Legislature(2003 - 2004)
04/22/2003 10:06 AM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE CS FOR CS FOR HOUSE BILL NO. 9(L&C) "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; repealing a law that limits liability for damages based on a duty to inspect a residential unit to damages caused by gross negligence or intentional misconduct; and providing for an effective date." This was the second hearing for this bill in the Senate Finance Committee. Co-Chair Wilken informed the Committee that, while Amendments #1 and #2 were previously adopted, a revised committee substitute has not, of yet, been provided. TERRY DUSZYNSKI, International Conference of Building Officials - Certified Inspector, and Existing Home Inspector, testified via teleconference from Fairbanks to voice concern that this bill might remove liability limits that International Conference of Building Officials (ICBO) inspectors have regarding damages caused by gross negligence. He clarified that, currently, Home Inspectors are only liable for damages caused by gross negligence or intentional misconduct. He informed that State building codes for residential construction are non-existent and that there is no rule specifying what should be inspected or what inspectors are liable for. He stressed that "this problem should be addressed before we start moving home inspectors into [the Division of] Occupational Licensing and providing a whole new set of rules." He questioned whether a fiscal note accompanies the legislation, as he understands that the Division of Occupational Licensing would incur expenses in developing a new set of Existing Home inspection standards. He voiced that this bill should address providing qualified Home Inspectors as well as requiring continuing education in the field. He contended that this bill in its current form would create more problems than it would solve. REPRESENTATIVE NORM ROKEBERG, the bill's sponsor, responded that the issue of repealing the section of the Alaska Housing Finance Corporation (AHFC) statutes that provides immunity for home inspectors of new AHFC financed homes has previously been discussed. The repeal language, he reminded, is limited to new homes that are financed by AHFC and that other new homes financed by other lenders, are not granted immunity under current statute. He specified that there is "no assurance standard" currently in place for any new home inspection at the State or national level. He noted that a forthcoming amendment would address this issue further. He informed that the Division of Occupational Licensing fiscal note has been minimized by including the new provision under the existing "Specialty Contractors" section, and he reminded that "all occupational boards and licensures have to be self-supporting therefore there is no draw on general fund." WILLIAM BRUU, International Conference of Building Officials Inspector, New Home Inspector and Energy Rater, testified via teleconference from Mat-Su in opposition to HB 9 as he stated his occupation would be negatively impacted by a change in the provisions regarding AHFC financed new homes. He noted that a forthcoming amendment would introduce a provision to provide new home inspectors some protection from nuisance lawsuits. He argued that, were a new home inspector to improperly perform his job, "the market itself would discipline him as to whether or not he would remain in business." He stated that the AHFC provision was originally established in law to recognize the fact that there was no insurance available to protect home inspectors from lawsuits and that no one would venture into the field of home inspection without some indemnification from AHFC or the State. He noted that the situation has not improved as there continues to be a lack of available insurance to protect an inspector's assets. He stated that, "this provision is the only thing that protects inspectors." He stated that he has no answer to the insurance situation, but he stressed that were HB 9 adopted and "this last little bit of protection" removed, then numerous inspectors would "seriously consider going out of business." Representative Rokeberg stated that during his nine years as an elected official, he has attempted to be a "voice for small business" and as such, he would not present legislation that would "jeopardize business activity." He mentioned that a "HB 9 New Home Inspection Survey" [copy on file] was recently conducted and, of the 26 respondents, seven indicated that they would not be able to remain in business because of HB 9. He voiced that while being "sensitive to these opinions," he is somewhat skeptical. He reiterated that the big issue is "the availability or lack of availability for adequate insurance coverage." He voiced that it should be recognized that provisions in the bill would provide a one-year statute of limitations for existing homes and a two-year statute of limitations for new homes. He stated that this counters Mr. Bruu's comment that no other limitations exist. He reiterated that rather than harming business, the intent of the bill "is to regulate an unregulated industry that is a central part, and is of growing importance, to the housing stock in the State." Senator Taylor inquired as to whether "a shorter statute of limitations on a civil action" exists