June 22, 2005, Introduced by Senators CASSIS, BASHAM, BARCIA, THOMAS, BISHOP, LELAND, CHERRY, BIRKHOLZ, EMERSON and TOY and referred to the Committee on Economic Development, Small Business and Regulatory Reform.
A bill to amend 1980 PA 299, entitled
"Occupational code,"
by amending sections 601, 602, 605, 2402, 2404, 2405, and 2411 (MCL
339.601, 339.602, 339.605, 339.2402, 339.2404, 339.2405, and
339.2411), section 601 as amended by 1998 PA 250, section 602 as
amended by 1981 PA 83, section 2404 as amended by 1988 PA 463, and
section 2411 as amended by 2001 PA 113, and by adding sections
2404a and 2411a.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 601. (1) A person shall not engage in or attempt to
engage in the practice of an occupation regulated under this act or
use a title designated in this act unless the person possesses a
license or registration issued by the department for the
occupation.
(2) A school, institution, or person shall not operate or
attempt to operate a barber college, school of cosmetology, or real
estate school unless the school, institution, or person is licensed
or approved by the department.
(3) A person, school, or institution which violates subsection
(1) or (2) is guilty of a misdemeanor, punishable by a fine of not
more than $500.00, or imprisonment for not more than 90 days, or
both. (4)
A person, school, or institution which violates
subsection (1) or (2) a second or any subsequent time is guilty of
a misdemeanor, punishable, except as provided in section 735, by a
fine of not more than $1,000.00, or imprisonment for not more than
1 year, or both.
(4) Notwithstanding subsection (3), a person not licensed
under article 24 as a residential builder or a residential
maintenance and alteration contractor who violates subsection (1)
or (2) is guilty of a misdemeanor punishable by imprisonment for
not less than 93 days or more than 1 year or a fine of not less
than $5,000.00 or more than $25,000.00, or both.
(5) Notwithstanding the existence and pursuit of any other
remedy, an affected person may maintain injunctive action to
restrain or prevent a person from violating subsection (1) or (2).
If successful in obtaining injunctive relief, the affected person
shall
be is entitled to actual costs and attorney fees.
(6) Nothing
in this This act shall does
not apply to a
person engaging in or practicing the following:
(a) Interior design.
(b) Building design.
(c)
Any activity for which the person is licensed under 1929
PA
266, MCL 338.901 to 338.917 the
state plumbing act, 2002 PA
733, MCL 338.3511 to 338.3569.
(d) Any activity for which the person is licensed under the
Forbes mechanical contractors act, 1984 PA 192, MCL 338.971 to
338.988.
(e) Any activity for which the person is licensed under the
electrical administrative act, 1956 PA 217, MCL 338.881 to 338.892.
(7) As used in subsection (5), "affected person" means a
person directly affected by the actions of a person suspected of
violating subsection (1) or (2) and includes, but is not limited
to, a board established pursuant to this act, a person who has
utilized the services of the person engaging in or attempting to
engage in an occupation regulated under this act or using a title
designated by this act without being licensed or registered by the
department, or a private association composed primarily of members
of the occupation in which the person is engaging in or attempting
to engage in or in which the person is using a title designated
under this act without being registered or licensed by the
department.
(8) An investigation may be conducted under article 6 to
enforce this section. A person who violates this section shall be
subject to the strictures prescribed in this section and section
506.
(9) The remedies under this section are independent and
cumulative. The use of 1 remedy by a person shall not bar the use
of other lawful remedies by that person or the use of a lawful
remedy by another person.
(10) An interior designer may perform services in connection
with the design of interior spaces including preparation of
documents relative to finishes, systems furniture, furnishings,
fixtures, equipment, and interior partitions that do not affect the
building mechanical, structural, electrical, or fire safety
systems.
Sec. 602. A person, school, or institution which violates a
section of this act or a rule or order promulgated or issued under
this act shall be assessed 1 or more of the following penalties:
(a)
Placement of a limitation on a license or certificate of
registration
for an occupation regulated under articles 8 to 25
26.
(b)
Suspension of a license or certificate of registration.
(c)
Denial of a license, certificate of registration, or
renewal
of a license or certificate of registration.
(d) Revocation of a license or certificate of registration.
