                         
31                 (3)  offer or deliver compensation, an inducement, or a reward to the                                   
01       owner of the inspected property, the broker, or the agent, for the referral of business to                        
02       the home inspector or the home inspector's company;                                                               
03                 (4)  without the written consent of the home inspection client or the                                   
04       client's legal representative, disclose information from a home inspection report                                 
05       prepared by the home inspector or the home inspector's company unless the disclosure                              
06       is made                                                                                                           
07                      (A)  to a subsequent client who requests a home inspection of                                      
08            the same premises; or                                                                                        
09                      (B)  by the home inspector in an administrative or judicial                                        
10            proceeding in which disclosure of the home inspection report is relevant to                                  
11            resolution of the legal issues in the proceeding;                                                            
12                 (5)  without the written consent of all interested parties, accept                                      
13       compensation from more than one interested party for the same home inspection                                     
14       services;                                                                                                         
15                 (6)  accept from a person who has other dealings with a home                                            
16       inspection client a commission or allowance, directly or indirectly, for work for which                           
17       the home inspector or the home inspector's company is responsible;                                                
18                 (7)  accept an engagement to make an inspection or to prepare a report                                  
19       in which the employment itself or the fee payable for the inspection is contingent upon                           
20       the conclusions in the report, preestablished findings, or the close of escrow.                                   
21            Sec. 08.18.154.  Limitation on home inspector's activities.  A registration                                
22       issued under AS 08.18.022 does not authorize the holder to perform an activity for                                
23       which a license is required under provisions of this title that are outside of this chapter.                      
24            Sec. 08.18.156.  Exemptions related to home inspections.  (a)                                              
25       Notwithstanding other provisions of this chapter, an individual who inspects a home is                            
26       not required to be registered under this chapter as a home inspector or associate home                            
27       inspector if the individual is                                                                                    
28                 (1)  employed by the federal or state government, a political                                           
29       subdivision of the state, or a municipality or unincorporated community and the                                   
30       employee is performing only duties that are within the employee's official duties;                                
31                 (2)  performing a home inspection only with respect to property that is                                 
01       the individual's residence or in which the individual has a financial interest;                                   
02                 (3)  registered as an engineer or architect under AS 08.48, prepares a                                  
03       written report after the inspection, affixes the individual's seal to the home inspection                         
04       report, signs and dates the report, and puts the individual's registration number on the                          
05       report;                                                                                                           
06                 (4)  engaged as an engineer in training or architect in training who                                    
07       works for and is supervised by a person described in (3) of this subsection and the                               
08       person described in (3) of this subsection affixes the person's seal to the home                                  
09       inspection report, signs and dates the report, and puts the person's registration number                          
10       on the report;                                                                                                    
11                 (5)  licensed as a pesticide applicator by the Department of                                            
12       Environmental Conservation and is performing only activities within the scope of that                             
13       license;                                                                                                          
14                 (6)  registered as a general contractor with a residential contractor                                   
15       endorsement under this chapter and is performing only activities within the scope of                              
16       that registration;                                                                                                
17                 (7)  certified as any type of real estate appraiser under AS 08.87 and is                               
18       performing only activities that are authorized under that certification; or                                       
19                 (8)  only determining whether a building complies with the thermal and                                  
20       lighting energy standards required by AS 46.11.040.                                                               
21            (b)  Notwithstanding the definition of "home inspection" in AS 08.18.171(12),                                
22       an individual is not considered to be doing a home inspection for purposes of this                                
23       chapter if the individual                                                                                         
24                 (1)  is in the business of repairing, maintaining, or installing any of  the                            
25       systems or components listed in AS 08.18.171(12); and                                                             
26                 (2)  inspects the system or component for the sole purpose of                                           
27       determining the condition of the system or component before performing or offering                                
28       to perform repair, maintenance, or installation work on the system  or component.                                 
