Legislature(2015 - 2016)BARNES 124

02/11/2015 03:15 PM House LABOR & COMMERCE

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Heard & Held
Heard & Held
            HB 81-EXEMPTION: LICENSING OF CONTRACTORS                                                                       
3:16:55 PM                                                                                                                    
CHAIR OLSON  announced that the first  order of business  would be                                                              
HOUSE  BILL NO.  81, "An  Act relating  to an  exemption from  the                                                              
regulation of construction contractors."                                                                                        
3:17:31 PM                                                                                                                    
REPRESENTATIVE  TILTON,  speaking  as  prime  sponsor  of  HB  81,                                                              
stated  that this  bill relates  to the  licensing of  residential                                                              
contractors.    She  said  she  introduced  HB  81  after  holding                                                              
discussions  with  members  of  the  Mat-Su  Home  Builders,  Inc.                                                              
Further,  after speaking  with contractors  and realtors in  other                                                              
areas  of the  state  and some  affected  home  buyers, it  became                                                              
clear   that  some   individuals   are  commonly   exploiting   an                                                              
unintended loophole  in the existing statutory  language, creating                                                              
an uneven  playing field for  licensed professionals who  abide by                                                              
the  law   and  potentially   exposing  unwitting  homebuyers   to                                                              
substandard construction.   In short,  HB 81 is really  a consumer                                                              
protection bill and  not a bill to restrict trade,  she said.  She                                                              
emphasized  that HB  81 does  not prevent  Alaskans from  building                                                              
their own  homes, from selling homes  they have built,  or propose                                                              
any new licensure.                                                                                                              
REPRESENTATIVE  TILTON  said  that  under  current  state  law  an                                                              
exemption   for  licensed  contractors   has  allowed   unlicensed                                                              
contractors   to  operate   a  substantial   businesses   avoiding                                                              
licensing,  bonding,  and  insurance.     By  avoiding  licensing,                                                              
bonding,  and  insurance  requirements   in  the  law,  unlicensed                                                              
contractors  are skirting  the  law and  jeopardizing  protections                                                              
for consumers.                                                                                                                  
REPRESENTATIVE  TILTON   surmised  that  most   committee  members                                                              
probably  recall the  first home  they  built and  their sense  of                                                              
taking financial risks  in doing so.  In fact,  for most Alaskans,                                                              
purchasing their homes  is the largest investment  they will make.                                                              
This bill  helps ensure  that home buyers  have expectations  of a                                                              
uniform  standard  of  professionalism   and  seek  to  reasonably                                                              
include  all  individuals  engaged  in  home  under  the  existing                                                              
residential contractor licensure.                                                                                               
3:19:50 PM                                                                                                                    
DAN BELLERIVE,  Staff, Representative  Cathy Tilton,  Alaska State                                                              
Legislature,  on behalf  of the  prime sponsor,  stated that  this                                                              
issue  was  initially  raised  by  home  builders  in  the  Mat-Su                                                              
valley.   A growing  number of  people are  abusing exemptions  in                                                              
state law that were  intended to allow people to  act as their own                                                              
general  contractors;  however,  abuse of  these  exemptions  have                                                              
allowed  unlicensed contractors  to  operate substantial  business                                                              
enterprises   without  obtaining   any   licensing,  bonding,   or                                                              
insurance,   thereby  creating   an  unfair   playing  field   for                                                              
contractors  who  do follow  the  law.   This  bill,  HB 81,  will                                                              
address the  issue by establishing  a two-year timeframe  in which                                                              
an owner-builder  cannot sell a home  after the completion  of the                                                              
construction, but  provides an opportunity for the  owners to sell                                                              
their  homes earlier  if they  notify  the Department  of Labor  &                                                              
Workforce Development (DLWD).                                                                                                   
3:20:53 PM                                                                                                                    
REPRESENTATIVE  JOSEPHSON  said he  likes  the bill;  however,  he                                                              
wondered  whether any constitutional  issues  such as due  process                                                              
will  arise  under  the  bill,  with  respect  to  disposition  of                                                              
property,  since home  owners cannot  sell their  homes when  they                                                              
want to do so.                                                                                                                  
REPRESENTATIVE  TILTON answered  that  a few  questions have  been                                                              
raised,  but  she did  not  think  there were  any  constitutional                                                              