(e) A
In the case of a person
licensed or registered under
this act, a civil fine to be paid to the department, not to exceed
$10,000.00. In the case of a person not licensed or registered
under this act that violates section 601(1) or (2), the person
shall be assessed a civil fine to be paid to the person bringing
the action of not less than $5,000.00 or not more than $25,000.00.
(f) Censure.
(g) Probation.
(h) A requirement that restitution be made.
Sec. 605. (1) The department may bring any appropriate action
in the name of the people of this state to carry out this act and
to enforce this act.
(2) This section does not prohibit the department from
bringing any civil, criminal, or administrative action for the
enforcement of section 601.
(3) If the attorney general considers it necessary, the
attorney general shall intervene in and prosecute all cases arising
under this act.
Sec. 2402. (1) A residential builders' and maintenance and
alteration
contractors' board is created. Four Of
the 9-member
board, 4 members shall be licensed residential builders, and 2
members shall be licensed maintenance and alteration contractors.
(2) Of the members representing the general public, at least 1
member shall be registered under the building officials and
inspectors registration act, 1986 PA 54, MCL 338.2301 to 338.2313.
Sec. 2404. (1) The department may require an applicant,
licensee, or each partner, trustee, director, officer, member, or
shareholder to submit evidence of good moral character and
financial stability. Before the issuance of a license, an applicant
shall
submit any the
following:
(a) Any amount required to be paid under the construction lien
act, Act
No. 497 of the Public Acts of 1980, being sections
570.1101
to 570.1305 of the Michigan Compiled Laws 1980 PA 497,
MCL 570.1101 to 570.1305.
(b) A copy of an operator's license or state personal
identification card, to be used by the department only for proof of
identity of the applicant.
(c) In the case of license renewal, proof of successful
completion of continuing education.
(2) The department shall require an applicant for a license to
pass an examination establishing that the applicant has a fair
knowledge of the obligations of a residential builder or
residential maintenance and alteration contractor to the public and
the applicant's principal, and the statutes relating to the
applicant's licensure.
(3) The department, upon application, may issue a residential
maintenance and alteration contractor's license to an applicant
who, upon examination, qualifies for a license, which shall
authorize the licensee according to the applicant's qualifications,
crafts, and trades to engage in the activities of a residential
maintenance and alteration contractor. A license shall include the
following crafts and trades: carpentry; concrete; swimming pool
installation; waterproofing a basement; excavation; insulation
work; masonry work; painting and decorating; roofing; siding and
gutters; screen or storm sash installation; tile and marble work;
and house wrecking. The license shall specify the particular craft
or trade for which the licensee has qualified. This subsection
shall not prohibit a specialty contractor from taking and executing
a contract involving the use of 2 or more crafts or trades if the
performance of the work in the craft or trade, other than in which
the person is licensed, is incidental and supplemental to the
performance of work in the craft for which the specialty contractor
is licensed.
(4) A residential builder or residential maintenance and
alteration contractor shall maintain a place of business in this
state. If a residential builder or residential maintenance and
alteration contractor maintains more than 1 place of business
within this state, a branch office license shall be issued to the
builder or contractor for each place of business so maintained.
(5) Beginning the license cycle after the effective date of
the amendatory act that added this subsection, the department shall
issue the license of a residential builder and residential
maintenance and alteration contractor for a period of 3 years in
duration.
Sec. 2404a. (1) Beginning after the effective date of the
amendatory act that added this section, applicants for initial
licensure either as a residential builder or as a residential
maintenance and alteration contractor shall successfully complete a
prelicensure course of study as prescribed by this subsection.
Licensees holding a residential builder or a residential
maintenance and alteration contractor license on the effective date
of the amendatory act that added this subsection that are renewing
a license in the capacity of an individual or qualifying officer,
or both, are exempt from the requirement of successfully completing
prelicensure courses described in this subsection. The department
shall require an applicant not exempted by this subsection to
successfully complete 60 hours of approved prelicensure courses
consisting of at least 6 hours of courses in each of the following
areas of competency:
(a) Business management, estimating, and job costing.
(b) Design and building science.
(c) Contracts, liability, and risk management.
(d) Marketing and sales.
(e) Project management and scheduling.
(f) The current Michigan residential code and construction
safety standards promulgated under the Michigan occupational safety
and health act, 1974 PA 154, MCL 408.1001 to 408.1094.
