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Minutes for SB168 - Committee on Commerce
Short Title
Enacting the Kansas home inspectors professional competence and financial responsibility act.
Minutes Content for Tue, Feb 18, 2020
Chairperson Lynn recognized Mark Tomb, Kansas Association of Realtors, who provided an update on the bill. (Attachment 3)
The Kansas Association of Realtors has taken a lead role in working with stakeholders to advance a home inspector bill. Stakeholders, including the state's main professional organizations for home inspectors as well as those representing the interests of engineers and architects, have produced a compromise that will be the source of an amendment to SB 168. The bill would create the Kansas Home Inspectors Professional Competency and Financial Responsibility Act. Following is a brief overview of the legislation:
- Re-establishes professional standards for this profession, standards that were allowed to sunset in 2013.
- Requires those that do this type of work to register with the state and establishes penalties for those that fail to register.
- Establishes the Kansas Home Inspectors' Advisory Council to review complaints and serve as an advisory panel for education and testing requirements.
- Empowers the Attorney General to appoint council members and administer the law.
- Establishes minimum educational requirements and installs an ongoing commitment to continuing education.
- Sets fees for different types of registrations.
- Requires meaningful liability and errors and omission insurance requirements as well as surety bond and other financial responsibilities.
- Requires engineers and architects that do home inspections to register but exempts those licensed professionals from the insurance and financial requirements under the law. In addition, any complaints or investigation involving an engineer or architect doing work as a home inspector would be conducted by the Kansas Board of Technical Professions.
- Establishes a sunset of July 1, 2025.
The testimony included information concerning previous attempts at legislative solutions. Mr. Tomb urged Committee members to support the bill as it would establish standards for the home inspection industry while providing protections for consumers.
Senator Holland thanked the stakeholders for their work on compromise language for the bill.
Senator Holland moved to amend SB 168 with Substitute for SB168. He requested Mr. Reimer to review the bill. (Attachment 4)
Senator Suellentrop said previous legislation was for licensing, while this bill is for registration, and questioned how much difference was there between being licensed and being registered.
Senator Holland responded there are multiple issues and, in fact, we are establishing a baseline of licensure by this being publicized as a registry. There is contention among the various home inspectors in this state as far as what are appropriate licensure requirements. The registry is requiring the home inspectors to have a minimum level of financial surety to cover liability for the work being performed. The registry is a vehicle for consumers to use to report home inspection issues to the Attorney General's Office.
Senator Baumgardner said it appeared this registry could be impacted by SB 366 - Expanding the expedited occupational licensure provisions for military servicemembers and spouses to all license applicants.
Senator Holland responded he saw the two bills as separate issues and Substitute for SB 168 would stand on it own.
Senator Baumgardner said if the Committee moves forward with SB 366, she felt Substitute for SB 168 would need further amendment.
Senator Alley asked if there was a fiscal note on the proposed substitute bill and Mr. Reimer replied there was not. Due to the involvement of the Attorney General's Office in the bill, Senator Alley said an updated fiscal note would be needed. Senator Holland said when the compromise language was drafted he did reach out to the Attorney General's Office to keep them informed.
Senator Thompson asked whether the state is sanctioning those who register. He also wondered if closing costs could be driven higher due to the continuing education and bonding expenses required by the home inspectors to register.
Senator Olson questioned whether the bill was needed.
Senator Holland said this amendment is a compromise agreement driven by stakeholders in the industry which he helped to facilitate. The reason why there has been so much debate concerning licensure is because there have been complaints by consumers and the question of who owns the liability when there is a disconnect between the inspection report and the buyer when they take possession of the property. There is a moral hazard when people who are not home inspectors are trying to transfer the liability onto the home inspectors. All parties came to an agreement that the registry was the best way to have a uniform level of standard to protect the consumer's interest.
Chairperson Lynn said the substitute bill would be held for continuing deliberation.
