Committee Substitute for HB0849JCS

HOUSE JUDICIARY COMMITTEE SUBSTITUTE FOR

HOUSE BILL 849

49th legislature - STATE OF NEW MEXICO - first session, 2009

AN ACT

RELATING TO CONSTRUCTION; CLARIFYING DEFINITIONS IN THE CONSTRUCTION INDUSTRIES LICENSING ACT; PROVIDING AN ELECTRICAL PERMIT EXEMPTION ON FARMS AND RANCHES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. Section 60-13-2 NMSA 1978 (being Laws 1967, Chapter 199, Section 2, as amended) is amended to read:

"60-13-2. GENERAL DEFINITIONS.--As used in the Construction Industries Licensing Act:

A. "division" means the construction industries division of the regulation and licensing department;

B. "trade bureau" means the electrical bureau, the mechanical bureau, the general construction bureau or the liquefied petroleum gas bureau of the division;

C. "jurisdictional conflict" means [any] a conflict between or among trade bureaus as to the exercise of jurisdiction over an occupation or trade for which a license is required under the provisions of the Construction Industries Licensing Act;

D. "person" includes an individual, firm, partnership, corporation, association or other organization, or any combination thereof;

E. "qualifying party" means [any] an individual who submits to the examination for a license to be issued under the Construction Industries Licensing Act and who is responsible for the licensee's compliance with the requirements of that act and with the rules, regulations, codes and standards adopted and promulgated in accordance with that act;

F. "certificate of qualification" means a certificate issued by the division to a qualifying party;

G. "journeyman" means [any] an individual who is properly certified by the electrical bureau or the mechanical bureau, as required by law, to engage in or work at [his] the certified trade;

H. "apprentice" means an individual who is engaged, as [his] the individual's principal occupation, in learning and assisting in a trade;

I. "wages" means compensation paid to an individual by an employer from which taxes are required to be withheld by federal and state law;

J. "public use" means the use or occupancy of [any] a structure, facility or manufactured commercial unit to which the general public, as distinguished from residents or employees, has access;

K. "bid" means a written or oral offer to contract;

L. "building" means [any] a structure built for use or occupancy by persons or property, including manufactured commercial units and modular homes or premanufactured homes designed to be placed on permanent foundations whether mounted on skids or permanent foundations or whether constructed on or off the site of location;

M. "inspection agency" means a firm, partnership, corporation, association or any combination thereof approved in accordance with regulations as having the personnel and equipment available to adequately inspect for the proper construction of manufactured commercial units, modular homes or premanufactured homes;

N. "director" means the administrative head of the division;

O. "chief" means the administrative head of a trade bureau;

P. "commission" means the construction industries commission;

Q. "manufactured commercial unit" means a movable or portable housing structure over thirty-two feet in length or over eight feet in width that is constructed to be towed on its own chassis and designed so as to be installed without a permanent foundation for use as an office or other commercial purpose and that may include one or more components that can be retracted for towing purposes and subsequently expanded for additional capacity, or two or more units separately towable but designed to be joined into one integral unit, as well as a single unit, but that does not include any movable or portable housing structure over twelve feet in width and forty feet in length that is used for nonresidential purposes. "Manufactured commercial unit" does not include modular or premanufactured homes, built to a nationally recognized standard adopted by the commission and designed to be permanently affixed to real property; [and]

R. "code" means a body or compilation of provisions or standards adopted by the commission that govern contracting or some aspect of contracting; that provide for safety and protection of life and health; and that are published by a nationally recognized standards association; and

S. "employee" means an individual who is employed by a licensee or a person who is exempt from licensing under the Construction Industries Licensing Act and who receives wages as compensation for performing construction as an employee of the licensee or the exempted person; provided, however, that an individual shall not be considered an employee unless the employer can provide to the division documentary evidence of the payment of wages to the individual."

