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H.B. 105

Representative J. Stuart Adams proposes the following substitute bill:





Sponsor: J. Stuart Adams

             7      LONG TITLE
             8      General Description:
             9          This bill modifies provisions of the Utah Construction Trades Licensing Act.
             10      Highlighted Provisions:
             11          This bill:
             12          .    provides that noncompliance with continuing education requirements for licensed
             13      contractors is unlawful conduct under the licensing act;
             14          .    provides for an exemption from the requirement; and
             15          .    provides for the issuance of a citation and other penalties.
             16      Monies Appropriated in this Bill:
             17          None
             18      Other Special Clauses:
             19          This bill takes effect on January 1, 2005.
             20      Utah Code Sections Affected:
             21      AMENDS:
             22          58-55-503, as last amended by Chapters 33 and 241, Laws of Utah 2002
             23          58-55-501, as last amended by Chapters 198 and 257, Laws of Utah 2001
             25      Be it enacted by the Legislature of the state of Utah:

             26          Section 1. Section 58-55-501 is amended to read:
             27           58-55-501. Unlawful conduct.
             28          Unlawful conduct includes:
             29          (1) engaging in a construction trade, acting as a contractor, an alarm business or
             30      company, or an alarm company agent, or representing oneself to be engaged in a construction
             31      trade or to be acting as a contractor in a construction trade requiring licensure, unless the
             32      person doing any of these is appropriately licensed or exempted from licensure under this
             33      chapter;
             34          (2) acting in a construction trade, as an alarm business or company, or as an alarm
             35      company agent beyond the scope of the license held;
             36          (3) hiring or employing in any manner an unlicensed person, other than an employee
             37      for wages who is not required to be licensed under this chapter, to engage in a construction
             38      trade for which licensure is required or to act as a contractor or subcontractor in a construction
             39      trade requiring licensure;
             40          (4) applying for or obtaining a building permit either for oneself or another when not
             41      licensed or exempted from licensure as a contractor under this chapter;
             42          (5) issuing a building permit to any person for whom there is no evidence of a current
             43      license or exemption from licensure as a contractor under this chapter;
             44          (6) applying for or obtaining a building permit for the benefit of or on behalf of any
             45      other person who is required to be licensed under this chapter but who is not licensed or is
             46      otherwise not entitled to obtain or receive the benefit of the building permit;
             47          (7) failing to obtain a building permit when required by law or rule;
             48          (8) submitting a bid for any work for which a license is required under this chapter by a
             49      person not licensed or exempted from licensure as a contractor under this chapter;
             50          (9) willfully or deliberately misrepresenting or omitting a material fact in connection
             51      with an application to obtain or renew a license under this chapter;
             52          (10) allowing one's license to be used by another except as provided by statute or rule;
             53          (11) doing business under a name other than the name appearing on the license, except
             54      as permitted by statute or rule;
             55          (12) if licensed as a specialty contractor in the electrical trade or plumbing trade,
             56      journeyman plumber, residential journeyman plumber, journeyman electrician, master

             57      electrician, or residential electrician, failing to directly supervise an apprentice under one's
             58      supervision or exceeding the number of apprentices one is allowed to have under his
             59      supervision;
             60          (13) if licensed as a contractor or representing oneself to be a contractor, receiving any
             61      funds in payment for a specific project from an owner or any other person, which funds are to
             62      pay for work performed or materials and services furnished for that specific project, and after
             63      receiving the funds to exercise unauthorized control over the funds by failing to pay the full
             64      amounts due and payable to persons who performed work or furnished materials or services
             65      within a reasonable period of time;
             66          (14) employing as an alarm company an unlicensed individual as an alarm company
             67      agent, except as permitted under the exemption from licensure provisions under Section
             68      58-1-307 ;
             69          (15) if licensed as an alarm company or alarm company agent, filing with the division
             70      fingerprint cards for an applicant which are not those of the applicant, or are in any other way
             71      false or fraudulent and intended to mislead the division in its consideration of the applicant for
             72      licensure;
             73          (16) if licensed under this chapter, willfully or deliberately disregarding or violating:
             74          (a) the building or construction laws of this state or any political subdivision;
             75          (b) the safety and labor laws applicable to a project;
             76          (c) any provision of the health laws applicable to a project;
             77          (d) the workers' compensation insurance laws of the state applicable to a project;
             78          (e) the laws governing withholdings for employee state and federal income taxes,
             79      unemployment taxes, FICA, or other required withholdings; or
             80          (f) reporting, notification, and filing laws of this state or the federal government;
             81          (17) aiding or abetting any person in evading the provisions of this chapter or rules
             82      established under the authority of the division to govern this chapter;
             83          (18) engaging in the construction trade or as a contractor for the construction of
             84      residences of up to two units when not currently registered or exempt from registration as a
             85      qualified beneficiary under Title 38, Chapter 11, Residence Lien Restriction and Lien Recovery
             86      Fund Act;
             87          (19) failing, as an original contractor, as defined in Section 38-11-102 , to include in a

