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H0733......................................................by STATE AFFAIRS
CONTRACTOR LICENSING - Amends existing law relating to contractor licensing
to require license applications for electricians, electrical contractors,
master electricians, specialty electricians, specialty electrical
contractors, plumbing contractors and heating, ventilation and air
conditioning contractors and specialty contractors to be accompanied by a
bond; to set an amount for the bond; to provide terms and conditions; to
require such applications be accompanied by proof of liability insurance;
to set an amount for the insurance; and to require such applications to be
accompanied by proof of worker's compensation insurance, if applicable.
02/24 House intro - 1st rdg - to printing
02/27 Rpt prt - to Bus
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-eighth Legislature Second Regular Session - 2006
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 733
BY STATE AFFAIRS COMMITTEE
1 AN ACT
2 RELATING TO CONTRACTOR LICENSING; AMENDING SECTION 54-1003, IDAHO CODE, TO
3 REQUIRE THAT LICENSE APPLICATIONS FOR ELECTRICIANS, ELECTRICAL CONTRAC-
4 TORS, MASTER ELECTRICIANS, SPECIALTY ELECTRICIANS AND SPECIALTY ELECTRICAL
5 CONTRACTORS BE ACCOMPANIED BY A BOND, TO SET AN AMOUNT FOR THE BOND, TO
6 PROVIDE TERMS AND CONDITIONS, TO REQUIRE SUCH APPLICATIONS BE ACCOMPANIED
7 BY PROOF OF LIABILITY INSURANCE, TO SET AN AMOUNT FOR SUCH INSURANCE AND
8 TO REQUIRE THAT SUCH APPLICATIONS BE ACCOMPANIED BY PROOF OF WORKER'S COM-
9 PENSATION INSURANCE, IF APPLICABLE; AMENDING SECTION 54-2606, IDAHO CODE,
10 TO DELETE LANGUAGE RELATING TO BONDS, TO REQUIRE THAT LICENSE APPLICATIONS
11 FROM PLUMBING CONTRACTORS BE ACCOMPANIED BY A BOND, TO SET AN AMOUNT FOR
12 THE BOND, TO PROVIDE TERMS AND CONDITIONS, TO REQUIRE THAT SUCH APPLICA-
13 TIONS BE ACCOMPANIED BY PROOF OF LIABILITY INSURANCE, TO SET AN AMOUNT FOR
14 SUCH INSURANCE AND TO REQUIRE THAT SUCH APPLICATIONS BE ACCOMPANIED BY
15 PROOF OF WORKER'S COMPENSATION INSURANCE, IF APPLICABLE; AND AMENDING SEC-
16 TION 54-5007, IDAHO CODE, TO DELETE LANGUAGE RELATING TO BONDS, TO REQUIRE
17 THAT LICENSE APPLICATIONS FROM HEATING, VENTILATION AND AIR CONDITIONING
18 CONTRACTORS AND SPECIALTY CONTRACTORS BE ACCOMPANIED BY A BOND, TO SET AN
19 AMOUNT FOR THE BOND, TO PROVIDE TERMS AND CONDITIONS, TO REQUIRE THAT SUCH
20 APPLICATIONS BE ACCOMPANIED BY PROOF OF LIABILITY INSURANCE, TO SET THE
21 AMOUNT FOR SUCH INSURANCE AND TO REQUIRE THAT SUCH APPLICATIONS BE ACCOM-
22 PANIED BY PROOF OF WORKER'S COMPENSATION INSURANCE, IF APPLICABLE.
23 Be It Enacted by the Legislature of the State of Idaho:
24 SECTION 1. That Section 54-1003, Idaho Code, be, and the same is hereby
25 amended to read as follows:
26 54-1003. ADMINISTRATOR AUTHORITY. (1) Only the administrator of the divi-
27 sion of building safety of the state of Idaho is authorized and empowered to
28 conduct examinations and to pass upon the qualifications of applicants, and to
29 grant and issue licenses or registrations to such applicants as are found to
30 be qualified to engage in the trade, business or calling of a journeyman elec-
31 trician, electrical contractor, master electrician, specialty electrician,
32 specialty electrical contractor, specialty electrical trainee or apprentice
33 electrician in the manner and upon the terms and conditions hereinafter pro-
34 vided.
