2007 Legislation
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HOUSE BILL NO. 139 – Contractor, certain violatns, pnlty


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Bill Status

H0139...........................................................by BUSINESS
PUBLIC CONTRACTORS - Amends existing law relating to public contractors to
provide civil and criminal sanctions for knowingly failing to comply with
certain provisions of Idaho Code; to require a general contractor
self-performing plumbing, HVAC work or electrical work to be properly
licensed and to list the license number on the bid form; and to provide
that failure to do so shall render any bid submitted by a general
contractor unresponsive and void.
02/08    House intro - 1st rdg - to printing
02/09    Rpt prt - to Bus
02/16    Rpt out - rec d/p - to 2nd rdg
02/19    2nd rdg - to 3rd rdg
02/22    3rd rdg - PASSED - 67-3-0
      AYES -- Anderson, Andrus, Bayer, Bedke, Bell, Bilbao, Black, Block,
      Bock, Boe, Bolz, Brackett, Bradford, Chadderdon, Chavez, Chew, Clark,
      Collins, Crane, Durst, Edmunson, Eskridge, Hagedorn, Hart, Henbest,
      Henderson, Jaquet, Killen, King, Kren, Labrador, Lake, LeFavour,
      Loertscher, Luker, Marriott, Mathews, McGeachin, Mortimer, Moyle,
      Nielsen, Nonini, Pasley-Stuart, Patrick, Pence, Raybould, Ring,
      Ringo, Roberts, Ruchti, Rusche, Sayler, Schaefer, Shepherd(2),
      Shepherd(8), Shirley, Shively, Smith(30), Smith(24), Snodgrass,
      Stevenson, Thayn, Trail, Vander Woude, Wills, Wood(27), Mr. Speaker
      NAYS -- Barrett, Harwood, Wood(35)
      Absent and excused -- None
    Floor Sponsor - Collins
    Title apvd - to Senate
02/23    Senate intro - 1st rdg - to Com/HuRes
03/07    Rpt out - rec d/p - to 2nd rdg
03/08    2nd rdg - to 3rd rdg
03/14    3rd rdg - PASSED - 33-0-2
      AYES -- Andreason, Bair, Bastian, Bilyeu, Broadsword, Burkett,
      Cameron, Coiner, Darrington, Davis, Fulcher, Gannon, Geddes, Goedde,
      Hammond, Heinrich, Jorgenson, Kelly, Keough, Langhorst, Little,
      Lodge, Malepeai, McGee, McKague, McKenzie, Pearce, Richardson,
      Schroeder, Siddoway, Stegner, Stennett, Werk
      NAYS -- None
      Absent and excused -- Corder, Hill
    Floor Sponsor - Goedde
    Title apvd - to House
03/15    To enrol - Rpt enrol - Sp signed - Pres signed
03/16    To Governor
03/21    Governor signed
         Session Law Chapter 127
         Effective: 07/01/07

