Introduced Version Senate Bill 266 History

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Senate Bill No. 266

(By Senators Hunter, Minard, White, McKenzie and Dempsey)


[Introduced February 23, 2005; referred to the Committee

on Government Organization; and then to the Committee on the Judiciary.]


A BILL to amend and reenact §21-11-4, §21-11-5, §21-11-7, §21-11-10 and §21-11-14 of the Code of West Virginia, 1931, as amended; and to amend said code by adding thereto a new section, designated §21-11-21, all relating to licensed contractors; increasing the membership of the West Virginia Contractor's Licensing Board; individuals eligible to take examination; additional information requested from applicants; presumption in disputes without written contract; criteria for rejecting license application or renewal; and proof of license prerequisite to civil action.

Be it enacted by the Legislature of West Virginia:

That §21-11-4, §21-11-5, §21-11-7, §21-11-10 and §21-11-14 of the Code of West Virginia, 1931, as amended, be amended and reenacted; and that said code be amended by adding thereto a new
section, designated §21-11-21, all to read as follows:

§21-11-4. West Virginia Contractor Licensing Board created; members; appointment; terms; vacancies; qualifications; quorum

(a) The West Virginia Contractor Licensing Board is continued. The Board shall consist of ten eleven members appointed by the Governor by and with the advice and consent of the Senate for terms of four years. The eleven appointed Such members shall serve until their successors are appointed and have qualified. Eight of the appointed members shall be owners of businesses engaged in the various contracting industries, with at least one member appointed from each of the following contractor classes: One electrical contractor, one general building contractor, one general engineering contractor, one heating, ventilating and cooling contractor, one multifamily contractor, one piping contractor, one plumbing contractor and one residential contractor, as defined in section three hereof. Two of the appointed members shall be building code officials who are not members of any contracting industry. One of the appointed members shall be a person who by reason of previous training or experience may reasonably be said to represent the viewpoint of consumers. At least three members of the Board shall reside at the time of their appointment in each congressional district as existing on the first day of January, one thousand nine hundred ninety-eight. The Commissioner of Labor, the Secretary of the Department of Tax and Revenue or his or her designee, and the Commissioner of the Bureau of Employment Programs or his or her designee shall be ex officio nonvoting members of the Board.
(b) Terms of the members first appointed shall be two members for one year, two members for two years, three members for three years and three members for four years, as designated by the Governor at the time of appointment. Thereafter, terms shall be for four years. A member who has served all or part of two consecutive terms shall not be subject to reappointment unless four years have elapsed since the member last served. Vacancies shall be filled by appointment by the Governor for the unexpired term of any member whose office is vacant and shall be made within sixty days of the occurrence of the vacancy. A vacancy on the Board shall not impair the right of the remaining members to exercise all the powers of the Board.
(c) The Board shall elect a chair from one of the voting members of the Board. The Board shall meet at least once annually and at such other times as called by the chair or a majority of the Board. Board members shall receive compensation not to exceed the amount paid to members of the Legislature for the interim duties as recommended by the Citizens Legislative Compensation Commission and authorized by law for each day or portion of a day spent attending meetings of the Board and shall be reimbursed for all reasonable and necessary expenses incurred incident to his or her duties as a member of the Board: Provided, That the compensation and expenses may not be paid for the one appointed member who by reason of previous training or experience may reasonably be said to represent the viewpoint of consumers. A majority of the members appointed shall constitute a quorum of the Board.
§21-11-5. Administrative duties of the Board.
(a) Pursuant to the provisions of chapter twenty-nine-a of this code, the Board shall adopt rules and regulations relating to the following:
(1) The minimum qualifications for applicants for examination and license in each of the following specified classes of contractor:
(A) Electrical contractor;
(B) General building contractor;
(C) General engineering contractor;
(D) Heating, ventilating and cooling contractor;
(E) Multifamily contractor;
(F) Piping contractor;
(G) Plumbing contractor;
(H) Residential contractor; or
(I) Specialty contractor;
The individual taking an examination on behalf of an entity seeking licensure shall be the owner, a partner, or a corporate officer of the entity.
(2) The content of examinations for applicants in each class;
(3) Procedures for application, examination and license renewal, and the manner in which the examination will be conducted;
(4) The continued competency of licensees for purposes of renewal and reinstatement of licenses; and
(5) Procedures for disciplinary action before the Board; and
(6) Procedures for the investigation and resolution of all complaints against persons licensed under this chapter.

