6271-S

AN ACT Relating to construction services; amending RCW 18.27.020, 18.27.030, 18.27.040, 18.27.090, 18.27.100, 18.27.104, 18.27.114, 18.27.117, 18.27.340, 43.22.434, 43.22.480, 43.22.500, 84.36.400, 18.27.010, and 18.27.050; adding new sections to chapter 18.27 RCW; creating a new section; prescribing penalties; and providing an effective date.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. The directors of the departments of revenue, licensing, and labor and industries, and the commissioner of employment security shall develop a plan for maximum coordination and cooperation of those departments in the effective enforcement of chapters 18.27, 82.04, and 82.08 RCW and Titles 50 and 51 RCW. This plan shall be submitted to the legislature by December 30, 1994.

NEW SECTION. Sec. 2. A new section is added to chapter 18.27 RCW to read as follows:

The department shall establish and maintain a toll-free telephone number dedicated to receiving information regarding violations or suspected violations of this chapter. Information shall be received and promptly forwarded to compliance officers. Upon request, the identity of callers may be kept confidential, but the department must require callers to identify themselves in order for the information to be received and forwarded to compliance officers.

NEW SECTION. Sec. 3. A new section is added to chapter 18.27 RCW to read as follows:

All retail suppliers of building materials shall post in conspicuous locations around the retail display area a poster briefly describing the registration requirements of this chapter and that purchasers of construction services should demand proof of registration from contractors they employ, for their own protection.

NEW SECTION. Sec. 4. A new section is added to chapter 18.27 RCW to read as follows:

(1) The department shall prepare, with the assistance of the attorney general, a pamphlet on how to make a claim against the bond or deposit required by RCW 18.27.040. The pamphlet shall include sample forms of a summons and complaint and at least the following information:

(a) How the summons and complaint are to be served and filed;

(b) The requirement that a lawsuit must be commenced before a surety can make a payment to a claimant;

(c) That claims for under thirty-five thousand dollars are required to be determined by arbitration, with right of appeal, and not by a court trial;

(d) That arbitration is a less formal procedure than a courtroom trial, usually occurring in the arbitrator's office under somewhat relaxed rules of evidence, and that many cases are heard without either party being represented by lawyers; and

(e) That if they do retain a lawyer they may recover attorneys' fees up to the amount available under the bond or deposit.

(2) The pamphlet described in this section shall be offered by the department and any issuer of the surety bonds required by this chapter to anyone who requests information about making a claim against the bond.

NEW SECTION. Sec. 5. A new section is added to chapter 18.27 RCW to read as follows:

All advertising vendors who purvey advertising for contractors shall require the person purchasing the advertising to supply his or her name, address, telephone number and relationship to the contractor being advertised. The advertising vendor shall promptly make available to the department upon request the identity and all information obtained regarding the person purchasing advertising that the advertiser prints, publishes, or broadcasts.

Sec. 6. RCW 18.27.020 and 1993 c 454 s 6 are each amended to read as follows:

(1) Every contractor shall register with the department.

(2) It is a misdemeanor for any contractor to:

(a) Advertise, offer to do work, submit a bid, or perform any work as a contractor without being registered as required by this chapter;

(b) Advertise, offer to do work, submit a bid, or perform any work as a contractor when the contractor's registration is suspended;

(c) Use a false or expired registration number in purchasing or offering to purchase an advertisement for which a contractor registration number is required; or

(d) Transfer a valid registration to an unregistered contractor or allow an unregistered contractor to work under a registration issued to another contractor.

(3) All misdemeanor actions under this chapter shall be prosecuted in the county where the ((~~infraction~~)) violation occurs.

(4) The doctrine of substantial compliance has no place in the application and construction of this section.

Sec. 7. RCW 18.27.030 and 1992 c 217 s 1 are each amended to read as follows:

(1) An applicant for registration as a contractor shall submit an application under oath upon a form to be prescribed by the director and which shall include the following information pertaining to the applicant:

(a) Employer social security number.

(b) As applicable: (i) The industrial insurance account number covering employees domiciled in Washington; and (ii) evidence of workers' compensation coverage in the applicant's state of domicile for the applicant's employees working in Washington who are not domiciled in Washington.

(d) State excise tax registration number.

(e) Unified business identifier (UBI) account number may be substituted for the information required by (b), (c), and (d) of this subsection.

