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[Introduced][Status][Bill Documents][Fiscal Note][Bills Directory]

Second Substitute S.B. 44

This document includes Senate 3rd Reading Floor Amendments incorporated into the bill on Mon, Mar 11, 2013 at 7:53 AM by lpoole. -->

Representative James A. Dunnigan proposes the following substitute bill:


             1     
CONSTRUCTION TRADES LICENSING REVISIONS

             2     
2013 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Karen Mayne

             5     
House Sponsor: James A. Dunnigan


             6      Cosponsors:
             7      Curtis S. Bramble
John L. Valentine

             8     

             9      LONG TITLE
             10      General Description:
             11          This bill modifies the Utah Construction Trades Licensing Act.
             12      Highlighted Provisions:
             13          This bill:
             14          .    reduces the number of days of a time interval in which an unincorporated entity is
             15      required to submit an ownership status report;
             16          .    provides for an automatic suspension of a license if the licensee becomes an
             17      unincorporated entity or transfers the license to an unincorporated entity;
             18          .    modifies financial responsibility provisions;
             19          .    requires government entities to require a contractor to provide proof that the
             20      contractor provides workers compensation insurance, pays into the unemployment
             21      insurance fund, and withholds applicable taxes from worker pay;
             22          .    makes it unlawful conduct for an unincorporated entity to have an individual who is
             23      an owner of the unincorporated entity engage in a construction trade while using a
             24      Social Security number that does not belong to the individual;



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         .    makes it unlawful conduct for an unincorporated entity that provides labor to a
             26      licensed entity to provide an individual who is an owner of the unincorporated
             27      entity to engage in a construction trade while the individual is using a Social
             28      Security number that does not belong to the individual; and
             29          .    makes technical changes.
             30      Money 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 Laws of Utah 2012, Chapter 192
             37          58-55-303, as last amended by Laws of Utah 2011, Chapter 367
             38          58-55-306, as last amended by Laws of Utah 2012, Chapter 192
             39          58-55-310, as renumbered and amended by Laws of Utah 1994, Chapter 181
             40          58-55-501, as last amended by Laws of Utah 2012, Chapter 278
             41          58-55-503, as last amended by Laws of Utah 2011, Chapters 195, 340, and 413
             42     

             43      Be it enacted by the Legislature of the state of Utah:
             44          Section 1. Section 58-55-302 is amended to read:
             45           58-55-302. Qualifications for licensure.
             46          (1) Each applicant for a license under this chapter shall:
             47          (a) submit an application prescribed by the division;
             48          (b) pay a fee as determined by the department under Section 63J-1-504 ;
             49          (c) (i) meet the examination requirements established by rule by the commission with
             50      the concurrence of the director, except for the classifications of apprentice plumber and
             51      apprentice electrician for whom no examination is required; or
             52          (ii) if required in Section 58-55-304 , the individual qualifier must pass the required
             53      examination if the applicant is a business entity;
             54          (d) if an apprentice, identify the proposed supervisor of the apprenticeship;
             55          (e) if an applicant for a contractor's license:



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         (i) produce satisfactory evidence of financial responsibility, except for a construction
             57      trades instructor for whom evidence of financial responsibility is not required;
             58          (ii) produce satisfactory evidence of knowledge and experience in the construction
             59      industry and knowledge of the principles of the conduct of business as a contractor, reasonably
             60      necessary for the protection of the public health, safety, and welfare;
             61          (iii) (A) be a licensed master electrician if an applicant for an electrical contractor's
             62      license or a licensed master residential electrician if an applicant for a residential electrical
             63      contractor's license;
             64          (B) be a licensed master plumber if an applicant for a plumbing contractor's license or
             65      a licensed master residential plumber if an applicant for a residential plumbing contractor's
             66      license; or
             67          (C) be a licensed elevator mechanic and produce satisfactory evidence of three years
             68      experience as an elevator mechanic if an applicant for an elevator contractor's license; and
             69          (iv) when the applicant is an unincorporated entity, provide a list of the one or more
             70      individuals who hold an ownership interest in the applicant as of the day on which the
             71      application is filed that includes for each individual:
             72          (A) the individual's name, address, birthdate, and Social Security number; and
             73          (B) whether the individual will engage in a construction trade; and
             74          (f) if an applicant for a construction trades instructor license, satisfy any additional
             75      requirements established by rule.
             76          (2) After approval of an applicant for a contractor's license by the applicable board and
             77      the division, the applicant shall file the following with the division before the division issues
             78      the license:
             79          (a) proof of workers' compensation insurance which covers employees of the applicant
             80      in accordance with applicable Utah law;
             81          (b) proof of public liability insurance in coverage amounts and form established by rule
             82      except for a construction trades instructor for whom public liability insurance is not required;
             83      and
             84          (c) proof of registration as required by applicable law with the:
             85          (i) Utah Department of Commerce;
             86          (ii) Division of Corporations and Commercial Code;



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         (iii) Unemployment Insurance Division in the Department of Workforce Services, for
             88      purposes of Title 35A, Chapter 4, Employment Security Act;
             89          (iv) State Tax Commission; and
             90          (v) Internal Revenue Service.
             91          (3) In addition to the general requirements for each applicant in Subsection (1),
             92      applicants shall comply with the following requirements to be licensed in the following
             93      classifications:
             94          (a) (i) A master plumber shall produce satisfactory evidence that the applicant:
             95          (A) has been a licensed journeyman plumber for at least two years and had two years of
             96      supervisory experience as a licensed journeyman plumber in accordance with division rule;
             97          (B) has received at least an associate of applied science degree or similar degree
             98      following the completion of a course of study approved by the division and had one year of
             99      supervisory experience as a licensed journeyman plumber in accordance with division rule; or
             100          (C) meets the qualifications determined by the division in collaboration with the board
             101      to be equivalent to Subsection (3)(a)(i)(A) or (B).
             102          (ii) An individual holding a valid Utah license as a journeyman plumber, based on at
             103      least four years of practical experience as a licensed apprentice under the supervision of a
             104      licensed journeyman plumber and four years as a licensed journeyman plumber, in effect
             105      immediately prior to May 5, 2008, is on and after May 5, 2008, considered to hold a current
             106      master plumber license under this chapter, and satisfies the requirements of this Subsection
             107      (3)(a) for the purpose of renewal or reinstatement of that license under Section 58-55-303 .
             108          (iii) An individual holding a valid plumbing contractor's license or residential
             109      plumbing contractor's license, in effect immediately prior to May 5, 2008, is on or after May 5,
             110      2008:
             111          (A) considered to hold a current master plumber license under this chapter if licensed
             112      as a plumbing contractor and a journeyman plumber, and satisfies the requirements of this
             113      Subsection (3)(a) for purposes of renewal or reinstatement of that license under Section
             114      58-55-303 ; and
             115          (B) considered to hold a current residential master plumber license under this chapter if
             116      licensed as a residential plumbing contractor and a residential journeyman plumber, and
             117      satisfies the requirements of this Subsection (3)(a) for purposes of renewal or reinstatement of



