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Enrolled HB 9: 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; repealing a law that limits liability for damages based on a duty to inspect a residential unit to damages caused by gross negligence or intentional misconduct; and providing for an effective date.

00Enrolled HB 9 01 Relating to the registration of individuals who perform home inspections; relating to 02 regulation of contractors; relating to registration fees for specialty contractors, home 03 inspectors, and associate home inspectors; relating to home inspection requirements for 04 residential loans purchased or approved by the Alaska Housing Finance Corporation; relating 05 to civil actions by and against home inspectors and to civil actions arising from residential 06 unit inspections; repealing a law that limits liability for damages based on a duty to inspect a 07 residential unit to damages caused by gross negligence or intentional misconduct; and 08 providing for an effective date. 09 _______________ 10 * Section 1. AS 08.01.010(12) is amended to read: 11 (12) regulation of construction contractors and home inspectors under 12 AS 08.18;

01 * Sec. 2. AS 08.01.065(c) is amended to read: 02 (c) Except as provided in (f) - (i) [(f) - (h)] of this section, the department shall 03 establish fee levels under (a) of this section so that the total amount of fees collected 04 for an occupation approximately equals the actual regulatory costs for the occupation. 05 The department shall annually review each fee level to determine whether the 06 regulatory costs of each occupation are approximately equal to fee collections related 07 to that occupation. If the review indicates that an occupation's fee collections and 08 regulatory costs are not approximately equal, the department shall calculate fee 09 adjustments and adopt regulations under (a) of this section to implement the 10 adjustments. In January of each year, the department shall report on all fee levels and 11 revisions for the previous year under this subsection to the office of management and 12 budget. If a board regulates an occupation covered by this chapter, the department 13 shall consider the board's recommendations concerning the occupation's fee levels and 14 regulatory costs before revising fee schedules to comply with this subsection. In this 15 subsection, "regulatory costs" means costs of the department that are attributable to 16 regulation of an occupation plus 17 (1) all expenses of the board that regulates the occupation if the board 18 regulates only one occupation; 19 (2) the expenses of a board that are attributable to the occupation if the 20 board regulates more than one occupation. 21 * Sec. 3. AS 08.01.065 is amended by adding a new subsection to read: 22 (i) Notwithstanding (c) of this section, the department shall establish fee levels 23 under (a) of this section so that the total amount of fees collected by the Department of 24 Community and Economic Development for specialty contractors, home inspectors, 25 and associate home inspectors approximately equals the total regulatory costs of the 26 department for those three registration categories. The department shall set the fee 27 levels for the issuance and renewal of a certificate of registration issued under 28 AS 08.18 so that the fee levels are the same for all three of these registration 29 categories and so that the fee level for a home inspector with a joint registration is not 30 different from the fee level for a home inspector who does not have a joint 31 registration. In this subsection, "joint registration" has the meaning given in

01 AS 08.18.171. 02 * Sec. 4. AS 08.18.011 is amended to read: 03 Sec. 08.18.011. Registration required. (a) A person may not submit a bid or 04 work as a contractor until that person has been issued a certificate of registration as a 05 contractor by the department. A partnership or joint venture shall be considered 06 registered as a contractor if one of the general partners or venturers whose name 07 appears in the name under which the partnership or venture does business is registered 08 as a contractor. 09 (b) A general contractor may not use a bid or proposal from, award a bid or 10 proposal to, contract with, or allow a person required to be registered under this 11 chapter to work for the general contractor as a specialty contractor unless the person is 12 registered as a specialty contractor under this chapter. 13 * Sec. 5. AS 08.18.011 is amended by adding new subsections to read: 14 (c) Unless exempt under AS 08.18.156 or serving lawfully as an associate 15 home inspector under (d) of this section, an individual may not perform a home 16 inspection for a residence 17 (1) not previously occupied as a residence unless that individual is 18 registered as a home inspector for new homes under this chapter; 19 (2) previously occupied as a residence unless that individual is 20 registered as a home inspector for existing homes under this chapter. 21 (d) Notwithstanding (c) of this section, an individual who is not registered as a 22 home inspector under this chapter may perform a home inspection as an associate 23 home inspector if the individual is 24 (1) employed by a registered home inspector who supervises the 25 associate's work and the inspection is of the type that the supervising individual is 26 authorized to perform; and 27 (2) registered with the department as an associate home inspector. 28 (e) A registered home inspector who employs an associate home inspector 29 under (d) of this section is liable for the work done by the associate home inspector. 30 (f) An individual who holds a joint registration for home inspection is 31 considered to be registered as both a home inspector for new homes and a home

