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HOUSE BILL NO. 750
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H0750......................................................by STATE AFFAIRS
CONSTRUCTION MANAGEMENT - Adds to and amends existing law to provide for
the licensing of construction managers who provide construction management
services on public works projects.
02/19 House intro - 1st rdg - to printing
02/20 Rpt prt - to St Aff
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-fourth Legislature Second Regular Session - 1998
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 750
BY STATE AFFAIRS COMMITTEE
1 AN ACT
2 RELATING TO LICENSING OF CONSTRUCTION MANAGERS; AMENDING TITLE 54, IDAHO CODE,
3 BY THE ADDITION OF A NEW CHAPTER 45, TITLE 54, IDAHO CODE, TO PROVIDE A
4 SHORT TITLE, TO PROVIDE A STATEMENT OF LEGISLATIVE INTENT, TO PROVIDE DEF-
5 INITIONS, TO ESTABLISH A CONSTRUCTION MANAGEMENT LICENSING BOARD WITH
6 SPECIFIED POWERS AND DUTIES, TO REQUIRE CONSTRUCTION MANAGERS ON PUBLIC
7 WORKS PROJECTS TO BE LICENSED, TO ESTABLISH REQUIREMENTS FOR LICENSURE, TO
8 PROVIDE FOR INTERIM AND TEMPORARY LICENSES, TO PROVIDE FOR LICENSE
9 RENEWAL, TO PROVIDE FOR DISCIPLINARY PROCEEDINGS, TO PROVIDE FOR CERTIFI-
10 CATES OF AUTHORITY FOR FIRMS PROVIDING CONSTRUCTION MANAGEMENT SERVICES ON
11 PUBLIC WORKS PROJECTS, TO PROVIDE FOR LICENSE FEES AND DISPOSITION OF
12 FUNDS, TO REQUIRE BIDDING OF CONSTRUCTION CONTRACTS, TO REQUIRE BONDING OF
13 CONSTRUCTION MANAGERS WHO HOLD AND DISBURSE FUNDS, TO PROVIDE PENALTIES
14 FOR VIOLATION, AND TO PROVIDE FOR INJUNCTIVE RELIEF; AND AMENDING SECTION
15 67-2320, IDAHO CODE, TO PROVIDE FOR SELECTION OF PROFESSIONALS PROVIDING
16 DESIGN SERVICES ON PUBLIC WORKS CONSTRUCTION PROJECTS.
17 Be It Enacted by the Legislature of the State of Idaho:
18 SECTION 1. That Title 54, Idaho Code, be, and the same is hereby amended
19 by the addition thereto of a NEW CHAPTER , to be known and desig-
20 nated as Chapter 45, Title 54, Idaho Code, and to read as follows:
21 CHAPTER 45
22 CONSTRUCTION MANAGEMENT LICENSING ACT
23 54-4501. SHORT TITLE. The provisions of this chapter shall be known and
24 may be cited as the "Construction Management Licensure Act of 1998."
25 54-4502. LEGISLATIVE INTENT. In order to protect the public welfare and
26 to promote the highest degree of professional conduct on the part of persons
27 providing construction management services, the provisions of this chapter
28 provide for the licensure of individuals and regulation of persons providing
29 construction management services for public works projects. In the performance
30 of their services, construction managers shall comply with the provisions of
31 section 50-341, Idaho Code, relating to the competitive bidding process.
32 54-4503. DEFINITIONS. As used in this chapter:
33 (1) "Applicant" means an individual who applies for a license or interim
34 license pursuant to the provisions of this chapter.
35 (2) "Board" means the construction management licensing board established
36 in this chapter.
37 (3) "Construction manager" means an individual who performs construction
38 management services. Licensure under the provisions of this chapter requires a
39 construction manager to comply with the provisions of section 50-341, Idaho
40 Code, relating to the competitive bidding process.
1 (4) "Construction management services" means representation of an owner
2 in public works construction, as defined in section 54-1901(c), Idaho Code, by
3 a person with substantial discretion and authority to plan including schedul-
4 ing, estimating and approval, coordinate, manage or direct phases of a project
5 for the construction, demolition, alteration, repair or reconstruction of any
6 public work. This definition shall not include general contracting services
7 provided by public works contractors who actually perform the work of con-
8 struction, alteration, repair or reconstruction. This definition shall not
9 include services for which the laws of this state require a person to be
10 licensed as an architect or registered as a professional engineer, nor shall
11 it include services traditionally and customarily provided by licensed archi-
12 tects or registered professional engineers.