Bill Text

  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-ninth Legislature                   First Regular Session - 2007
                              IN THE HOUSE OF REPRESENTATIVES
                                     HOUSE BILL NO. 139
                                   BY BUSINESS COMMITTEE
  1                                        AN ACT
 11    Be It Enacted by the Legislature of the State of Idaho:
 12        SECTION 1.  That Section 54-1914, Idaho Code, be, and the same  is  hereby
 13    amended to read as follows:
 14        54-1914.  ADMINISTRATIVE  ENFORCEMENT  PROCEEDINGS.  (1) The administrator
 15    may upon his own motion or at the direction of the board, and shall  upon  the
 16    verified  complaint  in  writing of any person, investigate the actions of any
 17    public works contractor within the state  and  may  undertake  to  reclassify,
 18    retype,  place on probation, defer or precondition licensure, impose an admin-
 19    istrative fine not to exceed twenty thousand dollars ($20,000) per  violation,
 20    impose the administrative costs of bringing the action including, but not lim-
 21    ited to, hearing officer fees, expert witness fees, attorney's fees,  costs of
 22    hearing  transcripts and copies, temporarily suspend or permanently revoke any
 23    license  if  the holder, while a licensee or applicant hereunder, is guilty of
 24    or commits any one (1) or more of the following acts or omissions:
 25        (a)  Abandonment without legal excuse of any construction project or oper-
 26        ation engaged in or undertaken by the licensee as a contractor.
 27        (b)  Diversion of funds or property received under express  agreement  for
 28        prosecution or completion of a specific construction project or operation,
 29        or  for  a  specified purpose in the prosecution or completion of any con-
 30        struction project or operation, and their application or use for any other
 31        construction project or operation, obligation or purpose, with  intent  to
 32        defraud or deceive creditors or the owner.
 33        (c)  Willful  departure  from  or disregard of, plans or specifications in
 34        any material respect, and prejudicial to another, without consent  of  the
 35        owner  or  his  duly authorized representative, and without the consent of
 36        the person entitled to have the particular construction project or  opera-
 37        tion completed in accordance with such plans and specifications.
 38        (d)  Willful  or deliberate disregard and violation of valid building laws
 39        of the state, or of any political subdivision thereof, or  of  the  safety
 40        laws or labor laws or compensation insurance laws of the state.
 41        (e)  Misrepresentation  of  a material fact by an applicant in obtaining a
 42        license.
 43        (f)  Aiding or abetting an unlicensed person to evade  the  provisions  of
  1        this  chapter  or  conspiring with an unlicensed person, or allowing one's
  2        license to be used by an unlicensed person, or acting as agent or  partner
  3        or  associate  or  otherwise,  of  an unlicensed person with the intent to
  4        evade the provisions of this chapter.
  5        (g)  Failure in any material respect to comply with the provisions of this
  6        chapter.
  7        (h)  Acting in the capacity of a contractor under any license issued here-
  8        under except: (1) in the name of  the  licensee  as  set  forth  upon  the
  9        license,  or  (2)  in accordance with the personnel of the licensee as set
 10        forth in the application for such license, or as later changed as provided
 11        in this chapter.
 12        (i)  Knowingly accepting a bid from, or  entering  into  a  contract  with
 13        another contractor for a portion of a public works project if at that time
 14        such  contractor  does not possess the appropriate license to do that work
 15        as provided in this chapter.
 16        (j)  Willful failure or refusal without legal excuse  on  the  part  of  a
 17        licensee  as  a  contractor  to finish a construction project or operation
 18        with reasonable diligence, causing material injury to another.
 19        (k)  Willful or deliberate failure by any licensee, or  agent  or  officer
 20        thereof,  to  pay  any moneys when due, for any materials or services ren-
 21        dered in connection with his operations as a contractor, when he  has  the
 22        capacity  to pay or when he has received sufficient funds therefor as pay-
 23        ment for the particular construction work, project or operation for  which
 24        the  services  or  materials  were rendered or purchased; or denial of any
 25        such amount due or the validity of the claim thereof with intent to secure
 26        for himself, his employer, or other person, any discount upon such indebt-
 27        edness or with intent to hinder, delay or defraud the person to whom  such
 28        indebtedness is due.
 29        (l)  Suffers  a  change  in  financial  circumstances which may impair the
 30        licensee's financial responsibility.
 31        (m)  Holding oneself or one's firm out as a  public  works  contractor  by
 32        engaging  in any act meeting the definition or character of a public works
 33        contractor as defined herein without a legally required license.
 34        (n)  Failure to comply with subsection (1), (2) or (3) of section 67-2310,
 35        Idaho Code.
 36        (2)  The administrator may upon his own motion or at the direction of  the
 37    board, and shall upon the verified complaint in writing of any licensed public
 38    works contractor eligible to perform public works contracting duties, investi-
 39    gate  the  actions  of  any  public  entity within the state and may impose an
 40    administrative fine not to exceed five thousand dollars ($5,000) per violation
 41    or impose the administrative costs of bringing the action including,  but  not
 42    limited  to, hearing officer fees, expert witness fees, attorney's fees, costs
 43    of hearing transcripts and copies, if the public agency contracts  for  public
 44    works  construction  with  an  unlicensed or improperly licensed contractor or
 45    knowingly awards a contract based upon a bid or  proposal  not  in  compliance
 46    with subsection (1) or (2) of section 67-2310, Idaho Code.
 47        SECTION  2.  That  Section 54-1920, Idaho Code, be, and the same is hereby
 48    amended to read as follows:
 49        54-1920.  PENALTIES -- INJUNCTION. (1) Any  person,  firm,  copartnership,
 50    corporation, limited liability company, limited liability partnership, associ-
 51    ation  or other organization acting in the capacity of a public works contrac-
 52    tor within the meaning of this chapter, without a license as  herein  provided
 53    or  fails  to comply with the provisions of subsection (1), (2) or (3) of sec-
  1    tion 67-2310, Idaho Code, shall be guilty of a  misdemeanor  and  shall,  upon
  2    conviction  thereof, be punished by a fine not to exceed five thousand dollars
  3    ($5,000) or by imprisonment in the county jail for a term not  to  exceed  one
