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S.B. 193

             1     

RESIDENTIAL LIEN RECOVERY FUND

             2     
2000 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Sponsor: Scott N. Howell

             5      AN ACT RELATING TO THE RESIDENTIAL LIEN RECOVERY FUND; AMENDING THE
             6      MEMBERSHIP OF THE ADVISORY BOARD; LIMITING THE AMOUNT OF ATTORNEYS'
             7      FEES THAT MAY BE RECOVERED FROM THE FUND; AMENDING THE CAPS ON
             8      RECOVERY FROM THE FUND; ELIMINATING THE NOTICE OF COMMENCEMENT
             9      REQUIREMENT; PROVIDING FOR SUSPENSION OF A LICENSE; REQUIRING THE
             10      INCLUSION OF INSTRUCTIONS AND A FORM AFFIDAVIT AND MOTION WHEN
             11      SERVING A COMPLAINT ON A HOMEOWNER; ADDING FACTORY BUILT HOUSING
             12      TO THE SCOPE OF THE FUND; ASSESSING A FEE ON RESIDENTIAL BUILDING
             13      PERMITS; AND MAKING TECHNICAL CHANGES.
             14      This act affects sections of Utah Code Annotated 1953 as follows:
             15      AMENDS:
             16          31A-23-216, as last amended by Chapter 232, Laws of Utah 1997
             17          38-1-11, as last amended by Chapter 172, Laws of Utah 1995
             18          38-11-102, as last amended by Chapter 193, Laws of Utah 1999
             19          38-11-104, as last amended by Chapter 172, Laws of Utah 1995
             20          38-11-107, as last amended by Chapter 49, Laws of Utah 1998
             21          38-11-202, as last amended by Chapter 193, Laws of Utah 1999
             22          38-11-203, as last amended by Chapter 193, Laws of Utah 1999
             23          38-11-204, as last amended by Chapter 193, Laws of Utah 1999
             24          38-11-207, as enacted by Chapter 308, Laws of Utah 1994
             25          38-11-301, as last amended by Chapter 146, Laws of Utah 1996
             26          58-55-302, as last amended by Chapter 375, Laws of Utah 1997
             27          58-55-303, as renumbered and amended by Chapter 181, Laws of Utah 1994


             28          58-55-501, as enacted by Chapter 181, Laws of Utah 1994
             29          58-55-502, as last amended by Chapter 172, Laws of Utah 1995
             30          58-55-503, as last amended by Chapter 10, Laws of Utah 1997
             31      ENACTS:
             32          58-56-19, Utah Code Annotated 1953
             33      Be it enacted by the Legislature of the state of Utah:
             34          Section 1. Section 31A-23-216 is amended to read:
             35           31A-23-216. Termination of license.
             36          (1) A license issued under this chapter remains in force until:
             37          (a) revoked, suspended, or limited under Subsection (2);
             38          (b) lapsed under Subsection (3);
             39          (c) surrendered to and accepted by the commissioner; or
             40          (d) the licensee dies or is adjudicated incompetent as defined under Title 75, Chapter 5,
             41      Part 3, Guardians of Incapacitated Persons or Part 4, Protection of Property of Persons Under
             42      Disability and Minors.
             43          (2) (a) After an adjudicative proceeding under Title 63, Chapter 46b, Administrative
             44      Procedures Act, the commissioner may revoke, suspend, or limit in whole or in part the license of
             45      any agent, broker, surplus lines broker, or consultant who is found:
             46          (i) to be unqualified;
             47          (ii) to have violated an insurance statute, valid rule under Subsection 31A-2-201 (3), or a
             48      valid order under Subsection 31A-2-201 (4); [or]
             49          (iii) if the licensee's methods and practices in the conduct of business endanger the
             50      legitimate interests of customers and the public[.]; or
             51          (iv) to have violated Section 38-11-208 .
             52          (b) Every order suspending a license issued under this chapter shall specify the period for
             53      which the suspension is effective, but in no event may the period exceed 12 months.
             54          (3) Any license issued under this chapter shall lapse if the licensee fails to pay when due
             55      a fee under Section 31A-3-103 . The commissioner shall by rule prescribe the license renewal and
             56      reinstatement procedures, in accordance with Title 63, Chapter 46a, Utah Administrative
             57      Rulemaking Act.
             58          (4) A licensee under this chapter whose license is suspended, revoked, or lapsed, but who


             59      continues to act as a licensee, is subject to the penalties for acting as a licensee without a license.
             60          (5) Any person licensed in this state shall immediately report to the commissioner:
             61          (a) a suspension or revocation of that person's license in any other state, District of
             62      Columbia, or territory of the United States;
             63          (b) the imposition of a disciplinary sanction imposed on that person by any other state,
             64      District of Columbia, or territory of the United States; and
             65          (c) a judgment or injunction entered against that person on the basis of conduct involving
             66      fraud, deceit, misrepresentation, or violation of an insurance law or rule.
             67          (6) An order revoking a license under Subsection (2) may specify a time, not to exceed five
             68      years, within which the former licensee may not apply for a new license. If no time is specified,
             69      the former licensee may not apply for a new license for five years without express approval by the
             70      commissioner.
             71          (7) Any person whose license is suspended or revoked under Subsection (2) shall, when
             72      the suspension ends or a new license is issued, pay all fees that would have been payable if the
             73      license had not been suspended or revoked, unless the commissioner by order waives the payment
             74      of the interim fees. If a new license is issued more than three years after the revocation of a similar
             75      license, this Subsection (7) applies only to the fees that would have accrued during the three years
             76      immediately following the revocation.
             77          (8) The division shall promptly withhold, suspend, restrict, or reinstate the use of a license
             78      issued under this part if so ordered by a court.
             79          Section 2. Section 38-1-11 is amended to read:
             80           38-1-11. Enforcement -- Time for -- Lis pendens -- Action for debt not affected --
             81      Instructions and form affidavit and motion.
             82          (1) A lien claimant shall file an action to enforce the lien filed under this chapter within:
             83          (a) [twelve] 12 months from the date of final completion of the original contract not
             84      involving a residence as defined in Section 38-11-102 ; or
             85          (b) 180 days from the date the lien claimant last performed labor and services or last
             86      furnished equipment or material for a residence, as defined in Section 38-11-102 .
             87          (2) (a) Within the time period provided for filing in Subsection (1) the lien claimant shall
             88      file for record with the county recorder of each county in which the lien is recorded a notice of the
             89      pendency of the action, in the manner provided in actions affecting the title or right to possession