(f) Type of contracting activity, whether a general or a specialty contractor and if the latter, the type of specialty.

(g) The name and address of each partner if the applicant be a firm or partnership, or the name and address of the owner if the applicant be an individual proprietorship, or the name and address of the corporate officers and statutory agent, if any, if the applicant be a corporation. The information contained in such application shall be a matter of public record and open to public inspection.

(h) That the applicant will meet and maintain his or her statutory obligations with respect to state and local taxes, fees, industrial insurance, employment security, and the requirements of this chapter.

(i) That the applicant has no unsatisfied judgments issuing from any court or unpaid settlements in claims against the applicant arising from the applicant's activities as a contractor.

(2) The department may verify the workers' compensation coverage information provided by the applicant under subsection (1)(b) of this section, including but not limited to information regarding the coverage of an individual employee of the applicant. If coverage is provided under the laws of another state, the department may notify the other state that the applicant is employing employees in Washington.

(3) Registration shall be denied if the applicant has been previously registered as a sole proprietor, partnership or corporation, and was a principal or officer of the corporation, and if the applicant has an unsatisfied final judgment in an action based on RCW 18.27.040 that incurred during a previous registration under this chapter or if the applicant has taxes or another outstanding obligation due and owing to the state of Washington or a local governmental entity, with either the time for contesting the debt having elapsed or the debt has been reduced to a final judgment with time for remaining appeals elapsed.

Sec. 8. RCW 18.27.040 and 1988 c 139 s 1 are each amended to read as follows:

(1) Each applicant shall((, at the time of applying for or renewing a certificate of registration, file with the department a surety bond issued by a surety insurer who meets the requirements of chapter 48.28 RCW in a form acceptable to the department running to the state of Washington if a general contractor, in the sum of six thousand dollars; if a specialty contractor, in the sum of four thousand dollars,)) accompany the application for a certificate of registration with a surety bond or continuation certificate issued by a surety insurer who meets the requirements of chapter 48.28 RCW in the sum of ten thousand dollars if the applicant is a general contractor and six thousand five hundred dollars if the applicant is a specialty contractor, unless the estimated annual volume of work expected by the applicant is in excess of four hundred thousand dollars, then in the sum of fifteen thousand dollars if the applicant is a general contractor and ten thousand dollars if the applicant is a specialty contractor. If the applicant has been found guilty of a violation or infraction of this chapter by a court or an administrative law judge on two previous occasions, appeals therefrom either having been exhausted or the time for appeals having expired, the surety bonds required by this section shall be for double the applicable amounts set forth in this subsection. The bond shall have the state of Washington named as obligee with good and sufficient surety in a form to be approved by the department. The bond shall be continuous and may be canceled by the surety upon the surety giving written notice to the director of its intent to cancel the bond. A cancellation or revocation of the bond or withdrawal of the surety from the bond suspends the registration issued to the principal until a new bond or reinstatement notice has been filed and approved as provided in this section. Whether or not the bond is renewed, continued, reinstated, reissued, or otherwise extended, replaced, or modified, including increases or decreases in the penal sum, it shall be considered one continuous obligation, and the surety upon the bond shall not be liable in an aggregate or cumulative amount exceeding the penal sum set forth on the face of the bond. In no event shall the penal sum, or a portion thereof, at two or more points in time be added together in determining the surety's liability. The bond shall be conditioned that the applicant will pay all persons performing labor, including employee benefits, for the contractor, will pay all taxes and contributions due to the state of Washington, and will pay all persons furnishing labor or material or renting or supplying equipment to the contractor and will pay all amounts that may be adjudged against the contractor by reason of ((~~negligent or improper work or~~)) breach of contract including negligent or improper work in the conduct of the contracting business. A change in the name of a business or a change in the type of business entity shall not impair a bond for the purposes of this section so long as one of the original applicants for such bond maintains partial ownership in the business covered by the bond.

(2) Any contractor registered as of ((~~the effective date of this 1983 act~~)) July 1, 1994, who maintains such registration in accordance with this chapter shall be in compliance with this chapter until the next annual renewal of the contractor's certificate of registration. At that time, the contractor shall provide a bond, cash deposit, or other security deposit as required by this chapter and comply with all of the other provisions of this chapter before the department shall renew the contractor's certificate of registration.

