H.B. 173

This document includes House Committee Amendments incorporated into the bill on Thu, Feb 26, 2004 at 2:44 PM by chopkin. --> 1

LIABILITY INSURANCE FOR CONTRACTORS
2 - MONITORING SYSTEM
3 2004 GENERAL SESSION
4 STATE OF UTAH
5 Sponsor: Michael T. Morley
6
7 LONG TITLE
8 General Description:
9 This bill enacts the Licensure Requirements and Standards Compliance Database
10 Program and modifies related provisions of the Utah Construction Trades Licensing
11 Act.
12 Highlighted Provisions:
13 This bill:
14 . requires insurers who issue liability insurance to contractors, burglar alarm
15 companies, and contract security companies to provide a record of the policy to the
16 Division of Occupational and Professional Licensing's designated agent;
17 . creates the Licensure Requirements and Standards Compliance Database Program
18 to verify compliance with state licensure requirements and standards;
19 . provides for suspension or revocation of licensure;
20 . provides criteria for the disclosure of information in the database and establishes a
21 penalty for unlawful disclosure;
22 . modifies qualifications for licensures;
23 . includes failing to obtain and continuously maintain comprehensive general liability
24 insurance as unprofessional conduct;
25 . provides that monetary penalties for violations of construction trades licensing shall
26 be deposited in the General Fund as a dedicated credit; and
27 . expands the purposes for which the monetary penalties may be used to include

28 administration of the Licensure Requirements and Standards Compliance Database
29 Program.
30 Monies Appropriated in this Bill:
31 None
32 Other Special Clauses:
33 None
34 Utah Code Sections Affected:
35 AMENDS:
36 58-55-302, as last amended by Chapter 241, Laws of Utah 2002
37 58-55-303, as last amended by Chapter 198, Laws of Utah 2001
38 58-55-502, as last amended by Chapter 198, Laws of Utah 2001
39 58-55-503, as last amended by Chapters 33 and 241, Laws of Utah 2002
40 58-63-103, as enacted by Chapter 308, Laws of Utah 2003
41 ENACTS:
42 31A-22-205, Utah Code Annotated 1953
43 58-1-601, Utah Code Annotated 1953
44 58-1-602, Utah Code Annotated 1953
45 58-1-603, Utah Code Annotated 1953
46 58-1-604, Utah Code Annotated 1953
47 58-1-605, Utah Code Annotated 1953
48 58-55-104, Utah Code Annotated 1953
49
50 Be it enacted by the Legislature of the state of Utah:
51 Section 1. Section 31A-22-205 is enacted to read:
52 31A-22-205. DOPL liability insurance reporting requirements -- Penalty.
53 (1) (a) Each insurer that issues a policy that includes comprehensive general liability
54 coverage for the following licensees licensed under Title 58 shall, before the seventh day of
55 each calendar month, provide to the Division of Occupational and Professional Licensing's
56 designated agent selected in accordance with Title 58, Chapter 1, Part 6, Licensure
57 Requirements and Standards Compliance Database Program, a record of each insurance policy
58 in effect for licensees in Utah as of the previous month that was issued by the insurer:

59 (i) contractors licensed under Chapter 55;
60 (ii) burglar alarm companies licensed under Chapter 55; and
61 (iii) contract security companies licensed under Chapter 63.
62 (b) This Subsection (1) does not preclude more frequent reporting.
63 (2) The record shall include:
64 (a) the name, date of birth, and social security number of each individual licensee or
65 the name and federal identification number of each person, and the address of the named
66 insured and other required identity information as prescribed by division rule;
67 (b) the policy number, effective date, and expiration date of each policy; and
68 (c) other information as defined by rule of the division in accordance with Title 63,
69 Chapter 46a, Utah Administrative Rulemaking Act, such as coverage amounts or types of
70 coverage.
71 (3) Each insurer shall provide this information on magnetic tape or in another form the
72 division's designated agent agrees to accept.
73 (4) (a) The commissioner may, following procedures set forth in Title 63, Chapter 46b,
74 Administrative Procedures Act, assess a fine against an insurer of up to $250 for each day the
75 insurer fails to comply with this section.
76 (b) A fine collected under this section shall be deposited into the General Fund as a
77 dedicated credit to be used by the division for the purposes listed in Section 58-55-104 .
78 (c) If an insurer shows that the failure to comply with this section was inadvertent,
79 accidental, or the result of excusable neglect, the commissioner may excuse the fine.
80 Section 2. Section 58-1-601 is enacted to read:
81 Part 6. Licensure Requirements and Standards Compliance Database Program
82 58-1-601. Title.
83 This part is known as the "Licensure Requirements and Standards Compliance
84 Database Program."
85 Section 3. Section 58-1-602 is enacted to read:
86 58-1-602. Definitions.
87 As used in this part:
88 (1) "Database" means the Licensure Requirements and Standards Compliance Database
89 created in Section 58-1-603 .

