1     
PROFESSIONAL LICENSING AMENDMENTS

2     
2018 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Mike Schultz

5     
Senate Sponsor: David G. Buxton

6     

7     LONG TITLE
8     General Description:
9          This bill modifies provisions of the Residence Lien Restriction and Lien Recovery
10     Fund Act, the Building Inspector and Factory Built Housing Licensing Act, and other
11     related provisions.
12     Highlighted Provisions:
13          This bill:
14          ▸     modifies provisions related to the Residence Lien Restriction and Lien Recovery
15     Fund Act, the Building Inspector and Factory Built Housing Licensing Act, and
16     other related provisions;
17          ▸     discontinues assessments to provide money for the continuing operation of the
18     Residence Lien Recovery Fund;
19          ▸     requires certain reporting requirements from the Division of Occupational and
20     Professional Licensing to the Legislature regarding the Residence Lien Recovery
21     Fund, including providing the Legislature with a recommendation of when
22     provisions related to the fund should be repealed due to insufficient money in the
23     fund to pay claims; and
24          ▸     makes technical changes.
25     Money Appropriated in this Bill:
26          None
27     Other Special Clauses:
28          None
29     Utah Code Sections Affected:
30     AMENDS:
31          38-11-102, as last amended by Laws of Utah 2014, Chapter 108
32          38-11-104, as last amended by Laws of Utah 2004, Chapter 42
33          38-11-105, as last amended by Laws of Utah 2008, Chapter 382
34          38-11-106, as last amended by Laws of Utah 2004, Chapter 42
35          38-11-201, as last amended by Laws of Utah 2013, Chapter 400
36          38-11-202, as last amended by Laws of Utah 2009, Chapter 183
37          38-11-203, as last amended by Laws of Utah 2016, Chapter 238
38          38-11-301, as last amended by Laws of Utah 2009, Chapter 183
39          58-56-9, as last amended by Laws of Utah 2011, Chapter 14
40          58-56-9.3, as last amended by Laws of Utah 2010, Chapter 310
41          58-56-9.5, as last amended by Laws of Utah 2010, Chapter 278
42          63J-1-504, as last amended by Laws of Utah 2013, Chapter 310
43     ENACTS:
44          58-56-9.4, Utah Code Annotated 1953
45     REPEALS AND REENACTS:
46          38-11-206, as last amended by Laws of Utah 2011, Chapter 367
47     REPEALS:
48          38-11-302, as last amended by Laws of Utah 2009, Chapter 183
49     

50     Be it enacted by the Legislature of the state of Utah:
51          Section 1. Section 38-11-102 is amended to read:
52          38-11-102. Definitions.
53          (1) "Board" means the Residence Lien Recovery Fund Advisory Board established
54     under Section 38-11-104.
55          (2) "Certificate of compliance" means an order issued by the director to the owner
56     finding that the owner is in compliance with the requirements of Subsections 38-11-204(4)(a)
57     and (4)(b) and is entitled to protection under Section 38-11-107.
58          (3) "Construction on an owner-occupied residence" means designing, engineering,
59     constructing, altering, remodeling, improving, repairing, or maintaining a new or existing
60     residence.
61          (4) "Department" means the Department of Commerce.
62          (5) "Director" means the director of the Division of Occupational and Professional
63     Licensing.
64          (6) "Division" means the Division of Occupational and Professional Licensing.
65          (7) "Duplex" means a single building having two separate living units.
66          (8) "Encumbered fund balance" means the aggregate amount of outstanding claims
67     against the fund. The remainder of the money in the fund is unencumbered funds.
68          (9) "Executive director" means the executive director of the Department of Commerce.
69          (10) "Factory built housing" is as defined in Section 15A-1-302.
70          (11) "Factory built housing retailer" means a person that sells factory built housing to
71     consumers.
72          (12) "Fund" means the Residence Lien Recovery Fund established under Section
73     38-11-201.
74          (13) "Laborer" means a person who provides services at the site of the construction on
75     an owner-occupied residence as an employee of an original contractor or other qualified
76     beneficiary performing qualified services on the residence.
77          (14) "Licensee" means any holder of a license issued under Title 58, Chapter 3a,
78     Architects Licensing Act; Chapter 22, Professional Engineers and Professional Land Surveyors
79     Licensing Act; Chapter 53, Landscape Architects Licensing Act; and Chapter 55, Utah
80     Construction Trades Licensing Act.
81          (15) "Nonpaying party" means the original contractor, subcontractor, or real estate
82     developer who has failed to pay the qualified beneficiary making a claim against the fund.
