S.B. 191

             1     

VERIFICATION OF LEGAL STATUS AMENDMENTS

             2     
2014 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: John L. Valentine

             5     
House Sponsor: ____________

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill modifies the Utah Construction Trades Licensing Act to address verification of
             10      legal status under certain circumstances.
             11      Highlighted Provisions:
             12          This bill:
             13          .    modifies provisions related to when a licensee verifies the legal status of an owner
             14      by complying with the federal process applicable to verifying the legal status of an
             15      employee to work in the United States; and
             16          .    makes technical changes.
             17      Money Appropriated in this Bill:
             18          None
             19      Other Special Clauses:
             20          None
             21      Utah Code Sections Affected:
             22      AMENDS:
             23           58-55-501 , as last amended by Laws of Utah 2013, Chapter 57
             24           58-55-502 , as last amended by Laws of Utah 2011, Chapters 170 and 413
             25           58-55-503 , as last amended by Laws of Utah 2013, Chapter 57
             26     
             27      Be it enacted by the Legislature of the state of Utah:


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


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


             90      written contract the notification required in Section 38-11-108 ;
             91          (20) wrongfully filing a preconstruction or construction lien in violation of Section
             92      38-1a-308 ;
             93          (21) if licensed as a contractor, not completing the approved continuing education
             94      required under Section 58-55-302.5 ;
             95          (22) an alarm company allowing an employee with a temporary license under Section
             96      58-55-312 to engage in conduct on behalf of the company outside the scope of the temporary
             97      license, as provided in Subsection 58-55-312 (3)(a)(ii);
             98          (23) an alarm company agent under a temporary license under Section 58-55-312
             99      engaging in conduct outside the scope of the temporary license, as provided in Subsection
             100      58-55-312 (3)(a)(ii);
             101          (24) (a) an unincorporated entity licensed under this chapter having an individual who
             102      owns an interest in the unincorporated entity engage in a construction trade in Utah while not
             103      lawfully present in the United States, unless the unincorporated entity has complied with 8
             104      U.S.C. Sec. 1324a(b) with the individual who is not lawfully present in the United States; or
             105          (b) an unincorporated entity providing labor to an entity licensed under this chapter by
             106      providing an individual who owns an interest in the unincorporated entity to engage in a
             107      construction trade in Utah while not lawfully present in the United States, unless the
             108      unincorporated entity has complied with 8 U.S.C. Sec. 1324a(b) with the individual who is not
             109      lawfully present in the United States;
             110          (25) an unincorporated entity failing to provide the following for an individual who
             111      engages, or will engage, in a construction trade in Utah for the unincorporated entity, or for an
             112      individual who engages, or will engage, in a construction trade in Utah for a separate entity for
             113      which the unincorporated entity provides the individual as labor:
             114          (a) workers' compensation coverage:
             115          (i) to the extent required by Title 34A, Chapter 2, Workers' Compensation Act, and
             116      Title 34A, Chapter 3, Utah Occupational Disease Act; or
             117          (ii) that would be required under the chapters listed in Subsection (25)(a)(i) if the
             118      unincorporated entity were licensed under this chapter; and
             119          (b) unemployment compensation in accordance with Title 35A, Chapter 4,
             120      Employment Security Act, for an individual who owns, directly or indirectly, less than an 8%


