AN ACT Relating to consumer protection
regarding contractors; amending RCW 18.27.010, 18.27.030, 18.27.040, 18.27.050,
18.27.090, 18.27.100, 18.27.114, 18.27.310, 18.27.320, and 18.27.075;
reenacting and amending RCW 18.27.060; adding new sections to chapter 18.27
RCW; and prescribing penalties.
Sec. 1. RCW 18.27.010 and 1997 c
314 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, 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 or
her 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.
"Contractor" includes any person, firm, ((or)) corporation,
or other entity covered by this subsection, whether or not registered as
required under this chapter.
(2) "Department" means the
department of labor and industries.
(3) "Director" means the director
of the department of labor and industries or designated representative employed
by the department.
(4) "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 in this section. The terms
"general contractor" and "builder" are synonymous.
(((3))) (5) "Partnership"
means a business formed under Title 25 RCW.
(6) "Registration cancellation"
means a written notice from the department that a contractor's action is in violation
of this chapter and that the contractor's registration has been revoked.
(7) "Registration suspension"
means a written notice from the department that a contractor's action is a
violation of this chapter and that the contractor's registration has been
suspended for a specified time, or until the contractor shows evidence of
compliance with this chapter.
(8) "Residential homeowner" means
an individual person or persons owning or leasing real property:
(a) Upon which one single-family residence
is to be built and in which the owner or lessee intends to reside upon
completion of any construction; or
(b) Upon which there is a single-family
residence to which improvements are to be made and in which the owner or lessee
intends to reside upon completion of any construction.
(9) "Specialty contractor"
means a contractor whose operations do not fall within the ((foregoing))
definition of "general contractor".
(((4))) (10) "Unregistered
contractor" means a person, firm, ((or)) corporation, or other
entity doing work as a contractor without being registered in compliance
with this chapter. "Unregistered contractor" includes contractors
whose registration is expired ((for more than thirty days beyond the renewal
date or has been)), revoked, or suspended. "Unregistered
contractor" does not include a contractor who has maintained a valid bond
and the insurance or assigned account required by RCW 18.27.050, and whose
registration has lapsed for thirty or fewer days.
(((5) "Department" means the
department of labor and industries.
(6) "Director" means the director of
the department of labor and industries.
(7))) (11) "Unsatisfied final judgment"
means a judgment that has not been satisfied either through payment, court
approved settlement, discharge in bankruptcy, or assignment under RCW
19.72.070.
(12) "Verification" means the
receipt and duplication by the city, town, or county of a contractor
registration card that is current on its face, checking the department's
contractor registration data base, or calling the department to confirm that
the contractor is registered.
Sec. 2. RCW 18.27.030 and 1998 c
279 s 3 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) Unified business identifier number, if
required by the department of revenue.
(c) Evidence of workers' compensation
coverage for the applicant's employees working in Washington, as follows:
(i) The applicant's industrial insurance
account number issued by the department;
(ii) The applicant's self-insurer number issued
by the department; or
(iii) For applicants domiciled in a state or
province of Canada subject to an agreement entered into under RCW 51.12.120(7),
as permitted by the agreement, filing a certificate of coverage issued by the
agency that administers the workers' compensation law in the applicant's state
or province of domicile certifying that the applicant has secured the payment
of compensation under the other state's or province's workers' compensation
law.
(((c))) (d) Employment security
department number.
(((d))) (e) State excise tax
registration number.
(((e))) (f) Unified business
identifier (UBI) account number may be substituted for the information required
by (((b))) (c) of this subsection if the applicant will not
employ employees in Washington, and by (((c))) (d) and (((d)))
(e) of this subsection.
(((f))) (g) Type of contracting
activity, whether a general or a specialty contractor and if the latter, the
type of specialty.
(((g))) (h) The name and address
of each partner if the applicant is a firm or partnership, or the name and
address of the owner if the applicant is an individual proprietorship, or the
name and address of the corporate officers and statutory agent, if any, if the applicant
is a corporation or the name and address of all members of other business
entities. The information contained in such application is a matter of
public record and open to public inspection.
(2) The department may verify the workers'
compensation coverage information provided by the applicant under subsection
(1)(((b))) (c) 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)(a) The department shall deny an
application for registration if: (i) The applicant has been previously
((registered)) performing work subject to this chapter as a sole
proprietor, partnership, ((or)) corporation, or other entity and the
department has notice that the applicant has an unsatisfied final judgment
against him or her in an action based on this chapter ((that was incurred
during a previous registration under this chapter)) or the applicant
owes the department money for penalties assessed or fees due under this chapter
as a result of a final judgment; (ii) the applicant was a principal or officer
of a partnership, corporation, or other entity that either has an unsatisfied
final judgment against it in an action that was incurred for work performed
subject to this chapter or owes the department money for penalties assessed or
fees due under this chapter as a result of a final judgment; or (iii) the
applicant does not have a valid unified business identifier number, if required
by the department of revenue.
