Bill Text: AZ SB1284 | 2011 | Fiftieth Legislature 1st Regular | Engrossed
Bill Title: Registrar of contractors; arbitration
Spectrum: Partisan Bill (Republican 8-0)
Status: (Passed) 2011-04-26 - Governor Signed [SB1284 Detail]
Download: Arizona-2011-SB1284-Engrossed.html
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House Engrossed Senate Bill |
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State of Arizona Senate Fiftieth Legislature First Regular Session 2011
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SENATE BILL 1284 |
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AN ACT
Repealing section 32‑1134.01, Arizona Revised Statutes; amending sections 32‑1139 and 32-1154, Arizona Revised Statutes; amending title 32, chapter 10, article 3, Arizona Revised Statutes, by adding section 32‑1155.01; relating to the registrar of contractors.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Repeal
Section 32-1134.01, Arizona Revised Statutes, is repealed.
Sec. 2. Section 32-1139, Arizona Revised Statutes, is amended to read:
32-1139. Liability of fund for each residential contractor's license; suspension of license; repayment
A. The liability of the fund shall not exceed two hundred thousand dollars for any one residential contractor's license. If claims against the fund on behalf of any one residential contractor's license exceed two hundred thousand dollars, the claims shall be paid based on a pro rata share of the common liability in order of the date of entry of the order of the registrar or court, and the registrar or a court entering an order for payment after the sum of two hundred thousand dollars has been paid from the fund shall modify the order indicating that no further recovery from the fund shall be allowed.
B. If any amount is paid from the fund in settlement of a claim arising from the act, representation, transaction or conduct of a residential contractor, the license of the contractor shall be automatically suspended by operation of law until the amount paid from the fund is repaid in full, plus interest at the rate of ten per cent a year. Any person who is or was, at the time of the act or omission, named on a license that has been suspended because of a payment from the recovery fund is not eligible to receive a new license or retain another existing license that also shall be suspended by operation of law, nor shall any suspended license be reactivated, until the amount paid from the fund is repaid as provided in this subsection.
C. After receiving an award from the fund pursuant to this article a person is deemed to have assigned to the registrar the person's rights for recovery against the responsible residential contractor licensed pursuant to this chapter to the extent of the person's award from the fund.
Sec. 3. Section 32-1154, Arizona Revised Statutes, is amended to read:
32-1154. Grounds for suspension or revocation of license; continuing jurisdiction; civil penalty; recovery fund award; summary suspension
A. The holder of a license or any person listed on a license pursuant to this chapter shall not commit any of the following acts or omissions:
1. Abandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.
2. Departure from or disregard of plans or specifications or any building codes of the state or any political subdivision of the state in any material respect which is prejudicial to another without consent of the owner or the owner's duly authorized representative and without the consent of the person entitled to have the particular construction project or operation completed in accordance with such plans and specifications and code.
3. Violation of any rule adopted by the registrar.
4. Failure to comply with the statutes or rules governing social security, workers' compensation or unemployment insurance.
5. Failure to pay income taxes, withholding taxes or any tax imposed by title 42, chapter 5, articles 1 and 4 and incurred in the operation of the licensed business.
6. Misrepresentation of a material fact by the applicant in obtaining a license.
7. The doing of a fraudulent act by the licensee as a contractor resulting in another person being substantially injured.
8. Conviction of a felony.
9. Failure in a material respect by the licensee to complete a construction project or operation for the price stated in the contract, or in any modification of the contract.
10. Aiding or abetting a licensed or unlicensed person to evade this chapter, knowingly or recklessly combining or conspiring with a licensed or unlicensed person, allowing one's license to be used by a licensed or unlicensed person or acting as agent, partner, associate or otherwise of a licensed or unlicensed person with intent to evade this chapter.
11. Failure by a licensee or agent or official of a licensee to pay monies in excess of seven hundred fifty dollars when due for materials or services rendered in connection with the licensee's operations as a contractor when the licensee has the capacity to pay or, if the licensee lacks the capacity to pay, when the licensee has received sufficient monies as payment for the particular construction work project or operation for which the services or materials were rendered or purchased.
12. Failure of a contractor to comply with any safety or labor laws or codes of the federal government, state or political subdivisions of the state.
13. Failure in any material respect to comply with this chapter.
14. Knowingly entering into a contract with a contractor for work to be performed for which a license is required with a person not duly licensed in the required classification.
15. Acting in the capacity of a contractor under any license issued under this chapter in a name other than as set forth upon the license.
16. False, misleading or deceptive advertising whereby any member of the public may be misled and injured.
17. Knowingly contracting beyond the scope of the license or licenses of the licensee.
18. Contracting or offering to contract or submitting a bid while the license is under suspension or while the license is on inactive status.
