DAR File No. 38825

Commerce, Occupational and Professional Licensing

Rule R156-55d

Burglar Alarm Licensing Rule

Notice of Proposed Rule

(Amendment)

DAR File No.: 38825
Filed: 08/28/2014 04:21:56 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The Division, Alarm System Security and Licensing Board, and Construction Services Commission reviewed the rule and determined changes should be made. The purpose of this filing is to: 1) add, modify, and renumber definitions in Section R156-55d-102; 2) add "direct seller" in Section R156-55d-302c; 3) modify the timing of retaking of exams in Section R156-55d-302d; and 4) clarify that unprofessional conduct of an alarm company agent, who is compensated as a direct seller in accordance with 26 USC Section 3508, may also be unprofessional conduct of the alarm company.

Summary of the rule or change:

The new Subsection R156-55d-102(1) adds a definition for "alarm company agent" for clarification to include a direct seller in accordance with 26 USC Section 3508. The new Subsection R156-55d-102(2) adds a definition for "conviction". The amended Subsection R156-55d-102(3) deletes an inapplicable reference to Subsection R156-55d-102(1) and adds additional clarifications to the definition of "employee". Subsection R156-55d-302c(2) adds "direct seller" in accordance with 26 USC Section 3508. Subsection R156-55d-302d(3) is rewritten to delete the requirement of burglar alarm company qualifiers to wait six months to retake a failed examination following the third failed attempt. Subsection R156-55d-502(2) is added to clarify that unprofessional conduct of an alarm company agent, whether compensated as a W-2 employee or compensated in accordance with 26 USC Section 3508 as a direct seller, may also be unprofessional conduct of the alarm company.

State statutory or constitutional authorization for this rule:

• Section 58-55-101
• Subsection 58-1-202(1)(a)
• Subsection 58-55-302(3)(l)
• Subsection 58-1-106(1)(a)
• Section 58-55-308
• Subsection 58-55-302(3)(k)
• Subsection 58-55-302(4)

Anticipated cost or savings to:

the state budget:

The Division will incur minimal costs of approximately $75 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.

local governments:

The proposed amendments only apply to licensed burglar alarm companies and burglar alarm company agents and applicants for licensure in those classifications. As a result, the proposed amendments do not apply to local governments.

small businesses:

The proposed amendments apply only to licensed burglar alarm companies and burglar alarm company agents and applicants for licensure in those classifications. Licensees and applicants for licensure may work in a small business; however, the proposed amendments may decrease the amount of state and federal tax withholdings a burglar alarm company is required to withhold pursuant to 26 USC Section 3508. However, the Division cannot quantify any potential savings due to a wide range of circumstances.

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

The proposed amendments apply only to licensed burglar alarm companies and burglar alarm company agents and applicants for licensure in those classifications. The Division does not anticipate these proposed amendments will impact other persons.

Compliance costs for affected persons:

The proposed amendments apply only to licensed burglar alarm companies and burglar alarm company agents and applicants for licensure in those classifications. The proposed amendments may decrease the amount of state and federal tax withholdings a burglar alarm company is required to withhold pursuant to 26 USC Section 3508, specifically for burglar alarm company agents that qualify as direct sellers as defined by the Internal Revenue Service (IRS). However, the Division cannot quantify any potential savings due to a wide range of circumstances.

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

This filing brings the rules into compliance with federal laws that exempt businesses that employ direct sellers from certain federal requirements regarding tax withholding and insurance coverage. Any fiscal impact to such businesses will vary and cannot be quantified.

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:

• Kristina Bean at the above address, by phone at 801-530-6621, by FAX at 801-530-6511, or by Internet E-mail at kbean@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:

10/15/2014

Interested persons may attend a public hearing regarding this rule:

• 09/24/2014 09:00 AM, Heber Wells Bldg, 160 E 300 S, Conference Room 474, Salt Lake City, UT

This rule may become effective on:

10/22/2014

Authorized by:

Mark Steinagel, Director

R156. Commerce, Occupational and Professional Licensing.

R156-55d. Burglar Alarm Licensing Rule.

R156-55d-102. Definitions.

In addition to the definitions in Title 58, Chapters 1 and 55, as used in Title 58, Chapters 1 and 55, or this rule:

(1) "Alarm company agent", as defined in Subsection 58-55-102(2), is further defined for clarification to include a direct seller in accordance with 26 U.S.C. Section 3508.

(2) "Conviction", as used in this rule, means criminal conduct where the filing of a criminal charge has resulted in:

(a) a plea of guilty or nolo contendere which is held in abeyance pending the successful completion of probation;

(b) a pending diversion agreement;

(c) a plea of nolo contendere;

(d) a guilty plea;

(e) a finding of guilt based on evidence presented to a judge or jury; or

(f) a conviction which has been reduced pursuant to Section 76-3-402.

([2]3) "Employee", as used in Subsection[s] 58-55-102(17)[and R156-55d-102(1) ], means an individual: [providing labor services for compensation who has federal and state taxes withheld and worker's compensation and unemployment insurance provided by the individual's employer.]