(b) The department shall suspend an active
registration if (i) the department has notice that the registrant is a sole
proprietor or a principal or officer of a registered contractor that has an
unsatisfied final judgment against it for work within the scope of this
chapter; or (ii) the applicant does not maintain a valid unified business
identifier number, if required by the department of revenue.
(4) The department shall not deny an
application or suspend a registration because of an unsatisfied final judgment
if the applicant's or registrant's unsatisfied final judgment was determined by
the director to be the result of the fraud or negligence of another party.
Sec. 3. RCW 18.27.040 and 1997 c
314 s 5 are each amended to read as follows:
(1) Each applicant shall file with the
department a surety bond issued by a surety insurer who meets the requirements
of chapter 48.28 RCW in the sum of ((six)) twelve thousand
dollars if the applicant is a general contractor and ((four)) six
thousand dollars if the applicant is a specialty contractor. If no valid bond
is already on file with the department at the time the application is filed, a
bond must accompany the registration application. 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 automatically suspends the
registration issued to the registrant until a new bond or reinstatement notice
has been filed and approved as provided in this section. 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 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 July
1, 1997, 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)) At the time of
initial registration or renewal, 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 issue or renew the contractor's certificate of registration. Any
contractor registered as of July 1, 2001, who maintains that registration in
accordance with this chapter is in compliance with this chapter until the next
renewal of 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 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 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)) brought by a residential
homeowner for breach of contract by a party to the construction contract shall
be commenced by filing the summons and complaint with the clerk of the
appropriate superior court within two years from the date the claimed contract
work was substantially completed or abandoned. Action upon the bond or deposit
brought by any other authorized party shall be commenced by filing the summons
and complaint with the clerk of the appropriate superior court within one year
from the date 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 substantially
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)) adopted by rule of not less than twenty dollars to
cover the ((handling)) costs shall be served by registered or certified
mail, or other delivery service requiring notice of receipt, 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. 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 the registrant's application and to the
surety within ((forty-eight hours)) two days 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 and claims of laborers,
including employee benefits;
(b) Claims for breach of contract by a party to
the construction contract;
(c) Registered or licensed subcontractors,
material, and equipment;
(d) Taxes and contributions due the state of
Washington;
(e) Any court costs, interest, and attorney's
fees plaintiff may be entitled to recover. The surety is not liable for any
amount in excess of the penal limit of its bond.
A payment made by the surety in good faith
exonerates the bond to the extent of any payment made by the surety.
(5) The total amount paid from a bond or
deposit required of a general contractor by this section to claimants other
than residential homeowners must not exceed one-half of the bond amount. The
total amount paid from a bond or deposit required of a specialty contractor by
this section to claimants other than residential homeowners must not exceed
one-half of the bond amount or four thousand dollars, whichever is greater.
(6) The prevailing party in an action filed
under this section against the contractor and contractor's bond or deposit, for
breach of contract by a party to a construction contract, is entitled to costs,
interest, and reasonable attorneys' fees. The surety upon the bond is not
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.
(7) If a final judgment impairs the
liability of the surety upon the bond so furnished that there ((shall not be))
is not in effect a bond ((undertaking)) in the full amount
prescribed in this section, ((the department shall suspend)) the registration
of the contractor is automatically suspended until the bond liability in
the required amount unimpaired by unsatisfied judgment claims is furnished. ((If
the bond becomes fully impaired, a new bond must be furnished at the rates
prescribed by this section.
(6))) (8) 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.
(((7))) (9) 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 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))) (10) The director may require
an applicant applying to renew or reinstate a registration or applying for a
new registration to file a bond of up to three times the normally required
amount, if the director determines that an applicant, or a previous
registration of a corporate officer, owner, or partner of a current applicant,
has had in the past five years a total of six final judgments in actions under
this chapter involving a residential single-family dwelling on two or more
different structures.
(11) The director may adopt rules
necessary for the proper administration of the security.
Sec. 4. 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.)) An
expiration, cancellation, or revocation of the insurance policy or withdrawal
of the insurer from the insurance policy automatically suspends the
registration issued to the registrant until a new insurance policy or
reinstatement notice has been filed and approved as provided in this section.
(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.