01 inspector for existing homes. 02 * Sec. 6. AS 08.18.021(a) is amended to read: 03 (a) An applicant for registration as a contractor or home inspector shall 04 submit an application under oath upon a form to be prescribed by the commissioner 05 and that [WHICH] must include the following information pertaining to the applicant: 06 (1) the applicant's [EMPLOYER] social security number; 07 (2) if applying to be a registered contractor, the type of contracting 08 activity, whether a general or a specialty contractor and, if the latter, the type of 09 specialty; 10 (3) if applying to be a registered home inspector, whether the 11 applicant is applying to inspect new homes or existing homes, or both; 12 (4) if applying to be a registered contractor, the name and address of 13 each partner if the applicant is a firm or partnership, or the name and address of the 14 owner if the applicant is an individual proprietorship, or the name and address of the 15 corporate officers and statutory agent, if any, if the applicant is a corporation; and 16 (5) if applying to be a registered home inspector, the name and 17 address of the applicant. 18 * Sec. 7. AS 08.18 is amended by adding new sections to read: 19 Sec. 08.18.022. Home inspectors; associate home inspectors. (a) The 20 department shall issue a certificate of registration as a home inspector for new homes, 21 existing homes, or both, as appropriate, to an individual who 22 (1) passes the appropriate home inspection examination; for purposes 23 of this paragraph, the appropriate home inspection examination for an individual who 24 applies to be registered for inspection of 25 (A) existing homes is the examination offered by the American 26 Society of Home Inspectors, American Home Inspectors Training Institute, or 27 National Association of Home Inspectors; 28 (B) new homes or for a joint registration is the examination 29 offered by the International Code Council; 30 (2) meets the educational and experience requirements adopted by the 31 department in regulations for the type of registration applied for;

01 (3) submits a complete application for registration within one year 02 after passing the examination required under (1) of this subsection; 03 (4) within the seven years preceding the date of application, has not 04 been under a sentence for an offense related to forgery, theft in the first or second 05 degree, extortion, or defrauding creditors or for a felony involving dishonesty; 06 (5) has not had the authority to perform home inspections revoked in 07 this state or in another jurisdiction; 08 (6) is not the subject of an unresolved criminal complaint or 09 unresolved disciplinary action before a regulatory authority in this state or in another 10 jurisdiction related to real estate or home inspection matters; and 11 (7) pays the appropriate fees. 12 (b) An individual may register with the department as an associate home 13 inspector upon application, payment of the required fee, and determination by the 14 department that the individual 15 (1) within the seven years preceding the date of application, has not 16 been under a sentence for an offense related to forgery, theft in the first or second 17 degree, extortion, or defrauding creditors or for a felony involving dishonesty; 18 (2) has not had the authority to perform home inspections revoked in 19 this state or in another jurisdiction; and 20 (3) is not the subject of an unresolved criminal complaint or 21 unresolved disciplinary action before a regulatory authority in this state or in another 22 jurisdiction related to real estate or home inspection matters. 23 Sec. 08.18.023. Pre-inspection documents and inspection reports. (a) 24 Before performing a home inspection, a registered home inspector or associate home 25 inspector shall provide to the person on whose behalf a home is inspected a written 26 document that includes the home inspector's registration number and that specifies 27 (1) the scope of intended inspection; the scope of the intended 28 inspection may include systems and components that are not listed in 29 AS 08.18.171(12); and 30 (2) that the inspector will notify in writing the person on whose behalf 31 the inspection is being made of defects noted during the inspection along with a

