Commerce, Occupational and Professional Licensing

Rule R156-46b

Division Utah Administrative Procedures Act Rule

Notice of Proposed Rule

(Amendment)

DAR File No.: 33639
Filed: 05/13/2010 01:57:26 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose or reason for this filing is to change the classification of certain formal adjudicative proceedings to informal adjudicative proceedings and to make other technical changes. Also, H.B. 193 passed during the 2010 Legislative Session deleted the disciplinary option of a "private reprimand". As a result, a similar change needs to be made to this rule. (DAR NOTE: H.B. 193 (2010) is found at Chapter 372, Laws of Utah 2010, and was effective 05/11/2010.)

Summary of the rule or change:

First, the proposed amendments in this filing change the classification of adjudicative proceedings for contractors applying for renewal or reinstatement of licensure and contractor disciplinary actions from formal adjudicative proceedings to informal adjudicative proceedings. This is done in Subsections R156-46b-201(1) and R156-46b-202(1). Contractors applying for initial licensure are already reviewed under informal adjudicative proceedings. Contractors applying for renewal of licensure have the same issues reviewed at the time of application for renewal but currently are subject to a formal adjudicative proceeding. The most common issue needing review in contractor renewal applications is financial responsibility. The same issue is involved in the vast majority of contractor disciplinary cases currently handled in formal adjudicative proceedings. Over 95 percent of disciplinary cases referred to the Attorney General's Office for financial responsibility are resolved by informal methods, such as a Stipulation and Order or the licensee resolves the financial problem and the action is dismissed. Less than 5 percent of these cases result in a formal adjudicative hearing. For those that have gone to a formal hearing, the outcome has been comparable to the outcome of cases that have been settled by informal methods. The Division of Real Estate has been successfully handling denial of renewal and disciplinary actions as informal adjudicative proceedings for several years. Changing the classifications of these proceedings to informal proceedings will not cause any detrimental effect on licensees who are able to demonstrate they are qualified and will conserve scarce Division resources. In short, the requirements of Subsection 63G-4-202(1) are met. A case can be converted to a formal adjudicative proceeding, if the case involves issues that may merit a formal proceeding. The standard is set forth in Subsection 63G-4-202(3). Applicants who are denied licensure or have disciplinary action taken against them in an informal adjudicative proceeding are entitled to a trial de novo on judicial appeal and would have their formal day in court at that level. Second, this filing also changes the classification of adjudicative proceeding for the Lien Recovery Fund claims where the claimant is precluded from obtaining the required civil judgment or administrative order against the nonpaying party involved in the claim because of a filing of bankruptcy. The classification is changed from a formal adjudicative proceeding to an informal adjudicative proceeding. Past experience has shown that formal hearings in these cases are almost always unnecessary. This is done in Subsections R156-46b-201(1) and R156-46b-202(1). It should be noted that a companion rule filing that includes revisions to Section R156-1-109 makes correlating changes to the designation of presiding officer to address the changes to the designation of adjudicative proceedings made by this rule filing. Finally, this filing makes other cleanup and technical changes including capitalizing the word "Division" consistently throughout the rule and deleting the reference to a private reprimand in Section R156-46b-202. (DAR NOTE: The proposed amendment to Rule R156-1 is under DAR No. 33641 in this issue, June 1, 2010, of the Bulletin.)

State statutory or constitutional authorization for this rule:

• Subsection 63G-4-102(6)
• Subsection 58-1-106(1)(a)

Anticipated cost or savings to:

the state budget:

The Division does not anticipate any increased costs as a result of the proposed amendments. The changes will allow the Division to more efficiently handle these types of cases in an informal setting without unnecessarily devoting resources to formal proceedings. The savings allow the Division to more efficiently handle its increasing workload without requiring additional resources as soon as would otherwise be required or without reducing the level of service provided. The changes necessitated by the 2010 Legislature addressed in this filing do not result in any additional impacts.

local governments:

The proposed amendments only apply to adjudicative proceedings in the Division with respect to contractors and Lien Recovery Fund claims. As a result, the proposed amendments do not apply to local governments.

small businesses:

The proposed amendments only apply to adjudicative proceedings in the Division with respect to contractors and Lien Recovery Fund claims. Contractors and companies who file a Lien Recovery Fund claim may qualify as a small business; however, these proposed amendments would not directly affect the business.

persons other than small businesses, businesses, or local governmental entities:

The proposed amendments will not result in any additional costs or savings to licensees with regard to the change in classification of contractor adjudicative proceedings. Since most cases are currently resolved by informal means, those licensees will not be affected. For the more controversial cases, the overall expense to the licensee is not expected to change significantly. The changes necessitated by the 2010 Legislature addressed in this filing do not result in any additional impacts.

Compliance costs for affected persons:

The proposed amendments will not result in any additional costs or savings to licensees with regard to the change in classification of contractor adjudicative proceedings. Since most cases are currently resolved by informal means, those licensees will not be affected. For the more controversial cases, the overall expense to the licensee is not expected to change significantly. The changes necessitated by the 2010 Legislature addressed in this filing do not result in any additional impacts.

