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S.B. 254

             1     

RESIDENCE LIENS RECOVERY FUND

             2     
AMENDMENTS

             3     
2001 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Sponsor: Lyle W. Hillyard

             6      David L. Gladwell




             7      This act modifies the Residence Lien Restriction and Lien Recovery Fund Act and related
             8      provisions of the Utah Construction Trades Licensing Act. The act adds factory built
             9      housing to the scope of the fund. The act repeals the lifetime cap on recovery from the fund.
             10      The act extends the filing deadline. The act requires the inclusion of instructions and a form
             11      affidavit and motion when serving a complaint on a homeowner. The act assesses a fee on
             12      residential building permits to be paid to the fund.
             13      This act affects sections of Utah Code Annotated 1953 as follows:
             14      AMENDS:
             15          38-1-11, as last amended by Chapter 172, Laws of Utah 1995
             16          38-11-102, as last amended by Chapter 193, Laws of Utah 1999
             17          38-11-107, as last amended by Chapter 49, Laws of Utah 1998
             18          38-11-202, as last amended by Chapter 193, Laws of Utah 1999
             19          38-11-203, as last amended by Chapter 193, Laws of Utah 1999
             20          38-11-204, as last amended by Chapter 193, Laws of Utah 1999
             21          38-11-207, as enacted by Chapter 308, Laws of Utah 1994
             22          38-11-301, as last amended by Chapter 146, Laws of Utah 1996
             23          58-55-302, as last amended by Chapter 317, Laws of Utah 2000
             24          58-55-303, as renumbered and amended by Chapter 181, Laws of Utah 1994
             25          58-55-501, as last amended by Chapters 233 and 317, Laws of Utah 2000
             26          58-55-502, as last amended by Chapter 317, Laws of Utah 2000
             27          58-55-503, as last amended by Chapters 100, 233 and 317, Laws of Utah 2000


             28      ENACTS:
             29          58-56-19, Utah Code Annotated 1953
             30      Be it enacted by the Legislature of the state of Utah:
             31          Section 1. Section 38-1-11 is amended to read:
             32           38-1-11. Enforcement -- Time for -- Lis pendens -- Action for debt not affected --
             33      Instructions and form affidavit and motion.
             34          (1) A lien claimant shall file an action to enforce the lien filed under this chapter within:
             35          (a) [twelve] 12 months from the date of final completion of the original contract not
             36      involving a residence as defined in Section 38-11-102 ; or
             37          (b) 180 days from the date the lien claimant last performed labor and services or last
             38      furnished equipment or material for a residence, as defined in Section 38-11-102 .
             39          (2) (a) Within the time period provided for filing in Subsection (1) the lien claimant shall
             40      file for record with the county recorder of each county in which the lien is recorded a notice of the
             41      pendency of the action, in the manner provided in actions affecting the title or right to possession
             42      of real property, or the lien shall be void, except as to persons who have been made parties to the
             43      action and persons having actual knowledge of the commencement of the action.
             44          (b) The burden of proof shall be upon the lien claimant and those claiming under him to
             45      show actual knowledge.
             46          (3) This section may not be interpreted to impair or affect the right of any person to whom
             47      a debt may be due for any work done or materials furnished to maintain a personal action to
             48      recover the same.
             49          (4) (a) If a lien claimant files an action to enforce a lien filed under this chapter involving
             50      a residence, as defined in Section 38-11-102 , the lien claimant shall include with the service of the
             51      complaint on the owner of the residence:
             52          (i) instructions to the owner of the residence relating to the owner's rights under Title 38,
             53      Chapter 11, Residence Lien Restriction and Lien Recovery Fund Act; and
             54          (ii) a form affidavit and motion for summary judgment to enable the owner of the
             55      residence to specify the grounds upon which the owner may exercise available rights under Title
             56      38, Chapter 11, Residence Lien Restriction and Lien Recovery Fund Act.
             57          (b) The lien claimant may file a notice to submit for decision on the motion for summary
             58      judgment. The motion may be ruled upon after the service of the summons and complaint upon


             59      the nonpaying party, as defined in Section 38-11-102 , and the time for the nonpaying party to
             60      respond, as provided in the Utah Rules of Civil Procedure, has elapsed.
             61          (c) The instructions and form affidavit and motion required by Subsection (4)(a) shall meet
             62      the requirements established by rule by the Division of Occupational and Professional Licensing
             63      in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act.
             64          (d) If the nonpaying party, as defined by Section 38-11-102 , files for bankruptcy protection
             65      and there is a bankruptcy stay in effect, the motion for summary judgment and the action to enforce
             66      the lien shall be stayed until resolution of the related claim under Title 38, Chapter 11, Residence
             67      Lien Restriction and Lien Recovery Fund Act.
             68          (e) If a lien claimant fails to provide to the owner of the residence the instructions and
             69      form affidavit required by Subsection (4)(a), the lien claimant shall be barred from maintaining
             70      or enforcing the lien upon the residence.
             71          Section 2. Section 38-11-102 is amended to read:
             72           38-11-102. Definitions.
             73          (1) "Board" means the Residence Lien Recovery Fund Advisory Board established under
             74      Section 38-11-104 .
             75          (2) "Construction on an owner-occupied residence" means designing, engineering,
             76      constructing, altering, remodeling, improving, repairing, or maintaining a new or existing
             77      residence.
             78          (3) "Department" means the Department of Commerce.
             79          (4) "Director" means the director of the Division of Occupational and Professional
             80      Licensing.
             81          (5) "Division" means the Division of Occupational and Professional Licensing.
             82          (6) "Encumbered fund balance" means the aggregate amount of all outstanding claims
             83      against the fund. The remainder of monies in the fund are unencumbered funds.
             84          (7) "Executive director" means the executive director of the Department of Commerce.
             85          (8) "Factory built housing" is as defined in Section 58-56-3 .
             86          (9) "Factory built housing retailer" means a person that sells factory built housing to
             87      consumers.
             88          [(8)] (10) "Fund" means the Residence Lien Recovery Fund established under Section
             89      38-11-201 .


             90          [(9)] (11) "Laborer" means a person who provides services at the site of the construction
             91      on an owner-occupied residence as an employee of an original contractor or other qualified
             92      beneficiary performing qualified services on the residence.
             93          [(10)] (12) "Licensee" means any holder of a license issued under Title 58, Chapters 3a,
             94      22, 53, and 55.
             95          [(11)] (13) "Nonpaying party" means the original contractor, subcontractor, or real estate
             96      developer who has failed to pay the qualified beneficiary making a claim against the fund.
             97          [(12)] (14) "Original contractor" means a person who contracts with the owner of real
             98      property or the owner's agent to provide services, labor, or material for the construction of an
             99      owner-occupied residence.
             100          [(13)] (15) "Owner" means a person who:
             101          (a) contracts with a person who is licensed as a contractor or is exempt from licensure
             102      under Title 58, Chapter 55, Utah Construction Trades Licensing Act, for the construction on an
             103      owner-occupied residence upon real property owned by that person;
             104          (b) contracts with a real estate developer to buy a residence upon completion of the
             105      construction on the owner-occupied residence; or
             106          (c) buys a residence from a real estate developer after completion of the construction on
             107      the owner-occupied residence.
             108          [(14)] (16) "Owner-occupied residence" means a residence that is, or after completion of
             109      the construction on the residence will be, occupied by the owner or the owner's tenant or lessee as
             110      a primary or secondary residence within 180 days from the date of the completion of the
             111      construction on the residence.
             112          [(15)] (17) "Qualified beneficiary" means a person who:
             113          (a) provides qualified services;
             114          (b) pays all necessary fees or assessment required under this chapter; and
             115          (c) registers with the division:
             116          (i) as a licensed contractor under Subsection 38-11-301 (1) or (2) if that person seeks
             117      recovery from the fund as a licensed contractor; or
             118          (ii) as a person providing qualified services other than as a licensed contractor under
             119      Subsection 38-11-301 (3) if the person seeks recovery from the fund in a capacity other than as a
             120      licensed contractor.


