Title of Regulation: 18VAC50-22. Board for Contractors Regulations (amending 18VAC50-22-10, 18VAC50-22-100; adding 18VAC50-22-65, 18VAC50-22-66).

Statutory Authority: §§ 54.1-201 and 54.1-1102 of the Code of Virginia.

Public Hearing Information:

December 19, 2012 - 10 a.m. - Department of Professional and Occupational Regulations, 9960 Mayland Drive, 2nd Floor (Board Room 3), Suite 400, Richmond, VA

Public Comment Deadline: February 1, 2013.

Agency Contact: Eric L. Olson, Executive Director, Board for Contractors, 9960 Mayland Drive, Suite 400, Richmond, VA 23233, telephone (804) 367-2785, FAX (804) 527-4401, or email contractors@dpor.virginia.gov.

Basis: Section 54.1-201 of the Code of Virginia provides the board the authority to establish regulations. Section 54.1-1102 of the Code of Virginia provides authority to the board to promulgate regulations to carry out the requirements of Chapter 11 of Title 54.1 of the Code of Virginia.

Purpose: The proposed amendments establish temporary licensure for contractor entities pursuant to Chapters 260 and 280 of the 2010 Acts of Assembly.

The amendments to the statutes introduce "temporary license" to the regulatory authority of the Board for Contractors. These regulations will define entry requirements, list fees, and provide the disciplinary authority of the board for this license.

Substance: The board seeks to amend its regulations to include a definition and fee for "temporary licenses" and to bring "temporary license" holders under the board's jurisdiction and disciplinary authority.

18VAC50-22-10 adds "temporary licenses" to the definitions and list of licenses issued by the Board for Contractors.

18VAC50-22-65 includes entry requirements for temporary license applicants. This amendment also indicates the length of time for which a temporary license is valid and that a temporary license is not eligible for renewal or reinstatement.

18VAC50-22-66 includes the Board for Contractors' disciplinary authority over temporary license holders. This amendment also makes working on an expired temporary license against the law.

18VAC50-22-100 adds a temporary license fee of $50.

Issues: In amending these regulations, the Board for Contractors is continuing to provide necessary public protection tasked to it through existing statutes. These proposed amendments will, without compromising that protection, respond to statutory changes. By qualifying for a temporary license, a business entity will be permitted to bid upon or actually commence construction projects within the Commonwealth while working to meet examination, education, and other eligibility criteria. In order to meet the current criteria, contractor business entities may spend up to a month to schedule and complete the prelicense education requirements, study for and successfully complete the exam, and submit all required documentation. The ability to start a project while working to meet these criteria allows the business entity to hire individuals and properly license subcontractors to work. This allows those individuals and employees of the subcontractor to start receiving compensation sooner, putting people to work sooner and, as a result, putting more money into the economy. This is a distinct advantage to the public and the Commonwealth.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. Pursuant to Chapters 260 and 280 of the 2010 Acts of Assembly, the Board for Contractors (Board) proposes to make permanent an emergency regulation that enables the Board to issue temporary licenses. The emergency action became effective on March 2, 2011 and expires on December 31, 2013. The proposed amendments include a definition of temporary licenses, establishment of eligibility criteria for such a license, the fees associated with such a license and other administrative requirements.

Result of Analysis. The benefits likely exceed the costs for all proposed changes.

Estimated Economic Impact. Chapter 260 and Chapter 280 of the 2010 Acts of Assembly provide emergency authorization for the Department of Professional and Occupational Regulation's boards to issue temporary licenses and certifications in instances where applicants are validly licensed in good standing in other states and have simultaneously submitted a completed application for a Virginia license or certification. The proposed action would define entry requirements, list fees, and set out the disciplinary authority for temporary licenses.

In order to qualify for a temporary license a firm must hold a comparable license or certificate in another state and provide verification of current licensure or certification from the other state in a format acceptable to the Board. The license or certificate, as applicable, must be in good standing and have comparable qualifications to the Virginia license applied for by the firm. By qualifying for a temporary license, a business entity will be permitted to bid upon or actually commence construction projects within the Commonwealth while working to meet examination, education and other eligibility criteria. In order to meet the current criteria contractor business entities may spend up to a month to schedule and complete the pre-license education requirements, study for and successfully complete the exam, and submit all required documentation.

The ability to start a project while working to meet these criteria allows the business entity to hire individuals and properly licensed sub-contractors to work. This allows those individuals and employees of the sub-contractor to start receiving compensation sooner, putting people to work sooner. Furthermore, firms which hold a comparable license or certificate in good standing in another state with comparable qualifications to the Virginia license applied for by the firm will be more likely to bid for contracts in Commonwealth, potentially reducing the market cost of contractor services for Virginia purchasers of these services.