13 (5) "Firm" means any business organization, including individuals, part-
14 nerships, corporations, associations or any combination thereof acting as a
16 (6) "Licensure" means the issuance of a license to an applicant under the
17 provisions of this chapter authorizing such individual to offer and perform
18 construction management services.
19 (7) "Person" includes an individual, partnership, corporation, associa-
20 tion or other organization.
21 54-4504. CONSTRUCTION MANAGEMENT LICENSING BOARD. (1) There is hereby
22 created in the department of self-governing agencies the construction manage-
23 ment licensing board comprised of five (5) members appointed by the governor.
24 Each board member shall be appointed for a term of three (3) years, provided
25 that the initial appointments shall consist of two (2) members with three (3)
26 year terms, two (2) members with two (2) year terms, and one (1) member with a
27 one (1) year term. At least one (1) member of the board shall be a member of
28 the public works contractors licensing board, at least one (1) member shall be
29 a licensed architect and at least one (1) member shall be a registered profes-
30 sional engineer. Within two (2) years of the effective date of this chapter at
31 least two (2) members shall be licensed construction managers. Each member of
32 the board shall be compensated as provided in section 59-509(h), Idaho Code,
33 to be allowed and paid from the construction management license account.
34 (2) In case of a vacancy occurring on the board by reason of the death,
35 resignation, incapacity, neglect or refusal to act of any member, or in any
36 other way, the governor shall appoint a successor for the remainder of the
37 unexpired term of the vacancy. The governor shall have the power to remove any
38 board member for willful failure to properly discharge the duties of a board
40 (3) The board shall meet at least annually to elect a chairman, vice-
41 chairman, and secretary and to take official board action on all pending mat-
42 ters. Three (3) members of the board shall constitute a quorum, and official
43 actions may be taken by a majority vote of those voting, provided that a quo-
44 rum is present.
45 54-4505. POWERS AND DUTIES OF THE BOARD. The board shall have the follow-
46 ing powers and duties:
47 (1) To receive and process applications for construction manager licenses
48 and certificates of authority and to issue the same;
49 (2) To prepare, conduct, and grade examinations of applicants for con-
50 struction manager licenses or to contract for such services to be provided;
51 (3) To certify the results of examinations of applicants and determine
52 whether an applicant is qualified for licensure;
53 (4) To conduct investigations, hearings and proceedings in connection
1 with the suspension or revocation of licenses or certificates of authority;
2 (5) To perform all duties and exercise all other powers granted pursuant
3 to this chapter or the laws of the state of Idaho;
4 (6) To enter into agreements with the department of self-governing agen-
5 cies, bureau of occupational licenses, to provide staffing, clerical and other
6 support services for the board and for the administration of its duties under
7 the provisions of this chapter and to act in its interest; and
8 (7) To adopt and promulgate rules necessary to carry out the provisions
9 of this chapter pursuant to chapter 52, title 67, Idaho Code.
10 54-4506. LICENSE REQUIRED. (1) Except as otherwise provided herein, on
11 and after the effective date of this chapter, it shall be unlawful for any
12 person to act as a construction manager or to practice or perform or offer to
13 perform construction management services unless such construction management
14 services are performed by or under the direct supervision of a licensed con-
15 struction manager.
16 (2) Only an individual may be licensed as a construction manager. No firm
17 may provide or hold itself out as providing, construction management services
18 unless it holds a certificate of authority issued by the board pursuant to
19 section 54-4511, Idaho Code.
20 (3) Construction management services provided by a firm must be provided
21 under the direct supervision and control of a licensed construction manager
22 who is a principal or employee of the firm.
23 54-4507. REQUIREMENTS FOR LICENSURE. (1) Any individual who wishes to
24 become licensed as a construction manager shall make written application to
25 the board on such forms or in such manner as the board may prescribe. Each
26 applicant shall provide such proof as the board may require that he:
27 (a) Has a bachelor's degree in architecture, engineering or construction
28 management from a college or university which has an educational program
29 in architecture, engineering or construction management, as the case may
30 be, accredited by a nationally recognized accrediting organization and
31 that he has a minimum of three (3) years' experience in managing construc-
32 tion projects; or
33 (b) Has a minimum of eight (8) years' experience in responsible charge of
34 providing construction management services.