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     that license under Section 58-55-303 .
             119          (b) A master residential plumber applicant shall produce satisfactory evidence that the
             120      applicant:
             121          (i) has been a licensed residential journeyman plumber for at least two years and had
             122      two years of supervisory experience as a licensed residential journeyman plumber in
             123      accordance with division rule; or
             124          (ii) meets the qualifications determined by the division in collaboration with the board
             125      to be equivalent to Subsection (3)(b)(i).
             126          (c) A journeyman plumber applicant shall produce satisfactory evidence of:
             127          (i) successful completion of the equivalent of at least four years of full-time training
             128      and instruction as a licensed apprentice plumber under supervision of a licensed master
             129      plumber or journeyman plumber and in accordance with a planned program of training
             130      approved by the division;
             131          (ii) at least eight years of full-time experience approved by the division in collaboration
             132      with the Plumbers Licensing Board; or
             133          (iii) satisfactory evidence of meeting the qualifications determined by the board to be
             134      equivalent to Subsection (3)(c)(i) or (c)(ii).
             135          (d) A residential journeyman plumber shall produce satisfactory evidence of:
             136          (i) completion of the equivalent of at least three years of full-time training and
             137      instruction as a licensed apprentice plumber under the supervision of a licensed residential
             138      master plumber, licensed residential journeyman plumber, or licensed journeyman plumber in
             139      accordance with a planned program of training approved by the division;
             140          (ii) completion of at least six years of full-time experience in a maintenance or repair
             141      trade involving substantial plumbing work; or
             142          (iii) meeting the qualifications determined by the board to be equivalent to Subsection
             143      (3)(d)(i) or (d)(ii).
             144          (e) The conduct of licensed apprentice plumbers and their licensed supervisors shall be
             145      in accordance with the following:
             146          (i) while engaging in the trade of plumbing, a licensed apprentice plumber shall be
             147      under the immediate supervision of a licensed master plumber, licensed residential master
             148      plumber, licensed journeyman plumber, or a licensed residential journeyman plumber; and



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         (ii) a licensed apprentice plumber in the fourth through tenth year of training may work
             150      without supervision for a period not to exceed eight hours in any 24-hour period, but if the
             151      apprentice does not become a licensed journeyman plumber or licensed residential journeyman
             152      plumber by the end of the tenth year of apprenticeship, this nonsupervision provision no longer
             153      applies.
             154          (f) A master electrician applicant shall produce satisfactory evidence that the applicant:
             155          (i) is a graduate electrical engineer of an accredited college or university approved by
             156      the division and has one year of practical electrical experience as a licensed apprentice
             157      electrician;
             158          (ii) is a graduate of an electrical trade school, having received an associate of applied
             159      sciences degree following successful completion of a course of study approved by the division,
             160      and has two years of practical experience as a licensed journeyman electrician;
             161          (iii) has four years of practical experience as a journeyman electrician; or
             162          (iv) meets the qualifications determined by the board to be equivalent to Subsection
             163      (3)(f)(i), (ii), or (iii).
             164          (g) A master residential electrician applicant shall produce satisfactory evidence that
             165      the applicant:
             166          (i) has at least two years of practical experience as a residential journeyman electrician;
             167      or
             168          (ii) meets the qualifications determined by the board to be equivalent to this practical
             169      experience.
             170          (h) A journeyman electrician applicant shall produce satisfactory evidence that the
             171      applicant:
             172          (i) has successfully completed at least four years of full-time training and instruction as
             173      a licensed apprentice electrician under the supervision of a master electrician or journeyman
             174      electrician and in accordance with a planned training program approved by the division;
             175          (ii) has at least eight years of full-time experience approved by the division in
             176      collaboration with the Electricians Licensing Board; or
             177          (iii) meets the qualifications determined by the board to be equivalent to Subsection
             178      (3)(h)(i) or (ii).
             179          (i) A residential journeyman electrician applicant shall produce satisfactory evidence



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     that the applicant:
             181          (i) has successfully completed two years of training in an electrical training program
             182      approved by the division;
             183          (ii) has four years of practical experience in wiring, installing, and repairing electrical
             184      apparatus and equipment for light, heat, and power under the supervision of a licensed master,
             185      journeyman, residential master, or residential journeyman electrician; or
             186          (iii) meets the qualifications determined by the division and applicable board to be
             187      equivalent to Subsection (3)(i)(i) or (ii).
             188          (j) The conduct of licensed apprentice electricians and their licensed supervisors shall
             189      be in accordance with the following:
             190          (i) A licensed apprentice electrician shall be under the immediate supervision of a
             191      licensed master, journeyman, residential master, or residential journeyman electrician. An
             192      apprentice in the fourth year of training may work without supervision for a period not to
             193      exceed eight hours in any 24-hour period.
             194          (ii) A licensed master, journeyman, residential master, or residential journeyman
             195      electrician may have under immediate supervision on a residential project up to three licensed
             196      apprentice electricians.
             197          (iii) A licensed master or journeyman electrician may have under immediate
             198      supervision on nonresidential projects only one licensed apprentice electrician.
             199          (k) An alarm company applicant shall:
             200          (i) have a qualifying agent who is an officer, director, partner, proprietor, or manager of
             201      the applicant who:
             202          (A) demonstrates 6,000 hours of experience in the alarm company business;
             203          (B) demonstrates 2,000 hours of experience as a manager or administrator in the alarm
             204      company business or in a construction business; and
             205          (C) passes an examination component established by rule by the commission with the
             206      concurrence of the director;
             207          (ii) if a corporation, provide:
             208          (A) the names, addresses, dates of birth, Social Security numbers, and fingerprint cards
             209      of all corporate officers, directors, and those responsible management personnel employed
             210      within the state or having direct responsibility for managing operations of the applicant within