Section 2. Section 60-13-3 NMSA 1978 (being Laws 1978, Chapter 66, Section 1, as amended) is amended to read:

"60-13-3. DEFINITION--CONTRACTOR.--As used in the Construction Industries Licensing Act, "contractor":

A. means [any] a person who undertakes, offers to undertake by bid or other means or purports to have the capacity to undertake, by [himself] the person alone or through others, contracting. Contracting includes constructing, altering, repairing, installing or demolishing any:

(1) road, highway, bridge, parking area or related project;

(2) building, stadium or other structure;

(3) airport, subway or similar facility;

(4) park, trail, bridle path, athletic field, golf course or similar facility;

(5) dam, reservoir, canal, ditch or similar facility;

(6) sewerage or water treatment facility, power generating plant, pump station, natural gas compressing station or similar facility;

(7) sewerage, water, gas or other pipeline;

(8) transmission line;

(9) radio, television or other tower;

(10) water, oil or other storage tank;

(11) shaft, tunnel or mining appurtenance;

(12) leveling or clearing land;

(13) excavating earth;

(14) air conditioning, conduit, heating or other similar mechanical works;

(15) electrical wiring, plumbing or plumbing fixture, consumers' gas piping, gas appliances or water conditioners; or

(16) similar work, structures or installations [which] that are covered by applicable codes adopted under the provisions of the Construction Industries Licensing Act;

B. includes subcontractor and specialty contractor;

C. includes a construction manager who coordinates and manages the building process; who is a member of the construction team with the owner, architect, engineer and other consultants required for the building project; and who utilizes his or her skill and knowledge of general contracting to develop schedules, prepare project construction estimates, study labor conditions and advise concerning construction; and

D. does not include:

(1) [any] a person who merely furnishes materials or supplies at the site without fabricating them into, or consuming them in the performance of, the work of a contractor;

(2) [any] a person who drills, completes, tests, abandons or operates [any] a petroleum, gas or water well; [or] services equipment and structures used in the production and handling of [any] a product incident to the production of [any] petroleum, gas or water wells, excluding [any] a person performing duties normally performed by electrical, mechanical or general contractors; or [who] performs geophysical or similar exploration for oil, gas or water;

(3) a public utility or rural electric cooperative that constructs, reconstructs, operates or maintains its plant or renders authorized service by the installation, alteration or repair of facilities, up to and including the meters, which facilities are an integral part of the operational system of the public utility or rural electric cooperative; provided that the construction of a building by a public utility or rural electric cooperative or the installation or repair of [any] a consumer gas or electrical appliance not an integral part of the operational system makes a public utility or rural electric cooperative a contractor for that purpose;

(4) a utility department of [any] a municipality or local public body rendering authorized service by the installation, alteration or repair of facilities, up to and including the meters, which facilities are an integral part of the operational system of the utility department of the municipality;

(5) [any] a railroad company;

(6) a telephone or telegraph company or rural electric cooperative that installs, alters or repairs electrical equipment and devices for the operation of signals or the transmission of intelligence where that work is an integral part of the operation of a communication system owned and operated by a telephone or telegraph company or rural electric cooperative in rendering authorized service;

(7) a pipeline company that installs, alters or repairs electrical equipment and devices for the operation of signals or the transmission of intelligence where that service is an integral part of the operation of the communication system of that pipeline company and is not for hire or for the use of the general public, or [any] a pipeline company [which] that installs, alters or repairs plumbing fixtures or gas piping where the work is an integral part of installing and operating the system owned or operated by the pipeline company in rendering its authorized service;

(8) [any] a mining company, gas company or oil company that installs, alters or repairs its facilities, including plumbing fixtures or gas piping, where the work is an integral part of the installing or operating of a system owned or operated by the mining company, gas company or oil company; provided the construction of a building by a mining company, a gas company or an oil company is required to be done in conformity with all other provisions of the Construction Industries Licensing Act and with orders, rules, [regulations] standards and codes adopted pursuant to that act;

(9) a radio or television broadcaster who installs, alters or repairs electrical equipment used for radio or television broadcasting;

(10) an individual who, [by himself] alone or with the aid of [others who are paid wages and] one or more employees who receive no other form of compensation, builds or makes installations, alterations or repairs in or to a single-family dwelling owned and occupied or to be occupied by [him] the individual; provided that the installation, building, alteration or repair is [required to be done] performed in conformity with all other provisions of the Construction Industries Licensing Act and with the orders, rules, [regulations] standards and codes adopted pursuant to that act;

