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S1343.......................................by COMMERCE AND HUMAN RESOURCES
CONTRACTORS - Adds to existing law to provide for the licensing of
contractors; to provide that licenses shall be required on and after
January 1, 2001; and to authorize the Idaho Contractors Board to collect a
fee from each applicant, a portion of which may be refundable.
02/02 Senate intro - 1st rdg - to printing
02/03 Rpt prt - to Com/HuRes
02/18 Rpt out - rec d/p - to 2nd rdg
02/21 2nd rdg - to 3rd rdg
03/02 To 14th Ord
03/15 Rpt out w/o amen - ret'd to Com/HuRes
S1343
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-fifth Legislature Second Regular Session - 2000
IN THE SENATE
SENATE BILL NO. 1343
BY COMMERCE AND HUMAN RESOURCES COMMITTEE
1 AN ACT
2 RELATING TO CONTRACTOR LICENSING; AMENDING TITLE 54, IDAHO CODE, BY THE ADDI-
3 TION OF A NEW CHAPTER 13, TITLE 54, IDAHO CODE, TO PROVIDE DEFINITIONS, TO
4 CREATE AN IDAHO CONTRACTORS BOARD, TO PROVIDE GENERAL POWERS AND DUTIES OF
5 THE BOARD AND EXCLUSIVE LICENSING AUTHORITY, TO REQUIRE LICENSING OF CON-
6 TRACTORS, TO PROVIDE FOR DENIAL OF LIEN RIGHTS, TO PROVIDE THAT A
7 CONTRACTOR'S LICENSE NUMBER SHALL BE REQUIRED ON ANY BUILDING OR OTHER
8 PERMIT ISSUED, TO PROVIDE FOR APPLICATION FOR LICENSE, TO PROVIDE FOR
9 ISSUANCE OF A LICENSE CERTIFICATE AND DISPLAY OF LICENSE NUMBER, TO PRO-
10 VIDE FOR SUSPENSION OR REVOCATION OF LICENSE, TO PROVIDE FOR REINSTATEMENT
11 OF A SUSPENDED OR REVOKED LICENSE, TO PROVIDE FOR BOND FORFEITURE AND
12 REDEMPTION OF A CASH DEPOSIT, TO PROVIDE FOR CANCELLATION OF CONTRACTOR'S
13 BOND BY A SURETY, TO PROVIDE PENALTIES, TO PROVIDE INFORMATION TO THE PUB-
14 LIC ON LICENSED CONTRACTORS AND TO CREATE A CONTRACTORS BOARD FUND; TO
15 PROVIDE EFFECTIVE DATES; AND TO PROVIDE AUTHORITY TO THE CONTRACTORS
16 LICENSE BOARD FOR THE COLLECTION AND REFUNDING OF AN APPLICATION FEE UNTIL
17 A TIME CERTAIN.
18 Be It Enacted by the Legislature of the State of Idaho:
19 SECTION 1. That Title 54, Idaho Code, be, and the same is hereby amended
20 by the addition thereto of a NEW CHAPTER, to be known and designated as Chap-
21 ter 13, Title 54, Idaho Code, and to read as follows:
22 CHAPTER 13
23 CONTRACTOR LICENSING
24 54-1301. DEFINITIONS. As used in this chapter:
25 (1) "Board" means the Idaho contractors board as created in section
26 54-1302, Idaho Code.
27 (2) "Contractor" means:
28 (a) Any private person who undertakes to, or offers to undertake to, or
29 purports to have the capacity to undertake to, or submits a bid to, or
30 does himself or by or through others, construct, alter, repair, add to,
31 subtract from, improve, move, wreck or demolish any building, highway,
32 road, railroad, excavation or other structure, project, development or
33 improvement, or to do any part thereof, including the erection of scaf-
34 folding or other structures or works in connection therewith; or
35 (b) Any person who in any capacity undertakes, or offers to undertake, or
36 purports to have the capacity to undertake any construction, repair or
37 reconstruction; or
38 (c) A construction manager who performs construction management services.
39 Under the provisions of this chapter, a contractor shall not mean any per-
40 son who engages in construction activities for personal use; any person who is
41 a registered architect or a registered professional engineer acting solely in
42 his professional capacity; or any person who is the employee of another with
2
1 wages as his sole compensation.
2 (3) "Department" means the department of self-governing agencies.
3 (4) "Person" includes any individual, firm, copartnership, corporation,
4 association or other organization, or any combination thereof acting as a
5 unit.