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     the state; and
             212          (B) the names, addresses, dates of birth, Social Security numbers, and fingerprint cards
             213      of all shareholders owning 5% or more of the outstanding shares of the corporation, except this
             214      shall not be required if the stock is publicly listed and traded;
             215          (iii) if a limited liability company, provide:
             216          (A) the names, addresses, dates of birth, Social Security numbers, and fingerprint cards
             217      of all company officers, and those responsible management personnel employed within the
             218      state or having direct responsibility for managing operations of the applicant within the state;
             219      and
             220          (B) the names, addresses, dates of birth, Social Security numbers, and fingerprint cards
             221      of all individuals owning 5% or more of the equity of the company;
             222          (iv) if a partnership, provide the names, addresses, dates of birth, Social Security
             223      numbers, and fingerprint cards of all general partners, and those responsible management
             224      personnel employed within the state or having direct responsibility for managing operations of
             225      the applicant within the state;
             226          (v) if a proprietorship, provide the names, addresses, dates of birth, Social Security
             227      numbers, and fingerprint cards of the proprietor, and those responsible management personnel
             228      employed within the state or having direct responsibility for managing operations of the
             229      applicant within the state;
             230          (vi) if a trust, provide the names, addresses, dates of birth, Social Security numbers,
             231      and fingerprint cards of the trustee, and those responsible management personnel employed
             232      within the state or having direct responsibility for managing operations of the applicant within
             233      the state;
             234          (vii) be of good moral character in that officers, directors, shareholders described in
             235      Subsection (3)(k)(ii)(B), partners, proprietors, trustees, and responsible management personnel
             236      have not been convicted of a felony, a misdemeanor involving moral turpitude, or any other
             237      crime that when considered with the duties and responsibilities of an alarm company is
             238      considered by the board to indicate that the best interests of the public are served by granting
             239      the applicant a license;
             240          (viii) document that none of the applicant's officers, directors, shareholders described
             241      in Subsection (3)(k)(ii)(B), partners, proprietors, trustees, and responsible management



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     personnel have been declared by any court of competent jurisdiction incompetent by reason of
             243      mental defect or disease and not been restored;
             244          (ix) document that none of the applicant's officers, directors, shareholders described in
             245      Subsection (3)(k)(ii)(B), partners, proprietors, and responsible management personnel are
             246      currently suffering from habitual drunkenness or from drug addiction or dependence;
             247          (x) file and maintain with the division evidence of:
             248          (A) comprehensive general liability insurance in form and in amounts to be established
             249      by rule by the commission with the concurrence of the director;
             250          (B) workers' compensation insurance that covers employees of the applicant in
             251      accordance with applicable Utah law; and
             252          (C) registration as is required by applicable law with the:
             253          (I) Division of Corporations and Commercial Code;
             254          (II) Unemployment Insurance Division in the Department of Workforce Services, for
             255      purposes of Title 35A, Chapter 4, Employment Security Act;
             256          (III) State Tax Commission; and
             257          (IV) Internal Revenue Service; and
             258          (xi) meet with the division and board.
             259          (l) Each applicant for licensure as an alarm company agent shall:
             260          (i) submit an application in a form prescribed by the division accompanied by
             261      fingerprint cards;
             262          (ii) pay a fee determined by the department under Section 63J-1-504 ;
             263          (iii) be of good moral character in that the applicant has not been convicted of a felony,
             264      a misdemeanor involving moral turpitude, or any other crime that when considered with the
             265      duties and responsibilities of an alarm company agent is considered by the board to indicate
             266      that the best interests of the public are served by granting the applicant a license;
             267          (iv) not have been declared by any court of competent jurisdiction incompetent by
             268      reason of mental defect or disease and not been restored;
             269          (v) not be currently suffering from habitual drunkenness or from drug addiction or
             270      dependence; and
             271          (vi) meet with the division and board if requested by the division or the board.
             272          (m) (i) Each applicant for licensure as an elevator mechanic shall:



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         (A) provide documentation of experience and education credits of not less than three
             274      years work experience in the elevator industry, in construction, maintenance, or service and
             275      repair; and
             276          (B) satisfactorily complete a written examination administered by the division
             277      established by rule under Section 58-1-203 ; or
             278          (C) provide certificates of completion of an apprenticeship program for elevator
             279      mechanics, having standards substantially equal to those of this chapter and registered with the
             280      United States Department of Labor Bureau Apprenticeship and Training or a state
             281      apprenticeship council.
             282          (ii) (A) If an elevator contractor licensed under this chapter cannot find a licensed
             283      elevator mechanic to perform the work of erecting, constructing, installing, altering, servicing,
             284      repairing, or maintaining an elevator, the contractor may:
             285          (I) notify the division of the unavailability of licensed personnel; and
             286          (II) request the division issue a temporary elevator mechanic license to an individual
             287      certified by the contractor as having an acceptable combination of documented experience and
             288      education to perform the work described in this Subsection (3)(m)(ii)(A).
             289          (B) (I) The division may issue a temporary elevator mechanic license to an individual
             290      certified under Subsection (3)(m)(ii)(A)(II) upon application by the individual, accompanied by
             291      the appropriate fee as determined by the department under Section 63J-1-504 .
             292          (II) The division shall specify the time period for which the license is valid and may
             293      renew the license for an additional time period upon its determination that a shortage of
             294      licensed elevator mechanics continues to exist.
             295          (4) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             296      division may make rules establishing when Federal Bureau of Investigation records shall be
             297      checked for applicants as an alarm company or alarm company agent.
             298          (5) To determine if an applicant meets the qualifications of Subsections (3)(k)(vii) and
             299      (3)(l)(iii), the division shall provide an appropriate number of copies of fingerprint cards to the
             300      Department of Public Safety with the division's request to:
             301          (a) conduct a search of records of the Department of Public Safety for criminal history
             302      information relating to each applicant for licensure as an alarm company or alarm company
             303      agent and each applicant's officers, directors, shareholders described in Subsection