  4    (1)  year  or  by  both  such  fine and imprisonment, at the discretion of the
  5    court. The same penalties shall apply, upon conviction  to  any  member  of  a
  6    copartnership,  or  to  any construction, managing or directing officer of any
  7    corporation, limited liability company or limited  liability  partnership,  or
  8    other  organization consenting to, participating in, or aiding or abetting any
  9    such violation of this chapter.
 10        (2)  Every public officer who knowingly lets a public contract to any per-
 11    son, firm, copartnership, corporation, limited liability company, limited lia-
 12    bility partnership, association or other organization  who  does  not  hold  a
 13    license  as  required  by the provisions of this chapter or knowingly fails to
 14    comply with the provisions of subsection (1) or (2) of section 67-2310,  Idaho
 15    Code, shall be guilty of a misdemeanor and upon conviction, punishable as pro-
 16    vided  in  this section, unless, however, there be no qualified bidder willing
 17    to undertake the public works covered by the contract. No  person  engaged  in
 18    the  business or acting in the capacity of a contractor, may bring or maintain
 19    any action in any court of this state for the collection of  compensation  for
 20    the performance of any act or contract for which a license is required by this
 21    chapter  without alleging and providing that he was a duly licensed contractor
 22    at all times during the performance of such act or contract.
 23        (3)  In addition to any other penalties specified in this  section,  when-
 24    ever  any person violates the provisions of this chapter by acting as a public
 25    works contractor without a license, the administrator may maintain  an  action
 26    in the name of the state of Idaho to enjoin the person from any further viola-
 27    tions.  Such  action may be brought either in the county in which the acts are
 28    claimed to have been or are being committed, in the county where the defendant
 29    resides or in Ada county. Upon the filing of a verified complaint in the  dis-
 30    trict  court, the court, if satisfied that the acts complained of have been or
 31    probably are being or may be committed,  may  issue  a  temporary  restraining
 32    order  and/or  preliminary  injunction,  without bond, enjoining the defendant
 33    from the commission of any such act or acts constituting the violation. A copy
 34    of the complaint shall be served upon the defendant and the proceedings  shall
 35    thereafter  be  conducted as in other similar civil actions. If the commission
 36    of the act or acts is established, the court shall enter a decree  permanently
 37    enjoining  the  defendant  from  committing such act or acts. If an injunction
 38    issued under the provisions of this section is violated,  the  court,  or  the
 39    judge  thereof at chambers, may summarily try and punish the offender for con-
 40    tempt of court.
 41        SECTION 3.  That Section 67-2310, Idaho Code, be, and the same  is  hereby
 42    amended to read as follows:
 44    EXCEPTIONS. (1) Hereafter, before the state of Idaho, the  separate  counties,
 45    cities,  towns,  villages  or school districts within the state of Idaho shall
 46    let contracts for the construction, alteration or repair of any and all build-
 47    ings, improvements or public  works,  and  such  construction,  alteration  or
 48    repair  requires plumbing, heating and air-conditioning HVAC work, or electri-
 49    cal work, the general contractor shall be required to include in his  bid  the
 50    name,  or names and address, or addresses, of the subcontractors who shall, in
 51    the event the contractor secures the contract, subcontract the plumbing, heat-
 52    ing and air-conditioning HVAC work, and electrical work under the general con-
 53    tract. In the event that the general contractor intends  to  self-perform  the
  1    plumbing,  HVAC  or  electrical  work, the general contractor must be properly
  2    licensed by the state of Idaho to perform such work.  The  general  contractor
  3    shall  demonstrate  compliance  with  this  requirement  by  listing the valid
  4    contractor's license number for the plumbing, HVAC or electrical  work  to  be
  5    self-performed by the general contractor on the bid form.
  6        (2)  No  general contractor shall name any subcontractor in his bid unless
  7    the general contractor has received communication from the subcontractor.  For
  8    the  purposes  of this section, "communication" shall include telephone, mail,
  9    facsimile machine, in person, or by computer using the internet or a bid  ser-
 10    vice.
 11        (3)  In  the  event  a general contractor secures the contract, and if the
 12    general contractor and a named subcontractor  cannot  finalize  the  terms  of
 13    agreement  between them for any reason other than cost, the general contractor
 14    shall name another subcontractor by written notification within ten (10)  days
 15    of  being awarded the public works contract. The general contractor shall dis-
 16    close to the public entity the cost for work to be performed by the substitute
 17    subcontractor. If the amount of the substitute  subcontractor's  bid  is  less
 18    than  the  original subcontractor's bid, the reduction in cost shall be passed
 19    through to the benefit of the public entity which awarded the contract.
 20        (4)  This act shall not apply to the construction, alteration or repair of
 21    public buildings under the jurisdiction of the board of regents of the Univer-
 22    sity of Idaho.
 23        (5)  This act shall have no application to the preparation and  submission
 24    of plans and specifications pursuant to statute or local ordinance.
 25        (6)  Failure to name subcontractors or list the valid contractor's license
 26    number  for plumbing, HVAC or electrical work being self-performed by the gen-
 27    eral contractor as required by subsection (1) of this section shall render any
 28    bid submitted by a general contractor unresponsive and void.
 29        (7)  At the time subcontractors are named in accordance  with  the  provi-
 30    sions  of this section, they must possess the appropriate licenses or certifi-
 31    cates of competency issued by the state of Idaho covering the contractor  work
 32    classification in which each respective subcontractor is named.

Statement of Purpose / Fiscal Impact

                       STATEMENT OF PURPOSE

                             RS 16936

The naming law, 67-2310, is now referenced in Public Works
Chapter 54 in order to ensure that contractors and public officials
are aware of the requirement to name electrical, HVAC and plumbing
contractors in their bids for a public works project.  This
legislation allows a qualified general contractor to perform HVAC,
electrical or plumbing if so qualified by his public works license. 
It also provides for enforcement by the Public Works Board and the
Administrator of the Division of Building Safety.   

                           FISCAL NOTE


Name:     Bob Corbell 
Phone:    870-5817

STATEMENT OF PURPOSE/FISCAL NOTE                         H 139