challenges at this point.                                                                                                       
REPRESENTATIVE LEDOUX  related her understanding  that contractors                                                              
can  still  sell  homes,  but  they   must  have  the  appropriate                                                              
licensing to build homes.                                                                                                       
3:22:36 PM                                                                                                                    
REPRESENTATIVE  COLVER asked whether  this bill  was an  effort to                                                              
obtain compliance  from those parties building homes  who have not                                                              
adhered to  rules and  regulations pertaining  to their  employees                                                              
or by obtaining  contractor licenses that most  contractors in the                                                              
home  building industry  acquire.   He  asked whether  this is  an                                                              
effort  to  "level the  playing  field"  of  those who  have  been                                                              
operating outside the regulatory environment.                                                                                   
REPRESENTATIVE  TILTON replied the  bill could  be viewed  in that                                                              
way;  however, HB  81 does  not prevent  people  from building  or                                                              
selling  their own homes,  but it  does allow  regulators to  look                                                              
for patterns of  unlicensed home building, closes  a loophole, and                                                              
creates an "even playing field."                                                                                                
3:23:58 PM                                                                                                                    
REPRESENTATIVE COLVER  referred to page 2, paragraph  11, of HB 81                                                              
which read, " ...  the exemption in this paragraph  does not apply                                                              
if  the structure  under construction  is advertised  for sale  or                                                              
sold during  the period  of construction  or for  two years  after                                                              
the   period  of   construction   ends,  unless   the  owner   can                                                              
demonstrate to the  department's satisfaction that  the sale would                                                              
not  result  in  circumvention  of  the  requirements  under  this                                                              
chapter;".   He  expressed concern  about  what "the  department's                                                              
satisfaction" might  mean if owner-builders  desire to  sell their                                                              
homes.   He wondered  what hurdles  the owner/builders  would need                                                              
to  jump over,  and whether  the owners  will need  to show  cause                                                              
such  as divorce  or loss  of  job to  do so.    He further  asked                                                              
whether owner-builders could add their spouses to the deeds.                                                                    
3:25:23 PM                                                                                                                    
MR. BELLERIVE deferred  to the Division of  Corporations, Business                                                              
& Professional  Licensing, Department of Commerce,  Community, and                                                              
Economic Development (DCCED).                                                                                                   
3:25:40 PM                                                                                                                    
SARA  CHAMBERS,   Acting  Director,   Division  of   Corporations,                                                              
Business,  and  Professional Licensing,  Department  of  Commerce,                                                              
Community,  &  Economic  Development   (DCCED),  stated  that  the                                                              
language  "to the  department's satisfaction"  would be  developed                                                              
through the  public comment process  when the department  develops                                                              
its  regulations.    She  envisioned  it  would  be  an  open  and                                                              
transparent process  for public scrutiny, but will  be codified in                                                              
regulations to ensure the process is clear.                                                                                     
3:26:40 PM                                                                                                                    
REPRESENTATIVE  LEDOUX asked  whether the  parameters will  be put                                                              
in regulation  and if the regulations  will identify the  types of                                                              
exemptions  or  reasons  the  department   will  accept  to  avoid                                                              
contractors circumventing the law.                                                                                              
MS. CHAMBERS answered that is correct.                                                                                          
3:27:02 PM                                                                                                                    
REPRESENTATIVE LEDOUX  asked whether there would be  a "catch all"                                                              
for  other  circumstances  that the  department  deemed  will  not                                                              
circumvent the law.                                                                                                             
MS. CHAMBERS responded  that the department will work  to create a                                                              
process  that  is  transparent  and   educational  to  the  public                                                              
without being  so restrictive  that some qualifying  circumstances                                                              
wouldn't fit  within the structure.   She said setting  a standard                                                              
for  the public  must be  in regulation;  however, the  department                                                              
will  want to  ensure that  the process  meets the  intent of  the                                                              
bill by closing any loopholes, yet not be unduly restrictive.                                                                   
3:27:54 PM                                                                                                                    
