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Senate Engrossed |
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State of Arizona Senate Fifty-fourth Legislature Second Regular Session 2020
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SENATE BILL 1162 |
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AN ACT
amending sections 32‑1122, 32‑1123.01, 32‑1127.01, 32‑1132, 32‑1132.01, 32‑1133, 32‑1133.01, 32‑1134.02, 32‑1151.02, 32‑1154, 32‑1155, 32‑1158, 32‑1161, 32‑1166 and 32‑1166.01, Arizona Revised Statutes; relating to the registrar of contractors.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 32-1122, Arizona Revised Statutes, is amended to read:
32-1122. Qualifications for license
A. A contractor's license may be issued only by act of the registrar of contractors. The registrar shall:
1. Classify and qualify applicants for a license.
2. If necessary, change the license classification of a licensee in the case of a title reclassification, with or without a bond rider for the purpose of continuing liability on the bond.
3. Conduct investigations the registrar deems necessary.
4. Establish written examinations to protect the health and safety of the public.
B. To obtain, renew or maintain a license under this chapter, the applicant or licensee shall:
1. Submit to the registrar of contractors a verified application on forms that are prescribed by the registrar of contractors and that contain the following information:
(a) A designation of the classification of license that is sought by the applicant.
(b) If the applicant is a sole proprietorship, the applicant's name and address.
(c) If the applicant is a partnership, the names and addresses of all partners with a designation of any limited partners.
(d) If the applicant is a limited liability company, the names and addresses of all of the following, as applicable:
(i) If the applicant is a manager‑managed limited liability company, all managers.
(ii) If the applicant is a member‑managed limited liability company, all members.
(iii) All owners of twenty‑five percent or more of the stock or beneficial interest.
(e) If the applicant is a corporation, an association or any other organization, the names and addresses of all of the following:
(i) The president, vice president, secretary and treasurer or the names and addresses of the functional equivalent of all of these officers.
(ii) The directors.
(iii) The owners of twenty‑five percent or more of the stock or beneficial interest.
(f) The name and address of the qualifying party.
(g) If the applicant is a limited liability company or corporation, an attestation that the limited liability company or corporation is in good standing with the corporation commission.
(h) The address or location of the applicant's place of business and the mailing address if it is different from the applicant's place of business.
(i) An attestation that the applicant has complied with the statutes and rules governing workers' compensation insurance. If the applicant is required by law to secure workers' compensation insurance pursuant to section 23‑961 title 23, chapter 6, the attestation must contain the workers' compensation insurance policy number or be accompanied by proof of self‑insurance.
(j) If the applicant is a trust, the names and addresses of all trustees.
2. Submit the appropriate fee required under this chapter.
3. Submit and maintain the appropriate bond required under this chapter.
4. Notify the registrar of any change in the information required by this section within thirty days after the change occurs.
C. To obtain, renew or maintain a license under this chapter, each person who is named on a license must be of good character and reputation. Lack of good character and reputation may be established by showing that a person engaged in contracting without a license or committed any act that, if committed or done by any licensed contractor, would be grounds for suspension or revocation of a contractor's license or by showing that the person was named on a license that was suspended or revoked in this state or another state.
D. To obtain a license under this chapter, a person may not have had a license denied, refused or revoked within one year before the person's application. The registrar may find circumstances behind the denial, refusal or revocation excusable if the applicant's actions did not result in an unremedied hardship or danger or loss to the public. A person who has been convicted of contracting without a license is not eligible to obtain a license under this chapter for one year after the date of the last conviction.
E. Before a license is issued, the qualifying party must:
1. Have a minimum of four years' practical or management trade experience, at least two of which must have been within the last ten years, dealing specifically with the type of construction, or its equivalent, for which the applicant is applying for a license. Technical training in an accredited college or university or in a manufacturer's accredited training program may be substituted for a portion of such experience, but in no case may credited technical training exceed two years of the required four years' experience. The registrar of contractors may reduce the four years' practical or management experience requirement if in the registrar's opinion it has been conclusively shown by custom and usage in the particular industry or craft involved that the four-year requirement is excessive. The registrar shall must waive the work experience documentation and verification if the records reflect that the qualifying party is currently or has previously been a qualifying party for a licensee in this state or another state in the same or a comparable classification and meets all other qualifications.
