2012 -- S 2341

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LC01279

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

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A N A C T

RELATING TO BUSINESSES AND PROFESSIONS -- CONTRACTORS' REGISTRATION

BOARD

     Introduced By: Senators McCaffrey, Goodwin, Jabour, Doyle, and Miller

     Date Introduced: February 07, 2012

     Referred To: Senate Labor

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 5-65-10 of the General Laws in Chapter 5-65 entitled "Contractors'

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Registration and Licensing Board" is hereby amended to read as follows:

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     5-65-10. Grounds for discipline -- Injunctions. -- (a) The board or commission may

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revoke, suspend, or refuse to issue, reinstate, or reissue a certificate of registration if the board or

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commission determines after notice and opportunity for a hearing:

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      (1) That the registrant or applicant has violated section 5-65-3.

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      (2) That the insurance required by section 5-65-7 is not currently in effect.

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      (3) That the registrant, licensee or applicant has engaged in conduct as a contractor that

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is dishonest or fraudulent that the board finds injurious to the welfare of the public.

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      (4) Has violated a rule or order of the board.

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      (5) That the registrant has knowingly assisted an unregistered person to act in violation

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of this chapter.

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      (6) That a lien was filed on a structure under chapter 28 of title 34 because the registrant

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or applicant wrongfully failed to perform a contractual duty to pay money to the person claiming

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the lien.

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      (7) That the registrant has substantially violated state or local building codes.

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      (8) That the registrant has made false or fraudulent statements on his or her application.

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      (9) That a registrant has engaged in repeated acts in violation of this chapter and the

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board's rules and regulations inclusive of substandard workmanship and any misuse of

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registration.

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      (10) The board may take disciplinary action against a contractor who performed work or

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arranged to perform, while the registration was suspended, invalidated or revoked. Deposits

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received by a contractor and ordered returned are not considered a monetary award when no

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services or supplies have been received.

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      (11) That the registrant breached a contract.

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      (12) That the registrant performed negligent and/or improper work.

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      (13) That the registrant has advertised with a license number instead of using a

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registration number.

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      (14) That the registrant has failed to complete a project(s) for construction or a willful

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failure to comply with the terms of a contract or written warranty.

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      (15) That the registrant has misrepresented his registration status as valid when said

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registration is suspended, revoked, invalidated, inactive or unregistered as required by the board.

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      (16) That the registrant has failed to pay a fine or comply with any order issued by the

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board.

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      (17) That the registrant has failed to obtain or maintain the required continuing

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education/units required by the board, or failed to sign the affidavit required by the board for

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registration or renewal.

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      (18) When a violation for hiring a non-registered contractor, working as a non-registered

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contractor, or not maintaining the insurance required is issued, the registration may become

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invalidated until the violation is resolved or hearing is requested on this offense.

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     (19) That the registrant has violated any of the provisions of chapters 25-3, 28-3, 28-12,

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28-14, 28-36, 28-50, and/or 37-13. A finding that the registrant has violated any of the foregoing

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provisions in this subdivision (19) is not grounds for imposition of a monetary penalty under

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subsection (c) below.

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      (b) In addition to all other remedies, when it appears to the board that a person has

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engaged in, or is engaging in, any act, practice or transaction which violates the provisions of this

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chapter, the board may direct the attorney general to apply to the court for an injunction

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restraining the person from violating the provisions of this chapter. An injunction shall not be

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issued for failure to maintain the list provided for in section 5-65-3(h) unless the court determines

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that the failure is intentional.

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      (c) (1) For each first violation of a particular section of this chapter or any rule or

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regulation promulgated by the board, a fine not to exceed five thousand dollars ($5,000) may be

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imposed after a hearing by the board. Provided, further, that the board at its discretion may, after

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a hearing, impose an additional fine up to but not to exceed the face value of the contract or the

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actual damages caused by the contractor, whichever shall be greater. Where the claim is for actual

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damages the board shall require proof satisfactory to the board indicating said damages. Where

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corrective work is completed as ordered by the board, the fine assessed may be reduced as

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determined by the board. Fines and decisions on claims or violations inclusive of monetary

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awards can be imposed against registered as well as contractors required to be registered by the

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board.

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      (2) For each subsequent violation of a particular subsection of this chapter or of a rule or

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regulation promulgated by the board, a fine not to exceed ten thousand dollars ($10,000) may be

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imposed after a hearing by the board. All fines collected by the board shall be deposited as

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general revenues until June 30, 2008 to be used to enforce the provisions of this chapter.

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Beginning July 1, 2008, all fines collected by the board shall be deposited into a restricted receipt

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account to be used to enforce the provisions of this chapter.

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      (3) For the first violation of section 5-65-3, only for non-registered contractors, a fine of

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up to five thousand dollars ($5,000) for a first offense and up to ten thousand dollars ($10,000)

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for each subsequent offense shall be imposed.

