SENATE BILL REPORT

SHB 364

BYHouse Committee on Commerce & Labor (originally sponsored by Representatives Wang and Doty)

Changing provisions relating to contractor registration and disclosure.

House Committe on Commerce & Labor

Senate Committee on Commerce & Labor

Senate Hearing Date(s):March 26, 1987; March 27, 1987

Majority Report:  Do pass as amended and be referred to Committee on Ways & Means.

      Signed by Senators Warnke, Chairman; Smitherman, Vice Chairman; Anderson, Vognild, West, Williams.

Senate Staff:Jean Meyn (786-7472)

                  March 30, 1987

Senate Committee on Ways & Means

Senate Hearing Date(s):April 2, 1987

Majority Report:  Do pass as amended by Committee on Commerce & Labor.

      Signed by Senators McDermott, Chairman; Gaspard, Vice Chairman; Bauer, Cantu, Deccio, Hayner, Kreidler, McDonald, Moore, Rasmussen, Rinehart, Talmadge, Vognild, Warnke, Williams, Wojahn, Zimmerman.

Senate Staff:Stephen Rose (786-7443)

                  April 6, 1987

AS REPORTED BY COMMITTEE ON WAYS & MEANS, APRIL 2, 1987

BACKGROUND:

General and specialty construction contractors must register with the Department of Labor and Industries and post a bond or other security.  Any person having claim against the contractor for breach of contract, wages or materials supplied may bring suit against the bond to recover.  In many cases, the amount of the bond is not enough to cover the potential liability of the contractor.  A default by the contractor in payment of wages or cost of materials furnished for a project on an owner's property may result in the property being subject to lien to enforce payment.

SUMMARY:

A contractor performing construction work with a contract price of $1,000 or more or under a written bid or contract is required to provide the customer with a disclosure statement.  It must include the contractor's registration number, the amount of the contractor's bond, and an explanation of steps that the customer might take to procure additional protection if a claim arises from the work done under the contract.

A contractor who fails to provide a customer with the disclosure statement may not bring or maintain any action in court to collect compensation for work done under a contract subject to the disclosure provisions. Failure to comply is also an infraction under the contractor registration law.

The Department of Labor and Industries is directed to produce model disclosure statements and other educational materials to assist contractors and customers under the disclosure provisions.

The Department may inspect and investigate job sites to determine whether the contractor is complying with the registration law.  If the Department reasonably believes that a contractor has failed to register as required, the director must issue an order immediately restraining further construction at the site.

SUMMARY OF PROPOSED SENATE AMENDMENT:

A disclosure statement is also required when the bid amount for a contracting project is $1,000 or more, but is not required on written bids or contracts of less than $1,000.

Fiscal Note:      available

Senate Committee - Testified: COMMERCE & LABOR:  Gary Smith, Independent Business Association

Senate Committee - Testified: WAYS & MEANS:  No one