19. Failure to notify the registrar in writing within a period of fifteen days of any disassociation of the person who qualified for the license. Such licensee shall have sixty days from the date of such disassociation to qualify through another person.
20. Subsequent discovery of facts which if known at the time of issuance of a license or the renewal of a license would have been grounds to deny the issuance or renewal of a license.
21. Having a person named on the license who is named on any other license in this state or in another state which is under suspension or revocation unless the prior revocation was based solely on a violation of this paragraph.
22. Continuing a new single family residential construction project with actual knowledge that a pretreatment wood‑destroying pests or organisms application was either:
(a) Not performed at the required location.
(b) Performed in a manner inconsistent with label requirements, state law or rules.
23. Failure to take appropriate corrective action to comply with this chapter or with rules adopted pursuant to this chapter without valid justification within a reasonable period of time after receiving a written directive from the registrar. The written directive shall set forth the time within which the contractor is to complete the remedial action. The time permitted for compliance shall not be less than fifteen days from the date of issuance of the directive. A license shall not be revoked or suspended nor shall any other penalty be imposed for a violation of this paragraph until after a hearing has been held.
24. Prohibit, threaten to prohibit, retaliate, threaten to retaliate or otherwise intimidate any contractor or materialman from serving a preliminary notice pursuant to section 33‑992.01.
B. The registrar may on the registrar's own motion, and shall on the written complaint of any owner or contractor that is a party to a construction contract or a person who suffers a material loss or injury as a result of a contractor's failure to perform work in a professional and workmanlike manner or in accordance with any applicable building codes and professional industry standards, investigate the acts of any contractor within this state and may temporarily suspend, with or without imposition of specific conditions in addition to increased surety bond or cash deposit requirements, or permanently revoke any or all licenses issued under this chapter if the holder of the license issued pursuant to this chapter is guilty of or commits any of the acts or omissions set forth in subsection A of this section. For the purposes of this subsection:
1. "Construction contract" means a written or oral agreement relating to the construction, alteration, repair, maintenance, moving or demolition of any building, structure or improvement or relating to the contractor's excavation of or other development or improvement to land if the registrar investigates the contractor's actions under this subsection.
2. "Owner" means any person, firm, partnership, corporation, association or other organization, or a combination of any of them, that causes a building, structure or improvement to be constructed, altered, repaired, maintained, moved or demolished or that causes land to be excavated or otherwise developed or improved, whether the interest or estate of the person is in fee, as vendee under a contract to purchase, as lessee or another interest or estate less than fee, pursuant to a construction contract.
C. The expiration, cancellation, suspension or revocation of a license by operation of law or by decision and order of the registrar or a court of law or the voluntary surrender of a license by a licensee shall not deprive the registrar of jurisdiction to proceed with any investigation of or action or disciplinary proceeding against such licensee, or to render a decision suspending or revoking such a license, or denying the renewal or right of renewal of such license.
D. The registrar may impose a civil penalty of not to exceed five hundred dollars on a contractor for each violation of subsection A, paragraph 23 of this section. Civil penalties collected pursuant to this subsection shall be deposited in the residential contractors' recovery fund. The failure by the licensee to pay any civil penalty imposed under this subsection results in the automatic revocation of the license thirty days after the effective date of the order providing for the civil penalty. No future license may be issued to an entity consisting of a person associated with the contractor, as defined in section 32‑1101, subsection A, paragraph 5, unless payment of any outstanding civil penalty is tendered.
E. The registrar shall impose a civil penalty of not to exceed one thousand dollars on a contractor for each violation of subsection A, paragraph 18 of this section. Civil penalties collected pursuant to this subsection shall be deposited in the residential contractors' recovery fund. The failure by the licensee to pay any civil penalty imposed under this subsection results in the automatic permanent revocation of the license thirty days after the effective date of the order providing for the civil penalty. No future license may be issued to an entity consisting of a person associated with the contractor, as defined in section 32‑1101, subsection A, paragraph 5, unless payment of any outstanding civil penalty is tendered.
F. Notwithstanding any other provisions in this chapter, if a contractor's license has been revoked or has been suspended as a result of an order to remedy a violation of this chapter, and the contractor refuses or is unable to comply with the order of the registrar to remedy the violation, the registrar may order payment from the residential contractors' recovery fund to remedy the violation. The registrar shall serve the contractor with a notice setting forth the amount claimed or to be awarded. If the contractor contests the amount or propriety of the payment, the contractor shall respond within ten days of the date of service by requesting a hearing to determine the amount or propriety of the payment. Failure by the contractor to respond in writing within ten days of the date of service shall be deemed a waiver by the contractor of the right to contest the amount claimed or to be awarded. Service may be made by personal service to the contractor or by mailing a copy of the notice by registered mail with postage prepaid to the contractor's latest address of record on file in the registrar's office. If service is made by registered mail, it is effective five days after the notice is mailed. Except as provided in section 41‑1092.08, subsection H, the contractor or injured person may seek judicial review of the registrar's final award pursuant to title 12, chapter 7, article 6.