             90      of real property, or the lien shall be void, except as to persons who have been made parties to the
             91      action and persons having actual knowledge of the commencement of the action.
             92          (b) The burden of proof shall be upon the lien claimant and those claiming under him to
             93      show actual knowledge.
             94          (3) This section may not be interpreted to impair or affect the right of any person to whom
             95      a debt may be due for any work done or materials furnished to maintain a personal action to
             96      recover the same.
             97          (4) (a) If a lien claimant files an action to enforce a lien filed under this chapter involving
             98      a residence, as defined in Section 38-11-102 , the lien claimant shall include with the service of the
             99      complaint on the owner of the residence:
             100          (i) instructions to the owner of the residence relating to the owner's rights under Title 38,
             101      Chapter 11, Residence Lien Restriction and Lien Recovery Fund Act; and
             102          (ii) a form affidavit and motion for summary judgment to enable the owner of the
             103      residence to specify the grounds upon which the owner may exercise available rights under Title
             104      38, Chapter 11, Residence Lien Restriction and Lien Recovery Fund Act.
             105          (b) The lien claimant may file a notice to submit for decision on the motion for summary
             106      judgment. The motion may be ruled upon after the service of the summons and complaint upon
             107      the nonpaying party, as defined in Section 38-11-102 , and the time for the nonpaying party to
             108      respond, as provided in the Utah Rules of Civil Procedure, has elapsed.
             109          (c) The instructions and form affidavit and motion required by Subsection (4)(a) shall meet
             110      the requirements established by rule by the Division of Occupational and Professional Licensing
             111      in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act.
             112          (d) If the nonpaying party, as defined by Section 38-11-102 , files for bankruptcy protection
             113      and there is a bankruptcy stay in effect, the motion for summary judgment and the action to enforce
             114      the lien shall be stayed until resolution of the related claim under Title 38, Chapter 11, Residence
             115      Lien Restriction and Lien Recovery Fund Act.
             116          Section 3. Section 38-11-102 is amended to read:
             117           38-11-102. Definitions.
             118          (1) "Board" means the Residence Lien Recovery Fund Advisory Board established under
             119      Section 38-11-104 .
             120          (2) "Construction on an owner-occupied residence" means designing, engineering,


             121      constructing, altering, remodeling, improving, repairing, or maintaining a new or existing
             122      residence.
             123          (3) "Department" means the Department of Commerce.
             124          (4) "Director" means the director of the Division of Occupational and Professional
             125      Licensing.
             126          (5) "Division" means the Division of Occupational and Professional Licensing.
             127          (6) "Encumbered fund balance" means the aggregate amount of all outstanding claims
             128      against the fund. The remainder of monies in the fund are unencumbered funds.
             129          (7) "Executive director" means the executive director of the Department of Commerce.
             130          (8) "Factory built housing" is as defined in Section 58-56-3 .
             131          (9) "Factory built housing retailer" means a person that sells factory built housing to
             132      consumers.
             133          [(8)] (10) "Fund" means the Residence Lien Recovery Fund established under Section
             134      38-11-201 .
             135          [(9)] (11) "Laborer" means a person who provides services at the site of the construction
             136      on an owner-occupied residence as an employee of an original contractor or other qualified
             137      beneficiary performing qualified services on the residence.
             138          [(10)] (12) "Licensee" means any holder of a license issued under Title 58, Chapters 3a,
             139      22, 53, and 55.
             140          [(11)] (13) "Nonpaying party" means the original contractor, subcontractor, or real estate
             141      developer who has failed to pay the qualified beneficiary making a claim against the fund.
             142          [(12)] (14) "Original contractor" means a person who contracts with the owner of real
             143      property or the owner's agent to provide services, labor, or material for the construction of an
             144      owner-occupied residence.
             145          [(13)] (15) "Owner" means a person who:
             146          (a) contracts with a person who is licensed as a contractor or is exempt from licensure
             147      under Title 58, Chapter 55, Utah Construction Trades Licensing Act, for the construction on an
             148      owner-occupied residence upon real property owned by that person;
             149          (b) contracts with a real estate developer to buy a residence upon completion of the
             150      construction on the owner-occupied residence; or
             151          (c) buys a residence from a real estate developer after completion of the construction on


             152      the owner-occupied residence.
             153          [(14)] (16) "Owner-occupied residence" means a residence that is, or after completion of
             154      the construction on the residence will be, occupied by the owner or the owner's tenant or lessee as
             155      a primary or secondary residence within 180 days from the date of the completion of the
             156      construction on the residence.
             157          [(15)] (17) "Qualified beneficiary" means a person who:
             158          (a) provides qualified services;
             159          (b) pays all necessary fees or assessment required under this chapter; and
             160          (c) registers with the division:
             161          (i) as a licensed contractor under Subsection 38-11-301 (1) or (2) if that person seeks
             162      recovery from the fund as a licensed contractor; or
             163          (ii) as a person providing qualified services other than as a licensed contractor under
             164      Subsection 38-11-301 (3) if the person seeks recovery from the fund in a capacity other than as a
             165      licensed contractor.
             166          [(16)] (18) (a) "Qualified services" means the following performed in construction on an
             167      owner-occupied residence:
             168          [(a)] (i) contractor services provided by a contractor licensed or exempt from licensure
             169      under Title 58, Chapter 55, Utah Construction Trades Licensing Act;
             170          [(b)] (ii) architectural services provided by an architect licensed under Title 58, Chapter
             171      3a;
             172          [(c)] (iii) engineering and land surveying services provided by a professional engineer or
             173      land surveyor licensed or exempt from licensure under Title 58, Chapter 22;
             174          [(d)] (iv) landscape architectural services by a landscape architect licensed or exempt from
             175      licensure under Title 58, Chapter 53;
             176          [(e)] (v) design and specification services of mechanical or other systems;
             177          [(f)] (vi) other services related to the design, drawing, surveying, specification, cost
             178      estimation, or other like professional services;
             179          [(g)] (vii) providing materials, supplies, components, or similar products;
             180          [(h)] (viii) renting equipment or materials; [and]
             181          [(i)] (ix) labor at the site of the construction on the owner-occupied residence[.]; and
             182          [(j)] (x) site preparation, set up, and installation of factory built housing.


             183          (b) "Qualified services" does not include the construction of factory built housing in the
             184      factory.
             185          [(17)] (19) "Real estate developer" means a person having an ownership interest in real
             186      property who contracts for the construction of a residence that is offered for sale to the public.
             187          [(18)] (20) "Residence" means an improvement to real property used or occupied, to be
             188      used or occupied as, or in conjunction with, a primary or secondary detached single-family
             189      dwelling or multifamily dwelling up to two units, including factory built housing.
             190          [(19)] (21) "Subsequent owner" means a person who purchases a residence from an owner
             191      within 180 days from the date of the completion of the construction on the residence.
             192          Section 4. Section 38-11-104 is amended to read:
             193           38-11-104. Board.
             194          (1) There is created the Residence Lien Recovery Fund Advisory Board consisting of:
             195          (a) [three] two individuals licensed as a contractor who are actively engaged in
             196      construction on owner-occupied residences;
             197          (b) [three] two individuals who are employed in responsible management positions with
             198      major suppliers of materials or equipment used in the construction on owner-occupied residences;
             199      and
             200          (c) [one member] three members from the general public who [has] have no interest in the
             201      construction on owner-occupied residences, or supply of materials used in the construction on
             202      owner-occupied residences.
             203          (2) The board shall be appointed and members shall serve their respective terms in
             204      accordance with Section 58-1-201 .
             205          (3) The duties and responsibilities of the board shall be to:
             206          (a) advise the division with respect to informal adjudication of claims for payment from
             207      the fund by the division;
             208          (b) act as the presiding officer, as defined by rule, in formal adjudicative proceedings held
             209      before the division with respect to claims made for payment from the fund;
             210          (c) advise the division with respect to:
             211          (i) the general operation of the fund;
             212          (ii) the amount and frequency of any assessment under this chapter;
             213          (iii) the amount of any fees required under this chapter;