(3) Any person, firm, or corporation having a claim against the contractor for any of the items referred to in this section may bring suit upon ((~~such~~)) the bond or deposit in the superior court of the county in which the work was done or of any county in which jurisdiction of the contractor may be had. The surety issuing the bond shall be named as a party to any suit upon the bond. Action upon ((~~such~~)) the bond or deposit shall be commenced by filing the summons and complaint with the clerk of the appropriate superior court within one year from the date of expiration of the certificate of registration in force at the time the claimed labor was performed and benefits accrued, taxes and contributions owing the state of Washington became due, materials and equipment were furnished, or the claimed contract work was completed or abandoned. Service of process in an action against the contractor, the contractor's bond, or the deposit shall be exclusively by service upon the department. Three copies of the summons and complaint and a fee of ten dollars to cover the handling costs shall be served by registered or certified mail upon the department at the time suit is started and the department shall maintain a record, available for public inspection, of all suits so commenced. Service is not complete until the department receives the ten-dollar fee and three copies of the summons and complaint. ((~~Such~~)) The service shall constitute service on the registrant and the surety for suit upon the bond or deposit and the department shall transmit the summons and complaint or a copy thereof to the registrant at the address listed in his application and to the surety within forty-eight hours after it shall have been received.

(4) The surety upon the bond shall not be liable in an aggregate amount in excess of the amount named in the bond nor for any monetary penalty assessed pursuant to this chapter for an infraction. The liability of the surety shall not cumulate where the bond has been renewed, continued, reinstated, reissued or otherwise extended. The surety upon the bond may, upon notice to the department and the parties, tender to the clerk of the court having jurisdiction of the action an amount equal to the claims thereunder or the amount of the bond less the amount of judgments, if any, previously satisfied therefrom and to the extent of such tender the surety upon the bond shall be exonerated but if the actions commenced and pending at any one time exceed the amount of the bond then unimpaired, claims shall be satisfied from the bond in the following order:

(a) Employee labor, including employee benefits;

(b) Claims for breach of contract by a party to the construction contract;

(d) Taxes and contributions due the state of Washington;

(e) Any court costs, interest, and attorney's fees plaintiff may be entitled to recover. A party who prevails in a claim against the bond required by this section for breach of a construction contract shall be entitled to costs and reasonable attorneys' fees. In no event, however, will the combined costs, interest, attorneys' fees, and bond loss exceed the penal limit of the bond.

The total amount paid from a bond or deposit, including costs and attorneys' fees, to claimants other than those asserting a claim for breach of the construction contract shall not exceed in the aggregate six thousand dollars for a general contractor and four thousand dollars for a specialty contractor.

A payment made by the surety in good faith shall exonerate the bond to the extent of any payment made by the surety.

(5) In the event that any final judgment shall impair the liability of the surety upon the bond so furnished that there shall not be in effect a bond undertaking in the full amount prescribed in this section, the department shall suspend the registration of ((~~such~~)) the contractor until the bond liability in the required amount unimpaired by unsatisfied judgment claims shall have been furnished. If ((~~such~~)) the bond becomes fully impaired, a new bond must be furnished at the increased rates prescribed by this section as now or hereafter amended.

(6) In lieu of the surety bond required by this section the contractor may file with the department a deposit consisting of cash or other security acceptable to the department, and equal to the face amount of the surety bonds required by this section.

(7) Any person having filed and served a summons and complaint as required by this section having an unsatisfied final judgment against the registrant for any items referred to in this section may execute upon the security held by the department by serving a certified copy of the unsatisfied final judgment by registered or certified mail upon the department within one year of the date of entry of such judgment. Upon the receipt of service of ((~~such~~)) the certified copy the department shall pay or order paid from the deposit, through the registry of the superior court which rendered judgment, towards the amount of the unsatisfied judgment. The priority of payment by the department shall be the order of receipt by the department, but the department shall have no liability for payment in excess of the amount of the deposit.

(8) The director may ((~~promulgate~~)) adopt rules necessary for the proper administration of the security.

NEW SECTION. Sec. 9. A new section is added to chapter 18.27 RCW to read as follows:

The construction industry administration account is created in the office of the treasurer. All receipts from fees collected under this chapter and RCW 43.22.340 through 43.22.505 shall be deposited into the account. Moneys in the account may be spent only after appropriation. Expenditures from the account may be used only for the administration of this chapter and RCW 43.22.340 through 43.22.505.