29    * Sec. 32.  AS 08.18.161 is amended to read:                                                                       
30            Sec. 08.18.161.  Exemptions.  To the extent that this chapter governs                                  
31       contractors, this [THIS] chapter does not apply to                                                            
01                 (1)  an authorized representative of the United States government, the                                  
02       State of Alaska, or a political subdivision or agency of the state;                                               
03                 (2)  an officer of a court when acting within the scope of office;                                      
04                 (3)  a public utility operating under the regulations of the public service                             
05       commission in construction, maintenance, or development work incidental to its own                                
06       business;                                                                                                         
07                 (4)  a construction, repair, or operation incidental to the discovering or                              
08       producing of petroleum or gas, or the drilling, testing, abandoning, or other operation                           
09       of a petroleum or gas well or a surface or underground mine or mineral deposit when                               
10       performed by an owner or lessee;                                                                                  
11                 (5)  the sale or installation of finished products, materials, or articles of                           
12       merchandise that are not actually fabricated into and do not become a permanent,                                  
13       fixed part of a structure;                                                                                        
14                 (6)  construction, alteration, or repair of personal property;                                          
15                 (7)  a person who only furnished materials, supplies, or equipment                                      
16       without fabricating them into, or consuming them in the performance of, the work of                               
17       the contractor;                                                                                                   
18                 (8)  work on one project under one or more contracts, the aggregate                                     
19       contract price of which for labor and materials and all other items is less than $10,000                          
20       [, THIS WORK BEING CONSIDERED AS OF A CASUAL, MINOR, OR                                                           
21       INCONSEQUENTIAL NATURE]; this exemption does not apply when the work is                                           
22       only a part of a larger or major operation, whether undertaken by the same or a                                   
23       different contractor, or when the work is divided into contracts of amounts less than                             
24       $10,000 for the purpose of evasion of this chapter or otherwise; this exemption does                              
25       not apply to a person who advertises or puts out a sign or card or other device that                              
26       might indicate to the public that the person is a contractor, or that the person is                               
27       qualified to engage in the contracting business; a contractor who performs work priced                            
28       at $2,500 or more, under this exemption, shall nevertheless keep in force public                                  
29       liability and property damage insurance with coverage in at least the amounts set out                             
30       in AS 08.18.101;                                                                                                  
31                 (9)  an owner who contracts for a project with a registered contractor;                                 
01                 (10)  a person working on that person's own property, whether occupied                                  
02       by the person or not, and a person working on that person's own residence, whether                                
03       owned by the person or not;                                                                                       
04                 (11)  an owner or tenant of commercial property who uses the owner's                                    
05       or tenant's own employees to do maintenance, repair, and alteration work upon that                                
06       property;                                                                                                         
07                 (12)  an owner who acts as the owner's own contractor and in doing so                                   
08       hires workers on an hourly basis, hires subcontractors, purchases materials and, as                               
09       such, sees to the paying for all labor, subcontractors, and materials; in this case, the                          
10       owner shall be limited to construction of one home, duplex, triplex, four-plex, or one                            
11       commercial building a [PER] year;                                                                             
12                 (13)  a person performing construction work incidental to farming,                                      
13       dairying, agriculture, horticulture, stock or poultry raising, mining, logging, fishing,                          
14       clearing, or other work upon the land in rural districts for fire prevention purposes, or                         
15       access road building, unless the person is a licensee.                                                            
16    * Sec. 33.  AS 08.18.171 is amended by adding new paragraphs to read:                                              
17                 (11)  "existing home" means a residence previously occupied as a                                        
18       residence;                                                                                                        
19                 (12)  "home inspection" means a visual examination, performed in                                        
20       accordance with standards of practice adopted by the department, of the readily                                   
21       accessible parts of one or more of the following systems and components of a                                      
22       residence or intended residence:                                                                                  
23                      (A)  heating and air-conditioning systems;                                                         
24                      (B)  plumbing and electrical systems;                                                              
25                      (C)  built-in appliances;                                                                          
26                      (D)  roof, attic, and visible insulation;                                                          
27                      (E)  walls, ceilings, floors, windows, and doors;                                                  
28                      (F)  foundation and basement;                                                                      
29                      (G)  visible interior and exterior structures;                                                     
30                      (H)  drainage to and from the residence;                                                           
31                      (I)  other systems or components as specified by the department                                    