REPRESENTATIVE LEDOUX  asked for further clarification  on whether                                                              
the answer is yes.                                                                                                              
MS. CHAMBERS answered yes.                                                                                                      
3:28:01 PM                                                                                                                    
REPRESENTATIVE  COLVER  asked  for  a  general  framework  of  the                                                              
conditions  the  department  envisions  will be  in  the  proposed                                                              
regulations.   He further  asked what the  department has  done to                                                              
enforce contracting  regulations,  in particular, the  requirement                                                              
that  general contractors  hold  a  residential endorsement.    He                                                              
recalled  the residential  endorsement  requires contractors  must                                                              
obtain training  and undergo  a certification  process.   He asked                                                              
whether the  department has worked  to assist the industry  in the                                                              
Mat-Su  Valley to  achieve compliance,  the  types of  enforcement                                                              
actions  the  department employs,  and  the  reason this  bill  is                                                              
MS. CHAMBERS  explained that the  DCCED works with  the Department                                                              
of  Labor &  Workforce Development  (DLWD)  to enforce  contractor                                                              
licensing  throughout   the  state.    Although   the  enforcement                                                              
statutes  are located  within  the  DCCED's statutes,  the  DLWD's                                                              
Division  of Labor  Standards and  Safety, Wage  and Hour  section                                                              
conducts   wage  and   hour   inspections   statewide  to   ensure                                                              
compliance.   As an  efficiency measure,  the departments  decided                                                              
that  the DLWD  will  also perform  licensing  compliance.   Thus,                                                              
rather  than  having two  departments  with  separate  enforcement                                                              
staff located  throughout the state,  the DLWD provides  licensure                                                              
compliance  and   ultimately  issues   fines,  cease   and  desist                                                              
letters, and follow-up  collection of fines.   She emphasized that                                                              
the DCCED's  goal was to  ensure compliance  and to work  with the                                                              
public and  first-time offenders  to bring  them into  compliance;                                                              
however, the department  does have the authority  to take stronger                                                              
action  with repeat  offenders  or  those blatantly  skirting  the                                                              
3:31:22 PM                                                                                                                    
REPRESENTATIVE COLVER  asked whether the department  could provide                                                              
data on  complaints and subsequent  investigations to  support the                                                              
legislative   intent   of   non-compliance.     He   related   his                                                              
understanding that  DCCED issues and administers  licenses and the                                                              
DLWD  conducts the  wage and  hour inspections  to verify  whether                                                              
contractors are properly licensed.                                                                                              
MS.  CHAMBERS  related  that the  division  lists  the  contractor                                                              
enforcement activity  and those out  of compliance on  the DCCED's                                                              
website.    She   offered  to  provide  the  information   to  the                                                              
3:32:45 PM                                                                                                                    
REPRESENTATIVE  HUGHES related her  understanding that  this issue                                                              
was brought  to the sponsor's attention  in the Mat-Su area.   She                                                              
asked whether this problem exists in other parts of the state.                                                                  
REPRESENTATIVE  TILTON answered  yes;  that unlicensed  contractor                                                              
activity also  occurs in other parts  of the state.   She reported                                                              
that this  issue is  the number  one legislative  priority  of the                                                              
Alaska State  Home Builders Association  (ASHBA) and  although the                                                              
Mat-Su  Home  Builders   first  approached  her,   the  ASHBA  has                                                              
subsequently   highlighted   the   problems   its   members   have                                                              
CHAIR  OLSON added  that this  issue is  a priority  for the  home                                                              
builders  [Kenai Peninsula  Builders  Association  (KPBA)] in  his                                                              
district, too.   He suggested unlicensed contractors  might not be                                                              
as  prevalent  in   Anchorage  due  to  the  number   of  building                                                              
inspectors  in  that area,  but  it is  an  issue in  the  smaller                                                              
3:33:49 PM                                                                                                                    
REPRESENTATIVE  LEDOUX  asked  for further  clarification  on  the                                                              
fiscal note.                                                                                                                    
REPRESENTATIVE    TILTON   answered    that   the   Division    of                                                              
Corporations,  Business  and  Professional   Licensing  identified                                                              
costs  of $2,500  in its  fiscal note,  but she  has been  working                                                              