Sec. 10. RCW 18.27.090 and 1987 c 313 s 1 are each amended to read as follows:

This chapter shall not apply to:

(1) An authorized representative of the United States government, the state of Washington, or any incorporated city, town, county, township, irrigation district, reclamation district, or other municipal or political corporation or subdivision of this state;

(2) Officers of a court when they are acting within the scope of their office;

(3) Public utilities operating under the regulations of the utilities and transportation commission in construction, maintenance, or development work incidental to their own business;

(4) Any construction, repair, or operation incidental to the discovering or producing of petroleum or gas, or the drilling, testing, abandoning, or other operation of any petroleum or gas well or any surface or underground mine or mineral deposit when performed by an owner or lessee;

(5) The sale or installation of any finished products, materials, or articles of merchandise which are not actually fabricated into and do not become a permanent fixed part of a structure;

(6) Any construction, alteration, improvement, or repair of personal property((,)) except this chapter shall apply to all mobile/manufactured housing. A mobile/manufactured home may be installed, set up, or repaired by the registered or legal owner, by a contractor ((~~licensed~~)) registered under this chapter, or by a mobile/manufactured home retail dealer or manufacturer licensed under chapter 46.70 RCW who shall warranty service and repairs under chapter 46.70 RCW;

(7) Any construction, alteration, improvement, or repair carried on within the limits and boundaries of any site or reservation under the legal jurisdiction of the federal government;

(8) Any person who only furnished materials, supplies, or equipment without fabricating them into, or consuming them in the performance of, the work of the contractor;

(9) Any work or operation on one undertaking or project by one or more contracts, the aggregate contract price of which for labor and materials and all other items is less than five hundred dollars, ((~~such~~)) the work or operations being considered as of a casual, minor, or inconsequential nature. The exemption prescribed in this subsection does not apply in any instance wherein the work or construction is only a part of a larger or major operation, whether undertaken by the same or a different contractor, or in which a division of the operation is made into contracts of amounts less than five hundred dollars for the purpose of evasion of this chapter or otherwise. The exemption prescribed in this subsection does not apply to a person who advertises or puts out any sign or card or other device which might indicate to the public that he or she is a contractor, or that he or she is qualified to engage in the business of contractor;

(10) Any construction or operation incidental to the construction and repair of irrigation and drainage ditches of regularly constituted irrigation districts or reclamation districts; or to farming, dairying, agriculture, viticulture, horticulture, or stock or poultry raising; or to clearing or other work upon land in rural districts for fire prevention purposes; except when any of the above work is performed by a registered contractor;

(11) An owner who contracts for a project with a registered contractor;

(12) Any person working on his or her own property, whether occupied by him or her or not, and any person working on his or her residence, whether owned by him or her or not but this exemption shall not apply to any person otherwise covered by this chapter who constructs an improvement on his or her own property with the intention and for the purpose of selling the improved property. Sellers of residential real property shall make full disclosure to bona fide purchasers for value any repair or alteration which meet all of the following criteria:

(a) Commenced or completed within the three years prior to entering into the purchase and sale agreement;

(b) The work was done by the owner under this subsection;

(c) It was work that would have to have been done by a registered contractor except that it was permitted by this owner's exception;

(d) The contract amount would have exceeded one thousand dollars; and

(e) The work did not involve purely cosmetic work, such as cleaning, painting, or landscaping;

(13) Owners of commercial properties who use their own employees to do maintenance, repair, and alteration work in or upon their own properties;

(14) A licensed architect or civil or professional engineer acting solely in his or her professional capacity, an electrician licensed under the laws of the state of Washington, or a plumber licensed under the laws of the state of Washington or licensed by a political subdivision of the state of Washington while operating within the boundaries of ((~~such~~)) the political subdivision. The exemption provided in this subsection is applicable only when the licensee is operating within the scope of his or her license;

(15) ((~~Any~~)) A person who engages in the activities herein regulated as an employee of a registered contractor with wages as his or her sole compensation or as an employee of a homeowner with wages totaling no more than five hundred dollars as his or her sole compensation. This five hundred dollar limitation shall not apply to regular maintenance employees of homeowners' associations who as part of their maintenance duties occasionally perform work covered by this chapter;

(16) Contractors on highway projects who have been prequalified as required by chapter 13 of the Laws of 1961, RCW 47.28.070, with the department of transportation to perform highway construction, reconstruction, or maintenance work.