(2) Beginning the calendar year after the effective date of
the amendatory act that added this section, a person licensed under
this article as a residential builder or a residential maintenance
and alteration contractor shall successfully complete not less than
3 hours of continuing education per calendar year and 21 hours per
license cycle since the issuance of his or her license or since the
preceding license renewal. The 21 hours shall be prorated for
licensees who obtain licensure in the second or third year of the
license cycle. At least 1 hour of courses in codes, safety, and
legal issues shall be successfully completed each calendar year.
(3) The education courses described in section 3, pages 3-6
through 3-58 of the January 2005 edition of the publication "NAHB
University of Housing, Blueprint for Success", published by the
national association of home builders, are considered approved, are
considered appropriate for fulfilling the prelicensure and
continuing education requirements of subsections (1) and (2), and
are incorporated by reference. The department may approve any
courses it considers to be the equivalent of those courses
incorporated by reference by this subsection. The department shall
approve any updates to the courses described in this subsection or
equivalent courses unless it determines that the courses do not
meet the quality and standards of the courses incorporated by
reference by this subsection. Any construction code update courses
approved by the bureau of construction codes and fire safety and
workplace safety courses approved or sponsored by the department
are also considered appropriate for fulfilling the continuing
education requirements of this subsection. The department may, by
rule, amend, supplement, update, substitute, or determine
equivalency regarding any courses described in this subsection.
(4) The prelicensure and continuing education courses
described in subsection (3) shall be taught and presented by
instructors approved by the department. Except as otherwise
provided by this section or rule of the department, instructors of
prelicensure and continuing education shall meet the standards of
section 4, pages 4-5 through 4-9 of the January 2005 edition of the
publication "NAHB University of Housing, Blueprint for Success",
published by the national association of home builders, and
incorporated by reference. The department may waive the requirement
of membership in a local, state, or national trade association
contained in the standards incorporated by reference in this
subsection. By rule, the department may amend, supplement, update,
substitute, or determine equivalency regarding the standards in
this subsection and shall establish instructor qualifications for
courses not incorporated by reference in subsection (3).
(5) The subject matter of the prelicensure and continuing
education courses may be offered by a high school, intermediate
school district, community college, university, trade association,
or other entity approved by the department as meeting the subject
matter qualifications described in subsection (3) and the
instructional qualifications described in subsection (4). The
department shall accept hours or equivalent credits for any courses
offered by a high school, intermediate school district, community
college, university, trade association, or other entity offering
the prelicensure and continuing education courses that are approved
by the department.
(6) The department shall promulgate rules to provide for the
following:
(a) Prepresentation approval of continuing education courses
offered by a high school, intermediate school district, community
college, university, trade association, or other entity that meet
or exceed the course content of the continuing education courses
described in subsection (3).
(b) Postpresentation approval for courses offered at seminars
and conventions by trade associations, research institutes, risk
management entities, manufacturers, suppliers, governmental
agencies, consulting agencies, or other entities. This subdivision
does not prohibit applications for the prepresentation approval of
courses described in this subdivision.
(c) Approval of distance learning.
(7) Each licensee may select approved courses in his her
subject matter area or specialty. Service as a lecturer or
discussion leader in an approved course shall be counted toward the
continuing education requirements of subsection (2).
Sec. 2405. (1) If a license is applied for by a corporation,
partnership, or association, the applicant shall designate 1 of its
officers, partners, members, or managing agent as a qualifying
officer who, upon taking and passing the examination, and upon
meeting all other requirements of this article, shall be entitled
to a license to act for the corporation, partnership, or
association. In the case of a license issued under this subsection,
each officer, partner, member, or managing agent, whether or not he
or she is the qualifying officer, shall provide a copy of his or
her operator's license or state personal identification card to the
department for use by the department only for identification
purposes. The qualifying officer shall be responsible for
exercising the supervision or control of the building or
construction operations necessary to secure full compliance with
this article and the rules promulgated under this article. A
license shall not be issued to a corporation, partnership, or
association unless each partner, trustee, director, officer,
member, and a person exercising control is at least 18 years of age
and meets the requirements for a license under this article other
than those relating to knowledge and experience.
(2) The license of a corporation, partnership, or other
association shall be suspended when a license or license
application of a qualifying officer, partner, trustee, director,
officer, member, or a person exercising control of the corporation,
partnership, or other association is suspended, revoked, or denied.
