Legislature(2017 - 2018)BELTZ 105 (TSBldg)

02/07/2017 01:30 PM LABOR & COMMERCE

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01:33:21 PM Start
01:34:54 PM SB45
02:45:13 PM Workers' Compensation Overview
03:20:15 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SB 45 EXEMPTION: LICENSING OF CONTRACTORS TELECONFERENCED
Heard & Held
+ Presentation: Workers' Compensation Reform TELECONFERENCED
- Department of Labor & Workforce Development
+ Bills Previously Heard/Scheduled TELECONFERENCED
-- Public Testimony --
           SB  45-EXEMPTION: LICENSING OF CONTRACTORS                                                                       
                                                                                                                                
CHAIR COSTELLO announced the consideration  of SB 45. She advised                                                               
that the  intent is to  hear the  bill, take public  comment, and                                                               
hold it for further consideration.                                                                                              
                                                                                                                                
1:34:54 PM                                                                                                                    
JULIANA MELIN, Staff,  Senator Mia Costello, introduced  SB 45 on                                                               
behalf of  the Senate Labor  and Commerce  Committee paraphrasing                                                               
the following sponsor statement:                                                                                                
                                                                                                                                
     Senate   Bill  45   provides  better   protections  for                                                                    
     consumers   purchasing  a   home  from   an  unlicensed                                                                    
     builder.                                                                                                                   
                                                                                                                                
     Following the  housing market crash  of the  1980s, the                                                                    
     Alaska  State  Legislature  raised  the  standards  for                                                                    
     homebuilders. Residential contractors  were required to                                                                    
     obtain  a  state-license,  a  residential  endorsement,                                                                    
     bonding,  and  insurance.   In  addition,  programs  on                                                                    
     energy ratings and  efficiency were established through                                                                    
     the Alaska  Housing Finance Corporation.  These efforts                                                                    
     helped  Alaska  develop  a home  construction  industry                                                                    
     that offers  quality options for  home buyers  that are                                                                    
     efficient and affordable.                                                                                                  
                                                                                                                                
     Currently state  law provides an exemption  that allows                                                                    
     individuals  to build  structures without  a contractor                                                                    
     license.  Alaska  law  AS 08.18.161  allows  anyone  to                                                                    
     build one structure every two  years without a license.                                                                    
     While the  exemption was intended to  allow Alaskans to                                                                    
     build their own home, the  industry is seeing a growing                                                                    
     number of  individuals using  the exemption  to operate                                                                    
     construction businesses.                                                                                                   
                                                                                                                                
     In   2013,  the   Mat-Su   Home  Building   Association                                                                    
     estimated that almost one-half  of all new construction                                                                    
     home  sales   in  their   area  were   from  unlicensed                                                                    
     construction   companies.    Without   a   construction                                                                    
     contractor    license,   unlicensed    builders   avoid                                                                    
     requirements for  bonding and  insurance that  apply to                                                                    
     licensed  builders.   The  wording  of   the  exemption                                                                    
     creates enforcement  problems and allows  for potential                                                                    
     abuse by those  who would seek to build  homes for sale                                                                    
     without the required state license.                                                                                        
                                                                                                                                
     Senate Bill  45 helps prevent abuse  of this exemption.                                                                    
     The bill  would require anyone  who builds and  sells a                                                                    
     home without a contractor  license to disclose the fact                                                                    
     that they  do not  have a license  to the  state within                                                                    
     two years  of completing construction. Senate  Bill 161                                                                    
     does   not  prohibit   owner-builder  construction   or                                                                    
     require  any form  of state  approval, it  simply calls                                                                    
     for   disclosure  to   the   Department  of   Commerce,                                                                    
     Community &  Economic Development for  builders selling                                                                    
     structures without a license.                                                                                              
                                                                                                                                
     SB 45  is supported by  the Alaska State  Home Building                                                                    
     Association.                                                                                                               
                                                                                                                                
1:37:06 PM                                                                                                                    
MS. MELIN provided a sectional analysis for SB 45.                                                                              
                                                                                                                                