             214          (iv) the availability and advisability of using funds for purchase of surety bonds to
             215      guarantee payment to qualified beneficiaries; and
             216          (v) the limitation on the fund balance under Section 38-11-206 ; and
             217          (d) review the administrative expenditures made by the division pursuant to Subsection
             218      38-11-201 (4) and report its findings regarding those expenditures to the executive director on or
             219      before the first Monday of December of each year.
             220          (4) The attorney general shall render legal assistance as requested by the board.
             221          Section 5. Section 38-11-107 is amended to read:
             222           38-11-107. Restrictions upon maintaining a lien against residence or owner's interest
             223      in the residence.
             224          (1) A person qualified to file a lien upon an owner-occupied residence and the real
             225      property associated with that residence under the provisions of Title 38, Chapter 1, Mechanics'
             226      Liens, who provides qualified services under an agreement effective on or after January 1, 1995,
             227      other than directly with the owner, shall be barred after January 1, 1995, from maintaining a lien
             228      upon that residence and real property or recovering a judgment in any civil action against the
             229      owner or the owner-occupied residence to recover monies owed for qualified services provided
             230      by that person if:
             231          (a) the conditions described in Subsections 38-11-204 (3)(a) and (3)(b) are met; or
             232          (b) (i) a subsequent owner purchases a residence from an owner;
             233          (ii) the subsequent owner who purchased the residence under Subsection (1)(b)(i) occupies
             234      the residence as a primary or secondary residence within 180 days from the date of transfer or the
             235      residence is occupied by the subsequent owner's tenant or lessee as a primary or secondary
             236      residence within 180 days from the date of transfer; and
             237          (iii) the owner from whom the subsequent owner purchased the residence met the
             238      conditions described in Subsections 38-11-204 (3)(a) and (3)(b).
             239          (2) If a residence is constructed under conditions that do not meet all of the provisions of
             240      Subsection (1), that residence and the real property associated with that residence as defined in
             241      Section 38-1-4 , shall be subject to any mechanics' lien as provided in Section 38-1-3 .
             242          (3) A lien claimant who files a mechanics' lien or foreclosure action upon an
             243      owner-occupied residence is not liable for costs and attorneys' fees under Sections 38-1-17 and
             244      38-1-18 or for any damages arising from a civil action related to the lien filing or foreclosure


             245      action if the lien claimant removes the lien within ten days from the date the owner establishes
             246      compliance, through written findings of fact from a court of competent jurisdiction or, in cases
             247      where a bankruptcy has been filed, from the director, with the requirements of Subsections
             248      38-11-204 (3)(a) and (3)(b).
             249          Section 6. Section 38-11-202 is amended to read:
             250           38-11-202. Payments to the fund.
             251          The Residence Lien Recovery Fund shall be supported solely from:
             252          (1) initial and special assessments collected by the division from licensed contractors
             253      registered as qualified beneficiaries in accordance with Subsections 38-11-301 (1) and (2) and
             254      Section 38-11-206 ;
             255          (2) initial and special assessments collected by the division from other qualified
             256      beneficiaries registering with the division in accordance with Subsection 38-11-301 (3) and Section
             257      38-11-206 ;
             258          (3) fees determined by the division under Section 63-38-3.2 collected from laborers under
             259      Subsection 38-11-204 [(7)](6) when the laborers obtain a recovery from the fund;
             260          (4) amounts collected by subrogation under Section 38-11-205 on behalf of the fund
             261      following a payment from the fund;
             262          (5) application fees determined by the division under Section 63-38-3.2 collected from
             263      qualified beneficiaries or laborers under Subsection 38-11-204 (1)(b) when qualified beneficiaries
             264      or laborers make a claim against the fund;
             265          (6) registration fees determined by the division under Section 63-38-3.2 collected from
             266      other qualified beneficiaries registering with the department in accordance with Subsection
             267      38-11-301 (3)(a)(iii);
             268          (7) reinstatement fees determined by the division under Section 63-38-3.2 collected from
             269      registrants in accordance with Subsection 38-11-302 (5)(b);
             270          (8) civil fines authorized under Subsection 38-11-205 (2) collected by the attorney general
             271      for failure to reimburse the fund; [and]
             272          (9) any interest earned by the fund[.]; and
             273          (10) residential building permit fees determined by the division under Section 63-38-3.2 ,
             274      collected pursuant to Section 58-56-19 .
             275          Section 7. Section 38-11-203 is amended to read:


             276           38-11-203. Disbursements from the fund -- Limitations.
             277          (1) A payment of any claim upon the fund by a qualified beneficiary shall be made only
             278      upon an order issued by the director finding that:
             279          (a) the claimant was a qualified beneficiary during the construction on a residence;
             280          (b) the claimant complied with the requirements of Section 38-11-204 ; and
             281          (c) there is adequate money in the fund to pay the amount ordered.
             282          (2) A payment of a claim upon the fund by a laborer shall be made only upon an order
             283      issued by the director finding that:
             284          (a) the laborer complied with the requirements of Subsection 38-11-204 [(6)](5); and
             285          (b) there is adequate money in the fund to pay the amount ordered.
             286          (3) (a) An order under this section may be issued only after the division has complied with
             287      the procedures established by rule under Section 38-11-105 .
             288          (b) The director shall order payment of the qualified services as established by evidence,
             289      or if the claimant has obtained a judgment, then in the amount awarded for qualified services in
             290      the judgment to the extent the qualified services are attributable to the owner-occupied residence
             291      at issue in the claim.
             292          (c) The director shall order payment of interest on all amounts claimed for qualified
             293      services at the rate of 12%, annual percentage rate, from the date payment was due to the date the
             294      claim is approved for payment except for delays attributable to the claimant.
             295          (d) The director shall order payment of costs in the amount stated in the judgment. If the
             296      judgment does not state a sum certain for costs, or if no judgment has been obtained, the director
             297      shall order payment of reasonable costs as supported by evidence. The claim application fee as
             298      established by the division pursuant to Subsection 38-11-204 (1)(b) is not a reimbursable cost.
             299          (e) The director shall order payment of [attorney's fees in the amount stated in a judgment.]
             300      reasonable attorney fees attributable to the owner-occupied residence at issue in the claim, to the
             301      extent documented according to the provisions of Rule 4-505, Utah Code of Judicial
             302      Administration, and subject to the following limitations:
             303          (i) if the payable amount of qualified services is $3,000 or less, not more than 33% of the
             304      value of the qualified services;
             305          (ii) if the payable amount of qualified services is greater than $3,000 and $10,000 or less,
             306      not more than 25% of the value of the qualified services; or


