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SPONSOR: |
King |
DATE TYPED: |
2/19/03 |
HB |
609 |
||
SHORT TITLE: |
Amend Construction Industries Licensing Act |
SB |
|
||||
|
ANALYST: |
Maloy |
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REVENUE
Estimated Revenue |
Subsequent Years Impact |
Recurring or
Non-Rec |
Fund Affected |
|
FY03 |
FY04 |
|
|
|
|
See
Narrative |
|
Recurring |
General
Fund |
|
|
|
Recurring |
Local |
Relates to SB 141. This bill essentially duplicates SB 141 except for minor,
grammatical differences.
Response
Not Received From
Construction
Industries Division
SUMMARY
Synopsis of Bill
House Bill 609
clarifies and tightens pro-consumer disclosure requirements and increases the
penalty fees that may be assessed against a contractor failing to meet those
requirements. Specifically, HB 609
requires:
Significant Issues
Many contractors
advertise that they are “licensed and bonded”.
While it is true that a contractor must present proof of financial
responsibility at a level sufficient to cover the value of his projects before
being issued a contractor’s license through CID, advertising the existence of
bonding or insurance is misleading to consumers.
Consumers expect that
the coverage is for their project and that the funds will be available to them
in the event the contractor defaults on the project. Unfortunately, the consumer is mistaken. The bonding or proof of
financial responsibility required by CID is a “licensing bond”. The funds may be accessed by CID for unpaid
license renewal fees, permit fees and administrative fines. The bond or policy is not intended to
address contractor liabilities to consumers.
FISCAL IMPLICATIONS
· There
may be a slight increase in revenue to the general fund as a result of
additional penalty fees being assessed by the CID. This would be a recurring increase.
· Penalties
assessed by local building departments within political subdivisions would remain
with the political subdivision.
· CID,
as well as all of the local building departments throughout the state, would be
required to develop a disclosure form that is to be completed by contractors
and provided to owners in advance of contracting for work or receiving
compensation. This would not be time intensive for CID, or for
the local subdivisions, and could be accomplished with existing staff.
· As
with all new administrative requirements for professional licensees, there will
be some time and resources directed to informing / training the industry. This can be accomplished with existing
staff.
· Finally,
these additional requirements could potentially result in a slight increase in
the number of administrative hearings for CID and local subdivisions. If this occurs, these hearings should be
“cut and dry”. Either the contractor’s
license number is on his written bid or his permit application or it is not; either
the form disclosing the meaning of contractor’s license, bond and insurance is
completed and provided to the homeowner, or it is not.