in State statutes. Representative Rokeberg voiced that he is unaware of any, and he deferred to Senator Taylor's knowledge regarding this issue. Senator Taylor relayed that, other than as specified in this bill, he is unaware of any other one-year statute of limitations. He furthered that due to tort reform and other legalities, liabilities for contracts have been reduced to a three-year period. He asserted that the hiring of a home inspector by a home purchaser or seller would qualify as a contract under State statute, as it is a contract for services. He questioned the reasoning behind this action as he voiced that limiting the buyer to a one-year statute of limitations protection period is unacceptable. Representative Rokeberg replied that Senator Taylor's "good points" address the public policy issue that is pertinent to this legislation. He informed that a home inspector conducts a "visual survey" of a home at a cost of approximately $300. He stated that one element of this legislation would provide inspector experience and competency qualification requirements where none currently exist. He stated that the statute of limitations should reflect the service being performed rather than providing "a chain of deep pockets for people to pick on." He stated that currently the inspection addresses the condition of a house at the time of inspection, and he attested that weather conditions and natural disasters such as wind, hail, flooding, and earthquakes could change the condition of the home. Therefore, he argued, the inspector's report should only be valid for 24 hours as the condition of a home could be changed in a short period of time. He stated that in a situation where latent defects were unidentified by a home inspector, a longer period could be provided; however, he specified that those liabilities should be the responsibly of the builder, homeowner, or subcontractor rather than being the responsibility of the home inspector. He declared that the home inspector's liabilities should be limited to what is being provided. He noted that contract language exists that limits the amount of liability to the inspector as the amount of the contract, which he qualified "is unenforceable as a matter of law." He stated that, while he agrees with Senator Taylor's sectional analysis, he stated, "there is a valid public policy consideration to shorten this period." Senator Taylor opined that realtors, in an effort to protect themselves from lawsuits, lobbied the Legislature to incorporate the use of home inspections into the real estate transaction. He stated that when realtors sold a home with defects, "the old adage, let the buyer beware, applies." He continued that when people brought lawsuits for damages against the realtors, the realtors came to the Legislature for help. He noted, that although he opposed the legislation, the home inspection program was enacted by the Legislature, and, he furthered, upon its adoption, every bank began insisting "instantly" that a home inspection be performed. He stated that the home inspection program increases the cost of every house in Alaska that is bought or sold by whatever the cost of the inspector is. He attested "that the home inspector provided another opportunity for the realtor to say this isn't my fault, blame the home inspector and sue him." Senator Taylor continued that, subsequently, in order to provide protection to home inspectors, the legislature "set up a limitation on liability called the gross negligent policy." Therefore he asserted, when the realtor gets sued, "in court he professes that it was the home inspector that is at fault and by the way, rather than gross negligence it was simple negligence" therefore "you can't sue the home inspector." He stressed that this legislation limits the liability for simple negligence to one year, and that gross negligence must be proven in order to extend liability to the three-year statute of limitations. Senator Taylor continued that this legislation would require home inspectors to be certified, registered, and bonded, and that any lawsuit brought against a home inspector would be required to be brought within one-year. He stated that were a lawsuit brought within one year, other than the home inspector, all other involved parties would be protected "by saying blame the home inspector but guess what you can't sue him so sorry." He stated that the only reason this legislation is being presented is to allow "certain professions to shield themselves from their own negligence and liability." Senator Taylor asserted that while realtors support this legislation, home inspectors do not. He aired that "it provides no service to the average mom and pop homebuyer and just adds another layer of bureaucracy to the transaction." He warned that this legislation would make home inspections mandatory as "all financial institutions would adopt every single thing included in the legislation…the cost of buying and selling every single home would rise based upon what it would cost the home inspector to be bonded, what it costs for him to be licensed," as those costs are passed on to the consumer. He remarked that the only person provided protection by this legislation is the realtor. DAVID OWENS, Owner, Owens Inspections Services, testified via teleconference from