35 (2) License applications for electricians, electrical contractors, master
36 electricians, specialty electricians and specialty electrical contractors
37 shall be accompanied by a bond in the amount of ten thousand dollars ($10,000)
38 executed by a surety company authorized to do business in Idaho as surety with
39 the applicant as principal and the state of Idaho as obligee, for its benefit
40 and that of consumers dealing with the applicant, conditioned that the appli-
41 cant shall faithfully perform the duties and in all things comply with the
42 laws and rules pertaining to the license or registration applied for and shall
43 pay all amounts due to the consumer for reason of the contractor's breach of
2
1 contract including negligent or improper work in the conduct of the contract-
2 ing business or failure to fully perform a contract. In order for a claim to
3 be payable by the surety, it must be established that the claim is within the
4 scope of the bond as described in this subsection; however, it is not neces-
5 sary for a claimant to reduce a claim to judgment before submitting a claim to
6 the surety.
7 The bond shall be continuous unless canceled as provided for in this sub-
8 section, and the aggregate liability of the surety, regardless of the number
9 of claims made against the bond or the number of years the bond remains in
10 force, shall in no event exceed the amount of the bond. The bond may be termi-
11 nated at any time by the surety upon sending thirty (30) days' notice in writ-
12 ing to the state of Idaho at the office where the bond is filed and to the
13 contractor.
14 (3) License applications for electrical contractors, master electricians,
15 specialty electricians and specialty electrical contractors shall also be
16 accompanied by proof of liability insurance in the amount of three hundred
17 thousand dollars ($300,000) and proof of worker's compensation insurance, if
18 applicable.
19 (4) No licenses granted hereunder shall be transferable. Licenses shall
20 be issued upon the condition that the holder thereof shall comply with all
21 provisions of this chapter.
22 (35) The administrator of the division of building safety is authorized
23 to impose civil penalties as provided in this chapter.
24 SECTION 2. That Section 54-2606, Idaho Code, be, and the same is hereby
25 amended to read as follows:
26 54-2606. POWERS AND DUTIES OF THE IDAHO PLUMBING BOARD. (1) The board
27 shall have the general administration and supervision of the design, construc-
28 tion, installation, improvement, extension and alteration of plumbing and
29 plumbing systems, except that which has been heretofore and hereinafter
30 exempted from the jurisdiction of this board, in connection with all build-
31 ings, residences and structures in this state including buildings, residences
32 and structures owned by the state or any political subdivision thereof.
33 (2) The division of building safety shall enforce the minimum standards
34 and requirements therefor as provided by this chapter.
35 (3) The board may exercise such powers and duties as are reasonably nec-
36 essary to carry out the provisions of this chapter, and it may among other
37 things:
38 (a) Establish the fees to be charged for permits and inspections of
39 plumbing systems.
40 (b) Hold public meetings and attend or be represented at such meetings,
41 within or without the state, prepare and publish rules pertaining to this
42 chapter, and such other information as may be necessary, and furnish cop-
43 ies thereof to those engaged in the business, trade, practice or work of
44 plumbing and pipefitting and to the public upon request.
45 (c) Furnish standards and procedures and prescribe reasonable rules for
46 examinations, qualification and certification of plumbing contractors and
47 journeymen and apprentice plumbers not herein prescribed., including the
48 furnishing of a compliance bond in an amount not to exceed two thousand
49 dollars ($2,000) for the contractor classification or evidence of such
50 coverage by a corporate industry group bond acceptable to the board.
51 (d) Furnish standards and procedures and prescribe reasonable rules to
52 provide for the certification of specialty contractors, specialty journey-
53 men, and specialty apprentices, including the furnishing of a compliance
3
1 bond in an amount not to exceed two thousand dollars ($2,000) for the spe-
2 cialty contractor classification or evidence of coverage by a corporate
3 industry group bond acceptable to the board.
4 (e) Establish by administrative rule civil penalties not to exceed one
5 thousand dollars ($1,000) for each count or separate offense, to be paid
6 for violations of this chapter and rules of the Idaho plumbing board; and
7 to establish by administrative rule the process by which appeals from the
8 imposition of civil penalties may be heard. The board is authorized to
9 affirm, reject, decrease or increase the penalty imposed; however, the
10 board shall not increase any penalty imposed to an amount exceeding one
11 thousand dollars ($1,000) for each individual count or separate offense.
