 |
ARIZONA STATE SENATE
Fifty-Fourth Legislature, First Regular Session
registrar of contractors omnibus
Purpose
Makes various changes to the Registrar of Contractors (ROC).
Background
The ROC issues contractor licenses by classifying qualified applicants, changing license classifications, conducting investigations and establishing examinations. Applicants for ROC licensure must have a minimum of four years' practical or management trade experience in classification-related construction and pass a written application covering relevant building, safety, health and lien laws. The ROC may choose to waive the work experience and examination requirements for an applicant previously licensed by the ROC in the preceding five years (A.R.S. § 32-1122).
The Residential Contractors' Recovery Fund (Fund) is administered by the ROC and serves as a statutorily instituted safeguard allowing eligible, damaged homeowners to recover losses or restore their property if harmed by a licensed contractor. Owners of noncommercial historic property or class three residential real property are eligible for Fund relief of up to $30,000 per property (A.R.S § 32-1131 and 32-1132).
The Fund is capitalized from an assessment, not to exceed $600 per biennial license period, paid by residential contractors. The ROC will suspend distributions if the Fund becomes insolvent. Unpaid claims, or a portion of unpaid claims, will be satisfied based on the time of filing a certified copy of the court order with the ROC (A.R.S. § 1134.02).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
Eligibility of Fund Relief
1. Determines an individual eligible for an award from the Fund if they:
a) own residential real property that is damaged by the failure of a residential contractor to adequately build or improve a residential structure or appurtenance; and
b) actually occupy or intend to occupy the residential real property as the individual's primary residence.
2. Determines a limited liability company (LLC) eligible for an award from the Fund if:
a) the LLC owns the residential real property that is damaged by the failure of a residential contractor to adequately build or improve a residential structure or appurtenance;
b) all of the LLC's members actually occupy or intend to occupy the residential real property as their primary residence; and
c) a member of the LLC has not received monies from the Fund in the last two years.
3. Determines a trust eligible for an award from the Fund if:
a) the trust is a revocable living trust;
b) the trust owns the residential real property that is damaged by the failure of a residential contractor to adequately build or improve a residential structure or appurtenance;
c) all of the trust's trustors actually occupy or intend to occupy the residential real property as their primary residence; and
d) a trustor has not received monies from the Fund in the last two years.
4. Determines a planned community or unit owners' association eligible for an award from the Fund if:
a) the builder or developer transferred control to the planned community or unit owners' association; and
b) the planned community or unit owners' association owns the residential real property that is damaged by the failure of a licensed residential contractor to adequately build or improve a residential structure or appurtenance.
5. Determines a lessee of residential real property eligible for an award from the Fund if they:
a) contract directly with a residential contractor or indirectly with a subcontractor of the residential contractor;
b) actually occupy or intend to occupy the residential real property as the individual's primary residence; and
c) are damaged by the licensed residential contractor's failure to adequately build or improve a residential structure or appurtenance.
6. Requires, in order for a claimant to be eligible for an award from the Fund, the contractor whose actions damaged the claimant to have been appropriately licensed on the date that the:
a) underlying contract was signed;
b) first payment was made; or
c) underlying work first commenced.
7. Limits awards from the Fund to residential real properties and prohibits the Fund from issuing an award covering damages to commercial property.
Contractor Licensure
8. Allows, rather than requires, the ROC to suspend a license if:
a) the licensed entity is dissolved;
b) the licensed entity does not have authority to do business in Arizona; or
c) the license is obtained or renewed with an insufficient funds check.
9. Allows a proper showing to regain licensure to be made by a contractor with a revoked license by demonstrating to the ROC that the licensee exhausted all reasonable means to remedy the underlying loss caused by the act or omission.
10. Requires the ROC to issue a contractor license if the applicant meets all requirements, regardless of the 20-day public posting period.
11. Requires an applicant or licensee that is a trust, who is obtaining, renewing or maintaining a license, to supply the names and addresses of all trustees.
12. Removes the requirement for a contractor to supply a detailed financial statement when requesting an exception for biennial licensing or renewal requirements.
