Legislature(2003 - 2004)

02/05/2003 01:00 PM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB 9 - HOME INSPECTORS/CONTRACTORS                                                                                            
                                                                                                                                
Number 2063                                                                                                                     
                                                                                                                                
CHAIR McGUIRE  announced that the  final order of  business would                                                               
be HOUSE  BILL NO.  9, "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."                                                                                               
                                                                                                                                
Number 2060                                                                                                                     
                                                                                                                                
REPRESENTATIVE COGHILL moved to adopt  CSHB 9(L&C) as the working                                                               
document.  There  being no objection, CSHB 9(L&C)  was before the                                                               
committee.                                                                                                                      
                                                                                                                                
Number 2080                                                                                                                     
                                                                                                                                
REPRESENTATIVE   NORMAN  ROKEBERG,   Alaska  State   Legislature,                                                               
sponsor, relayed  that last year,  a previous iteration of  HB 9,                                                               
after the  passing the House,  did not get  a chance to  pass the                                                               
Senate.  He  explained that HB 9 will regulate  the occupation of                                                               
home  inspectors,   which  is  one   element  in  the   chain  of                                                               
transactions that  lead up to  the purchase  and sale of  new and                                                               
existing homes in  Alaska.  He noted that of  all the occupations                                                               
involved in  a real  estate transaction,  the occupation  of home                                                               
inspector is not  licensed or regulated in any way.   He remarked                                                               
that at one time, this legislation  had provisions for a board of                                                               
home  inspectors, but  due  to  the high  costs  of the  biennial                                                               
licensing fee, he  decided to delete those  provisions.  Instead,                                                               
he added,  "we took the  novel approach  of putting it  under the                                                               
specialty contractor  section" of  the [Division  of Occupational                                                               
Licensing],  which in  effect lowered  the cost  of the  biennial                                                               
license from approximately $600 to $250.   He relayed that one of                                                               
his concerns was that if the price  of a license was too high, it                                                               
could actually affect the price of a home inspection.                                                                           
                                                                                                                                
REPRESENTATIVE ROKEBERG said that the  current version of HB 9 is                                                               
a  good compromise  and will  still provide  consumer protection.                                                               
He noted that  in a memorandum to the committee,  he has outlined                                                               
a few  legal issues that  the committee  might wish to  focus its                                                               
attention  on.   He  remarked  that the  original  idea for  this                                                               
legislation was brought  forth by the real estate  industry in an                                                               
effort to "do some cost shifting  of liability."  He said that he                                                               
in turn has tried to create  a "balanced, equitable bill with the                                                               
foremost  thought  and  objective  to   be  the  consumer."    He                                                               
continued:                                                                                                                      
                                                                                                                                
     I  believe   we've  given  the  home   inspectors  some                                                                    
     benefits here  by lessening  their liabilities  and the                                                                    
     statute of limitations  as it relates to  some of their                                                                    
     reports  and  so  forth.   On  the  other  hand,  we've                                                                    
     removed some  immunization that  they've had  ... under                                                                    
     the  current statutes  ..., always  keeping in  focus a                                                                    
     certain   balance,   here,   about   Alaska   climactic                                                                    
     conditions, the  impacts on reports, [and]  the cost to                                                                    
     consumers.    But the  foremost  issue  is, right  now,                                                                    
     anybody  without any  competency whatsoever  can go  in                                                                    
     business as a home inspector.                                                                                              
                                                                                                                                
REPRESENTATIVE  ROKEBERG, in  closing,  said,  "By providing  the                                                               
bonding and  other sources, we  do not  affect, in any  way other                                                               
than  timeframes,   any  rights  of   cause  of  action   by  any                                                               
complainant in the state."  He  noted that there were a couple of                                                               
"tune-up" amendments.                                                                                                           
                                                                                                                                
Number 2328                                                                                                                     
                                                                                                                                
REPRESENTATIVE GARA said:                                                                                                       
                                                                                                                                
     There is a  provision in this bill  that addresses when                                                                    
     somebody who  writes a home  inspection report  will be                                                                    
     held liable if  they do a very poor job  at it, and the                                                                    
     bill  as  it  reads   right  now  allows  somebody  who                                                                    
     purchases a  home to hold a  home inspector accountable                                                                    
     if their  conduct was negligent,  if their  conduct was                                                                    
     grossly  negligent, if  their conduct  was reckless  or                                                                    
     somehow deficient ...                                                                                                      
                                                                                                                                
REPRESENTATIVE ROKEBERG  interjected to say that  those standards                                                               
are  not listed  in HB  9, adding  that "the  standards of  gross                                                               
negligence and so forth are repealed by this bill."                                                                             
                                                                                                                                
TAPE 03-2, SIDE B                                                                                                             
Number 2383                                                                                                                     
                                                                                                                                
REPRESENTATIVE GARA indicated that he  did not mean to imply that                                                               
those  liability  standards were  in  the  bill; rather,  he  was                                                               
merely leading up to an issue he has concerns with.                                                                             
                                                                                                                                
Number 2327                                                                                                                     
                                                                                                                                
BRYAN  BUTCHER,  Legislative   Liaison,  Alaska  Housing  Finance                                                               
Corporation  (AHFC), Department  of  Revenue  (DOR), said  simply                                                               
that the AHFC supports HB 9.                                                                                                    
                                                                                                                                
Number 2296                                                                                                                     
                                                                                                                                
RICK  JARVIS,  Re/Max  Properties   Inc.,  said  simply  that  he                                                               
initiated the concept of this  legislation, that it is a consumer                                                               
protection issue, and that he is in support of HB 9.                                                                            
                                                                                                                                
REPRESENTATIVE  GRUENBERG requested  that at  some point  someone                                                               
"walk us through the bill."                                                                                                     
                                                                                                                                
CHAIR McGUIRE  indicated that the  committee would hear  from the                                                               
sponsor again  and suggested that  he would provide  more details                                                               
at  that time;  she  also noted  that in  members'  packets is  a                                                               
sectional analysis  and a  sponsor statement.   She noted  that a                                                               
previous version  of the  bill passed the  House during  the last                                                               
legislative session.                                                                                                            
                                                                                                                                
Number 2211                                                                                                                     
                                                                                                                                
TED VEAL noted  that he is a  residential homebuilding contractor                                                               
and  an International  Conference  of  Building Officials  (ICBO)                                                               
inspector.    He  referred  to   Section  40,  which  repeals  AS                                                               
18.56.300(c),  and said  that by  not having  that language,  "it                                                               
more  or less  puts a  target  on the  back of  the inspector  to                                                               
anybody  ... who  has  any  kind of  a  complaint" regarding  the                                                               
structure and will make the  inspector liable for that structure.                                                               
He said  that currently,  an inspector appears  on site  and does                                                               
spot checks during  the construction process; he/she  is not able                                                               
to  continually observe  what is  done  throughout that  process.                                                               
Therefore,  he  added, "removing  that  raises  a great  deal  of                                                               
concern on  my part, just  having to fend off  frivolous lawsuits                                                               
and liability issues  that are prone to happen in  our society in                                                               
this day."                                                                                                                      
                                                                                                                                
MR. VEAL said that if [HB 9] passes,  it is going to make it much                                                               
more  difficult   to  perform  the  inspection   because  of  the                                                               
liability burden;  "there are  so many things  and options  - the                                                               
contractor  can  change things  after  the  inspector's left  the                                                               
site" -  he noted, and  the contractor  would not know  that such                                                               
had occurred.  He reiterated that  there are a lot of things that                                                               
concern him  with regard  to repealing  that portion  of [current                                                               
statute].   He expressed  a desire to  protect the  consumer, but                                                               
noted that he  wanted to "see some more  investigation, and maybe                                                               
refer to the  practice of the code bodies  throughout the country                                                               
- and  how they  handle it  - and  take a  similar track  in that                                                               
manner."                                                                                                                        
                                                                                                                                
MR. VEAL then referred  to page 10, lines 1-4.   He noted that it                                                               
lists a two-year  period for new-construction reports  and a one-                                                               
year  period for  existing-construction  reports.   He asked  why                                                               
that difference is stipulated.   He also noted that homebuilders,                                                               
too, have a one-year warranty period.                                                                                           
                                                                                                                                
REPRESENTATIVE  ROKEBERG, in  response  to  Mr. Veal's  question,                                                               
said that the  distinction was based upon the premise  that in an                                                               
exiting home, any defect or  omission in a home inspection report                                                               
should  be evident  pretty  quickly to  anybody  that would  have                                                               
grounds  for a  cause of  action.   He noted  that currently  the                                                               
statute  of limitations  regarding that  type of  circumstance is                                                               
three years; HB 9 would reduce it  to one year.  With regard to a                                                               
new home,  however, an  error or omission  might not  make itself                                                               
evident until  after one year  has elapsed, he said,  adding that                                                               
this distinction was a compromise  arrived at while attempting to                                                               
lower   the   "traditional   period  of   contractual   statutory                                                               
limitation" from a  three-year period to a lower period.   To the                                                               
benefit of home inspectors, he remarked.                                                                                        
                                                                                                                                
Number 2007                                                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG, in response to  a question, noted that a                                                               
copy  of  the statute  repealed  by  Section  40 is  included  in                                                               
members' packets.                                                                                                               
                                                                                                                                
MR.  VEAL  asked whether,  as  a  licensed, homebuilding  general                                                               
contractor with  a residential  endorsement and  required bonding                                                               
and liability  insurance, he would  have to get more  bonding and                                                               
liability  insurance  in  order   to  continue  to  perform  ICBO                                                               
inspections.   He  also asked  whether, under  HB 9,  he will  be                                                               
required to  "use a  different form  of inspection  reports other                                                               
than the PUR [purchase] forms that [AHFC] is currently using."                                                                  
                                                                                                                                
REPRESENTATIVE ROKEBERG, in response, said:                                                                                     
                                                                                                                                
     As  a contractor,  under the  exemption section  in the                                                                    
     bill, he would be  exempt from his contracting business                                                                    
     -  would not  have to  be a  licensed home  inspector -                                                                    
     unless  ... he  wished to  put himself  out and  charge                                                                    
     money for  home inspections.   In that  instance, then,                                                                    
     he  needs to  be licensed  as  a home  inspector.   And                                                                    
     presumably the  bond would not be  duplicative; I'm not                                                                    
     familiar enough with  that statute to see  if it would,                                                                    
     because  he's  required  to  have   a  bond  under  the                                                                    
     contracting  license and,  frankly,  I  don't know  the                                                                    
     answer to that, whether it would be duplicative.                                                                           
                                                                                                                                