01            in regulations;                                                                                              
02                 (13)  "home inspector" means an individual who performs or offers to                                    
03       perform a home inspection for a fee;                                                                              
04                 (14)  "joint registration" means a certificate of registration that                                     
05       authorizes an individual to inspect both new homes and existing homes;                                            
06                 (15)  "knowingly" has the meaning given in AS 11.81.900;                                                
07                 (16)  "new home" means a residence not previously occupied as a                                         
08       residence;                                                                                                        
09                 (17)  "residence" means                                                                                 
10                      (A)  a single-family home other than a mobile home;                                                
11                      (B)  a duplex, triplex, or four-plex; or                                                           
12                      (C)  a residential townhouse or residential condominium unit;                                      
13                 (18)  "visual examination" means an examination performed in person                                     
14       at the physical location of the residence except that, if a method other than personal                            
15       physical inspection has been approved by the Alaska Housing Finance Corporation                                   
16       under AS 18.56.300(b), use of the other approved method constitutes a visual                                      
17       examination under this chapter.                                                                                   
18    * Sec. 34.  AS 18.56.300(b) is amended to read:                                                                    
19            (b)  As a condition of a commitment to purchase or approve a loan under this                                 
20       section for residential housing the construction of which begins after June 30, 1992,                             
21       the corporation shall require inspection of the unit of residential housing that is the                           
22       subject of the loan.  The inspection must be performed by a municipal building                                    
23       inspector, by a person who is approved or certified to perform residential inspections                            
24       by the International Conference of Building Officials or the International Association                            
25       of Electrical Inspectors, by an individual who is registered under AS 08.18 to                                
26       perform home inspections for new construction [OR, WHEN THE UNIT OF                                           
27       RESIDENTIAL HOUSING IS LOCATED IN A RURAL AREA], by an architect                                                  
28       registered under AS 08.48, by an engineer registered under AS 08.48, or by another                                
29       person approved by the corporation.  When the unit of residential housing is located in                           
30       a rural area, the person who makes the inspection may use methods other than a                                    
31       personal physical inspection to make the inspection if the method is approved by the                              
01       corporation, and variations from the applicable code may be accepted at the                                       
02       corporation's discretion, if the person authorized to inspect the unit under this                                 
03       subsection satisfies the corporation that the variation does not adversely affect the                             
04       structural integrity of the unit or the health and safety of the residents.  The person                           
05       who makes the inspection shall determine whether the construction conforms to                                     
06       relevant provisions of the construction codes of the municipality or of the state                                 
07       building code, as applicable, at each of the following stages of construction:                                    
08                 (1)  plan approval;                                                                                     
09                 (2)  completion of footings and foundations;                                                            
10                 (3)  completion of electrical installation, plumbing, and framing;                                      
11                 (4)  completion of installation of insulation;                                                          
12                 (5)  final approval.                                                                                    
13    * Sec. 35.  AS 18.56.300(b) is amended to read:                                                                    
14            (b)  As a condition of a commitment to purchase or approve a loan under this                                 
15       section for residential housing the construction of which begins after June 30, 1992,                             
16       the corporation shall require inspection of the unit of residential housing that is the                           
17       subject of the loan.  The inspection must be performed by a municipal building                                    
18       inspector, [BY A PERSON WHO IS APPROVED OR CERTIFIED TO PERFORM                                                   
19       RESIDENTIAL INSPECTIONS BY THE INTERNATIONAL CONFERENCE OF                                                        
20       BUILDING OFFICIALS OR THE INTERNATIONAL ASSOCIATION OF                                                            
21       ELECTRICAL INSPECTORS,] by an individual who is registered under AS 08.18 to                                      
22       perform home inspections for new construction, by an architect registered under                                   
23       AS 08.48, by an engineer registered under AS 08.48, or by another person approved                                 
24       by the corporation.  When the unit of residential housing is located in a rural area, the                         
25       person who makes the inspection may use methods other than a personal physical                                    
26       inspection to make the inspection if the method is approved by the corporation, and                               
27       variations from the applicable code may be accepted at the corporation's discretion, if                           
28       the person authorized to inspect the unit under this subsection satisfies the corporation                         
29       that the variation does not adversely affect the structural integrity of the unit or the                          
30       health and safety of the residents.  The person who makes the inspection shall                                    
31       determine whether the construction conforms to relevant provisions of the                                         
01       construction codes of the municipality or of the state building code, as applicable, at                           
02       each of the following stages of construction:                                                                     