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      (d) The hearing officer, upon rendering a conclusion may require the registrant, in lieu of

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a fine, to attend continuing education courses as appropriate. Failure to adhere to the requirement

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could result in immediate revocation of registration.

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      (e) The expiration of a registration by operation of law or by order or decision of the

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board or a court, or the voluntary surrender of registration by the registrant, does not deprive the

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board of jurisdiction, an action or disciplinary proceeding against the registrant or to render a

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decision suspending or revoking a registration.

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      (f) In emergency situations, when a registrant is acting to the detriment of the health,

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welfare and safety of the general public, the board's executive director may revoke or suspend a

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registration without a hearing for just cause for a period of thirty (30) days.

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      (g) A registrant may petition the board to partially or completely expunge his or her

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record provided that notice of said expungment proceedings has been provided to the claimant

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who was the subject of the violation. For purposes of this subsection "notice" shall consist of a

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mailing to the last known address of the claimant and need not be actual notice.

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      (h) Any person or contractor, registered or not, who uses another contractor's

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registration, contractor's registration identification card, or allows another person to use their

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contractor's registration fraudulently in any way, will be subject to a fine not exceeding ten

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thousand dollars ($10,000).

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      (i) When the use of fraudulent advertising entices an individual to hire an unregistered

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contractor, a fine of up to ten thousand dollars ($10,000) may be imposed by the board.

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      (j) It shall be unlawful to retain a social security number or copy of the driver's license

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from a registrant by a building official as a condition of obtaining a permit.

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      (k) The board is further authorized upon certain findings or violations to:

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      (1) Put a lien on property held by a contractor.

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      (2) Take action on registrant when the continuing education requirements have failed to

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be attained as required in rules and regulations.

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      (3) When upon investigation a complaint reveals: serious code infractions; unsatisfied

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mechanic's liens; abandonment of a job for a substantial period of time without apparent cause; or

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any other conduct detrimental to the public, the board can double the fines.

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      (4) Suspend, revoke or refuse to issue, reinstate or reissue a certificate of registration to

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any registrant who has contracted, advertised, offered to contract or submitted a bid when the

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contractor's registration is suspended, revoked, invalidated or inactive or unregistered as required

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by the board.

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     (l) No person shall register as a contractor with the contractors' registration board for the

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purpose of deceiving or circumventing the registration process by enabling a person whose

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registration has been suspended or revoked to conduct business. Provided, further, that any person

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who, in good faith relies on the board or the contractor's registration website for information

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regarding registration status of another shall be exempt from violations pursuant to this section if

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the information is not correct. Violators of this section shall be jointly and individually liable for

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damages resulting from their activities as contractors pursuant to this chapter. Violations of this

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subsection may result in a revocation of registration and/or fines not to exceed ten thousand

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dollars ($10,000) and/or up to one year in jail. Furthermore, the director shall require that all

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applicants for registration shall swear by way of affidavit that they are aware of this provision and

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its implications.

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     (m) Upon receipt of notice of a final determination, after the exhaustion of all appeals, by

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the department of labor and training, consent agreement, or court order that a registered

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contractor violated any of the provisions of chapters 25-3, 28-3, 28-12, 28-14, 28-36, 28-50,

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and/or 37- 13 and owes any wages, benefits or other sums arising out of such violation, the board

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shall immediately suspend the contractor’s registration of such contractor in accordance with this

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subsection. The suspension shall continue until all wages, benefits, or other sums owed have been

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paid or the contractor has entered into a written, binding agreement to pay the same acceptable to

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the department of labor and training and is not in default in payment under such agreement. If the

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contractor fails to remain current in payment under any such agreement, the department of labor

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and training shall notify the contractors’ registration board and the suspension shall be imposed or

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reinstated as the case may be. The foregoing sanction is mandatory, but shall not be grounds for

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imposition of a monetary penalty under subsection (c) above.

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     (n) When the registration of a contractor has been revoked or suspended, neither the

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contractor nor any successor entity or sole proprietorship that: (1) Has one or more of the same

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principals or officers as the partnership, limited partnership, limited liability partnership, joint

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venture, limited liability company, corporation, or sole proprietorship as the subject contractor;

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and (2) Is engaged in the same or equivalent trade or activity shall be qualified to register or

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retain a registration as a contractor under this chapter, unless and until the board shall determine

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that the basis of the revocation or suspension has been satisfied or removed and that the registrant

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or applicant otherwise satisfies the requirements for registration under this chapter.

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Notwithstanding the foregoing, a natural person may obtain relief from the application and

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enforcement of this subsection as to him or her, if he or she can establish that he or she was not

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responsible for, was not aware of, and did not acquiesce to the misconduct which is the basis of

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the revocation, suspension or denial of registration.

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     SECTION 2. This act shall take effect upon passage.

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LC01279

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO BUSINESSES AND PROFESSIONS -- CONTRACTORS' REGISTRATION

BOARD

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     This act would expand the powers of the contractors’ registration and licensing board to

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discipline contractors who violate their rules.

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     This act would take effect upon passage.

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LC01279

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