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

It is not expected that there will be a cost increase to the contractor industry as a result of the changes in the designation of adjudicative proceedings, as experience has shown that such cases are able to be resolved informally. No fiscal impact to other businesses is anticipated by such change of procedures.

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
160 E 300 S
SALT LAKE CITY, UT 84111-2316

Direct questions regarding this rule to:

• Dan Jones at the above address, by phone at 801-530-6720, by FAX at 801-530-6511, or by Internet E-mail at dansjones@utah.gov
• Dane Ishihara at the above address, by phone at 801-530-7632, by FAX at 801-530-6511, or by Internet E-mail at dishihara@utah.gov

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:

07/01/2010

Interested persons may attend a public hearing regarding this rule:

• 06/30/2010 09:00 AM, Heber Wells Bldg, 160 E 300 S, Conference Room 474, Salt Lake City, UT

This rule may become effective on:

07/08/2010

Authorized by:

Mark Steinagel, Director

R156. Commerce, Occupational and Professional Licensing.

R156-46b. Division Utah Administrative Procedures Act Rule.

R156-46b-103. Authority - Purpose.

This rule is adopted by the [d]Division under the authority of Title 63G, Chapter 4, Subsection 58-1-108(1), and Subsection 58-1-106(1)(a). The purposes of this rule include:

(a) classifying [d]Division adjudicative proceedings;

(b) clarifying the identity of presiding officers at [d]Division adjudicative proceedings; and

(c) defining procedures for [d]Division adjudicative proceedings which are consistent with the requirements of Titles 58 and 63G and Rule R151-46b.

 

R156-46b-201. Formal Adjudicative Proceedings.

(1) The following adjudicative proceedings initiated by a request for agency action are classified as formal adjudicative proceedings:

(a) denial of application for renewal of licensure, except denial of an application for renewal of a contractor license under Title 58, Chapter 55;

(b) denial of application for reinstatement of licensure submitted pursuant to Subsection 58-1-308(5), except denial of an application for reinstatement of a contractor license under Title 58, Chapter 55;

(c) denial of application for reinstatement of licensure submitted pursuant to Subsection 58-1-308(6)(b), except denial of an application for reinstatement of a contractor license under Title 58, Chapter 55;

(d) special appeals board held in accordance with Section 58-1-402;

(e) [approval or denial of claims against the Residence Lien Recovery Fund created under Title 38, Chapter 11, in which the claimant is precluded from obtaining the required civil judgment or administrative order against the nonpaying party involved in the claim because the nonpaying party filed bankruptcy;

(f) payment of approved claims against the Residence Lien Recovery Fund described in Subparagraph (e);

(g) ]declaratory order determining the applicability of statute, rule or order to specified circumstances, when determined by the director to be conducted as a formal adjudicative proceeding; and

([h]f) board of appeal held in accordance with Subsection 58-56-8(3).

(2) The following adjudicative proceedings initiated by a Notice of Agency Action are classified as formal adjudicative proceedings:

(a) disciplinary proceedings, except disciplinary proceedings against a contractor licensed under Title 58, Chapter 55, which result in the following sanctions:

(i) revocation of licensure[ except a proceeding requesting revocation of licensure for failure to maintain a qualifier under Subsections 58-55-304(6) and (7) or a proceeding requesting revocation of licensure for failure to maintain liability insurance under Subsection 58-55-302(2)(b)];

(ii) suspension of licensure;

(iii) restricted licensure;

(iv) probationary licensure;

(v) issuance of a cease and desist order except when imposed by citation or by an order in a contested citation hearing;

(vi) administrative fine except when imposed by citation or by an order in a contested citation hearing; and

(vii) issuance of a public reprimand;

(b) unilateral modification of a disciplinary order; and

(c) termination of diversion agreements.

 

R156-46b-202. Informal Adjudicative Proceedings.

(1) The following adjudicative proceedings initiated by a request for agency action are classified as informal adjudicative proceedings:

(a) approval of application for initial licensure, renewal or reinstatement of licensure, or relicensure;

(b) denial of application for initial licensure or relicensure;

(c) denial of application for reinstatement of licensure submitted pursuant to Subsection 58-1-308(6)(a);

(d) denial of application for reinstatement of restricted, suspended, or probationary licensure during the term of the restriction, suspension, or probation;

(e) approval or denial of application for inactive or emeritus licensure status;

(f) board of appeal under Subsection 58-56-8(3);

(g) approval or denial of claims against the Residence Lien Recovery Fund created under Title 38, Chapter 11[, except those in which the claimant is precluded from obtaining the required civil judgment or administrative order against the nonpaying party involved in the claim because the nonpaying party filed bankruptcy];

(h) payment of approved claims against the Residence Lien Recovery Fund described in Subparagraph (g);

(i) approval or denial of request to surrender licensure;

(j) approval or denial of request for entry into diversion program under Section 58-1-404;

(k) matters relating to diversion program;

(l) contested citation hearing s held in accordance with Subsection 58-55-503(4)(b);

(m) approval or denial of request for modification of disciplinary order;

(n) declaratory order determining the applicability of statute, rule or order to specified circumstances, when determined by the director to be conducted as an informal adjudicative proceeding;

(o) approval or denial of request for correction of procedural or clerical mistakes;

(p) approval or denial of request for correction of other than procedural or clerical mistakes;[ and]

(q) denial of application for renewal of licensure as a contractor under Title 58, Chapter 55;

(r) denial of application for reinstatement of licensure as a contractor under Title 58, Chapter 55;

(s) disciplinary proceedings against a contractor licensed under Title 58, Chapter 55; and

([q]t) all other requests for agency action permitted by statute or rule governing the Division not specifically classified as formal adjudicative proceedings in Subsection R156-46b-201(1).

