Commerce, Occupational and Professional Licensing

Rule R156-55a

Utah Construction Trades Licensing Act Rule

Notice of Proposed Rule

(Amendment)

DAR File No.: 35013
Filed: 07/07/2011 12:47:42 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The Division and the Construction Services Commission reviewed the rule and determined that proposed rule amendments should be filed to: 1) update the rule as the result of S.B. 35 which was passed during the 2011 General Session; 2) clarify continuing education requirements for testing for distance learning courses; 3) delete a continuing education cutoff date that is no longer needed; and 4) make additional technical changes.

Summary of the rule or change:

In Subsection R156-55a-303b(2)(g), amendments clarify that test questions for all distance learning must be randomized. This new requirement helps prevent a person from simply buying an answer sheet through the Internet. Subsection R156-55a-303b(7) is being deleted as it is unnecessary due to requirements in other sections. The remaining subsections are renumbered. In Section R156-55a-306, the proposed amendments are needed as the result of S.B. 35. S. B. 35 requires that owner-workers having less than eight percent ownership now must meet financial responsibility requirements. Proposed amendments clarify that the existing financial review requirements will apply to all owner-workers. In Section R156-55a-503, the proposed amendments are needed as the result of S.B. 35 which added new unlawful conduct provisions to the statute. Additions are made to the fine schedule for these new offenses. In Section R156-55a-602, the proposed amendments are needed as the result of S.B. 35. S.B. 35 requires owner-workers having less than eight percent ownership shall post a license bond if they do not meet financial responsibility requirements. The proposed amendments clarify that the existing bond requirements will apply to all owner-workers.

State statutory or constitutional authorization for this rule:

• Subsection 58-1-106(1)(a)
• Subsection 58-1-202(1)(a)
• Section 58-55-101
• Subsection 58-55-308(1)(a)
• Subsection 58-55-102(39)(a)

Anticipated cost or savings to:

the state budget:

The Division will incur minimal costs of approximately $50 to print and distribute the rule once the proposed amendments are made effective. Any costs incurred will be absorbed in the Division's current budget. No additional costs are added by the proposed rule amendments with respect to S.B. 35 because those costs of implementing the bill were added with the fiscal note attached to the bill.

local governments:

The proposed amendments apply to licensed contractors and applicants for licensure in those classifications as well as continuing education providers. As a result, the proposed amendments do not apply to local governments.

small businesses:

The proposed amendments apply to licensed contractors and applicants for licensure in those classifications. Some of the proposed amendments also apply to continuing education providers, which may qualify as a small business. The continuing education providers may have a slight cost increase in preparing randomized questions for distance learning courses. However, the Division is not able to determine an amount of the cost increase due to varying circumstances with the continuing education providers. No additional costs are added by the proposed rule amendments with respect to S.B. 35 because the costs of implementing the bill were not caused by these proposed rule amendments but were caused by the statutory change and those costs were indicated in the fiscal note attached to the bill.

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

The proposed amendments apply to licensed contractors and applicants for licensure in those classifications. Some of the proposed amendments also apply to continuing education providers. The continuing education providers may have a slight cost increase in preparing randomized questions for distance learning courses. However, the Division is not able to determine an amount of the cost increase due to varying circumstances with the continuing education providers. No additional costs are added by the proposed rule amendments with respect to S.B. 35 because the costs of implementing the bill were not caused by these proposed rule amendments but were caused by the statutory change and those costs were indicated in the fiscal note attached to the bill.

Compliance costs for affected persons:

The proposed amendments apply to licensed contractors and applicants for licensure in those classifications. Some of the proposed amendments also apply to continuing education providers. The continuing education providers may have a slight cost increase in preparing randomized questions for distance learning courses. However, the Division is not able to determine an amount of the cost increase due to varying circumstances with the continuing education providers. No additional costs are added by the proposed rule amendments with respect to S.B. 35 because the costs of implementing the bill were not caused by these proposed rule amendments but were caused by the statutory change and those costs were indicated in the fiscal note attached to the bill.

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

No fiscal impact to businesses is anticipated beyond those addressed in a recent statutory change and beyond those stated in the rule summary (slight cost to continuing education providers from creating a system to provide random test questions.)

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

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:

08/31/2011

Interested persons may attend a public hearing regarding this rule:

• 08/31/2011 09:00 AM, Heber Wells Bldg, 160 E 300 S, Conference Room 474 (fourth floor), Salt Lake City, UT

This rule may become effective on:

09/07/2011

Authorized by:

Mark Steinagel, Director

R156. Commerce, Occupational and Professional Licensing.

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

R156-55a-303b. Continuing Education - Standards.

(1) Required Hours. Pursuant to Subsection 58-55-302.5, each licensee shall complete a total of six hours of continuing education during each two year license term except that for the renewal term ending November 30, 2009, the continuing education must be completed between July 1, 2007 and November 30, 2009. A minimum of three hours shall be core education. The remaining three hours are to be professional education. Additional core education hours beyond the required amount may be substituted for professional education hours.