90 (2) "Designated agent" means the third party the division contracts with under Section
91 58-1-603 .
92 (3) "Program" means the Licensure Requirements and Standards Compliance Database
93 Program created in Section 58-1-603 .
94 Section 4. Section 58-1-603 is enacted to read:
95 58-1-603. Program creation -- Administration -- Selection of designated agent --
96 Duties -- Rulemaking -- Audits.
97 (1) H [ There ] SUBJECT TO RECEIVING ADEQUATE FUNDING THROUGH A LEGISLATIVE
97a APPROPRIATION, THERE h is created the Licensure Requirements and Standards Compliance
97b Database
98 Program to:
99 (a) establish a database to verify compliance with licensure requirements and standards
100 under this title as created and maintained by the division's designated agent;
101 (b) continuously monitor compliance with licensure requirements and standards;
102 (c) assist in increasing compliance with licensure requirements and standards; and
103 (d) assist in protecting public health, safety, and welfare and promote a fair working
104 environment.
105 (2) The division shall administer the program with the assistance of the designated
106 agent.
107 (3) The division shall contract in accordance with Title 63, Chapter 56, Utah
108 Procurement Code, with a third party to establish and maintain a Licensure Requirements and
109 Standards Compliance Database for the purposes established under this part.
110 (4) (a) The third party under contract under this section is the division's designated
111 agent.
112 (b) The designated agent shall develop and maintain a computer database from the
113 information provided by:
114 (i) insurers under Section 31A-22-205 ; and
115 (ii) the division under Subsection (5).
116 (c) The division shall establish guidelines for the development and maintenance of the
117 database.
118 (5) With information provided by the division, the designated agent shall, at least
119 monthly:
120 (a) update the database with the information provided by any other agency or entity

121 required or allowed by statute to provide information; and
122 (b) compare the database with the information provided.
123 (6) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
124 division shall make rules and develop procedures for the purpose of administering and
125 enforcing this part.
126 (7) (a) The designated agent shall archive computer data files at least semi-annually for
127 auditing purposes.
128 (b) The division may audit the designated agent's administration of the database as
129 considered necessary.
130 Section 5. Section 58-1-604 is enacted to read:
131 58-1-604. Notice -- Proof -- Suspension and Revocation of licensure -- Penalties --
132 Exemptions.
133 Notwithstanding Title 63, Chapter 46b, Administrative Procedures Act:
134 (1) the designated agent shall:
135 (a) if the comparison under Section 58-1-603 shows that a licensee is out of
136 compliance with licensure requirements or standards for a time period determined by rule,
137 provide notice to the licensee:
138 (i) that the licensee has 20 calendar days or other time period as established by rule to
139 provide evidence of compliance or exemption from compliance; and
140 (ii) that failure to provide the evidence will result in automatic suspension of licensure;
141 and
142 (b) if a licensee fails to provide satisfactory evidence of compliance to the designated
143 agent, provide a second notice to the licensee notifying the licensee:
144 (i) that the licensee has one year or other period of time as established by rule, to
145 establish compliance and submit a reinstatement application; and
146 (ii) that if the licensee does not establish compliance and submit a reinstatement
147 application within the time specified, the licensee's license shall be automatically revoked
148 without further notice.
149 (2) The division:
150 (a) shall suspend a license upon receiving notification from the designated agent that
151 the licensee failed to provide evidence under the notice specified in Subsection (1)(a);

152 (b) shall revoke a suspended license if the licensee fails to timely reinstate the license
153 as specified in Subsection (1)(b); and
154 (c) may direct the designated agent to provide the notices under this section.
155 (3) An action by the division to suspend or revoke a license under this section does not
156 restrict other action by law enforcement or any other agency to impose any penalties allowed
157 by law.
158 (4) Upon direction from the division, the designated agent shall include in the notices
159 specified in this section notification that the licensee may be out of compliance with any other
160 statutory or regulatory requirements.
161 Section 6. Section 58-1-605 is enacted to read:
162 58-1-605. Disclosure of licensure requirements or standards -- Penalty.
163 (1) (a) Information in the database established under Section 58-1-603 provided by a
164 person to the designated agent is considered to be the property of the person providing the
165 information.
166 (b) The information may not be disclosed from the database under Title 63, Chapter 2,
167 Government Records Access and Management Act, or otherwise, except as follows:
168 (i) for the purpose of investigating, litigating, or enforcing licensure requirements or
169 standards under this title;
170 (ii) for the purpose of investigating, litigating, or enforcing licensure requirements or
171 standards under this title, the designated agent shall, upon request, issue to any state or local
172 government agency or court a certificate documenting the licensure requirements or standards
173 information, according to the database, of a specific licensee for the time period designated by
174 the government agency;
175 (iii) upon request, the division or its designated agent shall disclose whether or not a
176 licensee is in compliance with specified licensure requirements or standards documented in the
177 database, and any additional information specified by rule to:
178 (A) the licensee or, if the licensee is deceased, any interested person of the licensee, as
179 defined in Section 75-1-201 ;
180 (B) the parent or legal guardian of the licensee, if the licensee is an unemancipated
181 minor;
182 (C) the legal guardian of the licensee if the licensee is legally incapacitated;