     The other question  he raises ... came up  in a hearing                                                                    
     last week.  The current  bill requires that a report be                                                                    
     filled out, both for a new  and existing home.  It came                                                                    
     to  my attention  that  generally  ICBO inspectors  for                                                                    
     newer  homes don't  necessarily  fill out  a report  to                                                                    
     make visual  inspections, and basically  sign off  on a                                                                    
     form from  [AHFC] which is  [an] occupancy permit.   So                                                                    
     we have  drafted a conceptual amendment  ... that takes                                                                    
     care of that, that there  either would be a report form                                                                    
     or, that report, in the case  of new homes, would be in                                                                    
     the form of a certificate  of occupancy.  So that would                                                                    
     be consistent with ... current practice.                                                                                   
                                                                                                                                
CHAIR  McGUIRE directed  attention  to the  exemption section  on                                                               
page 15, specifically  lines 28-30, which read:   "(6) registered                                                               
as   a  general   contractor   with   a  residential   contractor                                                               
endorsement under this chapter and  is performing only activities                                                               
within the scope of that registration".                                                                                         
                                                                                                                                
Number 1813                                                                                                                     
                                                                                                                                
ROBERT MILBY  noted that  he has  a general  contractor's license                                                               
with a  residential endorsement,  and that he  is also  "an ICBO-                                                               
certified  combination  dwelling   inspector"  and  inspects  new                                                               
construction.   He  opined that  [HB  9] contains  discriminatory                                                               
language   with  regard   to  inspections   of  new   residential                                                               
construction in rural Alaska.  He  said that he is opposed to the                                                               
deletion of  [AS 18.56.300(c) as  is proposed via] Section  40 of                                                               
the bill.   He  said that ICBO  certifications are  required [by]                                                               
"municipality inspectors  as well as  in the private  sector, ...                                                               
and I  don't think leaving this  [language] out when the  rest of                                                               
the inspectors  in the  state are  not ...  judged under  those -                                                               
they're exempt from  that."  "I believe that we  should all be on                                                               
the same  playing field," he  said, adding, "I believe  the state                                                               
of  Alaska should  be  on [the]  same -  residential  - the  same                                                               
building codes throughout the state."                                                                                           
                                                                                                                                
MR. MILBY continued:                                                                                                            
                                                                                                                                
     As inspectors  out in  rural Alaska,  we don't  make up                                                                    
     any codes.   We inspect by the codes  that we're given,                                                                    
     that the [Alaska State Fire  Marshal] has adopted.  And                                                                    
     I'm not  sure what's broken  here that we're  trying to                                                                    
     fix.  ...  I'm just  not  sure  of what  problems  it's                                                                    
     causing anybody, that  an ICBO-certified inspector goes                                                                    
     out and inspects  a home.  Now,  the inspection reports                                                                    
     that we make  out through each phase of the  house is a                                                                    
     written [form].  It's not  like ... the final summation                                                                    
     goes on the  PUR forms, but we  clearly have inspection                                                                    
     reports that state any violations of the code.                                                                             
                                                                                                                                
     And ... I'm not sure, from  what I heard ..., if that's                                                                    
     clear.  The contractors have  it, and we inspect ... to                                                                    
     make  sure  that those  are  corrected.   The  two-year                                                                    
     liability thing  sounds like a  downplay from  a three-                                                                    
     year.  However, I've been  a general contractor here in                                                                    
     Alaska  for almost  30  years, and  ...  you have  that                                                                    
     inherent one-year liability for  things that are wrong.                                                                    
     And I  think you're always  liable for things  that are                                                                    
     gross and  negligent.  And  even if I had  a mechanical                                                                    
     contractor putting in a furnace,  ... he has a one-year                                                                    
     liability  also,  but  not  from  when  the  house  was                                                                    
     purchased but  from when  he installed  that particular                                                                    
     item. ...  I'm just not  sure what we're trying  to fix                                                                    
     here.                                                                                                                      
                                                                                                                                
Number 1647                                                                                                                     
                                                                                                                                
MR. MILBY opined  that it would be much more  productive to spend                                                               
time adopting  a single code  for the entire state,  and ensuring                                                               
that inspectors  are certified  by the  state and  are inspecting                                                               
under the same code.                                                                                                            
                                                                                                                                
REPRESENTATIVE  GARA asked  Mr.  Milby whether  he  is saying  he                                                               
believes  that currently,  the standards  that are  applicable to                                                               
home inspectors might be adequate  to assure the public that home                                                               
inspectors are well enough qualified.                                                                                           
                                                                                                                                
MR. MILBY replied:                                                                                                              
                                                                                                                                
     I am  in the new-construction inspection  field, having                                                                    
     had that  many years in  the building industry  here in                                                                    
     Anchorage.  And I  also have a residential contractor's                                                                    
     license in another  state.  But what I'm  saying is, an                                                                    
     ICBO-certified  inspector  is  qualified to  inspect  a                                                                    
     home, yes.                                                                                                                 
                                                                                                                                
REPRESENTATIVE ROKEBERG pointed  out that HB 9  calls for certain                                                               
competency  standards, one  of  which is  passing  an ICBO  exam.                                                               
Thus, he ventured, there are  no additional burdens placed on Mr.                                                               
Milby  other  than  applying  for  his  license  and  paying  the                                                               
licensing  fee.   He also  pointed  out that  the Uniform  Common                                                               
[Interest]  Ownership Act  (UCIOA) requires  a two-year  warranty                                                               
period for condominium-style townhouse developments.                                                                            
                                                                                                                                
CHAIR McGUIRE  noted that  the transitional  licensing provisions                                                               
can be found on  page 22, beginning on line 11.   She relayed her                                                               
belief  that  Representative Rokeberg  has  done  a good  job  of                                                               
trying to  be as accommodating as  possible to the people  in the                                                               
industry.  She  acknowledged that it can difficult  to have one's                                                               
industry become regulated, but  suggested that the aforementioned                                                               
provisions do  give some leeway to  folks who are already  in the                                                               
home inspection industry.                                                                                                       
                                                                                                                                
REPRESENTATIVE   GRUENBERG  asked   for  verification   that  the                                                               
language which two  speakers have objected to  having removed via                                                               
Section  40 reads,  "(c) A  person may  not bring  an action  for                                                               
damages  based on  a  duty  imposed by  (b)  of  this section  to                                                               
inspect  a residential  unit  unless the  action  is for  damages                                                               
caused by  gross negligence or intentional  misconduct", and that                                                               
that duty  is basically a  requirement of inspection in  order to                                                               
get  certain loans.   Thus,  he surmised,  passage of  HB 9  will                                                               
allow  a person  to maintain  an  action for  damages based  upon                                                               
simple negligence.                                                                                                              
                                                                                                                                
REPRESENTATIVE ROKEBERG  confirmed that.   He  said that  that is                                                               
part  of the  balance  achieved  by HB  9.    "We're making  some                                                               
concessions - I  know that Representative Gara has  some of those                                                               
concerns - but that's really a  major part of the whole balancing                                                               
act," he added.                                                                                                                 
                                                                                                                                
Number 1421                                                                                                                     
                                                                                                                                
BERNIE  SCHUYLER noted  that he  is "an  ICBO-certified inspector                                                               
for combination dwellings and business,  and a building inspector                                                               
in the UBC [Uniform  Building Code]."  He said that  he is not in                                                               
favor  of  HB 9,  the  main  reason  being  the deletion  of  the                                                               
language cited in  Section 40.  He also opined  that there is not                                                               
enough   delineation   between   "new  construction   and   prior                                                               
construction," adding that they are two different inspections.                                                                  
                                                                                                                                
REPRESENTATIVE GRUENBERG said:                                                                                                  
                                                                                                                                
     Just for the  record, I've heard three  of you testify,                                                                    
     and you're all  in the business, and you'd  all like to                                                                    
     be  immunized  unless  somebody   can  show  you  acted                                                                    
     grossly  negligent or  ...  did something  intentional.                                                                    
     That's a very  high standard.  Why, on  a public policy                                                                    
     basis,   do  you   think  you   deserve  such   special                                                                    
     protection, sir?                                                                                                           
                                                                                                                                
MR. SCHUYLER said, "Well, for  one reason, the municipalities are                                                               
covered; they don't have any of that problem that we have."                                                                     
                                                                                                                                
REPRESENTATIVE  GARA  remarked  that the  current  standard  that                                                               
applies to most  people in society when they  act towards another                                                               
person  is  that  they're  not   liable  unless  they  engage  in                                                               
unreasonable care  that causes  somebody harm.   "That's  what we                                                               
define as  negligence," he added,  "that's the standard  that has                                                               
been applied in  this country for over 100 years  in all sorts of                                                               
circumstances,   and  that's   the   standard   that  I   believe                                                               
Representative Rokeberg has said should  stay in place and not be                                                               
altered in this  bill.  But sometimes, he noted,  people hear the                                                               
term   negligence   and  they   think   that   that's  not   very                                                               
irresponsible conduct.   But  one would  never be  held negligent                                                               
unless it  were determined  that he/she  engaged in  conduct that                                                               
was  unreasonable and  that  showed a  lack  of reasonable  care.                                                               
That is quite a burden, he opined.                                                                                              
                                                                                                                                
Number 1264                                                                                                                     
                                                                                                                                
KEVIN  JONES  said  that  he performs  home  inspections  in  the                                                               
Anchorage area as  well outside that area.  He  explained that he                                                               
mainly  concentrates   on  preexisting  homes  rather   than  new                                                               
construction,  although  he   is  an  ICBO-certified  combination                                                               
dwelling  inspector and  could "do  that" should  he choose.   He                                                               
said that  overall, he is  supportive of  HB 9, although  he does                                                               
understand the  concern regarding Section  40.  He noted  that he                                                               
is also  president of the  local chapter of the  American Society                                                               
of Home Inspectors (ASHI), and  that they do support licensing of                                                               
the industry.                                                                                                                   
                                                                                                                                
MR. JONES  referred to  page 8,  line 3, which  reads:   "(b) All                                                               
advertising  and business  cards  prepared by  a registered  home                                                               
inspector  or associate  home inspector  for the  home inspection                                                               
business  must show  the inspector's  name, mailing  address, and                                                               
registration  number".     He  asked  why   that  requirement  is                                                               
included,  and  whether  such  is   required  of  everyone  who's                                                               
licensed in any type of business in the state.                                                                                  
                                                                                                                                
REPRESENTATIVE ROKEBERG  said that this particular  provision "is                                                               
found in other forms of  statutes in occupational licensing," but                                                               
as written only applies to home  inspectors.  He added that [such                                                               
a requirement] is consistent with  a number of other occupations.                                                               
He  indicated that  this requirement  will enable  authorities to                                                               
identify and "grab" those who  fail to comply with the [proposed]                                                               
licensing provisions.                                                                                                           
                                                                                                                                