Sec. 5. RCW 18.27.060 and 1997 c
314 s 6 and 1997 c 58 s 817 are each reenacted and amended to read as follows:
(1) A certificate of registration shall be
valid for ((one)) two years and shall be renewed on or
before the expiration date. The department shall issue to the applicant a
certificate of registration upon compliance with the registration requirements
of this chapter.
(2) If the department approves an application,
it shall issue a certificate of registration to the applicant. ((The
certificate shall be valid for:
(a) One year;
(b) Until the bond expires; or
(c) Until the insurance expires, whichever
comes first. The department shall place the expiration date on the
certificate.
(3) A contractor may supply a short-term bond
or insurance policy to bring its registration period to the full one year.
(4))) (3) If a contractor's surety bond or
other security has an unsatisfied judgment against it or is canceled, or if the
contractor's insurance policy is canceled, the contractor's registration shall
be automatically suspended on the effective date of the impairment or
cancellation. The department shall mail notice of the suspension to the
contractor's address on the certificate of registration by certified and by
first class mail within ((forty-eight hours)) two days after
suspension.
(((5))) (4) Renewal of
registration is valid on the date the department receives the required fee and
proof of bond and liability insurance, if sent by certified mail or other means
requiring proof of delivery. The receipt or proof of delivery shall serve as
the contractor's proof of renewed registration until he or she receives
verification from the department.
(((6))) (5) The department shall
immediately suspend the certificate of registration of a contractor who has
been certified by the department of social and health services as a person who
is not in compliance with a support order or a residential or visitation order
as provided in RCW 74.20A.320. The certificate of registration shall not be
reissued or renewed unless the person provides to the department a release from
the department of social and health services stating that he or she is in
compliance with the order and the person has continued to meet all other
requirements for certification during the suspension.
NEW SECTION. Sec. 6. A new section is added to
chapter 18.27 RCW to read as follows:
(1) If an unregistered contractor defaults in a
payment, penalty, or fine due to the department, the director or the director's
designee may issue a notice of assessment certifying the amount due. The
notice must be served upon the unregistered contractor by mailing the notice to
the unregistered contractor by certified mail to the unregistered contractor's
last known address or served in the manner prescribed for the service of a
summons in a civil action.
(2) A notice of assessment becomes final thirty
days from the date the notice was served upon the unregistered contractor
unless a written request for reconsideration is filed with the department or an
appeal is filed in a court of competent jurisdiction in the manner specified in
RCW 34.05.510 through 34.05.598. The request for reconsideration must set
forth with particularity the reason for the unregistered contractor's request.
The department, within thirty days after receiving a written request for
reconsideration, may modify or reverse a notice of assessment, or may hold a
notice of assessment in abeyance pending further investigation. If a final
decision of a court in favor of the department is not appealed within the time
allowed by law, then the amount of the unappealed assessment, or such amount of
the assessment as is found due by the final decision of the court, is final.
(3) The director or the director's designee may
file with the clerk of any county within the state, a warrant in the amount of
the notice of assessment, plus interest, penalties, and a filing fee of twenty
dollars. The clerk of the county in which the warrant is filed shall
immediately designate a superior court cause number for the warrant, and the
clerk shall cause to be entered in the judgment docket under the superior court
cause number assigned to the warrant, the name of the unregistered contractor
mentioned in the warrant, the amount of payment, penalty, fine due on it, or
filing fee, and the date when the warrant was filed. The aggregate amount of
the warrant as docketed shall become a lien upon the title to, and interest in,
all real and personal property of the unregistered contractor against whom the
warrant is issued, the same as a judgment in a civil case docketed in the
office of the clerk. The sheriff shall proceed upon the warrant in all
respects and with like effect as prescribed by law with respect to execution or
other process issued against rights or property upon judgment in a court of
competent jurisdiction. The warrant so docketed is sufficient to support the
issuance of writs of garnishment in favor of the state in a manner provided by
law in case of judgment, wholly or partially unsatisfied. The clerk of the
court is entitled to a filing fee which will be added to the amount of the
warrant. A copy of the warrant shall be mailed to the unregistered contractor
within three days of filing with the clerk.
(4) The director or the director's designee may
issue to any person, firm, corporation, other entity, municipal corporation,
political subdivision of the state, a public corporation, or any agency of the
state, a notice and order to withhold and deliver property of any kind
whatsoever when he or she has reason to believe that there is in the possession
of the person, firm, corporation, other entity, municipal corporation,
political subdivision of the state, public corporation, or agency of the state,
property that is or will become due, owing, or belonging to an unregistered
contractor upon whom a notice of assessment has been served by the department
for payments, penalties, or fines due to the department. The effect of a
notice and order is continuous from the date the notice and order is first made
until the liability out of which the notice and order arose is satisfied or
becomes unenforceable because of lapse of time. The department shall release
the notice and order when the liability out of which the notice and order arose
is satisfied or becomes unenforceable by reason of lapse of time and shall
notify the person against whom the notice and order was made that the notice
and order has been released.