01 recommendation, if any, that experts be retained to conduct further evaluation through 02 examination and analysis by a qualified professional, tradesperson, or service 03 technician beyond that provided by the home inspection to determine the extent of 04 defects and corrective action necessary to address the defects. 05 (b) After performance of a home inspection, a registered home inspector or 06 associate home inspector shall give a written home inspection report to the person 07 requesting the inspection. The written report must include the home inspector's 08 registration number and a review of the condition of each system and component 09 identified as being within the scope of the intended inspection under (a) of this section 10 except that a home inspector's written report for new construction that is the subject of 11 a loan by the Alaska Housing Finance Corporation or another lender may be in the 12 form required by the corporation or other lender, as appropriate. 13 (c) In addition to the written inspection report required under (b) of this 14 section, an oral inspection report may be given by the inspector during or after the 15 inspection. 16 (d) A home inspection report is valid for 180 days after the date the home 17 inspector signs and dates the report. 18 * Sec. 8. AS 08.18.031(a) is amended to read: 19 (a) Except as provided in (c) of this section, a [A] certificate of registration 20 shall be renewed under the same requirements as for an original registration, and the 21 [. THE] commissioner shall issue to the applicant a certificate of registration upon 22 compliance with the registration requirements of this chapter. 23 * Sec. 9. AS 08.18.031 is amended by adding a new subsection to read: 24 (c) A certificate of registration as a home inspector may not be renewed unless 25 the home inspector has complied with the continuing competency requirements 26 established by the department. The department shall adopt regulations establishing the 27 continuing competency requirements. The department shall require at least eight 28 hours of continuing competency activity for each licensing period. The regulations 29 must provide that a continuing competency activity approved by one of the following 30 entities satisfies the continuing competency requirements of this subsection if the 31 activity meets the requirements established by the department in regulations adopted

01 under this subsection: 02 (1) Alaska Housing Finance Corporation; 03 (2) University of Alaska; 04 (3) American Society of Home Inspectors Alaska Chapter; 05 (4) a chapter of the International Code Council Alaska; 06 (5) Alaska State Home Building Association; or 07 (6) a state agency that offers an activity that meets the requirements set 08 by the department. 09 * Sec. 10. AS 08.18.041 is amended to read: 10 Sec. 08.18.041. Fees. (a) The department shall set fees under AS 08.01.065 11 for 12 (1) registration and renewal of registration for all categories of 13 contractors; 14 (2) registration and renewal of registration for a home inspector 15 qualified to inspect new homes; 16 (3) registration and renewal of registration for a home inspector 17 qualified to inspect existing homes; 18 (4) joint registration and renewal of joint registration for home 19 inspectors; 20 (5) registration and renewal of registration as an associate home 21 inspector; 22 (6) examinations for applicants for home inspector registration; 23 (7) examination, issuance of initial endorsement, and renewal of active 24 or inactive endorsements for residential contractors; and 25 (8) [(3)] departmental publications and seminars related to this chapter. 26 (b) A person who fails a residential contractor examination or home 27 inspector examination shall pay the examination fee set by the department if the 28 person applies to retake an examination. 29 * Sec. 11. AS 08.18.051(a) is amended to read: 30 (a) Except as provided otherwise by law, a person who has registered as a 31 contractor under one name as required by this chapter may not act in the capacity of a