35 (2) If the board finds that the applicant meets the requirements for
36 licensure set forth in subsection (1) of this section, it shall administer an
37 examination to the applicant, which examination shall be offered at least once
38 each year. The examination shall test the applicant's knowledge and profi-
39 ciency in construction management issues, including health, environmental and
40 safety regulations, interpretation of construction contracts, financing,
41 scheduling and project administration for construction projects. The board
42 shall establish a fee for administering the examination to each applicant
43 which must be paid before the applicant may sit for the examination.
44 (3) An applicant who demonstrates knowledge and proficiency of construc-
45 tion management by virtue of passing the examination, and upon the payment of
46 an appropriate fee, shall be issued a license authorizing that individual to
47 provide construction management services.
48 54-4508. INTERIM AND TEMPORARY LICENSES. (1) For a period of one (1) year
49 following the effective date of this chapter, each applicant who meets the
50 requirements of section 54-4507(1), Idaho Code, shall be issued an interim
51 construction manager's license pursuant to such application terms and condi-
52 tions as the board may require. At the conclusion of the one (1) year period,
1 following the effective date of this chapter, such interim licenses shall
2 expire and thereafter all licensed construction managers shall be required to
3 meet the licensure requirements as set forth in section 54-4507, Idaho Code.
4 (2) The board may issue a temporary license for a period not to exceed
5 one (1) year to an applicant who provides satisfactory proof of possession of
6 a valid construction manager's license issued by another state pursuant to
7 requirements substantially similar to those set forth in section 54-4507,
8 Idaho Code.
9 (3) Interim and temporary licenses may not be renewed nor their terms
10 extended beyond the period set forth in this section.
11 54-4509. LICENSE RENEWAL. (1) Each construction management license issued
12 under the terms of this chapter shall expire and become invalid one (1) year
13 after issuance unless renewed in the manner prescribed by the board.
14 (2) Upon application, the board may grant inactive status to the holder
15 of a license who is no longer actively providing construction management ser-
17 (3) The board may provide for reinstatement of an expired or inactive
18 license upon such terms as it may determine by rule.
19 54-4510. DISCIPLINARY PROCEEDINGS. (1) The board shall have the authority
20 to deny or refuse to renew a license or certificate of authority, suspend or
21 revoke a license, or impose probationary conditions on the holder of a license
22 or certificate of authority, upon the following grounds:
23 (a) Fraud or deception in the procurement of a license or certificate of
24 authority or in the taking of an examination required under the provisions
25 of this chapter;
26 (b) Incompetence in the performance of a construction manager's duties;
27 (c) Fraud or deceit in the performance of a construction manager's duties;
29 (d) Willful violation of the provisions of this chapter or the rules pro-
30 mulgated by the board.
31 (2) Proceedings which may result in the suspension or revocation of a
32 license or certificate of authority, or the imposition of probationary condi-
33 tions on the holder of a license or certificate of authority, shall be con-
34 ducted in accordance with the provisions of chapter 52, title 67, Idaho Code;
35 provided however, that the suspension of a certificate of authority, upon the
36 notification by its holder that the construction manager it has designated to
37 the board no longer is a principal or employee of the firm, shall not be
38 required to be conducted in accordance with the provisions of chapter 52,
39 title 67, Idaho Code.
40 (3) The board may, by rule, provide for the reinstatement of suspended or
41 revoked licenses upon such terms as it may impose.
42 54-4511. CERTIFICATES OF AUTHORITY FOR FIRMS. (1) No firm shall provide
43 or hold itself out as providing construction management services unless it has
44 a certificate of authority issued by the board. If one (1) or more principals
45 or employees of a firm are licensed construction managers the firm may apply
46 to the board for a certificate of authority to provide and hold itself out as
47 providing construction management services. An application for a certificate
48 of authority shall:
49 (a) Designate the licensed construction manager or managers, who are
50 principals or employees of the firm, specified to be in responsible charge
51 of construction management services provided by the firm;
52 (b) Be accompanied by a statement signed by such licensed construction
1 manager or managers accepting the responsibility and duty to provide con-
2 struction management services for the firm; and
3 (c) Contain such other information as the board reasonably may require.
4 If the board concludes that the construction manager or managers desig-
5 nated by the firm is or are licensed in good standing and that the firm meets
6 such other criteria reasonably established by the board, it shall issue a cer-
7 tificate of authority to the firm authorizing it to provide and hold itself
8 out as providing construction management services.