83          (16) "Original contractor" means a person who contracts with the owner of real
84     property or the owner's agent to provide services, labor, or material for the construction of an
85     owner-occupied residence.
86          (17) "Owner" means a person who:
87          (a) contracts with a person who is licensed as a contractor or is exempt from licensure
88     under Title 58, Chapter 55, Utah Construction Trades Licensing Act, for the construction on an
89     owner-occupied residence upon real property that the person:
90          (i) owns; or
91          (ii) purchases after the person enters into a contract described in this Subsection (17)(a)
92     and before completion of the owner-occupied residence;
93          (b) contracts with a real estate developer to buy a residence upon completion of the
94     construction on the owner-occupied residence; or
95          (c) purchases a residence from a real estate developer after completion of the
96     construction on the owner-occupied residence.
97          (18) "Owner-occupied residence" means a residence that is, or after completion of the
98     construction on the residence will be, occupied by the owner or the owner's tenant or lessee as a
99     primary or secondary residence within 180 days after the day on which the construction on the
100     residence is complete.
101          (19) "Qualified beneficiary" means a person who:
102          (a) provides qualified services;
103          (b) pays necessary fees [or assessments] required under this chapter; and
104          (c) registers with the division:
105          (i) as a licensed contractor under Subsection 38-11-301(1) or (2), if that person seeks
106     recovery from the fund as a licensed contractor; or
107          (ii) as a person providing qualified services other than as a licensed contractor under
108     Subsection 38-11-301(3) if the person seeks recovery from the fund in a capacity other than as
109     a licensed contractor.
110          (20) (a) "Qualified services" means the following performed in construction on an
111     owner-occupied residence:
112          (i) contractor services provided by a contractor licensed or exempt from licensure
113     under Title 58, Chapter 55, Utah Construction Trades Licensing Act;
114          (ii) architectural services provided by an architect licensed under Title 58, Chapter 3a,
115     Architects Licensing Act;
116          (iii) engineering and land surveying services provided by a professional engineer or
117     land surveyor licensed or exempt from licensure under Title 58, Chapter 22, Professional
118     Engineers and Professional Land Surveyors Licensing Act;
119          (iv) landscape architectural services by a landscape architect licensed or exempt from
120     licensure under Title 58, Chapter 53, Landscape Architects Licensing Act;
121          (v) design and specification services of mechanical or other systems;
122          (vi) other services related to the design, drawing, surveying, specification, cost
123     estimation, or other like professional services;
124          (vii) providing materials, supplies, components, or similar products;
125          (viii) renting equipment or materials;
126          (ix) labor at the site of the construction on the owner-occupied residence; and
127          (x) site preparation, set up, and installation of factory built housing.
128          (b) "Qualified services" does not include the construction of factory built housing in
129     the factory.
130          (21) "Real estate developer" means a person having an ownership interest in real
131     property who:
132          (a) contracts with a person who is licensed as a contractor or is exempt from licensure
133     under Title 58, Chapter 55, Utah Construction Trades Licensing Act, for the construction of a
134     residence that is offered for sale to the public; or
135          (b) is a licensed contractor under Title 58, Chapter 55, Utah Construction Trades
136     Licensing Act, who engages in the construction of a residence that is offered for sale to the
137     public.
138          (22) (a) "Residence" means an improvement to real property used or occupied, to be
139     used or occupied as, or in conjunction with:
140          (i) a primary or secondary detached single-family dwelling; or
141          (ii) a multifamily dwelling up to and including duplexes.
142          (b) "Residence" includes factory built housing.
143          (23) "Subsequent owner" means a person who purchases a residence from an owner
144     within 180 days after the day on which the construction on the residence is completed.
145          Section 2. Section 38-11-104 is amended to read:
146          38-11-104. Board.
147          (1) There is created the Residence Lien Recovery Fund Advisory Board consisting of:
148          (a) three individuals licensed as a contractor who are actively engaged in construction
149     on owner-occupied residences;
150          (b) three individuals who are employed in responsible management positions with
151     major suppliers of materials or equipment used in the construction on owner-occupied
152     residences; and
153          (c) one member from the general public who has no interest in the construction on
154     owner-occupied residences, or supply of materials used in the construction on owner-occupied
155     residences.
156          (2) The board shall be appointed and members shall serve their respective terms in
157     accordance with Section 58-1-201.