             121      interest in the unincorporated entity, as defined by rule made by the division in accordance with
             122      Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
             123          (26) the failure of a sign installation contractor or nonelectrical outdoor advertising
             124      sign contractor, as classified and defined in division rules, to:
             125          (a) display the contractor's license number prominently on a vehicle that:
             126          (i) the contractor uses; and
             127          (ii) displays the contractor's business name; or
             128          (b) carry a copy of the contractor's license in any other vehicle that the contractor uses
             129      at a job site, whether or not the vehicle is owned by the contractor;
             130          (27) (a) an unincorporated entity licensed under this chapter having an individual who
             131      owns an interest in the unincorporated entity engage in a construction trade in the state while
             132      the individual is using a Social Security number that does not belong to that individual, unless
             133      the unincorporated entity has complied with 8 U.S.C. Sec. 1324a(b) with the individual who is
             134      not lawfully present in the United States; or
             135          (b) an unincorporated entity providing labor to an entity licensed under this chapter by
             136      providing an individual, who owns an interest in the unincorporated entity, to engage in a
             137      construction trade in the state while the individual is using a Social Security number that does
             138      not belong to that individual, unless the unincorporated entity has complied with 8 U.S.C. Sec.
             139      1324a(b) with the individual who is not lawfully present in the United States; or
             140          (28) a contractor failing to comply with a requirement imposed by a political
             141      subdivision, state agency, or board of education under Section 58-55-310 .
             142          Section 2. Section 58-55-502 is amended to read:
             143           58-55-502. Unprofessional conduct.
             144          Unprofessional conduct includes:
             145          (1) failing to establish, maintain, or demonstrate financial responsibility while licensed
             146      as a contractor under this chapter;
             147          (2) disregarding or violating through gross negligence or a pattern of negligence:
             148          (a) the building or construction laws of this state or any political subdivision;
             149          (b) the safety and labor laws applicable to a project;
             150          (c) any provision of the health laws applicable to a project;
             151          (d) the workers' compensation insurance laws of this state applicable to a project;


             152          (e) the laws governing withholdings for employee state and federal income taxes,
             153      unemployment taxes, Social Security payroll taxes, or other required withholdings; or
             154          (f) any reporting, notification, and filing laws of this state or the federal government;
             155          (3) any willful, fraudulent, or deceitful act by a licensee, caused by a licensee, or at a
             156      licensee's direction which causes material injury to another;
             157          (4) contract violations that pose a threat or potential threat to the public health, safety,
             158      and welfare including:
             159          (a) willful, deliberate, or grossly negligent departure from or disregard for plans or
             160      specifications, or abandonment or failure to complete a project without the consent of the
             161      owner or the owner's duly authorized representative or the consent of any other person entitled
             162      to have the particular project completed in accordance with the plans, specifications, and
             163      contract terms;
             164          (b) failure to deposit funds to the benefit of an employee as required under any written
             165      contractual obligation the licensee has to the employee;
             166          (c) failure to maintain in full force and effect any health insurance benefit to an
             167      employee that was extended as a part of any written contractual obligation or representation by
             168      the licensee, unless the employee is given written notice of the licensee's intent to cancel or
             169      reduce the insurance benefit at least 45 days before the effective date of the cancellation or
             170      reduction;
             171          (d) failure to reimburse the Residence Lien Recovery Fund as required by Section
             172      38-11-207 ;
             173          (e) failure to provide, when applicable, the information required by Section 38-11-108 ;
             174      and
             175          (f) willfully or deliberately misrepresenting or omitting a material fact in connection
             176      with an application to claim recovery from the Residence Lien Recovery Fund under Section
             177      38-11-204 ;
             178          (5) failing as an alarm company to notify the division of the cessation of performance
             179      of its qualifying agent, or failing to replace its qualifying agent as required under Section
             180      58-55-304 ;
             181          (6) failing as an alarm company agent to carry or display a copy of the licensee's
             182      license as required under Section 58-55-311 ;