9 (2) If the construction manager or managers designated by the firm cease
10 to be licensed or to be principals or employees of the firm, the firm shall
11 immediately notify the board in writing and shall cease to hold itself out as
12 qualified to offer construction management services. Upon receiving such noti-
13 fication the board shall suspend the firm's certificate of authority. If the
14 firm is in the process of providing construction management services when its
15 designated licensed construction manager becomes unable to provide those ser-
16 vices, the firm shall complete the construction management services for the
17 project by using the services of another licensed construction manager who
18 need not be a principal or employee of the firm. The firm shall not provide or
19 hold itself out as providing construction management services for other proj-
20 ects until the board has reinstated the firm's certificate of authority which
21 the board shall do if the firm submits an application for reinstatement of its
22 certificate of authority, which shall contain the information required for an
23 original application together with such other information as the board reason-
24 ably may require, and the board finds such application to be satisfactory and
26 54-4512. FEES -- DISPOSITION OF FUNDS. (1) The board shall adopt by rule
27 reasonable fees not to exceed two hundred dollars ($200) for each of the fol-
29 (a) Initial examination and licensing;
30 (b) License renewal;
31 (c) Inactive licenses;
32 (d) License reinstatement; and
33 (e) Issuance, suspension and reinstatement of a certificate of authority.
34 (2) All fees collected by the board shall be paid to the bureau of occu-
35 pational licenses and deposited in the state treasury, to the credit of the
36 occupational licenses fund, and shall be used only for the administration of
37 the provisions of this chapter. All expenses incurred pursuant to the provi-
38 sions of this chapter shall be paid from the occupational licenses fund. All
39 fees collected by the board under the provisions of this chapter are hereby
40 appropriated for one (1) year following the effective date of this chapter and
41 thereafter as appropriated each year by the legislature for carrying out the
42 purposes and objectives of this chapter and to pay all costs and expenses
43 incurred in connection therewith. Such moneys shall be paid out on warrants
44 drawn by the state controller upon presentation of proper vouchers approved by
45 the board.
46 54-4513. MANAGEMENT OF OWNER'S FUNDS -- BIDDING OF CONTRACTS -- DUAL
47 CAPACITY. (1) A construction manager licensed pursuant to the provisions of
48 this chapter is authorized to perform all construction management services,
49 except that a licensed construction manager may not hold or disburse a project
50 owner's funds unless the construction manager or the firm of which the con-
51 struction manager is a principal or employee also meets the requirements of
52 section 54-4514, Idaho Code.
53 (2) In soliciting bids or awarding contracts for public works construc-
1 tion, a licensed construction manager shall comply with all notice and bidding
2 laws with which an owner would be required to comply if it were to do the same
3 activities without the assistance of a construction manager.
4 (3) A licensed construction manager and the firm of which he is a princi-
5 pal or employee shall not provide construction management services for a con-
6 struction project on which the licensed construction manager or his firm also
7 provides design services or other construction related services, whether as a
8 contractor or subcontractor.
9 54-4514. REQUIREMENT OF BOND. Any licensed construction manager or firm
10 providing construction management services who undertakes, or offers to under-
11 take, the management of public works construction, as defined in section
12 54-1901, Idaho Code, shall be required to post a bond or bonds in such forms
13 and amounts and pursuant to such terms and conditions as may be determined
14 pursuant to the provisions of the public contracts bond act, sections 54-1925,
15 et seq., Idaho Code.
16 54-4515. PENALTIES. Any person who violates any provision of this chapter
17 shall, upon conviction, be guilty of a misdemeanor.
18 54-4516. INJUNCTIVE RELIEF. The board may bring an action in the district
19 court for a temporary restraining order, preliminary injunction or permanent
20 injunction against any person who violates the provisions of this chapter.
21 SECTION 2. That Section 67-2320, Idaho Code, be, and the same is hereby
22 amended to read as follows:
23 67-2320. PROFESSIONAL SERVICE CONTRACTS WITH DESIGN PROFESSIONALS
24 AND PROFESSIONAL LAND SURVEYORS . (1) Notwithstanding any other provi-
25 sion of law to the contrary, it shall be the policy of this state that all
26 public agencies and political subdivisions of the state of Idaho may
27 and their agents shall make selections for professional
28 engineering, architectural and professional land surveying ser-
29 vices, including services by persons licensed pursuant to chapters 3, 12
30 , and 19, 30 and 45 , title 54,
31 Idaho Code, on the basis of qualifications and demonstrated competence and
32 may shall negotiate contracts or agreements for such
33 services on the basis of demonstrated competence and qualifications for the
34 type of services required at fair and reasonable prices.