158          (3) The duties and responsibilities of the board shall be to:
159          (a) advise the division with respect to informal adjudication of any claim for payment
160     from the fund and any request for a certificate of compliance received by the division;
161          (b) act as the presiding officer, as defined by rule, in formal adjudicative proceedings
162     held before the division with respect to any claim made for payment from the fund;
163          (c) advise the division with respect to:
164          (i) the general operation of the fund;
165          [(ii) the amount and frequency of any assessment under this chapter;]
166          [(iii)] (ii) the amount of any fees required under this chapter; and
167          [(iv) the availability and advisability of using funds for purchase of surety bonds to
168     guarantee payment to qualified beneficiaries; and]
169          [(v)] (iii) the limitation on the fund balance under Section 38-11-206; and
170          (d) review the administrative expenditures made by the division pursuant to Subsection
171     38-11-201(4) and report its findings regarding those expenditures to the executive director on
172     or before the first Monday of December of each year.
173          (4) The attorney general shall render legal assistance as requested by the board.
174          Section 3. Section 38-11-105 is amended to read:
175          38-11-105. Procedures established by rule.
176          In compliance with Title 63G, Chapter 4, Administrative Procedures Act, the division
177     shall establish procedures by rule by which claims for compensation from the fund and requests
178     for certificates of compliance shall be adjudicated [and by which assessments shall be
179     collected].
180          Section 4. Section 38-11-106 is amended to read:
181          38-11-106. State not liable.
182          The state and the state's agencies, instrumentalities, and political subdivisions are not
183     liable for:
184          (1) issuance or denial of any certificate of compliance;
185          (2) any claims made against the fund; or
186          (3) failure of the fund to pay any amounts ordered by the director to be paid from the
187     fund, including failure of the fund to pay any amounts ordered by the director to be paid
188     because there is insufficient money in the fund.
189          Section 5. Section 38-11-201 is amended to read:
190          38-11-201. Residence Lien Recovery Fund.
191          (1) There is created an expendable special revenue fund called the "Residence Lien
192     Recovery Fund."
193          [(2) (a) The fund consists of all amounts collected by the division in accordance with
194     Section 38-11-202.]
195          [(b) (i) The division shall deposit the funds in an account with the state treasurer.]
196          [(ii) The division shall record the funds in the Residence Lien Recovery Fund.]
197          [(c)] (2) The fund shall earn interest.
198          (3) The division shall employ personnel and resources necessary to administer the fund
199     and shall use fund money in accordance with Sections 38-11-203 and 38-11-204 and to pay the
200     costs charged to the fund by the attorney general.
201          (4) Costs incurred by the division, on or after May 8, 2018, for administering the fund
202     [shall] may be paid out of fund money in an amount that may be no more than a total of
203     $300,000 for the remaining existence of the fund.
204          (5) (a) The Division of Finance shall report annually to the Legislature, the division,
205     and the board.
206          (b) The report shall state:
207          [(a)] (i) amounts received by the fund;
208          [(b)] (ii) disbursements from the fund;
209          [(c)] (iii) interest earned and credited to the fund; and
210          [(d)] (iv) the fund balance.
211          [(6) (a) For purposes of establishing and assessing fees under Section 63J-1-504, the
212     provisions of this chapter are considered a new program for fiscal year 1995-96.]
213          [(b) The department shall submit its fee schedule to the Legislature for its approval at
214     the 1996 Annual General Session.]
215          Section 6. Section 38-11-202 is amended to read:
216          38-11-202. Payments to the fund.
217          [The] Beginning on May 8, 2018, the Residence Lien Recovery Fund [shall be
218     supported solely from] will no longer be supported by special assessments and will be solely
219     supported by:
220          [(1) initial and special assessments collected by the division from licensed contractors
221     registered as qualified beneficiaries in accordance with Subsections 38-11-301(1) and (2) and
222     Section 38-11-206;]
223          [(2) initial and special assessments collected by the division from other qualified
224     beneficiaries registering with the division in accordance with Subsection 38-11-301(3) and
225     Section 38-11-206;]
226          [(3)] (1) fees determined by the division under Section 63J-1-504 collected from
227     laborers under Subsection 38-11-204(7) when the laborers obtain a recovery from the fund;
228          [(4)] (2) amounts collected by subrogation under Section 38-11-205 on behalf of the
229     fund following a payment from the fund;
230          [(5)] (3) application fees determined by the division under Section 63J-1-504 collected
231     from:
232          (a) qualified beneficiaries or laborers under Subsection 38-11-204(1)(b) when qualified
233     beneficiaries or laborers make a claim against the fund; or
234          (b) owners or agents of the owners seeking to obtain a certificate of compliance for the
235     owner;
236          [(6)] (4) registration fees determined by the division under Section 63J-1-504 collected
237     from other qualified beneficiaries registering with the department in accordance with
238     Subsection 38-11-301(3)(a)(iii);
239          [(7)] (5) reinstatement fees determined by the division under Section 63J-1-504
240     collected from registrants in accordance with Subsection 38-11-302(5)(b);
241          [(8)] (6) civil fines authorized under Subsection 38-11-205(2) collected by the attorney
242     general for failure to reimburse the fund; and
243          [(9)] (7) any interest earned by the fund.