The suspension shall remain in force until the board determines
that the disability created by the suspension, revocation, or
denial has been removed.
(3) A suspension, revocation, or denial of a license of an
individual shall suspend, revoke, or deny any other license held or
applied for by that individual issued under this article. A
suspension, revocation, or denial of a license by the department
may suspend, revoke, or deny any other license held or applied for
under this article by the qualifying officer of a corporation,
partnership, or other association whose license is suspended,
revoked, or denied.
(4) If the qualifying officer of a licensee ceases to be its
qualifying officer, the license is suspended. However, upon
request, the department may permit the license to remain in force
for a reasonable time to permit the qualification of a new
qualifying officer.
Sec. 2411. (1) A complaint filed under this section or article
5,
or both, shall be made within 18 months after completion,
occupancy,
or purchase, whichever occurs later, of the latest of
the following regarding a residential structure or a combination of
residential
and commercial structure: .
(a) Its completion.
(b) Its occupancy.
(c) Its purchase.
(d) The last progress payment or draw received from the owner
or a lender.
(2) A licensee or applicant who commits 1 or more of the
following shall be subject to the penalties set forth in article 6:
(a) Abandonment without legal excuse of a contract,
construction project, or operation engaged in or undertaken by the
licensee.
(b) Diversion of funds or property received for prosecution or
completion of a specific construction project or operation, or for
a specified purpose in the prosecution or completion of a
construction project or operation, and the funds or property
application or use for any other construction project or operation,
obligation, or purposes.
(c) Failure to account for or remit money coming into the
person's
possession which that
belongs to others.
(d) A willful departure from or disregard of plans or
specifications in a material respect and prejudicial to another,
without consent of the owner or an authorized representative and
without the consent of the person entitled to have the particular
construction project or operation completed in accordance with the
plans and specifications.
(e) A willful violation of the building laws of the state or
of a political subdivision of the state.
(f) In a maintenance and alteration contract, failure to
furnish to a lender the purchaser's signed completion certificate
executed upon completion of the work to be performed under the
contract.
(g) If a licensed residential builder or licensed residential
maintenance and alteration contractor, failure to notify the
department within 10 days of a change in the control or direction
of the business of the licensee resulting from a change in the
licensee's partners, directors, officers, or trustees, or a change
in the control or direction of the business of the licensee
resulting from any other occurrence or event.
(h) Failure to deliver to the purchaser the entire agreement
of the parties including finance and any other charge arising out
of or incidental to the agreement when the agreement involves
repair, alteration, or addition to, subtraction from, improvement
of, wrecking of, or demolition of a residential structure or
combination of residential and commercial structure, or building of
a garage, or laying of concrete on residential property, or
manufacture, assembly, construction, sale, or distribution of a
residential or combination residential and commercial structure
which is prefabricated, preassembled, precut, packaged, or shell
housing.
(i) If a salesperson, failure to pay over immediately upon
receipt money received by the salesperson, in connection with a
transaction governed by this article to the residential builder or
residential maintenance and alteration contractor under whom the
salesperson is licensed.
(j) Aiding or abetting an unlicensed person to evade this
article, or knowingly combining or conspiring with, or acting as
agent, partner, or associate for an unlicensed person, or allowing
one's license to be used by an unlicensed person, or acting as or
being an ostensible licensed residential builder or licensed
residential maintenance and alteration contractor for an
undisclosed person who does or shall control or direct, or who may
have the right to control or direct, directly or indirectly, the
operations of a licensee.
(k) Acceptance of a commission, bonus, or other valuable
consideration by a salesperson for the sale of goods or the
performance of service specified in the article from a person other
than the residential builder or residential maintenance and
alteration contractor under whom the person is licensed.
(l) Becoming insolvent, filing a bankruptcy action, becoming
subject to a receivership, assigning for the benefit of creditors,
failing to satisfy judgments or liens, or failing to pay an
obligation as it becomes due in the ordinary course of business.