2. Except as provided in subsection F of this section, successfully show, by a written trade examination taken not more than two years before the application, as applicable, if required, qualification in the kind of work for which the applicant proposes to contract, the applicant's general knowledge of the building, safety, health and lien laws of the state, administrative principles of the contracting business and the rules adopted by the registrar of contractors pursuant to this chapter, demonstrate knowledge and understanding of construction plans and specifications applicable to the particular industry or craft and of the standards of construction work and techniques and practices in the particular industry or craft and demonstrate a general understanding of other related construction trades, in addition to any other matters as may be deemed appropriate by the registrar to determine that the qualifying party meets the requirements of this chapter. all of the following:
(a) Qualification in the kind of work for which the qualifying party proposes to contract.
(b) Knowledge and understanding of construction plans and specifications applicable to the particular industry or craft.
(c) Knowledge and understanding of the standards of construction work and techniques and practices in the particular industry or craft.
(d) General understanding of other related construction trades.
(e) Any other matters deemed appropriate by the registrar to demonstrate the qualifying party's knowledge of the particular kind of work performed in the license classification.
3. Except as provided in subsection G of this section, successfully show by a written statute and rules examination taken not more than two years before application, the qualifying party's General knowledge of this chapter and rules adopted by the registrar.
F. The registrar must waive the written trade examination required under subsection E, paragraph 2 of this section if the qualifying party is currently or has previously been within the preceding five years either a qualifying party for a licensee in this state or in another state in the same or a comparable classification and meets all other requirements.
G. The registrar must waive the written statute and rules examination required under subsection E, paragraph 3 of this section if the qualifying party is currently or has previously been within the preceding five years a qualifying party for a licensee in this state and meets all other requirements.
F. H. The registrar shall maintain multiple versions of examinations for each type of license that requires an examination. The registrar shall waive the examination requirement requirements if the records reflect that the qualifying party is currently or has previously been within the preceding five years a qualifying party for a licensee in this state in the same classification within the preceding five years.
G. I. A license may not be issued to a minor, to any partnership in which one of the partners is a minor or to any corporation in which a corporate officer is a minor.
H. J. Before receiving, renewing and holding a license pursuant to this chapter, the registrar may require a license applicant or licensee to submit to the registrar a full set of fingerprints and the fees required in section 41‑1750. The registrar shall submit the fingerprints and fees to the department of public safety for the purpose of obtaining a state and federal criminal records check pursuant to section 41‑1750 and Public Law 92‑544. The department of public safety may exchange this fingerprint data with the federal bureau of investigation.
Sec. 2. Section 32-1123.01, Arizona Revised Statutes, is amended to read:
32-1123.01. Staggered periods of licensure; biennial renewal
A. The registrar shall maintain a system of staggered licensure to distribute the work of licensure throughout the twelve months of the year.
B. The registrar shall implement a system for biennial license renewal and provide for proration of license renewal fees for that purpose.
C. The registrar may grant an exception to the biennial licensing or biennial renewal requirements of this section and may allow an annual renewal based on a written petition by a contractor claiming that the biennial requirements would cause a real and immediate hardship.
Sec. 3. Section 32-1127.01, Arizona Revised Statutes, is amended to read:
32-1127.01. Qualifying parties; disassociation with license; notice; requalification
A. If a person who qualified for a license qualifying party ceases to be connected with the a licensee, both the licensee and or the qualifying party shall must notify the registrar in writing within fifteen days after the disassociation.
B. If the registrar receives notice from a qualifying party pursuant to subsection A of this section, the registrar must notify the licensee in writing of the disassociation. The registrar's notice must contain all of the following:
1. The date the registrar received the notice required by subsection A of this section.
2. A copy of the notice required by subsection A of this section.
3. The date by which the licensee must requalify through another person to avoid license suspension.
B. C. A licensee shall must receive a qualifying party exemption pursuant to section 32‑1125, subsection C or requalify through another person within sixty days after the date of a disassociation the registrar's notice required under subsection B of this section.