244          Section 7. Section 38-11-203 is amended to read:
245          38-11-203. Disbursements from the fund -- Limitations.
246          (1) A payment of any claim upon the fund by a qualified beneficiary shall be made only
247     upon an order issued by the director finding that:
248          (a) the claimant was a qualified beneficiary during the construction on a residence;
249          (b) the claimant complied with the requirements of Section 38-11-204;
250          (c) there is adequate money in the fund to pay the amount ordered; and
251          (d) the claimant provided the qualified services that are the basis of the claim.
252          (2) A payment of a claim upon the fund by a laborer shall be made only upon an order
253     issued by the director finding that:
254          (a) the laborer complied with the requirements of Subsection 38-11-204(7); and
255          (b) there is adequate money in the fund to pay the amount ordered.
256          (3) (a) An order under this section may be issued only after the division has complied
257     with the procedures established by rule under Section 38-11-105.
258          (b) The director shall order payment of the qualified services as established by
259     evidence, or if the claimant has obtained a judgment, then in the amount awarded for qualified
260     services in the judgment to the extent the qualified services are attributable to the
261     owner-occupied residence at issue in the claim.
262          (c) The director shall order payment of interest on amounts claimed for qualified
263     services based on the current prime interest rate at the time payment was due to the date the
264     claim is approved for payment except for delays attributable to the claimant but not more than
265     10% per annum.
266          (d) The rate shall be the prime lending rate as published in the Wall Street Journal on
267     the first business day of each calendar year adjusted annually.
268          (e) The director shall order payment of costs in the amount stated in the judgment. If
269     the judgment does not state a sum certain for costs, or if no judgment has been obtained, the
270     director shall order payment of reasonable costs as supported by evidence. The claim
271     application fee as established by the division pursuant to Subsection 38-11-204(1)(b) is not a
272     reimbursable cost.
273          (f) If a judgment has been obtained with attorneys' fees, notwithstanding the amount
274     stated in a judgment, or if no judgment has been obtained but the contract provides for
275     attorneys' fees, the director shall order payment of attorneys' fees not to exceed 15% of
276     qualified services. If the judgment does not state a sum for attorneys' fees, no attorneys' fees
277     will be paid by the director.
278          (4) (a) Payments made from the fund may not exceed $75,000 per construction project
279     to qualified beneficiaries and laborers who have claim against the fund for that construction
280     project.
281          (b) If claims against the fund for a construction project exceed $75,000, the $75,000
282     shall be awarded proportionately so that each qualified beneficiary and laborer awarded
283     compensation from the fund for qualified services shall receive an identical percentage of the
284     qualified beneficiary's or laborer's award.
285          [(5) Subject to the limitations of Subsection (4), if on the day the order is issued there
286     are inadequate funds to pay the entire claim and the director determines that the claimant has
287     otherwise met the requirements of Subsection (1) or (2), the director shall order additional
288     payments once the fund meets the balance limitations of Section 38-11-206.]
289          [(6)] (5) (a) A payment of any claim upon the fund may not be made to an assignee or
290     transferee unless an order issued by the director finds that:
291          (i) the claim is assigned or transferred to a person who is a qualified beneficiary; and
292          (ii) the person assigning or transferring the claim:
293          (A) was a qualified beneficiary during the construction on a residence; and
294          (B) provided the qualified services that are the basis of the claim.
295          (b) A claimant who is an assignee or transferee of a claim upon the fund under this
296     Subsection (6) does not have to meet the requirements of Subsections 38-11-203(1)(a) and (d).
297          Section 8. Section 38-11-206 is repealed and reenacted to read:
298          38-11-206. Limitations on fund balance.