183 (D) a person who has power of attorney from the licensee;
184 (E) a person who submits a notarized release from the licensee dated no more than 90
185 days before the date the request is made; or
186 (F) a person suffering loss or injury who certifies under penalty of perjury that the
187 licensee was involved in the loss or injury and that the loss or injury was related to the
188 licensee's practice under this title;
189 (iv) for the purpose of investigating, enforcing, or prosecuting laws or issuing citations
190 by federal, state, or local law enforcement agencies related to licensure requirements or
191 standards;
192 (v) upon request of a peace officer acting in an official capacity under Subsection
193 (1)(b)(iv), the division or the designated agent shall disclose relevant information for
194 investigation, enforcement, or prosecution;
195 (vi) for the purpose of the state auditor, the legislative auditor general, or other auditor
196 of the state conducting audits of the program; and
197 (vii) any other person, agency, or entity, as defined by rule, whose need for access to
198 the information in the database is determined to be greater than the privacy interests of the
199 licensee.
200 (2) (a) The division may allow the designated agent to prepare and deliver upon request
201 of a person, entity, or agency entitled to the information under Subsection (1), a report in the
202 form of:
203 (i) a certified copy that is considered admissible in any court proceeding in the same
204 manner as the original; or
205 (ii) information accessible through the Internet or through other electronic medium if
206 the division determines that sufficient security is provided to safeguard the privacy interests of
207 the parties involved.
208 (b) The division or its designated agent, if allowed by the department, may charge a fee
209 established by the department under Section 63-38-3.2 for each:
210 (i) document authenticated, including each certified copy; and
211 (ii) record accessed by the Internet or by other electronic medium.
212 (c) The division shall deposit any fee collected under Subsection (2)(b) into the
213 General Fund as a dedicated credit to be used by the division for the purposes listed in Section

214 58-55-104 .
215 (3) Any person who knowingly releases or discloses information from the database for
216 a purpose other than those authorized in this section or to a person who is not entitled to it is
217 guilty of a third degree felony.
218 (4) Any person, agency, or entity required by law to report information to the
219 designated agent is not subject to liability for providing that information.
220 (5) Neither the state nor the division's designated agent is liable to any person for
221 gathering, managing, or using the information in the database.
222 Section 7. Section 58-55-104 is enacted to read:
223 58-55-104. Use of funding for education, training, enforcement, investigations,
224 and a database.
225 (1) The director may, with the concurrence of the commission, use the monies
226 collected under Section 58-55-503 for the following purposes:
227 (a) enforcing this chapter by:
228 (i) investigating unprofessional or unlawful conduct; and
229 (ii) providing legal representation to the division when it takes legal action against a
230 person charged with unprofessional or unlawful conduct;
231 (b) educating and training licensees under this chapter;
232 (c) educating and training the general public or other interested persons in matters
233 concerning the laws that govern the practices licensed under this chapter; and
234 (d) funding the activities of the division's designated agent under Title 58, Chapter 1,
235 Part 6, with respect to persons licensed under this chapter.
236 (2) Funding used for the purposes listed in Subsection (1) is nonlapsing.
237 Section 8. Section 58-55-302 is amended to read:
238 58-55-302. Qualifications for licensure.
239 (1) Each applicant for a license under this chapter shall:
240 (a) submit an application prescribed by the division;
241 (b) pay a fee as determined by the department under Section 63-38-3.2 ;
242 (c) submit proof of registration, if required, with the Division of Corporations and
243 Commercial Code;
244 (d) obtain and maintain a policy of comprehensive general liability insurance in an

245 amount determined by rule, immediately upon receipt of an active license and, continuously
246 thereafter, unless the license is placed on inactive status;
247 [(c)] (e) (i) meet the examination requirements established by rule by the commission
248 with the concurrence of the director, except for the classifications of apprentice plumber,
249 residential apprentice plumber, and apprentice electrician for whom no examination is
250 required; or
251 (ii) if required in Section 58-55-304 , the individual qualifier must pass the required
252 examination if the applicant is a business entity;
253 [(d)] (f) if an apprentice, identify the proposed supervisor of the apprenticeship;
254 [(e)] (g) if an applicant for a contractor's license:
255 (i) produce satisfactory evidence of financial responsibility, except for construction
256 trades instructor for whom evidence of financial responsibility is not required;
257 (ii) produce satisfactory evidence of knowledge and experience in the construction
258 industry and knowledge of the principles of the conduct of business as a contractor, reasonably
259 necessary for the protection of the public health, safety, and welfare; and
260 (iii) be a licensed master electrician if an applicant for an electrical contractor's license
261 or a licensed master residential electrician if an applicant for a residential electrical contractor's
262 license; or
263 (iv) be a journeyman plumber or residential journeyman plumber if an applicant for a
264 plumbing contractor's license; and
265 [(f)] (h) if an applicant for a construction trades instructor license, satisfy any
266 additional requirements established by rule.
267 [(2) After approval of an applicant for a contractor's license by the applicable board
268 and the division, the applicant shall file the following with the division before the division
269 issues the license:]
270 [(a) proof of workers' compensation insurance which covers employees of the applicant
271 in accordance with applicable Utah law;]
272 [(b) proof of public liability insurance in coverage amounts and form established by
273 rule except for a construction trades instructor for whom public liability insurance is not
274 required; and]
275 [(c) proof of registration as required by applicable law with the:]