(b) The Board shall:
(1) Hold at least one examination in each calendar quarter for each specific classification of contractor, designate the time and place of such examinations, and notify applicants thereof;
(2) Request, through the division, investigation of any alleged violation of this article or of the regulations;
(3) Forward results of examinations to the division within twenty days following the examination;
(4) Notify the Commissioner and Board members of meeting dates and agenda items at least five days prior to such meetings; and
(5) Take minutes and records of all meetings and proceedings.
§21-11-7. Application for and issuance of license.
(a) A person desiring to be licensed as a contractor under this article shall submit to the Board, in a form to be prescribed by the Board, the following information:
(1) The name, social security number and physical address of the applicant;
(2) The name, address and principal occupation:
(A) Of each person who, as a stockholder or otherwise, has a proprietary interest of ten percent or more in the applicant;
(B) Of each officer and director of a corporate applicant;
(C) Of each trustee and beneficiary of an applicant which is a trust; and
(D) Where a corporation has a proprietary interest of twenty-five percent or more in an applicant, the name, address and principal occupation of each officer and director of the corporation;
(3) Such additional information as the Board may require and as may be necessary to show that the applicant is in compliance with the standards for contractors as established by this article and the rules lawfully promulgated by the Board hereunder information.
a written application requesting licensure, providing the applicant's social security number and such other information as the board may require on forms supplied by the board The applicant shall pay a license fee not to exceed one hundred fifty dollars: Provided, That electrical contractors already licensed under section four, article three-b, chapter twenty-nine of this code shall pay no more than twenty dollars.
(b) A person holding a business registration certificate to conduct business in this state as a contractor on the thirtieth day of September, one thousand nine hundred ninety-one, may register with the Board, certify by affidavit the requirements of subsection (c), section fifteen of this article and pay such license fee not to exceed one hundred fifty dollars and shall be issued a contractor's license without further examination: Provided, That no license may be issued without examination pursuant to this subsection after the first day of April, two thousand two: Provided, however, That any person issued a contractor's license by the Board pursuant to this subsection may apply to the Board for transfer of the license to a new business entity in which the license holder is the principal owner, partner or corporate officer: Provided further, That a license holder may hold a license on behalf of only one business entity during a given time period. The Board may transfer the license issued pursuant to this subsection to the new business entity without requiring examination of the license holder.
§21-11-10. Prerequisites to obtaining building permit; mandatory written contracts.