     Section  1   adds  the  following   legislative  intent                                                                    
     language:                                                                                                                  
                                                                                                                                
     It  is   the  intent   of  the  legislature   that  the                                                                    
     exemptions listed  in AS 08.18.161, as  amended by sec.                                                                    
     3  of   this  Act,   be  construed  broadly   to  allow                                                                    
     individuals the  freedom and  ability to  construct and                                                                    
     sell their own homes based on their own discretion.                                                                        
                                                                                                                                
     Section  2 adds  a new  subsection (b)  clarifying when                                                                    
     the  Department  of  Commerce, Community  and  Economic                                                                    
     Development should  investigate whether a  home builder                                                                    
     who  has  listed his  house  for  sale is  operating  a                                                                    
     business  for which  he/she would  need a  contractor's                                                                    
     license.                                                                                                                   
                                                                                                                                
     Section  3 makes  a series  of  technical changes  that                                                                    
     appear  on page  2, lines  22-30. They  make conforming                                                                    
     changes   and   add   language   that   clarifies   the                                                                    
     exemptions. Language is added on  page 3, lines 2-6, to                                                                    
     clarify that a disclosure must  be filed with the state                                                                    
     if  an owner  sells a  structure or  advertises it  for                                                                    
     sale within two years after construction begins.                                                                           
                                                                                                                                
     Section  4  adds  an  applicability  section.  For  the                                                                    
     purposes  of   this  law,   it  defines   beginning  of                                                                    
     construction as  either when  construction begins  on a                                                                    
     structure  or when  an owner  enters into  an agreement                                                                    
     with another  person to  provide labor,  act as  a sub-                                                                    
     contractor, or provide materials for construction.                                                                         
                                                                                                                                
MS. MELIN listed the individuals  available to testify and answer                                                               
questions.                                                                                                                      
                                                                                                                                
1:39:28 PM                                                                                                                    
SENATOR  GARDNER said  she likes  the bill  but wonders  what the                                                               
consequences are for somebody who fails to comply.                                                                              
                                                                                                                                
MS.  MELIN  deferred  the  question  to  Ms.  Hovenden  with  the                                                               
Division of Corporations, Business and Professional Licensing.                                                                  
                                                                                                                                
SENATOR GARDNER  said she reviewed  the testimony from  last year                                                               
when  similar legislation  was heard,  and some  people indicated                                                               
that the  bill would  have greater impact  in rural  Alaska where                                                               
there is  less access  to licensed builders.  She asked  if there                                                               
has been pushback from that area.                                                                                               
                                                                                                                                
MS.  MELIN  replied some  of  the  contractors will  address  the                                                               
effect in rural areas in particular.                                                                                            
                                                                                                                                
1:40:48 PM                                                                                                                    
SENATOR  MEYER asked  how this  bill  differs from  the one  last                                                               
year.                                                                                                                           
                                                                                                                                
MS. MELIN said  the primary difference is that SB  45 defines the                                                               
two-year   timeline   as   starting   with   the   beginning   of                                                               
construction. The bill last year was ambiguous in that regard.                                                                  
                                                                                                                                
SENATOR MEYER asked why the bill didn't pass last year.                                                                         
                                                                                                                                
MS. MELIN deferred the question.                                                                                                
                                                                                                                                
CHAIR COSTELLO invited Ms. Hovenden to comment on the bill.                                                                     
                                                                                                                                
1:42:08 PM                                                                                                                    
JANEY HOVENDEN, Director, Division  of Corporations, Business and                                                               
Professional  Licensing, Department  of  Commerce, Community  and                                                               
Economic  Development  (DCCED)  responded  to  Senator  Gardner's                                                               
question about the penalty for  failing to comply with provisions                                                               
in the bill. She explained  that circumventing the home builder's                                                               
law would fall under unlicensed practice in Title 08.                                                                           
                                                                                                                                
SENATOR GARDNER asked her to describe the consequences.                                                                         
                                                                                                                                
MS. HOVENDEN offered to follow up with the information.                                                                         
                                                                                                                                