Mat-Su that a new home inspector could be likened "to a third-party inspector of a construction project" as he stated the inspection might require ten visits to a house as it progresses. He stated that even with frequent site visits, the home inspector could not observe the entire process. He stated that there is a significant difference between a new home inspection and an existing home inspection, as he explained, an existing home inspector views a completed home whose walls could conceal a multitude of things. This, he stated, would require an existing home inspector "to make his best guess" based on what equipment he might have and general rules based on national standards. Mr. Owens stated that the aforementioned survey addresses a variety of concerns and issues with, he contended, the biggest issue being the additional liability placed upon the home inspector. He noted that he could support the bill were amendments relating to liability adopted. STEVE WISDOM, Owner, Wisdom & Associates, testified via teleconference from Kenai to voice that his company conducts new and existing homes inspections and code compliance inspections. He stated that confusion arises in the bill because it addresses two different types of inspections: those conducted on new homes and those conducted on existing homes. He qualified that the gross negligence clause is limited to new construction inspections. He continued that an existing home inspection is primarily conducted as a component of a real estate transaction. SFC 03 # 60, Side B 10:55 AM Mr. Wisdom continued that, "anyone could purchase a fifty dollar business license and perform existing home inspections legally in the State of Alaska." Unfortunately, he shared that this has resulted in numerous people being defrauded by unqualified people identifying themselves as home inspectors. This situation, he declared, "was the original focus of HB 9." Mr. Wisdom explained that, currently, a typical home inspection should take two hours to complete and "the home inspector is required by the American Society of Home Inspectors [ASHI] code of ethics and standards to provide their client with information regarding the condition of the systems and components of the house" at the time of the inspection. He furthered that items relating to structural, health, and safety issues are usually noted; however, he shared, it is uncommon that an existing home inspector "walks into a home and finds a major defect." Rather, he noted, "they would usually find small clues that would lead them down a path to discovering a major problem within the house." Mr. Wisdom contended that the majority of today's building inspectors are trained in current building code standards rather than receiving adequate training to inspect an existing home built in 1970 that would not meet today's building codes. He avowed that an existing home inspection is not "a code compliance inspection and does not act as a warranty of quality workmanship, but is simply a report of the home's condition at the time of inspection." Mr. Wisdom furthered that the ASHI and other organizations have excellent training programs and provide testing to gauge competency in understanding the principles required for an existing home inspection. He stressed the importance of understanding that existing home inspections and new construction and code compliance inspections are very different and require different skills. He informed that code compliance and new construction inspectors must demonstrate competency before earning their code compliance inspector license. He furthered that currently AHFC is the only entity that provides guidance to code compliance inspectors who are referred to as new home inspectors in this legislation. Mr. Wisdom stated that the home inspection program was adopted in the early 1990s after prompting, "from the housing industry itself" to address the substandard housing built in the 1980s "due to no minimum standards being in place." He continued that the effort to assure that the home inspection program would be adopted was based in "tying the enforcement to State funding of the housing through the AHFC loan program." He noted that some municipalities have established building departments and building codes; however, he alerted that "most of the housing was being built as it is today," outside of a municipality jurisdiction. He declared "this left the AHFC as the State's building authority by default." He stated that this is why AHFC supports this legislation. He urged that new construction compliance codes be included, and he stated that AHFC views this legislation as a positive way to regulate and police new construction code compliance inspectors. Mr. Wisdom voiced that this legislation is positive in that it would regulate and police new inspectors, however, he attested that the removal of the gross negligence clause would cause great problems in the industry. He noted that a compliance code inspector must have an ICBO issued license, which would demonstrate competency in codes relating to one-and-two-family dwellings. He stated that failing this test is common as the test covers all topics relating to new construction codes including such things as administrative duties, building plans, footings, foundations, framing, pouring, welds, chimneys, energy