October 19, 2005, Introduced by Senators BASHAM, LELAND, CLARKE, JACOBS, SCOTT, OLSHOVE, CLARK-COLEMAN, CHERRY, EMERSON and BRATER 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, 2404, 2405, 2411, and 2412 (MCL
339.601, 339.602, 339.605, 339.2404, 339.2405, 339.2411, and
339.2412), 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
sections 2411 and 2412 as amended by 2001 PA 113, and by adding
section 606.
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 that
violates
subsection
(1) or (2) is guilty of a misdemeanor
, punishable
by
a
fine of not more than $500.00, $2,000.00 or imprisonment
for
not
more than 90 93
days, or both.
(4)
A person, school, or institution which that
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, $5,000.00 or imprisonment
for
not more than 1 year, 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 entitled to actual costs and attorney fees. An affected
person may also bring an action for a civil violation in a court of
competent jurisdiction against a person not registered or licensed
under this act that has violated subsection (1) or (2). If the
affected person prevails in such an action, the court shall assess
a civil fine, to be paid to the department, attorney general,
county prosecutor, or attorney representing a local unit of
government, of not less than $5,000.00 and not more than
$50,000.00.
(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, the department, 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
5 to
enforce this section. A person who violates this section shall be
subject
to the strictures prescribed in this section and section
sections 506, 602, and 606.
(8) The department, the attorney general, a county prosecutor,
and an attorney representing a local unit of government may utilize
forfeiture as a remedy in the manner provided for in section 606.
(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.
(11) Upon entering a conviction under subsection (1) or (2), a
court entering the conviction shall notify the bureau of commercial
services at the department.
Sec. 602. (1) 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.
(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.
(f) Censure.
(g) Probation.
(2) (h)
A Any violation of this act
shall include a
requirement that restitution be made, based upon proofs submitted
to, and the finding made by, the trier of fact and as provided by
law.
Sec. 605. (1) The department may bring any appropriate action,
including mediation or other alternative dispute resolution, in the
name of the people of this state to carry out this act and to
enforce this act against a person practicing with or without a
license.
(2) If the attorney general considers it necessary, the
attorney general shall intervene in and prosecute all cases arising
under this act.
(3) This section does not prohibit the department from
bringing any civil, criminal, or administrative action for the
enforcement of section 601.
(4) The department has standing to bring an administrative
action or to directly bring an action in a court of competent
jurisdiction regarding unlicensed practice of an occupation.
Sec. 606. The department, the attorney general, a county
prosecutor, and an attorney representing a local unit of government
may utilize the forfeiture provisions of chapter 47 of the revised
judicature act of 1961, 1961 PA 236, MCL 600.4701 to 600.4709, for
items seized and determined to be proceeds of a crime, substituted
proceeds of a crime, or the instrumentality of a crime as those
terms are defined under section 4701 of the revised judicature act
of 1961, 1961 PA 236, MCL 600.4701.
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 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.
(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
does 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.
(6) A licensee shall, as part of the contract, provide a copy
of his or her individual license and any license issued to that
person as a qualifying officer of another entity.
Sec. 2405. (1) If a license is applied for by a corporation,
partnership, or
association,
or other entity, 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 is entitled to a license to act for the
corporation,
partnership, or association,
or other entity. The
qualifying officer shall also obtain a license under this article
as an individual. 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, or other entity 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. If an individual licensee is also a qualifying officer,
the individual's name and license number shall be listed on any
license issued to the individual as a qualifying officer.
(2) The license of a corporation, partnership, association, or
other association
entity 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, association, or other
association
entity 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
shall suspend, revoke, or deny any other license held or
applied for under this article by the qualifying officer of a
corporation,
partnership, association, or other
association
entity 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 a residential
structure or a combination of residential and commercial structure.
(2)
A licensee, or applicant,
or person required to be
licensed under this article who commits 1 or more of the following,
if applicable, 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 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 residential 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 not meeting the standards
of the custom or trade verified by a building code enforcement
official.
(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) In any case where the licensee or respondent fails to
appear, participate, or defend any action, the board shall issue an
order granting by default the relief requested, with prejudice.
(7) (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.
Sec. 2412. (1) In any action brought in a court of this state,
restitution shall be ordered, based upon proofs submitted to, and
the finding made by, the court and as provided by law.
(2) (1)
A person or qualifying officer for a corporation or
member of a residential builder or residential maintenance and
alteration contractor shall not bring or maintain an action in a
court of this state for the collection of compensation for the
performance of an act or contract for which a license is required
by this article without alleging and proving that the person was
licensed under this article during the performance of the act or
contract.
(3) (2)
Failure of the person bringing a complaint against a
licensee to utilize a contractually provided alternative dispute
resolution procedure shall be an affirmative defense to an action
brought in a court of this state against a licensee under this
article.
(4) A person or qualifying officer for a corporation or a
member of a residential builder or residential maintenance and
alteration contractor shall not impose or take any legal or other
action to impose a lien on real property unless that person was
licensed under this article during the performance of the act or
contract.
(5) An unlicensed person who commits any of the following acts
is guilty of a misdemeanor punishable by a fine of not more than
$5,000.00 or imprisonment for not more than 93 days, or both:
(a) 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.
(b) Failure to account for or remit money coming into the
person's possession which belongs to others.
(c) 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.
(d) A willful violation of the building laws of the state or
of a political subdivision of the state.
(e) 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.
(f) 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.
(g) 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.
(h) Poor workmanship or workmanship not meeting the standards
of the custom or trade verified by a building code enforcement
official.
(6) A person who suffers damages as a result of a violation of
subsection (5) by an unlicensed person has a cause of action for
damages. The action shall be brought in a court of competent
jurisdiction.
Enacting section 1. This amendatory act does not take effect
unless all of the following bills of the 93rd Legislature are
enacted into law:
(a) Senate Bill No. 827.
(b) Senate Bill No. 828.