35 (2) In carrying out this policy, public agencies and political subdivi-
36 sions of the state may shall use the following
37 minimum guidelines in securing contracts for engineering, archi-
38 tectural and land surveying services on projects for which the professional
39 service fee is anticipated to exceed the total sum of fifteen thousand dollars
40 ($15,000), excluding professional services contracts previously awarded for an
41 associated or phased project, and the expenditure is otherwise exempt from the
42 bidding process provided by law :
43 (a) Encourage persons or firms engaged in the design
44 professions services being solicited to submit state-
45 ments of qualifications and performance data;
46 (b) Establish and make available to all interested persons
47 the public the criteria and procedures used for the selection
48 of qualified persons or firms to perform such services;
49 (c) Select from the interested persons those the
50 persons or firms whom the public agency or political
1 subdivision determines the most highly to be best
2 qualified to provide the required services , ranked in
3 order of preference, pursuant to the public agency or political
4 subdivision's established criteria and procedures;
5 (d) Negotiate with the highest qualified
6 ranked person or firm for a contract or agreement to
7 perform such services at a price determined by the public agency or polit-
8 ical subdivision to be reasonable and fair to the public after considering
9 the estimated value, the scope, the complexity and the nature of the ser-
11 (e) When unable to negotiate a satisfactory contract or agreement, for-
12 mally terminate negotiations and undertake negotiations with the next
13 most qualified highest ranked person or
14 firm , following the procedure prescribed in subsection (2)(d) of
15 this section; and
16 (f) When unable to negotiate a satisfactory contract or agreement with
17 any of the selected persons or firms , continue with the
18 selection and negotiation process provided in this section until a con-
19 tract or agreement is reached ; and
20 (g) In fulfilling the requirements of subsections (2)(a) through (2)(f)
21 of this section, a public agency or political subdivision may limit its
22 selection from a list of three (3) persons or firms selected and
23 preapproved for consideration by the public agency or political subdivi-
24 sion .
25 (3) In securing contracts for engineering, architectural or land
26 surveying services on projects for which the professional service fee is
27 anticipated to be less than the total sum of fifteen thousand dollars
28 ($15,000), the public agency or political subdivision may use the guidelines
29 set forth in paragraphs (a) through (f) of subsection (2) of this section or
30 establish its own guidelines for selection based on demonstrated competence
31 and qualifications to perform the type of services required, followed by nego-
32 tiation of the fee at a price determined by the public agency or political
33 subdivision to be fair and reasonable after considering the estimated value,
34 the scope, the complexity and the nature of services.
35 (4) When a public agency or political subdivision of the state has previ-
36 ously awarded a professional services contract to a person or firm for an
37 associated or phased project the public agency or political subdivision may,
38 at its discretion, negotiate an extended or new professional services contract
39 with that person or firm.
40 (5) (a) For the purposes of this section, "public agency"
41 shall mean the state of Idaho and any departments, commissions, boards,
42 authorities, bureaus, universities, college s , educational
43 institutions or other state agencies which have been created by or pursu-
44 ant to statute other than courts and their agencies and divisions, and the
45 judicial council and the district magistrate's commission;
46 (b) For the purposes of this section, "political subdivision" shall mean
47 a county, city, airport, airport district, school district, health dis-
48 trict, road district, cemetery district, junior commu-
49 nity college district, hospital district, irrigation district,
50 sewer district, fire protection district, or any other district or munici-
51 pality of any nature whatsoever having the power to levy taxes or assess-
52 ment, organized under any general or special law of this state. The enu-
53 meration of certain districts herein shall not be construed to exclude
54 other districts or municipalities from this definition.
STATEMENT OF PURPOSE
Idaho does not currently have a process in code for use of a
"construction manager". Many public entities are attempting to use
this concept but bonding and bidding laws are being ignored on
public works projects. It exposes those districts to large
potential financial losses. This bill would define the method by
which public entities could use the process through licensing and
In addition, the bill defines how architects, engineers,
and land surveyors would be selected under a method of quality
based selection by public entities for their portion of the
public works jobs. Their selections would be based on
demonstrated competence as design professionals.
License fees will provide funds to conduct the license
procedures required by this legislation. This bill is revenue
CONTACT: Representative Lee Gagner
STATEMENT OF PURPOSE/FISCAL NOTE