[(11) a person who acts on his own account to build or improve a single-family residence for his personal use, including the building or improvement of a freestanding storage building located on that residential property; provided that the construction or improvement is required to be done in conformity with all other provisions of the Construction Industries Licensing Act and with the orders, rules, regulations, standards and codes adopted pursuant to that act; and provided further that he does not engage in commercial construction;

(12)] (11) a person who, [by himself] alone or with the aid of [others who are paid wages and] one or more employees who receive no other form of compensation, builds or makes installations, repairs or alterations in or to a building or other improvement on a farm or ranch taxed as an agricultural enterprise and owned, occupied or operated by [him, or makes installations of electrical wiring that are not to be connected to electrical energy supplied from a power source outside the premises of the farm or ranch owned, occupied or operated by him; provided that the state codes and any local codes adopted pursuant to Subsection F of Section 60-13-44 NMSA 1978 shall not require any permits or inspections for such construction on a farm or ranch except for electrical wiring to be connected to a power source outside the premises;

(13) an individual who works only for wages] the person;

(12) an employee;

[(14)] (13) an individual who works on one undertaking or project at a time that, in the aggregate or singly, does not exceed seven thousand two hundred dollars ($7,200) compensation a year, the work being casual, minor or inconsequential, such as handyman repairs; provided that this exemption shall not apply to any undertaking or project pertaining to the installation, connection or repair of electrical wiring, plumbing or gas fitting as defined in Section 60-13-32 NMSA 1978 and provided:

(a) the work is not part of a larger or major operation undertaken by the same individual or different contractor;

(b) the individual does not advertise or maintain a sign, card or other device [which] that would indicate to the public that [he] the individual is qualified to engage in the business of contracting; and

(c) the individual files annually with the division, on a form prescribed by the division, a declaration substantially to the effect that [he] the individual is not a contractor within the meaning of the Construction Industries Licensing Act, that the work [he] the individual performs is casual, minor or inconsequential and will not include more than one undertaking or project at one time and that the total amount of such contracts, in the aggregate or singly, will not exceed seven thousand two hundred dollars ($7,200) compensation a year;

[(15) any] (14) a person, firm or corporation that installs fuel containers, appliances, furnaces and other appurtenant apparatus as an incident to its primary business of distributing liquefied petroleum fuel;

[(16)] (15) a cable television or community antenna television company that constructs, installs, alters or repairs facilities, equipment, cables or lines for the provision of television service or the carriage and transmission of television or radio broadcast signals; or

[(17) any] (16) a weatherization project not exceeding two thousand dollars ($2,000) that has been approved and is administered by a federal or state agency [or

(18) a person who performs work consisting of short-term depreciable improvements to commercial property to provide needed repairs and maintenance for items not covered by building codes adopted by the construction industry commission if the total amount paid the person for the work on a single undertaking, including materials, services and wages of those who work for him, does not exceed the sum of five thousand dollars ($5,000)]."

Section 3. Section 60-13-3.1 NMSA 1978 (being Laws 2005, Chapter 94, Section 1) is recompiled in Chapter 50 NMSA 1978 and is amended to read:

"EMPLOYER AND EMPLOYEE RELATIONSHIP--INDEPENDENT CONTRACTOR--IMPROPER REPORTING--PENALTY--LICENSE SANCTIONS.--

A. Except as provided in Subsection D of this section, for purposes of the employer and employee relationship within those construction industries subject to the Construction Industries Licensing Act, a contractor who is an employer shall consider a person providing labor or services to the contractor for compensation to be an employee of the contractor and not an independent contractor unless the following standards indicative of an independent contractor are met:

(1) the person providing labor or services is free from direction and control over the means and manner of providing the labor or services, subject only to the right of the person for whom the labor or services are provided to specify the desired results;

(2) the person providing labor or services is responsible for obtaining business registrations or licenses required by state law or local ordinance for the person to provide the labor or services;

(3) the person providing labor or services furnishes the tools or equipment necessary to provide the labor or services;

(4) the person providing labor or services has the authority to hire and fire employees to perform the labor or services;

(5) payment for labor or services is made upon completion of the performance of specific portions of a project or is made on the basis of a periodic retainer; and

(6) the person providing labor or services represents to the public that the labor or services are to be provided by an independently established business. A person is engaged in an independently established business when four or more of the following circumstances exist:

(a) labor or services are primarily performed at a location separate from the person's residence or in a specific portion of the residence that is set aside for performing labor or services;

(b) commercial advertising or business cards are purchased by the person or the person is a member of a trade or professional association;

(d) labor or services are performed only pursuant to a written contract;

(e) labor or services are performed for two or more persons within a period of one year; or

(f) the person assumes financial responsibility for errors and omissions in labor or services as evidenced by insurance, performance bonds and warranties relating to the labor or services being provided.

