HB2483 - 571R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 32-1104, Arizona Revised Statutes, is amended to read:

START_STATUTE32-1104. Powers and duties

A. The registrar, in addition to other duties and rights provided for in this chapter, shall:

1. Maintain an office in Phoenix and in such other cities and towns in the this state as the registrar deems advisable and necessary.

2. Maintain a complete indexed record of all applications and licenses that are issued, renewed, terminated, cancelled canceled, revoked or suspended under this chapter, including timely notation of any judicial disposition on appeal, for a period of not less than seven years.

3. Furnish a certified copy of any license issued or an affidavit that no license exists or that a license has been cancelled canceled or suspended, including information as to the status on appeal of such a cancellation or suspension, on receipt of the prescribed fee. , and That certified copy or affidavit shall be received in all courts and elsewhere as prima facie evidence of the facts stated therein in the certified copy or affidavit. The registrar shall also furnish certified copies of license bonds or cash deposit certificates on receipt of the prescribed fee. Fees charged pursuant to this paragraph are $10 per hour, except that the minimum fee charged pursuant to this paragraph is $10.

4. Employ such deputies, investigators and assistants subject to title 41, chapter 4, article 4, and procure such equipment and records, as are necessary to enforce this chapter. With respect to the enforcement of section 32-1164, the registrar or the registrar's investigators are vested with the authority to issue a citation to any violators of this chapter in accordance with section 13-3903. When the registrar or the registrar's investigators conduct investigations they are authorized to receive criminal history record information from the department of public safety and other law enforcement agencies.

5. Make rules the registrar deems necessary to effectually carry out the provisions and intent of this chapter. Such rules shall include the adoption of minimum standards for good and workmanlike construction. In adopting such rules of minimum standards, the registrar shall be guided by established usage and procedure as found in the construction business in this state. If the rules of minimum standards adopted by the registrar are in any manner inconsistent with a building or other code of this state, or a county, city or other political subdivision or local authority of this state, compliance with such code shall constitute good and workmanlike construction for the purposes of this chapter.

6. Apply the following to proposed rule changes:

(a) The registrar of contractors, at the time the registrar files a notice of proposed rule change with the secretary of state in compliance with title 41, chapter 6, shall mail to each trade association that qualifies in accordance with subdivision (b) of this paragraph, and any other individual holding a bona fide contractor's license who qualifies in accordance with subdivision (b) of this paragraph, a copy of the notice of proposed rule change.

(b) Every trade association in this state allied with the contracting business that files a written request that a notice be mailed to it and shows that the association has an interest in the rules of the registrar of contractors shall receive a copy thereof of the notice of proposed change, as set forth in subdivision (a) of this paragraph. Such filing of a request may be made every two years, and it shall contain information as to the nature of the association and its mailing address. Any duly licensed contractor who files a written request shall receive a copy of the proposed rule changes in accordance with this paragraph. Each such request may be made every two years.

7. Prepare and furnish decals and business management books when deemed advisable by the registrar. A reasonable fee may be charged for such decals and business management books.

8. Refer criminal violations of this chapter to the appropriate law enforcement agency or prosecuting authority.

B. The registrar may develop and institute programs to do any of the following:

1. Educate the public and contractors licensed pursuant to this chapter regarding statutes, rules, policies and operations of the agency.

2. Assist in resolving disputes in an informal process before a reportable written complaint is filed. The registrar must notify the licensed contractor in an alleged dispute before a written complaint is filed and allow the contractor the opportunity to be present at any inspection regarding the alleged dispute. The registrar must give the contractor at least five days' notice before the inspection. Issues in the alleged dispute under this section shall not be limited in number and shall not be considered formal written complaints. The homeowner reserves the right to deny access to the contractor under this informal complaint process. The registrar must notify the contractor and the homeowner in writing of the registrar's findings within five days after the date of the inspection. The registrar may not post any information regarding the informal complaint process as part of a licensee's record on the registrar's website.

3. Develop, manage, operate and sponsor construction related construction-related programs that are designed to benefit the public in conjunction with other private and public entities.

C. The registrar shall publicly post a list of applicants for a contractor license on its website for at least twenty days, commencing on the day designated by the registrar. The registrar shall issue a license if the applicant meets all requirements regardless of the twenty-day posting period. The registrar shall furnish copies of the posting list on written request. A reasonable charge, not to exceed $2 per month, may be made for compilation, printing and postage for the posting list. The list shall contain the following information:

1. The name and address of the applicant.

2. The names, addresses and official capacity of all persons required to sign the application under section 32-1122.

D. c. The registrar may accept voluntary gifts, grants or matching monies from public agencies or enterprises for the conduct of programs that are authorized by this section or that are consistent with the purpose of this chapter. END_STATUTE

Sec. 2. Section 32-1122, Arizona Revised Statutes, is amended to read:

START_STATUTE32-1122. 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 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 not either:

1. Have 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 unless any loss caused by such an act has been fully satisfied PURSUANT to section 32-1161. or

2. Be 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 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 in the same classification and meets all other qualifications.