             121          [(16)] (18) (a) "Qualified services" means the following performed in construction on an
             122      owner-occupied residence:
             123          [(a)] (i) contractor services provided by a contractor licensed or exempt from licensure
             124      under Title 58, Chapter 55, Utah Construction Trades Licensing Act;
             125          [(b)] (ii) architectural services provided by an architect licensed under Title 58, Chapter
             126      3a;
             127          [(c)] (iii) engineering and land surveying services provided by a professional engineer or
             128      land surveyor licensed or exempt from licensure under Title 58, Chapter 22;
             129          [(d)] (iv) landscape architectural services by a landscape architect licensed or exempt from
             130      licensure under Title 58, Chapter 53;
             131          [(e)] (v) design and specification services of mechanical or other systems;
             132          [(f)] (vi) other services related to the design, drawing, surveying, specification, cost
             133      estimation, or other like professional services;
             134          [(g)] (vii) providing materials, supplies, components, or similar products;
             135          [(h)] (viii) renting equipment or materials; [and]
             136          [(i)] (ix) labor at the site of the construction on the owner-occupied residence[.]; and
             137          [(j)] (x) site preparation, set up, and installation of factory built housing.
             138          (b) "Qualified services" do not include the construction of factory built housing in the
             139      factory.
             140          [(17)] (19) "Real estate developer" means a person having an ownership interest in real
             141      property who contracts for the construction of a residence that is offered for sale to the public.
             142          [(18)] (20) "Residence" means an improvement to real property used or occupied, to be
             143      used or occupied as, or in conjunction with, a primary or secondary detached single-family
             144      dwelling or multifamily dwelling up to two units, including factory built housing.
             145          [(19)] (21) "Subsequent owner" means a person who purchases a residence from an owner
             146      within 180 days from the date of the completion of the construction on the residence.
             147          Section 3. Section 38-11-107 is amended to read:
             148           38-11-107. Restrictions upon maintaining a lien against residence or owner's interest
             149      in the residence.
             150          (1) A person qualified to file a lien upon an owner-occupied residence and the real
             151      property associated with that residence under the provisions of Title 38, Chapter 1, Mechanics'


             152      Liens, who provides qualified services under an agreement effective on or after January 1, 1995,
             153      other than directly with the owner, shall be barred after January 1, 1995, from maintaining a lien
             154      upon that residence and real property or recovering a judgment in any civil action against the
             155      owner or the owner-occupied residence to recover monies owed for qualified services provided
             156      by that person if:
             157          (a) the conditions described in Subsections 38-11-204 (3)(a) and (3)(b) are met; or
             158          (b) (i) a subsequent owner purchases a residence from an owner;
             159          (ii) the subsequent owner who purchased the residence under Subsection (1)(b)(i) occupies
             160      the residence as a primary or secondary residence within 180 days from the date of transfer or the
             161      residence is occupied by the subsequent owner's tenant or lessee as a primary or secondary
             162      residence within 180 days from the date of transfer; and
             163          (iii) the owner from whom the subsequent owner purchased the residence met the
             164      conditions described in Subsections 38-11-204 (3)(a) and (3)(b).
             165          (2) If a residence is constructed under conditions that do not meet all of the provisions of
             166      Subsection (1), that residence and the real property associated with that residence as defined in
             167      Section 38-1-4 , shall be subject to any mechanics' lien as provided in Section 38-1-3 .
             168          (3) A lien claimant who files a mechanics' lien or foreclosure action upon an
             169      owner-occupied residence is not liable for costs and attorneys' fees under Sections 38-1-17 and
             170      38-1-18 or for any damages arising from a civil action related to the lien filing or foreclosure
             171      action if the lien claimant removes the lien within ten days from the date the owner establishes
             172      compliance, through written findings of fact from a court of competent jurisdiction or, in cases
             173      where a bankruptcy has been filed, from the director, with the requirements of Subsections
             174      38-11-204 (3)(a) and (3)(b).
             175          Section 4. Section 38-11-202 is amended to read:
             176           38-11-202. Payments to the fund.
             177          The Residence Lien Recovery Fund shall be supported solely from:
             178          (1) initial and special assessments collected by the division from licensed contractors
             179      registered as qualified beneficiaries in accordance with Subsections 38-11-301 (1) and (2) and
             180      Section 38-11-206 ;
             181          (2) initial and special assessments collected by the division from other qualified
             182      beneficiaries registering with the division in accordance with Subsection 38-11-301 (3) and Section


             183      38-11-206 ;
             184          (3) fees determined by the division under Section 63-38-3.2 collected from laborers under
             185      Subsection 38-11-204 (7) when the laborers obtain a recovery from the fund;
             186          (4) amounts collected by subrogation under Section 38-11-205 on behalf of the fund
             187      following a payment from the fund;
             188          (5) application fees determined by the division under Section 63-38-3.2 collected from
             189      qualified beneficiaries or laborers under Subsection 38-11-204 (1)(b) when qualified beneficiaries
             190      or laborers make a claim against the fund;
             191          (6) registration fees determined by the division under Section 63-38-3.2 collected from
             192      other qualified beneficiaries registering with the department in accordance with Subsection
             193      38-11-301 (3)(a)(iii);
             194          (7) reinstatement fees determined by the division under Section 63-38-3.2 collected from
             195      registrants in accordance with Subsection 38-11-302 (5)(b);
             196          (8) civil fines authorized under Subsection 38-11-205 (2) collected by the attorney general
             197      for failure to reimburse the fund; [and]
             198          (9) any interest earned by the fund[.]; and
             199          (10) residential building permit fees, not to exceed $5 per permit, determined by the
             200      division under Section 63-38-3.2 , collected pursuant to Section 58-56-19 , as the primary source
             201      of funding.
             202          Section 5. Section 38-11-203 is amended to read:
             203           38-11-203. Disbursements from the fund -- Limitations.
             204          (1) A payment of any claim upon the fund by a qualified beneficiary shall be made only
             205      upon an order issued by the director finding that:
             206          (a) the claimant was a qualified beneficiary during the construction on a residence;
             207          (b) the claimant complied with the requirements of Section 38-11-204 ; and
             208          (c) there is adequate money in the fund to pay the amount ordered.
             209          (2) A payment of a claim upon the fund by a laborer shall be made only upon an order
             210      issued by the director finding that:
             211          (a) the laborer complied with the requirements of Subsection 38-11-204 (6); and
             212          (b) there is adequate money in the fund to pay the amount ordered.
             213          (3) (a) An order under this section may be issued only after the division has complied with