SENATOR MEYER expressed interest  in getting that information. He                                                               
asked if  the zero fiscal  note is realistic given  the potential                                                               
need to investigate.                                                                                                            
                                                                                                                                
MS. HOVENDEN said the qualifier  is the language that says, "when                                                               
circumstances  indicate that  the owner  is operating  a business                                                               
for which  the owner is  required to register."  Any irregularity                                                               
would  have to  come  to  the division's  attention  and that  is                                                               
happening  now. She  anticipates  this form  could be  downloaded                                                               
from  the division's  website. Because  the forms  would be  from                                                               
homeowners rather  than licensees, the  names would be  listed in                                                               
an Excel spreadsheet and could be searched that way.                                                                            
                                                                                                                                
SENATOR MEYER asked how the two-year timeframe came about.                                                                      
                                                                                                                                
MS. HOVENDEN said she didn't know.                                                                                              
                                                                                                                                
1:45:33 PM                                                                                                                    
SENATOR  STEVENS noted  that the  committee heard  that in  2013,                                                               
half of the construction in  Mat-Su involved unlicensed builders.                                                               
He  asked if  she  has  statistics on  the  number of  unlicensed                                                               
builders statewide.                                                                                                             
                                                                                                                                
MS.  HOVENDEN said  she  did not  have  statistics on  unlicensed                                                               
builders in Mat-Su or statewide.                                                                                                
                                                                                                                                
1:46:12 PM                                                                                                                    
SENATOR HUGHES  asked how  the penalties compare  to the  cost of                                                               
the license and if there is anything to prevent repeat offenses.                                                                
                                                                                                                                
MS. HOVENDEN offered to follow up with an answer.                                                                               
                                                                                                                                
1:46:56 PM                                                                                                                    
CHAIR COSTELLO opened public testimony on SB 45.                                                                                
                                                                                                                                
1:47:21 PM                                                                                                                    
AARON   WELTALEN,   President,   Alaska   State   Home   Building                                                               
Association and President,  Interior Alaska Building Association,                                                               
testified in support of SB  45. Responding to an earlier question                                                               
about why  the bill didn't  pass last  year, he said  the sponsor                                                               
opted to  pull the bill.  He said these associations  support the                                                               
bill to ensure that people can't  build home after home without a                                                               
license  or bonding.  He  emphasized  that this  is  in the  best                                                               
interest of consumers.                                                                                                          
                                                                                                                                
SENATOR  STEVENS  asked  if  the   two-year  window  couldn't  be                                                               
circumvented easily  by starting  excavation then waiting  a year                                                               
and one-half to start building.                                                                                                 
                                                                                                                                
MR.  WELTALEN  said  it's  been  a difficult  issue,  but  he  is                                                               
satisfied with the two-year timeline in SB 45.                                                                                  
                                                                                                                                
CHAIR COSTELLO clarified  that the bill went  through the process                                                               
in the  Senate and  the sponsor  withdrew the  bill on  the House                                                               
floor.                                                                                                                          
                                                                                                                                
1:49:20 PM                                                                                                                    
JEFF   TWAIT,   licensed   builder,  Kenai   Peninsula   Builders                                                               
Association, testified  in support  of SB  45. He  said a  lot of                                                               
work has gone into this bill  and it's time it passed. Other than                                                               
this  being a  consumer protection  bill, it  levels the  playing                                                               
field  by ensuring  that people  who  build homes  as a  business                                                               
adhere to the  licensing and bonding requirements.  It's a matter                                                               
of fairness.                                                                                                                    
                                                                                                                                
1:50:31 PM                                                                                                                    
BRANDON   SNODGRASS,  Director,   Alaska   State  Home   Building                                                               
Association and  Treasurer, Anchorage Home  Builders Association,                                                               
testified in support  of SB 45. He  said he is also  in charge of                                                               
construction lending for First National  Bank Alaska and has seen                                                               
the ramifications  of owner-built  homes on consumers.  Last year                                                               
someone who was  using a licensed builder applied for  a loan but                                                               
couldn't  be   accommodated  because  the  appraisal   only  used                                                               
comparables that  were owner/builder  homes and  all of  them had                                                               
sold for  quite a bit  below market. He  opined that as  more and                                                               
more homes  built by  unlicensed builders go  on the  market, all                                                               
home  values  will  be  affected.  It  will  also  make  it  more                                                               
difficult to obtain financing.                                                                                                  
                                                                                                                                