MR. JONES  referred to  Section 18, page  10, lines  20-22, which                                                               
read:   "Contractors and home  inspectors may not  advertise that                                                           
they are  bonded and  insured simply  because they  have complied                                                               
with the  bond and insurance  requirements of this chapter".   He                                                               
asked what the intent of that language is.                                                                                      
                                                                                                                                
CHAIR  McGUIRE  surmised  that   that  language  merely  modifies                                                               
existing law to include home inspectors.                                                                                        
                                                                                                                                
REPRESENTATIVE ROKEBERG  agreed, adding  that the  language being                                                               
modified  is  located  in  the  "specialty  contractors  license"                                                               
[requirements].   He  remarked,  however, that  "it seems  rather                                                               
redundant."                                                                                                                     
                                                                                                                                
CHAIR McGUIRE  suggested that  the language  is intended  to mean                                                               
that  because   new  requirements   are  being   imposed,  simply                                                               
complying with  any other bonding  and licensing elements  of the                                                               
chapter  does not  then enable  a  person to  advertise as  being                                                               
"licensed and bonded."                                                                                                          
                                                                                                                                
Number 1061                                                                                                                     
                                                                                                                                
REPRESENTATIVE GRUENBERG  remarked that  the language  in Section                                                               
18 relates  back to  and conforms  to language  in Section  15 on                                                               
page 9.   After noting  that the bonding requirements  in Section                                                               
15 stipulate  $10,000 for a  general contractor and $5,000  for a                                                               
home inspector, he  posited that the policy  behind [proposed] AS                                                               
08.18.111 is  to indicate that a  contractor, and in this  case a                                                               
home inspector, may  not claim to the general  public that he/she                                                               
is properly  bonded and  insured merely  by acquiring  "this very                                                               
small  bond," which  probably  would not  cover  him/her in  most                                                               
circumstances.  He  said he thinks that this provision  is a good                                                               
one and,  turning back  to the  provision pertaining  to business                                                               
cards, stated that that provision is really good public policy.                                                                 
                                                                                                                                
MR.  JONES, on  the  issue  of what  shall  be visually  examined                                                               
during  a home  inspection,  referred to  page  18, lines  14-15,                                                               
which reads:   "(I) other  systems or components as  specified by                                                               
the  department in  regulations".   He  remarked that  that is  a                                                               
pretty broad statement, and asked the sponsor to comment.                                                                       
                                                                                                                                
REPRESENTATIVE   ROKEBERG  replied   that  when   defining  "home                                                               
inspection" for the purposes of  this legislation, he tried to be                                                               
as  thorough as  possible.   However, in  the event  that changes                                                               
need to  be made at a  later date, the language  in [subparagraph                                                               
(I)]  gives  the department  the  flexibility  to further  define                                                               
"home inspection" via regulations  without having to petition the                                                               
legislature for a statutory change.                                                                                             
                                                                                                                                
Number 0729                                                                                                                     
                                                                                                                                
DAVID R. OWENS,  owner, Owens Inspections Services,  said that he                                                               
has been a building  inspector for 20 years as of  this year.  He                                                               
went on to say:                                                                                                                 
                                                                                                                                
     In general  ... I  believe that this  is a  pretty good                                                                    
     bill   for  existing-home   inspectors;  I   don't  see                                                                    
     anything in here  that is too flagrant  for the portion                                                                    
     of the  work that's  for existing-home  inspectors. ...                                                                    
     But the other part of  this is the new-home inspection,                                                                    
     and this  is not  a good  bill.  I  do not  endorse it.                                                                    
     I'm strongly opposed to ...  [Section 40, which repeals                                                                    
     AS  AS  18.56.300(c)].   We  were  instrumental in  the                                                                    
     early  '90s in  getting that  [language] put  in there,                                                                    
     and  that  is the  same  type  of protection  that  any                                                                    
     municipal  inspector has  under the  ... administrative                                                                    
     section  of   the  code  -  they   are  not  personally                                                                    
     responsible   unless    it's   gross    negligence   or                                                                    
     intentional  misconduct.    And that  language  appears                                                                    
     throughout  all   the  codes,  and  is   given  to  all                                                                    
     municipal inspectors that do that type of work.                                                                            
                                                                                                                                
     One of the  things that's always bothered  me about the                                                                    
     way this has  gone together is that  not all inspectors                                                                    
     ...  that do  inspection  work are  being regulated  by                                                                    
     this bill.  ... They're picking and  choosing who we're                                                                    
     going to regulate.  And  ... if we're going to regulate                                                                    
     an  activity,  such  as building  inspection,  then  we                                                                    
     ought to  include all building inspectors;  ... there's                                                                    
     a  list  of 20  or  30  different types  of  commercial                                                                    
     inspectors that are  not being regulated.  A  few of my                                                                    
     buddies that  do that  kind of work  kind of  chuckle a                                                                    
     little  bit saying,  "You're under  the regulation  and                                                                    
     I'm not," and I simple don't think that that's fair.                                                                       
                                                                                                                                
Number 0586                                                                                                                     
                                                                                                                                
CAROL PERKINS,  Owner, Active Inspections,  noted that she  is an                                                               
ICBO  combination   dwelling  inspector   in  Wasilla   and  does                                                               
inspections  on  existing  homes.    She  indicated  that  as  an                                                               
existing-home inspector, she likes HB  9.  However, she remarked,                                                               
as a  new-construction inspector she  has the same  concerns that                                                               
were previously  expressed regarding Section  40 and the  lack of                                                               
clarity pertaining to the inspection reporting of new and                                                                       
existing [buildings].                                                                                                           
                                                                                                                                
Number 0533                                                                                                                     
                                                                                                                                
WILLIAM BRUU noted that he is an ICBO inspector, does existing-                                                                 
home inspections, and  is also an "energy rater."   He said, "The                                                               
current proposed  legislation is flawed,  in my opinion,  in that                                                               
it assesses a common set  of liabilities to two totally different                                                               
activities."  He continued:                                                                                                     
                                                                                                                                
     As to certification, a home  inspector is an individual                                                                    
     who says,  "I am  a home  inspector."   Meanwhile, [an]                                                                    
     ICBO-certified  combination  dwelling  inspector  is  a                                                                    
     person  who  has  proven  his   knowledge  of  all  the                                                                    
     applicable codes  through a  comprehensive test.   Many                                                                    
     of the current ICBO  inspectors in Alaska obtained that                                                                    
     certification  by   attending  a  weeklong   series  of                                                                    
     seminars  and then  challenging  the test.   For  those                                                                    
     attempting  the test  the first  time, the  test had  a                                                                    
     failure  rate in  excess of  50 percent.   The  test is                                                                    
     comprehensive and  tough.  The  ICBO inspector  is also                                                                    
     required  to  maintain  his  or  her  certification  by                                                                    
     testing on  code changes and additions,  typically on a                                                                    
     three-year cycle.                                                                                                          
                                                                                                                                
     One aspect  of the legislation  before you:   [page] 5,                                                                    
     lines 21-31, and  [page] 6, lines 1-12,  in summary lay                                                                    
     out  the  required reports  that  a  home inspector  is                                                                    
     required  to  provide  and  perform   as  part  of  his                                                                    
     inspection.   An ICBO inspector is  already required to                                                                    
     leave  a  copy  of  his   field  notes  at  each  phase                                                                    
     inspection.   The requirement that he  provide a verbal                                                                    
     report to  the customer is counterproductive.   In most                                                                    
     cases,  the customer  is  not there.    The builder  is                                                                    
     nowhere on site.                                                                                                           
                                                                                                                                
     All the inspections performed by  the ICBO inspector on                                                                    
     new   construction   are   required  to   be   formally                                                                    
     documented on  an [AHFC] form  PUR-102.  The  ... [PUR-                                                                    
     102]  becomes a  recordable  document upon  completion.                                                                    
     The  completed PUR-102  is  then  recorded and  becomes                                                                    
     attached to  the deed  on the property.   The  name and                                                                    
     the ICBO certification number  of the inspector becomes                                                                    
     a matter of record and,  in reality, the inspectors can                                                                    
     stand  liable for  those inspections  as  long as  that                                                                    
     document exists.   A previous legislature  has provided                                                                    
     some  protection for  the inspectors  from unscrupulous                                                                    
     clients    by   adopting    the   provision    in   [AS                                                                    
     18.56.300(c)].  This legislation  proposes to drop that                                                                    
     protection, and we feel that that is a violation.                                                                          
                                                                                                                                
Number 0325                                                                                                                     
                                                                                                                                
MR. BRUU continued:                                                                                                             
                                                                                                                                
     As to  the function  of the  home inspector  versus the                                                                    
     ICBO inspector,  there is a  world of difference.   The                                                                    
     ICBO  inspector  is required  to  perform  a series  of                                                                    
     inspections  during  the  construction of  new  houses.                                                                    
     Those periodic  inspections include:   a  plans review,                                                                    
     which  may  take up  to  four  hours depending  on  the                                                                    
     complexity  of the  plan;  footings  and foundations  -                                                                    
     some foundation types require as  many as five trips to                                                                    
     the  site to  view  the progress  until the  foundation                                                                    
     itself is complete;  rough-ins inspections, which shall                                                                    
     include at  least four major sub  assemblies - framing,                                                                    
     mechanical   rough-ins,   electrical   rough-ins,   and                                                                    
     plumbing rough-ins;  ... insulation and  vapor retarder                                                                    
     inspections -  this, of course, is  extremely important                                                                    
     in  our sever  climate; and  a final  inspection, [for]                                                                    
     which  [the AHFC]  has published  very specific  policy                                                                    
     and guidelines ....                                                                                                        
                                                                                                                                
     All installed  appliances and  systems are  checked for                                                                    
     installation  and function.    It would  be very,  very                                                                    
     unusual  if   any  of  the  appliances   or  mechanical                                                                    
     equipment  installed  in   new  construction  would  be                                                                    
     "used"  and would  require the  inspector to  render an                                                                    
     opinion as  to the  life expectancy, which  is normally                                                                    
     expected  of an  existing-home inspector.   Conversely,                                                                    
     the home inspector visits a  house once for a period of                                                                    
     time, usually  less than three  hours.  He  is expected                                                                    
     to visually  inspect the  property.   He cannot  and is                                                                    
     not expected  to view the  interior of walls  and other                                                                    
     hidden parts of  the constructions.  He  is expected to                                                                    
     comment  on the  age  and condition  of appliances  and                                                                    
     systems that  are installed.   The American  Society of                                                                    
     Home   Inspectors  [ASHI]   in   their  "Standards   of                                                                    
     Practice"  fully   recommend  that  an   inspector  not                                                                    
     address code  issues because they  are not  trained nor                                                                    
     equipped with the knowledge to do so.                                                                                      
                                                                                                                                