             183          (7) failing to comply with operating standards established by rule in accordance with
             184      Section 58-55-308 ;
             185          (8) an unincorporated entity licensed under this chapter having an individual who owns
             186      an interest in the unincorporated entity engage in a construction trade in Utah while not
             187      lawfully present in the United States, unless the unincorporated entity has complied with 8
             188      U.S.C. Sec. 1324a(b) with the individual who is not lawfully present in the United States;
             189          (9) an unincorporated entity failing to provide the following for an individual who
             190      engages, or will engage, in a construction trade in Utah for the unincorporated entity:
             191          (a) workers' compensation coverage to the extent required by Title 34A, Chapter 2,
             192      Workers' Compensation Act, and Title 34A, Chapter 3, Utah Occupational Disease Act; and
             193          (b) unemployment compensation in accordance with Title 35A, Chapter 4,
             194      Employment Security Act, for an individual who owns, directly or indirectly, less than an 8%
             195      interest in the unincorporated entity, as defined by rule made by the division in accordance with
             196      Title 63G, Chapter 3, Utah Administrative Rulemaking Act; or
             197          (10) the failure of an alarm company or alarm company agent to inform a potential
             198      customer, before the customer's purchase of an alarm system or alarm service from the alarm
             199      company, of the policy of the county, city, or town within which the customer resides relating
             200      to priority levels for responding to an alarm signal transmitted by the alarm system that the
             201      alarm company provides the customer.
             202          Section 3. Section 58-55-503 is amended to read:
             203           58-55-503. Penalty for unlawful conduct -- Citations.
             204          (1) (a) (i) A person who violates Subsection 58-55-308 (2), Subsection 58-55-501 (1),
             205      (2), (3), (4), (5), (6), (7), (9), (10), (12), (14), (15), (22), (23), (24), (25), (26), (27), or (28), or
             206      Subsection 58-55-504 (2), or who fails to comply with a citation issued under this section after
             207      it is final, is guilty of a class A misdemeanor.
             208          (ii) As used in this section in reference to Subsection 58-55-504 (2), "person" means an
             209      individual and does not include a sole proprietorship, joint venture, corporation, limited
             210      liability company, association, or organization of any type.
             211          (b) A person who violates the provisions of Subsection 58-55-501 (8) may not be
             212      awarded and may not accept a contract for the performance of the work.
             213          (2) A person who violates the provisions of Subsection 58-55-501 (13) is guilty of an


             214      infraction unless the violator did so with the intent to deprive the person to whom money is to
             215      be paid of the money received, in which case the violator is guilty of theft, as classified in
             216      Section 76-6-412 .
             217          (3) Grounds for immediate suspension of the licensee's license by the division and the
             218      commission include the issuance of a citation for violation of Subsection 58-55-308 (2), Section
             219      58-55-501 , or Subsection 58-55-504 (2), or the failure by a licensee to make application to,
             220      report to, or notify the division with respect to any matter for which application, notification, or
             221      reporting is required under this chapter or rules adopted under this chapter, including applying
             222      to the division for a new license to engage in a new specialty classification or to do business
             223      under a new form of organization or business structure, filing with the division current
             224      financial statements, notifying the division concerning loss of insurance coverage, or change in
             225      qualifier.
             226          (4) (a) If upon inspection or investigation, the division concludes that a person has
             227      violated the provisions of Subsection 58-55-308 (2) [or Subsections], Subsection 58-55-501 (1),
             228      (2), (3), (9), (10), (12), (14), (19), (21), (22), (23), (24), (25), (26), (27), or (28), or Subsection
             229      58-55-504 (2), or any rule or order issued with respect to these subsections, and that disciplinary
             230      action is appropriate, the director or the director's designee from within the division shall
             231      promptly issue a citation to the person according to this chapter and any pertinent rules, attempt
             232      to negotiate a stipulated settlement, or notify the person to appear before an adjudicative
             233      proceeding conducted under Title 63G, Chapter 4, Administrative Procedures Act.
             234          (i) A person who is in violation of the provisions of Subsection 58-55-308 (2),
             235      Subsection 58-55-501 (1), (2), (3), (9), (10), (12), (14), (19), (21), (22), (23), (24), (25), (26),
             236      (27), or (28), or Subsection 58-55-504 (2), as evidenced by an uncontested citation, a stipulated
             237      settlement, or by a finding of violation in an adjudicative proceeding, may be assessed a fine
             238      pursuant to this Subsection (4) and may, in addition to or in lieu of, be ordered to cease and
             239      desist from violating Subsection 58-55-308 (2), Subsection 58-55-501 (1), (2), (3), (9), (10),
             240      (12), (14), (19), (21), (24), (25), (26), (27), or (28), or Subsection 58-55-504 (2).
             241          (ii) Except for a cease and desist order, the licensure sanctions cited in Section
             242      58-55-401 may not be assessed through a citation.
             243          (b) (i) A citation shall be in writing and describe with particularity the nature of the
             244      violation, including a reference to the provision of the chapter, rule, or order alleged to have