(m) Poor
workmanship or workmanship Workmanship
not meeting
the
standards of the custom or trade verified by a building code
enforcement
official Michigan
residential code as promulgated
under the Stille-DeRossett-Hale single state construction code act,
1972 PA 230, MCL 125.1501 to 125.1531.
(3) The department shall suspend or revoke the license of a
person licensed under this article whose failure to pay a lien
claimant results in a payment being made from the homeowner
construction lien recovery fund pursuant to the construction lien
act, 1980 PA 497, MCL 570.1101 to 570.1305, regardless of whether
the person was performing services as a licensee under this
article; under the electrical administrative act, 1956 PA 217, MCL
338.881
to 338.892; or under 1929 PA 266, MCL 338.901 to 338.917
the state plumbing act, 2002 PA 733, MCL 338.3511 to 338.3569. The
department shall not renew a license or issue a new license until
the licensee has repaid in full to the fund the amount paid out
plus the costs of litigation and interest at the rate set by
section 6013 of the revised judicature act of 1961, 1961 PA 236,
MCL 600.6013.
(4) The department shall conduct a review upon notice that the
licensee has violated the asbestos abatement contractors licensing
act, 1986 PA 135, MCL 338.3101 to 338.3319. The department may
suspend or revoke that person's license for a knowing violation of
the asbestos abatement contractors licensing act, 1986 PA 135, MCL
338.3101 to 338.3319.
(5) Notwithstanding article 5, the following apply to
administrative proceedings regarding workmanship under subsection
(2)(m):
(a) A complaint submitted by an owner shall describe in
writing to the department the factual basis for the allegation. The
homeowner shall send a copy of the initial complaint to the
licensee concurrent with the submission of the complaint to the
department.
(b) The department shall presume the innocence of the licensee
throughout the proceeding until the administrative law hearing
examiner finds otherwise in a determination of findings of fact and
conclusions of law under article 5. The licensee has the burden of
refuting evidence submitted by a person during the administrative
hearing. The licensee also has the burden of proof regarding the
reason deficiencies were not corrected.
(c) Upon receipt of a building inspection report issued to the
department by a state or local building enforcement official
authorized to do so under the Stille-DeRossett-Hale single state
construction code act, 1972 PA 230, MCL 125.1501 to 125.1531, which
report verifies or confirms the substance of the complaint, the
department shall send by certified mail a copy of the verified
complaint to both the complainant and the licensee. Failure of the
department to send a copy of the verified complaint within 30 days
of receipt of the building inspection report prevents the
department from assessing a fine against the licensee under article
6 but does not prevent the department from pursuing restitution,
license suspension, or other remedies provided under this act.
(d) A licensee may contractually provide for an alternative
dispute resolution procedure to resolve complaints filed with the
department. The procedure shall be conducted by a neutral third
party for determining the rights and responsibilities of the
parties and shall be initiated by the licensee, who shall provide
notice of the initiation of the procedure to the complainant by
certified mail not less than 30 days before the commencement of
that procedure. The procedure shall be conducted at a location
mutually agreed to by the parties.
(e) The department shall not initiate a proceeding against a
licensee under this subsection in the case of a licensee who
contractually provides for an alternative dispute resolution
procedure that has not been utilized and completed unless it is
determined that the licensee has not complied with a decision or
order issued as a result of that alternative dispute resolution
procedure, that alternative dispute resolution procedure was not
fully completed within 90 days after the filing of the complaint
with the department, or an alternative dispute resolution procedure
meeting the requirements of subdivision (D) is not available to the
complainant.
(f) The complainant shall demonstrate that notice has been
provided to the licensee describing reasonable times and dates that
the residential structure was accessible for any needed repairs and
proof acceptable to the department that the repairs were not made
within 60 days after the sending of the notice. This subdivision
does not apply where the department determines a necessity to
safeguard the structure or to protect the occupant's health and
safety and, in such case, the department may utilize any remedy
available under section 504(3)(a) through (d).
(g) In the case where the owner and licensee have agreed
contractually on mutually acceptable performance guidelines
relating to workmanship, the department shall consider those
guidelines in its evaluation of a complaint. The guidelines shall
be consistent with the Stille-DeRossett-Hale single state
construction code act, 1972 PA 230, MCL 125.1501 to 125.1531.
(6) As used in this section, "verified complaint" means a
complaint in which all or a portion of the allegations have been
confirmed
by the building inspection report an affidavit of the
state or local building official.
Sec. 2411a. (1) The department shall post on its website any
final order of the board and the date it was issued. The posting
shall occur within 30 days after the final order is issued.
(2) The department shall annually post on its website the
number of final orders of the board.
Enacting section 1. This amendatory act does not take effect
unless Senate Bill No. 631
of the 93rd Legislature is enacted into law.