C. D. If the registrar notifies a licensee pursuant to subsection B of this section and if a the licensee fails to receive a qualifying party exemption pursuant to section 32‑1125, subsection C or to requalify through another person within sixty days after notification, the license is automatically suspended by operation of law at the end of the period until the licensee qualifies through another person.
Sec. 4. Section 32-1132, Arizona Revised Statutes, is amended to read:
32-1132. Residential contractors' recovery fund; claimants; eligibility; definition
A. The residential contractors' recovery fund is established, to be administered by the registrar, for the benefit of a claimant damaged by an act, representation, transaction or conduct of a residential contractor licensed pursuant to this chapter that is in violation of this chapter or the rules adopted pursuant to this chapter.
B. Only the following claimants are eligible for an award from the residential contractors' recovery fund:
1. An individual who both:
(a) Owns residential real property that is damaged by the failure of a residential contractor to adequately build or improve a residential structure or appurtenance.
(b) Actually occupies or intends to occupy the residential real property described in subdivision (a) of this paragraph as the individual's primary residence.
2. A limited liability company to which all of the following apply:
(a) The limited liability company 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 limited liability company's members actually occupy or intend to occupy the residential real property as described in subdivision (a) of this paragraph as their primary residence.
(c) A member of the limited liability company has not received monies from the fund in the last two years.
3. A trust to which all of the following apply:
(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 described in subdivision (b) of this paragraph as their primary residence.
(d) A trustor has not received monies from the fund in the last two years.
4. A planned community as defined in section 33‑1802 or unit owners' association as defined in section 33‑1202 if both:
(a) The builder or developer transferred control to the planned community as defined in section 33‑1802 or unit owners' association as defined in section 33‑1202.
(b) A licensed residential contractor's failure to adequately build or improve a residential structure or appurtenance caused damage to the common elements within the complex.
5. A lessee of residential real property that meets all of the following:
(a) Contracts directly with a residential contractor or indirectly with a subcontractor of the residential contractor.
(b) Actually occupies or intends to occupy the residential real property described in subdivision (a) of this paragraph as the lessee's primary residence.
(c) Is damaged by the licensed residential contractor's failure to adequately build or improve a residential structure or appurtenance.
C. In order for a claimant to be eligible for an award from the residential contractors' recovery fund, the contractor whose actions damaged the claimant must have been appropriately licensed at one of the following times:
1. The date that the underlying contract was signed.
2. The date that the first payment was made.
3. The date that the underlying work first commenced.
D. For the purposes of this section, "appropriately licensed" means the residential contractor held a valid residential contractor license that was issued pursuant to this chapter and that was not canceled, in inactive status, expired, suspended or revoked.
Sec. 5. Section 32-1132.01, Arizona Revised Statutes, is amended to read:
32-1132.01. Actual damages; fund; limits; definition
A. An award from the residential contractors' recovery fund is limited to residential real properties. The fund may not issue an award covering damages to commercial property.
B. An award from the residential contractors' recovery fund may not exceed the actual damages suffered by the claimant as a direct result of a contractor's violation. Actual damages:
1. May not exceed an amount necessary to complete or repair a residential structure or appurtenance within residential property lines.
2. Must be established by bids supplied by or the value of work performed by a person that is licensed pursuant to this chapter if the person is required to be licensed pursuant to this chapter.
C. If the claimant paid a deposit or down payment and no actual work is performed or materials are delivered, the claimant's actual damages are the exact dollar amount of the deposit or down payment plus interest at the rate of ten percent a year from the date the deposit or down payment is made, but may not exceed $30,000. Interest may not be paid from the fund on any other awards under this chapter unless ordered by a court of competent jurisdiction.
D. The maximum individual award from the residential contractors' recovery fund is $30,000. An individual A claimant may not be awarded more than the maximum individual award.
E. Monies in the residential contractors' recovery fund may not be awarded for attorney fees or costs, except in contested cases appealed to the superior court.