Number 0212                                                                                                                     
                                                                                                                                
     There  are other  major differences  in  the scope  and                                                                    
     responsibilities  of  an  ICBO  inspector  and  a  home                                                                    
     inspector that  this legislation does not  address.  If                                                                    
     this legislation passes as written,  we feel there will                                                                    
     be a  major reduction in  the standards to  which homes                                                                    
     have been built in order  that they be financed by [the                                                                    
     AHFC].   Sections  33 and  34,  when implemented,  will                                                                    
     allow anyone who claims to  be a home inspector, and is                                                                    
     licensed  by  the  state,  to  perform  new-house  code                                                                    
     inspections on  new construction.   The  inspector will                                                                    
     not have  to be  certified by  any of  the code-writing                                                                    
     organizations.  He  can do so voluntarily,  but he does                                                                    
     not need to be, under this legislation.                                                                                    
                                                                                                                                
MR. BRUU concluded:                                                                                                             
                                                                                                                                
     If  the legislature  wishes to  keep  the standards  as                                                                    
     high as they are today  and have the inspectors respond                                                                    
     to changes and advancements,  then they should continue                                                                    
     to call for the new-home  inspectors to be certified by                                                                    
     the   code-writing  organizations.     Alaska   Housing                                                                    
     Finance  [Corporation] should  continue to  be required                                                                    
     to have their collateral  inspected to ensure that they                                                                    
     have  code-compliant dwellings  in compliance  with the                                                                    
     legislature's   wishes   and  provide   some   consumer                                                                    
     protection.   One matter of administrative  change that                                                                    
     I think needs to be  understood by the committee ... as                                                                    
     well  [as]  the  sponsor is  [that]  the  International                                                                    
     Conference  of Building  Officials basically  no longer                                                                    
     exists.  All the  code-writing organizations across the                                                                    
     United States  have now come  together and  created the                                                                    
     International  Code Conference,  and that  will be  the                                                                    
     governing  and authoring  agency for  all the  building                                                                    
     codes.  Thank you for the opportunity to testify.                                                                          
                                                                                                                                
CHAIR McGUIRE, with regard to  Mr. Bruu's comments about the oral                                                               
report, turned to page 6, line  9, and pointed out that it merely                                                               
says that  an oral inspection  report "may"  be given.   In other                                                               
words, she explained, it is not a requirement.                                                                                  
                                                                                                                                
MR. BRUU mentioned that in previous versions of the legislation,                                                                
it was mandatory to give both a written report and an oral                                                                      
report.                                                                                                                         
                                                                                                                                
TAPE 03-3, SIDE A                                                                                                             
Number 0001                                                                                                                     
                                                                                                                                
CHAIR  McGUIRE  turned  to  the  language on  page  6,  line  11,                                                               
regarding the  180-day period,  and asked  for an  explanation of                                                               
how "that matches up with the statute of limitations."                                                                          
                                                                                                                                
REPRESENTATIVE ROKEBERG offered that  the 180-day period pertains                                                               
to  the amount  of time  in which  a home  inspection report  has                                                               
validity.    He   recounted  that  a  previous   version  of  the                                                               
legislation had a one-year period,  and that some have argued for                                                               
a  24-hour   period  of  validity;   the  180-day  period   is  a                                                               
compromise.  He remarked that a  home inspection report is not an                                                               
engineering report; it is merely  a report of a three-hour visual                                                               
inspection  that  costs $350.    He  noted  that in  Alaska,  the                                                               
climactic  conditions are  such  that a  home  inspection can  be                                                               
performed one  day but then the  next day it could  snow two feet                                                               
and cause  damage to the  building, or an earthquake  could occur                                                               
and cause damage.                                                                                                               
                                                                                                                                
CHAIR McGUIRE turned  to page 10, lines 1-4.   She noted that the                                                               
statutes  of  limitations for  [filing]  claims  are based  on  a                                                               
report  that  is  only  valid   for  180  days.    She  surmised,                                                               
therefore, that "that  defect had to have  been discovered during                                                               
that 180-day period upon which the home inspector signs off."                                                                   
                                                                                                                                
REPRESENTATIVE  ROKEBERG   indicated  that  that   is  incorrect;                                                               
instead,  the defect  or omission  can be  discovered within  the                                                               
one- or  two-year period,  depending upon what  type of  home the                                                               
report was related to.  He elaborated:                                                                                          
                                                                                                                                
     One of the problems that  we found in practice is that,                                                                    
     number one,  whoever would purchase  the report,  say a                                                                    
     buyer  of  a home,  would  purchase  a home  inspection                                                                    
     report at  the advice  of a  real estate  licensee. ...                                                                    
     They  would have  the inspection  done, they'd  own the                                                                    
     report, [and]  they'd then make  an offer on  the home;                                                                    
     many  times  the  seller  would   even  [have]  ...  an                                                                    
     inspection [done as well]. ...  Then the report becomes                                                                    
     part   of  the   bargaining  process   -  usually   for                                                                    
     correction of  defects ... [listed] in  the report. ...                                                                    
     Remember, ...  the disclosure form under  state law ...                                                                    
     even advises  people to get  a home  inspection report.                                                                    
     But at this  point, ... in the real  estate business we                                                                    
     call it a  "DFT," deal fell through. ...  What we found                                                                    
     is [that]  this particular report keeps  getting handed                                                                    
     around to lenders, to other  people, [and] it could ...                                                                    
     end up with buyer number two.                                                                                              
                                                                                                                                
REPRESENTATIVE  ROKEBERG said  that  the  questions then  become:                                                               
Who  has liability?   Who  owns this  report?   House Bill  9, he                                                               
opined,  makes clear  that  the  ownership of  the  report is  in                                                               
control of the person who has  purchased it or "has given written                                                               
consent for that, because the lender  may want to see that."  The                                                               
lender can see it, but cannot pass  it on to a third party.  This                                                               
will ensure  that someone unrelated  to the  original transaction                                                               
regarding  the  home  inspection  report  does  not  rely  on  an                                                               
obsolete report.   This  provision, he  noted, does  not preclude                                                               
someone from bringing forth a cause of action.                                                                                  
                                                                                                                                
Number 0428                                                                                                                     
                                                                                                                                
REPRESENTATIVE GARA surmised as follows:                                                                                        
                                                                                                                                
     As to  whether or  not somebody is  harmed by  a report                                                                    
     and  has a  right to  seek to  hold the  home inspector                                                                    
     accountable,   the   one-   or   two-year   statute-of-                                                                    
     limitations period  applies.   As to  whether or  not a                                                                    
     report that  is written can  be used for purposes  of a                                                                    
     home  sale,  [it's]  a separate  question.    And  this                                                                    
     section that  says the 180-day period  applies, applies                                                                    
     only  in those  circumstances where  you're determining                                                                    
     how  long the  report  is valid  for  purposes of  home                                                                    
     sales  and deals  that fall  through, and  this is  not                                                                    
     related to the liability issue;  this is related to the                                                                    
     "who gets to  rely on the report in  purchasing a home"                                                                    
     issue.                                                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG said that is correct.                                                                                   
                                                                                                                                
REPRESENTATIVE GRUENBERG  reiterated that  he would  like someone                                                               
to walk him through the bill.   He mentioned that he would like a                                                               
little time,  a day or two,  to figure out what  the bill entails                                                               
before passing it from committee.                                                                                               
                                                                                                                                
CHAIR McGUIRE  said that it  is her intention  to pass HB  9 from                                                               
committee  at  this  meeting.     She  expressed  the  hope  that                                                               
Representative  Gruenberg would  have his  concerns addressed  by                                                               
the sponsor after the meeting or  some other time before the bill                                                               
goes to the House floor.                                                                                                        
                                                                                                                                
Number 0603                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GARA  pointed  out  that  although  many  of  the                                                               
members of the committee are already  familiar with HB 9 and many                                                               
of  the  people who  have  testified  have  been working  on  the                                                               
legislation  for  many  years,  he  and  other  members  are  not                                                               
familiar with the topic.  He said:                                                                                              
                                                                                                                                
     I do not  believe that we can go through  as detailed a                                                                    
     bill like this, and  answer everybody's questions about                                                                    
     a bill  as detailed as  this -  a bill that  changes as                                                                    
     many liability standards and rules  of law as this - in                                                                    
     a  hasty manner.   We  have 10  minutes left  under our                                                                    
     schedule  for  this  meeting;  I  have  many  questions                                                                    
     [that] are  going to take more  than 10 minutes.   I am                                                                    
     generally  supportive of  this  bill.   There are  some                                                                    
     provisions  that   cause  me   concern,  I   have  some                                                                    
     substantive questions, and,  I hate to say  this, but I                                                                    
     think that I would request  that maybe we continue this                                                                    
     discussion  at  our   next  [House  Judiciary  Standing                                                                    
     Committee]  meeting.   And  I  think  that would  be  a                                                                    
     decent practice for other bills  that involve sort of a                                                                    
     significant amount of analysis, as  this one does.  So,                                                                    
     that would be my request  for the chair, that we invite                                                                    
     the folks back,  including Representative Rokeberg, for                                                                    
     another meeting  on this  bill.   It's a  complex bill,                                                                    
     and we  shouldn't vote before we  fully understand what                                                                    
     we're voting upon.                                                                                                         
                                                                                                                                
REPRESENTATIVE GRUENBERG  said, "Madam  Chair, I'm not  trying to                                                               
delay this, but I would like to  know what I'm voting on so I can                                                               
defend it on the [House] floor."                                                                                                
                                                                                                                                
REPRESENTATIVE ROKEBERG  pointed out that  HB 9 also has  a House                                                               
Finance  Committee   referral.     He  again  mentioned   that  a                                                               
memorandum he provided listed the  points that he anticipated the                                                               
House Judiciary  Standing Committee  would focus on,  adding that                                                               
he  provided  that  memorandum  in  an  effort  to  expedite  the                                                               
process.   He said that  although he can appreciate  the comments                                                               
made by Representatives  Gara and Gruenberg, reading  the bill is                                                               
"the responsibility of a particular member."                                                                                    
                                                                                                                                
REPRESENTATIVE  GARA  interjected  to  say,  "Point  of  personal                                                               
privilege."  He went on to say:                                                                                                 
                                                                                                                                