B. The [labor] workforce solutions department shall administer and enforce the provisions of Subsection A of this section, including coordination with the construction industries division of the regulation and licensing department. C. A contractor who intentionally and willfully reports to a state agency or other client that an employee is an independent contractor or who, for the purposes of a program administered by a state agency, intentionally and willfully treats or otherwise lists an employee as an independent contractor when the employee's status does not meet the standards indicative of an independent contractor as identified in Subsection A of this section is guilty of a misdemeanor and shall be punished by a fine of not more than five thousand dollars ($5,000) or by imprisonment for a definite term not to exceed six months or both. For the purposes of this subsection, "state agency" means an administration, board, commission, department or division of this state.

D. Conviction of a contractor for violating Subsection C of this section shall be grounds for the construction industries commission to take action to suspend, revoke or refuse to renew a license issued to that contractor by the construction industries division of the regulation and licensing department.

E. Subsections A, B and C of this section shall not be construed to affect or apply to a common law or statutory action providing for recovery in torts and shall not be construed to affect or change the common law interpretation of independent contractor status as it relates to tort liability.

F. The provisions of Subsections A, B and C of this section shall not affect or apply to the licensing requirements adopted by the construction industries division of the regulation and licensing department pursuant to the Construction Industries Licensing Act."

Section 4. Section 60-13-45 NMSA 1978 (being Laws 1967, Chapter 199, Section 53, as amended) is amended to read:

"60-13-45. TRADE BUREAUS--PERMITS.--

A. The trade bureaus within their respective jurisdictions may require a permit to be secured and conspicuously posted prior to any construction, installation, alteration, repair or addition to or within any building, structure or premises.

B. No permit shall be required for the performance of any of the following classes of work:

(1) minor repairs, replacement of lamps, the connection of portable electrical equipment to suitable receptacles [which] that are permanently installed, minor repairs or replacement of or to faucets, taps or jets or connection of portable equipment to suitable connections or inlets [which] that have been permanently installed;

(2) installation of temporary wiring for testing electrical equipment or apparatus or installation of temporary fixtures or devices for testing fixtures, equipment, apparatus or appliances;

(3) installation, alteration or repair of electrical equipment for the operation of signals or the transmission of intelligence by wire; [and]

(4) installation or work [which] that is done after regular business hours or during a holiday when immediate action is imperative to safeguard life, health or property, provided the person making the installation or performing the work applies for a permit covering the installation or work not later than the next business day; and

(5) installation of electrical wiring that is not connected to electrical energy supplied from a power source outside the premises of a farm or ranch when the installation is performed by a person, or the employee of a person, who owns, occupies or operates the farm or ranch.

C. If a permit has been issued for construction of a new residential building, that residential building shall not be occupied until a certificate of occupancy has been issued certifying compliance with all codes and standards.

D. The commission shall make rules and regulations pertaining to the issuance of permits and the setting of reasonable fees to be paid by the applicant for a permit. The regulations shall provide a procedure for the issuance of permits outside the corporate limits of a municipality where inspection is made by a state inspector or a municipal inspector serving as a part-time state inspector and for inspections within a municipality where the inspection is done exclusively by a full-time state inspector. Each trade bureau by regulation may require a reasonable bond or surety in the penal sum of five hundred dollars ($500) or more, but not to exceed [fifteen hundred dollars] one thousand five hundred dollars ($1,500), with such bureau named as obligee and conditioned for the payment of inspection fees provided in the Construction Industries Licensing Act. Nothing in this section shall preclude municipalities from making inspections in accordance with the Construction Industries Licensing Act or rules and regulations pursuant to that act or from establishing a schedule of fees to be paid by an applicant for a permit.

E. In the event that the division assumes inspections of a municipal or county jurisdiction, the permit fees shall be paid directly to the division."

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