Sec. 11. RCW 18.27.100 and 1993 c 454 s 3 are each amended to read as follows:

(1) Except as provided in RCW 18.27.065 for partnerships and joint ventures, no person who has registered under one name as provided in this chapter shall engage in the business, or act in the capacity, of a contractor under any other name unless such name also is registered under this chapter.

(2) All advertising and all contracts, correspondence, cards, signs, posters, papers, and documents which show a contractor's name or address shall show the contractor's name or address as registered under this chapter.

(3)(a) The ((~~alphabetized listing of contractors appearing in the~~)) advertising section of telephone books or other directories and all advertising that shows the contractor's name or address shall show the contractor's current registration number((~~: PROVIDED, That~~)). However, signs on motor vehicles subject to RCW 46.16.010 and on-premise signs shall not constitute advertising as provided in this section. All materials used to directly solicit business from retail customers who are not businesses shall show the contractor's current registration number. A contractor shall not use a false or expired registration number in purchasing or offering to purchase an advertisement for which a contractor registration number is required. Advertising by airwave transmission shall not be subject to this subsection if the person selling the advertisement obtains the contractor's current registration number from the contractor.

(b) A person selling advertising should not accept advertisements for which the contractor registration number is required under (a) of this subsection if the contractor fails to provide the contractor registration number.

(4) No contractor shall advertise that he or she is bonded and insured because of the bond required to be filed and sufficiency of insurance as provided in this chapter.

(5) No contractor shall advertise that he or she is licensed when he or she is only registered, as required by this chapter, unless he or she is licensed under chapter 19.28 RCW.

(6) A contractor shall not falsify a registration number and use it in connection with any solicitation or identification as a contractor. All individual contractors and all partners, associates, agents, salesmen, solicitors, officers, and employees of contractors shall use their true names and addresses at all times while engaged in the business or capacity of a contractor or activities related thereto.

((~~(6)~~)) (7)(a) The finding of a violation of this section by the director at a hearing held in accordance with the Administrative Procedure Act, chapter 34.05 RCW, shall subject the person committing the violation to a penalty of not more than five thousand dollars as determined by the director.

(b) Penalties under this section shall not apply to a violation determined to be an inadvertent error.

Sec. 12. RCW 18.27.104 and 1989 c 175 s 61 are each amended to read as follows:

(1) If, upon investigation, the director or the director's designee has probable cause to believe that a person holding a registration, an applicant for registration, or an unregistered person acting in the capacity of a contractor who is not otherwise exempted from this chapter, has violated RCW 18.27.100 by unlawfully advertising for work covered by this chapter in ((~~an alphabetical or~~)) a classified directory, the department may issue a citation containing an order of correction. Such order shall require the violator to cease the unlawful advertising.

(2) If the person to whom a citation is issued under subsection (1) of this section notifies the department in writing that he or she contests the citation, the department shall afford an opportunity for an adjudicative proceeding under chapter 34.05 RCW, the Administrative Procedure Act, within thirty days after receiving the notification.

Sec. 13. RCW 18.27.114 and 1988 c 182 s 1 are each amended to read as follows:

(1) Until July 1, ((~~1989~~)) 1994, any contractor agreeing to perform any contracting project: (a) For the repair, alteration, or construction of four or fewer residential units or accessory structures on such residential property when the bid or contract price totals one thousand dollars or more; or (b) for the repair, alteration, or construction of a commercial building when the bid or contract price totals one thousand dollars or more but less than sixty thousand dollars, must provide the customer with the following disclosure statement prior to starting work on the project:

"NOTICE TO CUSTOMER

This contractor is registered with the state of Washington, registration no. . . . ., as a general/specialty contractor and has posted with the state a bond or cash deposit of $6,000/$4,000 for the purpose of satisfying claims against the contractor for negligent or improper work or breach of contract in the conduct of the contractor's business. This bond or cash deposit may not be sufficient to cover a claim which might arise from the work done under your contract. If any supplier of materials used in your construction project or any employee of the contractor or subcontractor is not paid by the contractor or subcontractor on your job, your property may be liened to force payment. If you wish additional protection, you may request the contractor to provide you with original "lien release" documents from each supplier or subcontractor on your project. The contractor is required to provide you with further information about lien release documents if you request it. General information is also available from the department of labor and industries."