with the department  to see if these costs can be  zeroed out.  In                                                              
response  to  a question,  she  agreed  that  a similar  bill  was                                                              
introduced  last year  without any  fiscal impact  so she  thought                                                              
there might be some leeway.                                                                                                     
3:34:45 PM                                                                                                                    
REPRESENTATIVE  LEDOUX asked  whether  the fiscal  note costs  are                                                              
limited to $2,500.                                                                                                              
REPRESENTATIVE TILTON  answered yes.  She stated  that contractors                                                              
pay fees  and their  program pays for  itself; however,  there are                                                              
some additional  items  she has been  working  on with respect  to                                                              
the fiscal note.                                                                                                                
3:35:48 PM                                                                                                                    
CHAIR OLSON opened public testimony on HB 81.                                                                                   
3:35:57 PM                                                                                                                    
ALAN  WILSON,  Chair, Legislative  Committee,  Alaska  State  Home                                                              
Building Association  (ASHBA), stated  that HB  81 is the  ASHBA's                                                              
number one  priority.  He stated  that the problems  are magnified                                                              
in  the  Mat-Su  area, but  as  previously  mentioned,  the  Kenai                                                              
Peninsula  and rural areas  have also  experienced some  problems.                                                              
Although ASHBA views  this bill as a consumer  protection bill, it                                                              
is also a means  of closing a loophole since some  homeowners have                                                              
complained to  the ASHBA.   He offered his  belief that  this bill                                                              
will  "level  the  playing  field" since  some  people  have  been                                                              
operating  outside  of the  regulations  that everyone  else  must                                                              
abide by;  however, the bigger issue  is consumer protection.   He                                                              
said his organization  has worked extensively with  Grey Mitchell,                                                              
Director,   of  the  Division   of  Labor   Standards  &   Safety,                                                              
Department   of   Labor   &  Workforce   Development   (DLWD)   on                                                              
enforcement  issues.    Although  significant  progress  has  been                                                              
made, the  issue has  become a  priority for  The ASHBA,  he said.                                                              
He urged members to support HB 81.                                                                                              
MR. WILSON added  that he was surprised by the  fiscal note costs;                                                              
however, licensed  contractors are willing  to pay extra  fees, if                                                              
necessary.    In  response  to a  question,  he  agreed  that  the                                                              
"valley" is the Mat-Su Valley and not the Mendenhall Valley.                                                                    
3:39:24 PM                                                                                                                    
ANDRE  SPINELLI,  Design  & Development  Manager,  Spinell  Homes,                                                              
Inc., testified in  support of HB 81.  He offered  his belief that                                                              
this issue  is not limited to  rural Alaska or the  Mat-Su Valley,                                                              
and   said  that   unlicensed  contractor   activity  happens   in                                                              
Anchorage,   even  though   it's   a  heavily-regulated   building                                                              
environment.   For example, someone  will build a house  without a                                                              
contractor's  license and immediately  put up  a "for sale"  sign.                                                              
These  unlicensed  contractors don't  pay  fees for  licensure  or                                                              
other  fees  for  their  employees,  he  said.    He  related  his                                                              
understanding  that  the  need  for   this  bill  arose  when  the                                                              
attorney general's  office advised the  DLWD that the law  was too                                                              
vague to  enforce and  he envisioned  that HB  81 will tighten  up                                                              
existing  law.    For example,  when  owner-builders  build  their                                                              
homes,  they  are  allowed  to  perform  their  own  plumbing  and                                                              
electrical  work.     If  these   owner/builders  are   acting  as                                                              
unlicensed contractors,  it allows  them to unfairly  compete with                                                              
licensed  contractors.    It  raises  consumer  protection  issues                                                              
since licensed plumbers  and electrical contractors  are not being                                                              
used in  homes that  are built  and subsequently  marketed  to the                                                              
3:41:53 PM                                                                                                                    
ROBERT  YUNDT,   Vice  President,  Mat-Su  Valley   Home  Builders                                                              
Association (MSVHBA),  stated his family  has lived in  the Mat-Su                                                              
area since  the 1940s.  He  graduated from Wasilla High  School in                                                              
1998 and  has also worked  as an owner-builder.   Although  he now                                                              
does consulting  work, he  has family  members [who build  homes].                                                              
He offered  his belief  that this  bill was  not intended  to harm                                                              