             214      the procedures established by rule under Section 38-11-105 .
             215          (b) The director shall order payment of the qualified services as established by evidence,
             216      or if the claimant has obtained a judgment, then in the amount awarded for qualified services in
             217      the judgment to the extent the qualified services are attributable to the owner-occupied residence
             218      at issue in the claim.
             219          (c) The director shall order payment of interest on all amounts claimed for qualified
             220      services at the rate of 12%, annual percentage rate, from the date payment was due to the date the
             221      claim is approved for payment except for delays attributable to the claimant.
             222          (d) The director shall order payment of costs in the amount stated in the judgment. If the
             223      judgment does not state a sum certain for costs, or if no judgment has been obtained, the director
             224      shall order payment of reasonable costs as supported by evidence. The claim application fee as
             225      established by the division pursuant to Subsection 38-11-204 (1)(b) is not a reimbursable cost.
             226          (e) The director shall order payment of attorney's fees in the amount stated in a judgment.
             227          (4) (a) Payments made from the fund may not exceed[: (i)] $75,000 per [residence ]
             228      construction project to all qualified beneficiaries and laborers who have claim against the fund for
             229      that [residence; and] construction project.
             230          [(ii) $500,000 per qualified beneficiary or laborer for payments to the qualified beneficiary
             231      over the qualified beneficiary's lifetime.]
             232          (b) If claims against the fund for a [residence] construction project exceed $75,000, the
             233      $75,000 shall be awarded proportionately so that each qualified beneficiary and laborer awarded
             234      compensation from the fund for qualified services shall receive an identical percentage of the
             235      qualified beneficiary's or laborer's award.
             236          (5) Subject to the limitations of Subsection (4), if on the day the order is issued there are
             237      inadequate funds to pay the entire claim and the director determines that the claimant has otherwise
             238      met the requirements of Subsection (1) or (2), the director shall order additional payments once
             239      the fund meets the balance limitations of Section 38-11-206 .
             240          Section 6. Section 38-11-204 is amended to read:
             241           38-11-204. Claims against the fund -- Requirement to make a claim -- Qualifications
             242      to receive compensation.
             243          (1) To claim recovery from the fund a person shall:
             244          (a) meet the requirements of either Subsection (3) or (6);


             245          (b) pay an application fee determined by the division under Section 63-38-3.2 ; and
             246          (c) file with the division a completed application on a form provided by the division
             247      accompanied by supporting documents establishing:
             248          (i) that the person meets the requirements of either Subsection (3) or (6);
             249          (ii) that the person was a qualified beneficiary or laborer during the construction on the
             250      owner-occupied residence; and
             251          (iii) the basis for the claim.
             252          (2) To recover from the fund, the application required by Subsection (1) shall be filed no
             253      later than [120 days] one year:
             254          (a) from the date the judgment required by Subsection (3)(c) is entered;
             255          (b) from the date the nonpaying party filed bankruptcy, if the claimant is precluded from
             256      obtaining a judgment or from satisfying the requirements of Subsection (3)(c) because the
             257      nonpaying party filed bankruptcy within [120 days] one year after the entry of judgment; or
             258          (c) if a laborer, from the date the laborer completed the laborer's qualified services.
             259          (3) To recover from the fund, regardless of whether the residence is occupied by the
             260      owner, a subsequent owner, or the owner or subsequent owner's tenant or lessee, a qualified
             261      beneficiary shall establish that:
             262          (a) (i) the owner of the owner-occupied residence or the owner's agent entered into a
             263      written contract with an original contractor licensed or exempt from licensure under Title 58,
             264      Chapter 55, Utah Construction Trades Licensing Act, for the performance of qualified services,
             265      to obtain the performance of qualified services by others, or for the supervision of the performance
             266      by others of qualified services in construction on that residence; [or]
             267          (ii) the owner of the owner-occupied residence or the owner's agent entered into a written
             268      contract with a real estate developer for the purchase of an owner-occupied residence; or
             269          (iii) the owner of the owner-occupied residence or the owner's agent entered into a written
             270      contract with a factory built housing retailer for the purchase of an owner-occupied residence;
             271          (b) the owner has paid in full the original contractor, licensed or exempt from licensure
             272      under Title 58, Chapter 55, Utah Construction Trades Licensing Act, real estate developer, or
             273      [both, ] factory built housing retailer under Subsection (3)(a)[(i) or (ii)] with whom the owner has
             274      a written contract in accordance with the written contract and any amendments to the contract, and:
             275          (i) the original contractor [or real estate developer], licensed or exempt from licensure


             276      under Title 58, Chapter 55, Utah Construction Trades Licensing Act, the real estate developer, or
             277      the factory built housing retailer subsequently failed to pay a qualified beneficiary who is entitled
             278      to payment under an agreement with that original contractor or real estate developer licensed or
             279      exempt from licensure under Title 58, Chapter 55, Utah Construction Trades Licensing Act, for
             280      services performed or materials supplied by the qualified beneficiary;
             281          (ii) a subcontractor who contracts with the original contractor [or real estate developer],
             282      licensed or exempt from licensure under Title 58, Chapter 55, Utah Construction Trades Licensing
             283      Act, the real estate developer, or the factory built housing retailer failed to pay a qualified
             284      beneficiary who is entitled to payment under an agreement with that subcontractor or supplier; or
             285          (iii) a subcontractor who contracts with a subcontractor or supplier failed to pay a qualified
             286      beneficiary who is entitled to payment under an agreement with that subcontractor or supplier;
             287          (c) (i) the qualified beneficiary filed:
             288          (A) an action against the nonpaying party to recover monies owed him within 180 days
             289      from the date the qualified beneficiary last provided qualified services, unless precluded from
             290      doing so by the nonpaying party's bankruptcy filing within the 180 days after completion of
             291      services; and
             292          (B) a notice of commencement of action with the division within 30 days from the date the
             293      qualified beneficiary filed the civil action if a civil action was filed as required by Subsection
             294      (3)(c)(i)(A);
             295          (ii) the qualified beneficiary has obtained a judgment against the nonpaying party who
             296      failed to pay the qualified beneficiary under an agreement to provide qualified services for
             297      construction of that owner-occupied residence;
             298          (iii) (A) the qualified beneficiary has obtained from a court of competent jurisdiction the
             299      issuance of an order requiring the judgment debtor, or if a corporation any officer of the
             300      corporation, to appear before the court at a specified time and place to answer concerning the
             301      debtor's or corporation's property, has received return of service of the order from a person
             302      qualified to serve documents under the Utah Rules of Civil Procedure, Rule 4(b), and has made
             303      reasonable efforts to obtain asset information from the supplemental proceedings; and
             304          (B) if assets subject to execution are discovered as a result of the order required under
             305      Subsection (3)(c)(iii)(A) or for any other reason, to obtain the issuance of a writ of execution from
             306      a court of competent jurisdiction; or