03                 (1)  plan approval;                                                                                     
04                 (2)  completion of footings and foundations;                                                            
05                 (3)  completion of electrical installation, plumbing, and framing;                                      
06                 (4)  completion of installation of insulation;                                                          
07                 (5)  final approval.                                                                                    
08    * Sec. 36.  AS 36.30.050(b) is amended to read:                                                                    
09            (b)  A person who desires to be on a list shall submit to the commissioner                                   
10       evidence of a valid Alaska business license.  A biennial fee may be established by                                
11       regulation in an amount reasonably calculated to pay the costs of administering this                              
12       section.  A construction contractor shall also submit a valid certificate of registration                         
13       as a contractor issued under AS 08.18. The commissioner, by regulation, may require                           
14       submission of additional information.                                                                             
15    * Sec. 37.  AS 36.30.115(a) is amended to read:                                                                    
16            (a)  Within five working days after the identification of the apparent low bidder                            
17       for a construction contract, the apparent low bidder shall submit a list of the                                   
18       subcontractors the bidder proposes to use in the performance of the construction                                  
19       contract.  The list must include the name and location of the place of business for each                          
20       subcontractor, evidence of each subcontractor's valid Alaska business license, and                                
21       evidence of each subcontractor's registration as a contractor under AS 08.18. If a                            
22       subcontractor on the list did not have a valid Alaska business license and a valid                                
23       certificate of registration as a contractor under AS 08.18 at the time the bid was                            
24       opened, the bidder may not use the subcontractor in the performance of the contract,                              
25       and shall replace the subcontractor with a subcontractor who had a valid Alaska                                   
26       business license and a valid certificate of registration as a contractor under AS 08.18                       
27       at the time the bid was opened.                                                                                   
28    * Sec. 38.  AS 36.30.210(b) is amended to read:                                                                    
29            (b)  An offeror for a construction contract shall submit evidence of the offeror's                           
30       registration as a contractor under AS 08.18. A request for sealed proposals for a                             
31       construction contract, except a design-build construction contract, must require the                              
01       offeror, no later than five working days after the proposal that is the most                                      
02       advantageous to the state is identified, to list subcontractors the offeror proposes to use                       
03       in the performance of the construction contract.  The list must include the information                           
04       required under AS 36.30.115(a). The provisions of AS 36.30.115(b) - (g) that apply to                             
05       a construction contractor or an apparent low bidder apply to offerors submitting                                  
06       competitive sealed proposals for construction contracts, except design-build                                      
07       construction contracts.                                                                                           
08    * Sec. 39.  AS 36.90.290(1) is amended to read:                                                                    
09                 (1)  "prime contractor" means a person required to be registered as a                               
10       contractor under AS 08.18 who has a contract with the state or a political subdivision                        
11       of the state to provide materials or services, other than as an employee, for a public                            
12       construction or public works project;                                                                             
13    * Sec. 40.  AS 45.50.471(b) is amended by adding a new paragraph to read:                                          
14                 (45)  violating AS 08.18.023(b) or 08.18.152.                                                           
15    * Sec. 41.  AS 18.56.300(c) is repealed.                                                                           
16    * Sec. 42.  The uncodified law of the State of Alaska is amended by adding a new section to                        
17 read:                                                                                                                   
18       APPLICABILITY.  The change made by sec. 41 of this Act applies to causes of action                                
19 that accrue on or after July 1, 2005.                                                                                   
20    * Sec. 43.  The uncodified law of the State of Alaska is amended by adding a new section to                        
21 read:                                                                                                                   
22       REGULATIONS.  The Department of Community and Economic Development may                                            
23 proceed to adopt regulations to implement this Act.  A regulation adopted under this section                            
24 takes effect under AS 44.62 (Administrative Procedure Act) but not before the effective date                            
25 of the law implemented by the regulation.                                                                               
26    * Sec. 44.  The uncodified law of the State of Alaska is amended by adding a new section to                        
27 read:                                                                                                                   
28       TRANSITIONAL LICENSING PROVISIONS.  (a)  Notwithstanding AS 08.18.022,                                            
29 added by sec. 7 of this Act, the Department of Community and Economic Development shall                                 
30 issue a certificate of joint registration that is valid until January 1, 2006, to an individual who                     
31 submits to the department satisfactory evidence of being in the business of home inspection in                          
01 the state at the time of application for registration under this subsection and of having                               
02            (1)  been in the business of home inspection in the state on October 1, 2002;                                
03 and                                                                                                                     
04            (2)  passed the building inspector examination or property maintenance and                                   
05 housing inspector examination given by the International Conference of Building Officials.                              