efficiencies, mechanical systems and components, plumbing systems and components, electrical systems and components, and swimming pools. He stated that a code compliance, or new home inspector, must examine a home repeatedly throughout the construction process. He stated that new construction/code compliance inspectors must know, in excess of 1700 pages of codes for residential construction. Mr. Wisdom informed that while "municipalities could be insured through their general liability policy and by favorable state statutes that provide protection to political entities," HB 9's removal of the gross negligence clause would ensure that no insurance carrier would provide Errors and Omission Insurance [E&O] insurance to small firms. He continued that this, coupled with the extended two-year liability period designated for new construction, which he attested is one year longer than the general contractor is held liable for his work, and "would open the door for many lawsuits." He stated that this would place private inspection firms at tremendous risk. He exampled some construction scenarios in which a leak caused by a defective nail plate might show up eighteen months later; however, he declared, that, as a result of the two-year liability clause in this legislation, the inspector, rather than the contractor or another entity whose liability ended twelve months after the home was completed, might be held liable. He stated that it would be possible, even after careful inspection, that one detail of the 1700 pages of code might be overlooked. He stated that this is why the gross resilience clause is important. He stated that, "the original authors of the original inspection requirements intended to require new construction inspections, but not to place such liability on the inspector to discourage the inspection from taking place." He qualified that this should not imply that the industry does not require policing, and he noted that this legislation would allow the Department of Labor and Workforce Development and the Division of Occupational Licensing in the Department of Community and Economic Development to investigate and stop inspectors who are not adequately performing their jobs. He alerted that the removal of the gross negligent clause would accomplish nothing more than increase the cost of housing to the consumer. Mr. Wisdom reminded that the gross negligence language in the bill is limited "to new construction code compliance not the existing home inspection which is a very different item." Therefore, he reiterated that the "great differences" in the two types of inspections requires that specific certification requirements be maintained for each type of inspection. Senator Bunde voiced that, "the more I hear about this bill, the less I understand." He stated that it appears that the "Buyer Beware" component referred to by Senator Taylor "is being taken out of the equation in lots of situations." He suggested that perhaps the new and existing home controversy could be resolved by implementing a law that would require every home built outside of a municipality that has inspectors to be labeled with the warning that the home is built in an area that does not require inspection. He stated that the warning would alert the homebuyer that losses might not be recoverable. Representative Rokeberg agreed that compliance codes are not required for structures built outside of a municipality. Senator Bunde attested to the seriousness of the situation as he was unaware that a new home built, for instance in Chugiak which is outside of a municipal building code area, might not meet building codes. He understood that while private inspections are available in those areas, something might be missed just as it could be during a new home construction inspection within a municipality. However, he stated that at least those homes being build in a municipality would be build under the auspice of municipal codes. Senator Bunde opined that an existing home inspection is "really someone else's best guess." He stated that while there is a fee for this service, ultimately, he declared, "it isn't worth anything more than advice." He puzzled as to what would be accomplished by this legislation. Representative Rokeberg replied that the purpose of this legislation "is to bring some level of competency and qualification of certification to these practitioners…and provide some resource for grievance through a formal procedure." He stated that, in the past, the Legislature has imposed "a disclosure statement requirement on the sale of all existing homes in the State." He stated that this "has driven the development of home inspection." Representative Rokeberg referenced the copy of the home inspection disclosure report [copy on file] that is required on all home sales. He stated that this report is of great benefit to the people of the State as the report recommends, in two sections, that a home inspector be retained. In response to Senator Taylor's assertion that this would increase the cost of buying a home, he countered that the majority of the financial lending community already require a home inspection to be conducted before a loan is arranged. He opined that this legislation "is not the cost driver" in this situation, "but is a remedial piece of regulatory