299          By October 1 of each year, the division shall provide a written report to the Legislature
300     and the Business and Labor Interim Committee that describes:
301          (1) the amount of money in the fund, including the encumbered fund balance;
302          (2) an estimate of when the fund will have insufficient money to continue to pay claims
303     under this chapter; and
304          (3) a recommendation to the Legislature of whether the substantive provisions of this
305     chapter should be repealed due to insufficient money in the fund.
306          Section 9. Section 38-11-301 is amended to read:
307          38-11-301. Registration as a qualified beneficiary -- Initial regular assessment --
308     Affidavit.
309          (1) A person licensed as of July 1, 1995, as a contractor under the provisions of Title
310     58, Chapter 55, Utah Construction Trades Licensing Act, in license classifications that
311     regularly engage in providing qualified services shall be automatically registered as a qualified
312     beneficiary [upon payment of the initial assessment].
313          (2) A person applying for licensure as a contractor after July 1, 1995, in license
314     classifications that regularly engage in providing qualified services shall be automatically
315     registered as a qualified beneficiary upon issuance of a license [and payment of the initial
316     assessment].
317          (3) (a) After July 1, 1995, any person providing qualified services as other than a
318     contractor as provided in Subsection (1) or any person exempt from licensure under the
319     provisions of Title 58, Chapter 55, Utah Construction Trades Licensing Act, may register as a
320     qualified beneficiary by:
321          (i) submitting an application in a form prescribed by the division;
322          (ii) demonstrating registration with the Division of Corporations and Commercial Code
323     as required by state law; and
324          (iii) paying a registration fee determined by the division under Section 63J-1-504[;
325     and].
326          [(iv) paying the initial assessment established under Subsection (4), and any special
327     assessment determined by the division under Subsection 38-11-206(1).]
328          (b) A person who does not register under Subsection (1), (2), or (3)(a) shall be
329     prohibited from recovering under the fund as a qualified beneficiary for work performed as
330     qualified services while not registered with the fund.
331          [(4) (a) An applicant shall pay an initial assessment determined by the division under
332     Section 63J-1-504.]
333          [(b) The initial assessment to qualified registrants under Subsection (1) shall be made
334     not later than July 15, 1995, and shall be paid no later than November 1, 1995.]
335          [(c) The initial assessment to qualified registrants under Subsections (2) and (3) shall
336     be paid at the time of application for license or registration, however, beginning on May 1,
337     1996, only one initial assessment or special assessments thereafter shall be required for persons
338     having multiple licenses under this section.]
339          [(5) A person shall be considered to have been registered as a qualified beneficiary on
340     January 1, 1995, for purposes of meeting the requirements of Subsection 38-11-204(1)(c)(ii) if
341     the person:]
342          [(a) (i) is licensed on or before July 1, 1995, as a contractor under the provisions of
343     Title 58, Chapter 55, Utah Construction Trades Licensing Act, in license classifications that
344     regularly engage in providing qualified services; or]
345          [(ii) provides qualified services after July 1, 1995, as other than a contractor as
346     provided in Subsection (5)(a)(i) or is exempt from licensure under the provisions of Title 58,
347     Chapter 55, Utah Construction Trades Licensing Act; and]
348          [(b) registers as a qualified beneficiary under Subsection (1) or (3) on or before
349     November 1, 1995.]
350          Section 10. Section 58-56-9 is amended to read:
351          58-56-9. Qualifications of inspectors -- Contract for inspection services.
352          (1) An inspector employed by a local regulator, state regulator, or compliance agency
353     to enforce the codes shall:
354          (a) (i) meet minimum qualifications as established by the division in collaboration with
355     the commission;
356          (ii) be certified by a nationally recognized organization which promulgates
357     construction codes; or
358          (iii) pass an examination developed by the division in collaboration with the
359     commission;
360          (b) be currently licensed by the division as meeting those minimum qualifications; and
361          (c) be subject to revocation or suspension of the inspector's license or being placed on
362     probation if found guilty of unlawful or unprofessional conduct.
363          (2) A local regulator, state regulator, or compliance agency may contract for the
364     services of a licensed inspector not regularly employed by the regulator or agency.
365          (3) In accordance with Section 58-1-401, the division may:
366          (a) refuse to issue a license to an applicant;
367          (b) refuse to renew the license of a licensee;
368          (c) revoke, suspend, restrict, or place on probation the license of a licensee;
369          (d) issue a public or private reprimand;
370          (e) issue a citation to a licensee; and
371          (f) issue a cease and desist order.