F. If the claimant has recovered a portion of the claimant's loss from sources other than the fund, the registrar shall deduct the amount recovered from other sources from the amount of actual damages suffered pursuant to subsection B of this section and direct the difference, not to exceed $30,000, to be paid from the fund.
G. The claimant may not be the spouse of the residential contractor or the personal representative of the spouse of the residential contractor.
H. For the purposes of this section, "actual damages" means the reasonable cost of completing the contract and repairing the contractor's defective performance, minus the part of the contract price still unpaid.
Sec. 6. Section 32-1133, Arizona Revised Statutes, is amended to read:
32-1133. Civil recovery; statute of limitations
A. An action for a judgment that may subsequently result in an order for collection from the residential contractors' recovery fund may not be commenced later than two years after the date of the commission of the act by the contractor that is the cause of the injury or from the date of occupancy.
B. When a claimant commences an action for a judgment that may result in collection from the fund, the claimant must notify the registrar in writing to this effect within thirty calendar days after the commencement of the action. The registrar at any time may intervene in and defend the action.
C. When any claimant recovers a valid judgment against any residential contractor for an act, representation, transaction or conduct that is in violation of this chapter or the rules adopted pursuant to this chapter, the claimant, on twenty days' written notice to the registrar, may apply to the court for an order directing payment out of the fund, of the amount unpaid on the judgment, subject to the limits stated in this article. If the claimant fails to notify the registrar within thirty calendar days after commencement of the action as required by this subsection, the court may direct payment out of the fund on receipt of a consent to payment signed on behalf of the registrar. If the claimant gives notice to the registrar as required by this subsection, the court may direct payment out of the fund either on receipt of a consent to payment signed on behalf of the registrar or, in the absence of any written consent, after the notice period required by this subsection. If the court receives written objections by the registrar, the court may not direct payment from the fund without affording the registrar a reasonable opportunity to present and support the registrar's objections.
D. The court may proceed on an application in a summary manner and, on the hearing, the claimant is required to show that the claimant has done all of the following:
1. Given notice as required by subsections B and C of this section.
2. Obtained a judgment that has become final, as provided in subsection C of this section, stating the amount and the amount owing at the date of the application.
3. Proceeded against any existing bond covering the residential contractor.
E. The court may make an order directed to the registrar requiring payment from the fund of whatever sum it finds to be payable on the claim, in accordance with this section, if the court is satisfied on the hearing of the truth of all matters required to be shown by the claimant by subsection D of this section. The recovery limits established under this article apply to all judgments awarded beginning September 1, 2002. If the claimant has recovered a portion of the claimant's loss from sources other than the fund, the court shall deduct the amount recovered from other sources from the amount of actual damages suffered pursuant to section 32‑1132.01, subsection A and direct the difference, not to exceed $30,000, to be paid from the fund.
F. On receipt of a certified copy of the order specified in subsection E of this section, the registrar may authorize payment from the residential contractors' recovery fund even if an appeal has been instituted but not completed.
Sec. 7. Section 32-1133.01, Arizona Revised Statutes, is amended to read:
32-1133.01. Administrative recovery; statute of limitations
A. Notwithstanding any other provision in this chapter, if a contractor license has been revoked or suspended as a result of an order to remedy a violation of this chapter, the registrar may order payment from the residential contractors' recovery fund to remedy the violation.
B. The registrar must serve the contractor with a notice setting forth the amount claimed or to be awarded.
C. If the contractor contests the amount or propriety of the payment, the contractor must respond in writing within ten days after the date of service by requesting a hearing to determine the amount or propriety of the payment. The contractor's failure to respond in writing within ten days after the date of service may be deemed a waiver by the contractor of the right to contest the amount claimed or to be awarded.
D. Service of the notice required by subsection B of this section may be made by personal service to the contractor or by mailing a copy of the notice by certified mail with postage prepaid to the contractor's latest address of record on file in the registrar's office.
E. If service is made by certified mail, it is effective five days after the notice is mailed. Except as provided in section 41‑1092.08, subsection H, the contractor or claimant may seek judicial review of the registrar's final award pursuant to title 12, chapter 7, article 6.