01 contractor under any other name unless that name also is registered. 02 * Sec. 12. AS 08.18 is amended by adding a new section to read: 03 Sec. 08.18.053. Identification requirements for home inspectors. (a) 04 Except as provided otherwise by law, an individual who is registered as a home 05 inspector or associate home inspector under this chapter by one name may not act in 06 the capacity of a home inspector or associate home inspector under any other name. 07 (b) All advertising and business cards prepared by a registered home inspector 08 or associate home inspector for the home inspection business must show the 09 inspector's name, mailing address, and registration number. 10 (c) Individual registered home inspectors and partners, associates, agents, 11 salespeople, solicitors, officers, and employees of registered home inspectors shall use 12 their true names and addresses and the true name of the home inspecting firm at all 13 times while acting in the capacity of a registered home inspector or performing related 14 activities. 15 (d) Individuals who are exempt from registration under AS 08.18.156(a) or 16 whose actions are not considered to be home inspections under AS 08.18.156(b) may 17 not hold themselves out to be registered home inspectors or use words or titles that 18 may reasonably be confused with the title of "registered home inspector" or "home 19 inspector" unless they are registered as a home inspector under this chapter. 20 * Sec. 13. AS 08.18.061 is amended to read: 21 Sec. 08.18.061. Requirements of political subdivision. A contractor or 22 home inspector who is registered with the state under this chapter may not be 23 required to give bond in applying for or holding a license issued by a political 24 subdivision for a similar occupation. 25 * Sec. 14. AS 08.18.071(a) is amended to read: 26 (a) Each applicant shall, at the time of applying for a certificate of registration, 27 file with the commissioner a surety bond running to the state conditioned upon the 28 applicant's promise to pay all 29 (1) taxes and contributions due the state and political subdivisions; 30 (2) persons furnishing labor or material or renting or supplying 31 equipment to the applicant; and

01 (3) amounts that may be adjudged against the applicant by reason of 02 negligent or improper work or breach of contract in the conduct of the contracting 03 business or home inspection activity, as applicable, or by reason of damage to 04 public facilities occurring in the course of a construction project. 05 * Sec. 15. AS 08.18.071(b) is amended to read: 06 (b) If the applicant is a general contractor, the amount of the bond shall be 07 $10,000; if the applicant is a mechanical or specialty contractor or home inspector, 08 the amount of the bond shall be $5,000. In lieu of the surety bond, the applicant may 09 file with the commissioner a cash deposit or other negotiable security acceptable to the 10 commissioner in the amount specified for bonds. 11 * Sec. 16. AS 08.18.081(a) is amended to read: 12 (a) Except as provided in AS 08.18.085, a [A] person having a claim against 13 a contractor or home inspector for any of the items referred to in AS 08.18.071 may 14 bring suit upon the bond in the district court of the judicial district in which venue lies. 15 A copy of the complaint shall be served by registered or certified mail upon the 16 commissioner at the time suit is filed, and the commissioner shall maintain a record, 17 available for public inspection, of all suits commenced. Two additional copies shall 18 be served upon the director of the division of insurance with the payment to the 19 director of a fee set under AS 21.06.250, taxable as costs in the action. This service 20 upon the director shall constitute service on the surety, and the director shall transmit 21 the complaint or a copy of it to the surety within 72 hours after it has been received. 22 The surety upon the bond is not liable in an aggregate amount in excess of that named 23 in the bond, but in case claims pending at any one time exceed the amount of the bond, 24 the claims shall be satisfied from the bond in the following order: 25 (1) labor, including employee benefits; 26 (2) taxes and contributions due the state, city, and borough, in that 27 order; 28 (3) material and equipment; 29 (4) claims for breach of contract; 30 (5) repair of public facilities. 31 * Sec. 17. AS 08.18 is amended by adding a new section to read:

01 Sec. 08.18.085. Legal actions against home inspector. (a) Notwithstanding 02 contrary provisions of AS 08.18.081 or AS 09.10, a person may not bring an action 03 against an individual registered under this chapter based on a home inspection report 04 unless the action is commenced within one year. 05 (b) The limitation in (a) of this section applies to all actions based on a home 06 inspection report, regardless of whether the action is based on breach of contract, 07 personal injury or death, property damage, or another source of liability except that (a) 08 of this section is not applicable to an action based on gross negligence or intentional 09 misconduct by the home inspector. The limitation may not be waived by contract. 10 (c) A person may not bring an action against an individual registered under 11 this chapter for damages that arise from an act or omission relating to a home 12 inspection performed by the individual unless the person 13 (1) was a party to the real estate transaction for which the home 14 inspection was conducted; 15 (2) received the home inspection report with the written consent of the 16 party for whom the home inspection was originally performed; or 17 (3) acquired the property for which the home inspection report was 18 conducted by inheritance or bequest from a person who could have brought an action 19 under (1) or (2) of this subsection. 20 (d) Contractual provisions that purport to limit the liability of a home 21 inspector to the cost of the home inspection report are contrary to public policy and 22 void. 23 * Sec. 18. AS 08.18.111 is amended to read: 24 Sec. 08.18.111. Advertising bond and insurance. Contractors and home 25 inspectors may not advertise that they are bonded and insured simply because they 26 have complied with the bond and insurance requirements of this chapter. 27 * Sec. 19. AS 08.18.115 is amended to read: 28 Sec. 08.18.115. Return of cash deposit. (a) A contractor or home inspector 29 who has filed a cash deposit and who ceases doing business as a contractor or home 30 inspector may request the return of as much of that cash deposit as is held by the 31 commissioner by

01 (1) filing a notarized statement with the commissioner that the 02 contractor or home inspector has ceased doing business as a contractor or home 03 inspector, as applicable; and 04 (2) filing a notarized statement with the commissioner at least three 05 years after filing the statement in (1) of this subsection that [WHICH] 06 (A) requests return of the cash deposit; 07 (B) certifies that the former contractor or home inspector has 08 not been engaged in business as a contractor or home inspector, as 09 applicable, for at least three years; and 10 (C) certifies that to the best of the contractor's or home 11 inspector's knowledge no action has been commenced upon the cash deposit 12 that [WHICH] has not been dismissed or reduced to a final judgment that 13 [WHICH] has been satisfied. 14 (b) The commissioner, after paying any judgments against the cash deposit 15 under AS 08.18.081(b), shall return the remainder of a former contractor's or former 16 home inspector's cash deposit to the contractor or home inspector, as applicable, if 17 (1) the former contractor or former home inspector has complied 18 with (a) of this section; and 19 (2) no action has been commenced upon the cash deposit that 20 [WHICH] has not been dismissed or reduced to a final judgment that [WHICH] has 21 been satisfied. 22 * Sec. 20. AS 08.18.116 is amended to read: 23 Sec. 08.18.116. Investigations. Either the Department of Community and 24 Economic Development or the Department of Labor and Workforce Development 25 may investigate alleged or apparent violations of this chapter relating to contractors. 26 The Department of Community and Economic Development may investigate 27 alleged or apparent violations of this chapter relating to home inspection 28 activities. These departments, upon showing proper credentials, may enter, during 29 regular hours of work, a construction site where it appears that contracting work is 30 being done. The departments may make inquiries about the identity of the contractor 31 or the person acting in the capacity of a contractor. The Department of Community