             88      written contract the notification required in Section 38-11-108 ; [or]
             89          (20) wrongfully filing a mechanics' lien in violation of Section 38-1-25 [.]; or
             90          (21) if licensed as a contractor, not completing a three-hour core education class and an
             91      additional nine hours of professional education approved by the division and the Construction
             92      Services Commission within each two-year renewal cycle, unless an exemption has been
             93      granted to the licensee by the Construction Services Commission, with the concurrence of the
             94      division.
             95          Section 2. Section 58-55-503 is amended to read:
             96           58-55-503. Penalty for unlawful conduct -- Citations.
             97          (1) Any person who violates Subsection 58-55-308 (2) or Subsection 58-55-501 (1), (2),
             98      (3), (4), (5), (6), (7), (9), (10), (12), (14), or (15), or who fails to comply with a citation issued
             99      under this section after it is final, is guilty of a class A misdemeanor. Any person who violates
             100      the provisions of Subsection 58-55-501 (8) may not be awarded and may not accept a contract
             101      for the performance of the work.
             102          (2) Any person who violates the provisions of Subsection 58-55-501 (13) is guilty of an
             103      infraction unless the violator did so with the intent to deprive the person to whom money is to
             104      be paid of the money received, in which case the violator is guilty of theft, as classified in
             105      Section 76-6-412 .
             106          (3) Grounds for immediate suspension of the licensee's license by the division and the
             107      commission include the issuance of a citation for violation of Subsection 58-55-308 (2) or
             108      Section 58-55-501 or the failure by a licensee to make application to, report to, or notify the
             109      division with respect to any matter for which application, notification, or reporting is required
             110      under this chapter or rules adopted under this chapter, including applying to the division for a
             111      new license to engage in a new specialty classification or to do business under a new form of
             112      organization or business structure, filing with the division current financial statements,
             113      notifying the division concerning loss of insurance coverage, or change in qualifier.
             114          (4) (a) If upon inspection or investigation, the division concludes that a person has
             115      violated the provisions of Subsection 58-55-308 (2) or Subsections 58-55-501 (1), (2), (3), (9),
             116      (10), (12), (14), (19), (21) or any rule or order issued with respect to these subsections, and that
             117      disciplinary action is appropriate, the director or the director's designee from within the
             118      division shall promptly issue a citation to the person according to this chapter and any pertinent