(2) The following adjudicative proceedings initiated by a notice of agency action or request for agency action are classified as informal adjudicative proceedings:

(a) [disciplinary proceeding seeking exclusively the issuance of a private reprimand;

(b)] nondisciplinary proceeding which results in cancellation of licensure;

([c]b) disciplinary sanctions imposed in a memorandum of understanding with an applicant for licensure; and

(c) disciplinary proceedings against a contractor licensed under Title 58, Chapter 55.[

(d) a proceeding requesting revocation of licensure for failure to maintain a qualifier under Subsections 58-55-304(6) and (7); and

(e) a proceeding requesting revocation of licensure for failure to maintain liability insurance under Subsection 58-55-302(2)(b).]

 

R156-46b-301. Designation.

The presiding officers for [d]Division adjudicative proceedings are as defined at Subsection 63G-4-103(1)(h) and as specifically established by Section 58-1-109 and by Section R156-1-109.

 

R156-46b-401. In General.

(1) The procedures for formal [d]Division adjudicative proceedings are set forth in Sections 63G-4-204 through 63G-4-208, Rule R151-46b-1, and this rule.

(2) The procedures for informal [d]Division adjudicative proceedings are set forth in Section 63G-4-203, Rule R151-46b-1, and this rule.

 

R156-46b-403. Evidentiary Hearings in Informal Adjudicative Proceedings.

(1) Evidentiary hearings are not required for informal [d]Division adjudicative proceedings unless required by statute or rule, or permitted by rule and requested by a party within the time prescribed by rule.

(2) Unless otherwise provided, a request for an evidentiary hearing permitted by rule must be submitted in writing no later than 20 days following the issuance of the notice of agency action if the proceeding was initiated by the [d]Division, or together with the request for agency action if the proceeding was not initiated by the [d]Division.

(3) [E]An evidentiary hearing[s are] is required for the following informal proceedings:

(a) R156-46b-202(1)(l), contested citation hearing s held in accordance with [Subsection 58-55-503(4)(b)]Title 58; and

(b) R156-46b-202(1)(f), board of appeal held in accordance with Subsection 58-56-8(3).

(4) [E]An evidentiary hearing[s are] is permitted for [the following]an informal proceeding[s:] pertaining to matters relating to a diversion program in accordance with R156-46b-202(1)(k).[

(a) R156-46b-202(1)(k), matters relating to a diversion program; and

(b) R156-46b-202(2)(a), issuance of a private reprimand.]

(5) Unless otherwise agreed by the parties, no evidentiary hearing shall be held in an informal adjudicative proceeding unless timely notice of the hearing has been served upon the parties as required by Subsection 63G-4-203(1)(d). Timely notice means service of a Notice of Hearing upon all parties not later than ten days prior to any scheduled evidentiary hearing.

(6) Parties shall be permitted to testify, present evidence, and comment on the issues at an evidentiary hearing in a [d]Division informal adjudicative proceeding.

 

R156-46b-404. Orders in Informal Adjudicative Proceedings.

(1) Orders issued in [d]Division informal adjudicative proceedings shall comply with Subsection 63G-4-203(1)(i).

(2) Issuance of a license or approval of related requests in response to a request for agency action is sufficient to satisfy the requirements of Subsection 63G-4-203(1)(i).

(3) Issuance of a letter denying a license or related requests is sufficient to satisfy the requirements of Subsection 63G-4-203(1)(i). The letter must explain the reasons for the denial and the rights of the parties to seek agency review, including the time limits for requesting review.

(4) Unless otherwise specified by the director, the fact finder who serves as the presiding officer at an evidentiary hearing convened in [d]Division informal adjudicative proceedings shall issue a final order.

(5) Orders issued in [d]Division informal adjudicative proceedings in which an evidentiary hearing is convened shall comply with the requirements of Subsection 63G-4-208(1).

 

R156-46b-405. Informal Agency Advice.

(1) The [d]Division may issue an informal guidance letter in response to a request for advice unless the request specifically seeks a declaratory order.

(2) A notice shall appear in the informal guidance letter notifying the subject of the letter that the letter is an informal guidance letter only and is not intended as a formal declaratory order. The notice shall also provide the citation where the requirements which govern declaratory orders are found.

 

KEY: administrative procedures, government hearings, occupational licensing

Date of Enactment or Last Substantive Amendment: [October 23, 2008]2010

Notice of Continuation: April 25, 2006

Authorizing, and Implemented or Interpreted Law: 63G-4-102(6); 58-1-106(1)(a)