(2) On and after July 1, ((~~1989~~)) 1994, any contractor agreeing to perform any contracting project: (a) For the repair, alteration, or construction of four or fewer residential units or accessory structures on such residential property when the bid or contract price totals one thousand dollars or more; or (b) for the repair, alteration, or construction of a commercial building when the bid or contract price totals one thousand dollars or more but less than sixty thousand dollars, must provide the customer with the following disclosure statement prior to starting work on the project:

"NOTICE TO CUSTOMER

This contractor is registered with the state of Washington, registration no. . . . ., as a general/specialty contractor and has posted with the state a bond or cash deposit of ((~~$6,000/$4,000~~)) $10,000/$6,500 or $15,000/$10,000, if applicable for the purpose of satisfying claims against the contractor for negligent or improper work or breach of contract in the conduct of the contractor's business. The expiration date of this contractor's registration is . . . . . . This bond or cash deposit may not be sufficient to cover a claim which might arise from the work done under your contract and other claimants may be entitled to a portion or all of the bond or cash deposit. You must file a lawsuit to recover any money from the bond or cash deposit. In addition to this legally required bond or cash deposit, you may want to negotiate with your contractor that he or she provide you with a bond that guarantees proper performance of the full contract. If any supplier of materials used in your construction project or any employee of the contractor or subcontractor is not paid by the contractor or subcontractor on your job, your property may be liened to force payment. If you wish additional protection, you may request the contractor to provide you with original "lien release" documents from each supplier or subcontractor on your project. The contractor is required to provide you with further information about lien release documents if you request it. General information is also available from the department of labor and industries."

(3) On and after July 1, ((~~1989~~)) 1994, a contractor subject to this section shall notify any consumer to whom notice is required under subsection (2) of this section if the contractor's registration has expired or is revoked or suspended by the department prior to completion or other termination of the contract with the consumer.

(4) No contractor subject to this section may bring or maintain any lien claim under chapter 60.04 RCW based on any contract to which this section applies without alleging and proving that the contractor has provided the customer with a copy of the disclosure statement as required in subsection (1) or (2) of this section.

(5) This section does not apply to contracts authorized under chapter 39.04 RCW or to contractors contracting with other contractors.

(6) Failure to comply with this section shall constitute an infraction under the provisions of this chapter.

(7) The department shall produce model disclosure statements, and public service announcements detailing the information needed to assist contractors and contractors' customers to comply under this section. As necessary, the department shall periodically update these education materials.

Sec. 14. RCW 18.27.117 and 1987 c 313 s 2 are each amended to read as follows:

The legislature finds that setting up and siting mobile/manufactured homes must be done properly for the health, safety, and enjoyment of the occupants. Therefore, when any of the following cause a health and safety risk to the occupants of a mobile/manufactured home, or severely hinder the use and enjoyment of the mobile/manufactured home, a violation of RCW 19.86.020 shall have occurred:

(1) The mobile/manufactured home has been improperly installed by a contractor ((~~licensed~~)) registered under chapter 18.27 RCW, or a mobile/manufactured dealer or manufacturer licensed under chapter 46.70 RCW;

(2) A warranty given under chapter 18.27 RCW or chapter 46.70 RCW has not been fulfilled by the person or business giving the warranty; and

(3) A bonding company that issues a bond under chapter 18.27 RCW or chapter 46.70 RCW does not reasonably and professionally investigate and resolve claims made by injured parties.

Sec. 15. RCW 18.27.340 and 1986 c 197 s 10 are each amended to read as follows:

(1) A contractor found to have committed an infraction under RCW 18.27.200 shall be assessed a monetary penalty of not less than ((~~two~~)) five hundred dollars and not more than three thousand dollars.

(2) The ((~~administrative law judge~~)) director may waive, reduce, or suspend the monetary penalty imposed for the infraction only upon a showing of good cause that the penalty would be unduly burdensome to the contractor.

(3) Monetary penalties collected under this chapter shall be deposited in the general fund.

Sec. 16. RCW 43.22.434 and 1977 ex.s. c 21 s 5 are each amended to read as follows:

(1) The director or the director's authorized representative may conduct ((~~such~~)) inspections and investigations as may be necessary to ((~~promulgate~~)) adopt or enforce mobile home, commercial coach, recreational vehicle, factory built housing, and factory built commercial structure rules adopted under the authority of this chapter or to carry out the director's duties under this chapter.