372          Section 11. Section 58-56-9.3 is amended to read:
373          58-56-9.3. Unprofessional conduct.
374          Unprofessional conduct is as defined in Subsection 58-1-501(2) and includes:
375          (1) knowingly failing to inspect or issue correction notices for code violations which
376     when left uncorrected would constitute a hazard to the public health and safety and knowingly
377     failing to require that correction notices are complied with as a building inspector;
378          (2) the use of alcohol or the illegal use of drugs while performing duties as a building
379     inspector or at any time to the extent that the inspector is physically or mentally impaired and
380     unable to effectively perform the duties of an inspector;
381          (3) gross negligence in the performance of official duties as a building inspector;
382          (4) the personal use of information or knowingly revealing information to unauthorized
383     persons when that information has been obtained by a building inspector as a result of the
384     inspector's employment, work, or position as an inspector;
385          (5) unlawful acts or practices which are clearly unethical under generally recognized
386     standards of conduct of a building inspector;
387          (6) engaging in fraud or knowingly misrepresenting a fact relating to the performance
388     of duties and responsibilities as a building inspector;
389          (7) a building inspector knowingly failing to require that all plans, specifications,
390     drawings, documents, and reports be stamped by architects, professional engineers, or both as
391     established by law;
392          (8) a building inspector knowingly failing to report to the division an act or omission of
393     a licensee under Title 58, Chapter 55, Utah Construction Trades Licensing Act, which when
394     left uncorrected constitutes a hazard to public health and safety;
395          (9) a building inspector knowingly failing to report to the division unlicensed practice
396     persons who are required to be licensed under Title 58, Chapter 55, Utah Construction Trades
397     Licensing Act;
398          (10) a building inspector's approval of work which materially varies from approved
399     documents that have been stamped by an architect, professional engineer, or both unless
400     authorized by the licensed architect, professional engineer, or both;
401          (11) a building inspector failing to produce verification of current licensure and current
402     certifications for the codes upon request of the division, a compliance agency, or a contractor
403     or property owner whose work is being inspected;
404          (12) a building inspector requiring work that materially varies from the building codes
405     adopted by the state;
406          [(12)] (13) nondelivery of goods or services by a registered dealer which constitutes a
407     breach of contract by the dealer;
408          [(13)] (14) the failure of a registered dealer to pay a subcontractor or supplier any
409     amounts to which that subcontractor or supplier is legally entitled; and
410          [(14)] (15) any other activity which is defined as unprofessional conduct by division
411     rule in accordance with the provisions of Title 63G, Chapter 3, Utah Administrative
412     Rulemaking Act.
413          Section 12. Section 58-56-9.4 is enacted to read:
414          58-56-9.4. Investigation of regulated activity.
415          (1) The division is responsible for the investigation of a person or an activity that
416     violates the provisions of this chapter.
417          (2) An investigation by the division may include:
418          (a) a requirement that potential administrative appeals described in Section 15A-1-207
419     have been exhausted before conducting the investigation;
420          (b) an investigation of a person engaged in unlawful or unprofessional conduct; and
421          (c) a referral to the Uniform Building Code Commission to review a dispute involving
422     an application or interpretation of a building code or construction law by a licensee.
423          Section 13. Section 58-56-9.5 is amended to read:
424          58-56-9.5. Penalty for unlawful conduct -- Citations.
425          (1) A person who violates a provision of Section 58-56-9.1 or who fails to comply with
426     a citation issued under this section after it is final is guilty of a class A misdemeanor.
427          (2) Grounds for immediate suspension of a licensee's license by the division under this
428     chapter include:
429          (a) the issuance of a citation for violation of a provision of Section 58-56-9.1 or
430     58-56-9.3; and
431          (b) failure by a licensee to make application to, report to, or notify the division with
432     respect to a matter for which application, notification, or reporting is required under this
433     chapter or rules made under this chapter by the division.
434          (3) (a) If upon inspection or investigation, the division concludes that a person has
435     violated a provision of Section 58-56-9.1 or 58-56-9.3, or a rule or order issued with respect to
436     that section, and that disciplinary action is appropriate, the director or the director's designee
437     from within the division shall:
438          (i) promptly issue a citation to the person according to this chapter and any pertinent
439     rules;
440          (ii) attempt to negotiate a stipulated settlement; or
441          (iii) notify the person to appear before an adjudicative proceeding conducted under
442     Title 63G, Chapter 4, Administrative Procedures Act.
443          (b) (i) A person who violates a provision of Section 58-56-9.1 or 58-56-9.3, as
444     evidenced by an uncontested citation, a stipulated settlement, or by a finding of violation in an
445     adjudicative proceeding, may be assessed a fine under this Subsection (3)(b) and may, in
446     addition to or instead of the fine, be ordered by the division to cease from violating the
447     provision.