(a) Any person making application to the building inspector or other authority of any incorporated municipality or other political subdivision in this state charged with the duty of issuing building or other permits for the construction of any building, highway, sewer or structure or for any removal of materials or earth, grading or improvement, shall, before issuance of the permit, either furnish satisfactory proof to the inspector or authority that such person is duly licensed under the provisions of this article to carry out or superintend the same, or file a written affidavit that such person is not subject to licensure as a contractor or subcontractor as defined in this article. The inspector or authority may not issue a building permit to any person who does not possess a valid contractor's license when required by this article.
(b) Effective the first day of October, two thousand two, no person licensed under the provisions of this article may perform contracting work of an aggregate value of ten thousand dollars or more, including materials and labor, without a written contract, setting forth a description and cost of the work to be performed, signed by the licensee and the person for whom the work is to be performed: Provided, That in a civil action in any court of the state involving a dispute as to the terms of an agreement for contracting services in an amount in excess of two thousand five hundred dollars, the person for whom the work is or was to be performed is entitled to a rebuttable legal presumption against the contractor as to the terms of the agreement when the contractor fails to execute a written contract. The presumption may be rebutted by clear and convincing evidence of the terms of the parties' agreement.
(c) On or before the first day of June, two thousand two, the Board shall file a procedural rule setting forth a standard contract form which meets the minimum requirements of this subsection for use by licensees. The Board shall post the contract form on its website and shall assist licensees in the correct completion of the form. On or before the first day of August, two thousand two, the Board shall mail a written notice of the requirements imposed by the rule to each licensed contractor at the address provided to the Board by the contractor on his or her last application for licensure or renewal.
§21-11-14. Disciplinary powers of the Board.
(a) The Board has the power and authority to impose the following disciplinary actions:
(1) Permanently revoke a license;
(2) Suspend a license for a specified period;
(3) Censure or reprimand a licensee;
(4) Impose limitations or conditions on the professional practice of a licensee;
(5) Impose requirements for remedial professional education to correct deficiencies in the education, training and skill of a licensee;
(6) Impose a probationary period requiring a licensee to report regularly to the Board on matters related to the grounds for probation; the Board may withdraw probationary status if the deficiencies that require the sanction are remedied; and
(7) Order a contractor who has been found, after hearing, to have violated any provision of this article or the rules of the Board to provide, as a condition of licensure, assurance of financial responsibility. The form of financial assurance may include, but is not limited to, a surety bond, a cash bond, a certificate of deposit, an irrevocable letter of credit or performance insurance: Provided, That the amount of financial assurance required under this subdivision may not exceed the total of the aggregate amount of the judgments or liens levied against the contractor or the aggregate value of any corrective work ordered by the Board or both: Provided, however, That the Board may remove this requirement for licensees against whom no complaints have been filed for a period of five continuous years.
(b) No license issued under the provisions of this article may be suspended or revoked without a prior hearing before the Board: Provided, That the Board may summarily suspend a licensee pending a hearing or pending an appeal after hearing upon a determination that the licensee poses a clear, significant and immediate danger to the public health and safety.
(c) The Board may reinstate the suspended or revoked license of a person, if, upon a hearing, the Board finds and determines that the person is able to practice with skill and safety.
(d) The Board may accept the voluntary surrender of a license: Provided, That the license may not be reissued unless the Board determines that the licensee is competent to resume practice and the licensee pays the appropriate renewal fee.
(e) A person or contractor adversely affected by disciplinary action may appeal to the Board within sixty days of the date the disciplinary action is taken. The Board shall hear the appeal within thirty days from receipt of notice of appeal in accordance with the provisions of chapter twenty-nine-a of this code. Hearings shall be held in Charleston. The Board may retain a hearing examiner to conduct the hearings and present proposed findings of fact and conclusions of law to the Board for its action.
(f) Any party adversely affected by any action of the Board may appeal that action in either the circuit court of Kanawha County, West Virginia, or in the circuit court of the county in which the petitioner resides or does business, within thirty days after the date upon which the petitioner received notice of the final order or decision of the Board.
(g) The following are causes for disciplinary action:
(1) Abandonment, without legal excuse, of any construction project or operation engaged in or undertaken by the licensee;
(2) Willful failure or refusal to complete a construction project or operation with reasonable diligence, thereby causing material injury to another;
(3) Willful departure from or disregard of plans or specifications in any material respect without the consent of the parties to the contract;
(4) Willful or deliberate violation of the building laws or regulations of the state or of any political subdivision thereof;
(5) Willful or deliberate failure to pay any moneys when due for any materials free from defect, or services rendered in connection with the person's operations as a contractor when the person has the capacity to pay or when the person has received sufficient funds under the contract as payment for the particular construction work for which the services or materials were rendered or purchased, or the fraudulent denial of any amount with intent to injure, delay or defraud the person to whom the debt is owed;
(6) Willful or deliberate misrepresentation of a material fact by an applicant or licensee in obtaining a license, or in connection with official licensing matters;
(7) Willful or deliberate failure to comply in any material respect with the provisions of this article or the rules of the Board;
(8) Willfully or deliberately acting in the capacity of a contractor when not licensed or as a contractor by a person other than the person to whom the license is issued except as an employee of the licensee;
(9) Willfully or deliberately acting with the intent to evade the provisions of this article by: (i) Aiding or abetting an unlicensed person to evade the provisions of this article; (ii) combining or conspiring with an unlicensed person to perform an unauthorized act; (iii) allowing a license to be used by an unlicensed person; or (iv) attempting to assign, transfer or otherwise dispose of a license or permitting the unauthorized use thereof;
(10) Engaging in any willful, fraudulent or deceitful act in the capacity as a contractor whereby substantial injury is sustained by another;
(11) Performing work which is not commensurate with a general standard of the specific classification of contractor or which is below a building or construction code adopted by the municipality or county in which the work is performed;
(12) Knowingly employing a person or persons who do not have the legal right to be employed in the United States;
(13) Failing to execute written contracts prior to performing contracting work, in accordance with section ten of this article; or
(14) Failing to abide by an order of the Board.
(h) In all disciplinary hearings the Board has the burden of proof as to all matters in contention. No disciplinary action may be taken by the Board except on the affirmative vote of at least six members thereof. Other than as specifically set out herein, the Board has no power or authority to impose or assess damages.
(i) On or before the first day of January, two thousand one, the board shall propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code which shall specify a procedure for the investigation and resolution of all complaints against persons licensed under this chapter.
(1) No license may be granted or renewed to an applicant for a license if the individual sole owner of the applicant, or if a partner, corporate officer or owner of record, or beneficiary of ten percent or more of any class of stock of the applicant, was an individual sole owner of a contractor, or a partner, corporate officer or owner of record, or beneficiary of ten percent or more, of any class of stock of a contractor that:
(A) Had its license permanently revoked;
(B) Has its license suspended;
(C) Failed to comply with a disciplinary order of the Board authorized by subsection (a) of this section; or
(D) Failed to satisfy a valid judgment issued by a court of competent jurisdiction for an act, representation, transaction or conduct which is in violation of this article or the rules adopted pursuant to this article:
Provided, That for the purposes of this section, a judgment is satisfied if the contractor has entered into an agreement to make periodic payments to satisfy the judgment and is current on those payments.
§21-11-21. Proof of license as prerequisite to civil action.
No contractor may act as an agent or commence or maintain any action in any court of this state for compensation based on the performance of any act for which a license is required by this article, without demonstrating that the contracting party whose contract gives rise to the claim, was a duly licensed contractor when the contract sued upon was entered, and when the alleged cause of action arose.

NOTE: The bill increases the composition of the Contractor's Licensing Board by adding a consumer advocate. Additionally, it makes it more difficult for a contractor whose license has been revoked, suspended or who has otherwise been disciplined, to obtain another license. The bill creates a rebuttable presumption against contractors who do not execute a written contract for contracting services in excess of $2,500 when there is a dispute as to the terms of a contract. Finally, the bill requires a contractor to provide proof of a contractor license as a prerequisite to maintaining a claim for the performance of any act for which a license is required.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.

§21-11-21 is new; therefore, strike-throughs and underscoring have been omitted.
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