     I  would  assume  that  every  single  member  of  this                                                                    
     committee has read  this bill.  I have  read this bill.                                                                    
     I   have  many   questions   for  you,   Representative                                                                    
     Rokeberg; you are the [person  most familiar] with this                                                                    
     bill.   I would like  to field those questions  to you,                                                                    
     and I would  like to have a debate on  the record as to                                                                    
     whether  or not  this  is good  public  policy for  the                                                                    
     state of Alaska.   This bill could be  referred to six,                                                                    
     seven,  or  eight committees;  if  all  six, seven,  or                                                                    
     eight committees  do not have  adequate time  to review                                                                    
     the  merits  of  this  bill,  then  that  doesn't  help                                                                    
     anybody.    It's not  so  much  a  matter of  how  many                                                                    
     committees this bill is referred  to, it is a matter of                                                                    
     whether  any committee  has adequate  time  to ask  the                                                                    
     questions and engage in the  debate that is relevant to                                                                    
     the bill.   So  that's why  I would  like to  have more                                                                    
     time to talk about this.   I'm perfectly ready to start                                                                    
     with  my  questions;  the  problem  is,  we  have  five                                                                    
     minutes left.                                                                                                              
                                                                                                                                
Number 0865                                                                                                                     
                                                                                                                                
REPRESENTATIVE  ROKEBERG opined  that  there  should be  adequate                                                               
time for members  to acquaint themselves with the  bill before it                                                               
is heard  on the House floor,  indicating that he would  be happy                                                               
to answer any questions before that time.                                                                                       
                                                                                                                                
REPRESENTATIVE GRUENBERG said:                                                                                                  
                                                                                                                                
     I was seriously considering  co-sponsoring the bill - I                                                                    
     didn't know enough about it to  do it - because I think                                                                    
     it's a  good idea these  people be licensed.   I didn't                                                                    
     do  it because  it seemed  like a  very complex  bill -                                                                    
     maybe it's  not - I  had no idea  how long it  had been                                                                    
     around.    And I  don't  mean  to  be goring  your  ox,                                                                    
     because I'm  really not.   I am  talking about  the way                                                                    
     our committee needs to work.   And I had previously sat                                                                    
     on this committee  for eight years; I was  the only one                                                                    
     who sat on it in  the legislature for eight years while                                                                    
     I was  here.   Sometimes ...  this committee  seemed to                                                                    
     take time to  do work on bills, and  it was aggravating                                                                    
     to those  of us  who sponsored  bills that  came before                                                                    
     the committee.  The bills  that came out were generally                                                                    
     pretty  [good]  product,  were defended  on  the  floor                                                                    
     pretty  easily,  and  passed, and  passed  both  bodies                                                                    
     because they knew  this committee did its work.   And I                                                                    
     was  always proud,  have always  been proud,  to be  on                                                                    
     this committee,  because that  has been  the reputation                                                                    
     of this committee.  And I would hope that ...                                                                              
                                                                                                                                
CHAIR McGUIRE interjected to call for an at-ease, which lasted                                                                  
from 2:54 p.m. to 2:55 p.m.                                                                                                     
                                                                                                                                
CHAIR McGUIRE  noted that  because the  House Labor  and Commerce                                                               
Standing  Committee was  not meeting  that  afternoon, the  House                                                               
Judiciary  Standing Committee  meeting could  continue past  3:00                                                               
p.m. in order to address some of the issues raised.  She said:                                                                  
                                                                                                                                
     I respect all the comments  that have been made.  There                                                                    
     is always  a very  tenuous balance ...  between getting                                                                    
     it 100  percent right and getting  bills moved through.                                                                    
     ... I  don't know  that 10 hours  more would  make [all                                                                    
     members]  100 percent  comfortable. ...  I respect  ...                                                                    
     [the   participation   of  Representatives   Gara   and                                                                    
     Gruenberg];  I don't  intend  to  marginalize that,  or                                                                    
     make you  feel ... that  your views are  not important.                                                                    
     At  the same  time, I  do  have the  background, and  I                                                                    
     guess  you'll just  have to  trust ...  that fact,  ...                                                                    
     that  ... I've  seen  the  bill, I  think  it's a  good                                                                    
     compromise,  I think  it's  a good  consumer-protection                                                                    
     bill,  and  there will  be  a  period of  time  between                                                                    
     today,  when this  bill  moves out,  and  ... [when  it                                                                    
     moves] on to Finance Committee.   And I would hope that                                                                    
     both  of you  would take  the opportunity  to read  the                                                                    
     packet ...  that contains  numerous pages  of testimony                                                                    
     and  opinions  and so  on,  and  to absorb  the  public                                                                    
     testimony today, [and] if you  have amendments that you                                                                    
     would like [offered],  that you would take  ... time to                                                                    
     meet  ... with  Representative  Rokeberg  prior to  its                                                                    
     final hearing before the Finance Committee.                                                                                
                                                                                                                                
Number 1062                                                                                                                     
                                                                                                                                
REPRESENTATIVE COGHILL made a motion to adopt Amendment 1, which                                                                
read:                                                                                                                           
                                                                                                                                
     Page 13, following line 12:                                                                                                
          Insert a new bill section to read:                                                                                    
        "* Sec. 27.  AS 08.18.123 is amended to read:                                                                       
          Sec.   08.18.123.      Denial,   suspension,   and                                                                  
     revocation   of    endorsement   or    home   inspector                                                                
     registration.    (a)     The  department  may  suspend,                                                                
     revoke,  or  refuse to  grant  or  renew a  residential                                                                    
     contractor endorsement, a  home inspector registration,                                                                
     or  an associate  home  inspector  registration upon  a                                                                
     finding that                                                                                                               
               (1)  the application is fraudulent or                                                                            
     misleading;                                                                                                                
               (2)  the endorsement holder or registrant                                                                    
     [CONTRACTOR] has  knowingly violated this chapter  or a                                                                    
     lawful order or regulation of the department;                                                                              
               (3)  the endorsement holder or registrant                                                                    
     [CONTRACTOR]   is  incompetent   or   has  engaged   in                                                                    
     fraudulent practices.                                                                                                      
          (b)  Proceedings for the denial, suspension, or                                                                       
     revocation of residential  contractor endorsement, home                                                                
     inspector  registration,  or associate  home  inspector                                                                
     registration are  governed by  AS 44.62 (Administrative                                                                
     Procedure Act)."                                                                                                           
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Renumber  internal  references   to  bill  sections  in                                                                    
     accordance  with   this  amendment.    Below   are  all                                                                    
     internal bill section references in this bill:                                                                             
          Page 22, lines 1, 12, 20, and 31                                                                                      
          Page 23, lines 7, 17, 19, 20, 21, 22, 24, 25, and                                                                     
     26                                                                                                                         
                                                                                                                                
REPRESENTATIVE ROKEBERG  noted that  Amendment 1,  which pertains                                                               
to registration,  is merely a  conforming amendment  requested by                                                               
the  Division  of  Occupational  Licensing.    He  said  that  he                                                               
supports the adoption of Amendment 1.                                                                                           
                                                                                                                                
Number 1122                                                                                                                     
                                                                                                                                
CHAIR McGUIRE asked whether there were any objections.  There                                                                   
being no objection, Amendment 1 was adopted.                                                                                    
                                                                                                                                
Number 1133                                                                                                                     
                                                                                                                                
REPRESENTATIVE GARA made a motion to adopt Amendment 2, which                                                                   
read [original punctuation provided]:                                                                                           
                                                                                                                                
     Section 17.  Add the following provision:                                                                                  
          (e) the limitations periods in this section will                                                                      
     not  begin until  the later  of  the date  of the  home                                                                    
     inspection  report,  or  the  date  a  claimant  should                                                                    
     reasonably become aware of an actionable claim.                                                                            
                                                                                                                                
CHAIR McGUIRE objected for purposes of discussion.                                                                              
                                                                                                                                
REPRESENTATIVE GARA said:                                                                                                       
                                                                                                                                
     There is  a rule in  our civil justice system  that has                                                                    
     been  around for  a good  50  years.   It's called  the                                                                    
     "date of  discovery" rule, and  I'll discuss that  in a                                                                    
     moment.   My overview of  this bill is that  largely it                                                                    
     gives  consumers some  additional assurances  than what                                                                    
     they had before about  the quality of home inspections.                                                                    
     Those provisions are good.   But what it gives, it also                                                                    
     takes  away.   As  currently written,  this bill  takes                                                                    
     away the rights of consumers  to enforce the new rights                                                                    
     they've  been  given.    In that  sense,  many  of  the                                                                    
     provisions of this bill  are - probably unintentionally                                                                    
     ... - empty, and that's what I'd like to address.                                                                          
                                                                                                                                
     Let  me give  you an  explanation of  what the  date of                                                                    
     discovery  rule  is; it's  been  in  our courts  for  a                                                                    
     number of  decades.  And,  for frame of  reference, for                                                                    
     those  of  you  who've  seen the  popular  movie  Civil                                                                  
     Action,  the  popular  movie Silkwood,  those  involved                                                                
     sever, fatal  injuries that people suffered  - cancers,                                                                    
     very  debilitating   injuries,  injuries   that  people                                                                    
     suffered many, many years  after somebody did something                                                                    
     bad. ...  The movie  Civil Action  involved groundwater                                                                  
     pollution, groundwater  pollution that occurred  in the                                                                    
     1970s.  For  many, many years, children  in a community                                                                    
     in Massachusetts  were exposed  to toxic  ground water.                                                                    
     They  didn't know  it; nobody  knew they  were drinking                                                                    
     polluted groundwater.   Within a number of  years - 10,                                                                    
     12,  15,  let's  say  -  many,  many  children  in  the                                                                    
     neighborhood started coming down  with leukemia.  Many,                                                                    
     many children in the neighborhood started dying.                                                                           
                                                                                                                                
Number 1242                                                                                                                     
                                                                                                                                
REPRESENTATIVE GARA continued:                                                                                                  
                                                                                                                                
     There's a  provision in this  bill that says  an action                                                                    
     has to  be brought within  two years of  the inspection                                                                    
     report.   The date of  discovery rule says,  "You don't                                                                    
     make  somebody bring  an action  before they  have one:                                                                    
     you  don't make  somebody bring  an action  before they                                                                    
     even know  they're injured."   The time  period doesn't                                                                    
     begin  to  run  until   somebody  reasonably  has  some                                                                    
     indication that  somebody else did something  bad.  So,                                                                    
     in this  bill right now, as  it is written, there  is a                                                                    
     one-year  and a  two-year statute  of limitations.   It                                                                    
     says the  people who write home  inspection reports can                                                                    
     only be  liable for up to  a year or two  years, at the                                                                    
     outset, from the date they write the report.                                                                               
                                                                                                                                