anyone who wants  to put sweat equity into a project.   Members of                                                              
his organization  and the  DLWD frequently  have observed  "owner-                                                              
builders" in  the Mat-Su  Valley who  build multiple homes,  often                                                              
in the  same subdivision.   These owner-builders post  real estate                                                              
signs in  their yards during  construction and market  their homes                                                              
on Craigslist.   He related a situation in which  an owner-builder                                                              
did  work to  a home  and  the family  died  from carbon  monoxide                                                              
poisoning due to  inadequate air exchange.  The  home with [faulty                                                              
ventilation]  was the  only home  in  the subdivision  he had  not                                                              
built.  He  offered his belief  that these deaths could  have been                                                              
avoided  if  the  owner-builder had  hired  a  contractor,  noting                                                              
contractors  are required  to have  continuing  education on  safe                                                              
MR.  YUNDT  acknowledged  it was  difficult  for  contractors  who                                                              
abide  by rules  to  compete with  unlicensed  contractors who  do                                                              
not.   He  offered  his  support  for HB  81  since it  will  help                                                              
provide consumer protection.   Although he did not  think the bill                                                              
would curb  owner-builders from building  homes, it  will probably                                                              
result  in more  residential contractor  licensing and  continuing                                                              
3:45:50 PM                                                                                                                    
REPRESENTATIVE LEDOUX  asked how this bill will be  enforced.  She                                                              
asked whether the banks will require some type of certificate.                                                                  
MR. YUNDT answered  that the unlicensed builders  don't use Alaska                                                              
Housing  Finance Corporation  (AHFC),  but  use larger  nationwide                                                              
conventional  mortgages,  such  as  Fannie  Mae  or  Freddie  Mac.                                                              
These conventional  financing organizations do not  require a full                                                              
set of  inspections, but rely on  a licensed safety  inspection at                                                              
the  end  of  construction;  however, this  bill  will  force  the                                                              
unlicensed builders to get a residential endorsement, he said.                                                                  
3:47:06 PM                                                                                                                    
REPRESENTATIVE  LEDOUX  asked  for further  clarification  on  the                                                              
provision related  to owners  selling a  home within the  two-year                                                              
period.   She questioned  how it  would be  known and whether  the                                                              
purchaser  could  declare  the home  sale  null  and void  if  any                                                              
problems  arose.   She said  she wants  to put  "teeth into  this"                                                              
issue and  not just  add prohibitions.   She  then questioned  how                                                              
this bill will stop the unlicensed builders.                                                                                    
MR.  YUNDT  related  his  understanding  that  owner-builders  not                                                              
being  able   to  openly  market   their  homes  will   help  curb                                                              
unlicensed  activities.    He  suggested   that  from  a  business                                                              
standpoint, it typically  takes about 4-6 months to  build a house                                                              
and  during  this  time  other  general   contractors  notice  any                                                              
building  activity  and  can  monitor  and  report  any  suspected                                                              
unlicensed activity.   Under the bill, anyone who  has posted "for                                                              
sale" signs  on their  property will need  to verify  whether they                                                              
are licensed contractors  or owner/builders.  He  offered that the                                                              
bill  will  likely   force  unlicensed  contractors   to  get  the                                                              
appropriate  licenses   so  they   can  legitimately   post  their                                                              
properties, satisfy their lenders, and sell their homes.                                                                        
REPRESENTATIVE LEDOUX  commented that  she was satisfied  with his                                                              
3:50:26 PM                                                                                                                    
KIRK PERISICH,  Member, Carpenters  Local 1281, viewed  regulation                                                              
of home builders  as a good thing.   He referred to  paragraph 10,                                                              
of HB 81, which  read, "an owner or tenant of  commercial property                                                              
who   uses  the   owner's  or   tenant's  own   employees  to   do                                                              
maintenance,   repair,  and   alteration  work   on  [UPON]   that                                                              
property;"  and asked  whether this  provision  leaves a  loophole                                                              
for commercial work  to be done by owners and if  the work will be                                                              
limited  by  a  certain  dollar   threshold  to  alter  or  repair                                                              
commercial  properties.   He  was  curious why  there  would be  a                                                              
loophole for commercial but not residential properties.                                                                         
3:51:29 PM                                                                                                                    
