No. 32438 (Amendment): R156-55a. Utah Construction Trades Licensing Act Rule

DAR File No.: 32438
Filed: 03/12/2009, 09:32
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

The Division and Construction Services Commission are proposing amendments to the rule to make some technical changes.

Summary of the rule or change:

In Subsection R156-55a-302c(1), provides that a new applicant as a qualifier for a I103 Electrical Trades Instruction Facility shall be licensed as either a master electrician or a residential master electrician. Amendment to Subsection R156-55a-302c(2) provides that a new applicant as a qualifier for a I104 Plumbing Trades Instruction Facility shall be licensed as either a master plumber or a residential master plumber. These amendments are being proposed due to a recent statutory amendment in H.B. 401, 2008 Legislative General Session, which created the master plumber classification as the highest level of licensure. Changes are made to both electrical and plumbing instructor qualifier requirements to be consistent. The instructor should be licensed at the most qualified level. In Section R156-55a-306, amendments proposed are a technical correction to clarify what items in the former Subsection (2) can be considered when a new entity is applying for licensure. An applicant argued that the way Subsection (2) was written, unless a new entity has had financial problems, the Division cannot consider the owner's prior history even if there has been a Residence Lien Recovery payout or other similar failures. Section R156-55a-602 is being added to clarify what types of insurance companies can issue acceptable bonds and to clarify the amount of the bond that is acceptable. This requirement has been used in the contractor application forms for years but has never been placed in the rule. (DAR NOTE: H.B. 401 (2008) is found at Chapter 215, Laws of Utah 2008, and was effective 05/05/2008.)

State statutory or constitutional authorization for this rule:

Section 58-55-101 and Subsections 58-1-106(1)(a), 58-1-202(1)(a), 58-55-308(1), 58-55-102(35), 58-55-501(21)

Anticipated cost or savings to:

the state budget:

The Division will incur minimal costs of approximately $100 to reprint the rule once the proposed amendments are made effective. Any costs incurred will be absorbed in the Division's current budget.

local governments:

The proposed amendments will not apply to local governments; proposed amendments will only apply to persons or companies applying for licensure as a contractor in Utah.

small businesses and persons other than businesses:

Since the proposed amendments are primarily technical changes, the Division does not anticipate any significant impact to either small businesses or persons other than businesses who may apply for licensure as a contractor. The bond requirements have been used for sometime, but the requirements have not been placed in the rule as they should have been.

Compliance costs for affected persons:

Since the proposed amendments are primarily technical changes, the Division does not anticipate any significant impact to any affected persons who may apply for licensure as a contractor.

Comments by the department head on the fiscal impact the rule may have on businesses:

This rule filing conforms the instructor licensure provisions for plumbers and electricians to new statutory changes, clarifies the financial responsibility provision and adopts by rule the existing practice regarding contractor license bonds. No fiscal impact to businesses is anticipated from this filing. Francine A. Giani, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Commerce
Occupational and Professional Licensing
HEBER M WELLS BLDG
160 E 300 S
SALT LAKE CITY UT 84111-2316

Direct questions regarding this rule to:

Dan S. Jones at the above address, by phone at 801-530-6720, by FAX at 801-530-6511, or by Internet E-mail at [e-mail]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

05/01/2009

Interested persons may attend a public hearing regarding this rule:

4/29/2009 at 9:00 AM, Heber Wells Bldg, 160 E 300 S, Conference Room 474, Salt Lake City, UT

This rule may become effective on:

05/08/2009

Authorized by:

F. David Stanley, Director

RULE TEXT

R156. Commerce, Occupational and Professional Licensing.

R156-55a. Utah Construction Trades Licensing Act Rule.

R156-55a-302c. Qualifications for Licensure Requiring Licensure in a Prerequisite Classification.

(1) Beginning at the effective date of this rule, e[E]ach new applicant as a qualifier for licensure as a I103 Electrical Trades Instruction Facility shall also be licensed as [either ]a [journeyman or ]master electrician or a [residential journeyman or ]residential master electrician.

(2) Beginning at the effective date of this rule, e[E]ach new applicant as a qualifier for licensure as a I104 Plumbing Trades Instruction Facility shall also be licensed as [either ]a [journeyman]master plumber or a residential [journeyman]master plumber.

 

R156-55a-306. Contractor Financial Responsibility - Division Audit.

In accordance with Subsections 58-55-306(2) and 58-55-102(16), the Division may consider various relevant factors in conducting an audit of the demonstration of financial responsibility including:

(1)(a) judgments, tax liens, collection actions, bankruptcy schedules and a history of late payments to creditors, including documentation showing the resolution of each of the above actions;

(b) the applicant's or licensee's financial statements and tax returns, including the ability to prepare or have prepared competent and current financial statements and tax returns;

(c) an acceptable current credit report of the applicant or licensee which meets the following requirements:

(i) for individuals:

(A) a credit report from each of the three national reporting agencies, Trans Union, Experian, and Equifax; or

(B) a merged credit report of the agencies identified in Subsection (A) prepared by the National Association of Credit Managers (NACM); or

(ii) for entities, a business credit report such as an Experian Business Credit Report or a Dun and Bradstreet Report;

(d) the applicant's or licensee's explanation of the reasons for any financial difficulties and how the financial difficulties were resolved;[ and]

(e) any of the factors listed in Subsection R156-1-302 which may relate to failure to maintain financial responsibility[.];

[(2) If the applicant or licensee has an inadequate financial history, the Division may also consider the following factors:

]([a]f) each of the factors listed in this Subsection [(1) ]regarding the financial history of the owners of the applicant or licensee;

([b]g) any guaranty agreements provided for the applicant or licensee; and

([c]h) any history of prior entities owned or operated by the owners of the applicant or licensee which have failed to maintain financial responsibility.

 

R156-55a-602. Contractor License Bonds.

(1) Pursuant to the provisions of Subsection 58-55-306(1)(b), a contractor shall provide a license bond issued by a surety acceptable to the Division in the amount of $50,000 or such higher amount as may be determined by the Division and the Commission as provided for in Subsection R156-55a-602(3). An acceptable surety is one that is listed in the Department of Treasury, Fiscal Service, Circular 570, entitled "Companies Holding Certificates of Authority as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring Companies" at the date of the bond.

(2) The coverage of the license bond shall include losses which may occur as the result of the contractor's violation of the unprofessional or unlawful provisions contained in Title 58, Chapters 1 and 55.

(3) The amount of the bond specified under Subsection R156-55a-602(1) may be increased by an amount determined by the Commission and Division when the financial history of the applicant, including any of its owners holding more than 10 percent interest, indicates the $50,000 bond is insufficient to reasonably cover risks to the public health, safety and welfare.

 

KEY: contractors, occupational licensing, licensing

Date of Enactment or Last Substantive Amendment: [October 9, 2008]2009

Notice of Continuation: November 8, 2006

Authorizing, and Implemented or Interpreted Law: 58-1-106(1)(a); 58-1-202(1)(a); 58-55-101; 58-55-308(1); 58-55-102(35); 58-55-501(21)