The notice and order to withhold and deliver
must be served by the sheriff of the county or by the sheriff's deputy, by
certified mail, return receipt requested, or by an authorized representative of
the director. A person, firm, corporation, other entity, municipal
corporation, political subdivision of the state, public corporation, or agency
of the state upon whom service has been made shall answer the notice within
twenty days exclusive of the day of service, under oath and in writing, and shall
make true answers to the matters inquired of in the notice and order. Upon
service of the notice and order, if the party served possesses any property
that may be subject to the claim of the department, the party shall promptly
deliver the property to the director or the director's authorized
representative. The director shall hold the property in trust for application
on the unregistered contractor's indebtedness to the department, or for return
without interest, in accordance with a final determination of a petition for
review. In the alternative, the party shall furnish a good and sufficient
surety bond satisfactory to the director conditioned upon final determination
of liability. If a party served and named in the notice fails to answer the
notice within the time prescribed in this section, the court may render
judgment by default against the party for the full amount claimed by the
director in the notice, together with costs. If a notice is served upon an
unregistered contractor and the property subject to it is wages, the
unregistered contractor may assert in the answer all exemptions provided for by
chapter 6.27 RCW to which the wage earner is entitled.
(5) In addition to the procedure for collection
of a payment, penalty, or fine due to the department as set forth in this
section, the department may recover civil penalties imposed under this chapter
in a civil action in the name of the department brought in a court of competent
jurisdiction of the county where the violation is alleged to have occurred.
Sec. 7. RCW 18.27.090 and 1997 c
314 s 8 are each amended to read as follows:
The registration provisions of this
chapter ((does)) do 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)) that
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 registered
under this chapter)) performed by the registered or legal owner, 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
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, except that this exemption shall not deprive the
owner of the protections of this chapter against registered and unregistered
contractors;
(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 personal 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;
(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 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 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 with wages as his or her sole
compensation;
(16) Contractors on highway projects who have
been prequalified as required by RCW 47.28.070, with the department of
transportation to perform highway construction, reconstruction, or maintenance
work;
(17) A mobile/manufactured home dealer or
manufacturer who subcontracts the installation, set-up, or repair work to
actively registered contractors. This exemption only applies to the
installation, set-up, or repair of the mobile/manufactured homes that were
manufactured or sold by the mobile/manufactured home dealer or manufacturer.
Sec. 8. RCW 18.27.100 and 1997 c
314 s 9 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) All advertising that shows the
contractor's name or address shall show the contractor's current registration
number. The registration number may be omitted in an alphabetized listing of
registered contractors stating only the name, address, and telephone number:
PROVIDED, That 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 (3)(a).
(b) The director may issue a subpoena to any
person or entity selling any advertising subject to this section for the name,
address, and telephone number provided to the seller of the advertising by the
purchaser of the advertising. The subpoena must have enclosed a stamped,
self-addressed envelope and blank form to be filled out by the seller of the
advertising. If the seller of the advertising has the information on file, the
seller shall, within a reasonable time, return the completed form to the
department. The subpoena must be issued ((before forty-eight hours)) no
more than two days after the expiration of the issue or publication
containing the advertising or after the broadcast of the advertising. The
good-faith compliance by a seller of advertising with a written request of the
department for information concerning the purchaser of advertising shall
constitute a complete defense to any civil or criminal action brought against
the seller of advertising arising from such compliance. Advertising by airwave
or electronic transmission is subject to this subsection (3)(b).
(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) A contractor shall not falsify a
registration number and use it, or use an expired registration number, 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) Any advertising by a person, firm, or
corporation soliciting work as a contractor when that person, firm, or
corporation is not registered pursuant to this chapter is a violation of this
chapter.
(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)) ten 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. 9. RCW 18.27.114 and 1997 c
314 s 12 are each amended to read as follows:
(1) 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 in substantially the following form using lower case and upper
case twelve-point and bold type where appropriate, 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. 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. 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."))
This contractor is registered with the state of
Washington, registration no. . . ., and has posted with the state a
bond or deposit of . . . . . for the purpose of satisfying
claims against the contractor for breach of contract including negligent or
improper work in the conduct of the contractor's business. The expiration date
of this contractor's registration is . . . . ..