             245      been violated.
             246          (ii) A citation shall clearly state that the recipient must notify the division in writing
             247      within 20 calendar days of service of the citation if the recipient wishes to contest the citation
             248      at a hearing conducted under Title 63G, Chapter 4, Administrative Procedures Act.
             249          (iii) A citation shall clearly explain the consequences of failure to timely contest the
             250      citation or to make payment of any fines assessed by the citation within the time specified in
             251      the citation.
             252          (c) A citation issued under this section, or a copy of a citation, may be served upon a
             253      person upon whom a summons may be served:
             254          (i) in accordance with the Utah Rules of Civil Procedure;
             255          (ii) personally or upon the person's agent by a division investigator or by a person
             256      specially designated by the director; or
             257          (iii) by mail.
             258          (d) (i) If within 20 calendar days from the service of a citation, the person to whom the
             259      citation was issued fails to request a hearing to contest the citation, the citation becomes the
             260      final order of the division and is not subject to further agency review.
             261          (ii) The period to contest a citation may be extended by the division for cause.
             262          (e) The division may refuse to issue or renew, suspend, revoke, or place on probation
             263      the license of a licensee who fails to comply with a citation after it becomes final.
             264          (f) The failure of an applicant for licensure to comply with a citation after it becomes
             265      final is a ground for denial of license.
             266          (g) A citation may not be issued under this section after the expiration of six months
             267      following the occurrence of a violation.
             268          (h) The director or the director's designee shall assess a fine in accordance with the
             269      following:
             270          (i) for a first offense handled pursuant to Subsection (4)(a), a fine of up to $1,000;
             271          (ii) for a second offense handled pursuant to Subsection (4)(a), a fine of up to $2,000;
             272      and
             273          (iii) for any subsequent offense handled pursuant to Subsection (4)(a), a fine of up to
             274      $2,000 for each day of continued offense.
             275          (i) (i) For purposes of issuing a final order under this section and assessing a fine under


             276      Subsection (4)(h), an offense constitutes a second or subsequent offense if:
             277          (A) the division previously issued a final order determining that a person committed a
             278      first or second offense in violation of Subsection 58-55-308 (2), Subsection 58-55-501 (1), (2),
             279      (3), (9), (10), (12), (14), (19), (24), (25), (26), (27), or (28), or Subsection 58-55-504 (2); or
             280          (B) (I) the division initiated an action for a first or second offense;
             281          (II) a final order has not been issued by the division in the action initiated under
             282      Subsection (4)(i)(i)(B)(I);
             283          (III) the division determines during an investigation that occurred after the initiation of
             284      the action under Subsection (4)(i)(i)(B)(I) that the person committed a second or subsequent
             285      violation of the provisions of Subsection 58-55-308 (2), Subsection 58-55-501 (1), (2), (3), (9),
             286      (10), (12), (14), (19), (24), (25), (26), (27), or (28), or Subsection 58-55-504 (2); and
             287          (IV) after determining that the person committed a second or subsequent offense under
             288      Subsection (4)(i)(i)(B)(III), the division issues a final order on the action initiated under
             289      Subsection (4)(i)(i)(B)(I).
             290          (ii) In issuing a final order for a second or subsequent offense under Subsection
             291      (4)(i)(i), the division shall comply with the requirements of this section.
             292          (j) In addition to any other licensure sanction or fine imposed under this section, the
             293      division shall revoke the license of a licensee that violates Subsection 58-55-501 (24) or (25)
             294      two or more times within a 12-month period[, unless, with respect to a violation of Subsection
             295      58-55-501 (24), the licensee can demonstrate that the licensee successfully verified the federal
             296      legal working status of the individual who was the subject of the violation using a status
             297      verification system, as defined in Section 13-47-102] .
             298          (k) For purposes of this Subsection (4), a violation of Subsection 58-55-501 (24) or (25)
             299      for each individual is considered a separate violation.
             300          (5) (a) A penalty imposed by the director under Subsection (4)(h) shall be deposited
             301      into the Commerce Service Account created by Section 13-1-2 .
             302          (b) A penalty that is not paid may be collected by the director by either referring the
             303      matter to a collection agency or bringing an action in the district court of the county in which
             304      the person against whom the penalty is imposed resides or in the county where the office of the
             305      director is located.
             306          (c) A county attorney or the attorney general of the state is to provide legal assistance


             307      and advice to the director in any action to collect the penalty.
             308          (d) In an action brought to enforce the provisions of this section, reasonable attorney
             309      fees and costs shall be awarded.




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