06       (b)  Notwithstanding AS 08.18.022, added by sec. 7 of this Act, the Department of                                 
07 Community and Economic Development shall issue a certificate of registration to practice                                
08 home inspection of previously occupied residences that is valid until January 1, 2006, to an                            
09 individual who submits to the department satisfactory evidence of being in the business of                              
10 home inspection in the state at the time of application for registration under this subsection                          
11 and of having passed                                                                                                    
12            (1)  the national home inspector examination given by the American Society of                                
13 Home Inspectors, American Home Inspectors Training Institute, or National Association of                                
14 Home Inspectors; or                                                                                                     
15            (2)  the examination of the Examination Board of Professional Home                                           
16 Inspectors.                                                                                                             
17       (c)  Notwithstanding AS 08.18.022, added by sec. 7 of this Act, the Department of                                 
18 Community and Economic Development shall issue a certificate of registration to practice                                
19 home inspection of new construction that is valid until January 1, 2006, to an individual who                           
20 submits to the department satisfactory evidence of being in the business of home inspection in                          
21 the state at the time of application for registration under this subsection and of having passed                        
22 the combination inspector examination or the combination dwelling inspector examination                                 
23 given by the International Conference of Building Officials.                                                            
24       (d)  Notwithstanding AS 08.18.022, added by sec. 7 of this Act, the Department of                                 
25 Community and Economic Development shall issue a certificate of registration as an associate                            
26 home inspector that is valid until January 1, 2006, to an individual who submits to the                                 
27 department satisfactory evidence of being employed by an individual who is in the business of                           
28 home inspection and is registered under this section or under AS 08.18.                                                 
29       (e)  A certificate of registration issued under this section may not be renewed or                                
30 extended.                                                                                                               
31       (f)  Except as provided in (e) of this section, a certificate of registration as a home                           
01 inspector or associate home inspector issued under this section is considered to be a certificate                       
02 of registration as a home inspector or associate home inspector issued under AS 08.18.022,                              
03 added by sec. 7 of this Act.                                                                                            
04       (g)  In this section, "joint registration" has the meaning given in AS 08.18.171, as                              
05 amended by sec. 33 of this Act.                                                                                         
06    * Sec. 45.  AS 08.18.011(c) - (f), added by sec. 5 of this Act; AS 08.18.023, added by sec. 7                      
07 of this Act; AS 08.18.085, added by sec. 17 of this Act; AS 08.18.151, as amended by sec. 30                            
08 of this Act; and the amendment of AS 18.56.300(b), made by sec. 34 of this Act, take effect                             
09 July 1, 2004.                                                                                                           
10    * Sec. 46.  Section 35 of this Act takes effect January 1, 2006.                                                   
11    * Sec. 47.  Sections 41 and 42 of this Act take effect July 1, 2005.                                               
12    * Sec. 48.  Except as provided in secs. 45 - 47  of this Act, this Act takes effect immediately                    
13 under AS 01.10.070(c).