HOUSE BILL REPORT

ESSB 5024

As Amended by the House

BYSenate Committee on Commerce & Labor (originally sponsored by Senators Talmadge, Warnke, Smitherman and Moore)

Requiring advertising by contractors to carry the contractor's registration number.

House Committe on Commerce & Labor

Majority Report:  Do pass with amendments.  (11)

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

House Staff:Chris Cordes (786-7117)

AS PASSED HOUSE APRIL 8, 1987

BACKGROUND:

Construction contractors are required to register with the Department of Labor and Industries.  The registration number assigned to the contractor must appear in the contractor's listing in the advertising section of the telephone directory and on advertisements prepared by the contractor that show the contractor's name or address.  All materials prepared by the contractor to solicit business from nonbusiness retail customers must show the contractor's current registration number.  "Advertising" does not include signs on motor vehicles or on premise signs.

Any person having a claim against the contractor for damages arising out of the contracting project may bring a lawsuit against the contractor's surety bond.

SUMMARY:

It is a misdemeanor for a contractor to advertise as a contractor when the contractor is not registered as required or when the registration is suspended.

Registration may not be granted if the applicant has been previously registered as a contractor in a sole proprietorship, partnership or corporation and unsatisfied final judgments or pending lawsuits exist that were incurred during the previous registration.

The advertising section of the telephone directory and other directories and all advertising, including advertising by airwave transmission, that shows or announces the contractor's name or address must also show or announce the contractor's current registration number.  The provision restricting the advertising requirements to those materials prepared by the contractor is deleted. A contractor is prohibited from falsifying a registration number to use in connection with solicitation of business or identification as a contractor.

The maximum penalty for a violation of the advertising requirements is increased from $1,000 to $5,000.  The penalty does not apply to an inadvertent error.  When determining a violation of the advertising requirements, the person who purchased the advertising will be held responsible.

If an investigation by the Department of Labor and Industries provides probable cause to believe that a contractor has unlawfully advertised in an alphabetical or classified directory, the department may issue a citation ordering the violator to cease the unlawful advertising. Procedures for hearings on the citation are specified.

In any lawsuit on the contractor's surety bond, the surety company issuing the bond must be named as a party to the suit.

Fiscal Note:      Requested March 20, 1987.

House Committee ‑ Testified For:    Senator Talmadge, prime sponsor; Artie Robersen, Department of Labor and Industries; Bob Dilger, State Building and Construction Trades Council; Mark Triplett, Home Builders Association (with concerns); Duke Schaub, Associated General Contractors (with concerns); and Paul Conrad, Allied Newspapers.

House Committee - Testified Against:      None Presented.

House Committee - Testimony For:    The Department of Labor and Industries needs enhanced authority to ensure that contractor advertising complies with statutory requirements.

House Committee - Testimony Against:      None Presented.