01 and Economic Development may make inquiries about the identity of a home 02 inspector or a person acting in the capacity of a home inspector. Upon demand, a 03 contractor or home inspector or person acting in the capacity of a contractor or home 04 inspector, or that person's representative, shall produce evidence of current 05 endorsement, if applicable, and registration. 06 * Sec. 21. AS 08.18.117 is amended to read: 07 Sec. 08.18.117. Issuance of citations. Either the Department of Community 08 and Economic Development or the Department of Labor and Workforce Development 09 may issue a citation for a violation if there is probable cause to believe a person has 10 violated this chapter with respect to contractor activities. The Department of 11 Community and Economic Development may issue a citation for a violation if 12 there is probable cause to believe a person has violated this chapter with respect 13 to home inspection activities. Each day a violation continues after a citation for the 14 violation has been issued constitutes a separate violation. 15 * Sec. 22. AS 08.18.121(a) is amended to read: 16 (a) If the insurance required in AS 08.18.101 ceases to be in effect, the 17 registration of the contractor or home inspector shall be suspended until the insurance 18 has been reinstated. 19 * Sec. 23. AS 08.18.121(b) is amended to read: 20 (b) If a final judgment impairs the liability of the surety upon the bond or 21 depletes the cash deposit so that there is not in effect a bond undertaking or cash 22 deposit in the full amount prescribed in AS 08.18.071, the registration of the 23 contractor or home inspector involved shall be suspended until the bond liability in 24 the required amount, unimpaired by unsatisfied judgment claims, has been furnished. 25 * Sec. 24. AS 08.18.121(c) is amended to read: 26 (c) If a bonding company cancels its bond of a contractor or home inspector, 27 the contractor's or home inspector's registration shall be revoked. The contractor or 28 home inspector may again obtain registration by complying with the requirements of 29 this chapter. 30 * Sec. 25. AS 08.18.121(d) is amended to read: 31 (d) If a registered contractor or registered home inspector fails to fulfill the

01 contractor's or home inspector's obligations as set out in AS 08.18.071, the 02 contractor's or home inspector's registration shall be suspended for a period of time 03 the commissioner determines is appropriate. After three suspensions, the contractor's 04 or home inspector's registration may be permanently revoked. 05 * Sec. 26. AS 08.18.121(f) is amended to read: 06 (f) If the Department of Community and Economic Development or the 07 Department of Labor and Workforce Development determines that a contractor or [A] 08 person acting in the capacity of a contractor [,] is in violation of this chapter, that 09 department may give written notice to the person prohibiting further action by the 10 person as a contractor. If the Department of Community and Economic 11 Development determines that a home inspector or a person acting in the capacity 12 of a home inspector is in violation of this chapter, the department may give 13 written notice to the person prohibiting further action by the person as a home 14 inspector. The prohibition in a notice given under this subsection continues until 15 the person has submitted evidence acceptable to the appropriate [THAT] department 16 showing that the violation has been corrected. 17 * Sec. 27. AS 08.18.123 is amended to read: 18 Sec. 08.18.123. Denial, suspension, and revocation of endorsement or 19 home inspector registration. (a) The department may suspend, revoke, or refuse to 20 grant or renew a residential contractor endorsement, a home inspector registration, 21 or an associate 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, a regional housing authority created under AS 18.55.996(b), 30 or a municipality or unincorporated community and the employee is performing only 31 duties that are within the employee's official duties;

01 (2) performing a home inspection only with respect to property that is 02 the individual's residence or in which the individual has a financial interest; 03 (3) registered as an engineer or architect under AS 08.48, prepares a 04 written report after the inspection, affixes the individual's seal to the home inspection 05 report, signs and dates the report, and puts the individual's registration number on the 06 report; 07 (4) engaged as an engineer in training or architect in training who 08 works for and is supervised by a person described in (3) of this subsection and the 09 person described in (3) of this subsection affixes the person's seal to the home 10 inspection report, signs and dates the report, and puts the person's registration number 11 on the report; 12 (5) licensed as a pesticide applicator by the Department of 13 Environmental Conservation and is performing only activities within the scope of that 14 license; 15 (6) registered as a general contractor with a residential contractor 16 endorsement under this chapter and is performing only activities within the scope of 17 that registration; 18 (7) certified as any type of real estate appraiser under AS 08.87 and is 19 performing only activities that are authorized under that certification; or 20 (8) only determining whether a building complies with the thermal and 21 lighting energy standards required by AS 46.11.040. 22 (b) Notwithstanding the definition of "home inspection" in AS 08.18.171(12), 23 an individual is not considered to be doing a home inspection for purposes of this 24 chapter if the individual 25 (1) is in the business of repairing, maintaining, or installing any of the 26 systems or components listed in AS 08.18.171(12); and 27 (2) inspects the system or component for the sole purpose of 28 determining the condition of the system or component before performing or offering 29 to perform repair, maintenance, or installation work on the system or component. 30 * Sec. 32. AS 08.18.161 is amended to read: 31 Sec. 08.18.161. Exemptions. To the extent that this chapter governs