(a) whose manner and means of work performance are subject to the right of control of, or are controlled by, another person;

(b) whose compensation for federal income tax purposes is reported, or is required to be reported on a W-2 form issued by the controlling person; and

(c) who is entitled to workers compensation and unemployment insurance provided by the individual's employer per state or federal law.

([1]4) "Immediate supervision", as used in this rule, means reasonable direction, oversight, inspection, and evaluation of the work of a person, in or out of the immediate presence of the supervision person, so as to ensure that the end result complies with applicable standards.

([3]5) "Unprofessional conduct", as defined in Title 58, Chapters 1 and 55, is further defined, in accordance with Subsection 58-1-203(1), in Section R156-55d-502.

 

R156-55d-302c. Qualifications for Licensure - Experience Requirements.

In accordance with Subsections 58-1-203(1) and 58-1-301(3) the experience requirements for an alarm company applicant's qualifying agent in Subsection 58-55-302(3)(k)(i) are established as follows:

(1) [a]An applicant shall have within the past ten years:

(a) not less than 6,000 hours of experience in a lawfully operated alarm company business of which not less than 2,000 hours shall have been in a managerial, supervisory, or administrative position; or

(b) not less than 6,000 hours of experience in a lawfully operated alarm company business combined with not less than 2,000 hours of managerial, supervisory, or administrative experience in a lawfully operated construction company[;].

(2) [a]All experience under Subsection (1) shall be as an employee or in accordance with 26 U.S.C. Section 3508 as a direct seller, and under the immediate supervision of the applicant's employer;

(3) [a]All experience must be obtained while lawfully engaged as an alarm company agent and working for a lawfully operated burglar alarm company[;].

(4) A total of 2,000 hours of work experience constitutes one year (12 months) of work experience[;].

(5) [a]An applicant may claim no more than 2,000 hours of work experience in any 12 month period[; and].

(6) [n]No credit shall be given for experience obtained illegally.

 

R156-55d-302d. Qualifications for Licensure - Examination Requirements.

In accordance with Subsections 58-1-203(1) and 58-1-301(3), the examination requirements for an alarm company applicant's qualifying agent in Subsection 58-55-302(3)(k)(i)(C) are defined, clarified, or established in that an individual to be approved as a qualifying agent of an alarm company shall:

(1) pass the Utah Burglar Alarm Law and Rule Examination with a score of not less than 75%;

(2) pass the Burglar Alarm Qualifier Examination with a score of not less than 75%; and

(3) an applicant for licensure who fails an examination shall wait 30 days before retaking a [may retake the ]failed examination[as follows:

(a) no sooner than 30 days following any failure, up to three failures; and

(b) no sooner than six months following any failure thereafter].

 

R156-55d-502. Unprofessional Conduct.

(1)  "Unprofessional conduct" includes:

([1]a) failing as an alarm company to notify the Division of the cessation of performance of its qualifying agent or failing to replace its qualifying agent as required under Section R156-55d-306;

([2]b) failing as an alarm company agent to carry or display a copy of the licensee's license as required under Section R156-55d-601;

([3]c) failing as an alarm agent to carry or display a copy of his Electronic Security Association (ESA), formerly known as the National Burglar and Fire Alarm Association (NBFAA) level one certification or equivalent training as required under Section R156-55d-603;

([4]d) employing as an alarm company a qualifying agent or alarm company agent knowing that individual has engaged in conduct inconsistent with the duties and responsibilities of an alarm company agent.

([5]e) failing to comply with operating standards established by rule;

([6]f) a judgment on, or a judicial or prosecutorial agreement concerning a felony, or a misdemeanor involving moral turpitude, entered against an individual by a federal, state or local court, regardless of whether the court has made a finding of guilt, accepted a plea of guilty or nolo contendere by an individual, or a settlement or agreement whereby an individual has entered into participation as a first offender, or an action of deferred adjudication, or other program or arrangement where judgment or conviction is withheld;

([7]g) making false, misleading, deceptive, fraudulent, or exaggerated claims by an alarm company agent; and

([8]h) an alarm business or company having a residential or commercial false alarm rate 100% above the average of the residential or commercial false alarm rate of the municipality or county jurisdiction in which the alarm business or company's alarm systems are located.

(2) Unprofessional conduct by an alarm company agent, whether compensated as a W-2 employee or compensated in accordance with 26 U.S.C. Section 3508 as a direct seller, may also be unprofessional conduct of the alarm company employing the alarm company agent.

 

KEY: licensing, alarm company, burglar alarms

Date of Enactment or Last Substantive Amendment: [October 29, 2013]2014

Notice of Continuation: February 7, 2012

Authorizing, and Implemented or Interpreted Law: 58-55-101; 58-1-106(1)(a); 58-1-202(1)(a); 58-55-302(3)(k); 58-55-302(3)(l); 58-55-302(4); 58-55-308