     Let me give you an example  of where a consumer ... has                                                                    
     paid a  good bit of money  - and I don't  consider $350                                                                    
     to be a  trivial amount of money - let's  say we have a                                                                    
     circumstance where  a consumer purchases a  home.  They                                                                    
     want to know that the  home is safe for their children;                                                                    
     they  hire a  home inspector,  the home  inspector says                                                                    
     exactly  what Representative  Rokeberg says,  which is,                                                                    
     "I'm  not going  to tear  this house  apart for  you to                                                                    
     find every  single defect  in it."   But  the purchaser                                                                    
     says, "You know, I'm really  concerned about the wiring                                                                    
     in this house;  that's really all I want  to know about                                                                    
     - is the wiring okay."                                                                                                     
                                                                                                                                
     ...  Well,  maybe one  home  inspector  says, "I'm  not                                                                    
     willing to do that for you."   But the consumer finds a                                                                    
     home inspector who  says, "I am willing to  do that for                                                                    
     you."  The home inspector  gives the house a clean bill                                                                    
     of health but, in fact,  there was glaringly bad wiring                                                                    
     in the house.  And this  is ... close to a circumstance                                                                    
     that has happened  ... in the bush.   Three, four, five                                                                    
     years afterwards,  the house burns down.   The children                                                                    
     in  the  house  are   killed;  the  family  is  killed.                                                                    
     Significant injury  has occurred,  five years  from the                                                                    
     date  of construction  or  from the  date  of the  home                                                                    
     inspection  report.   The  consumer  all along  thought                                                                    
     that the house was okay.                                                                                                   
                                                                                                                                
Number 1359                                                                                                                     
                                                                                                                                
REPRESENTATIVE GARA went on to say:                                                                                             
                                                                                                                                
     But  ... you  don't  have a  timetable  for when  fires                                                                    
     happen;  you don't  have a  timetable  for when  faulty                                                                    
     wiring will finally sort  of manifest its inadequacies.                                                                    
     In  the case  I'm  referring to,  the  courts said  the                                                                    
     consumers'  cause of  action didn't  run out  two years                                                                    
     from the date they bought  the house.  They didn't know                                                                    
     there was  going to be a  fire two years from  the date                                                                    
     they  bought  the house;  they  thought  the house  was                                                                    
     okay.   They knew  there was  going to  be a  fire when                                                                    
     there  was  a fire;  they  didn't  have any  reason  to                                                                    
     disbelieve what they were told  about the house, ... to                                                                    
     disbelieve that the  house was a safe  house, until the                                                                    
     fire occurred.                                                                                                             
                                                                                                                                
     So  the  date  of  discovery rule  says  whatever  your                                                                    
     statute of  limitations, ... it  begins to run  at this                                                                    
     point:   either the date of  the person's bad act  - so                                                                    
     let's say  the negligent  home inspection  report, [in]                                                                    
     this case  - or  at the time  the consumer  should have                                                                    
     first had any reasonable  indication that something was                                                                    
     wrong  with  the  product they  purchased  -  the  home                                                                    
     inspection  report, in  this  case.   How  can you  let                                                                    
     somebody's rights disappear before  they even know that                                                                    
     they   have  them?     How   can  you   let  somebody's                                                                    
     opportunity  to  hold  somebody  accountable  disappear                                                                    
     even  before they  know that  they have  any reason  to                                                                    
     hold the person  accountable?  That's the  point of the                                                                    
     home inspection report.  If  the point is that a person                                                                    
     wants to find  out whether they have a  safe house, and                                                                    
     if  the  home  inspector  says, "Yes,  I'm  willing  to                                                                    
     provide  this  particular  service"   -  to  check  the                                                                    
     wiring, let's  say -  why are  we giving  people rights                                                                    
     that they can't enforce?                                                                                                   
                                                                                                                                
     So,  what  this Amendment  [2]  does  is it  says  your                                                                    
     limitations period  will not disappear before  you have                                                                    
     any  reason to  know that  you have  a claim.   It's  a                                                                    
     traditional rule  - it's applied in  Republican states,                                                                    
     it's applied  in Democratic  states, it's  been applied                                                                    
     by conservative  judges, it's  been applied  by liberal                                                                    
     judges  - it  first  started in  cases involving  toxic                                                                    
     chemicals like the ... Civil  Action [example] I talked                                                                  
     to you about.  Or,  let's envision a circumstance where                                                                    
     many,  many  years ago  a  cigarette  company tried  to                                                                    
     convince  children to  start smoking  -  in year  1960,                                                                    
     let's  say  -  the  child started  smoking  and  became                                                                    
     addicted and developed cancer in year 1975.                                                                                
                                                                                                                                
Number 1462                                                                                                                     
                                                                                                                                
REPRESENTATIVE GARA continued:                                                                                                  
                                                                                                                                
     The statute of limitations would  have been two years -                                                                    
     ... not two  years from the date  they started smoking,                                                                    
     [but]  two  years  from the  date  they  realized  that                                                                    
     something  wrong  had happened.    Maybe  in 1970  they                                                                    
     found  out that  cigarettes  were  dangerous for  them,                                                                    
     finally;  maybe the  studies finally  came out.   Well,                                                                    
     maybe they  had two years  from that date, but  not two                                                                    
     years  from  the date  that  somebody  handed them  the                                                                    
     cigarettes, when  they had no idea  something wrong had                                                                    
     happened.   So,  I'll give  you maybe  two examples  of                                                                    
     where this ...                                                                                                             
                                                                                                                                
CHAIR McGUIRE interjected to ask:   "Do you honestly believe that                                                               
a judge  would not  apply a  date of discovery  rule with  a case                                                               
such as you described?  Honestly?"                                                                                              
                                                                                                                                
REPRESENTATIVE GARA said, "If the statute directs ...  I worry."                                                                
                                                                                                                                
CHAIR McGUIRE  said, "I  don't."  "That's  why you  have judicial                                                               
discretion,  and   the  reality   is,  you've  set   statutes  of                                                               
limitations  that  you  have  a  reasonable  expectation  of  the                                                               
liability that's hanging  out there for you," she added.   But in                                                               
cases where situations  as described occur, where  there is gross                                                               
negligence,  where  a  serious  harm  has  been  done,  there  is                                                               
judicial discretion  to apply a  date of discovery,  she posited,                                                               
remarking, "And you know that."                                                                                                 
                                                                                                                                
REPRESENTATIVE GARA said:                                                                                                       
                                                                                                                                
     I don't  know that, and  here's why I don't  know that:                                                                    
     In this state, ... there  have been many, many attempts                                                                    
     to get of rid of and  limit the date of discovery rule.                                                                    
     This   statute  reads   that  your   cause  of   action                                                                    
     disappears specifically  within one  or two  years from                                                                    
     the date  of the  report.  It's  specific.   Courts are                                                                    
     very  wary about  overriding what  a legislature  tells                                                                    
     them  the law  is.   In this  bill we  are telling  the                                                                    
     courts the  law is  that ... a  home inspector  is only                                                                    
     liable  for one  or  two  years from  the  date of  the                                                                    
     report.                                                                                                                    
                                                                                                                                
Number 1563                                                                                                                     
                                                                                                                                
     If  somebody  wants  to  comfort me,  that  we  have  a                                                                    
     general  statute within  Alaska  law  that applies  the                                                                    
     date  of discovery  rule -  even apart  from what  this                                                                    
     statute says -  if somebody comforts me  that ... there                                                                    
     is a provision  in Alaska law that applies  the date of                                                                    
     discovery rule, I  have no problem with this  bill.  If                                                                    
     you can  convince me  that a court  is going  to ignore                                                                    
     the  specific wording  of this  [proposed] statute  and                                                                    
     impose  a date  of discovery  rule, I  have no  problem                                                                    
     with the bill.   I am not convinced at  this point that                                                                    
     ...  I would  be comfortable  ... passing  a bill  that                                                                    
     says the opposite of what I hope it would say.                                                                             
                                                                                                                                
REPRESENTATIVE GARA concluded:                                                                                                  
                                                                                                                                
     To be  careful, what we  would do is adopt  either this                                                                    
     amendment or  an amendment stating that  this provision                                                                    
     does not do  anything to disturb the  date of discovery                                                                    
     rule.   If we did  that, I would withdraw  my Amendment                                                                    
     [2] in favor  of an amendment like that.   But if it is                                                                    
     this  committee's intention  to apply  a rule  like the                                                                    
     date of discovery  rule, I believe it has  to be stated                                                                    
     somewhere  in the  statutes.   I  am  worried that  the                                                                    
     specific language of this  [proposed] statute, which is                                                                    
     that  the legislature  directs the  courts  to allow  a                                                                    
     cause of action only one or  two years from the date of                                                                    
     the report, will be applied as written.                                                                                    
                                                                                                                                
CHAIR McGUIRE  assured members  that during  the next  two years,                                                               
the extent of liability, personal  and otherwise, and statutes of                                                               
limitations would  be issues  for ongoing  debate.   She remarked                                                               
that statutes  of limitations are  in place  in order to  allow a                                                               
reasonable  businessperson to  move on.   At  the same  time, she                                                               
noted,  the legislature  has to  be protective  of consumers.   A                                                               
balance  must  be  achieved,  and that's  what  tort  reform  and                                                               
statute of limitations are about, she posited.  She observed:                                                                   
                                                                                                                                
     And the  date of discovery  has been something  that in                                                                    
     my  experience  - in  reading  -  ... [has]  even  been                                                                    
     applied in cases where there  was a specific statute of                                                                    
     limitations.  So  it is a tool in  a judicial [toolbox]                                                                    
     that is  there for  cases that  are egregious,  where a                                                                    
     judge can say  "You know what, there  was no reasonable                                                                    
     chance that this innocent  victim could have discovered                                                                    
     it."   And so I  don't know that  [what] Representative                                                                    
     Rokeberg wants  to do is to  say that; I think  what he                                                                    
     wants to do  is say, "We're going to try  to limit this                                                                    
     statute of limitations."   That tool is  out there, but                                                                    
     I  think it's  a  very specific  public policy  message                                                                    
     that [Representative Rokeberg is] trying to convey.                                                                        
                                                                                                                                
Number 1683                                                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG said he opposes  Amendment 2.  He went on                                                               
to say:                                                                                                                         
                                                                                                                                
     I think  that Representative Gara's arguments  are well                                                                    
     founded in law and have a  place in the law, but not in                                                                    
     this place.  It is the  intention of the author of this                                                                    
     bill  to place  a pretty  stringent fence  around those                                                                    
     periods when causes of action  be brought forward.  And                                                                    
     ...  there's numerous  reasons here.   Number  one, the                                                                    
     example  he cited  regarding the  wiring:   ... a  home                                                                    
     inspector ... is not generally  competent to comment on                                                                    
     ... the  state of  the wiring. ...  To make  a complete                                                                    
     analysis  of  that,  number one,  you  should  be  [an]                                                                    
     electrical  engineer and/or  a competent  journeyman in                                                                    
     that  trade.   And,  additionally, the  scope of  work,                                                                    
     which is required under this  bill to be defined in the                                                                    
     report  and  the contract  one  engages  in, should  be                                                                    
     clearly delineated:   the level of  competence and what                                                                    
     degree of inspection you're going to do.                                                                                   
                                                                                                                                