SENATOR STEVENS asked if all  licensed contractors are members of                                                               
the Alaska State Home Building Association.                                                                                     
                                                                                                                                
MR. SNODGRASS answered no                                                                                                       
                                                                                                                                
SENATOR  STEVENS said  he would  like to  see where  the licensed                                                               
contractors are located  and the size of  communities where there                                                               
are  few  to  no  licensed   contractors.  He  acknowledged  that                                                               
wouldn't be Mr. Snodgrass's purview.                                                                                            
                                                                                                                                
MR.  SNODGRASS said  the Department  of  Commerce, Community  and                                                               
Economic  Development  would  likely have  that  information.  He                                                               
disclosed that he  has financed homes for  owner/builders for the                                                               
purpose  of selling  when it  makes  sense. He  also described  a                                                               
situation  where a  group was  obviously skirting  the rules  and                                                               
getting preferential treatment.                                                                                                 
                                                                                                                                
1:54:45 PM                                                                                                                    
CHAIR COSTELLO asked  what recourse a family has  after they have                                                               
taken possession of an owner-built home and there are problems.                                                                 
                                                                                                                                
MR.  SNODGRASS  said there  is  no  recourse  if the  builder  is                                                               
unlicensed.                                                                                                                     
                                                                                                                                
CHAIR COSTELLO asked  if the requirement for  an owner/builder to                                                               
fill  out a  form  and  submit it  to  the  department is  overly                                                               
onerous.                                                                                                                        
                                                                                                                                
MR.  SNODGRASS answered  no,  it's nothing  compared  to what  he                                                               
requires for them to get a loan.                                                                                                
                                                                                                                                
1:55:39 PM                                                                                                                    
SENATOR  GARDNER  observed  that   passage  of  this  bill  would                                                               
increase the cost of new homes for everyone.                                                                                    
                                                                                                                                
MR.  SNODGRASS opined  that it  will return  prices to  the level                                                               
they should  be. He added  that homes built by  licensed builders                                                               
are generally a better product.                                                                                                 
                                                                                                                                
SENATOR GARDNER asked  if an owner/builder who is  not a licensed                                                               
contractor is  able to offer  workers' compensation  benefits and                                                               
insurance coverage  to someone working  with him/her; and  if the                                                               
owner/builder can offer a warranty that has backing.                                                                            
                                                                                                                                
MR. SNODGRASS said he didn't know for sure.                                                                                   
                                                                                                                                
1:58:11 PM                                                                                                                    
SENATOR  HUGHES asked  if bankers  and mortgage  lenders will  be                                                               
watching  to ensure  the owner/builder  files  the required  form                                                               
because some people may not be aware it is a requirement.                                                                       
                                                                                                                                
MR.  SNODGRASS said  he's not  in  the mortgage  business, so  he                                                               
didn't know if that's something they'd track.                                                                                   
                                                                                                                                
2:01:06 PM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
2:02:33 PM                                                                                                                    
CHAIR  COSTELLO reconvened  the  meeting  and recognized  Patrick                                                               
Dalton as the next testifier on SB 45.                                                                                          
                                                                                                                                
2:03:18 PM                                                                                                                    
At ease due to technical difficulties                                                                                           
                                                                                                                                
2:06:36 PM                                                                                                                    
CHAIR COSTELLO  reconvened the  meeting and  asked Mr.  Hébert to                                                               
respond to Senator Gardner's earlier questions.                                                                                 
                                                                                                                                
2:07:29 PM                                                                                                                    
JACK  HÉBERT,  Chief   Executive  Officer/Founder,  Cold  Climate                                                               
Housing Research  Center, Fairbanks, Alaska,  said he has  been a                                                               
licensed general  contractor with  a residential  endorsement for                                                               
40 years.                                                                                                                       
                                                                                                                                