F. A claimant to the residential contractors' recovery fund pursuant to this section must show that the claimant has proceeded against any existing bond covering the residential contractor.
G. A claim for payment from the residential contractor's contractors' recovery fund pursuant to this section must be submitted within two years after all proceedings, reviews and appeals connected with the registrar's final order terminate.
Sec. 8. Section 32-1134.02, Arizona Revised Statutes, is amended to read:
32-1134.02. Insufficiency of fund
If at any time the monies deposited in the residential contractors' recovery fund are insufficient to satisfy any duly authorized claim or portion thereof, the registrar shall, when sufficient monies have been deposited in the residential contractors' recovery fund, satisfy satisfies any unpaid claims or portion of unpaid claims with priority for payment based on either:
1. The time of filing a certified copy of the court order with the registrar.
2. The effective date of the final administrative order directing payment from the residential contractors' recovery fund.
Sec. 9. Section 32-1151.02, Arizona Revised Statutes, is amended to read:
32-1151.02. List of unlicensed contractors; website publication
A. The registrar shall must maintain a list of persons who have been convicted of contracting without a license in violation of section 32‑1151 or administratively adjudicated to have been contracting without a license after being issued a civil citation pursuant to section 32‑1166.01. The list shall must include any known related business names that the persons described in this subsection have used. The list shall must be published on the registrar's website.
B. The registrar shall must remove a person and any known related business names that person used from the list within ten business days when the person both:
1. Becomes licensed pursuant to this chapter. and submits a written request to the registrar requesting the person's name to be removed from the list.
2. Remedies all loss or damage caused to the public by the person's unlicensed activity.
C. If a member of the public requests a copy of the list prescribed by subsection A of this section, the registrar shall must provide a copy of the list.
Sec. 10. Section 32-1154, Arizona Revised Statutes, is amended to read:
32-1154. Grounds for suspension or revocation of license; continuing jurisdiction; civil penalty
A. The holder of a license or any person named on a license pursuant to this chapter may not commit any of the following acts or omissions:
1. Abandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.
2. Departure from or disregard of:
(a) Plans or specifications in any material respect that is prejudicial to another without consent of the owner or the owner's duly authorized representative and without the consent of the person entitled to have the particular construction project or operation completed in accordance with such plans and specifications and code.
(b) A building code of this state or any political subdivision of this state in any material respect that is prejudicial to another.
3. Violation of any rule adopted by the registrar.
4. Failure to comply with the statutes or rules governing social security, workers' compensation or unemployment insurance.
5. Misrepresentation of a material fact by the applicant in obtaining a license.
6. The doing of a fraudulent act by the licensee as a contractor resulting in another person being substantially injured. For the purposes of this paragraph, "fraudulent act" means a material misrepresentation that a licensee makes, that is relied on by another person and that results in damage to that person or that person's property.
7. Conviction of a felony.
8. Failure in a material respect by the licensee to complete a construction project or operation for the price stated in the contract, or in any modification of the contract.
9. Attempting to evade this chapter by:
(a) Aiding or abetting a licensed or unlicensed person.
(b) Acting or conspiring with a licensed or unlicensed person.
(c) Allowing one's license to be used by a licensed or unlicensed person.
(d) Acting as agent, partner, associate or otherwise of a licensed or unlicensed person.
10. Failure by a licensee or agent or official of a licensee to pay monies in excess of $750 when due for materials or services rendered in connection with the licensee's operations as a contractor unless the licensee proves that the licensee lacks the capacity to pay and has not received sufficient monies as payment for the particular construction work project or operation for which the services or materials were rendered or purchased.
11. Failure of a contractor to comply with any safety or labor laws or codes of the federal government, this state or political subdivisions of this state.
12. Failure in any material respect to comply with this chapter.
13. Knowingly entering into a contract with a contractor for work to be performed for which a license is required with a person that is not duly licensed in the required classification.
14. Acting in the capacity of a contractor under any license issued under this chapter in a name other than as set forth on the license.