             119      rules, attempt to negotiate a stipulated settlement, or notify the person to appear before an
             120      adjudicative proceeding conducted under Title 63, Chapter 46b, Administrative Procedures
             121      Act.
             122          (i) Any person who is in violation of the provisions of Subsection 58-55-308 (2) or
             123      Subsection 58-55-501 (1), (2), (3), (9), (10), (12), (14), [or] (19), or (21) as evidenced by an
             124      uncontested citation, a stipulated settlement, or by a finding of violation in an adjudicative
             125      proceeding, may be assessed a fine pursuant to this Subsection (4) and may, in addition to or in
             126      lieu of, be ordered to cease and desist from violating Subsection 58-55-308 (2) or Subsection
             127      58-55-501 (1), (2), (3), (9), (10), (12), (14), [or] (19), or (21).
             128          (ii) Except for a cease and desist order, the licensure sanctions cited in Section
             129      58-55-401 may not be assessed through a citation.
             130          (iii) (A) A person who receives a citation or is fined for violating Subsection
             131      58-55-501 (2) may also be issued a cease and desist order from engaging in work to be
             132      performed by a contractor licensed under this chapter unless the person meets the continuing
             133      education requirement within 30 days after receipt of the citation or fine.
             134          (B) The order, if issued, shall be removed upon the person's completion of the
             135      continuing education requirement.
             136          (b) Each citation shall be in writing and describe with particularity the nature of the
             137      violation, including a reference to the provision of the chapter, rule, or order alleged to have
             138      been violated. The citation shall clearly state that the recipient must notify the division in
             139      writing within 20 calendar days of service of the citation if the recipient wishes to contest the
             140      citation at a hearing conducted under Title 63, Chapter 46b, Administrative Procedures Act.
             141      The citation shall clearly explain the consequences of failure to timely contest the citation or to
             142      make payment of any fines assessed by the citation within the time specified in the citation.
             143          (c) Each citation issued under this section, or a copy of each citation, may be served
             144      upon any person upon whom a summons may be served:
             145          (i) in accordance with the Utah Rules of Civil Procedure;
             146          (ii) personally or upon the person's agent by a division investigator or by any person
             147      specially designated by the director; or
             148          (iii) by mail.
             149          (d) If within 20 calendar days from the service of a citation, the person to whom the

             150      citation was issued fails to request a hearing to contest the citation, the citation becomes the
             151      final order of the division and is not subject to further agency review. The period to contest a
             152      citation may be extended by the division for cause.
             153          (e) The division may refuse to issue or renew, suspend, revoke, or place on probation
             154      the license of a licensee who fails to comply with a citation after it becomes final.
             155          (f) The failure of an applicant for licensure to comply with a citation after it becomes
             156      final is a ground for denial of license.
             157          (g) No citation may be issued under this section after the expiration of six months
             158      following the occurrence of any violation.
             159          (h) Fines shall be assessed by the director or the director's designee according to the
             160      following:
             161          (i) for a first offense handled pursuant to Subsection (4)(a), a fine of up to $1,000;
             162          (ii) for a second offense handled pursuant to Subsection (4)(a), a fine of up to $2,000;
             163      and
             164          (iii) for any subsequent offense handled pursuant to Subsection (4)(a), a fine of up to
             165      $2,000 for each day of continued offense.
             166          (i) (i) For purposes of issuing a final order under this section and assessing a fine under
             167      Subsection (4)(i), an offense constitutes a second or subsequent offense if:
             168          (A) the division previously issued a final order determining that a person committed a
             169      first or second offense in violation of Subsection 58-55-308 (2) or Subsection 58-55-501 (1), (2),
             170      (3), (9), (10), (12), (14), or (19); or
             171          (B) (I) the division initiated an action for a first or second offense;
             172          (II) no final order has been issued by the division in the action initiated under
             173      Subsection (4)(i)(i)(B)(I);
             174          (III) the division determines during an investigation that occurred after the initiation of
             175      the action under Subsection (4)(i)(i)(B)(I) that the person committed a second or subsequent
             176      violation of the provisions of Subsection 58-55-308 (2) or Subsection 58-55-501 (1), (2), (3),
             177      (9), (10), (12), (14), or (19); and
             178          (IV) after determining that the person committed a second or subsequent offense under
             179      Subsection (4)(i)(i)(B)(III), the division issues a final order on the action initiated under
             180      Subsection (4)(i)(i)(B)(I).

             181          (ii) In issuing a final order for a second or subsequent offense under Subsection
             182      (4)(i)(i), the division shall comply with the requirements of this section.
             183          (5) Any penalty imposed by the director under Subsection (4)(h) shall be deposited into
             184      the Commerce Service Fund. Any penalty which is not paid may be collected by the director
             185      by either referring the matter to a collection agency or bringing an action in the district court of
             186      the county in which the person against whom the penalty is imposed resides or in the county
             187      where the office of the director is located. Any county attorney or the attorney general of the
             188      state is to provide legal assistance and advice to the director in any action to collect the penalty.
             189      In any action brought to enforce the provisions of this section, reasonable attorney's fees and
             190      costs shall be awarded.
             191          Section 3. Effective date.
             192          This bill takes effect on January 1, 2005.

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