SENATOR GARDNER asked if he  agrees with testimony last year that                                                               
the  bill  would  have  a greater  effect  in  rural  communities                                                               
because there are fewer licensed builders.                                                                                      
                                                                                                                                
MR. HÉBERT  said he didn't  believe so;  in rural areas,  most of                                                               
the building other than by  owner/builders is done by the housing                                                               
authorities.                                                                                                                    
                                                                                                                                
SENATOR  HUGHES  asked  if  there  is  any  concern  that  energy                                                               
efficient homes  that are  built by  an unlicensed  builder might                                                               
have  ventilation problems  that cause  health issues.  She noted                                                               
that this might be another consumer protection aspect.                                                                          
                                                                                                                                
MR. HÉBERT  said that is  a huge  problem in both  newer, tighter                                                               
homes and  older homes  that have  poor ventilation.  Solving the                                                               
problem  is a  matter of  education and  understanding that  good                                                               
indoor  air  quality  is  essential.  The  Cold  Climate  Housing                                                               
Research  Center   has  developed  affordable  systems   such  as                                                               
brHEAThe that provides  fresh air and high  efficiency heating in                                                               
an energy efficient building.                                                                                                   
                                                                                                                                
SENATOR  HUGHES  ask   if  there  is  a   problem  that  Alaskans                                                               
unknowingly  buy  homes  with  poor   air  quality  because  some                                                               
owner/builders  don't have  the training  and put  in ventilation                                                               
systems incorrectly.                                                                                                            
                                                                                                                                
MR. HÉBERT said there are thousands  of homes in Alaska that have                                                               
poor ventilation  because of  poor building  science and  lack of                                                               
builder education.  It's particularly problematic when  a builder                                                               
uses part of  a technology but not the whole  package. That's why                                                               
licensed contractors  are required  to take  continuing education                                                               
in several areas including ventilation.                                                                                         
                                                                                                                                
SENATOR HUGHES  commented that  we can  conclude that  people who                                                               
repeatedly sell  their owner-built homes probably  aren't getting                                                               
adequate  training increasing  the  potential  that Alaskans  are                                                               
living in homes that don't have good air quality.                                                                               
                                                                                                                                
MR. HÉBERT  added that the home  is likely going to  be unhealthy                                                               
throughout the life of the building.                                                                                            
                                                                                                                                
SENATOR  STEVENS asked  how many  hours of  training it  takes to                                                               
become a contractor.                                                                                                            
                                                                                                                                
MR.  HÉBERT said  16 hours  of continuing  education is  required                                                               
every two years.                                                                                                                
                                                                                                                                
2:13:58 PM                                                                                                                    
PATRICK DALTON,  representing himself, Delta  Junction, testified                                                               
in opposition to SB 45. He said  he has no problem with this type                                                               
of regulation in  the organized areas of the state,  but he would                                                               
like an exemption  for people living in the  unorganized areas of                                                               
Alaska. He  said the  people that live  in the  unorganized areas                                                               
are different.  "There is more  of a liberty mindedness  out here                                                               
... and we  appreciate the absence of  regulation." He maintained                                                               
that imposing  unnecessary regulations on people  that don't want                                                               
it  will cost  the  state  money. Requiring  people  to fill  out                                                               
paperwork when they  sell their house is going too  far, he said.                                                               
He pointed out that the legislature  sits as the assembly for the                                                               
unorganized  borough  and  as  such  has  the  responsibility  of                                                               
representing that population and  listening to their requests. He                                                               
suggested providing  incentives to  get people to  do a  good job                                                               
when they build instead of passing unwanted regulations.                                                                        
                                                                                                                                