6 54-1302. IDAHO CONTRACTORS BOARD. (1) The Idaho contractors board
7 referred to as the board is hereby created and made a part of the division of
8 building safety under the department of self-governing agencies. It shall be
9 the responsibility and duty of the board to administer and enforce the provi-
10 sions of this chapter; and the board shall make, promulgate and publish such
11 rules as may be necessary for carrying out the provisions of this chapter in
12 order to effectuate the purposes thereof and for the orderly and efficient
13 administration thereof, and except as may be limited or prohibited by law and
14 the provisions of this chapter, such rules so made and promulgated shall have
15 the force of statute.
16 (2) The board shall consist of five (5) members: one (1) member shall be
17 a contractor member of the public works contractors license board appointed by
18 the public works contractors license board, who shall serve concurrently with
19 his term of office as a member of the public works contractors license board;
20 one (1) member shall be an electrical contractor member of the Idaho electri-
21 cal board appointed by the Idaho electrical board who shall serve concurrently
22 with his term of office as a member of the electrical board; one (1) member
23 shall be a plumbing contractor member of the Idaho plumbing board appointed by
24 the Idaho plumbing board who shall serve concurrently with his term of office
25 as a member of the plumbing board; one (1) member shall be a licensed home
26 builder appointed by the governor for a term of four (4) years, except that
27 the first member to serve in this position shall not be required to be
28 licensed until after January 1, 2001; and one (1) member shall be a citizen at
29 large appointed by the governor for a term of four (4) years.
30 (3) The board shall meet within thirty (30) days after the appointment of
31 all its members and thereafter at such other times as may be expedient and
32 necessary for the proper performance of its duties, but not less than once
33 during each calendar quarter. At the board's first meeting, the members shall
34 elect one (1) of their number to be chairman. A majority of the board shall
35 constitute a quorum for the transaction of business and not less than four (4)
36 quorum meetings shall be held each year.
37 (4) The board may delegate to any member, or its chairman or other
38 employees, the power to make investigations and hold hearings at any place it
39 may deem proper, and to report findings to it; and may delegate to its chair-
40 man and employees the performance of ministerial functions.
41 (5) Each member of the board shall be compensated as provided by section
42 59-509(g), Idaho Code.
43 54-1303. GENERAL POWERS AND DUTIES OF THE BOARD -- EXCLUSIVE LICENSING
44 AUTHORITY. The board shall enforce the minimum standards and requirements
45 therefor as provided by this chapter. No government entity other than the
46 Idaho contractors board, the state electrical board, the state plumbing board,
47 the Idaho manufactured home advisory board and the public works contractors
48 license board shall have authority to issue their respective contractors
49 licenses or to provide for any other form of licensing or registration of
50 their respective contractors. The board may exercise such powers and duties as
51 are reasonably necessary to carry out the provisions of this chapter and it
52 may, among other things:
53 (1) Establish the fees to be charged for application, licensure and
3
1 renewal, subject to the provisions of this chapter;
2 (2) Hold public meetings and attend or be represented at such meetings,
3 within or without the state, prepare and publish rules pertaining to this
4 chapter and such other information as may be necessary, and furnish copies
5 thereof to those engaged in the business, trade, practice or work of contract-
6 ing and to the public upon request;
7 (3) Furnish standards and procedures and prescribe reasonable rules for
8 applications, qualifications and licensure of contractors, including proration
9 of license fees and staggering initial annual licenses;
10 (4) Under such rules as it may adopt, investigate, classify and determine
11 the qualifications of applicants for licensure pursuant to this chapter;
12 (5) Employ such personnel as is necessary to discharge the duties imposed
13 by this chapter and fix their compensation;
14 (6) Provide suitable quarters and such equipment, records and supplies as
15 deemed necessary to carry out the provisions of this chapter; and
16 (7) Pay all expenses as necessary to administer the provisions of this
17 chapter.
18 54-1304. LICENSING REQUIRED. (1) It shall be unlawful for any person to
19 engage in the business of, or act as, a contractor within this state without
20 having been licensed and validly maintaining the license as required in this
21 chapter, unless such person only performs labor or services for wages or sal-
22 ary for a licensed contractor. No person engaged in construction activities
23 for personal use only shall be considered a contractor.
24 (2) It shall be unlawful for a contractor to engage any contractor who is
25 required by this chapter to be licensed as a contractor unless said contractor
26 furnishes satisfactory proof to the contractor that he is duly licensed under
27 the terms of this chapter.
28 54-1305. DENIAL OF LIEN RIGHTS. Unlicensed contractors shall be denied
29 lien rights.