             307          (iv) the claimant timely filed a proof of claim where permitted in the bankruptcy action,
             308      if the nonpaying party has filed bankruptcy; and
             309          (d) the qualified beneficiary is not entitled to reimbursement from any other person.
             310          (4) The requirements of Subsection [ 38-11-204 ](3)(c) need not be met if the qualified
             311      beneficiary has been precluded from obtaining a judgment against the nonpaying party or from
             312      satisfying the requirements of Subsection [ 38-11-204 ](3)(c) because the nonpaying party filed
             313      bankruptcy.
             314          (5) If a qualified beneficiary fails to file the notice with the division required under
             315      Subsection (3)(c)(i)(B), the claim of the qualified beneficiary shall be paid:
             316          (a) if otherwise qualified under this chapter;
             317          (b) to the extent that the limit of Subsection 38-11-203 (4)(a)(i) has not been reached by
             318      payments from the fund to qualified beneficiaries who have complied with the notice requirements
             319      of Subsection (3)(c)(i)(B); and
             320          (c) in the order that the claims are filed by persons who fail to comply with Subsection
             321      (3)(c)(i)(B), not to exceed the limit of Subsection 38-11-203 (4)(a)(i).
             322          (6) To recover from the fund a laborer shall:
             323          (a) establish that the laborer has not been paid wages due for the work performed at the
             324      site of a construction on an owner-occupied residence; and
             325          (b) provide any supporting documents or information required by rule by the division.
             326          (7) A fee determined by the division under Section 63-38-3.2 shall be deducted from any
             327      recovery from the fund received by a laborer.
             328          (8) The requirements of Subsection (3)(a)(i) may be satisfied if a claimant establishes to
             329      the satisfaction of the director that the owner of the owner-occupied residence or the owner's agent
             330      entered into a written contract with an original contractor who:
             331          (a) was a business entity that was not licensed under Title 58, Chapter 55, Utah
             332      Construction Trades Licensing Act, but was solely owned by an individual that was licensed under
             333      Title 58, Chapter 55, Utah Construction Trades Licensing Act; or
             334          (b) was a natural person who was not licensed under Title 58, Chapter 55, Utah
             335      Construction Trades Licensing Act, but who was the sole owner and qualifier of a business entity
             336      that was licensed under Title 58, Chapter 55, Utah Construction Trades Licensing Act.
             337          Section 7. Section 38-11-207 is amended to read:


             338           38-11-207. Reimbursement to the fund.
             339          (1) If the director disburses monies from the fund as a result of a person licensed under
             340      Title 58, Chapter 55, Utah Construction Trades Licensing Act, or a qualified beneficiary failing
             341      to pay qualified beneficiaries[, the licensee or qualified beneficiary shall reimburse the fund within
             342      90 days from]:
             343          (a) the division shall issue a notice of the disbursement from the fund[.] and the obligation
             344      to reimburse the fund to the licensee or qualified beneficiary; and
             345          (b) the licensee or qualified beneficiary shall reimburse the fund within 20 days from the
             346      issuance of the notice required by Subsection (1)(a).
             347          (2) The notice required by Subsection (1)(a) shall meet the requirements established by
             348      rule by the division in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking
             349      Act.
             350          (3) (a) A finding of fact in an administrative action that a payment of any amount has been
             351      made from the fund in settlement of a claim arising from the act, representation, transaction, or
             352      conduct of a person licensed under Title 58, Chapter 55, Utah Construction Trades Licensing Act,
             353      in violation of Section 58-55-603 shall result in the immediate suspension of that person's license
             354      without further compliance with Title 63, Chapter 46b, Administrative Procedures Act.
             355          (b) The finding of fact for Subsection (3)(a) may be made in the same administrative
             356      action as the related claim and may be included in the findings required by Section 38-11-203 .
             357          (c) The suspension required by Subsection (3)(a) shall remain in effect until the person
             358      applies for reinstatement and is issued a license in accordance with Sections 58-1-308 and
             359      58-55-303 .
             360          Section 8. Section 38-11-301 is amended to read:
             361           38-11-301. Registration as a qualified beneficiary -- Initial regular assessment --
             362      Affidavit.
             363          (1) A person licensed as of July 1, 1995, as a contractor under the provisions of Title 58,
             364      Chapter 55, Utah Construction Trades Licensing Act, in license classifications that regularly
             365      engage in providing qualified services shall be automatically registered as a qualified beneficiary
             366      upon payment of the initial assessment.
             367          (2) A person applying for licensure as a contractor after July 1, 1995, in license
             368      classifications that regularly engage in providing qualified services shall be automatically


             369      registered as a qualified beneficiary upon issuance of a license and payment of the initial
             370      assessment.
             371          (3) (a) After July 1, 1995, any person providing qualified services as other than a
             372      contractor as provided in Subsection (1) or any person exempt from licensure under the provisions
             373      of Title 58, Chapter 55, Utah Construction Trades Licensing Act, may register as a qualified
             374      beneficiary by:
             375          (i) submitting an application in a form prescribed by the division;
             376          (ii) demonstrating registration with the Division of Corporations and Commercial Code
             377      as required by state law;
             378          (iii) paying a registration fee determined by the division under Section 63-38-3.2 ; and
             379          (iv) paying the initial assessment established under Subsection (4), and any special
             380      assessment determined by the division under Subsection 38-11-206 (1).
             381          (b) A person [other than a contractor] who does not register under Subsection (1), (2), or
             382      (3)(a) shall be prohibited from recovering under the fund as a qualified beneficiary for work
             383      performed as qualified services while not registered with the fund.
             384          (4) (a) An applicant shall pay an initial assessment determined by the division under
             385      Section 63-38-3.2 .
             386          (b) The initial assessment to qualified registrants under Subsection (1) shall be made not
             387      later than July 15, 1995, and shall be paid no later than November 1, 1995.
             388          (c) The initial assessment to qualified registrants under Subsections (2) and (3) shall be
             389      paid at the time of application for license or registration, however, beginning on May 1, 1996, only
             390      one initial assessment or special assessments thereafter shall be required for persons having
             391      multiple licenses under this section.
             392          (5) A person shall be considered to have been registered as a qualified beneficiary on
             393      January 1, 1995, for purposes of meeting the requirements of Subsection 38-11-204 (1)(c)(ii) if the
             394      person:
             395          (a) (i) is licensed on or before July 1, 1995, as a contractor under the provisions of Title
             396      58, Chapter 55, Utah Construction Trades Licensing Act, in license classifications that regularly
             397      engage in providing qualified services; or
             398          (ii) provides qualified services after July 1, 1995, as other than a contractor as provided
             399      in Subsection (5)(a)(i) or is exempt from licensure under the provisions of Title 58, Chapter 55,