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     (3)(k)(ii)(B), partners, proprietors, and responsible management personnel; and
             305          (b) forward to the Federal Bureau of Investigation a fingerprint card of each applicant
             306      requiring a check of records of the Federal Bureau of Investigation for criminal history
             307      information under this section.
             308          (6) The Department of Public Safety shall send to the division:
             309          (a) a written record of criminal history, or certification of no criminal history record, as
             310      contained in the records of the Department of Public Safety in a timely manner after receipt of
             311      a fingerprint card from the division and a request for review of Department of Public Safety
             312      records; and
             313          (b) the results of the Federal Bureau of Investigation review concerning an applicant in
             314      a timely manner after receipt of information from the Federal Bureau of Investigation.
             315          (7) (a) The division shall charge each applicant for licensure as an alarm company or
             316      alarm company agent a fee, in accordance with Section 63J-1-504 , equal to the cost of
             317      performing the records reviews under this section.
             318          (b) The division shall pay the Department of Public Safety the costs of all records
             319      reviews, and the Department of Public Safety shall pay the Federal Bureau of Investigation the
             320      costs of records reviews under this section.
             321          (8) Information obtained by the division from the reviews of criminal history records of
             322      the Department of Public Safety and the Federal Bureau of Investigation shall be used or
             323      disseminated by the division only for the purpose of determining if an applicant for licensure as
             324      an alarm company or alarm company agent is qualified for licensure.
             325          (9) (a) An application for licensure under this chapter shall be denied if:
             326          (i) the applicant has had a previous license, which was issued under this chapter,
             327      suspended or revoked within one year prior to the date of the applicant's application;
             328          (ii) (A) the applicant is a partnership, corporation, or limited liability company; and
             329          (B) any corporate officer, director, shareholder holding 25% or more of the stock in the
             330      applicant, partner, member, agent acting as a qualifier, or any person occupying a similar
             331      status, performing similar functions, or directly or indirectly controlling the applicant has
             332      served in any similar capacity with any person or entity which has had a previous license,
             333      which was issued under this chapter, suspended or revoked within one year prior to the date of
             334      the applicant's application; [or]



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         (iii) (A) the applicant is an individual or sole proprietorship; and
             336          (B) any owner or agent acting as a qualifier has served in any capacity listed in
             337      Subsection (9)(a)(ii)(B) in any entity which has had a previous license, which was issued under
             338      this chapter, suspended or revoked within one year prior to the date of the applicant's
             339      application[.]; or
             340          (iv) (A) the applicant includes an individual who was an owner, director, or officer of
             341      an unincorporated entity at the time the entity's license under this chapter was revoked; and
             342          (B) the application for licensure is filed within 60 months after the revocation of the
             343      unincorporated entity's license.
             344          (b) An application for licensure under this chapter shall be reviewed by the appropriate
             345      licensing board prior to approval if:
             346          (i) the applicant has had a previous license, which was issued under this chapter,
             347      suspended or revoked more than one year prior to the date of the applicant's application;
             348          (ii) (A) the applicant is a partnership, corporation, or limited liability company; and
             349          (B) any corporate officer, director, shareholder holding 25% or more of the stock in the
             350      applicant, partner, member, agent acting as a qualifier, or any person occupying a similar
             351      status, performing similar functions, or directly or indirectly controlling the applicant has
             352      served in any similar capacity with any person or entity which has had a previous license,
             353      which was issued under this chapter, suspended or revoked more than one year prior to the date
             354      of the applicant's application; or
             355          (iii) (A) the applicant is an individual or sole proprietorship; and
             356          (B) any owner or agent acting as a qualifier has served in any capacity listed in
             357      Subsection (9)(b)(ii)(B) in any entity which has had a previous license, which was issued under
             358      this chapter, suspended or revoked more than one year prior to the date of the applicant's
             359      application.
             360          (10) (a) (i) A licensee that is an unincorporated entity shall file an ownership status
             361      report with the division every [90] 30 days after the day on which the license is issued if the
             362      licensee has more than five owners who are individuals who:
             363          (A) own an interest in the contractor that is an unincorporated entity;
             364          (B) own, directly or indirectly, less than an 8% interest [in the unincorporated entity],
             365      as defined by rule made by the division in accordance with Title 63G, Chapter 3, Utah



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             366
     Administrative Rulemaking Act, in the unincorporated entity; and
             367          (C) engage, or will engage, in a construction trade in [Utah] the state as [an owner]
             368      owners of the contractor described in Subsection (10)(a)(i)(A).
             369          (ii) If the licensee has five or fewer owners described in Subsection (10)(a)(i), the
             370      licensee shall provide the ownership status report with an application for renewal of licensure.
             371          (b) An ownership status report required under this Subsection (10) shall:
             372          (i) [list] specify each addition or deletion of an owner:
             373          (A) for the first ownership status report, after the day on which the unincorporated
             374      entity is licensed under this chapter; and
             375          (B) for a subsequent ownership status report, after the day on which the previous
             376      ownership status report is filed;
             377          (ii) be in a format prescribed by the division that includes [the items on the list
             378      provided under] for each owner, regardless of the owner's percentage ownership in the
             379      unincorporated entity, the information described in Subsection(1)(e)(iv); [and]
             380          (iii) list the name of:
             381          (A) each officer or manager of the unincorporated entity; and
             382          (B) each other individual involved in the operation, supervision, or management of the
             383      unincorporated entity; and
             384          [(iii)] (iv) be accompanied by a fee set by the division in accordance with Section
             385      63J-1-504 if the ownership status report indicates there is a change described in Subsection
             386      (10)(b)(i).
             387          (c) The division may, at any time, audit an ownership status report under this
             388      Subsection (10):
             389          (i) to determine if financial responsibility has been demonstrated or maintained as
             390      required under Section 58-55-306 ; and
             391          (ii) to determine compliance with Subsection 58-55-501 (24) [or], (25), or (27) or
             392      Subsection 58-55-502 (8) or (9).
             393          (11) (a) An unincorporated entity that provides labor to an entity licensed under this
             394      chapter by providing an individual who owns an interest in the unincorporated entity to engage
             395      in a construction trade in Utah shall file with the division:
             396          (i) before the individual who owns an interest in the unincorporated entity engages in a