448          (ii) Except as otherwise provided in Subsection (2)(a), the division may not assess
449     licensure sanctions referred to in Subsection 58-56-9(1)(c) through a citation.
450          (c) (i) Each citation shall be in writing and describe with particularity the nature of the
451     violation, including a reference to the provision of the chapter, rule, or order alleged to have
452     been violated.
453          (ii) The citation shall clearly state that the recipient must notify the division in writing
454     within 20 calendar days of service of the citation if the recipient wishes to contest the citation
455     at a hearing conducted under Title 63G, Chapter 4, Administrative Procedures Act.
456          (iii) The citation shall clearly explain the consequences of failure to timely contest the
457     citation or to make payment of any fines assessed by the citation within the time specified in
458     the citation.
459          (d) Each citation issued under this section, or a copy of each citation, may be served
460     upon any person upon whom a summons may be served:
461          (i) in accordance with the Utah Rules of Civil Procedure;
462          (ii) personally or upon the person's agent by a division investigator or by any person
463     specially designated by the director; or
464          (iii) by mail.
465          (e) (i) If within 20 calendar days from the service of a citation, the person to whom the
466     citation was issued fails to request a hearing to contest the citation, the citation becomes the
467     final order of the division and is not subject to further agency review.
468          (ii) The period to contest a citation may be extended by the division for cause.
469          (f) The division may refuse to issue or renew, suspend, revoke, or place on probation
470     the license of a licensee who fails to comply with a citation after it becomes final.
471          (g) The failure of an applicant for licensure to comply with a citation after it becomes
472     final is a ground for denial of a license.
473          (h) No citation may be issued under this section after the expiration of six months
474     following the occurrence of the violation.
475          (i) The director or the director's designee may assess fines for violations of Section
476     58-56-9.1 or 58-56-9.3 as follows:
477          (i) for a first offense determined under this Subsection (3), a fine of up to $1,000;
478          (ii) for a second offense, a fine of up to $2,000; and
479          (iii) for any subsequent offense, a fine of up to $2,000 for each day of continued
480     offense.
481          (j) For the purposes of issuing a final order under this section and assessing a fine
482     under Subsection (3)(i), an offense constitutes a second or subsequent offense if:
483          (i) the division previously issued a final order determining that a person committed a
484     first or second offense in violation of a provision of Section 58-56-9.1; or
485          (ii) (A) the division initiated an action for a first or second offense;
486          (B) no final order has been issued by the division in the action initiated under
487     Subsection (3)(j)(ii)(A);
488          (C) the division determines during an investigation that occurred after the initiation of
489     the action under Subsection (3)(j)(ii)(A) that the person committed a second or subsequent
490     violation of a provision of Section 58-56-9.1; and
491          (D) after determining that the person committed a second or subsequent offense under
492     Subsection (3)(j)(ii)(C), the division issues a final order on the action initiated under
493     Subsection (3)(j)(ii)(A).
494          (k) In issuing a final order for a second or subsequent offense under Subsection (3)(j),
495     the division shall comply with the requirements of this section.
496          (4) (a) Proceeds from a fine imposed under Subsection (3)(i) shall be deposited in the
497     Commerce Service Account created by Section 13-1-2.
498          (b) The director may collect an unpaid fine by:
499          (i) referring the matter to a collection agency; or
500          (ii) bringing an action in the district court of the county in which the person resides or
501     in the county where the director's office is located.
502          (c) (i) The state's attorney general or a county attorney shall provide legal assistance
503     and advice to the director in an action brought under Subsection (4)(b).
504          (ii) Reasonable attorney fees and costs shall be awarded in an action brought to enforce
505     the provisions of this section.
506          Section 14. Section 63J-1-504 is amended to read:
507          63J-1-504. Fees -- Adoption, procedure, and approval -- Establishing and
508     assessing fees without legislative approval.
509          (1) As used in this section:
510          (a) (i) "Agency" means each department, commission, board, council, agency,
511     institution, officer, corporation, fund, division, office, committee, authority, laboratory, library,
512     unit, bureau, panel, or other administrative unit of the state.