             307          (iii) if the payable amount of qualified services is greater than $10,000, not more than 20%
             308      of the value of the qualified services.
             309          (f) (i) The limits on attorney fees set forth in Subsection (3)(e) may be waived by the
             310      director if the director determines that manifest injustice would result from the application of the
             311      limits.
             312          (ii) The burden of establishing manifest injustice for purposes of Subsection (3)(f)(i) is on
             313      the claimant.
             314          (4) (a) Payments made from the fund may not exceed:
             315          (i) [$75,000] $125,000 per [residence] construction project to all qualified beneficiaries
             316      and laborers who have claim against the fund for that [residence] construction project; and
             317          (ii) [$500,000] $100,000 per qualified beneficiary or laborer for payments to the qualified
             318      beneficiary [over the qualified beneficiary's lifetime] during each calendar year.
             319          (b) If claims against the fund for a [residence] construction project exceed [$75,000, the
             320      $75,000 shall be awarded proportionately so that each qualified beneficiary and laborer awarded
             321      compensation from the fund for qualified services shall receive an identical percentage] $125,000,
             322      the claims of the qualified [beneficiary's or laborer's award] beneficiaries shall be paid in the order
             323      that the claims are filed with the division until the limit of $125,000 is reached.
             324          (5) Subject to the limitations of Subsection (4), if on the day the order is issued there are
             325      inadequate funds to pay the entire claim and the director determines that the claimant has otherwise
             326      met the requirements of Subsection (1) or (2), the director shall order additional payments once
             327      the fund meets the balance limitations of Section 38-11-206 .
             328          Section 8. Section 38-11-204 is amended to read:
             329           38-11-204. Claims against the fund -- Requirement to make a claim -- Qualifications
             330      to receive compensation.
             331          (1) To claim recovery from the fund a person shall:
             332          (a) meet the requirements of either Subsection (3) or [(6)] (5);
             333          (b) pay an application fee determined by the division under Section 63-38-3.2 ; and
             334          (c) file with the division a completed application on a form provided by the division
             335      accompanied by supporting documents establishing:
             336          (i) that the person meets the requirements of either Subsection (3) or [(6)] (5);
             337          (ii) that the person was a qualified beneficiary or laborer during the construction on the


             338      owner-occupied residence; and
             339          (iii) the basis for the claim.
             340          (2) To recover from the fund, the application required by Subsection (1) shall be filed no
             341      later than 120 days:
             342          (a) from the date the judgment required by Subsection (3)(c) is entered;
             343          (b) from the date the nonpaying party filed bankruptcy, if the claimant is precluded from
             344      obtaining a judgment or from satisfying the requirements of Subsection (3)(c) because the
             345      nonpaying party filed bankruptcy within 120 days after the entry of judgment; or
             346          (c) if a laborer, from the date the laborer completed the laborer's qualified services.
             347          (3) To recover from the fund, regardless of whether the residence is occupied by the
             348      owner, a subsequent owner, or the owner or subsequent owner's tenant or lessee, a qualified
             349      beneficiary shall establish that:
             350          (a) (i) the owner of the owner-occupied residence or the owner's agent entered into a
             351      written contract with an original contractor licensed or exempt from licensure under Title 58,
             352      Chapter 55, Utah Construction Trades Licensing Act, for the performance of qualified services,
             353      to obtain the performance of qualified services by others, or for the supervision of the performance
             354      by others of qualified services in construction on that residence; [or]
             355          (ii) the owner of the owner-occupied residence or the owner's agent entered into a written
             356      contract with a real estate developer for the purchase of an owner-occupied residence; or
             357          (iii) the owner of the owner-occupied residence or the owner's agent entered into a written
             358      contract with a factory built housing retailer for the purchase of an owner-occupied residence;
             359          (b) the owner has paid in full the original contractor, licensed or exempt from licensure
             360      under Title 58, Chapter 55, Utah Construction Trades Licensing Act, real estate developer, or
             361      [both, ] factory built housing retailer under Subsection (3)(a)[(i) or (ii)] with whom the owner has
             362      a written contract in accordance with the written contract and any amendments to the contract, and:
             363          (i) the original contractor [or real estate developer], licensed or exempt from licensure
             364      under Title 58, Chapter 55, Utah Construction Trades Licensing Act, the real estate developer, or
             365      the factory built housing retailer subsequently failed to pay a qualified beneficiary who is entitled
             366      to payment under an agreement with that original contractor or real estate developer licensed or
             367      exempt from licensure under Title 58, Chapter 55, Utah Construction Trades Licensing Act, for
             368      services performed or materials supplied by the qualified beneficiary;


             369          (ii) a subcontractor who contracts with the original contractor [or real estate developer],
             370      licensed or exempt from licensure under Title 58, Chapter 55, Utah Construction Trades Licensing
             371      Act, the real estate developer, or the factory built housing retailer failed to pay a qualified
             372      beneficiary who is entitled to payment under an agreement with that subcontractor or supplier; or
             373          (iii) a subcontractor who contracts with a subcontractor or supplier failed to pay a qualified
             374      beneficiary who is entitled to payment under an agreement with that subcontractor or supplier;
             375          (c) (i) the qualified beneficiary filed[: (A)] an action against the nonpaying party to
             376      recover monies owed him within 180 days from the date the qualified beneficiary last provided
             377      qualified services, unless precluded from doing so by the nonpaying party's bankruptcy filing
             378      within the 180 days after completion of services; [and]
             379          [(B) a notice of commencement of action with the division within 30 days from the date
             380      the qualified beneficiary filed the civil action if a civil action was filed as required by Subsection
             381      (3)(c)(i)(A);]
             382          (ii) the qualified beneficiary has obtained a judgment against the nonpaying party who
             383      failed to pay the qualified beneficiary under an agreement to provide qualified services for
             384      construction of that owner-occupied residence;
             385          (iii) (A) the qualified beneficiary has obtained from a court of competent jurisdiction the
             386      issuance of an order requiring the judgment debtor, or if a corporation any officer of the
             387      corporation, to appear before the court at a specified time and place to answer concerning the
             388      debtor's or corporation's property, has received return of service of the order from a person
             389      qualified to serve documents under the Utah Rules of Civil Procedure, Rule 4(b), and has made
             390      reasonable efforts to obtain asset information from the supplemental proceedings; and
             391          (B) if assets subject to execution are discovered as a result of the order required under
             392      Subsection (3)(c)(iii)(A) or for any other reason, to obtain the issuance of a writ of execution from
             393      a court of competent jurisdiction; or
             394          (iv) the claimant timely filed a proof of claim where permitted in the bankruptcy action,
             395      if the nonpaying party has filed bankruptcy; and
             396          (d) the qualified beneficiary is not entitled to reimbursement from any other person.
             397          (4) The requirements of Subsection [ 38-11-204 ](3)(c) need not be met if the qualified
             398      beneficiary has been precluded from obtaining a judgment against the nonpaying party or from
             399      satisfying the requirements of Subsection [ 38-11-204 ](3)(c) because the nonpaying party filed