276 [(i) Utah Department of Commerce;]
277 [(ii) Division of Corporations and Commercial Code;]
278 [(iii) Division of Workforce Information and Payment Services in the Department of
279 Workforce Services, for purposes of Title 35A, Chapter 4, Employment Security Act;]
280 [(iv) State Tax Commission; and]
281 [(v) Internal Revenue Service.]
282 [(3)] (2) In addition to the general requirements for each applicant in Subsection (1),
283 applicants shall comply with the following requirements to be licensed in the following
284 classifications:
285 (a) A journeyman plumber applicant shall produce satisfactory evidence of:
286 (i) successful completion of the equivalent of at least four years of full-time training
287 and instruction as a licensed apprentice plumber under supervision of a licensed journeyman
288 plumber and in accordance with a planned program of training approved by the division;
289 (ii) at least eight years of full-time experience approved by the division in collaboration
290 with the Plumbers Licensing Board; or
291 (iii) satisfactory evidence of meeting the qualifications determined by the board to be
292 equivalent to Subsection [(3)] (2)(a)(i) or (a)(ii).
293 (b) A residential journeyman plumber shall produce satisfactory evidence of:
294 (i) completion of the equivalent of at least three years of full-time training and
295 instruction as a licensed apprentice plumber under the supervision of a licensed residential
296 journeyman plumber or licensed journeyman plumber in accordance with a planned program of
297 training approved by the division;
298 (ii) completion of at least six years of full-time experience in a maintenance or repair
299 trade involving substantial plumbing work; or
300 (iii) meeting the qualifications determined by the board to be equivalent to Subsection
301 [(3)] (2)(b)(i) or (b)(ii).
302 (c) A master electrician applicant shall produce satisfactory evidence that the applicant:
303 (i) is a graduate electrical engineer of an accredited college or university approved by
304 the division and has one year of practical electrical experience as a licensed apprentice
305 electrician;
306 (ii) is a graduate of an electrical trade school, having received an associate of applied

307 sciences degree following successful completion of a course of study approved by the division,
308 and has two years of practical experience as a licensed journeyman electrician;
309 (iii) is a graduate of an electrical trade school, having received a certificate of
310 completion following successful completion of a course of study approved by the division, and
311 has four years of practical experience as a journeyman electrician;
312 (iv) has at least eight years of practical experience under the supervision of a licensed
313 journeyman or master electrician; or
314 (v) meets the qualifications determined by the board to be equivalent to these
315 qualifications.
316 (d) A master residential electrician applicant shall produce satisfactory evidence that
317 the applicant:
318 (i) has at least two years of practical experience as a residential journeyman electrician;
319 or
320 (ii) meets the qualifications determined by the board to be equivalent to this practical
321 experience.
322 (e) A journeyman electrician applicant shall produce satisfactory evidence that the
323 applicant:
324 (i) has successfully completed at least four years of full-time training and instruction as
325 a licensed apprentice electrician under the supervision of a master electrician or journeyman
326 electrician and in accordance with a planned training program approved by the division;
327 (ii) has six years of practical experience in wiring, installing, and repairing electrical
328 apparatus and equipment for light, heat, and power under the supervision of a licensed master
329 or journeyman electrician; or
330 (iii) meets the qualifications determined by the board to be equivalent to these
331 qualifications.
332 (f) A residential journeyman electrician applicant shall produce satisfactory evidence
333 that the applicant:
334 (i) has successfully completed two years of training in an electrical training program
335 approved by the division;
336 (ii) has four years of practical experience in wiring, installing, and repairing electrical
337 apparatus and equipment for light, heat, and power under the supervision of a licensed master,

338 journeyman, residential master, or residential journeyman electrician; or
339 (iii) meets the qualifications determined by the division and applicable board to be
340 equivalent to Subsection [(3)] (2)(f)(i) or (f)(ii).
341 (g) The conduct of licensed apprentice electricians and their licensed supervisors shall
342 be in accordance with the following:
343 (i) A licensed apprentice electrician shall be under the immediate supervision of a
344 licensed master, journeyman, residential master, or residential journeyman electrician. An
345 apprentice in the fourth year of training may work without supervision for a period not to
346 exceed eight hours in any 24-hour period.
347 (ii) A licensed master, journeyman, residential master, or residential journeyman
348 electrician may have under immediate supervision on a residential project up to three licensed
349 apprentice electricians.
350 (iii) A licensed master or journeyman electrician may have under immediate
351 supervision on nonresidential projects only one licensed apprentice electrician.
352 (h) An alarm company applicant shall:
353 (i) have a qualifying agent who is an officer, director, partner, proprietor, or manager of
354 the applicant who:
355 (A) demonstrates 6,000 hours of experience in the alarm company business;
356 (B) demonstrates 2,000 hours of experience as a manager or administrator in the alarm
357 company business or in a construction business; and
358 (C) passes an examination component established by rule by the commission with the
359 concurrence of the director;
360 (ii) if a corporation, provide:
361 (A) the names, addresses, dates of birth, social security numbers, and fingerprint cards
362 of all corporate officers, directors, and those responsible management personnel employed
363 within the state or having direct responsibility for managing operations of the applicant within
364 the state; and
365 (B) the names, addresses, dates of birth, social security numbers, and fingerprint cards
366 of all shareholders owning 5% or more of the outstanding shares of the corporation, except this
367 shall not be required if the stock is publicly listed and traded;
368 (iii) if a limited liability company, provide:

369 (A) the names, addresses, dates of birth, social security numbers, and fingerprint cards
370 of all company officers, and those responsible management personnel employed within the
371 state or having direct responsibility for managing operations of the applicant within the state;
372 and
373 (B) the names, addresses, dates of birth, social security numbers, and fingerprint cards
374 of all individuals owning 5% or more of the equity of the company;
375 (iv) if a partnership, the names, addresses, dates of birth, social security numbers, and
376 fingerprint cards of all general partners, and those responsible management personnel
377 employed within the state or having direct responsibility for managing operations of the
378 applicant within the state;
379 (v) if a proprietorship, the names, addresses, dates of birth, social security numbers,
380 and fingerprint cards of the proprietor, and those responsible management personnel employed
381 within the state or having direct responsibility for managing operations of the applicant within
382 the state;
383 (vi) be of good moral character in that officers, directors, shareholders described in
384 Subsection [(3)] (2)(h)(ii)(B), partners, proprietors, and responsible management personnel
385 have not been convicted of a felony, a misdemeanor involving moral turpitude, or any other
386 crime that when considered with the duties and responsibilities of an alarm company is
387 considered by the board to indicate that the best interests of the public are served by granting
388 the applicant a license;
389 (vii) document that none of the applicant's officers, directors, shareholders described in
390 Subsection [(3)] (2)(h)(ii)(B), partners, proprietors, and responsible management personnel
391 have been declared by any court of competent jurisdiction incompetent by reason of mental
392 defect or disease and not been restored;
393 (viii) document that none of the applicant's officers, directors, shareholders described
394 in Subsection [(3)] (2)(h)(ii)(B), partners, proprietors, and responsible management personnel
395 are currently suffering from habitual drunkenness or from drug addiction or dependence;
396 (ix) file and maintain with the division evidence of[:] registration as is required by
397 applicable law with the Division of Corporations and Commercial Code; and
398 [(A) comprehensive general liability insurance in form and in amounts to be
399 established by rule by the commission with the concurrence of the director;]

400 [(B) workers' compensation insurance that covers employees of the applicant in
401 accordance with applicable Utah law; and]
402 [(C) registration as is required by applicable law with the:]
403 [(I) Division of Corporations and Commercial Code;]
404 [(II) Division of Workforce Information and Payment Services in the Department of
405 Workforce Services, for purposes of Title 35A, Chapter 4, Employment Security Act;]
406 [(III) State Tax Commission; and]
407 [(IV) Internal Revenue Service; and]
408 (x) meet with the division and board.
409 (i) Each applicant for licensure as an alarm company agent shall:
410 (i) submit an application in a form prescribed by the division accompanied by
411 fingerprint cards;
412 (ii) pay a fee determined by the department under Section 63-38-3.2 ;
413 (iii) be of good moral character in that the applicant has not been convicted of a felony,
414 a misdemeanor involving moral turpitude, or any other crime that when considered with the
415 duties and responsibilities of an alarm company agent is considered by the board to indicate
416 that the best interests of the public are served by granting the applicant a license;
417 (iv) not have been declared by any court of competent jurisdiction incompetent by
418 reason of mental defect or disease and not been restored;
419 (v) not be currently suffering from habitual drunkenness or from drug addiction or
420 dependence; and
421 (vi) meet with the division and board if requested by the division or the board.
422 [(4)] (3) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking
423 Act, the division may make rules establishing when Federal Bureau of Investigation records
424 shall be checked for applicants as an alarm company or alarm company agent.
425 [(5)] (4) To determine if an applicant meets the qualifications of Subsections [(3)]
426 (2)(h)(vi) and [(3)] (2)(i)(iii), the division shall provide an appropriate number of copies of
427 fingerprint cards to the Department of Public Safety with the division's request to:
428 (a) conduct a search of records of the Department of Public Safety for criminal history
429 information relating to each applicant for licensure as an alarm company or alarm company
430 agent and each applicant's officers, directors, shareholders described in Subsection [(3)]