2. Successfully show, by written examination taken not more than two years before application, 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.

F. The registrar shall maintain multiple versions of examinations for each type of license that requires an examination. The registrar shall waive the examination requirement if the records reflect that the qualifying party is currently or has previously been a qualifying party for a licensee in this state in the same classification within the preceding five years.

G. 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. 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 or a criminal records check. 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. END_STATUTE

Sec. 3. Section 32-1124, Arizona Revised Statutes, is amended to read:

START_STATUTE32-1124. License issuance; required posting and placement; license suspension

A. When the registrar receives the fee required by this chapter and an application furnishing complete information as required by the registrar, the registrar shall notify the applicant within sixty days after the date of the filing of a complete application of the action taken on the application. , and If the registrar determines that the applicant is qualified to hold a license in accordance with this chapter, the registrar shall issue a license to the applicant allowing the applicant to engage in business as a contractor under the terms of this chapter.

B. Licenses issued under this chapter and any renewals shall be signed by the registrar or the registrar's designated representative and by the licensee. The license is nontransferable, and satisfactory evidence of possession shall be exhibited by the licensee on demand. The license number appearing on any licenses held by the licensee must be preceded by the acronym "ROC" and shall be posted or placed as follows:

1. In a conspicuous place on premises where any work is being performed.

2. On all written bids and estimates submitted by the licensee.

3. On all published advertising, letterheads and other documents used by the licensee to correspond with the licensee's customers or potential customers in the conduct of conducting business regulated by this chapter.

4. On all broadcast, internet or billboard advertising, unless the broadcast, internet or billboard advertising includes a website's uniform resource locator that directly links to a website that prominently displays the licensee's name and license number.

C. A violation of subsection B of this section relating to posting and placement of license numbers shall be, at the discretion of the registrar, grounds for disciplinary action pursuant to section 32-1154, subsection A, paragraph 12, but not grounds for preventing the award of a contract, voiding an awarded contract, or constituting any other claim or defense against the licensee. For the purposes of this subsection B of this section, advertising does not include a trade association directory listing that is distributed solely to the members of the association and not to the general public.

D. If an application for a license is denied for any reason provided in this chapter, the application fee paid by the applicant is forfeited and shall be deposited pursuant to section 32-1107. A reapplication for a license shall be accompanied by the fee fixed by this chapter.

E. On issuance or renewal of a license, the registrar, at the request of a licensee, shall issue a single license certificate showing all contracting licenses held by the licensee that are currently in good standing and their dates of expiration.

F. The registrar may establish procedures to allow a licensee to establish a common expiration or renewal date for all licenses issued to the licensee and may provide for proration of license fees for that purpose.

G. The registrar may suspend by operation of law a license issued under this chapter if any of the following occurs:

1. The licensed entity is dissolved. The dissolution of the licensed entity includes the death of a sole owner, a change to the partnership by either adding or removing a partner, the revocation or dissolution of corporate authority or the dissolution of a limited liability company or limited liability partnership.

2. The licensed entity does not have authority to do business in this state.

3. The license is obtained or renewed with an insufficient funds check. The license remains suspended until the registrar receives sufficient funds as payment for the license fees and assessments.END_STATUTE

Sec. 4. Section 32-1133, Arizona Revised Statutes, is amended to read:

START_STATUTE32-1133. 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 from 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 from 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 from 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. END_STATUTE

Sec. 5. Section 32-1133.01, Arizona Revised Statutes, is amended to read:

START_STATUTE32-1133.01. 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 recovery fund must be submitted within two years after all proceedings, reviews and appeals connected with the registrar's final order terminate. END_STATUTE

Sec. 6. Section 32-1161, Arizona Revised Statutes, is amended to read:

START_STATUTE32-1161. Rights of contractor after suspension or revocation of license

A. After suspending the license on any of the grounds set forth in section 32-1154, the registrar shall renew it the license 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 a proper showing that all loss caused by the act or omission for which the license was suspended has been fully satisfied.

B. After suspending the license pursuant to section 32-1154, the licensee may perform, without compensation, warranty work or other corrective work.

C. After revoking a license on any of the grounds set forth in section 32-1154, the a new license may not be renewed or reissued for ISSued until 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. For the purposes of this subsection, 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. END_STATUTE