Sec. 4. Title 32, chapter 10, article 3, Arizona Revised Statutes, is amended by adding section 32-1155.01, to read:
32-1155.01. Arbitration process; applicability
A. Notwithstanding title 41, chapter 6, article 10 and any other provision of this article, if a person files a written complaint with the registrar pursuant to section 32-1155 and any party to the complaint disputes the registrar's corrective work order, within thirty calendar days after the corrective work order is made, the complaint May, at the sole discretion of the registrar, be referred to arbitration if the cost of repairs is five thousand dollars or less. If the cost of repairs is more than five thousand dollars, the contesting parties, within thirty calendar days after the corrective work order, may opt into arbitration if all of the parties agree. For the purposes of this subsection, the estimated cost of repairs shall be determined at the time of investigation by the registrar. if either party disputes the cost of the repairs, the party objecting shall submit to the registrar within ten calendar days two separate bids from qualified contractors on the cost of the repairs. Failure to provide two bids within this time will result in the party's waiving their right to object to mandatory arbitration.
B. The registrar shall serve the parties notice whether the matter has been referred to arbitration within ten calendar days after a request for arbitration has been received. If the matter has been referred to arbitration, the notice also shall identify the arbitrator selected by the Registrar, who shall be a member in good standing of the construction law section of the state bar of Arizona. Service shall be made by personal service or by mailing a copy of the notice by certified mail to the licensee's latest address of record on file in the Registrar's office. If service is made by certified mail, it is effective five calendar days after the notice is mailed.
C. Section 12‑3012 applies and the parties have the right to remove an arbitrator at any time on discovery of grounds set forth in section 12‑3011, subsection B. If an arbitrator is removed pursuant to this subsection, the registrar shall notify the parties of the new arbitrator selected within seven calendar days. The arbitrator has immunity as prescribed in section 12‑3014.
D. The licensee may post a bond in the amount of the estimated cost of repairs within fourteen calendar days after service of the registrar's notice referring the matter to arbitration. The registrar may not suspend or revoke any of the licenses held by a licensee that posts a bond in the amount of the claim subject to arbitration.
E. The arbitration process is governed by section 12‑3015.
F. Except as otherwise provided in this section, sections 12‑3010, 12‑3016 and 12‑3017 apply to arbitrations under this section.
G. The arbitration hearing shall be held within sixty calendar days after the registrar's notice referring the matter to arbitration. The arbitrator may extend the deadline to hold the hearing for an additional thirty calendar days on agreement of the parties or for good cause shown.
H. The arbitrator is prohibited from ordering the suspension or revocation of any license, awarding monetary damages, assessing civil penalties or awarding any legal fees or costs in any amount.
I. The arbitrator shall issue a recommended order with findings of fact and conclusions of law including necessary repairs no later than fifteen calendar days after the close of the arbitration hearing. The arbitrator shall serve a copy of the recommended order to each party to the arbitration proceeding as well as the registrar by personal service or by mailing a copy of the recommended order by certified mail to the licensee's latest address of record on file in the registrar's office. If service is made by certified mail, it is effective five calendar days after the notice is mailed. The arbitrator's recommended order shall become an order of the registrar, subject to acceptance, modification or rejection by the registrar, within twenty calendar days from the date of the arbitrator's recommended order. The registrar's order becomes final thirty calendar days after the date of an order by the registrar. The arbitrator or registrar shall not grant requests to rehear the matter. A party waives any objection that a order was not timely made unless the party gives notice of the objection to the registrar before receiving notice of the order.
J. Notwithstanding any other provision in this chapter, before an order of the registrar becomes final pursuant to subsection i of this section, if a contractor fails to comply with the order:
1. The registrar may order that the cash bond posted pursuant to subsection D of this section be discharged within twenty‑five calendar days. The complainant is not eligible for any additional award from the residential contractors' recovery fund pursuant to section 32‑1132 and may not seek the same award, claim or remedy through civil court.
2. If a bond is not posted by the licensee pursuant to subsection D of this section, the registrar may suspend or revoke the licensee's license by operation of law and order payment from the recovery fund for claimants who are eligible.
K. Compliance with the order shall be determined by the following:
1. If a complainant fails to notify the registrar within ten calendar days of the order becoming final, the respondent shall be deemed to have complied with the order.
2. If a complainant notifies the registrar of contractors that the respondent has failed to comply with the order, the registrar shall make a final determination of compliance.
L. This section applies to all complaints filed with the registrar on or after the effective date of this section.