431 (2)(h)(ii)(B), partners, proprietors, and responsible management personnel; and
432 (b) forward to the Federal Bureau of Investigation a fingerprint card of each applicant
433 requiring a check of records of the F.B.I. for criminal history information under this section.
434 [(6)] (5) The Department of Public Safety shall send to the division:
435 (a) a written record of criminal history, or certification of no criminal history record, as
436 contained in the records of the Department of Public Safety in a timely manner after receipt of
437 a fingerprint card from the division and a request for review of Department of Public Safety
438 records; and
439 (b) the results of the F.B.I. review concerning an applicant in a timely manner after
440 receipt of information from the F.B.I.
441 [(7)] (6) (a) The division shall charge each applicant for licensure as an alarm company
442 or alarm company agent a fee, in accordance with Section 63-38-3.2 , equal to the cost of
443 performing the records reviews under this section.
444 (b) The division shall pay the Department of Public Safety the costs of all records
445 reviews, and the Department of Public Safety shall pay the F.B.I. the costs of records reviews
446 under this section.
447 [(8)] (7) Information obtained by the division from the reviews of criminal history
448 records of the Department of Public Safety and the F.B.I. shall be used or disseminated by the
449 division only for the purpose of determining if an applicant for licensure as an alarm company
450 or alarm company agent is qualified for licensure.
451 [(9)] (8) (a) An application for licensure under this chapter shall be denied if:
452 (i) the applicant has had a previous license, which was issued under this chapter,
453 suspended or revoked within one year prior to the date of the applicant's application;
454 (ii) (A) the applicant is a partnership, corporation, or limited liability company; and
455 (B) any corporate officer, director, shareholder holding 25% or more of the stock in the
456 applicant, partner, member, agent acting as a qualifier, or any person occupying a similar
457 status, performing similar functions, or directly or indirectly controlling the applicant has
458 served in any similar capacity with any person or entity which has had a previous license,
459 which was issued under this chapter, suspended or revoked within one year prior to the date of
460 the applicant's application; or
461 (iii) (A) the applicant is an individual or sole proprietorship; and

462 (B) any owner or agent acting as a qualifier has served in any capacity listed in
463 Subsection [(9)] (8)(a)(ii)(B) in any entity which has had a previous license, which was issued
464 under this chapter, suspended or revoked within one year prior to the date of the applicant's
465 application.
466 (b) An application for licensure under this chapter shall be reviewed by the appropriate
467 licensing board prior to approval if:
468 (i) the applicant has had a previous license, which was issued under this chapter,
469 suspended or revoked more than one year prior to the date of the applicant's application;
470 (ii) (A) the applicant is a partnership, corporation, or limited liability company; and
471 (B) any corporate officer, director, shareholder holding 25% or more of the stock in the
472 applicant, partner, member, agent acting as a qualifier, or any person occupying a similar
473 status, performing similar functions, or directly or indirectly controlling the applicant has
474 served in any similar capacity with any person or entity which has had a previous license,
475 which was issued under this chapter, suspended or revoked more than one year prior to the date
476 of the applicant's application; or
477 (iii) (A) the applicant is an individual or sole proprietorship; and
478 (B) any owner or agent acting as a qualifier has served in any capacity listed in
479 Subsection [(9)] (8)(b)(ii)(B) in any entity which has had a previous license, which was issued
480 under this chapter, suspended or revoked more than one year prior to the date of the applicant's
481 application.
482 Section 9. Section 58-55-303 is amended to read:
483 58-55-303. Term of license -- Expiration -- Renewal.
484 (1) (a) Each license issued under this chapter shall be issued in accordance with a
485 two-year renewal cycle established by rule.
486 (b) The division may by rule extend or shorten a renewal period by as much as one year
487 to stagger the renewal cycle it administers.
488 (2) At the time of renewal, the licensee shall show satisfactory evidence of continuing
489 financial responsibility as required under Section 58-55-306 .
490 (3) Each license automatically expires on the expiration date shown on the license
491 unless the licensee renews the license in accordance with Section 58-1-308 .
492 (4) The requirements of Subsection 58-55-302 [(9)](8) shall also apply to applicants

493 seeking to renew or reinstate a license.
494 (5) In addition to any other requirements imposed by law, if a license has been
495 suspended or revoked for any reason, the applicant must:
496 (a) pay in full all fines imposed by the division[,];
497 (b) resolve any outstanding citations or disciplinary actions with the division[,];
498 (c) satisfy any Section 58-55-503 judgment and sentence or nontrial resolution[,];
499 (d) complete a new financial responsibility review as required under Section
500 58-55-306 , using only titled assets[,]; and
501 (e) pay in full any reimbursement amount as provided in Title 38, Chapter 11,
502 Residence Lien Restriction and Lien Recovery Fund Act.
503 Section 10. Section 58-55-502 is amended to read:
504 58-55-502. Unprofessional conduct.
505 Unprofessional conduct includes:
506 (1) failing to establish, maintain, or demonstrate financial responsibility while licensed
507 as a contractor under this chapter;
508 (2) disregarding or violating H [ [ ] through gross negligence or a pattern of
508a negligence [ ] ] h :
509 (a) the building or construction laws of this state or any political subdivision;
510 (b) the safety and labor laws applicable to a project;
511 (c) any provision of the health laws applicable to a project;
512 (d) the workers' compensation insurance laws of this state applicable to a project;
513 (e) the laws governing withholdings for employee state and federal income taxes,
514 unemployment taxes, FICA, or other required withholdings; or
515 (f) any reporting, notification, and filing laws of this state or the federal government;
516 (3) any willful, fraudulent, or deceitful act by a licensee, caused by a licensee, or at a
517 licensee's direction which causes material injury to another;
518 (4) contract violations that pose a threat or potential threat to the public health, safety,
519 and welfare including:
520 (a) willful, deliberate, or grossly negligent departure from or disregard for plans or
521 specifications, or abandonment or failure to complete a project without the consent of the
522 owner or his duly authorized representative or the consent of any other person entitled to have
523 the particular project completed in accordance with the plans, specifications, and contract