(a) "Core continuing" education" is defined as construction codes, construction laws, OSHA 10 or OSHA 30 safety training, governmental regulations pertaining to the construction trades and employee verification and payment practices.

(b) "Professional continuing education" is defined as substantive subjects dealing with the practice of the construction trades, including land development, land use, planning and zoning, energy conservation, professional development, arbitration practices, estimating, finance and bookkeeping, marketing techniques, servicing clients, personal and property protection for the licensee and the licensee's clients and similar topics.

(c) The following course subject matter is not acceptable as core education or professional education hours: mechanical office and business skills, such as typing, speed reading, memory improvement and report writing; physical well-being or personal development, such as personal motivation, stress management, time management, dress for success, or similar subjects; presentations by a supplier or a supplier representative to promote a particular product or line of products; and meetings held in conjunction with the general business of the licensee or employer.

(d) The Division may defer or waive the continuing education requirements as provided in Section R156-1-308d.

(2) A continuing education course shall meet the following standards:

(a) Time. Each hour of continuing education course credit shall consist of 50 minutes of education in the form of seminars, lectures, conferences, training sessions or distance learning modules. The remaining ten minutes is to allow for breaks.

(b) Provider. The course provider shall meet the requirements of this Section and shall be one of the following:

(i) a recognized accredited college or university;

(ii) a state or federal agency;

(iii) a professional association or organization involved in the construction trades; or

(iv) a commercial continuing education provider providing a program related to the construction trades.

(c) Content. The content of the course shall be relevant to the practice of the construction trades and consistent with the laws and rules of this state.

(d) Objectives. The learning objectives of the course shall be reasonably and clearly stated.

(e) Teaching Methods. The course shall be presented in a competent, well organized and sequential manner consistent with the stated purpose and objective of the program.

(f) Faculty. The course shall be prepared and presented by individuals who are qualified by education, training and experience.

(g) Distance learning. A course [may be recognized for continuing education] that is provided [via]through Internet or [through] home study [courses provided] may be recognized for continuing education if the course verifies registration and participation in the course by means of a test [which demonstrates]demonstrating that the participant has learned the material presented. Test questions shall be randomized for each participant.

(h) Documentation. The course provider shall have a competent method of registration of individuals who actually completed the course, shall maintain records of attendance that are available for review by the Division and shall provide individuals completing the course a certificate [which]that contains the following information:

(i) the date of the course;

(ii) the name of the course provider;

(iii) the name of the instructor;

(iv) the course title;

(v) the hours of continuing education credit and type of credit (core or professional);

(vi) the attendee's name; and

(v) the signature of the course provider.

(3) On a random basis, the Division may assign monitors at no charge to attend a course for the purpose of evaluating the course and the instructor.

(4) Each licensee shall maintain adequate documentation as proof of compliance with this section, such as certificates of completion, course handouts and materials. The licensee shall retain this proof for a period of three years from the end of the renewal period for which the continuing education is due. Each licensee shall assure that the course provider has submitted the verification of attendance to the continuing education registry on behalf of the licensee as specified in Subsection (8). Alternatively, the licensee may submit the course for approval and pay any course approval fees and attendance recording fees.

(5) Licensees who lecture in continuing education courses meeting these requirements shall receive two hours of continuing education for each hour spent lecturing. However, no lecturing or teaching credit is available for participation in a panel discussion.

(6) The continuing education requirement for electricians, plumbers and elevator mechanics as established in Subsections 58-55-302.7 and 58-55-303(6), which is completed by an employee or owner of a contractor, shall satisfy the continuing education requirement for contractors as established in Subsection 58-55-302.5 and implemented herein. The contractor licensee shall assure that the course provider has submitted the verification of the electrician's attendance on behalf of the licensee to the continuing education registry as specified in Subsection (8).

(7) [Licensees who obtain an initial license after March 31st of the renewal year shall not be required to meet the continuing education requirement for that renewal cycle.

(8)] A course provider shall submit continuing education courses for approval to the continuing education registry and shall submit verification of attendance and completion on behalf of licensees attending and completing the program directly to the continuing education registry in the format required by the continuing education registry.

([9]8) The Division shall review continuing education courses which have been submitted through the continuing education registry and approve only those courses which meet the standards set forth under this Section.

([10]9) Continuing Education Registry.

(a) The Division shall designate an entity to act as the Continuing Education Registry under this rule.