01 contractors, this [THIS] chapter does not apply to 02 (1) an authorized representative of the United States government, the 03 State of Alaska, or a political subdivision or agency of the state; 04 (2) an officer of a court when acting within the scope of office; 05 (3) a public utility operating under the regulations of the public service 06 commission in construction, maintenance, or development work incidental to its own 07 business; 08 (4) a construction, repair, or operation incidental to the discovering or 09 producing of petroleum or gas, or the drilling, testing, abandoning, or other operation 10 of a petroleum or gas well or a surface or underground mine or mineral deposit when 11 performed by an owner or lessee; 12 (5) the sale or installation of finished products, materials, or articles of 13 merchandise that are not actually fabricated into and do not become a permanent, 14 fixed part of a structure; 15 (6) construction, alteration, or repair of personal property; 16 (7) a person who only furnished materials, supplies, or equipment 17 without fabricating them into, or consuming them in the performance of, the work of 18 the contractor; 19 (8) work on one project under one or more contracts, the aggregate 20 contract price of which for labor and materials and all other items is less than $10,000 21 [, THIS WORK BEING CONSIDERED AS OF A CASUAL, MINOR, OR 22 INCONSEQUENTIAL NATURE]; this exemption does not apply when the work is 23 only a part of a larger or major operation, whether undertaken by the same or a 24 different contractor, or when the work is divided into contracts of amounts less than 25 $10,000 for the purpose of evasion of this chapter or otherwise; this exemption does 26 not apply to a person who advertises or puts out a sign or card or other device that 27 might indicate to the public that the person is a contractor, or that the person is 28 qualified to engage in the contracting business; a contractor who performs work priced 29 at $2,500 or more, under this exemption, shall nevertheless keep in force public 30 liability and property damage insurance with coverage in at least the amounts set out 31 in AS 08.18.101;

01 (9) an owner who contracts for a project with a registered contractor; 02 (10) a person working on that person's own property, whether occupied 03 by the person or not, and a person working on that person's own residence, whether 04 owned by the person or not; 05 (11) an owner or tenant of commercial property who uses the owner's 06 or tenant's own employees to do maintenance, repair, and alteration work upon that 07 property; 08 (12) an owner who acts as the owner's own contractor and in doing so 09 hires workers on an hourly basis, hires subcontractors, purchases materials and, as 10 such, sees to the paying for all labor, subcontractors, and materials; in this case, the 11 owner shall be limited to construction of one home, duplex, triplex, four-plex, or one 12 commercial building a [PER] year; 13 (13) a person performing construction work incidental to farming, 14 dairying, agriculture, horticulture, stock or poultry raising, mining, logging, fishing, 15 clearing, or other work upon the land in rural districts for fire prevention purposes, or 16 access road building, unless the person is a licensee. 17 * Sec. 33. AS 08.18.171 is amended by adding new paragraphs to read: 18 (11) "existing home" means a residence previously occupied as a 19 residence; 20 (12) "home inspection" means a visual examination, performed in 21 accordance with standards of practice adopted by the department, of the readily 22 accessible parts of one or more of the following systems and components of a 23 residence or intended residence: 24 (A) heating and air-conditioning systems; 25 (B) plumbing and electrical systems; 26 (C) built-in appliances; 27 (D) roof, attic, and visible insulation; 28 (E) walls, ceilings, floors, windows, and doors; 29 (F) foundation and basement; 30 (G) visible interior and exterior structures; 31 (H) drainage to and from the residence;