             400      bankruptcy.
             401          [(5) If a qualified beneficiary fails to file the notice with the division required under
             402      Subsection (3)(c)(i)(B), the claim of the qualified beneficiary shall be paid:]
             403          [(a) if otherwise qualified under this chapter;]
             404          [(b) to the extent that the limit of Subsection 38-11-203 (4)(a)(i) has not been reached by
             405      payments from the fund to qualified beneficiaries who have complied with the notice requirements
             406      of Subsection (3)(c)(i)(B); and]
             407          [(c) in the order that the claims are filed by persons who fail to comply with Subsection
             408      (3)(c)(i)(B), not to exceed the limit of Subsection 38-11-203 (4)(a)(i).]
             409          [(6)] (5) To recover from the fund a laborer shall:
             410          (a) establish that the laborer has not been paid wages due for the work performed at the
             411      site of a construction on an owner-occupied residence; and
             412          (b) provide any supporting documents or information required by rule by the division.
             413          [(7)] (6) A fee determined by the division under Section 63-38-3.2 shall be deducted from
             414      any recovery from the fund received by a laborer.
             415          Section 9. Section 38-11-207 is amended to read:
             416           38-11-207. Reimbursement to the fund.
             417          (1) If the director disburses monies from the fund as a result of a person licensed under
             418      Title 58, Chapter 55, Utah Construction Trades Licensing Act, or a qualified beneficiary failing
             419      to pay qualified beneficiaries[, the licensee or qualified beneficiary shall reimburse the fund within
             420      90 days from]:
             421          (a) the division shall issue a notice of the disbursement from the fund[.] and the obligation
             422      to reimburse the fund to the licensee or qualified beneficiary; and
             423          (b) the licensee or qualified beneficiary shall reimburse the fund within 20 days from the
             424      issuance of the notice required by Subsection (1)(a).
             425          (2) The notice required by Subsection (1)(a) shall meet the requirements established by
             426      rule by the division in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking
             427      Act.
             428          (3) (a) A finding of fact in an administrative action that a payment of any amount has been
             429      made from the fund in settlement of a claim arising from the act, representation, transaction, or
             430      conduct of a person licensed under Title 58, Chapter 55, Utah Construction Trades Licensing Act,


             431      in violation of Section 58-55-603 shall result in the immediate suspension of that person's license
             432      without further compliance with Title 63, Chapter 46b, Administrative Procedures Act.
             433          (b) The finding of fact for Subsection (3)(a) may be made in the same administrative
             434      action as the related claim and may be included in the findings required by Section 38-11-203 .
             435          (c) The suspension required by Subsection (3)(a) shall remain in effect until the person
             436      applies for reinstatement of the license in accordance with Sections 58-1-308 and 58-55-303 .
             437          Section 10. Section 38-11-301 is amended to read:
             438           38-11-301. Registration as a qualified beneficiary -- Initial regular assessment --
             439      Affidavit.
             440          (1) A person licensed as of July 1, 1995, as a contractor under the provisions of Title 58,
             441      Chapter 55, Utah Construction Trades Licensing Act, in license classifications that regularly
             442      engage in providing qualified services shall be automatically registered as a qualified beneficiary
             443      upon payment of the initial assessment.
             444          (2) A person applying for licensure as a contractor after July 1, 1995, in license
             445      classifications that regularly engage in providing qualified services shall be automatically
             446      registered as a qualified beneficiary upon issuance of a license and payment of the initial
             447      assessment.
             448          (3) (a) After July 1, 1995, any person providing qualified services as other than a
             449      contractor as provided in Subsection (1) or any person exempt from licensure under the provisions
             450      of Title 58, Chapter 55, Utah Construction Trades Licensing Act, may register as a qualified
             451      beneficiary by:
             452          (i) submitting an application in a form prescribed by the division;
             453          (ii) demonstrating registration with the Division of Corporations and Commercial Code
             454      as required by state law;
             455          (iii) paying a registration fee determined by the division under Section 63-38-3.2 ; and
             456          (iv) paying the initial assessment established under Subsection (4), and any special
             457      assessment determined by the division under Subsection 38-11-206 (1).
             458          (b) A person [other than a contractor] who does not register under Subsection (3)(a) shall
             459      be prohibited from recovering under the fund as a qualified beneficiary for work performed as
             460      qualified services while not registered with the fund.
             461          (4) (a) An applicant shall pay an initial assessment determined by the division under


             462      Section 63-38-3.2 .
             463          (b) The initial assessment to qualified registrants under Subsection (1) shall be made not
             464      later than July 15, 1995, and shall be paid no later than November 1, 1995.
             465          (c) The initial assessment to qualified registrants under Subsections (2) and (3) shall be
             466      paid at the time of application for license or registration, however, beginning on May 1, 1996, only
             467      one initial assessment or special assessments thereafter shall be required for persons having
             468      multiple licenses under this section.
             469          (5) A person shall be considered to have been registered as a qualified beneficiary on
             470      January 1, 1995, for purposes of meeting the requirements of Subsection 38-11-204 (1)(c)(ii) if the
             471      person:
             472          (a) (i) is licensed on or before July 1, 1995, as a contractor under the provisions of Title
             473      58, Chapter 55, Utah Construction Trades Licensing Act, in license classifications that regularly
             474      engage in providing qualified services; or
             475          (ii) provides qualified services after July 1, 1995, as other than a contractor as provided
             476      in Subsection (5)(a)(i) or is exempt from licensure under the provisions of Title 58, Chapter 55,
             477      Utah Construction Trades Licensing Act; and
             478          (b) registers as a qualified beneficiary under Subsection (1) or (3) on or before November
             479      1, 1995.
             480          Section 11. Section 58-55-302 is amended to read:
             481           58-55-302. Qualifications for licensure.
             482          (1) Each applicant for a license under this chapter shall:
             483          (a) submit an application prescribed by the division;
             484          (b) pay a fee as determined by the department under Section 63-38-3.2 ;
             485          (c) (i) pass an examination approved by the division in collaboration with the board, except
             486      for the classifications of apprentice plumber, residential apprentice plumber, and apprentice
             487      electrician for whom no examination is required; or
             488          (ii) the individual qualifier must pass the required examination if the applicant is a
             489      business entity;
             490          (d) if an apprentice, identify the proposed supervisor of the apprenticeship;
             491          (e) if an applicant for a contractor's license:
             492          (i) produce satisfactory evidence of financial responsibility, except for construction trades