CHAIR  OLSON  suggested he  discuss  this  further with  the  bill                                                              
sponsor, but noted his point made sense.                                                                                        
MR.  PERISICH  remarked   it  might  leave  a   loophole  for  the                                                              
commercial industry  since some commercial owners  have very large                                                              
properties  so  the  amount  of   work  they  could  do  would  be                                                              
REPRESENTATIVE  TILTON  offered  a  willingness  to  discuss  this                                                              
provision further after the hearing.                                                                                            
REPRESENTATIVE  LEDOUX   pointed  out  that  paragraph   (10)  was                                                              
existing law and this bill makes a small editorial change.                                                                      
3:52:51 PM                                                                                                                    
REPRESENTATIVE   COLVER  suggested   that  the   intent  of   this                                                              
provision  in  existing  law  was   to  allow  owners  to  perform                                                              
maintenance and  minor alterations  on their commercial  property,                                                              
but  it does  not include  major maintenance  since that  activity                                                              
would necessitate  using a licensed  contractor.  He  offered that                                                              
any  commercial   electrical  work  will  require   an  electrical                                                              
administrator's approval  since the standards are  much higher for                                                              
commercial  electrical  and  plumbing.   He  concluded  that  this                                                              
language  refers to minimal  minor maintenance  rather than  major                                                              
MR.  PERISICH  suggested   imposing  a  dollar  limit   for  minor                                                              
alterations on commercial property.                                                                                             
3:54:02 PM                                                                                                                    
GREY  MITCHELL,  Director,  Central   Office,  Division  of  Labor                                                              
Standards &  Safety, Department of  Labor & Workforce  Development                                                              
(DLWD),  with  respect  to  an  earlier  question  on  enforcement                                                              
activity,  responded  that  investigator Al  Nagel  reported  that                                                              
since  fiscal  year  (FY)  2011   the  department  has  issued  30                                                              
administrative  fines for owner/builder  violations and  issued 16                                                              
fines in  FY 11.  These were  violations associated with  a person                                                              
building  more than  one structure  within a  two-year period,  he                                                              
said,  which is  what the  bill would  address.   This bill  would                                                              
clarify that the  department can investigate when  it appears that                                                              
homes are  being sold  by unlicensed  contractors  and not  by the                                                              
3:56:01 PM                                                                                                                    
MR. MITCHELL referred  to page 2, line 10, to paragraph  10, of HB
81 which read, "(9)  [(10)] a person working on  that person's own                                                              
property,  whether occupied  by the  person or  not, and a  person                                                              
working  on that  person's  own residence,  whether  owned by  the                                                              
person or  not."  Although this  is existing law that  provides an                                                              
exemption  from contractor  licensing, the  division has had  some                                                              
situations  arise, he said.   He  stated that previous  testifiers                                                              
identified   instances   when  the   attorney   general   reviewed                                                              
violations  and found  some vagueness  to the  law that  precluded                                                              
enforcement.   The department  has interpreted  this paragraph  to                                                              
apply  to  people  working  on  their  own  property  on  existing                                                              
structures,  rather  than "ground  up"  or brand  new  structures;                                                              
however,  the language does  not clearly  provide the  legislative                                                              
intent  nor does a  regulation further  define  it.  He  suggested                                                              
one remedy  would be  to add  "existing structures"  to avoid  any                                                              
ongoing  confusion   about  owner-builders  building   new  houses                                                              
versus working on existing homes.                                                                                               
3:58:04 PM                                                                                                                    
REPRESENTATIVE  COLVER asked  for further  clarification that  the                                                              
aforementioned   provision    made   the   two-year    restriction                                                              
unenforceable  as interpreted  by the  attorney general's  office.                                                              
If   the  language   was   tightened   up  by   adding   "existing                                                              
structures,"  he  wondered  whether  it would  be  an  enforceable                                                              
statute with the  prohibition of a two-year waiting  period for an                                                              
owner/builder  -  without  adding   the  department's  review  and                                                              
consideration of the  factors that led to the sale.   He expressed                                                              
concern  about   involving  more  government  and   asked  whether                                                              
compliance  can  be  achieved  by tightening  up  that  clause  in                                                              