(b) The Continuing Education Registry, in consultation with the Division and the Commission, shall:

(i) through its internet site electronically receive applications from continuing education course providers and shall submit the application for course approval to the Division for review and approval of only those programs [which]that meet the standards set forth under this Section;

(ii) publish on their website listings of continuing education programs [which]that have been approved by the Division, and which meet the standards for continuing education credit under this rule;

(iii) maintain accurate records of qualified continuing education approved;

(iv) maintain accurate records of verification of attendance and completion, by individual licensee, which the licensee may review for compliance with this rule; and

(v) make records of approved continuing education programs and attendance and completion available for audit by representatives of the Division.

(c) Fees. A continuing education registry may charge a reasonable fee to continuing education providers or licensees for services provided for review and approval of continuing education programs.

 

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

In accordance with Subsections 58-55-302(10)(c), 58-55-306(2) , 58-55-306(4)(b), and 58-55-102(19), the Division may consider various relevant factors in conducting [an]a financial responsibility audit of an applicant, licensee, or any owner,[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]that 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]an explanation of the reasons for any financial difficulties and how the financial difficulties were resolved;

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

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

(g) any guaranty agreements provided for the applicant or licensee and any owners; and

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

 

R156-55a-503. Administrative Penalties.

(1) In accordance with Subsection 58-55-503, the following fine schedule shall apply to citations issued under Title 58, Chapter 55:

 

TABLE II

FINE SCHEDULE

FIRST OFFENSE

                    All Licenses Except        Electrical or

Violation           Electrical or Plumbing     Plumbing

58-55-308(2)             $  500.00                 N/A

58-55-501(1)             $  500.00              $  500.00

58-55-501(2)             $  500.00              $  800.00

58-55-501(3)             $  800.00              $1,000.00

58-55-501(9)             $  500.00              $  500.00

58-55-501(10)            $  800.00              $1,000.00

58-55-501(12)               N/A                 $  500.00

58-55-501(14)            $  500.00                 N/A

58-55-501(19)            $  500.00                 N/A

58-55-501(21)            $  500.00              $  500.00

58-55-501(24)            $  500.00                 N/A

58-55-501(25)            $  500.00                 N/A

58-55-504(2)             $  500.00                 N/A

SECOND OFFENSE

58-55-308(2)             $1,000.00                 N/A

58-55-501(1)             $1,000.00              $1,500.00

58-55-501(2)             $1,000.00              $1,500.00

58-55-501(3)             $1,600.00              $2,000.00

58-55-501(9)             $1,000.00              $1,000.00

58-55-501(10)            $1,600.00              $2,000.00

58-55-501(12)               N/A                 $1,000.00

58-55-501(14)            $1,000.00                 N/A

58-55-501(19)            $1,000.00                 N/A

58-55-501(21)            $1,000.00              $1,000.00

58-55-501(24)            $1,000.00                 N/A

58-55-501(25)            $1,000.00                 N/A

58-55-504(2)             $1,000.00                 N/A

THIRD OFFENSE

Double the amount for a second offense with a maximum amount

not to exceed the maximum fine allowed under Subsection

58-55-503(4)(h).

 

(2) Citations shall not be issued for third offenses, except in extraordinary circumstances approved by the investigative supervisor.

(3) If multiple offenses are cited on the same citation, the fine shall be determined by evaluating the most serious offense.

(4) An investigative supervisor may authorize a deviation from the fine schedule based upon the aggravating or mitigating circumstances.

(5) The presiding officer for a contested citation shall have the discretion, after a review of the aggravating and mitigating circumstances, to increase or decrease the fine amount imposed by an investigator based upon the evidence [reviewed]presented.

 

R156-55a-602. Contractor License Bonds.

(1) Pursuant to the provisions of Subsection s 58-55-306(1)(b) and 58-55-306(4)(c) and except as provided in Subsection R156-55a-602(4), 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]that may occur as the result of the contractor's violation of the unprofessional or unlawful provisions contained in Title 58, Chapters 1 and 55 and rules R156-1 and R156-55a including the failure to maintain financial responsibility.

(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, licensee or any owner [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. The financial history of the applicant, licensee or any owner, as outlined in Section R156-55a-306 may be reviewed in determining the bond amount required.

(4) A contractor may provide a license bond issued by a surety acceptable to the Division in an amount less than $50,000 if:

(a) the contractor demonstrates by clear and convincing evidence that:

(i) the financial history of the applicant, licensee or any owner[including any of its owners holding more than 10 percent interest,] indicates the $50,000 bond is in excess of what is reasonably necessary to cover risks to the public health, safety and welfare;

(ii) the contractor's lack of financial responsibility is due to extraordinary circumstances that the contractor could not control as opposed to general financial challenges that all contractors experience; and

(iii) the contractor's scope of practice will be restricted commensurate with the degree of risk the contract presents to the public health, safety, and welfare; and

(b) the Commission and Division approve the amount.

 

KEY: contractors, occupational licensing, licensing

Date of Enactment or Last Substantive Amendment: [April 25, ]2011

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)(a); 58-55-102(39)(a)