             493      instructor for whom evidence of financial responsibility is not required;
             494          (ii) produce satisfactory evidence of knowledge and experience in the construction industry
             495      and knowledge of the principles of the conduct of business as a contractor, reasonably necessary
             496      for the protection of the public health, safety, and welfare; and
             497          (iii) be a licensed master electrician if an applicant for an electrical contractor's license or
             498      a licensed master residential electrician if an applicant for a residential electrical contractor's
             499      license; or
             500          (iv) be a journeyman plumber or residential journeyman plumber if an applicant for a
             501      plumbing contractor's license; and
             502          (f) if an applicant for a construction trades instructor license, satisfy any additional
             503      requirements established by rule.
             504          (2) After approval of an applicant for a contractor's license by the board and the division,
             505      the applicant shall file the following with the division before the division issues the license:
             506          (a) proof of workers' compensation insurance which covers employees of the applicant in
             507      accordance with applicable Utah law;
             508          (b) proof of public liability insurance in coverage amounts and form established by rule
             509      except for a construction trades instructor for whom public liability insurance is not required; and
             510          (c) proof of registration as required by applicable law with the:
             511          (i) Utah Department of Commerce;
             512          (ii) Division of Corporations and Commercial Code;
             513          (iii) Division of Workforce Information and Payment Services in the Department of
             514      Workforce Services, for purposes of Title 35A, Chapter 4, Employment Security Act;
             515          (iv) State Tax Commission; and
             516          (v) Internal Revenue Service.
             517          (3) In addition to the general requirements for each applicant in Subsection (1), applicants
             518      shall comply with the following requirements to be licensed in the following classifications:
             519          (a) A journeyman plumber applicant shall produce:
             520          (i) satisfactory evidence of successful completion of the equivalent of at least four years
             521      of full-time training and instruction as a licensed apprentice plumber under supervision of a
             522      licensed journeyman plumber and in accordance with a planned program of training approved by
             523      the division;


             524          (ii) satisfactory evidence of at least eight years of full-time experience approved by the
             525      division in collaboration with the Plumbers Licensing Board; or
             526          (iii) satisfactory evidence of meeting the qualifications determined by the division and
             527      board to be equivalent to Subsection (3)(a)(i) or (a)(ii).
             528          (b) A residential journeyman plumber shall produce satisfactory evidence of completion
             529      of:
             530          (i) the equivalent of at least three years of full-time training and instruction as a licensed
             531      apprentice plumber under the supervision of a licensed residential journeyman plumber or licensed
             532      journeyman plumber in accordance with a planned program of training approved by the division;
             533          (ii) at least six years of full-time experience in a maintenance or repair trade involving
             534      substantial plumbing work; or
             535          (iii) satisfactory evidence of meeting the qualifications determined by the division and
             536      board to be equivalent to Subsection (3)(b)(i) or (b)(ii).
             537          (c) A master electrician applicant shall produce satisfactory evidence that he either:
             538          (i) is a graduate electrical engineer of an accredited college or university approved by the
             539      division and has one year of practical electrical experience as a licensed apprentice electrician;
             540          (ii) is a graduate of an electrical trade school, having received an associate of applied
             541      sciences degree following successful completion of a course of study approved by the division, and
             542      has two years of practical experience as a licensed journeyman electrician;
             543          (iii) is a graduate of an electrical trade school, having received a certificate of completion
             544      following successful completion of a course of study approved by the division, and has four years
             545      of practical experience as a journeyman electrician;
             546          (iv) has at least eight years of practical experience under the supervision of a licensed
             547      journeyman or master electrician; or
             548          (v) meets the qualifications determined by the division and board to be equivalent to these
             549      qualifications.
             550          (d) A master residential electrician applicant shall produce satisfactory evidence that he:
             551          (i) has at least two years of practical experience as a residential journeyman electrician;
             552      or
             553          (ii) meets the qualifications determined by the division and board to be equivalent to this
             554      practical experience.


             555          (e) A journeyman electrician applicant shall produce satisfactory evidence that he either:
             556          (i) has successfully completed at least four years of full-time training and instruction as
             557      a licensed apprentice electrician under the supervision of a master electrician or journeyman
             558      electrician and in accordance with a planned training program approved by the division;
             559          (ii) has six years of practical experience in wiring, installing, and repairing electrical
             560      apparatus and equipment for light, heat, and power under the supervision of a licensed master or
             561      journeyman electrician; or
             562          (iii) meets the qualifications determined by the division and board to be equivalent to these
             563      qualifications.
             564          (f) A residential journeyman electrician applicant shall produce satisfactory evidence that
             565      he:
             566          (i) has successfully completed two years of training in an electrical training program
             567      approved by the division;
             568          (ii) has four years of practical experience in wiring, installing, and repairing electrical
             569      apparatus and equipment for light, heat, and power under the supervision of a licensed master,
             570      journeyman, residential master, or residential journeyman electrician; or
             571          (iii) meets the qualifications determined by the division and board to be equivalent to
             572      Subsection (3)(f)(i) or (f)(ii).
             573          (g) The conduct of licensed apprentice electricians and their licensed supervisors shall be
             574      in accordance with the following:
             575          (i) A licensed apprentice electrician shall be under the immediate supervision of a licensed
             576      master, journeyman, residential master, or residential journeyman electrician. An apprentice in
             577      the fourth year of training may work without supervision for a period not to exceed eight hours in
             578      any 24-hour period.
             579          (ii) A licensed master, journeyman, residential master, or residential journeyman
             580      electrician may have under his immediate supervision on a residential project up to three licensed
             581      apprentice electricians.
             582          (iii) A licensed master or journeyman electrician may have under his immediate
             583      supervision on nonresidential projects only one licensed apprentice electrician.
             584          (4) (a) An application for licensure under this chapter shall be denied if:
             585          (i) the applicant has had a previous license, which was issued under this chapter,


             586      suspended or revoked within one year prior to the date of the applicant's application;
             587          (ii) (A) the applicant is a partnership, corporation, or limited liability company; and
             588          (B) any corporate officer, director, shareholder holding 25% or more of the stock in the
             589      applicant, partner, member, agent acting as a qualifier, or any person occupying a similar status,
             590      performing similar functions, or directly or indirectly controlling the applicant has served in any
             591      similar capacity with any person or entity which has had a previous license, which was issued
             592      under this chapter, suspended or revoked within one year prior to the date of the applicant's
             593      application; or
             594          (iii) (A) the applicant is an individual or sole proprietorship; and
             595          (B) any owner or agent acting as a qualifier has served in any capacity listed in Subsection
             596      (4)(a)(ii)(B) in any entity which has had a previous license, which was issued under this chapter,
             597      suspended or revoked within one year prior to the date of the applicant's application.
             598          (b) An application for licensure under this chapter shall be reviewed by the appropriate
             599      licensing board prior to approval if:
             600          (i) the applicant has had a previous license, which was issued under this chapter,
             601      suspended or revoked more than one year prior to the date of the applicant's application;
             602          (ii) (A) the applicant is a partnership, corporation, or limited liability company; and
             603          (B) any corporate officer, director, shareholder holding 25% or more of the stock in the
             604      applicant, partner, member, agent acting as a qualifier, or any person occupying a similar status,
             605      performing similar functions, or directly or indirectly controlling the applicant has served in any
             606      similar capacity with any person or entity which has had a previous license, which was issued
             607      under this chapter, suspended or revoked more than one year prior to the date of the applicant's
             608      application; or
             609          (iii) (A) the applicant is an individual or sole proprietorship; and
             610          (B) any owner or agent acting as a qualifier has served in any capacity listed in Subsection
             611      (4)(b)(ii)(B) in any entity which has had a previous license, which was issued under this chapter,
             612      suspended or revoked more than one year prior to the date of the applicant's application.
             613          Section 12. Section 58-55-303 is amended to read:
             614           58-55-303. Term of license -- Expiration -- Renewal.
             615          (1) Each license issued under this chapter shall be issued in accordance with a two-year
             616      renewal cycle established by rule. The division may by rule extend or shorten a renewal period