     ...  So  the  consumer  has ...  been  put  on  notice;                                                                    
     therefore, anybody  who would undertake the  example of                                                                    
     the  bad wiring  would ...  be in  breach of  the basic                                                                    
     concepts  of  this  bill.  ...  Let's  not  use  wiring                                                                    
     [examples];   let's  use   a  roof   or  a   foundation                                                                    
     [example].   Those  are the  two primary  elements that                                                                    
     come into  play a  lot when you  are dealing  with home                                                                    
     inspections and there's some dispute  about that.  This                                                                    
     is  precisely the  point here.    To have  a full  roof                                                                    
     inspection, you  need to have an  invasive inspection -                                                                    
     you need to  take the ... thing apart -  and you should                                                                    
     have  an engineer  or somebody  that's competent  to do                                                                    
     that.  Not  a home inspector.  That's  the whole point.                                                                    
     A competent  home inspector who's licensed  - takes the                                                                    
     exam,   follows   the   regulations  of   a   regulated                                                                    
     occupation -  shouldn't even be  doing that. ...  If he                                                                    
     does it, then he should be actionable.                                                                                     
                                                                                                                                
Number 1727                                                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG continued:                                                                                              
                                                                                                                                
     ... And  the same  goes for  a foundation.   To  make a                                                                    
     proper  inspection of  a foundation,  a home  inspector                                                                    
     will go down and kind of  visually look at it.  And ...                                                                    
     guys  that know  the  business can  kind  of tell  you,                                                                    
     "This doesn't  look too good";  they can sniff  it out,                                                                    
     ...  people  with talent,  they  can  do that  kind  of                                                                    
     stuff.   And that's what  they get paid for,  for $350.                                                                    
     ...  That's  a  trifling  amount  in  the  whole  world                                                                    
     universe of economic activity; I  think it's pretty ...                                                                    
     small  to  try  to  lay ...  liabilities  of  literally                                                                    
     hundreds  of thousands  of  dollars  on something  like                                                                    
     that.   But I would  agree, there is certain  amount of                                                                    
     reliance upon that,  but it is limited  and that's part                                                                    
     of the whole process here of the bill.                                                                                     
                                                                                                                                
     Point in  fact ...,  if there  is a  structural problem                                                                    
     with  that, particularly  obviously  in  [a] new  home,                                                                    
     there's going to  be a warranty, there's going  to be a                                                                    
     contractor   and/or  there   should  be   a  disclosure                                                                    
     statement in  the liability on  the part of  the seller                                                                    
     if they don't properly disclose  a defect that would be                                                                    
     readily  ... apparent  to somebody.   So  there's other                                                                    
     elements here.   The  home inspector is  only one  of a                                                                    
     number  of  people  that   could  have  culpability  or                                                                    
     liability  in any  kind of  a transaction.   To  try to                                                                    
     focus on all  this attention on one party  is not fair.                                                                    
     And  that's  why, as  [Chair  McGuire]  ... points  out                                                                    
     here,  it's  the  effect  on  commerce  here.    To  do                                                                    
     otherwise, to use ... the  concept of date of discovery                                                                    
     rule, is basically  open ended.  It  doesn't affect the                                                                    
     [facts] that we're having to deal with here.                                                                               
                                                                                                                                
     ...  If there's  an  architectural  design problem,  if                                                                    
     there's a  structural problem in  the engineering  of a                                                                    
     structure, you're  right:  sometimes this  doesn't show                                                                    
     up for some  time. ... And that's why we  have a longer                                                                    
     statute  of  reposes  and statute  of  limitations  for                                                                    
     those  types of  things.   This is  a matter  of public                                                                    
     policy.    We're  trying  to  define  and  contain  the                                                                    
     liability on the  one hand ... and also  remove some of                                                                    
     the immunities  ... granted  before, to  kind of  get a                                                                    
     balance here, and also make  sure we do the two-pronged                                                                    
     thing we  want to do.   We  want to have  good consumer                                                                    
     protection -  as well  as try  to keep  the cost  of it                                                                    
     down to  the public  - and to  make sure  that commerce                                                                    
     can go on.                                                                                                                 
                                                                                                                                
Number 1869                                                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG concluded:                                                                                              
                                                                                                                                
     So, to try to say that  we ... can't adopt some kind of                                                                    
     a  modification to  these  time-honored  rules of  law,                                                                    
     that's precisely, as legislators,  what we're all about                                                                    
     here.   It  is  making  sure that  we  can  get a  fair                                                                    
     balance to  fit the circumstances  here.  I  would say,                                                                    
     Madam  Chair, when  I first  introduced  this bill,  we                                                                    
     were  one of  the first  states  in the  union to  even                                                                    
     undertake this.  Since that  time, ... at least half of                                                                    
     the other  states have already adopted  regulation.  So                                                                    
     it's a  matter of  the type  and form  here.   But it's                                                                    
     clear to me that this  situation doesn't lend itself to                                                                    
     that  type of  imposition  of this  particular date  of                                                                    
     discovery rule,  and I think  the clear  public policy,                                                                    
     from all standpoints, bears up that type of policy.                                                                        
                                                                                                                                
REPRESENTATIVE SAMUELS, on the issue of Amendment 2, said he                                                                    
agrees with Chair McGuire.                                                                                                      
                                                                                                                                
REPRESENTATIVE HOLM indicated that he is opposed to Amendment 2.                                                                
He said:                                                                                                                        
                                                                                                                                
     Why, in heaven's name, would  anybody want to be a home                                                                    
     inspector  if  he  had unlimited  liability?  ...  This                                                                    
     bill, to  me, is good  public policy, as  it's written,                                                                    
     to promote  orderly economic activity.   I think that's                                                                    
     what  we should  be  doing and  I respectfully  promote                                                                    
     that idea ...; Representative  Rokeberg did a very good                                                                    
     job drafting this bill.   As I've read this bill, there                                                                    
     are certain things that I  don't particular care about,                                                                    
     and I  don't particularly understand why  the timing is                                                                    
     there.                                                                                                                     
                                                                                                                                
     I, personally,  have had problems  with buying  a home,                                                                    
     and in my  history I understand what  caveat emptor is;                                                                    
     I understand  what "Let the  buyer beware" is.   I also                                                                    
     understand   what   personal  responsibility   for   my                                                                    
     purchasing  power is  all about,  that I  have personal                                                                    
     responsibility  to  myself   to  make  good  decisions.                                                                    
     There  are no  perfect solutions,  and the  reliance of                                                                    
     the buyer is upon his  or her knowledge, money, and the                                                                    
     seller's representation.  The  home inspector is just a                                                                    
     piece  of the  puzzle  ..., and  I respectfully  submit                                                                    
     that we  cannot make a  perfect bill that  will protect                                                                    
     all people  from no damage being  done to them.   So, I                                                                    
     speak against this Amendment [2].                                                                                          
                                                                                                                                
Number 1978                                                                                                                     
                                                                                                                                
REPRESENTATIVE GARA, in defense of Amendment 2, said:                                                                           
                                                                                                                                
     What we  have is one  bill.   We have a  chairwoman who                                                                    
     believes  that the  date of  discovery rule  will apply                                                                    
     under the  terms of  this bill, we  have a  sponsor who                                                                    
     believes  the date  of discovery  rule  will not  apply                                                                    
     under the terms of ... this  bill, and we have a person                                                                    
     speaking, myself, who  is not sure whether  the date of                                                                    
     discovery  rule will  apply and  who wants  to make  it                                                                    
     clear that it should apply.   Let me address the thrust                                                                    
     of Representative Rokeberg's  comments.  Representative                                                                    
     Rokeberg is  correct in stating  that a  home inspector                                                                    
     does not ...  warrant that everything is  great about a                                                                    
     house.   A  home inspection  is a  limited function;  a                                                                    
     home  inspection report  is a  limited document.   It's                                                                    
     pretty  clear  that  a  home  inspector  only  warrants                                                                    
     certain  things  when  the   home  inspector  writes  a                                                                    
     report, and doesn't undertake to warrant other things.                                                                     
                                                                                                                                
     All I'm  talking about  is those  things that  the home                                                                    
     inspector promises  the buyer  that the  home inspector                                                                    
     is  doing.   A court  could not  hold a  home inspector                                                                    
     liable  for  things  that  the  home  inspector  didn't                                                                    
     promise they were doing; a  court could not hold a home                                                                    
     inspector liable  for things that were  beyond the home                                                                    
     inspector's scope  of responsibilities  or duties.   So                                                                    
     the problem  that we  all suffer is,  none of  us build                                                                    
     homes, none of  us are home inspectors, and  none of us                                                                    
     - I think  - have a great grasp  on those circumstances                                                                    
     where  a home  inspector might  do  a bad  job and  put                                                                    
     somebody's life  at risk  and those  circumstances that                                                                    
     wouldn't  really occur  in  a  home inspection  report.                                                                    
     But  Representative  Rokeberg  mentions these  sort  of                                                                    
     structural problems.                                                                                                       
                                                                                                                                
Number 2062                                                                                                                     
                                                                                                                                
REPRESENTATIVE GARA continued:                                                                                                  
                                                                                                                                
     I'll give you  an example that really  doesn't apply to                                                                    
     homes,  but  I  suppose an  analogous  situation  could                                                                    
     occur.  There  was a terrible hotel  skywalk collapse a                                                                    
     number of  years ago.   We're not talking  about hotels                                                                    
     today,   but  just   assume  a   similar  smaller-scale                                                                    
     circumstance that involves  a house.  It  was a skywalk                                                                    
     that was  built more than  two years prior to  the date                                                                    
     of collapse, and it killed  over 100 people - I believe                                                                    
     those are  the right  numbers.  In  any case,  a tragic                                                                    
     loss of life  occurred, and it was a  very poorly built                                                                    
     and  poorly inspected  structure.   Now,  I don't  know                                                                    
     that  ... anything  similar to  that would  fall within                                                                    
     the scope of home inspectors  duties.  What is clear is                                                                    
     there are things  that will fall within the  scope of a                                                                    
     home  inspector's  duties.   And  we  can't  tell  home                                                                    
     inspectors  that,   "We're  not   going  to   hold  you                                                                    
     accountable  for  the  things   you  promised  to  do,"                                                                    
     whatever they are.                                                                                                         
                                                                                                                                