15. False, misleading or deceptive advertising whereby any member of the public was misled and injured.
16. Knowingly contracting beyond the scope of the license or licenses of the licensee.
17. Contracting or offering to contract or submitting a bid while the license is under suspension or while the license is on inactive status.
18. Failure to notify the registrar in writing within a period of fifteen days of any disassociation of the person who qualified for the license. The licensee must qualify through another person within sixty days after the date of the notice of disassociation required pursuant to section 32‑1127.01, subsection B.
19. Subsequent discovery of facts that if known at the time of issuance of a license or the renewal of a license would have been grounds to deny the issuance or renewal of the license.
20. Having a person named on the license who is or was named on any other license in this state or in another state that is under suspension or revocation for any act or omission that occurs while the person is or was named on the license unless the prior revocation was based solely on a violation of this paragraph.
21. Continuing a new single‑family residential construction project with actual knowledge that a pretreatment wood‑destroying pests or organisms application was either:
(a) Not performed at the required location.
(b) Performed in a manner inconsistent with label requirements, state law or rules.
22. Failure to take appropriate corrective action to comply with this chapter or with rules adopted pursuant to this chapter without valid justification within a reasonable period of time after receiving a written directive from the registrar. The written directive must set forth the time within which the contractor is to complete the remedial action. The time permitted for compliance may not be less than fifteen days from after the date of issuance of the directive. A license may not be revoked or suspended nor may any other penalty be imposed for a violation of this paragraph until after a hearing has been held.
23. Prohibit, threaten to prohibit, retaliate against, threaten to retaliate against or otherwise intimidate any contractor or materialman from serving a preliminary notice pursuant to section 33‑992.01.
24. For contractors, failure to comply with title 44, chapter 11, article 11.
B. The registrar:
1. May investigate the acts of a contractor in this state on the registrar's own motion.
2. Shall investigate the acts of a contractor in this state on the written complaint of any owner or contractor that is a party to a construction contract or a person who suffers a material loss or injury as a result of a contractor's failure to perform work in a professional and workmanlike manner or in accordance with any applicable building codes and professional industry standards. For the purposes of this paragraph:
(a) "Construction contract" means a written or oral agreement relating to the construction, alteration, repair, maintenance, moving or demolition of any building, structure or improvement or relating to the contractor's excavation of or other development or improvement to land if the registrar investigates the contractor's actions under this subsection.
(b) "Owner" means any person, firm, partnership, corporation, association or other organization, or a combination of any of them, that causes a building, structure or improvement to be constructed, altered, repaired, maintained, moved or demolished or that causes land to be excavated or otherwise developed or improved, whether the interest or estate of the person is in fee, as vendee under a contract to purchase, as lessee or another interest or estate less than fee, pursuant to a construction contract.
3. May temporarily suspend, with or without imposition of specific conditions in addition to increased surety bond or cash deposit requirements, or permanently revoke any or all licenses issued under this chapter if the holder of the license issued pursuant to this chapter is guilty of or commits any of the acts or omissions set forth in subsection A of this section.
C. Pursuant to this chapter, the registrar shall suspend a license that is issued under this chapter is suspended by operation of law a license issued to a person under this chapter on notice from the department of revenue that a tax debt related to income taxes, withholding taxes or any tax imposed or administered by title 42, chapter 5 that was incurred in the operation of the licensed business has become final and the person neglects to pay or refuses to pay the tax debt.
D. The expiration, cancellation, suspension or revocation of a license by operation of law or by decision and order of the registrar or a court of law or the voluntary surrender of a license by a licensee does not deprive the registrar of jurisdiction to proceed with any investigation of or action or disciplinary proceeding against such a licensee, or to render a decision suspending or revoking such a license, or denying the renewal or right of renewal of such a license.
E. The registrar may impose a civil penalty of not to exceed $500 on a contractor for each violation of subsection A, paragraph 22 of this section. Civil penalties collected pursuant to this subsection shall be deposited in the residential contractors' recovery fund. The failure by the licensee to pay any civil penalty imposed under this subsection results in the automatic revocation of the license thirty days after the effective date of the order providing for the civil penalty. A person who is or was named on a license of a contractor when an act or omission occurs that results in a civil penalty may not receive a new license under this chapter until the entire civil penalty is paid.