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             397
     construction trade in Utah, a current list of the one or more individuals who hold an ownership
             398      interest in the unincorporated entity that includes for each individual:
             399          (A) the individual's name, address, birthdate, and Social Security number; and
             400          (B) whether the individual will engage in a construction trade; and
             401          (ii) every [90] 30 days after the day on which the unincorporated entity provides the list
             402      described in Subsection (11)(a)(i), an ownership status report containing the information that
             403      would be required under Subsection (10) if the unincorporated entity were a licensed
             404      contractor.
             405          (b) When filing an ownership list described in Subsection (11)(a)(i) or an ownership
             406      status report described in Subsection (11)(a)(ii) or (iii) an unincorporated entity shall pay a fee
             407      set by the division in accordance with Section 63J-1-504 .
             408          (12) This chapter may not be interpreted to create or support an express or implied
             409      independent contractor relationship between an unincorporated entity described in Subsection
             410      (10) or (11) and the owners of the unincorporated entity for any purpose, including income tax
             411      withholding.
             412          (13) A Social Security number provided under Subsection (1)(e)(iv) is a private record
             413      under Subsection 63G-2-302 (1)(h).
             414          Section 2. Section 58-55-303 is amended to read:
             415           58-55-303. Term of license -- Expiration -- Renewal.
             416          (1) (a) Each license issued under this chapter shall be issued in accordance with a
             417      two-year renewal cycle established by rule.
             418          (b) The division may by rule extend or shorten a renewal period by as much as one year
             419      to stagger the renewal cycle it administers.
             420          (c) (i) Notwithstanding a renewal cycle under Subsection (1)(a) or (b), notwithstanding
             421      Title 63G, Chapter 4, Administrative Procedures Act, and subject to Subsection (1)(c)(ii), a
             422      license is automatically suspended 60 days after the licensee:
             423          (A) becomes, after the time of licensing, an unincorporated entity that is subject to the
             424      ownership status report filing requirements of Subsection 58-55-302 (10)(a)(i); or
             425          (B) transfers its license to an unincorporated entity that is subject to the ownership
             426      status report filing requirements of Subsection 58-55-302 (10)(a)(i).
             427          (ii) An automatic suspension does not occur under Subsection (1)(c)(i) if, before the



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     expiration of the 60-day period in Subsection (1)(c)(i):
             429          (A) the licensee submits an application for renewal of the license; and
             430          (B) the division renews the licensee's license pursuant to the licensee's application for
             431      renewal.
             432          (iii) Within 30 days after the effective date of a suspension under Subsection (1)(c)(i),
             433      the commission shall, in accordance with Title 63G, Chapter 4, Administrative Procedures Act,
             434      make a final determination concerning the suspension.
             435          (2) At the time of renewal, the licensee shall show satisfactory evidence of:
             436          (a) continuing financial responsibility as required under Section 58-55-306 ;
             437          (b) for a contractor licensee, completion of six hours of approved continuing education,
             438      as required in Section 58-55-302.5 ; and
             439          (c) if the licensee is an apprentice electrician or plumber, journeyman electrician or
             440      plumber, master electrician or plumber, residential journeyman electrician or plumber, or
             441      residential master electrician or plumber, completion of the number of hours of continuing
             442      education specified under Section 58-55-302.7 .
             443          (3) Each license automatically expires on the expiration date shown on the license
             444      unless the licensee renews the license in accordance with Section 58-1-308 .
             445          (4) The requirements of Subsection 58-55-302 (9) shall also apply to applicants seeking
             446      to renew or reinstate a license.
             447          (5) In addition to any other requirements imposed by law, if a license has been
             448      suspended or revoked for any reason, the applicant:
             449          (a) shall pay in full all fines imposed by the division;
             450          (b) resolve any outstanding citations or disciplinary actions with the division;
             451          (c) satisfy any Section 58-55-503 judgment and sentence or nontrial resolution;
             452          (d) complete a new financial responsibility review as required under Section
             453      58-55-306 , using only titled assets; and
             454          (e) pay in full any reimbursement amount as provided in Title 38, Chapter 11,
             455      Residence Lien Restriction and Lien Recovery Fund Act.
             456          Section 3. Section 58-55-306 is amended to read:
             457           58-55-306. Financial responsibility.
             458          (1) An applicant for licensure as a contractor, and a licensee applying for renewal or



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             459
     reinstatement of a contractor's license shall demonstrate to the division and the commission the
             460      applicant's or licensee's financial responsibility before the issuance of or the renewal or
             461      reinstatement of a license by:
             462          (a) (i) completing a questionnaire developed by the division; and
             463          (ii) signing the questionnaire, certifying that the information provided is true and
             464      accurate; or
             465          (b) submitting a bond in an amount and form determined by the commission with the
             466      concurrence of the director.
             467          (2) A licensee, including an individual who holds an ownership interest in an
             468      unincorporated entity licensee, shall maintain financial responsibility throughout the period of
             469      licensure.
             470          [(2)] (3) The division may audit [an applicant's or licensee's demonstration of] the
             471      financial responsibility of an applicant or licensee on a random basis or upon finding of a
             472      reasonable need.
             473          [(3)] (4) The burden to demonstrate financial responsibility is upon the applicant [or],
             474      licensee, or owner of an unincorporated entity licensee, as the case may be.
             475          [(4) (a) If an applicant for licensure as a contractor or a licensee applying for renewal
             476      or reinstatement of a contractor's license is an unincorporated entity, the division may require
             477      each individual who holds an ownership interest in the applicant or licensee to demonstrate
             478      financial responsibility to the division and the commission.]
             479          [(b) In accordance with Subsection (2), the division may audit an owner's
             480      demonstration of financial responsibility under Subsection (4)(a) at any time including
             481      requesting:]
             482          [(i) the applicant or licensee to provide a current list of owners meeting the
             483      requirements of Subsection 58-55-302 (1)(e)(iv); and]
             484          [(ii) a credit report for each owner.]
             485          [(c) If an owner described in Subsection (4) (a) fails to demonstrate financial
             486      responsibility under this section, the division may:]
             487          [(i) prohibit the licensee or owner from engaging in a construction trade; or]
             488          (5) (a) In determining the financial responsibility of an applicant or licensee described
             489      in Subsection (1) that is an unincorporated entity, the division:



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             490          (i) shall consider the personal financial information of each individual who holds an
             491      ownership interest in the unincorporated entity; and
             492          (ii) may, at any time:
             493          (A) audit the personal financial information of any individual who holds an ownership
             494      interest in the unincorporated entity; or
             495          (B) request and obtain a credit report on the individual.
             496          (b) If, based on the personal financial information of one or more individuals who hold
             497      an ownership interest in the unincorporated entity, the division determines that the applicant or
             498      licensee lacks financial responsibility to engage successfully in business as a contractor, the
             499      division may:
             500          (i) prohibit the individual or individuals from engaging in a construction trade;
             501          (ii) prohibit the applicant or licensee from engaging in a construction trade, unless the
             502      individual or individuals dissociate from the applicant or licensee within 10 days after the
             503      division makes the determination of a lack of financial responsibility; or
             504          [(ii)] (iii) require the [owner] individual or individuals, applicant, or licensee to submit
             505      a bond that is S. in a form determined by the commission with the concurrence of the director
             505a      and in an amount that is .S :
             506          (A) S. [ in an amount and form ] .S determined by the commission with the concurrence
             506a      of the
             507      director[.]; or
             508          (B) S. [ in an amount not less than ] .S 20% of the annual gross distributions from the
             509      unincorporated entity to its owners and that includes coverage for unpaid obligations incurred
             510      by the licensee contractor and any failure of the licensee contractor owners to pay income taxes
             511      and self-employment taxes on the gross distributions from the unincorporated entity to its
             512      owners.
             513          Section 4. Section 58-55-310 is amended to read:
             514           58-55-310. Requirements when working for political subdivision or state agency.
             515          Each political subdivision and agency of the state and each board of education which
             516      requires the issuance of a permit or license as a precondition to the construction, alteration,
             517      improvement, demolition, or other repairs for which a contractor's license is also required
             518      under this chapter shall:
             519          (1) require that each applicant for a permit or license file a signed statement that the
             520      applicant has a current contractor's license with the license number included in the application;



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             521
         (2) require that any representation of exemption from the contractor's licensing law be
             522      included in the signed statement and that if that exempt person, firm, corporation, association,
             523      or other organization intends to hire a contractor to perform any work under the permit or
             524      license, that the license number of that contractor be included in the application, but if a
             525      contractor has not been selected at the time of the application for a permit or license, the permit
             526      or license shall be issued only on the condition that a currently licensed contractor will be
             527      selected and that the license number of the contractor will be given to the issuing public body
             528      and displayed on the permit or license; [and]
             529          (3) require that, upon issuance of a permit or license, the contractor affix the
             530      contractor's license number to that permit or license for public display[.]; and
             531          (4) require the contractor to provide proof that the contractor provides workers'
             532      compensation insurance, pays into the unemployment insurance fund, provides health
             533      insurance as required under federal or state law, and withholds applicable taxes from worker
             534      pay.
             535          Section 5. Section 58-55-501 is amended to read:
             536           58-55-501. Unlawful conduct.
             537          Unlawful conduct includes:
             538          (1) engaging in a construction trade, acting as a contractor, an alarm business or
             539      company, or an alarm company agent, or representing oneself to be engaged in a construction
             540      trade or to be acting as a contractor in a construction trade requiring licensure, unless the
             541      person doing any of these is appropriately licensed or exempted from licensure under this
             542      chapter;
             543          (2) acting in a construction trade, as an alarm business or company, or as an alarm
             544      company agent beyond the scope of the license held;
             545          (3) hiring or employing in any manner an unlicensed person, other than an employee
             546      for wages who is not required to be licensed under this chapter, to engage in a construction
             547      trade for which licensure is required or to act as a contractor or subcontractor in a construction
             548      trade requiring licensure;
             549          (4) applying for or obtaining a building permit either for oneself or another when not
             550      licensed or exempted from licensure as a contractor under this chapter;
             551          (5) issuing a building permit to any person for whom there is no evidence of a current



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             552
     license or exemption from licensure as a contractor under this chapter;
             553          (6) applying for or obtaining a building permit for the benefit of or on behalf of any
             554      other person who is required to be licensed under this chapter but who is not licensed or is
             555      otherwise not entitled to obtain or receive the benefit of the building permit;
             556          (7) failing to obtain a building permit when required by law or rule;
             557          (8) submitting a bid for any work for which a license is required under this chapter by a
             558      person not licensed or exempted from licensure as a contractor under this chapter;
             559          (9) willfully or deliberately misrepresenting or omitting a material fact in connection
             560      with an application to obtain or renew a license under this chapter;
             561          (10) allowing one's license to be used by another except as provided by statute or rule;
             562          (11) doing business under a name other than the name appearing on the license, except
             563      as permitted by statute or rule;
             564          (12) if licensed as a specialty contractor in the electrical trade or plumbing trade,
             565      journeyman plumber, residential journeyman plumber, journeyman electrician, master
             566      electrician, or residential electrician, failing to directly supervise an apprentice under one's
             567      supervision or exceeding the number of apprentices one is allowed to have under the speciality
             568      contractor's supervision;
             569          (13) if licensed as a contractor or representing oneself to be a contractor, receiving any
             570      funds in payment for a specific project from an owner or any other person, which funds are to
             571      pay for work performed or materials and services furnished for that specific project, and after
             572      receiving the funds to exercise unauthorized control over the funds by failing to pay the full
             573      amounts due and payable to persons who performed work or furnished materials or services
             574      within a reasonable period of time;
             575          (14) employing an unlicensed alarm business or company or an unlicensed individual
             576      as an alarm company agent, except as permitted under the exemption from licensure provisions
             577      under Section 58-1-307 ;
             578          (15) if licensed as an alarm company or alarm company agent, filing with the division
             579      fingerprint cards for an applicant which are not those of the applicant, or are in any other way
             580      false or fraudulent and intended to mislead the division in its consideration of the applicant for
             581      licensure;
             582          (16) if licensed under this chapter, willfully or deliberately disregarding or violating:



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             583
         (a) the building or construction laws of this state or any political subdivision;
             584          (b) the safety and labor laws applicable to a project;
             585          (c) any provision of the health laws applicable to a project;
             586          (d) the workers' compensation insurance laws of the state applicable to a project;
             587          (e) the laws governing withholdings for employee state and federal income taxes,
             588      unemployment taxes, Social Security payroll taxes, or other required withholdings; or
             589          (f) reporting, notification, and filing laws of this state or the federal government;
             590          (17) aiding or abetting any person in evading the provisions of this chapter or rules
             591      established under the authority of the division to govern this chapter;
             592          (18) engaging in the construction trade or as a contractor for the construction of
             593      residences of up to two units when not currently registered or exempt from registration as a
             594      qualified beneficiary under Title 38, Chapter 11, Residence Lien Restriction and Lien Recovery
             595      Fund Act;
             596          (19) failing, as an original contractor, as defined in Section 38-11-102 , to include in a
             597      written contract the notification required in Section 38-11-108 ;
             598          (20) wrongfully filing a preconstruction or construction lien in violation of Section
             599      38-1a-308 ;
             600          (21) if licensed as a contractor, not completing the approved continuing education
             601      required under Section 58-55-302.5 ;
             602          (22) an alarm company allowing an employee with a temporary license under Section
             603      58-55-312 to engage in conduct on behalf of the company outside the scope of the temporary
             604      license, as provided in Subsection 58-55-312 (3)(a)(ii);
             605          (23) an alarm company agent under a temporary license under Section 58-55-312
             606      engaging in conduct outside the scope of the temporary license, as provided in Subsection
             607      58-55-312 (3)(a)(ii);
             608          (24) (a) an unincorporated entity licensed under this chapter having an individual who
             609      owns an interest in the unincorporated entity engage in a construction trade in Utah while not
             610      lawfully present in the United States; or
             611          (b) an unincorporated entity providing labor to an entity licensed under this chapter by
             612      providing an individual who owns an interest in the unincorporated entity to engage in a
             613      construction trade in Utah while not lawfully present in the United States;



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         (25) an unincorporated entity failing to provide the following for an individual who
             615      engages, or will engage, in a construction trade in Utah for the unincorporated entity, or for an
             616      individual who engages, or will engage, in a construction trade in Utah for a separate entity for
             617      which the unincorporated entity provides the individual as labor:
             618          (a) workers' compensation coverage:
             619          (i) to the extent required by Title 34A, Chapter 2, Workers' Compensation Act, and
             620      Title 34A, Chapter 3, Utah Occupational Disease Act; or
             621          (ii) that would be required under the chapters listed in Subsection (25)(a)(i) if the
             622      unincorporated entity were licensed under this chapter; and
             623          (b) unemployment compensation in accordance with Title 35A, Chapter 4,
             624      Employment Security Act, for an individual who owns, directly or indirectly, less than an 8%
             625      interest in the unincorporated entity, as defined by rule made by the division in accordance with
             626      Title 63G, Chapter 3, Utah Administrative Rulemaking Act; [or]
             627          (26) the failure of a sign installation contractor or nonelectrical outdoor advertising
             628      sign contractor, as classified and defined in division rules, to:
             629          (a) display the contractor's license number prominently on a vehicle that:
             630          (i) the contractor uses; and
             631          (ii) displays the contractor's business name; or
             632          (b) carry a copy of the contractor's license in any other vehicle that the contractor uses
             633      at a job site, whether or not the vehicle is owned by the contractor[.];
             634          (27) (a) an unincorporated entity licensed under this chapter having an individual who
             635      owns an interest in the unincorporated entity engage in a construction trade in the state while
             636      the individual is using a Social Security number that does not belong to that individual; or
             637          (b) an unincorporated entity providing labor to an entity licensed under this chapter by
             638      providing an individual, who owns an interest in the unincorporated entity, to engage in a
             639      construction trade in the state while the individual is using a Social Security number that does
             640      not belong to that individual; or
             641          (28) a contractor failing to comply with a requirement imposed by a political
             642      subdivision, state agency, or board of education under Section 58-55-310 .
             643          Section 6. Section 58-55-503 is amended to read:
             644           58-55-503. Penalty for unlawful conduct -- Citations.



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             645
         (1) (a) (i) A person who violates Subsection 58-55-308 (2), Subsection 58-55-501 (1),
             646      (2), (3), (4), (5), (6), (7), (9), (10), (12), (14), (15), (22), (23), (24), (25), [or] (26), (27), or (28),
             647      or Subsection 58-55-504 (2), or who fails to comply with a citation issued under this section
             648      after it is final, is guilty of a class A misdemeanor.
             649          (ii) As used in this section in reference to Subsection 58-55-504 (2), "person" means an
             650      individual and does not include a sole proprietorship, joint venture, corporation, limited
             651      liability company, association, or organization of any type.
             652          (b) A person who violates the provisions of Subsection 58-55-501 (8) may not be
             653      awarded and may not accept a contract for the performance of the work.
             654          (2) A person who violates the provisions of Subsection 58-55-501 (13) is guilty of an
             655      infraction unless the violator did so with the intent to deprive the person to whom money is to
             656      be paid of the money received, in which case the violator is guilty of theft, as classified in
             657      Section 76-6-412 .
             658          (3) Grounds for immediate suspension of the licensee's license by the division and the
             659      commission include the issuance of a citation for violation of Subsection 58-55-308 (2), Section
             660      58-55-501 , or Subsection 58-55-504 (2), or the failure by a licensee to make application to,
             661      report to, or notify the division with respect to any matter for which application, notification, or
             662      reporting is required under this chapter or rules adopted under this chapter, including applying
             663      to the division for a new license to engage in a new specialty classification or to do business
             664      under a new form of organization or business structure, filing with the division current
             665      financial statements, notifying the division concerning loss of insurance coverage, or change in
             666      qualifier.
             667          (4) (a) If upon inspection or investigation, the division concludes that a person has
             668      violated the provisions of Subsection 58-55-308 (2) or Subsections 58-55-501 (1), (2), (3), (9),
             669      (10), (12), (14), (19), (21), (22), (23), (24), (25), [or] (26), (27), or (28), or Subsection
             670      58-55-504 (2), or any rule or order issued with respect to these subsections, and that disciplinary
             671      action is appropriate, the director or the director's designee from within the division shall
             672      promptly issue a citation to the person according to this chapter and any pertinent rules, attempt
             673      to negotiate a stipulated settlement, or notify the person to appear before an adjudicative
             674      proceeding conducted under Title 63G, Chapter 4, Administrative Procedures Act.
             675          (i) A person who is in violation of the provisions of Subsection 58-55-308 (2),



