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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
|||| 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