             617      by as much as one year to stagger the renewal cycle it administers.
             618          (2) At the time of renewal, the licensee shall show satisfactory evidence of continuing
             619      financial responsibility as required under Section 58-55-306 .
             620          (3) Each license automatically expires on the expiration date shown on the license unless
             621      the licensee renews the license in accordance with Section 58-1-308 .
             622          (4) The requirements of Section 58-55-302 (4) shall also apply to applicants seeking to
             623      renew or reinstate a license.
             624          (5) In addition to any other requirements imposed by law, if a license has been suspended
             625      or revoked for any reason, the applicant must pay in full all fines imposed by the division,
             626      completely resolve any outstanding citations or disciplinary actions, complete a new financial
             627      responsibility review as required under Section 58-55-306 , using only titled assets, and pay in full
             628      any reimbursement amount as provided in Title 38, Chapter 11, Residence Lien Restriction and
             629      Lien Recovery Fund Act.
             630          Section 13. Section 58-55-501 is amended to read:
             631           58-55-501. Unlawful conduct.
             632          Unlawful conduct includes:
             633          (1) engaging in a construction trade, acting as a contractor, or representing oneself to be
             634      engaged in a construction trade or to be acting as a contractor in a construction trade requiring
             635      licensure, unless the person doing any of these is appropriately licensed or exempted from
             636      licensure under this chapter;
             637          (2) acting in a construction trade beyond the scope of the license held;
             638          (3) hiring or employing in any manner an unlicensed person, other than an employee for
             639      wages who is not required to be licensed under this chapter, to engage in a construction trade for
             640      which licensure is required or to act as a contractor or subcontractor in a construction trade
             641      requiring licensure;
             642          (4) applying for or obtaining a building permit either for oneself or another when not
             643      licensed or exempted from licensure as a contractor under this chapter;
             644          (5) issuing a building permit to any person for whom there is no evidence of a current
             645      license or exemption from licensure as a contractor under this chapter;
             646          (6) applying for or obtaining a building permit for the benefit of or on behalf of any other
             647      person who is required to be licensed under this chapter but who is not licensed or is otherwise not


             648      entitled to obtain or receive the benefit of the building permit;
             649          (7) failing to obtain a building permit when required by law or rule;
             650          (8) submitting a bid for any work for which a license is required under this chapter by a
             651      person not licensed or exempted from licensure as a contractor under this chapter;
             652          (9) willfully or deliberately misrepresenting or omitting a material fact in connection with
             653      an application to obtain or renew a license under this chapter;
             654          (10) allowing one's license to be used by another except as provided by statute or rule;
             655          (11) doing business under a name other than the name appearing on the license, except as
             656      permitted by statute or rule;
             657          (12) exceeding one's monetary limit as a licensed contractor, as the limit is defined by
             658      statute or rule;
             659          (13) if licensed as a contractor, submitting a bid on a single project in an amount exceeding
             660      his monetary limit, unless he first files with the division a notice of intent to request an increase
             661      of the monetary limit in compliance with Subsection 58-55-309 (5);
             662          (14) if licensed as a journeyman plumber, residential journeyman plumber, journeyman
             663      electrician, master electrician, or residential electrician, failing to directly supervise an apprentice
             664      under one's supervision or exceeding the number of apprentices one is allowed to have under his
             665      supervision;
             666          (15) if licensed as a contractor or representing oneself to be a contractor, receiving any
             667      funds in payment for a specific project from an owner or any other person, which funds are to pay
             668      for work performed or materials and services furnished for that specific project, and after receiving
             669      the funds to exercise unauthorized control over the funds by failing to pay the full amounts due and
             670      payable to persons who performed work or furnished materials or services within a reasonable
             671      period of time;
             672          (16) if licensed under this chapter, willfully or deliberately disregarding or violating:
             673          (a) the building or construction laws of this state or any political subdivision;
             674          (b) the safety and labor laws applicable to a project;
             675          (c) any provision of the health laws applicable to a project;
             676          (d) the workers' compensation insurance laws of the state applicable to a project;
             677          (e) the laws governing withholdings for employee state and federal income taxes,
             678      unemployment taxes, FICA, or other required withholdings; or


             679          (f) reporting, notification, and filing laws of this state or the federal government;
             680          (17) aiding or abetting any person in evading the provisions of this chapter or rules
             681      established under the authority of the division to govern this chapter; [or]
             682          (18) engaging in the construction trade or as a contractor for the construction of residences
             683      of up to two units when not currently registered or exempt from registration as a qualified
             684      beneficiary under Title 38, Chapter 11, Residence Lien Restriction and Lien Recovery Fund Act[.];
             685      or
             686          (19) failing to pay subcontractors and suppliers in proportion to the percentage of work
             687      they performed under a billing after a contractor receives any construction funds from an owner
             688      or another contractor for work performed and billed, unless otherwise agreed by contract.
             689          Section 14. Section 58-55-502 is amended to read:
             690           58-55-502. Unprofessional conduct.
             691          Unprofessional conduct includes:
             692          (1) failing to establish, maintain, or demonstrate financial responsibility while licensed as
             693      a contractor under this chapter;
             694          (2) disregarding or violating through gross negligence or a pattern of negligence:
             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 this 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) any reporting, notification, and filing laws of this state or the federal government;
             702          (3) any willful, fraudulent, or deceitful act by a licensee, caused by a licensee, or at a
             703      licensee's direction which causes material injury to another;
             704          (4) contract violations that pose a threat or potential threat to the public health, safety, and
             705      welfare including:
             706          (a) willful, deliberate, or grossly negligent departure from or disregard for plans or
             707      specifications, or abandonment or failure to complete a project without the consent of the owner
             708      or his duly authorized representative or the consent of any other person entitled to have the
             709      particular project completed in accordance with the plans, specifications, and contract terms;