30 54-1306. BUILDING PERMITS AND CONTRACTOR LICENSE NUMBER -- POSTING AT
31 SITE. (1) No building inspector or such other authority of any county, munic-
32 ipality or district charged with the duty of issuing building or other permits
33 for construction of any type, as defined herein, shall issue any permit with-
34 out first obtaining the contractor's Idaho license number, and such number
35 shall be entered on the permit so issued.
36 (2) All building permits or other permits for construction of any type
37 shall be prominently posted at the construction site and the contractor's
38 license number shall be visible on the permit.
39 (3) No person engaged in construction activities for personal use shall
40 be required to have a contractor license number.
41 54-1307. APPLICATION FOR LICENSE. An applicant for licensing as a con-
42 tractor shall submit an application under oath upon a form to be prescribed by
43 the board and which shall include the following information pertaining to the
44 applicant:
45 (1) Social security number for natural persons or employer identification
46 number for other persons;
47 (2) The name and address under which the applicant conducts business;
48 (3) A certificate issued by an insurance company licensed to do business
49 in the state of Idaho or other satisfactory proof that the applicant has pro-
50 cured and has in effect worker's compensation insurance or a statement by the
51 contractor as to why such certificate or coverage is not required for the
4
1 applicant;
2 (4) A certificate issued by an insurance company licensed to do business
3 in the state of Idaho that the applicant has procured and has in effect, pub-
4 lic liability and property damage insurance covering the applicant's construc-
5 tion operations in the sum of not less than three hundred thousand dollars
6 ($300,000) for injury or damage to property, including death to more than one
7 (1) person;
8 (5) Idaho state sales/use tax, state withholding tax and unemployment
9 insurance account tax numbers or statement as to why such certificate or cov-
10 erage is not required;
11 (6) A statement of the type of construction to be undertaken by the
12 applicant, with a brief chronological work history and information relevant to
13 the consumer protection act, chapter 6, title 48, Idaho Code, on a form pro-
14 vided by or satisfactory to, the board;
15 (7) A statement that the applicant has never been denied or had revoked a
16 contractor's license or registration privilege in this or in any other state,
17 or, if a license or registration privilege has been denied or revoked in this
18 or in any other state, an explanation of any such denial or revocation;
19 (8) A state of Idaho license fee as may be set by the board to cover its
20 administrative and enforcement costs, not to exceed one hundred fifty dollars
21 ($150) per year;
22 (9) A license or obligation bond running to the state in the amount of
23 ten thousand dollars ($10,000) for a contractor. In lieu of the license or
24 obligation bond, the applicant may file with the board a cash deposit. The
25 bond required herein shall remain in effect until canceled by action of the
26 surety, the principal or the board. An action may not be commenced upon the
27 bond later than three (3) years after its cancellation.
28 54-1308. LICENSE CERTIFICATE -- DISPLAY. (1) Upon receipt of a duly com-
29 pleted application, together with the license fee, and after such verification
30 process as the board may from time to time deem appropriate, a certificate of
31 license and a wallet sized card showing the licensee's name and showing a
32 license number shall be issued initially for a period commencing on the date
33 of issue and expiring one (1) year from the date issued. Upon annual renewal,
34 a certificate of license and wallet sized card shall be renewed for succeeding
35 terms of one (1) year each. Application for renewal of license shall be filed
36 on or before thirty (30) days prior to the expiration date. The board shall
37 issue a certificate of license to an applicant upon the applicant's compliance
38 with the licensing requirements of this chapter. Certificates shall not be
39 assignable or transferable. Upon any change of ownership of a licensed entity,
40 the board shall be notified within thirty (30) days. A certificate of license,
41 without the payment of a license fee, shall be issued to any person who is
42 granted a public works contractor license or a construction manager license,
43 as long as requirements for licensure in Idaho are met.
44 (2) A contractor licensed pursuant to this chapter shall prominently dis-
45 play his contractor license number for public view in his place of business,
46 on advertising, contracts, permits, company or business letterheads, purchase
47 orders and subcontracts, within sixty (60) days of issue of license.
48 54-1309. SUSPENSION OR REVOCATION OF LICENSE. (1) The board shall sus-
49 pend or revoke a contractor's license if, after an opportunity for a hearing,
50 it determines that:
51 (a) Any insurance coverages provided for hereunder have ceased to be
52 effective; or
53 (b) A contractor has violated any of the provisions of chapter 6, title
5
1 48, Idaho Code, relating to consumer protection; or
2 (c) A contractor has made any misstatement of a material fact or has
3 failed to pay the required fee in the licensing process; or
4 (d) A contractor has been convicted of or engaged in conduct constituting
5 a violation of public laws, ordinances or rules of this state, or any sub-
6 division thereof, relevant to contracting, reflecting on the licensee's
7 ability or qualifications to continue contracting for other persons, and
8 making the licensee a threat to the public safety, health or well-being.