             400      Utah Construction Trades Licensing Act; and
             401          (b) registers as a qualified beneficiary under Subsection (1) or (3) on or before November
             402      1, 1995.
             403          Section 9. Section 58-55-302 is amended to read:
             404           58-55-302. Qualifications for licensure.
             405          (1) Each applicant for a license under this chapter shall:
             406          (a) submit an application prescribed by the division;
             407          (b) pay a fee as determined by the department under Section 63-38-3.2 ;
             408          (c) (i) meet the examination requirements established by rule by the division in
             409      collaboration with the appropriate board, except for the classifications of apprentice plumber,
             410      residential apprentice plumber, and apprentice electrician for whom no examination is required;
             411      or
             412          (ii) the individual qualifier must pass the required examination if the applicant is a
             413      business entity;
             414          (d) if an apprentice, identify the proposed supervisor of the apprenticeship;
             415          (e) if an applicant for a contractor's license:
             416          (i) produce satisfactory evidence of financial responsibility, except for construction trades
             417      instructor for whom evidence of financial responsibility is not required;
             418          (ii) produce satisfactory evidence of knowledge and experience in the construction industry
             419      and knowledge of the principles of the conduct of business as a contractor, reasonably necessary
             420      for the protection of the public health, safety, and welfare; and
             421          (iii) be a licensed master electrician if an applicant for an electrical contractor's license or
             422      a licensed master residential electrician if an applicant for a residential electrical contractor's
             423      license; or
             424          (iv) be a journeyman plumber or residential journeyman plumber if an applicant for a
             425      plumbing contractor's license; and
             426          (f) if an applicant for a construction trades instructor license, satisfy any additional
             427      requirements established by rule.
             428          (2) After approval of an applicant for a contractor's license by the board and the division,
             429      the applicant shall file the following with the division before the division issues the license:
             430          (a) proof of workers' compensation insurance which covers employees of the applicant in


             431      accordance with applicable Utah law;
             432          (b) proof of public liability insurance in coverage amounts and form established by rule
             433      except for a construction trades instructor for whom public liability insurance is not required; and
             434          (c) proof of registration as required by applicable law with the:
             435          (i) Utah Department of Commerce;
             436          (ii) Division of Corporations and Commercial Code;
             437          (iii) Division of Workforce Information and Payment Services in the Department of
             438      Workforce Services, for purposes of Title 35A, Chapter 4, Employment Security Act;
             439          (iv) State Tax Commission; and
             440          (v) Internal Revenue Service.
             441          (3) In addition to the general requirements for each applicant in Subsection (1), applicants
             442      shall comply with the following requirements to be licensed in the following classifications:
             443          (a) A journeyman plumber applicant shall produce:
             444          (i) satisfactory evidence of successful completion of the equivalent of at least four years
             445      of full-time training and instruction as a licensed apprentice plumber under supervision of a
             446      licensed journeyman plumber and in accordance with a planned program of training approved by
             447      the division;
             448          (ii) satisfactory evidence of at least eight years of full-time experience approved by the
             449      division in collaboration with the Plumbers Licensing Board; or
             450          (iii) satisfactory evidence of meeting the qualifications determined by the division and
             451      board to be equivalent to Subsection (3)(a)(i) or (a)(ii).
             452          (b) A residential journeyman plumber shall produce satisfactory evidence of completion
             453      of:
             454          (i) the equivalent of at least three years of full-time training and instruction as a licensed
             455      apprentice plumber under the supervision of a licensed residential journeyman plumber or licensed
             456      journeyman plumber in accordance with a planned program of training approved by the division;
             457          (ii) at least six years of full-time experience in a maintenance or repair trade involving
             458      substantial plumbing work; or
             459          (iii) satisfactory evidence of meeting the qualifications determined by the division and
             460      board to be equivalent to Subsection (3)(b)(i) or (b)(ii).
             461          (c) A master electrician applicant shall produce satisfactory evidence that he either:


             462          (i) is a graduate electrical engineer of an accredited college or university approved by the
             463      division and has one year of practical electrical experience as a licensed apprentice electrician;
             464          (ii) is a graduate of an electrical trade school, having received an associate of applied
             465      sciences degree following successful completion of a course of study approved by the division, and
             466      has two years of practical experience as a licensed journeyman electrician;
             467          (iii) is a graduate of an electrical trade school, having received a certificate of completion
             468      following successful completion of a course of study approved by the division, and has four years
             469      of practical experience as a journeyman electrician;
             470          (iv) has at least eight years of practical experience under the supervision of a licensed
             471      journeyman or master electrician; or
             472          (v) meets the qualifications determined by the division and board to be equivalent to these
             473      qualifications.
             474          (d) A master residential electrician applicant shall produce satisfactory evidence that he:
             475          (i) has at least two years of practical experience as a residential journeyman electrician;
             476      or
             477          (ii) meets the qualifications determined by the division and board to be equivalent to this
             478      practical experience.
             479          (e) A journeyman electrician applicant shall produce satisfactory evidence that he either:
             480          (i) has successfully completed at least four years of full-time training and instruction as
             481      a licensed apprentice electrician under the supervision of a master electrician or journeyman
             482      electrician and in accordance with a planned training program approved by the division;
             483          (ii) has six years of practical experience in wiring, installing, and repairing electrical
             484      apparatus and equipment for light, heat, and power under the supervision of a licensed master or
             485      journeyman electrician; or
             486          (iii) meets the qualifications determined by the division and board to be equivalent to these
             487      qualifications.
             488          (f) A residential journeyman electrician applicant shall produce satisfactory evidence that
             489      he:
             490          (i) has successfully completed two years of training in an electrical training program
             491      approved by the division;
             492          (ii) has four years of practical experience in wiring, installing, and repairing electrical


             493      apparatus and equipment for light, heat, and power under the supervision of a licensed master,
             494      journeyman, residential master, or residential journeyman electrician; or
             495          (iii) meets the qualifications determined by the division and board to be equivalent to
             496      Subsection (3)(f)(i) or (f)(ii).
             497          (g) The conduct of licensed apprentice electricians and their licensed supervisors shall be
             498      in accordance with the following:
             499          (i) A licensed apprentice electrician shall be under the immediate supervision of a licensed
             500      master, journeyman, residential master, or residential journeyman electrician. An apprentice in
             501      the fourth year of training may work without supervision for a period not to exceed eight hours in
             502      any 24-hour period.
             503          (ii) A licensed master, journeyman, residential master, or residential journeyman
             504      electrician may have under his immediate supervision on a residential project up to three licensed
             505      apprentice electricians.
             506          (iii) A licensed master or journeyman electrician may have under his immediate
             507      supervision on nonresidential projects only one licensed apprentice electrician.
             508          (h) An alarm company applicant shall:
             509          (i) have a qualifying agent who is an officer, director, partner, proprietor, or manager of
             510      the applicant who:
             511          (A) demonstrates 6,000 hours of experience in the alarm company business;
             512          (B) demonstrates 2,000 hours of experience as a manager or administrator in the alarm
             513      company business or in a construction business; and
             514          (C) passes an examination component established by rule by the division in collaboration
             515      with the board;
             516          (ii) if a corporation, provide:
             517          (A) the names, addresses, dates of birth, social security numbers, and fingerprint cards of
             518      all corporate officers, directors, and those responsible management personnel employed within the
             519      state or having direct responsibility for managing operations of the applicant within the state; and
             520          (B) the names, addresses, dates of birth, social security numbers, and fingerprint cards of
             521      all shareholders owning 5% or more of the outstanding shares of the corporation, except this shall
             522      not be required if the stock is publicly listed and traded;
             523          (iii) if a limited liability company, provide:


             524          (A) the names, addresses, dates of birth, social security numbers, and fingerprint cards of
             525      all company officers, and those responsible management personnel employed within the state or
             526      having direct responsibility for managing operations of the applicant within the state; and
             527          (B) the names, addresses, dates of birth, social security numbers, and fingerprint cards of
             528      all individuals owning 5% or more of the equity of the company;
             529          (iv) if a partnership, the names, addresses, dates of birth, social security numbers, and
             530      fingerprint cards of all general partners, and those responsible management personnel employed
             531      within the state or having direct responsibility for managing operations of the applicant within the
             532      state;
             533          (v) if a proprietorship, the names, addresses, dates of birth, social security numbers, and
             534      fingerprint cards of the proprietor, and those responsible management personnel employed within
             535      the state or having direct responsibility for managing operations of the applicant within the state;
             536          (vi) be of good moral character in that officers, directors, shareholders described in
             537      Subsection (3)(h)(ii)(B), partners, proprietors, and responsible management personnel have not
             538      been convicted of a felony, a misdemeanor involving moral turpitude, or any other crime that when
             539      considered with the duties and responsibilities of an alarm company is considered by the division
             540      and the board to indicate that the best interests of the public are served by granting the applicant
             541      a license;
             542          (vii) document that none of the applicant's officers, directors, shareholders described in
             543      Subsection (3)(h)(ii)(B), partners, proprietors, and responsible management personnel have been
             544      declared by any court of competent jurisdiction incompetent by reason of mental defect or disease
             545      and not been restored;
             546          (viii) document that none of the applicant's officers, directors, shareholders described in
             547      Subsection (3)(h)(ii)(B), partners, proprietors, and responsible management personnel are currently
             548      suffering from habitual drunkenness or from drug addiction or dependence;
             549          (ix) file and maintain with the division evidence of:
             550          (A) comprehensive general liability insurance in form and in amounts to be established
             551      by rule by the division in collaboration with the board;
             552          (B) workers' compensation insurance that covers employees of the applicant in accordance
             553      with applicable Utah law; and
             554          (C) registration as is required by applicable law with the:


             555          (I) Division of Corporations and Commercial Code;
             556          (II) Division of Workforce Information and Payment Services in the Department of
             557      Workforce Services, for purposes of Title 35A, Chapter 4, Employment Security Act;
             558          (III) State Tax Commission; and
             559          (IV) Internal Revenue Service; and
             560          (x) meet with the division and board.
             561          (i) Each applicant for licensure as an alarm company agent shall:
             562          (i) submit an application in a form prescribed by the division accompanied by fingerprint
             563      cards;
             564          (ii) pay a fee determined by the department under Section 63-38-3.2 ;
             565          (iii) be of good moral character in that the applicant has not been convicted of a felony,
             566      a misdemeanor involving moral turpitude, or any other crime that when considered with the duties
             567      and responsibilities of an alarm company agent is considered by the division and the board to
             568      indicate that the best interests of the public are served by granting the applicant a license;
             569          (iv) not have been declared by any court of competent jurisdiction incompetent by reason
             570      of mental defect or disease and not been restored;
             571          (v) not be currently suffering from habitual drunkenness or from drug addiction or
             572      dependence; and
             573          (vi) meet with the division and board if requested by the division or the board.
             574          (4) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             575      division may make rules establishing when Federal Bureau of Investigation records shall be
             576      checked for applicants as an alarm company or alarm company agent.
             577          (5) To determine if an applicant meets the qualifications of Subsections (3)(h)(vi) and
             578      (3)(i)(iii), the division shall provide an appropriate number of copies of fingerprint cards to the
             579      Department of Public Safety with the division's request to:
             580          (a) conduct a search of records of the Department of Public Safety for criminal history
             581      information relating to each applicant for licensure as an alarm company or alarm company agent
             582      and each applicant's officers, directors, and shareholders described in Subsection (3)(h)(ii)(B),
             583      partners, proprietors, and responsible management personnel; and
             584          (b) forward to the Federal Bureau of Investigation a fingerprint card of each applicant
             585      requiring a check of records of the F.B.I. for criminal history information under this section.


             586          (6) The Department of Public Safety shall send to the division:
             587          (a) a written record of criminal history, or certification of no criminal history record, as
             588      contained in the records of the Department of Public Safety in a timely manner after receipt of a
             589      fingerprint card from the division and a request for review of Department of Public Safety records;
             590      and
             591          (b) the results of the F.B.I. review concerning an applicant in a timely manner after receipt
             592      of information from the F.B.I.
             593          (7) (a) The division shall charge each applicant for licensure as an alarm company or alarm
             594      company agent a fee, in accordance with Section 63-38-3.2 , equal to the cost of performing the
             595      records reviews under this section.
             596          (b) The division shall pay the Department of Public Safety the costs of all records reviews,
             597      and the Department of Public Safety shall pay the F.B.I. the costs of records reviews under this
             598      section.
             599          (8) Information obtained by the division from the reviews of criminal history records of
             600      the Department of Public Safety and the F.B.I. shall be used or disseminated by the division only
             601      for the purpose of determining if an applicant for licensure as an alarm company or alarm company
             602      agent is qualified for licensure.
             603          (9) (a) An application for licensure under this chapter shall be denied if:
             604          (i) the applicant has had a previous license, which was issued under this chapter,
             605      suspended or revoked within one year prior to the date of the applicant's application;
             606          (ii) (A) the applicant is a partnership, corporation, or limited liability company; and
             607          (B) any corporate officer, director, shareholder holding 25% or more of the stock in the
             608      applicant, partner, member, agent acting as a qualifier, or any person occupying a similar status,
             609      performing similar functions, or directly or indirectly controlling the applicant has served in any
             610      similar capacity with any person or entity which has had a previous license, which was issued
             611      under this chapter, suspended or revoked within one year prior to the date of the applicant's
             612      application; or
             613          (iii) (A) the applicant is an individual or sole proprietorship; and
             614          (B) any owner or agent acting as a qualifier has served in any capacity listed in Subsection
             615      (9)(a)(ii)(B) in any entity which has had a previous license, which was issued under this chapter,
             616      suspended or revoked within one year prior to the date of the applicant's application.


             617          (b) An application for licensure under this chapter shall be reviewed by the appropriate
             618      licensing board prior to approval if:
             619          (i) the applicant has had a previous license, which was issued under this chapter,
             620      suspended or revoked more than one year prior to the date of the applicant's application;
             621          (ii) (A) the applicant is a partnership, corporation, or limited liability company; and
             622          (B) any corporate officer, director, shareholder holding 25% or more of the stock in the
             623      applicant, partner, member, agent acting as a qualifier, or any person occupying a similar status,
             624      performing similar functions, or directly or indirectly controlling the applicant has served in any
             625      similar capacity with any person or entity which has had a previous license, which was issued
             626      under this chapter, suspended or revoked more than one year prior to the date of the applicant's
             627      application; or
             628          (iii) (A) the applicant is an individual or sole proprietorship; and
             629          (B) any owner or agent acting as a qualifier has served in any capacity listed in Subsection
             630      (9)(b)(ii)(B) in any entity which has had a previous license, which was issued under this chapter,
             631      suspended or revoked more than one year prior to the date of the applicant's application.
             632          Section 10. Section 58-55-303 is amended to read:
             633           58-55-303. Term of license -- Expiration -- Renewal.
             634          (1) Each license issued under this chapter shall be issued in accordance with a two-year
             635      renewal cycle established by rule. The division may by rule extend or shorten a renewal period
             636      by as much as one year to stagger the renewal cycle it administers.
             637          (2) At the time of renewal, the licensee shall show satisfactory evidence of continuing
             638      financial responsibility as required under Section 58-55-306 .
             639          (3) Each license automatically expires on the expiration date shown on the license unless
             640      the licensee renews the license in accordance with Section 58-1-308 .
             641          (4) The requirements of Subsection 58-55-302 (9) shall also apply to applicants seeking
             642      to renew or reinstate a license.
             643          (5) In addition to any other requirements imposed by law, if a license has been suspended
             644      or revoked for any reason, the applicant must pay in full all fines imposed by the division, resolve
             645      any outstanding citations or disciplinary actions with the division, satisfy any Section 58-55-503
             646      judgment and sentence or nontrial resolution, complete a new financial responsibility review as
             647      required under Section 58-55-306 , using only titled assets, and pay in full any reimbursement