12 (f) License applications for plumbing contractors shall be accompanied by
13 a bond in the amount of ten thousand dollars ($10,000) executed by a
14 surety company authorized to do business in Idaho as surety with the
15 applicant as principal and the state of Idaho as obligee, for its benefit
16 and that of consumers dealing with the applicant, conditioned that the
17 applicant shall faithfully perform the duties and in all things comply
18 with the laws and rules pertaining to the license applied for and shall
19 pay all amounts due to the consumer for reason of the contractor's breach
20 of contract including negligent or improper work in the conduct of the
21 contracting business or failure to fully perform a contract. In order for
22 a claim to be payable by the surety, it must be established that the claim
23 is within the scope of the bond as described in this paragraph; however,
24 it is not necessary for a claimant to reduce a claim to judgment before
25 submitting a claim to the surety. The bond shall be continuous unless can-
26 celed as provided for in this paragraph, and the aggregate liability of
27 the surety, regardless of the number of claims made against the bond or
28 the number of years the bond remains in force, shall in no event exceed
29 the amount of the bond. The bond may be terminated at any time by the
30 surety upon sending thirty (30) days' notice in writing to the state of
31 Idaho at the office where the bond is filed and to the contractor.
32 (g) License applications for plumbing contractors shall also be accompa-
33 nied by proof of liability insurance in the amount of three hundred thou-
34 sand dollars ($300,000) and proof of worker's compensation insurance, if
35 applicable.
36 SECTION 3. That Section 54-5007, Idaho Code, be, and the same is hereby
37 amended to read as follows:
38 54-5007. REQUIREMENTS FOR CERTIFICATES OF COMPETENCY. (1) The Idaho heat-
39 ing, ventilation and air conditioning board shall provide standards and proce-
40 dures and prescribe reasonable rules for examination, qualification and certi-
41 fication of heating, ventilation and air conditioning contractors, journeymen,
42 apprentices, specialty contractors, specialty journeymen and specialty appren-
43 tices. HVAC contractors and specialty contractors shall provide a bond in the
44 amount of two thousand dollars ($2,000) or evidence of such coverage by a cor-
45 porate industry group bond acceptable to the board.
46 (2) License applications for heating, ventilation and air conditioning
47 contractors and specialty contractors shall be accompanied by a bond in the
48 amount of ten thousand dollars ($10,000) executed by a surety company autho-
49 rized to do business in Idaho as surety with the applicant as principal and
50 the state of Idaho as obligee, for its benefit and that of consumers dealing
51 with the applicant, conditioned that the applicant shall faithfully perform
52 the duties and in all things comply with the laws and rules pertaining to the
53 license applied for and shall pay all amounts due to the consumer for reason
4
1 of the contractor's breach of contract including negligent or improper work in
2 the conduct of the contracting business or failure to fully perform a con-
3 tract. In order for a claim to be payable by the surety, it must be estab-
4 lished that the claim is within the scope of the bond as described in this
5 subsection; however, it is not necessary for a claimant to reduce a claim to
6 judgment before submitting a claim to the surety.
7 The bond shall be continuous unless canceled as provided for in this sub-
8 section and the aggregate liability of the surety, regardless of the number of
9 claims made against the bond or the number of years the bond remains in force,
10 shall in no event exceed the amount of the bond. The bond may be terminated at
11 any time by the surety upon sending thirty (30) days' notice in writing to the
12 state of Idaho at the office where the bond is filed and to the contractor.
13 (3) License applications for heating, ventilation and air conditioning
14 contractors and specialty contractors shall also be accompanied by proof of
15 liability insurance in the amount of three hundred thousand dollars ($300,000)
16 and proof of worker's compensation insurance, if applicable.
STATEMENT OF PURPOSE
RS 16107C1
This legislation will apply identical insurance and bonding
requirements to all electricians, plumbers, and heating and
ventilating ("HVAC") contractors. Current Idaho code provisions
provide different requirements for different trades. The new
bonding requirements in this legislation provide that a consumer
can obtain up to $10,000 for the failure of an electrician,
plumber, or HVAC contractor to comply with applicable rules, codes
or statutory requirements or comply with the terms of a contract to
perform work.
The requirements provided by this bill are: (1) proof of worker's
compensation insurance; (2) proof of liability insurance, in the
amount of $300,000; and(3) a surety bond in the amount of $10,000
payable to a consumer in the event the electrician, plumber, or
HVAC contractor fails to meet the requirements of applicable codes
or rules.
FISCAL NOTE
There is no impact to the general fund.
Contact
Name: Rep. Max Black
Phone: 332-1000
STATEMENT OF PURPOSE/FISCAL NOTE H 733