9 (2) A contractor whose license has been revoked or suspended shall be
10 required to return his certificate of license within the time determined by
11 the board or, upon failure to do so, be liable for civil penalties as set by
12 the board but not to exceed fifty dollars ($50.00) per day, for each day the
13 certificate is not returned after expiration of the period allowed.
14 (3) A licensed contractor is subject to the provisions set forth in chap-
15 ter 14, title 7, Idaho Code. The rights and remedies provided in this section
16 shall be in addition to any and all other rights and remedies that may exist
17 at law or in equity.
18 54-1310. REINSTATEMENT. The board may reinstate a suspended or revoked
19 license upon a showing that the grounds therefor have been eliminated, that
20 such a violation is not likely to reoccur in the future, and that the public
21 interest is not jeopardized by the relicensing.
22 54-1311. BOND FORFEITURE AND REDEMPTION OF A CASH DEPOSIT. (1) Forfei-
23 ture. A person having a claim against a contractor may bring action upon the
24 bond. A copy of the complaint shall be served by registered or certified mail
25 upon the board at the time action is taken and the board shall maintain a
26 record, available for public inspection, of all actions commenced. Two (2)
27 additional copies shall be served upon the director of the department of
28 insurance with the payment to the director of a fee as set by the director,
29 taxable as costs in the action. This service upon the director shall consti-
30 tute service on the surety and the director shall transmit the complaint or a
31 copy of it to the surety within seventy-two (72) hours after it has been
32 received. The surety upon the bond is not liable in an aggregate amount in
33 excess of that named in the bond, but in case claims pending at any one (1)
34 time exceed the amount of the bond, the claims shall be satisfied from the
35 bond in the following order:
36 (a) Labor, including employee benefits;
37 (b) Taxes and contributions due the state, city and county, in that
38 order;
39 (c) Materials, equipment, suppliers and subcontractors;
40 (d) Claims for breach of contract;
41 (e) Repair of public facilities.
42 If a judgment is entered against the cash deposit as provided in subsection
43 (2) of this section, the board, upon receipt of a certified copy of a final
44 judgment, shall pay the judgment from the amount of the deposit, in accordance
45 with the priorities set out in this subsection (1).
46 (2) Redemption of cash deposit. A contractor who has filed a cash deposit
47 and who ceases doing business as a contractor may request the return of as
48 much of that cash deposit as is held by the board by:
49 (a) Filing a notarized statement with the board that the contractor has
50 ceased doing business as a contractor; and
51 (b) Filing a notarized statement with the board at least three (3) years
52 after filing the statement in subsection (2)(a) of this section, which:
53 (i) Requests return of the cash deposit;
6
1 (ii) Certifies that the former contractor has not been engaged in
2 business as a contractor for at least three (3) years; and
3 (iii) Certifies that to the best of the contractor's knowledge no
4 action has been commenced upon the cash deposit which has not been
5 dismissed or reduced to a final judgment which has been satisfied.
6 The board, after paying any judgments against the cash deposit as provided in
7 subsection (1) of this section, shall return the remainder of a former
8 contractor's cash deposit to the contractor if the former contractor has com-
9 plied with the terms of paragraphs (a) and (b) of this subsection (2) and if
10 no action has been commenced upon the cash deposit which has not been dis-
11 missed or reduced to a final judgment which has been satisfied.
12 54-1312. CANCELLATION OF CONTRACTOR'S BOND BY SURETY - NOTICE - DUTIES OF
13 BOARD AND CONTRACTOR - REVOCATION OF LICENSE. (1) The surety may cancel the
14 bond upon giving sixty (60) days' notice to the board by certified mail. Upon
15 receipt by the board of a notice from a surety of cancellation of a
16 contractor's bond, the board immediately shall notify the contractor who is
17 the principal on the bond of the effective date of cancellation of the bond,
18 and that his license will be revoked unless he furnishes an equivalent bond or
19 establishes an equivalent cash deposit before the effective date of cancella-
20 tion.
21 (2) Notice to the contractor shall be by certified mail addressed to his
22 latest address of record in the office of the board.
23 (3) If the contractor does not comply with the requirements of the notice
24 from the board, his license shall be revoked on the date the bond is canceled.