legislation." Representative Rokeberg stressed that this is the only unregulated component in a real estate transaction. He stated that the backup material includes evidence of abuses by bad inspectors to which he attested, the only current recourse is through the court system. He stated that this bill could be summarized "as a balance of what we want to do in terms of limiting liabilities as a matter of pubic policy over creating a form for redress and grievance on the part of those who have been harmed and damaged by incompetency." He countered Mr. Wisdom's statement that a home inspector's two-year period of liability is one year longer than the contractor's home liability, as in statute, a three-year period is specified under Contract law. In addition, he noted that a ten-year State statute of repose from discoverability "would come into play if there is a latent defect in the construction of a new home." Therefore, he contended that the contractor is ultimately the first entity responsible. However, he continued, this legislation would allow for action against a home inspector "by the builder if the guy did not do his job." Senator Bunde asked for confirmation that new home construction inspectors, outside of a municipality, are currently regulated and must comply with some national organization standards. Representative Rokeberg clarified that an ICBO inspection of a home that is constructed outside of a municipality is only required if the home is being financed by AHFC or as specified by a financial institution. He noted that the ICBO has recently been renamed the International Code Council (ICC). Senator Bunde surmised that a person could claim to be a code inspector just by purchasing a business license. Representative Rokeberg clarified that in order to inspect AHFC homes an inspector must pass certification requirements. Senator Bunde expressed that someone without certification could conduct non-Alaska Housing home inspections. Representative Rokeberg concurred. Senator Hoffman agreed that further regulation of home inspectors would address some of the problems that home buyers experience. However, he questioned the benefit of lowering the statute of limitations from three-years to one-year and repealing the gross negligence language. He stated that it could be argued that one reason for lowering the statute of limitations is natural disasters; however, he stated that this could be resolved by the specifying that an inspector would not be liable for damages incurred by those elements as, he stated, prospective homebuyers do not assume that those damages would be warranted anyway. He asked what benefits this bill would provide. Senator Hoffman continued that the bonding language in Section 15 of the bill implies that people would be protected; however, he observed that the back-up material counters that assumption by referencing a scenario wherein a home purchased for $117,000 was subsequently determined to be "worthless," and the homebuyer award was limited to the $5,000 bonding requirement. He stated that unless the legislation "required a bond that meant something," the benefit of this legislation would be minimal. Therefore, he asserted that the coverage and the protections provided by HB 9 include a bond that is too low, and the limitation of one-year rather than three-years is inappropriate. Representative Rokeberg responded that were an individual to purchase an existing home and not determine within the first year that "it is broken," then the individual has the problem. He stated that were an earthquake to occur, the question would be whether the foundation was cracked before the earthquake when the inspector inspected it or was it the result of the earthquake after the inspection. He stated that this is the premise "of narrowing the scope of the limitation down to a shorter period." He asserted that defects should become apparent during the first year, and were a homeowner not to take action within that period of time, it should not be expected that action could be brought at a later date. He stated there should be a common sense limitation. He agreed that a person should be able to bring action against the seller and other involved persons including the home inspector were misrepresentation of the quality of the condition of the home a factor. He asserted that this is the reason that one component of the bill is the elimination of immunity. He furthered that were a pattern of bad behavior on the part of the home inspector determined, then the State would be allowed to revoke the individual's license. He clarified that, currently, this is not an option. Senator Taylor asked the bill's sponsor to list other contractors such as car mechanics, boat builders, or roof repair contractors, in the State who are limited to a one-year liability. Representative Rokeberg declined as he expressed that "the nature and scope of work" of a home inspector is a non-intrusive, visual home inspection as opposed to an engineering inspection which would be undertaken by engineers or other such qualified individuals. Senator Taylor surmised, therefore, that a person would be required to hire both a home inspector and an engineer in order to receive a thorough report. Representative Rokeberg suggested that, "in order to do it right, yes." He