2:18:08 PM                                                                                                                    
PAUL  MICHELSOHN JR.,  Alaska State  Homebuilding, and  Anchorage                                                               
Homebuilder  Association,  testified  in  support of  SB  45.  He                                                               
refuted  the  previous  testimony arguing  that  the  unorganized                                                               
areas  need this  type  of regulations  more  than the  organized                                                               
areas.  He cited  examples of  problems he  has seen  when people                                                               
purchased owner-built  homes. The  first was a  14-month-old home                                                               
outside of Wasilla that had  a failed septic system. Upon further                                                               
investigation he found  some of the floors were out  of level and                                                               
the walls were out of square.  The builder of record could not be                                                               
found and  the cost to  replace the  septic system and  bring the                                                               
floors and  walls up to  standard cost about $23,000.  The second                                                               
example was a  home outside Soldotna in  the unorganized borough.                                                               
This  was the  third house  that owner/builder  had sold.  He was                                                               
asked to  inspect the home  and found 18 code  infractions. These                                                               
included  no  bolts fastening  the  house  to the  foundation,  a                                                               
bedroom egress window that was too  small to meet fire codes, and                                                               
an undersized  gas pipe to the  house. He said he  didn't know if                                                               
the house sold, but if it did it was probably a cash sale.                                                                      
                                                                                                                                
MR.  MICHELSOHN said  those are  the kinds  of issues  that arise                                                               
when builders are unlicensed, and  it's the end user that suffers                                                               
the consequences. Referring to earlier  questions, he agreed with                                                               
Mr. Hébert  that indoor air quality  is a serious issue  and that                                                               
continuing education is critical to  ensure the health and safety                                                               
of the end  user. When problems arise it's generally  a matter of                                                               
the building not  being constructed to code and  there is usually                                                               
zero recourse other than filing a civil lawsuit.                                                                                
                                                                                                                                
Referring  to Senator  Steven's  question, he  said the  two-year                                                               
timeline was  a compromise. The  problem with the bill  last year                                                               
was that the  starting point for the timeline  was subjective. SB
45 establishes that  the timeline starts at the  beginning of the                                                               
project, which is customarily when  the footing and foundation is                                                               
put in  place. He urged  the committee  to pass the  bill, adding                                                               
that it should have happened last year.                                                                                         
                                                                                                                                
2:28:08 PM                                                                                                                    
CHAIR  COSTELLO  asked if  his  understanding  is that  the  bill                                                               
places no additional requirements  on an owner/builder who builds                                                               
his/her own home. She cited the  new language on page 3, lines 2-                                                               
6,  that requires  the  owner/builder  to file  a  form with  the                                                               
department indicating  that they are  "not engaged in  a business                                                               
for  which the  owner is  required  to register  as a  contractor                                                               
under  this chapter;".  She asked  if he  agrees that  other than                                                               
dating, signing,  and filing the  form no other  requirements are                                                               
imposed on the owner/builder.                                                                                                   
                                                                                                                                
MR.   MICHELSOHN  said   that's  correct.   He  added   that  the                                                               
legislature not  only sits  as the  assembly for  the unorganized                                                               
borough, it also  sits as the representative of  all the citizens                                                               
of the state. Thus it sits  to represent the uneducated buyers of                                                               
these   homes.  The   bill  simply   clarifies   the  rules   for                                                               
owner/builders who  sell their home  and are not registered  as a                                                               
contractor.                                                                                                                     
                                                                                                                                
CHAIR COSTELLO asked if he agrees  that the bill does not provide                                                               
a penalty.  Filing the form  with the department  simply provides                                                               
information for consumer protection purposes.                                                                                   
                                                                                                                                
MR. MICHELSOHN  said he understood the  department representative                                                               
say she  didn't know if there  was a penalty but  would follow up                                                               
with an  answer. He said he  believes there should be  a penalty,                                                               
but  he didn't  want to  slow the  bill by  suggesting that  that                                                               
amendment.                                                                                                                      
                                                                                                                                
CHAIR COSTELLO  asked if owner/builders  are unique to  Alaska or                                                               
if this is an issue in other states.                                                                                            
                                                                                                                                
MR. MICHELSOHN said  the requirements vary, but the  issue is not                                                               
as prevalent in other states.                                                                                                   
                                                                                                                                