F. The registrar may impose a civil penalty of not to exceed $1,000 on a contractor for each violation of subsection A, paragraph 17 of this section. Civil penalties collected pursuant to this subsection shall be deposited in the residential contractors' recovery fund. The failure by the licensee to pay any civil penalty imposed under this subsection results in the automatic permanent revocation of the license thirty days after the effective date of the order providing for the civil penalty. A person who is or was named on a license of a contractor when an act or omission occurs that results in a civil penalty may not receive a new license under this chapter until the entire civil penalty is paid.
Sec. 11. Section 32-1155, Arizona Revised Statutes, is amended to read:
32-1155. Filing of complaint; resolution of complaint; service of notice; failure to answer; prohibited citations
A. On the filing of a written complaint with the registrar charging a licensee with the commission of committing an act that is cause for suspension suspending or revocation of revoking a license, including an act that is in violation of violates title 44, chapter 11, article 11, the registrar after investigation, in its sole discretion, may issue a citation directing the licensee, within ten days after service of the citation on the licensee, to appear by filing with the registrar the licensee's written answer to the citation and complaint showing cause, if any, why the licensee's license should not be suspended or revoked. The complaint must be filed within the statute of limitations prescribed by section 32‑1162.
B. Service of the citation on the licensee is fully effected by personal service or by mailing a true copy thereof, together of the citation with a true copy of the complaint, by certified mail in a sealed envelope with postage prepaid and addressed to the licensee at the licensee's latest address of record in the registrar's office. Service of the citation and complaint is complete at the time of personal service or five days after deposit in the mail.
C. Failure of the licensee to answer within ten days after service may be deemed an admission by the licensee of the licensee's commission of the act or acts charged in the complaint citation, and the registrar may then suspend or revoke the licensee's license unless the registrar determines, in its sole discretion, that the failure to answer within such period is attributable to excusable neglect on the part of the licensee.
D. The registrar may not issue a citation for failure to perform work in a professional and workmanlike manner or in accordance with any applicable building codes and professional industry standards if either:
1. The contractor is not provided an opportunity to inspect the work within fifteen days after receiving a written notice from the registrar.
2. The contractor's work has been subject to neglect, modification or abnormal use.
E. Notwithstanding subsection D of this section, the registrar may investigate the complaint without waiting fifteen days.
Sec. 12. Section 32-1158, Arizona Revised Statutes, is amended to read:
32-1158. Contract requirements; provision of documents and receipt at contract signing
A. Any contract in an amount of more than one thousand dollars $1,000 entered into between a contractor and the owner of a property to be improved shall contain in writing at least the following information:
1. The name of the contractor and the contractor's business address and license number.
2. The name and mailing address of the owner and the jobsite address or legal description.
3. The date the parties entered into the contract.
4. The estimated date of completion of all work to be performed under the contract.
5. A description of the work to be performed under the contract.
6. The total dollar amount to be paid to the contractor by the owner for all work to be performed under the contract, including all applicable taxes.
7. The dollar amount of any advance deposit paid or scheduled to be paid to the contractor by the owner.
8. The dollar amount of any progress payment and the stage of construction at which the contractor will be entitled to collect progress payments during the course of construction under the contract.
9. That the property owner has the right to file a written complaint with the registrar for an alleged violation of section 32‑1154, subsection A. The contract shall contain the registrar's telephone number and website address and shall state that complaints must be made within the applicable time period as set forth in section 32‑1155 32‑1162, subsection A. The information in this paragraph must be prominently displayed in the contract in at least ten point ten-point bold type, and the contract shall be signed by the property owner and the contractor or the contractor's designated representative. This paragraph does not apply to a person who is subject to and complies with section 12‑1365.
B. When a contractor and an owner sign a contract, the contractor shall provide the owner with a legible copy of all documents signed and a written and signed receipt for and in the true amount of any cash paid to the contractor by the owner.