(2) For purposes of enforcement of this chapter, persons duly designated by the director upon presenting appropriate credentials to the owner, operator, or agent in charge may:

(a) At reasonable times and without advance notice enter any factory, warehouse, or establishment in which mobile homes, commercial coaches, recreational vehicles, factory built housing, and factory build commercial structures are manufactured, stored, or held for sale; and

(b) At reasonable times, within reasonable limits, and in a reasonable manner inspect any factory, warehouse, or establishment as required to comply with the standards adopted by the secretary of housing and urban development under the National Mobile Home Construction and Safety Standards Act of 1974. Each inspection shall be commenced and completed with reasonable promptness.

(3) In carrying out the inspections authorized by this section the director may establish, by rule, and impose on mobile home manufacturers, distributors, and dealers ((~~such~~)) reasonable fees as may be necessary to offset the expenses incurred by the director in conducting the inspections.

(4) All fees collected shall be deposited into the state treasury to the credit of the construction industry administration account and administered in accordance with section 9 of this act.

Sec. 17. RCW 43.22.480 and 1989 c 134 s 1 are each amended to read as follows:

The department shall adopt and enforce rules that protect the health, safety, and property of the people of this state by assuring that all factory built housing or factory built commercial structures are structurally sound and that the plumbing, heating, electrical, and other components thereof are reasonably safe. The rules shall be reasonably consistent with recognized and accepted principles of safety and structural soundness, and in adopting the rules the department shall consider, so far as practicable, the standards and specifications contained in the uniform building, plumbing, and mechanical codes, including the barrier free code and the Washington energy code as adopted by the state building code council pursuant to chapter 19.27A RCW, and the national electrical code, including the state rules as adopted pursuant to chapter 19.28 RCW and published by the national fire protection association.

The department shall set a schedule of fees which will cover the costs incurred by the department in the administration and enforcement of RCW 43.22.450 through 43.22.490. All fees collected shall be deposited into the state treasury to the credit of the construction industry administration account and administered in accordance with section 9 of this act.

Sec. 18. RCW 43.22.500 and 1979 ex.s. c 67 s 2 are each amended to read as follows:

The department of labor and industries, to defray the costs of printing, reprinting, or distributing printed matter issued by the department of labor and industries including, but not limited to, the matters listed in RCW 43.22.505, may charge a fee for ((~~such~~)) the publications in an amount which will reimburse the department for the costs of printing, reprinting, and distributing ((~~such~~)) the publications((~~: PROVIDED, That~~)). However, every person subject to regulation by the department may upon request receive without charge one copy per year of any publication printed pursuant to RCW 43.22.505 whenever such person is affected by any statute((,)) or rule ((~~or regulation~~)) printed therein. All fees collected shall be deposited in the state treasury to the credit of the ((~~appropriate fund or~~)) construction industry administration account and administered in accordance with section 9 of this act.

Sec. 19. RCW 84.36.400 and 1972 ex.s. c 125 s 3 are each amended to read as follows:

Any physical improvement to single family dwellings upon real property shall be exempt from taxation for the three assessment years subsequent to the completion of the improvement to the extent that the improvement represents thirty percent or less of the value of the original structure. A taxpayer desiring to obtain the exemption granted by this section must file notice of his or her intention to construct the improvement prior to the improvement being made on forms prescribed by the department of revenue and furnished to the taxpayer by the county assessor((~~: PROVIDED, That~~)). The notice must include the registration number, or license number if applicable, of the contractor or contractors the taxpayer has employed, or a notarized declaration under oath that the taxpayer is doing all the work of constructing the improvement under circumstances that meet the requirements of RCW 18.27.090(12). This taxation exemption may not be claimed if the taxpayer employs a person required to be registered under chapter 18.27 RCW, and who is not so registered. This exemption cannot be claimed more than once in a five-year period.

The department of revenue shall ((~~promulgate such~~)) adopt rules ((~~and regulations~~)) as ((~~are~~)) necessary and convenient to properly administer the provisions of this section.