stated that it would be unreasonable for a $300 visual scope of work inspection to be liable for thousands of dollars in damages unless the inspector was grossly rather than simply negligent. He stated that this is the issue. Senator Taylor commented that currently, State statute limits the responsibility to the cost of the contract. This, he declared, would limit the amount awarded to the cost of the inspection or the amount of the bond rather than actual damages. He declared that this is "a sham created by the realtors some years ago" who sought for the creation of "a middle person" who would be sued rather than the realtor." He stated that home inspectors are the "middlemen". Senator Taylor stated that, it is being asserted by the sponsor, who is a realtor, that hiring a home inspector is insufficient and that an engineer should be hired to properly inspect a home. Senator Taylor stated that this legislation would require a licensed, bonded, and certified inspector to be hired for every home transaction and subsequently, it would require a certified State engineer to be hired to ensure that both the home inspector and engineer would be sued instead of the realtor. He ascertained that furthermore, in order to avoid other lawsuits, the realtors association created the inspection report that specifies what must be inspected. He expressed that "this is appalling" as it is increasing the cost of buying a home for everyone in the State. He asserted that the largest expenses of a home sale would be those associated with bank requirements, the realtor, title reports and home inspectors. He stated that, at least, this bill would remove the gross negligence clause for home inspectors; however, he expressed that the one-year statute of limitations is unreasonable. Representative Rokeberg expressed that this situation is not unique to the State but is rather "a national phenomena" and it is good public policy to protect homebuyers in the State. Senator Taylor countered that narrowing the statute of limitations from three-years to one-year would not protect the buyer. Co-Chair Green asked the location of the statute of limitations language in the bill. Senator Taylor informed that it is referenced in Sec. 17, subsections (1) and (2) on page ten, lines five through nine. Representative Rokeberg responded to Senator Taylor's comments by stating that this legislation would protect the buyer by removing home inspector immunity in certain instances while granting them limitations on immunity in others, in order to reflect the scope of the job they are performing. He stated that the inspection is a fairly limited affair and should be appropriately reflected in context. He stated that this is a component of commerce, and the desire is to have it "move smoothly" while protecting the consumer. Senator Taylor again asked how the consumer would be protected. Representative Rokeberg responded that lowered inspection costs would result. Senator Taylor questioned how lowered fees would protect the consumer, as at the same time, the consumer must give up two of three years to file a lawsuit. Representative Rokeberg commented that another consideration is the availability and price of E&O insurance to the practitioners. Amendment #3: This amendment changes the bill's title by deleting language on page 1, lines 6-8 that reads "repealing a law that limits liability for damages based on a duty to inspect a residential unit to damages caused by gross negligence or intentional misconduct;" Additionally, the amendment deletes all material in Sec. 41, Sec. 42, on page 22, lines 21 -25; as well as accompanying technical language in Sec. 47 on page 24, line 17. This language reads as follows. Sec. 41. AS 18.56.300(c) is repealed. Sec. 42. The uncodified law of the State of Alaska is amended by adding a new section to read: APPLICABILITY. The change made by sec. 42 of this Act applies to causes of action that accrue on or after July 1, 2005. Sec. 47. Sections 41 and 42 of this Act take effect July 1, 2005. Co-Chair Green moved for the adoption of Amendment #3. Senator Bunde objected. Co-Chair Green explained that this amendment would change the bill's title by removing language pertaining to damages caused by gross negligence or intentional misconduct. Additionally, she stated that the amendment addresses concerns voiced by Mr. Owens in his testimony. Representative Rokeberg stated that arguments supporting the amendment would be that it would grant private home inspectors immunity from lawsuits, as are municipal code inspectors currently. He voiced concern regarding the lack of available E&O insurance for new home construction inspectors; which, he noted is available for existing home inspections. In opposition to the amendment, he shared that the amendment would allow for simple negligence. He reiterated that the intention of the bill is to remove some immunity while imposing other regulations. Senator Taylor stated that this amendment would "make a bad bill atrocious." He stated that it would not protect the consumer because the one-year statute of limitations would continue to be included in the bill. In addition, the amendment would repeal the language that would allow for simple negligence while allowing the continuance of a gross negligence standard comparable to