     Under today's  law, ... until  we adopt this  bill, the                                                                    
     date of  discovery rule does  apply.  And  the question                                                                    
     is whether or not we  should do anything that threatens                                                                    
     to take away  that right of consumers to  rely upon the                                                                    
     date  of  discovery rule.    And  I would  urge,  Madam                                                                    
     Chair, that if she believes  the date of discovery rule                                                                    
     should apply  implicitly, ... [that] we  take some time                                                                    
     to figure  out whether or  not a court  would determine                                                                    
     that  the date  of discovery  rule does  apply to  this                                                                    
     bill as  written.  I  think that requires that  some of                                                                    
     us open  up a law book  and look through some  cases to                                                                    
     make  sure that  it applies.   It's  a question  that I                                                                    
     think is lingering out here.                                                                                               
                                                                                                                                
REPRESENTATIVE GARA concluded:                                                                                                  
                                                                                                                                
     But all  I'm trying to  say is,  as to the  things home                                                                    
     inspectors  promise  they're going  to  do,  as to  the                                                                    
     warranties of  safety that they  do give  to consumers,                                                                    
     as to the things that  do fall within their job duties,                                                                    
     they should  be held accountable for  the promises that                                                                    
     they make.   It might not include wiring  in all cases,                                                                    
     though I  would say  that if a  home inspector  came to                                                                    
     you and says,  "I'm also going to  warrant the wiring,"                                                                    
     then  they're warranting  the wiring.    Maybe if  they                                                                    
     came  to you  and said,  "Look, I'm  not going  to look                                                                    
     inside any walls; I'm not  an electrician," they're not                                                                    
     warranting  the wiring.   Maybe  in most  cases they're                                                                    
     not warranting the wiring, but  if they said they were,                                                                    
     then they better be.                                                                                                       
                                                                                                                                
Number 2133                                                                                                                     
                                                                                                                                
CHAIR McGUIRE, in response, said:                                                                                               
                                                                                                                                
     What's happening right now is  that we're talking about                                                                    
     one specific  piece of legislation.   There is  a whole                                                                    
     framework  of laws  that are  out  there, dealing  with                                                                    
     consumer  protection, dealing  with date  of discovery,                                                                    
     dealing with all kinds of things.   And what I meant to                                                                    
     say, and I  thought I said clearly, was  that I believe                                                                    
     that  Representative Rokeberg  intent is  to limit  the                                                                    
     statute of  limitations to  one year  and two  years; I                                                                    
     believe that that's  his intent.  But what  I also said                                                                    
     was  that  I  have  never  seen a  case  where  a  very                                                                    
     egregious situation has happened  where a judge has not                                                                    
     been able  to access a tool  in their tool belt,  to go                                                                    
     back and  say, "date of  discovery."  So that's  what I                                                                    
     mean  to   say,  is  that   we  do  have   branches  of                                                                    
     government:    we make  the  laws,  the judiciary  goes                                                                    
     ahead and  takes those cases,  they have  various tools                                                                    
     in their  toolbox, we  don't always  like those,  but I                                                                    
     believe that  it is Representative  Rokeberg's [intent]                                                                    
     to limit that, and I think it's appropriate.                                                                               
                                                                                                                                
     Representative  Holm  has,  I  think,  very  eloquently                                                                    
     stated:   You're  looking at  it  as one  piece of  the                                                                    
     puzzle.   And what you're  talking about is a  group of                                                                    
     people  that   prior  to  now  have   never  even  been                                                                    
     regulated.  ... They've  been going  around doing  home                                                                    
     inspections, promising who knows what.   And so this is                                                                    
     a big  step that  Representative Rokeberg has  taken on                                                                    
     over  the last  ... [four]  years,  ... to  try to  say                                                                    
     let's bring  people together and do  some regulating of                                                                    
     it.   I  think it's  appropriate that  you say  there's                                                                    
     going to be some time  limit that we're going to impose                                                                    
     so that people can ... move  on with their lives from a                                                                    
     business standpoint.                                                                                                       
                                                                                                                                
CHAIR McGUIRE indicated that amongst  people who have gone to law                                                               
school, there  could be  any number  of viewpoints  regarding the                                                               
possible  interpretation of  a judicial  proceeding.   She  said,                                                               
"You can  continue to do  your debate,  and we will  go forward,"                                                               
noting that other members still wished to speak to [this issue].                                                                
                                                                                                                                
Number 2214                                                                                                                     
                                                                                                                                
REPRESENTATIVE   ANDERSON  opined   that  Representative   Gara's                                                               
[argument] has some merit.  He  remarked that he has suffered the                                                               
date of  discovery rule while  trying to  set a time  regarding a                                                               
tort action.   He  said that  he is as  pro-business and  as pro-                                                               
builder as they come, but  accountability and consumer protection                                                               
are important.  He added:                                                                                                       
                                                                                                                                
     And I think  the interesting thing is, as  we get these                                                                    
     bills, it  would be so easy  to pass the buck  and say,                                                                    
     "Hey, this  bill is  just addressing  one issue  - home                                                                    
     inspection/home inspectors  as whole  - and  there's so                                                                    
     many other people that could be sued and we can't get                                                                      
     them in this setting at this meeting."                                                                                     
                                                                                                                                
REPRESENTATIVE  ANDERSON  surmised   that  Representative  Gara's                                                               
point is, what better time  than the present to prevent ambiguity                                                               
and  litigation  with  regard  to legislation.    He  noted  that                                                               
although  Representative  Rokeberg  has  said  that  the  example                                                               
regarding electric  wiring is a bad  example, [paragraph] (12)(B)                                                               
on  page  18  specifically  refers  to  a  visual  inspection  of                                                               
electrical systems.                                                                                                             
                                                                                                                                
REPRESENTATIVE  ROKEBERG pointed  out that  there is  a provision                                                               
requiring  a pre-inspection  agreement, and  that this  agreement                                                               
would outline the specific scope  of what a particular inspection                                                               
entails.     He  remarked  that  Representative   Gara's  example                                                               
regarding the  hotel skywalk pertains to  commercial construction                                                               
issues, not home inspection issues.                                                                                             
                                                                                                                                
The committee took an at-ease from 3:26 p.m. to 3:29 p.m.                                                                       
                                                                                                                                
Number 2332                                                                                                                     
                                                                                                                                
REPRESENTATIVE COGHILL called for the question on Amendment 2.                                                                  
                                                                                                                                
CHAIR McGUIRE asked whether there were any objections.                                                                          
                                                                                                                                
REPRESENTATIVE GARA objected.                                                                                                   
                                                                                                                                
CHAIR McGUIRE announced  that there would be a roll  call vote on                                                               
the calling of the question.                                                                                                    
                                                                                                                                
A roll  call vote was  taken.  Representatives Anderson  and Gara                                                               
voted yes.   Representatives Coghill, Holm,  Samuels, and McGuire                                                               
voted  no.   Representative Gruenberg  was absent  for the  vote.                                                               
Therefore, the vote was 2-4.                                                                                                    
                                                                                                                                
Number 2382                                                                                                                     
                                                                                                                                
CHAIR McGUIRE asked that roll call vote be taken on Amendment 2.                                                                
                                                                                                                                
A roll  call vote  was taken.   Representatives  Gara, Gruenberg,                                                               
and  Anderson voted  in favor  of Amendment  2.   Representatives                                                               
Coghill,   Holm,  Samuels,   and   McGuire   voted  against   it.                                                               
Therefore, Amendment 2 failed by a vote of 3-4.                                                                                 
                                                                                                                                
Number 2386                                                                                                                     
                                                                                                                                
REPRESENTATIVE  COGHILL   made  a  motion  to   adopt  Conceptual                                                               
Amendment 3, which read [original punctuation provided]:                                                                        
                                                                                                                                
     Page 6, line 7 after "section." insert:                                                                                    
        In cases of new homes, this report can be in the                                                                      
     form of a certificate of occupancy.                                                                                      
                                                                                                                                
TAPE 03-3, SIDE B                                                                                                             
Number 2356                                                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG indicated that  Conceptual Amendment 3 is                                                               
a clarifying amendment that reflects  the current practice of the                                                               
ICBO inspectors  who inspect new  homes for  the AHFC.   He added                                                               
that a certificate  of occupancy is the equivalent  of the AHFC's                                                               
PUR-102 form.                                                                                                                   
                                                                                                                                
Number 2340                                                                                                                     
                                                                                                                                
CHAIR  McGUIRE  asked  whether   there  were  any  objections  to                                                               
Conceptual  Amendment 3.   There  being no  objection, Conceptual                                                               
Amendment 3 was adopted.                                                                                                        
                                                                                                                                
Number 2334                                                                                                                     
                                                                                                                                
REPRESENTATIVE COGHILL  moved to report CSHB  9(L&C), as amended,                                                               
out  of   committee  with  individual  recommendations   and  the                                                               
accompanying fiscal notes.                                                                                                      
                                                                                                                                
Number 2317                                                                                                                     
                                                                                                                                
REPRESENTATIVE GRUENBERG  objected for the purpose  of asking the                                                               
sponsor  a question.   He  referred to  page 9,  Section 17.   He                                                               
said:                                                                                                                           
                                                                                                                                
       I take it that the statute of limitations in that                                                                        
     provision only applies to actions against individuals                                                                      
     registered under the (indisc. - voice faded away).                                                                         
                                                                                                                                
REPRESENTATIVE  ROKEBERG said  it is  his understanding  that the                                                               
licensees  registered under  this proposed  legislation would  be                                                               
individuals rather than corporations.                                                                                           
                                                                                                                                
CHAIR McGUIRE asked whether there  were any further objections to                                                               
the motion.                                                                                                                     
                                                                                                                                
Number 2276                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GARA  objected.    He  said,  "With  the  Chair's                                                               
permission I  would request just  probably less than  two minutes                                                               
to discuss one conceptual amendment."                                                                                           
                                                                                                                                
CHAIR  McGUIRE said:    "At  this point  in  time,  I'm going  to                                                               
continue  moving the  bill out,  and  if you'd  like to  continue                                                               
discussing that  with Representative Rokeberg prior  to it moving                                                               
on to [the  House Finance Committee], I think  it'd be fantastic;                                                               
you two could even use my office."                                                                                              
                                                                                                                                
A  roll call  vote  was taken.    Representatives Holm,  Samuels,                                                               
Anderson, Coghill, and  McGuire voted in favor  of reporting CSHB                                                               
9(L&C), as amended,  out of committee.   Representatives Gara and                                                               
Gruenberg voted against it.   Therefore, CSHB 9(JUD) was reported                                                               
from the House Judiciary Standing Committee by a vote of 5-2.                                                                   

Document Name Date/Time Subjects