524 terms;
525 (b) failure to deposit funds to the benefit of an employee as required under any written
526 contractual obligation the licensee has to the employee;
527 (c) failure to maintain in full force and effect any health insurance benefit to an
528 employee that was extended as a part of any written contractual obligation or representation by
529 the licensee, unless the employee is given written notice of the licensee's intent to cancel or
530 reduce the insurance benefit at least 45 days before the effective date of the cancellation or
531 reduction;
532 (d) failure to reimburse the Residence Lien Recovery Fund as required by Section
533 38-11-207 ;
534 (e) failure to provide, when applicable, the information required by Section 38-11-108 ;
535 and
536 (f) willfully or deliberately misrepresenting or omitting a material fact in connection
537 with an application to claim recovery from the Residence Lien Recovery Fund under Section
538 38-11-204 ;
539 (5) failing as an alarm company to notify the division of the cessation of performance
540 of its qualifying agent, or failing to replace its qualifying agent as required under Section
541 58-55-304 ;
542 (6) failing as an alarm company agent to carry or display a copy of the licensee's
543 license as required under Section 58-55-311 ; [or]
544 (7) failing to comply with operating standards established by rule in accordance with
545 Section 58-55-308 [.]; or
546 (8) failing to obtain and continuously maintain a policy of comprehensive general
547 liability insurance as required in Subsection 58-55-302 (1)(d).
548 Section 11. Section 58-55-503 is amended to read:
549 58-55-503. Penalty for unlawful conduct -- Citations.
550 (1) Any person who violates Subsection 58-55-308 (2) or Subsection 58-55-501 (1), (2),
551 (3), (4), (5), (6), (7), (9), (10), (12), (14), or (15), or who fails to comply with a citation issued
552 under this section after it is final, is guilty of a class A misdemeanor. Any person who violates
553 the provisions of Subsection 58-55-501 (8) may not be awarded and may not accept a contract
554 for the performance of the work.

555 (2) Any person who violates [the provisions of] Subsection 58-55-501 (13) is guilty of
556 an infraction unless the violator did so with the intent to deprive the person to whom money is
557 to be paid of the money received, in which case the violator is guilty of theft, as classified in
558 Section 76-6-412 .
559 (3) Grounds for immediate suspension of the licensee's license by the division and the
560 commission include the issuance of a citation for violation of Subsection 58-55-308 (2) or
561 Section 58-55-501 or the failure by a licensee to make application to, report to, or notify the
562 division with respect to any matter for which application, notification, or reporting is required
563 under this chapter or rules adopted under this chapter, including applying to the division for a
564 new license to engage in a new specialty classification or to do business under a new form of
565 organization or business structure, filing with the division current financial statements,
566 notifying the division concerning loss of insurance coverage, or change in qualifier.
567 (4) (a) If upon inspection or investigation, the division concludes that a person has
568 violated [the provisions of] Subsection 58-55-308 (2) or Subsections 58-55-501 (1), (2), (3), (9),
569 (10), (12), (14), (19), or any rule or order issued with respect to these subsections, and that
570 disciplinary action is appropriate, the director or the director's designee from within the
571 division shall promptly issue a citation to the person according to this chapter and any pertinent
572 rules, attempt to negotiate a stipulated settlement, or notify the person to appear before an
573 adjudicative proceeding conducted under Title 63, Chapter 46b, Administrative Procedures
574 Act.
575 (i) Any person who is in violation of [the provisions of] Subsection 58-55-308 (2) or
576 Subsection 58-55-501 (1), (2), (3), (9), (10), (12), (14), or (19), as evidenced by an uncontested
577 citation, a stipulated settlement, or by a finding of violation in an adjudicative proceeding, may
578 be assessed a fine pursuant to this Subsection (4) and may, in addition to or in lieu of, be
579 ordered to cease and desist from violating Subsection 58-55-308 (2) or Subsection
580 58-55-501 (1), (2), (3), (9), (10), (12), (14), or (19).
581 (ii) Except for a cease and desist order, the licensure sanctions cited in Section
582 58-55-401 may not be assessed through a citation.
583 (b) (i) Each citation shall be in writing and describe with particularity the nature of the
584 violation, including a reference to the provision of the chapter, rule, or order alleged to have
585 been violated.