existing statute.                                                                                                               
MR.   MITCHELL   offered  that   clarifying   the   aforementioned                                                              
paragraph  (9) would go  a long  way to  resolve the loophole  for                                                              
owner-builders;  however, at  the same  time, testimony  indicates                                                              
problems  exist with owner-builders  putting  up "for sale"  signs                                                              
during construction  or immediately  after finishing  their homes.                                                              
Currently there  isn't a clean way  to say the  owner-builders are                                                              
competing with licensed  contractors.  Thus he  suggested the need                                                              
exists for both changes.                                                                                                        
4:00:01 PM                                                                                                                    
REPRESENTATIVE  COLVER  recalled  earlier testimony  about  carbon                                                              
monoxide in  a Wasilla home that  led to tragic deaths.   He asked                                                              
if  it would  be possible  to  get the  facts  in this  case.   He                                                              
related  his understanding  that the  homeowner changed  something                                                              
such as the air intake in his home.                                                                                             
MR. MITCHELL  replied that  he was  unsure because  owner-builders                                                              
can make  changes to their  property, so  that type of  case would                                                              
not typically be  something the department will  investigate since                                                              
homeowners have an  exemption from contractor licensing.   He said                                                              
it was  a tragedy  when work  is not performed  correctly  and the                                                              
department  hopes that  owner-builders  do the  work properly  and                                                              
get the guidance to do so.                                                                                                      
4:01:23 PM                                                                                                                    
REPRESENTATIVE  COLVER asked  whether he wrote  the language  with                                                              
respect to department waivers.                                                                                                  
MR. MITCHELL answered  no.  He recalled his earlier  question with                                                              
respect  to  how  standards  will  be  established  and  that  the                                                              
Department of Commerce,  Community & Economic  Development (DCCED)                                                              
responded by  suggesting regulations might  be the way  to address                                                              
the  standards.   A  common sense  approach  might be  to look  at                                                              
whether there is  any evidence to demonstrate  that owner-builders                                                              
were  acting  as  contractors,  for example,  a  history  of  past                                                              
violations of contractor  licensing requirements, or  of acting as                                                              
owner-builders  on multiple  projects.   Thus  the department  can                                                              
still conduct an  investigation, but the owner-builders  also have                                                              
an  opportunity  to  provide  legitimate   reasons  why  they  are                                                              
selling their homes.   However, owner-builders would  only need to                                                              
demonstrate proof  if the department  was pursuing  an enforcement                                                              
action.   These owner-builders  could counter enforcement  actions                                                              
by  indicating they  have reasons  to  sell their  homes, such  as                                                              
medical  situations, family  emergencies, divorces  or lost  jobs.                                                              
Certainly, if the  reasons make sense, the department  will accept                                                              
them.   In addition,  parties  receiving administrative  penalties                                                              
still have the  ability to request hearings and  supply the facts.                                                              
For example,  if the  home was the  fourth house an  owner-builder                                                              
built in the last  three years, it will likely result  in the type                                                              
of  action  to  stop the  owner-builder  from  using  a  homeowner                                                              
exemption   and   require   the  owner-builder   to   obtain   the                                                              
appropriate contractor license.                                                                                                 
4:04:17 PM                                                                                                                    
CHAIR OLSON,  after first  determining no  one wished to  testify,                                                              
closed public testimony on HB 81.                                                                                               
[HB 81 was held over.]                                                                                                          
4:04:38 PM                                                                                                                    
The committee took an at-ease from 4:04 p.m. to 4:12 p.m.                                                                       

Document Name Date/Time Subjects
HB81 ver A.pdf HL&C 2/11/2015 3:15:00 PM
HB 81
HB81 Sponsor Statement.pdf HL&C 2/11/2015 3:15:00 PM
HB 81
HB81 Fiscal Note-DCCED-CBPL-02-06-15.pdf HL&C 2/11/2015 3:15:00 PM
HB 81
HB81 Fiscal Note-DOLWD-MI-02-06-15.pdf HL&C 2/11/2015 3:15:00 PM
HB 81
HB81 Supporting Documents-Letter Jess Hall 2-10-2015.pdf HL&C 2/11/2015 3:15:00 PM
HB 81
HB9 ver A.pdf HL&C 2/11/2015 3:15:00 PM
HB 9
HB9 Sponsor Statement.pdf HL&C 2/11/2015 3:15:00 PM
HB 9
HB9 Sectional Analysis.pdf HL&C 2/11/2015 3:15:00 PM
HB 9
HB9 Fiscal Note-DCCED-CBPL-02-06-15.pdf HL&C 2/11/2015 3:15:00 PM
HB 9
HB9 Supporting Document-Email Habeger 09-09-2013.pdf HL&C 2/11/2015 3:15:00 PM
HB 9
FOR REFERENCE ONLY-HB253 Fiscal Note-DCCED-CBPL-03-21-2014.pdf HL&C 2/11/2015 3:15:00 PM
HB 9
HB9 Opposing Documents-Letter Frank Wake 2-07-2015.pdf HL&C 2/11/2015 3:15:00 PM
HB 9