THIS BOND OR DEPOSIT MIGHT NOT BE SUFFICIENT TO COVER A
CLAIM THAT MIGHT ARISE FROM THE WORK DONE UNDER YOUR CONTRACT.
This bond or deposit is not for your exclusive use
because it covers all work performed by this contractor. The bond or deposit
is intended to pay valid claims up to . . . . . that you
and other customers, suppliers, subcontractors, or taxing authorities may have.
FOR GREATER PROTECTION YOU MAY WITHHOLD A PERCENTAGE OF
YOUR CONTRACT.
You may withhold a contractually defined percentage of
your construction contract as retainage for a stated period of time to provide
protection to you and help insure that your project will be completed as
required by your contract.
YOUR PROPERTY MAY BE LIENED.
If a supplier of materials used in your construction
project or an employee or subcontractor of your contractor or subcontractors is
not paid, your property may be liened to force payment and you could pay twice
for the same work.
FOR 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 state Department of Labor and
Industries."
(2)
A contractor subject to this section shall notify any consumer to whom notice
is required under subsection (1) 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.
(3)
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) of this
section.
(4)
This section does not apply to contracts authorized under chapter 39.04 RCW or
to contractors contracting with other contractors.
(5)
Failure to comply with this section shall constitute an infraction under the
provisions of this chapter.
(6)
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.
10. RCW
18.27.310 and 1993 c 454 s 10 are each amended to read as follows:
(1)
The administrative law judge shall conduct contractors' notice of infraction
cases pursuant to chapter 34.05 RCW.
(2)
The burden of proof is on the department to establish the commission of the
infraction by a preponderance of the evidence. The notice of infraction shall
be dismissed if the defendant establishes that, at the time the ((notice was
issued)) work was performed, the defendant was registered by the
department, without suspension, or was exempt from registration.
(3)
After consideration of the evidence and argument, the administrative law judge
shall determine whether the infraction was committed. If it has not been
established that the infraction was committed, an order dismissing the notice
shall be entered in the record of the proceedings. If it has been established
that the infraction was committed, the administrative law judge shall issue
findings of fact and conclusions of law in its decision and order determining
whether the infraction was committed.
(4)
An appeal from the administrative law judge's determination or order shall be
to the superior court. The decision of the superior court is subject only to
discretionary review pursuant to Rule 2.3 of the Rules of Appellate Procedure.
Sec.
11. RCW
18.27.320 and 1993 c 454 s 11 are each amended to read as follows:
The
administrative law judge shall dismiss the notice of infraction at any time
upon written notification from the department that the contractor named in the
notice of infraction was registered, without suspension, at the time the ((notice
of infraction was issued)) work was performed.
NEW
SECTION. Sec. 12. A
new section is added to chapter 18.27 RCW to read as follows:
(1)
The department shall use reasonable means, including working cooperatively with
construction industry, financial institution, local government, consumer,
media, and other interested organizations and individuals, to increase:
(a)
Consumer awareness of the requirements of this chapter and the methods
available to consumers to protect themselves against loss; and
(b)
Contractor awareness of the obligations imposed on contractors by this chapter.
(2)
The department shall accomplish the tasks listed in this section within
existing resources, including but not limited to fees charged under RCW
18.27.075.
NEW
SECTION. Sec. 13. A
new section is added to chapter 18.27 RCW to read as follows:
(1)
The legislature finds that it is contrary to public policy to allow unregistered
contractors to continue doing business illegally.
(2)
The department of labor and industries, the employment security department, and
the department of revenue shall establish an unregistered contractors
enforcement team. The team shall develop a written plan to coordinate the
activities of the participating agencies to enforce the state's contractor
registration laws and rules and other state laws and rules deemed appropriate
by the team. In developing the plan, the team shall seek the input and advice
of interested stakeholders who support the work of the team.
(3)
The director or the director's designee shall call the initial meeting of the
unregistered contractors enforcement team by September 1, 2001. The team shall
complete the plan and forward it to the appropriate standing committees of the
legislature and to the departments that contribute members to the team by
December 1, 2001.
(4)
The department of labor and industries, the employment security department, and
the department of revenue shall accomplish the tasks listed in this section
within existing resources, including but not limited to fees charged under RCW
18.27.075.
Sec.
14. RCW
18.27.075 and 1983 c 74 s 2 are each amended to read as follows:
The department ((may not set)) shall charge a fee ((higher
than fifty)) of one hundred dollars for issuing or renewing a
certificate of registration during the 2001-2003 biennium. The department
shall revise this amount at least once every two years for the purpose of
recognizing economic changes as reflected by the fiscal growth factor under
chapter 43.135 RCW.