             710          (b) failure to deposit funds to the benefit of an employee as required under any written
             711      contractual obligation the licensee has to the employee;
             712          (c) failure to maintain in full force and effect any health insurance benefit to an employee
             713      that was extended as a part of any written contractual obligation or representation by the licensee,
             714      unless the employee is given written notice of the licensee's intent to cancel or reduce the insurance
             715      benefit at least 45 days before the effective date of the cancellation or reduction;
             716          (d) failure to reimburse the Residence Lien Recovery Fund [within 90 days after any
             717      disbursement from the fund resulting from the licensee's failure to pay qualified beneficiaries as
             718      provided in Title 38, Chapter 11, Residence Lien Restriction and Lien Recovery Fund Act] as
             719      required by Section 38-11-207 ;
             720          (e) failure to provide, when applicable, the information required by Section 38-11-108 ; or
             721          (f) willfully or deliberately misrepresenting or omitting a material fact in connection with
             722      an application to claim recovery from the Residence Lien Recovery Fund under Section 38-11-204 .
             723          Section 15. Section 58-55-503 is amended to read:
             724           58-55-503. Penalty for unlawful conduct -- Citations.
             725          (1) Any person who violates Subsections 58-55-501 (1) through (14), (16), (17) or (18),
             726      or who fails to comply with a citation issued under this section after it is final, is guilty of a class
             727      A misdemeanor. Any person who violates the provisions of Subsection 58-55-501 (8) or (13) may
             728      not be awarded and may not accept a contract for the performance of the work. Any licensee who
             729      submits a notice of intent to request an increase in the monetary limit under Subsection
             730      58-55-309 (5), but who is not granted an increase sufficient to cover the award of a contract upon
             731      which he has bid, may not be awarded and may not accept the contract.
             732          (2) Any person who violates the provisions of Subsection 58-55-501 (15) is guilty of an
             733      infraction unless the violator did so with the intent to deprive the person to whom money is to be
             734      paid of the money received, in which case the violator is guilty of theft, as classified in Section
             735      76-6-412 .
             736          (3) Grounds for immediate suspension of the licensee's license by the division and the
             737      board include the failure by a licensee to make application to, report to, or notify the division with
             738      respect to any matter for which application, notification, or reporting is required under this chapter
             739      or rules adopted under this chapter, including applying to the division for a new license to engage
             740      in a new specialty classification or to do business under a new form of organization or business


             741      structure, filing with the division current financial statements, notifying the division concerning
             742      loss of insurance coverage, or change in qualifier.
             743          (4) (a) If upon inspection or investigation, the division concludes that a contractor has
             744      violated the provisions of Subsections 58-55-501 (1), (2), (3), (19), or any rule or order issued with
             745      respect to these subsections, and that disciplinary action is appropriate, the director or his designee
             746      from within the division for each alternative respectively, shall, promptly issue a citation to the
             747      contractor according to this chapter and any pertinent rules, attempt to negotiate a stipulated
             748      settlement, or notify the contractor to appear before an adjudicative proceeding conducted under
             749      Title 63, Chapter 46b, Administrative Procedures Act.
             750          (i) Any person who is in violation of the provisions of Subsection 58-55-501 (1), (2), [or]
             751      (3), or (19) as evidenced by an uncontested citation, a stipulated settlement, or by a finding of
             752      violation in an adjudicative proceeding, may be assessed a fine pursuant to this Subsection (4) and
             753      may, in addition to or in lieu of, be ordered to cease and desist from violating Subsection
             754      58-55-501 (1), (2), [or] (3), or (19).
             755          (ii) Except for a cease and desist order, the licensure sanctions cited in Section 58-55-401
             756      may not be assessed through a citation.
             757          (b) Each citation shall be in writing and describe with particularity the nature of the
             758      violation, including a reference to the provision of the chapter, rule, or order alleged to have been
             759      violated. The citation shall clearly state that the recipient must notify the division in writing within
             760      20 calendar days of service of the citation if the recipient wishes to contest the citation at a hearing
             761      conducted under Title 63, Chapter 46b, Administrative Procedures Act. The citation shall clearly
             762      explain the consequences of failure to timely contest the citation or to make payment of any fines
             763      assessed by the citation within the time specified in the citation.
             764          (c) The division may issue a notice in lieu of a citation.
             765          (d) Each citation issued under this section, or a copy of each citation, may be served upon
             766      any person upon whom a summons may be served in accordance with the Utah Rules of Civil
             767      Procedure and may be made personally or upon his agent by a division investigator or by any
             768      person specially designated by the director or by mail.
             769          (e) If within 20 calendar days from the service of a citation, the person to whom the
             770      citation was issued fails to request a hearing to contest the citation, the citation becomes the final
             771      order of the division and is not subject to further agency review. The period to contest a citation


             772      may be extended by the division for cause.
             773          (f) The division may refuse to issue or renew, suspend, revoke, or place on probation the
             774      license of a licensee who fails to comply with a citation after it becomes final.
             775          (g) The failure of an applicant for licensure to comply with a citation after it becomes final
             776      is a ground for denial of license.
             777          (h) No citation may be issued under this section after the expiration of six months
             778      following the occurrence of any violation.
             779          (i) Fines shall be assessed by the director or his designee according to the following:
             780          (i) for a first offense handled pursuant to Subsection (4) (a), a fine of up to $1,000;
             781          (ii) for a second offense handled pursuant to Subsection (4) (a), a fine of up to $2,000; and
             782          (iii) for any subsequent offense handled pursuant to Subsection (4) (a), a fine of up to
             783      $2,000 for each day of continued offense.
             784          (j) (i) For purposes of issuing a final order under this section and assessing a fine under
             785      Subsection (4)(i), an offense constitutes a second or subsequent offense if:
             786          (A) the division previously issued a final order determining that a person committed a first
             787      or second offense in violation of Subsection 58-55-501 (1), (2), or (3); or
             788          (B) (I) the division initiated an action for a first or second offense;
             789          (II) no final order has been issued by the division in the action initiated under Subsection
             790      (4)(j)(i)(B)(I);
             791          (III) the division determines during an investigation that occurred after the initiation of the
             792      action under Subsection (4)(j)(i)(B)(I) that the person committed a second or subsequent violation
             793      of the provisions of Subsection 58-55-501 (1), (2), or (3); and
             794          (IV) after determining that the person committed a second or subsequent offense under
             795      Subsection (4)(j)(i)(B)(III), the division issues a final order on the action initiated under Subsection
             796      (4)(j)(i)(B)(I).
             797          (ii) In issuing a final order for a second or subsequent offense under Subsection (4)(j)(i),
             798      the division shall comply with the requirements of this section.
             799          (5) Any penalty imposed by the director under Subsection (4) (i) shall be deposited into
             800      the Commerce Service Fund. Any penalty which is not paid may be collected by the director by
             801      either referring the matter to a collection agency or bringing an action in the district court of the
             802      county in which the person against whom the penalty is imposed resides or in the county where


             803      the office of the director is located. Any county attorney or the attorney general of the state is to
             804      provide legal assistance and advice to the director in any action to collect the penalty. In any
             805      action brought to enforce the provisions of this section, reasonable attorney's fees and costs shall
             806      be awarded.
             807          Section 16. Section 58-56-19 is enacted to read:
             808          58-56-19. Residential building permit fees.
             809          (1) Each compliance agency shall assess a residential building permit fee, determined by
             810      the division under Section 63-38-3.2 , on each building permit issued by that compliance agency
             811      for work to be performed on a residence, as defined in Section 38-11-102 .
             812          (2) Each compliance agency shall collect the fee assessed in Subsection (1) and transmit
             813      the amount collected to the division to be deposited in the Residential Lien Recovery Fund created
             814      in Section 38-11-201 .




Legislative Review Note
    as of 1-13-00 2:31 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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