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             676
     Subsection 58-55-501 (1), (2), (3), (9), (10), (12), (14), (19), (21), (22), (23), (24), (25), [or]
             677      (26), (27), or (28), or Subsection 58-55-504 (2), as evidenced by an uncontested citation, a
             678      stipulated settlement, or by a finding of violation in an adjudicative proceeding, may be
             679      assessed a fine pursuant to this Subsection (4) and may, in addition to or in lieu of, be ordered
             680      to cease and desist from violating Subsection 58-55-308 (2), Subsection 58-55-501 (1), (2), (3),
             681      (9), (10), (12), (14), (19), (21), (24), (25), [or] (26), (27), or (28), or Subsection 58-55-504 (2).
             682          (ii) Except for a cease and desist order, the licensure sanctions cited in Section
             683      58-55-401 may not be assessed through a citation.
             684          (b) (i) A citation shall be in writing and describe with particularity the nature of the
             685      violation, including a reference to the provision of the chapter, rule, or order alleged to have
             686      been violated.
             687          (ii) A citation shall clearly state that the recipient must notify the division in writing
             688      within 20 calendar days of service of the citation if the recipient wishes to contest the citation
             689      at a hearing conducted under Title 63G, Chapter 4, Administrative Procedures Act.
             690          (iii) A citation shall clearly explain the consequences of failure to timely contest the
             691      citation or to make payment of any fines assessed by the citation within the time specified in
             692      the citation.
             693          (c) A citation issued under this section, or a copy of a citation, may be served upon a
             694      person upon whom a summons may be served:
             695          (i) in accordance with the Utah Rules of Civil Procedure;
             696          (ii) personally or upon the person's agent by a division investigator or by a person
             697      specially designated by the director; or
             698          (iii) by mail.
             699          (d) (i) If within 20 calendar days from the service of a citation, the person to whom the
             700      citation was issued fails to request a hearing to contest the citation, the citation becomes the
             701      final order of the division and is not subject to further agency review.
             702          (ii) The period to contest a citation may be extended by the division for cause.
             703          (e) The division may refuse to issue or renew, suspend, revoke, or place on probation
             704      the license of a licensee who fails to comply with a citation after it becomes final.
             705          (f) The failure of an applicant for licensure to comply with a citation after it becomes
             706      final is a ground for denial of license.



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             707
         (g) A citation may not be issued under this section after the expiration of six months
             708      following the occurrence of a violation.
             709          (h) The director or the director's designee shall assess a fine in accordance with the
             710      following:
             711          (i) for a first offense handled pursuant to Subsection (4)(a), a fine of up to $1,000;
             712          (ii) for a second offense handled pursuant to Subsection (4)(a), a fine of up to $2,000;
             713      and
             714          (iii) for any subsequent offense handled pursuant to Subsection (4)(a), a fine of up to
             715      $2,000 for each day of continued offense.
             716          (i) (i) For purposes of issuing a final order under this section and assessing a fine under
             717      Subsection (4)(h), an offense constitutes a second or subsequent offense if:
             718          (A) the division previously issued a final order determining that a person committed a
             719      first or second offense in violation of Subsection 58-55-308 (2), Subsection 58-55-501 (1), (2),
             720      (3), (9), (10), (12), (14), (19), (24), (25), [or] (26), (27), or (28), or Subsection 58-55-504 (2); or
             721          (B) (I) the division initiated an action for a first or second offense;
             722          (II) a final order has not been issued by the division in the action initiated under
             723      Subsection (4)(i)(i)(B)(I);
             724          (III) the division determines during an investigation that occurred after the initiation of
             725      the action under Subsection (4)(i)(i)(B)(I) that the person committed a second or subsequent
             726      violation of the provisions of Subsection 58-55-308 (2), Subsection 58-55-501 (1), (2), (3), (9),
             727      (10), (12), (14), (19), (24), (25), [or] (26), (27), or (28), or Subsection 58-55-504 (2); and
             728          (IV) after determining that the person committed a second or subsequent offense under
             729      Subsection (4)(i)(i)(B)(III), the division issues a final order on the action initiated under
             730      Subsection (4)(i)(i)(B)(I).
             731          (ii) In issuing a final order for a second or subsequent offense under Subsection
             732      (4)(i)(i), the division shall comply with the requirements of this section.
             733          (j) In addition to any other licensure sanction or fine imposed under this section, the
             734      division shall revoke the license of a licensee that violates Subsection 58-55-501 (24) or (25)
             735      two or more times within a 12-month period, unless, with respect to a violation of Subsection
             736      58-55-501 (24), the licensee can demonstrate that the licensee successfully verified the federal
             737      legal working status of the individual who was the subject of the violation using a status



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             738
     verification system, as defined in Section 13-47-102 .
             739          (k) For purposes of this Subsection (4), a violation of Subsection 58-55-501 (24) or (25)
             740      for each individual is considered a separate violation.
             741          (5) (a) A penalty imposed by the director under Subsection (4)(h) shall be deposited
             742      into the Commerce Service Account created by Section 13-1-2 .
             743          (b) A penalty that is not paid may be collected by the director by either referring the
             744      matter to a collection agency or bringing an action in the district court of the county in which
             745      the person against whom the penalty is imposed resides or in the county where the office of the
             746      director is located.
             747          (c) A county attorney or the attorney general of the state is to provide legal assistance
             748      and advice to the director in any action to collect the penalty.
             749          (d) In an action brought to enforce the provisions of this section, reasonable attorney
             750      fees and costs shall be awarded.


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