Licensee and Qualifying Party Responsibilities
13. Requires a licensee applying for exemption from a qualifying party to show the ROC that they:
a) held a valid and active license for the past five years; and
b) did not commit a violation that would be considered grounds for suspension or revocation of a contractor's license, rather than five valid unresolved complaints.
14. Makes a licensee's qualifying party responsible for any violation of contractor rules by the licensee.
15. Requires a licensee and qualifying party, if a person who qualified for a license ceases to be connected with the licensee, to notify the ROC in writing within 15 days after disassociation.
16. Requires a disassociated licensee to requalify through another person within 60 days after the date of disassociation or the license is automatically suspended until the licensee qualifies through another person.
17. Makes a person named on a license responsible for any violation of contractor rules committed by the licensee during the period of time that person was named on the license.
18. Defines qualifying party as a person who is responsible for a licensee's actions and conduct performed under the license and who either:
a) has an ownership interest in the license; or
b) is regularly employed by the licensee.
Civil and Administrative Recovery
19. Allows, rather than requires, the court to proceed on an application in a summary manner.
20. Removes the requirement for the claimant, at the hearing, to show that they are not aware of any personal or real property or other assets of the debtor that can be applied in satisfaction of the judgement.
21. Allows, rather than requires, the court, if satisfied at the hearing of the truth of all matters required to be shown by the claimant, to make an order directed to the ROC requiring payment from the Fund of whatever sum it finds to be payable on the claim.
22. Prohibits a restitution award recommended by an administrative law judge from including attorney fees.
23. Allows, rather than requires, a contractor's failure to respond to a notice stating the amount claimed or to be awarded from the Fund be deemed a waiver of the right to contest the amount set forth.
24. Requires a claim for administrative payment from the Fund be submitted within two years after all proceedings, reviews and appeals connected with the ROC's final order terminate.
25. Requires the ROC, if Fund monies are insufficient to satisfy authorized claims, to prioritize payment when sufficient monies have been deposited by either:
a) the time of filing a certified copy of the court order with the ROC; or
b) the date of the administrative order directing payment from the Fund.
ROC Responsibilities
26. Requires the ROC to maintain a list of persons who have been convicted of contracting without a license which includes any known related business names that the persons have used.
27. Allows, rather than requires, the terms and conditions surrounding alternate cash securities to be prescribed by the ROC.
28. Allows, rather than requires, the ROC to impose a civil penalty of not more than $1,000 on a contractor for contracting without a license.
29. Repeals the arbitration process in relation to written complaints with the ROC.
30. Requires the ROC to issue a contractor rule violation citation within 180 days after actual discovery of an offense.
31. Specifies that service of the contractor rule violation citation is fully effected by personal service or by mailing a true copy by certified mail in a sealed envelope with postage prepaid to the person's:
a) last known business address; or
b) residential address.
32. Allows, rather than requires, the ROC to adopt rules relating to a civil penalty that gives due consideration to the gravity of the violation and any history of previous violations.
33. Requires the ROC, in adopting rules and minimum standards, be guided by a manufacturer's installation specifications.
34. Removes the requirement for the ROC to adopt a single form of application for all licenses issued.
Contractor Rules Complaints
35. Allows a person to file a written complaint with the ROC alleging a licensee has committed a violation of contractor rules.
36. Requires a complaint to be filed:
a) for new home builds or other new building construction, within two years after the earlier of the close of escrow or actual occupancy; and
b) for all other projects, within two years after the completion of the specific project.
Miscellaneous
37. Allows, rather than requires, a trade association that files a written request to receive the rules of the ROC to do so every two years during the month of January.
38. Transfers and renumbers statutes.
39. Includes, in the definitions of commercial contractor, dual licensed contractor and residential contractor, any person that responds to a request for qualification or a request for proposal for construction services for compensation.
40. Defines relevant terms.
41. Makes technical and conforming changes.
42. Becomes effective on the general effective date.
Prepared by Senate Research
February 12, 2019
MG/gs