586 (ii) The citation shall clearly state that the recipient must notify the division in writing
587 within 20 calendar days of service of the citation if the recipient wishes to contest the citation
588 at a hearing conducted under Title 63, Chapter 46b, Administrative Procedures Act.
589 (iii) The citation shall clearly explain the consequences of failure to timely contest the
590 citation or to make payment of any fines assessed by the citation within the time specified in
591 the citation.
592 (c) Each citation issued under this section, or a copy of each citation, may be served
593 upon any person upon whom a summons may be served:
594 (i) in accordance with the Utah Rules of Civil Procedure;
595 (ii) personally or upon the person's agent by a division investigator or by any person
596 specially designated by the director; or
597 (iii) by mail.
598 (d) (i) If within 20 calendar days from the service of a citation, the person to whom the
599 citation was issued fails to request a hearing to contest the citation, the citation becomes the
600 final order of the division and is not subject to further agency review.
601 (ii) The period to contest a citation may be extended by the division for cause.
602 (e) The division may refuse to issue or renew, suspend, revoke, or place on probation
603 the license of a licensee who fails to comply with a citation after it becomes final.
604 (f) The failure of an applicant for licensure to comply with a citation after it becomes
605 final is a ground for denial of license.
606 (g) No citation may be issued under this section after the expiration of six months
607 following the occurrence of any violation.
608 (h) [Fines shall be assessed by the] The director or the director's designee shall assess
609 fines according to the following:
610 (i) for a first offense handled pursuant to Subsection (4)(a), a fine of up to $1,000;
611 (ii) for a second offense handled pursuant to Subsection (4)(a), a fine of up to $2,000;
612 and
613 (iii) for any subsequent offense handled pursuant to Subsection (4)(a), a fine of up to
614 $2,000 for each day of continued offense.
615 (i) (i) For purposes of issuing a final order under this section and assessing a fine under
616 Subsection (4)(i), an offense constitutes a second or subsequent offense if:

617 (A) the division previously issued a final order determining that a person committed a
618 first or second offense in violation of Subsection 58-55-308 (2) or Subsection 58-55-501 (1), (2),
619 (3), (9), (10), (12), (14), or (19); or
620 (B) (I) the division initiated an action for a first or second offense;
621 (II) no final order has been issued by the division in the action initiated under
622 Subsection (4) (i)(i)(B)(I);
623 (III) the division determines during an investigation that occurred after the initiation of
624 the action under Subsection (4) (i)(i)(B)(I) that the person committed a second or subsequent
625 violation of the provisions of Subsection 58-55-308 (2) or Subsection 58-55-501 (1), (2), (3),
626 (9), (10), (12), (14), or (19); and
627 (IV) after determining that the person committed a second or subsequent offense under
628 Subsection (4) (i)(i)(B)(III), the division issues a final order on the action initiated under
629 Subsection (4) (i)(i)(B)(I).
630 (ii) In issuing a final order for a second or subsequent offense under Subsection (4)
631 (i)(i), the division shall comply with the requirements of this section.
632 (5) (a) [Any] A monetary penalty imposed by the director under Subsection (4) (h) shall
633 be deposited into the [Commerce Service Fund. Any] General Fund as a dedicated credit to be
634 used by the division for the purposes listed in Section 58-55-104 .
635 (b) A penalty which is not paid may be collected by the director by either referring the
636 matter to the Office of Debt Collection, a collection agency or bringing an action in the district
637 court of the county in which the person against whom the penalty is imposed resides or in the
638 county where the office of the director is located. [Any]
639 (c) A county attorney or the attorney general of the state is to provide legal assistance
640 and advice to the director in any action to collect the penalty.
641 (d) In any action brought to enforce [the provisions of] this section, reasonable
642 attorney's fees and costs shall be awarded.
643 Section 12. Section 58-63-103 is amended to read:
644 58-63-103. Use of funding for education, training, enforcement, investigations
645 and a database.
646 (1) The director may, with the concurrence of the board, use the monies collected
647 under Section 58-63-503 for the following purposes:

648 (a) educating and training licensees under this chapter;
649 (b) educating and training the general public or other interested persons in matters
650 concerning the laws that govern the practices licensed under this chapter; [and]
651 (c) enforcing this chapter by:
652 (i) investigating unprofessional or unlawful conduct; and
653 (ii) providing legal representation to the division when it takes legal action against a
654 person charged with unprofessional or unlawful conduct[.]; and
655 (d) funding the activities of the division's designated agent under Title 58, Chapter 1,
656 Part 6, Licensure Requirements and Standards Compliance Database Program, with respect to
657 persons licensed under this chapter.
658 (2) [The monies collected under Section 58-63-503 and] Funding used for the purposes
659 listed in Subsection (1) [are] is nonlapsing.




Legislative Review Note
as of 12-22-03 8:38 AM

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

Office of Legislative Research and General Counsel