             648      amount as provided in Title 38, Chapter 11, Residence Lien Restriction and Lien Recovery Fund
             649      Act.
             650          Section 11. Section 58-55-501 is amended to read:
             651           58-55-501. Unlawful conduct.
             652          Unlawful conduct includes:
             653          (1) engaging in a construction trade, acting as a contractor, an alarm business or company,
             654      or an alarm company agent, or representing oneself to be engaged in a construction trade or to be
             655      acting as a contractor in a construction trade requiring licensure, unless the person doing any of
             656      these is appropriately licensed or exempted from licensure under this chapter;
             657          (2) acting in a construction trade, as an alarm business or company, or as an alarm
             658      company agent beyond the scope of the license held;
             659          (3) hiring or employing in any manner an unlicensed person, other than an employee for
             660      wages who is not required to be licensed under this chapter, to engage in a construction trade for
             661      which licensure is required or to act as a contractor or subcontractor in a construction trade
             662      requiring licensure;
             663          (4) applying for or obtaining a building permit either for oneself or another when not
             664      licensed or exempted from licensure as a contractor under this chapter;
             665          (5) issuing a building permit to any person for whom there is no evidence of a current
             666      license or exemption from licensure as a contractor under this chapter;
             667          (6) applying for or obtaining a building permit for the benefit of or on behalf of any other
             668      person who is required to be licensed under this chapter but who is not licensed or is otherwise not
             669      entitled to obtain or receive the benefit of the building permit;
             670          (7) failing to obtain a building permit when required by law or rule;
             671          (8) submitting a bid for any work for which a license is required under this chapter by a
             672      person not licensed or exempted from licensure as a contractor under this chapter;
             673          (9) willfully or deliberately misrepresenting or omitting a material fact in connection with
             674      an application to obtain or renew a license under this chapter;
             675          (10) allowing one's license to be used by another except as provided by statute or rule;
             676          (11) doing business under a name other than the name appearing on the license, except as
             677      permitted by statute or rule;
             678          (12) if licensed as a specialty contractor in the electrical trade or plumbing trade,


             679      journeyman plumber, residential journeyman plumber, journeyman electrician, master electrician,
             680      or residential electrician, failing to directly supervise an apprentice under one's supervision or
             681      exceeding the number of apprentices one is allowed to have under his supervision;
             682          (13) if licensed as a contractor or representing oneself to be a contractor, receiving any
             683      funds in payment for a specific project from an owner or any other person, which funds are to pay
             684      for work performed or materials and services furnished for that specific project, and after receiving
             685      the funds to exercise unauthorized control over the funds by failing to pay the full amounts due and
             686      payable to persons who performed work or furnished materials or services within a reasonable
             687      period of time;
             688          (14) employing as an alarm company an unlicensed individual as an alarm company agent,
             689      except as permitted under the exemption from licensure provisions under Section 58-1-307 ;
             690          (15) if licensed as an alarm company or alarm company agent, filing with the division
             691      fingerprint cards for an applicant which are not those of the applicant, or are in any other way false
             692      or fraudulent and intended to mislead the division in its consideration of the applicant for
             693      licensure;
             694          (16) if licensed under this chapter, willfully or deliberately disregarding or violating:
             695          (a) the building or construction laws of this state or any political subdivision;
             696          (b) the safety and labor laws applicable to a project;
             697          (c) any provision of the health laws applicable to a project;
             698          (d) the workers' compensation insurance laws of the state applicable to a project;
             699          (e) the laws governing withholdings for employee state and federal income taxes,
             700      unemployment taxes, FICA, or other required withholdings; or
             701          (f) reporting, notification, and filing laws of this state or the federal government;
             702          (17) aiding or abetting any person in evading the provisions of this chapter or rules
             703      established under the authority of the division to govern this chapter; [or]
             704          (18) engaging in the construction trade or as a contractor for the construction of residences
             705      of up to two units when not currently registered or exempt from registration as a qualified
             706      beneficiary under Title 38, Chapter 11, Residence Lien Restriction and Lien Recovery Fund Act[.];
             707      or
             708          (19) failing, as an original contractor, as defined in Section 38-11-102 , to include in a
             709      written contract the notification required in Section 38-11-108 .


             710          Section 12. Section 58-55-502 is amended to read:
             711           58-55-502. Unprofessional conduct.
             712          Unprofessional conduct includes:
             713          (1) failing to establish, maintain, or demonstrate financial responsibility while licensed as
             714      a contractor under this chapter;
             715          (2) disregarding or violating through gross negligence or a pattern of negligence:
             716          (a) the building or construction laws of this state or any political subdivision;
             717          (b) the safety and labor laws applicable to a project;
             718          (c) any provision of the health laws applicable to a project;
             719          (d) the workers' compensation insurance laws of this state applicable to a project;
             720          (e) the laws governing withholdings for employee state and federal income taxes,
             721      unemployment taxes, FICA, or other required withholdings; or
             722          (f) any reporting, notification, and filing laws of this state or the federal government;
             723          (3) any willful, fraudulent, or deceitful act by a licensee, caused by a licensee, or at a
             724      licensee's direction which causes material injury to another;
             725          (4) contract violations that pose a threat or potential threat to the public health, safety, and
             726      welfare including:
             727          (a) willful, deliberate, or grossly negligent departure from or disregard for plans or
             728      specifications, or abandonment or failure to complete a project without the consent of the owner
             729      or his duly authorized representative or the consent of any other person entitled to have the
             730      particular project completed in accordance with the plans, specifications, and contract terms;
             731          (b) failure to deposit funds to the benefit of an employee as required under any written
             732      contractual obligation the licensee has to the employee;
             733          (c) failure to maintain in full force and effect any health insurance benefit to an employee
             734      that was extended as a part of any written contractual obligation or representation by the licensee,
             735      unless the employee is given written notice of the licensee's intent to cancel or reduce the insurance
             736      benefit at least 45 days before the effective date of the cancellation or reduction;
             737          (d) failure to reimburse the Residence Lien Recovery Fund [within 90 days after any
             738      disbursement from the fund resulting from the licensee's failure to pay qualified beneficiaries as
             739      provided in Title 38, Chapter 11, Residence Lien Restriction and Lien Recovery Fund Act] as
             740      required by Section 38-11-207 ;


