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ARIZONA STATE SENATE
Fifty-Fourth Legislature, Second Regular Session
AMENDED
registrar of contractors
Purpose
Prohibits a person named on a suspended or revoked license from being named on another license. Modifies contractor requirements relating to license examinations, disassociation notification and removal from the list of persons contracting without a license.
Background
The Registrar of Contractors (ROC) licenses and regulates residential and commercial contractors. Its powers and duties include: 1) making rules deemed necessary for minimum standards for construction; 2) developing, managing, operating and sponsoring construction‑related programs to benefit the public; 3) maintaining a list of licenses issued, renewed, revoked, terminated, cancelled or suspended; 4) administering the Residential Contractors' Recovery Fund (Fund); 5) developing and instituting programs to educate the public and contractors on contracting requirements and assist in dispute resolution; and 6) referring criminal violations to the appropriate law enforcement agency or prosecution authority (A.R.S. Title 32, Chapter 10).
A qualifying party is a person who is responsible for a licensee's actions and conduct performed under the license who either has an ownership interest in the license or is regularly employed by the licensee (A.R.S. § 32-1101). Both a qualifying party and a licensee must notify the ROC of a disassociation within 15 days after the disassociation. The licensee must requalify through another person within 60 days after the date of disassociation to avoid license suspension (A.R.S. § 32-1127.01).
The ROC administers the Fund for the benefit of a claimant damaged by an act, representation, transaction or conduct of a licensed residential contractor. Applicants for a residential contractor license or renewal of a license must pay an assessment for deposit in the Fund (A.R.S. § 32-1126).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
License Suspension, Revocation and Renewal
1. Prohibits a person named on a suspended license from being named on another license, unless the person shows that all loss due to the act or omission for which the license was suspended has been satisfied.
2. Replaces the prohibition on renewing or reissuing a revoked license for one year after revocation with a one-year prohibition on a person named on a revoked license from being named on another license.
3. Removes the requirement that a contractor petitioning for an annual, rather than two-year, license renewal claim real and immediate hardship for the ROC to grant the exception.
4. Suspends, rather than requiring the ROC to suspend, a license on notice from the Arizona Department of Revenue that the licensee neglects or refuses to pay any specified tax debts incurred in the operation of the licensed business that have become final.
Disassociation
5. Requires either the licensee or the qualifying party, rather than both, to notify the ROC 15 days after a disassociation.
6. Requires the ROC to provide, to the licensee, written notice of disassociation upon receiving a disassociation notice from a qualifying party.
7. Requires the ROC to include in a disassociation notice to a licensee:
a) the date the ROC received the disassociation notice from the qualifying party;
b) a copy of the qualifying party's disassociation notice; and
c) the date by which the licensee must requalify through another person to avoid license suspension.
8. Requires a licensee to requalify through another person or receive a qualifying party exemption within 60 days after the ROC's disassociation notice, rather than within 60 days after disassociation.
9. Suspends a license if the licensee fails to requalify or receive a qualifying party exemption within 60 days after receiving the ROC's disassociation notice, rather than within 60 days after the date of disassociation.
Examination Requirements
10. Replaces the required examination a qualifying party must complete within two years before license application with a trade examination.
11. Replaces the requirement that the required examination include Arizona building, safety, health and lien laws, administrative principles of the contracting business and the rules adopted by the ROC with an examination on Contractors statutes and ROC rules.
12. Requires the ROC to waive the work experience documentation and verification requirement for a qualifying party who is or has been a qualifying party for a licensee in another state in the same or comparable classification and meets all other qualifications.
13. Requires the ROC to waive the required trade examination for a qualifying party who is or has, within five years, been a qualifying party for a licensee in the same or comparable classification in Arizona or another state and meets all other qualifications.
14. Requires the ROC to waive the required statute and rules examination for a qualifying party who is or has, within five years, been a qualifying party for an Arizona licensee and meets all other requirements.
Contracting Without A License
15. Adds as a requirement, for removal from the list of persons found contracting without a license, the remedy of all loss or damage to the public caused by the person's unlicensed activities.
16. Removes the requirement that a person submit a written request to the ROC for removal from the list of persons found contracting without a license.
17. Removes the 10-business-day timeframe in which the ROC must remove a person who meets specified criteria from the list of persons found to be contracting without a license.
Residential Contractors Recovery Fund
18. Replaces the requirement that the ROC must satisfy, with a statement that the ROC satisfies, any unpaid claims or portion of unpaid claims, prioritized as outlined, when sufficient monies have been deposited in the Fund after an insufficiency of monies.
19. Removes the exemption of contested cases appealed to the superior court from the prohibition on Fund monies being awarded for attorney fees or costs.
20. Replaces, as a basis for the ROC to prioritize claims for payment after an insufficiency of Fund monies, the date of the administrative order directing Fund payment with the final administrative order effective date.
21. Specifies that the two-year statute of limitations from the termination of all proceedings, reviews and appeals connected with the ROC's final termination order to submit a Fund payment claim applies to claims when a contractor license has been suspended or revoked.
Citations
22. Removes the requirement on a licensee to answer in writing to a complaint after the ROC issues a citation.
23. Allows the ROC to deem a licensee's failure to answer to a citation within 10 days as an admission to the acts charged in the citation, rather than the acts charged in the complaint.
Miscellaneous
24. Makes technical and conforming changes.
25. Becomes effective on the general effective date.
Amendments Adopted by the Committee of the Whole
1. Conforms specified acts that are grounds for license suspension and revocation to the requirement that a licensee qualify through another qualifying party within 60 days after a disassociation notice, rather than 60 days after the date of a disassociation.
Senate Action
COM 2/6/20 DP 8-0-0
Prepared by Senate Research
February 18, 2020
LB/JDP/gs