01 (I) other systems or components as specified by the department 02 in regulations; 03 (13) "home inspector" means an individual who performs or offers to 04 perform a home inspection for a fee; 05 (14) "joint registration" means a certificate of registration that 06 authorizes an individual to inspect both new homes and existing homes; 07 (15) "knowingly" has the meaning given in AS 11.81.900; 08 (16) "new home" means a residence not previously occupied as a 09 residence; 10 (17) "residence" means 11 (A) a single-family home other than a mobile home; 12 (B) a duplex, triplex, or four-plex; or 13 (C) a residential townhouse or residential condominium unit; 14 (18) "visual examination" means an examination performed in person 15 at the physical location of the residence except that, if a method other than personal 16 physical inspection has been approved by the Alaska Housing Finance Corporation 17 under AS 18.56.300(b), use of the other approved method constitutes a visual 18 examination under this chapter. 19 * Sec. 34. AS 18.56.300(b) is amended to read: 20 (b) As a condition of a commitment to purchase or approve a loan under this 21 section for residential housing the construction of which begins after June 30, 1992, 22 the corporation shall require inspection of the unit of residential housing that is the 23 subject of the loan. The inspection must be performed by a municipal building 24 inspector, by a person who is approved or certified to perform residential inspections 25 by the International Code Council [CONFERENCE OF BUILDING OFFICIALS] or 26 the International Association of Electrical Inspectors, by an individual who is 27 registered under AS 08.18 to perform home inspections for new construction 28 [OR, WHEN THE UNIT OF RESIDENTIAL HOUSING IS LOCATED IN A 29 RURAL AREA], by an architect registered under AS 08.48, by an engineer registered 30 under AS 08.48, or by another person approved by the corporation. When the unit of 31 residential housing is located in a rural area, the person who makes the inspection may

01 use methods other than a personal physical inspection to make the inspection if the 02 method is approved by the corporation, and variations from the applicable code may 03 be accepted at the corporation's discretion, if the person authorized to inspect the unit 04 under this subsection satisfies the corporation that the variation does not adversely 05 affect the structural integrity of the unit or the health and safety of the residents. The 06 person who makes the inspection shall determine whether the construction conforms 07 to relevant provisions of the construction codes of the municipality or of the state 08 building code, as applicable, at each of the following stages of construction: 09 (1) plan approval; 10 (2) completion of footings and foundations; 11 (3) completion of electrical installation, plumbing, and framing; 12 (4) completion of installation of insulation; 13 (5) final approval. 14 * Sec. 35. AS 18.56.300(b) is amended to read: 15 (b) As a condition of a commitment to purchase or approve a loan under this 16 section for residential housing the construction of which begins after June 30, 1992, 17 the corporation shall require inspection of the unit of residential housing that is the 18 subject of the loan. The inspection must be performed by a municipal building 19 inspector, [BY A PERSON WHO IS APPROVED OR CERTIFIED TO PERFORM 20 RESIDENTIAL INSPECTIONS BY THE INTERNATIONAL CODE COUNCIL OR 21 THE INTERNATIONAL ASSOCIATION OF ELECTRICAL INSPECTORS,] by an 22 individual who is registered under AS 08.18 to perform home inspections for new 23 construction, by an architect registered under AS 08.48, by an engineer registered 24 under AS 08.48, or by another person approved by the corporation. When the unit of 25 residential housing is located in a rural area, the person who makes the inspection may 26 use methods other than a personal physical inspection to make the inspection if the 27 method is approved by the corporation, and variations from the applicable code may 28 be accepted at the corporation's discretion, if the person authorized to inspect the unit 29 under this subsection satisfies the corporation that the variation does not adversely 30 affect the structural integrity of the unit or the health and safety of the residents. The 31 person who makes the inspection shall determine whether the construction conforms

01 to relevant provisions of the construction codes of the municipality or of the state 02 building code, as applicable, at 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 14 require 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 Code Council. 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 Code Council. 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).