C. The requirements of this section are not prerequisites to the formation or enforcement of a contract. Failure to comply with the requirements of this section does not constitute a defense by either party to an action for compensation, damages, breach, enforcement or other cause of action based on the contract.
Sec. 13. Section 32-1161, Arizona Revised Statutes, is amended to read:
32-1161. Rights of contractor after suspension of license
A. After suspending the license on any of the grounds set forth in section 32‑1154, the registrar shall renew it on proof of compliance by the contractor with provisions of the judgment relating to renewal of the license, or in the absence of a judgment or provisions therein as to renewal, on proper showing that all loss caused by the act or omission for which the license was suspended has been fully satisfied.
B. A person named on a suspended license may not be named on another license unless the person provides a proper showing that all loss caused by the act or omission for which the license is suspended has been fully satisfied.
B. C. After suspending the license pursuant to section 32‑1154, the licensee may perform, without compensation, warranty work or other corrective work.
C. D. After revoking a license A person named on a license that is revoked on any of the grounds set forth in section 32‑1154, the license may not be renewed or reissued named on another license for one year after final determination of revocation and then only on a proper showing that all loss caused by the act or omission for which the license was revoked has been fully satisfied.
E. For the purposes of this subsection section, a proper showing may be made by demonstrating, to the satisfaction of the registrar, that the licensee exhausted all reasonable means to remedy the underlying loss caused by the act or omission.
Sec. 14. Section 32-1166, Arizona Revised Statutes, is amended to read:
32-1166. Cease and desist orders
A. The registrar may issue a cease and desist order to any person who is required to be licensed by this chapter but who is not licensed and who engaged in an act of contracting, a practice or a transaction that violates this chapter, a rule adopted by the registrar or an order issued by the registrar.
B. The cease and desist order may require requires the person to immediately cease and desist from engaging in an act, practice or transaction on receipt of the order.
C. Service of the cease and desist order is fully effected by personal service or by mailing a true copy of the cease and desist order by certified mail in a sealed envelope, with postage prepaid, addressed to either:
1. The person's last known business address.
2. The person's residential address.
Sec. 15. Section 32-1166.01, Arizona Revised Statutes, is amended to read:
32-1166.01. Citation; requirements; civil penalties
A. In conjunction with the registrar's authority to issue a cease and desist order under section 32-1166, subsection A, the registrar may issue a citation for contracting practicing or transacting any act, practice or transaction that constitutes a violation of any of the following:
1. This chapter.
2. A rule adopted by the registrar.
3. An order issued by the registrar.
B. A citation issued pursuant to this section shall:
1. Be in writing.
2. Clearly describe the violation for which the citation was issued.
3. Contain an order to cease and desist.
4. Contain a civil penalty of at least $200 for each violation but not more than $2,500 for multiple violations committed on the same day.
C. Each violation of this chapter or a rule or order of the registrar by a person who is required to be licensed by this chapter and who does not possess the required license constitutes a separate offense and the registrar may impose a civil penalty not to exceed $2,500 for each violation except that the civil penalty may not exceed $2,500 for all violations committed on the same day.
D. The registrar shall issue a citation under this section within one hundred and eighty days after actual discovery of the offense by this state or the political subdivision having jurisdiction. Service of the citation is fully effected by personal service or by mailing a true copy of the citation by certified mail in a sealed envelope with postage prepaid and addressed to either:
1. The person's last known business address.
2. The person's residential address.
E. The registrar may issue citations containing orders to cease and desist and civil penalties against persons who have never been licensed under this chapter and who are acting in the capacity of or engaging in the business of a contractor in this state.
F. If the registrar issues a citation against a person and the person fails to comply with the cease and desist order and citation, the registrar may assess an additional civil penalty of up to $2,500 for each day the violation continues.
G. The registrar may adopt rules relating to the civil penalty that give due consideration to the gravity of the violation and any history of previous violations.
H. The penalties authorized under this section are separate from, and in addition to, all other remedies provided by law, either civil or criminal.
I. The registrar shall deposit, pursuant to sections 35‑146 and 35‑147, all monies collected from civil penalties under this section in the state general fund.