             741          (e) failure to provide, when applicable, the information required by Section 38-11-108 ; and
             742          (f) willfully or deliberately misrepresenting or omitting a material fact in connection with
             743      an application to claim recovery from the Residence Lien Recovery Fund under Section 38-11-204 ;
             744          (5) failing as an alarm company to notify the division of the cessation of performance of
             745      its qualifying agent, or failing to replace its qualifying agent as required under Section 58-55-304 ;
             746          (6) failing as an alarm company agent to carry or display a copy of the licensee's license
             747      as required under Section 58-55-311 ; or
             748          (7) failing to comply with operating standards established by rule in accordance with
             749      Section 58-55-308 .
             750          Section 13. Section 58-55-503 is amended to read:
             751           58-55-503. Penalty for unlawful conduct -- Citations.
             752          (1) Any person who violates Subsections 58-55-501 (1), (2), (3), (9), (10), (12), or (17),
             753      or who fails to comply with a citation issued under this section after it is final, is guilty of a class
             754      A misdemeanor. Any person who violates the provisions of Subsection 58-55-501 (8) may not be
             755      awarded and may not accept a contract for the performance of the work.
             756          (2) Any person who violates the provisions of Subsection 58-55-501 (13) is guilty of an
             757      infraction unless the violator did so with the intent to deprive the person to whom money is to be
             758      paid of the money received, in which case the violator is guilty of theft, as classified in Section
             759      76-6-412 .
             760          (3) Grounds for immediate suspension of the licensee's license by the division and the
             761      board include the issuance of a citation for violation of Section 58-55-501 or the failure by a
             762      licensee to make application to, report to, or notify the division with respect to any matter for
             763      which application, notification, or reporting is required under this chapter or rules adopted under
             764      this chapter, including applying to the division for a new license to engage in a new specialty
             765      classification or to do business under a new form of organization or business structure, filing with
             766      the division current financial statements, notifying the division concerning loss of insurance
             767      coverage, or change in qualifier.
             768          (4) (a) If upon inspection or investigation, the division concludes that a person has violated
             769      the provisions of Subsections 58-55-501 (1), (2), (3), (9), (10), (12), (14), (19), or any rule or order
             770      issued with respect to these subsections, and that disciplinary action is appropriate, the director or
             771      his designee from within the division for each alternative respectively, shall, promptly issue a


             772      citation to the person according to this chapter and any pertinent rules, attempt to negotiate a
             773      stipulated settlement, or notify the person to appear before an adjudicative proceeding conducted
             774      under Title 63, Chapter 46b, Administrative Procedures Act.
             775          (i) Any person who is in violation of the provisions of Subsection 58-55-501 (1), (2), (3),
             776      (9), (10), (12), [or] (14), or (19), as evidenced by an uncontested citation, a stipulated settlement,
             777      or by a finding of violation in an adjudicative proceeding, may be assessed a fine pursuant to this
             778      Subsection (4) and may, in addition to or in lieu of, be ordered to cease and desist from violating
             779      Subsection 58-55-501 (1), (2), (3), (9), (10), (12), [or] (14), or (19).
             780          (ii) Except for a cease and desist order, the licensure sanctions cited in Section 58-55-401
             781      may not be assessed through a citation.
             782          (b) Each citation shall be in writing and describe with particularity the nature of the
             783      violation, including a reference to the provision of the chapter, rule, or order alleged to have been
             784      violated. The citation shall clearly state that the recipient must notify the division in writing within
             785      20 calendar days of service of the citation if the recipient wishes to contest the citation at a hearing
             786      conducted under Title 63, Chapter 46b, Administrative Procedures Act. The citation shall clearly
             787      explain the consequences of failure to timely contest the citation or to make payment of any fines
             788      assessed by the citation within the time specified in the citation.
             789          (c) Each citation issued under this section, or a copy of each citation, may be served upon
             790      any person upon whom a summons may be served in accordance with the Utah Rules of Civil
             791      Procedure and may be made personally or upon his agent by a division investigator or by any
             792      person specially designated by the director or by mail.
             793          (d) If within 20 calendar days from the service of a citation, the person to whom the
             794      citation was issued fails to request a hearing to contest the citation, the citation becomes the final
             795      order of the division and is not subject to further agency review. The period to contest a citation
             796      may be extended by the division for cause.
             797          (e) The division may refuse to issue or renew, suspend, revoke, or place on probation the
             798      license of a licensee who fails to comply with a citation after it becomes final.
             799          (f) The failure of an applicant for licensure to comply with a citation after it becomes final
             800      is a ground for denial of license.
             801          (g) No citation may be issued under this section after the expiration of six months
             802      following the occurrence of any violation.


             803          (h) Fines shall be assessed by the director or his designee according to the following:
             804          (i) for a first offense handled pursuant to Subsection (4)(a), a fine of up to $1,000;
             805          (ii) for a second offense handled pursuant to Subsection (4)(a), a fine of up to $2,000; and
             806          (iii) for any subsequent offense handled pursuant to Subsection (4)(a), a fine of up to
             807      $2,000 for each day of continued offense.
             808          (i) (i) For purposes of issuing a final order under this section and assessing a fine under
             809      Subsection (4)(i), an offense constitutes a second or subsequent offense if:
             810          (A) the division previously issued a final order determining that a person committed a first
             811      or second offense in violation of Subsection 58-55-501 (1), (2), (3), (9), (10), (12), [or] (14), or
             812      (19); or
             813          (B) (I) the division initiated an action for a first or second offense;
             814          (II) no final order has been issued by the division in the action initiated under Subsection
             815      (4) (i)(i)(B)(I);
             816          (III) the division determines during an investigation that occurred after the initiation of the
             817      action under Subsection (4) (i)(i)(B)(I) that the person committed a second or subsequent violation
             818      of the provisions of Subsection 58-55-501 (1), (2), (3), (9), (10), (12), [or] (14), or (19); and
             819          (IV) after determining that the person committed a second or subsequent offense under
             820      Subsection (4) (i)(i)(B)(III), the division issues a final order on the action initiated under
             821      Subsection (4) (i)(i)(B)(I).
             822          (ii) In issuing a final order for a second or subsequent offense under Subsection (4) (i)(i),
             823      the division shall comply with the requirements of this section.
             824          (5) Any penalty imposed by the director under Subsection (4) (h) shall be deposited into
             825      the Commerce Service Fund. Any penalty which is not paid may be collected by the director by
             826      either referring the matter to a collection agency or bringing an action in the district court of the
             827      county in which the person against whom the penalty is imposed resides or in the county where
             828      the office of the director is located. Any county attorney or the attorney general of the state is to
             829      provide legal assistance and advice to the director in any action to collect the penalty. In any
             830      action brought to enforce the provisions of this section, reasonable attorney's fees and costs shall
             831      be awarded.
             832          Section 14. Section 58-56-19 is enacted to read:
             833          58-56-19. Residential building permit fees.


             834          (1) Each compliance agency shall assess a residential building permit fee not to exceed $5,
             835      determined by the division under Section 63-38-3.2 , on each building permit issued by that
             836      compliance agency for work to be performed on a residence, as defined in Section 38-11-102 ,
             837      where the value of the work to be performed exceeds $500.
             838          (2) Each compliance agency shall collect the fee assessed in Subsection (1) and transmit
             839      the amount collected to the division to be deposited in the Residential Lien Recovery Fund created
             840      in Section 38-11-201 .




Legislative Review Note
    as of 1-31-01 12:38 PM


A limited legal review of this legislation raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel


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