513          (ii) "Agency" does not mean the Legislature or its committees.
514          (b) "Fee agency" means any agency that is authorized to establish fees.
515          (c) "Fee schedule" means the complete list of fees charged by a fee agency and the
516     amount of those fees.
517          (2) Each fee agency shall adopt a schedule of fees assessed for services provided by the
518     fee agency that are:
519          (a) reasonable, fair, and reflect the cost of services provided; and
520          (b) established according to a cost formula determined by the executive director of the
521     Governor's Office of Management and Budget and the director of the Division of Finance in
522     conjunction with the agency seeking to establish the fee.
523          (3) Except as provided in Subsection (6), a fee agency may not:
524          (a) set fees by rule; or
525          (b) create, change, or collect any fee unless the fee has been established according to
526     the procedures and requirements of this section.
527          (4) Each fee agency that is proposing a new fee or proposing to change a fee shall:
528          (a) present each proposed fee at a public hearing, subject to the requirements of Title
529     52, Chapter 4, Open and Public Meetings Act;
530          (b) increase, decrease, or affirm each proposed fee based on the results of the public
531     hearing;
532          (c) except as provided in Subsection (6), submit the fee schedule to the Legislature as
533     part of the agency's annual appropriations request; and
534          (d) where necessary, modify the fee schedule to implement the Legislature's actions.
535          (5) (a) Each fee agency shall submit its fee schedule or special assessment amount to
536     the Legislature for its approval on an annual basis.
537          (b) The Legislature may approve, increase or decrease and approve, or reject any fee
538     submitted to it by a fee agency.
539          (6) After conducting the public hearing required by this section, a fee agency may
540     establish and assess fees without first obtaining legislative approval if:
541          (a) (i) the Legislature creates a new program that is to be funded by fees to be set by the
542     Legislature;
543          (ii) the new program's effective date is before the Legislature's next annual general
544     session; and
545          (iii) the fee agency submits the fee schedule for the new program to the Legislature for
546     its approval at a special session, if allowed in the governor's call, or at the next annual general
547     session of the Legislature, whichever is sooner; or
548          [(b) the Division of Occupational and Professional licensing makes a special
549     assessment against qualified beneficiaries under the Residence Lien Restriction and Lien
550     Recovery Fund Act as provided in Subsection 38-11-206(1); or]
551          [(c)] (b) (i) the fee agency proposes to increase or decrease an existing fee for the
552     purpose of adding or removing a transactional fee that is charged or assessed by a
553     non-governmental third party but is included as part of the fee charged by the fee agency;
554          (ii) the amount of the increase or decrease in the fee is equal to the amount of the
555     transactional fee charged or assessed by the non-governmental third party; and
556          (iii) the increased or decreased fee is submitted to the Legislature for its approval at a
557     special session, if allowed in the governor's call, or at the next annual session of the
558     Legislature, whichever is sooner.
559          (7) (a) Each fee agency that wishes to change any fee shall submit to the governor as
560     part of the agency's annual appropriation request a list that identifies:
561          (i) the title or purpose of the fee;
562          (ii) the present amount of the fee;
563          (iii) the proposed new amount of the fee;
564          (iv) the percent that the fee will have increased if the Legislature approves the higher
565     fee;
566          (v) the estimated total annual revenue change that will result from the change in the
567     fee;
568          (vi) the account or fund into which the fee will be deposited; and
569          (vii) the reason for the change in the fee.
570          (b) (i) The governor may review and approve, modify and approve, or reject the fee
571     increases.
572          (ii) The governor shall transmit the list required by Subsection (7)(a), with any
573     modifications, to the Legislative Fiscal Analyst with the governor's budget recommendations.
574          (c) Bills approving any fee change shall be filed before the beginning of the
575     Legislature's annual general session, if possible.
576          (8) (a) Except as provided in Subsection (8)(b), the School and Institutional Trust
577     Lands Administration, established in Section 53C-1-201, is exempt from the requirements of
578     this section.
579          (b) The following fees of the School and Institutional Trust Lands Administration are
580     subject to the requirements of this section: application, assignment, amendment, affidavit for
581     lost documents, name change, reinstatement, grazing nonuse, extension of time, partial
582     conveyance, patent reissue, collateral assignment, electronic payment, and processing.
583          Section 15. Repealer.
584          This bill repeals:
585          Section 38-11-302, Effective date and term of registration -- Penalty for failure to
586     pay assessments -- Reinstatement.