that of a public building official. He stated that this does not benefit the consumer but does benefit someone in the inspection business. He stated that were he in the home inspection business, he too, would "probably advocate for no liability to be placed on the business that I am practicing." However, he declared, as a matter of public policy, this is not in the best interest of Alaskans. A roll call was taken on the motion. IN FAVOR: Senator Olson and Co-chair Green OPPOSED: Senator Taylor, Senator Bunde, Senator Stevens, and Co- chair Wilken. ABSENT: Senator Hoffman The motion FAILED (2-4-1) Amendment #3 FAILED to be adopted. Amendment #4: This amendment changes language in Sec.17, on page 10, as follows. On page 10, line 5, the words "one year." are inserted following the word "within". The amended language reads as follows. Sec. 08.18.085. Legal actions against home inspector. (a) Notwithstanding contrary provisions of AS 08.18.081 or AS 09.10, a person may not bring an action against an individual registered under this chapter based on a home inspection report unless the action is commenced within one year. Furthermore, the following language on page 10, lines 6 - 9, is deleted. (1) two years after the date of the home inspection report if the report related to a new home; and (2) one year after the date of the home inspection report if the report related to an existing home. In addition, on page 10, line 10, the words "limitations" and "apply" are deleted and replaced with "limitation" and "applies," and on page 10, line 14, the word "limitations" is replaced with "limitation". The amended language reads as follows. (b) The limitation in (a) of this section applies to all actions based on a home inspection report, regardless of whether the action is based on breach of contract, personal injury or death, property damage, or another source of liability except that (a) of this section is not applicable to an action based on gross negligence or intentional misconduct by the home inspector. The limitation may not be waived by contract. Co-Chair Green moved for the adoption of Amendment #4. Co-Chair Wilken objected for explanation. Co-Chair Green explained that the amendment would reduce the length of time that action could be brought against a home inspector to one-year after the date of the new home inspection rather than two- years as specified in the proposed bill. She stated that this change would align that new home inspection time frame with the limitations for existing home inspections as well as aligning with the standard builder's warranty. Co-Chair Wilken summarized that the amendment would require that all action must be brought within a one-year timeframe, regardless of whether it involves a new or existing home. Representative Rokeberg agreed. He stated that the question is whether a new home should require a longer liability period than required for an existing home. He stated that while he supports Senator Taylor's stated position on this, it would not negate his support of the legislation. Senator Taylor voiced opposition to the amendment as he questioned why one group of contractor's liability period should be limited to one-year while other contractor groups would retain a three-year liability timeframe. He opined that the home inspector job does not require this level of protection. However, he stated that were this amendment rejected, the bill would provide a one-year statute of limitations on existing home inspections and a two-year limitation on new homes, which he voiced, "is backwards." A roll call was taken on the motion. IN FAVOR: Co-chair Green, Senator Stevens, Senator Bunde, and Senator Olson OPPOSED: Senator Taylor and Co-chair Wilken ABSENT: Senator Hoffman The motion PASSED (4-2-1) Amendment #4 was ADOPTED. In response to a question from Senator B. Stevens, Co-chair Wilken specified that Amendments #1 and #2 were adopted in the previous meeting. Co-Chair Wilken asked the sponsor to explain the Department of Community and Economic Development's fiscal note #4, dated January 29, 2003, which indicates that the State would expend $66,100 and collect $66,100 from receipt-supported services. He asked why a change in revenue of $126,200 is projected when these items would negate each other. Representative Rokeberg explained that start-up costs would be incurred during the first year of implementation. Senator B. Stevens referred the Committee to the fiscal note's analysis, which specifies that revenue would be collected every other year. Co-chair Wilken stated that the State would collect for two years and expend annually; therefore he stated that the fiscal impact would be net zero at the end of FY 05. Representative Rokeberg reminded that the initial year would include start-up expenses. REGINA MANTEUFEL testified via teleconference from Anchorage and urged the State to develop an Internet website that would identify contractors and subcontractors along with bond information and complaints about those entities. She voiced support for the statute of limitations to remain at three-years. Additionally she opined, that to protect the consumer, the State should require a contractor to provide a homeowner with a listing of the subcontractors who worked on the project. Co-Chair Wilken ordered the bill HELD in Committee.