25 54-1313. PENALTIES. (1) Any person, firm, copartnership, limited liabil-
26 ity partnership, limited liability company, corporation, association or other
27 organization acting in the capacity of a contractor within the meaning of this
28 chapter, without a current license as herein provided, shall be guilty of a
29 misdemeanor and shall, upon conviction thereof, if a person or persons, be
30 punished by a fine of not to exceed three hundred dollars ($300) or by impris-
31 onment in the county jail for a term not to exceed six (6) months or by both
32 such fine and imprisonment, in the discretion of the court. The same penalties
33 shall apply, upon conviction to any member of a copartnership, or to any con-
34 struction, managing or directing officer of any corporation or other organiza-
35 tion consenting to, participating in, or aiding or abetting any such violation
36 of this act.
37 (2) No person engaged in the business or acting in the capacity of a con-
38 tractor, may bring or maintain any action in any court of this state for the
39 collection of compensation for the performance of any act or contract for
40 which the license is required by this chapter without alleging and providing
41 that he was a duly licensed contractor at all times during the performance of
42 such act or contract.
43 54-1314. PUBLIC INFORMATION ON LICENSED CONTRACTORS. The board shall pro-
44 vide, upon request, or as it otherwise deems appropriate, to the public,
45 school districts, highway districts, county and municipal authorities informa-
46 tion regarding those contractors duly licensed under the provisions of this
47 chapter.
48 54-1315. CONTRACTORS BOARD FUND CREATED. All money received by the board
49 or the department under the terms and provisions of this chapter shall be
50 paid into the state treasury monthly, and shall be, by the state treasurer,
51 placed to the credit of the Idaho contractors board fund, which is hereby cre-
7
1 ated in the state treasury. All such moneys hereafter placed in said fund are
2 hereby set aside and perpetually appropriated to the board to carry into
3 effect the provisions of this chapter.
4 SECTION 2. This act shall be in full force and effect on and after July
5 1, 2000, and licensing shall be required on and after January 1, 2001.
6 SECTION 3. Beginning July 1, 2000, and until July 1, 2001, the Idaho con-
7 tractors board is hereby authorized to collect a fee of one hundred dollars
8 ($100) from each applicant for a contractors license. In the event the license
9 is not issued, the board shall refund seventy-five dollars ($75.00) of each
10 such fee to the applicant, and twenty-five dollars ($25.00) of the fee shall
11 be retained by the board to defray administrative costs.
STATEMENT OF PURPOSE
RS 09542
Idaho is one of the few remaining states that does not require licensing of
contractors. As a consequence, any person can hold themselves out as a
contractor in Idaho, even without experience, workman's compensation coverage,
liability insurance, a valid building permit, and even refusal to pay sales tax
on building materials purchased for the job. This "Contractor Licensing Bill",
(proposed as Idaho Code, Section 54-1301 et. seq.) will not remedy all of the
injustice that has affected homeowners in the state of Idaho, at the hands of
unreliable contractors, but it will be substantial improvement benefitting
the consumer.
This Bill will require contractors to be licensed in order to obtain a building
permit from the city or county, unless he/she works for hire or personal use.
Sub-contractors must also be licensed. An applicant for license must show that
there is:
1)workman compensation coverage (as required by law);
2)$300,000 of liability insurance;
3) unemployment coverage;
4)salesuse tax and withholding tax compliance;
5) $10,000 licensing bond in place;
6) pay the license fee (not to exceed $150; and,
7) make representations under oath about experience, past record and
compliance with Idaho law.
Failure to comply with the provision of the Act can result in denial of lien
rights, suspension of license, and a fine of $50 per day by the Contractor Board
for failure to surrender license. In addition thereto, the $10,000 license bond
may be forfeited and paid out according to the enumerated priorities. Misdemeanor
penalty of $300 and/or six months in jail can be imposed by court action.
Additionally, failure to have a required license can be a bar to collecting for
work done by the non-licensed contractor. If during the course of construction, the
contractor fails to continue compliance, the license can be revoked or suspended
by the Contractor Licensing Board. The board is composed of five members; two
appointed by the Governor and others selected by area of expertise.
FISCAL IMPACT
It is not expected that this Bill will impact the General Fund directly.
Contractors that purchase materials and supplies out of state and use them on
in-state projects, deprive Idaho of a substantial amount of Sales Tax revenue.
Once fully implemented, it is submitted that this Bill will enhance sales tax
collections and recover most of these losses.
Contact
Name: Bart Davis
Phone: (208) 332-1343
STATEMENT OF PURPOSE/FISCAL NOTE S134