HOUSE BILL REPORT

SB 6182

As Amended by the House

BYSenator McCaslin

Denying registration if contractor has previous unsatisfied judgment.

House Committe on Commerce & Labor

Majority Report:  Do pass with amendment.  (11)

      Signed by Representatives Wang, Chair; Cole, Vice Chair; Fisher, Jones, R. King, O'Brien, Patrick, Sanders, Sayan, C. Smith and Walker.

House Staff:Chris Cordes (786-7117)

AS PASSED HOUSE MARCH 2, 1988

BACKGROUND:

Construction contractors must register annually with the Department of Labor and Industries.  The department may not re-register a contractor who has either an unsatisfied final judgment entered against him or her or has a law suit based on a violation of the contractor registration act pending at the time of the application for re-registration.  Re-registration is precluded whether or not the law suit has merit.

A contractor may not bring or maintain an action in court related to work under the contract unless the contractor was validly registered at the time of entering into the contract.  However, courts have allowed contractor suits in cases in which the contractor was not technically registered if the contractor was in substantial compliance with the registration law.  To be in substantial compliance, a contractor must have the required bond and insurance and must have provided the department with his or her business identifier numbers.

SUMMARY:

The provision that prohibits contractor re-registration if a law suit has been filed against the contractor is deleted from the contractor registration law.

In determining whether a contractor is registered for the purposes of bringing or maintaining a law suit based on the contract, the court may not find the contractor in substantial compliance with the registration requirements unless (1) the Department of Labor and Industries has the contractor's employer identification number and other business registration numbers; and (2) the contractor has a current bond and insurance.  The court must also take into consideration the length of time during which the contractor did not hold a valid registration.

Fiscal Note:      Not Requested.

House Committee ‑ Testified For:    Duke Schaub, Associated General Contractors;  Doug Bohlke, Contractors Bonding Company; Gary Smith, Independent Business Association; and Larry Sundquist, Building Industry Association of Washington.

House Committee - Testified Against:      None Presented.

House Committee - Testimony For:    A contractor should not be denied registration based on a pending law suit when the merits of the law suit have not yet been decided.

House Committee - Testimony Against:      None Presented.