SENATOR HUGHES  asked if  there would be  a penalty  for innocent                                                               
lack of  knowledge of the  requirement if the person  clearly was                                                               
not  engaged  in  a  business.  She  expressed  hope  that  those                                                               
individuals would not  be penalized; they would just  be asked to                                                               
submit the form.                                                                                                                
                                                                                                                                
MR.  MICHELSOHN  said  he  didn't   know  but  he  believes  that                                                               
infractions  tend to  occur when  there  isn't a  penalty for  an                                                               
infraction.                                                                                                                     
                                                                                                                                
SENATOR HUGHES  clarified that she  is asking about a  person who                                                               
is  not running  a business  but  must sell  within the  two-year                                                               
timeframe.                                                                                                                      
                                                                                                                                
MR.  MICHELSOHN said  he believes  the  bill has  a provision  to                                                               
addresses that.                                                                                                                 
                                                                                                                                
CHAIR  COSTELLO  asked Ms.  Bruce  to  respond  to the  last  two                                                               
questions.                                                                                                                      
                                                                                                                                
2:35:56 PM                                                                                                                    
LINDA  BRUCE, Attorney,  Legislative Legal  Services, Legislative                                                               
Affairs Agency,  Alaska State Legislature,  said this  version of                                                               
the bill  does not  include anything related  to an  exception to                                                               
the exemptions  [listed in AS 08.18.161}.  Regarding the penalty,                                                               
she said  it appears  that a  person who  didn't submit  the form                                                               
could be issued a citation for a violation under AS 08.18.117.                                                                  
                                                                                                                                
SENATOR HUGHES asked  what the fine would be.  She clarified that                                                               
she was talking  about a well-meaning person who  was not engaged                                                               
in a business and didn't know to submit the form.                                                                               
                                                                                                                                
MS. BRUCE  said she  couldn't answer  that at  this time,  but it                                                               
would be minimal.                                                                                                               
                                                                                                                                
SENATOR  GARDNER said  she isn't  sure there  is any  consequence                                                               
whatsoever  for  violating  the statute  should  the  bill  pass.                                                               
Someone could get a citation and go on and build another house.                                                                 
                                                                                                                                
MS.  BRUCE  explained that  if  the  department investigated  and                                                               
found the owner  was running a business without  registering as a                                                               
contractor  under  that   chapter,  additional  provisions  might                                                               
apply. For example, the department  could issue an administrative                                                               
fine or petition  the superior court to issue a  civil penalty or                                                               
injunction. Under  certain facts  the person may  be guilty  of a                                                               
class B misdemeanor.                                                                                                            
                                                                                                                                
2:39:10 PM                                                                                                                    
SENATOR GARDNER  asked if adding  language authorizing  a penalty                                                               
would result in a positive fiscal note.                                                                                         
                                                                                                                                
MS. BRUCE deferred the question to the department.                                                                              
                                                                                                                                
SENATOR  STEVENS  said  he,  too,  would  like  more  information                                                               
because  cities and  boroughs also  have building  codes. In  his                                                               
community substantial fines are attached to those violations.                                                                   
                                                                                                                                
MR. MICHELSOHN  offered to serve  as a resource to  the committee                                                               
members going forward.                                                                                                          
                                                                                                                                
2:40:39 PM                                                                                                                    
CHAIR  COSTELLO closed  public testimony  on SB  45 and  held the                                                               
bill in committee.                                                                                                              

Document Name Date/Time Subjects
SB 45.PDF SL&C 2/7/2017 1:30:00 PM
SB 45
SB 45 - Sponsor Statement.pdf SL&C 2/7/2017 1:30:00 PM
SB 45
SB 45 - Fiscal Note.pdf SL&C 2/7/2017 1:30:00 PM
SB 45
SB 45 - Support Letter - ASHBA.PDF SL&C 2/7/2017 1:30:00 PM
SB 45
SB 45 - Support Letter BEMA.PDF SL&C 2/7/2017 1:30:00 PM
SB 45
2017.02.07 - DOL&WD Workers' Comp. L&C Overview.pdf SL&C 2/7/2017 1:30:00 PM
Wrokers Comp