NEW SECTION. Sec. 20. A new section is added to chapter 18.27 RCW to read as follows:

(1) The director or the director's designee may revoke, suspend, or refuse to issue or renew a certificate of registration if he or she determines after notice and opportunity for hearing:

(a) That the registrant or applicant has failed to meet or has violated the oath or affirmation made under RCW 18.27.030;

(b) That the insurance or surety bond requirements of this chapter is not currently in effect;

(c) That the registrant has knowingly assisted an unregistered person to act in violation of this chapter, which includes entering into a contract with an unregistered person to perform activities covered by this chapter;

(d) That the registrant or applicant has failed to pay in full a final judgment against him or her entered by a court of competent jurisdiction in a claim arising out of activities covered by this chapter; or

(e) That the registrant has performed work as a contractor without a construction permit where the permit was required, and the work resulted in damage to another, or created an unsafe condition. For the purposes of this section, "construction permit" includes a building permit, electrical permit, mechanical permit, or plumbing permit.

(2) In addition to other remedies, the director or the director's designee, through the attorney general or county prosecutor may apply to superior court for an injunction restraining a person from violating the provisions of this chapter.

(3) The hearing provided for in this section prior to revocation, suspension, or refusal to issue or renew a certificate of registration shall be conducted by an administrative law judge under chapter 34.05 RCW, part IV, with a right to judicial review as provided in chapter 34.05 RCW, part V.

Sec. 21. RCW 18.27.010 and 1993 c 454 s 2 are each amended to read as follows:

Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Contractor" means any person, firm or corporation who or which, in the pursuit of an independent business undertakes to, or offers to undertake, or submits a bid to, construct, alter, repair, remodel, add to, subtract from, improve, move, wreck or demolish, for another, any building, highway, road, railroad, excavation or other structure, project, development, or improvement attached to real estate or to do any part thereof including the installation of carpeting or other floor covering, the erection of scaffolding or other structures or works in connection therewith or who installs or repairs roofing or siding; or, who, to do similar work upon his own property, employs members of more than one trade upon a single job or project or under a single building permit except as otherwise provided herein.

(2) "General contractor" means a contractor whose business operations require the use of more than two unrelated building trades or crafts whose work the contractor shall superintend or do in whole or in part. "General contractor" shall not include an individual who does all work personally without employees or other "specialty contractors" as defined herein. The terms "general contractor" and "builder" are synonymous.

(3) "Specialty contractor" means a contractor whose operations as such do not fall within the foregoing definition of "general contractor".

(4) "Department" means the department of labor and industries.

(5) "Director" means the director of the department of labor and industries.

(6) "Verification" means the receipt and duplication by the city, town, or county of a contractor registration card that is current on its face, or checking the department's contractor registration base.

Sec. 22. RCW 18.27.050 and 1987 c 303 s 1 are each amended to read as follows:

(1) At the time of registration and subsequent reregistration, the applicant shall furnish insurance or financial responsibility in the form of an assigned account in the amount of ((~~twenty~~)) fifty thousand dollars for injury or damages to property, and ((~~fifty~~)) one hundred thousand dollars for injury or damage including death to any one person, and ((~~one~~)) two hundred thousand dollars for injury or damage including death to more than one person or financial responsibility to satisfy these amounts.

(2) Failure to maintain insurance or financial responsibility relative to the contractor's activities shall be cause to suspend or deny the contractor his or her or their registration.

(3)(a) Proof of financial responsibility authorized in this section may be given by providing, in the amount required by subsection (1) of this section, an assigned account acceptable to the department. The assigned account shall be held by the department to satisfy any execution on a judgment issued against the contractor for damage to property or injury or death to any person occurring in the contractor's contracting operations, according to the provisions of the assigned account agreement. The department shall have no liability for payment in excess of the amount of the assigned account.

(b) The assigned account filed with the director as proof of financial responsibility shall be canceled at the expiration of three years after:

(i) The contractor's registration has expired or been revoked; or

(ii) The contractor has furnished proof of insurance as required by subsection (1) of this section;

if, in either case, no legal action has been instituted against the contractor or on the account at the expiration of the three-year period.

(c) If a contractor chooses to file an assigned account as authorized in this section, the contractor shall, on any contracting project, notify each person with whom the contractor enters into a contract or to whom the contractor submits a bid that the contractor has filed an assigned account in lieu of insurance and that recovery from the account for any claim against the contractor for property damage or personal injury or death occurring in the project requires the claimant to obtain a court judgment.

NEW SECTION. Sec. 23. This act shall take effect July 1, 1994.