Businesses and Entities Affected. The Department of Professional and Occupational Regulation forecasts that there will be approximately 12 temporary contractor license applicants per year.

Localities Particularly Affected. The proposed amendments do not disproportionately affect particular localities.

Projected Impact on Employment. The proposal amendments are unlikely to significantly affect total employment.

Effects on the Use and Value of Private Property. The temporary license will reduce costs for firms newly operating in the Commonwealth and may moderately increase their value. Purchasers of contractor services may encounter moderately reduced through the price effect of additional competition.

Small Businesses: Costs and Other Effects. The temporary license will reduce costs for firms newly operating in the Commonwealth and may moderately reduce costs for consumers through the price effect of additional competition.

Small Businesses: Alternative Method that Minimizes Adverse Impact. The proposed amendments do not adversely affect small businesses.

Real Estate Development Costs. Real estate development costs may be moderately reduced due to possible lower market prices for contractor services due to additional competition.

Legal Mandate. The Department of Planning and Budget (DPB) has analyzed the economic impact of this proposed regulation in accordance with § 2.2-4007.04 of the Administrative Process Act and Executive Order Number 14 (10). Section 2.2-4007.04 requires that such economic impact analyses include, but need not be limited to, the projected number of businesses or other entities to whom the regulation would apply, the identity of any localities and types of businesses or other entities particularly affected, the projected number of persons and employment positions to be affected, the projected costs to affected businesses or entities to implement or comply with the regulation, and the impact on the use and value of private property. Further, if the proposed regulation has adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include (i) an identification and estimate of the number of small businesses subject to the regulation; (ii) the projected reporting, recordkeeping, and other administrative costs required for small businesses to comply with the regulation, including the type of professional skills necessary for preparing required reports and other documents; (iii) a statement of the probable effect of the regulation on affected small businesses; and (iv) a description of any less intrusive or less costly alternative methods of achieving the purpose of the regulation. The analysis presented above represents DPB's best estimate of these economic impacts.

Agency's Response to Economic Impact Analysis: The agency concurs with the economic impact analysis prepared by the Department of Planning and Budget.

Summary:

The board is amending the regulations to include temporary licenses available to out-of-state contractors that hold licenses in good standing in another state. The proposed amendments include the licensing requirements, the associated fees, and the disciplinary authority of the board for the temporary licenses.

Part I
Definitions

18VAC50-22-10. General definitions.

The following words and terms when used in this chapter, unless a different meaning is provided or is plainly required by the context, shall have the following meanings:

"Affidavit" means a written statement of facts, made voluntarily, and confirmed by the oath or affirmation of the party making it, taken before a notary or other person having the authority to administer such oath or affirmation.

"Business entity" means a sole proprietorship, partnership, corporation, limited liability company, limited liability partnership, or any other form of organization permitted by law.

"Controlling financial interest" means the direct or indirect ownership or control of more than 50% ownership of a firm.

"Firm" means any business entity recognized under the laws of the Commonwealth of Virginia.

"Formal vocational training" means courses in the trade administered at an accredited educational facility; or formal training, approved by the department, conducted by trade associations, businesses, military, correspondence schools or other similar training organizations.

"Full-time employee" means an employee who spends a minimum of 30 hours a week carrying out the work of the licensed contracting business.

"Helper" or "laborer" means a person who assists a licensed tradesman and who is not an apprentice as defined in 18VAC50-30-10.

"Licensee" means a firm holding a license issued by the Board for Contractors to act as a contractor, as defined in § 54.1-1100 of the Code of Virginia.

"Net worth" means assets minus liabilities. For purposes of this chapter, assets shall not include any property owned as tenants by the entirety.

"Reciprocity" means an arrangement by which the licensees of two states are allowed to practice within each other's boundaries by mutual agreement.

"Reinstatement" means having a license restored to effectiveness after the expiration date has passed.

"Renewal" means continuing the effectiveness of a license for another period of time.

"Responsible management" means the following individuals:

1. The sole proprietor of a sole proprietorship;

2. The partners of a general partnership;

3. The managing partners of a limited partnership;

4. The officers of a corporation;

5. The managers of a limited liability company;

6. The officers or directors of an association or both; and

7. Individuals in other business entities recognized under the laws of the Commonwealth as having a fiduciary responsibility to the firm.

"Sole proprietor" means any individual, not a corporation, who is trading under his own name, or under an assumed or fictitious name pursuant to the provisions of §§ 59.1-69 through 59.1-76 of the Code of Virginia.

"Supervision" means providing guidance or direction of a delegated task or procedure by a tradesman licensed in accordance with Chapter 11 (§ 54.1-1100 et seq.) of Title 54.1 of the Code of Virginia, being accessible to the helper or laborer, and periodically observing and evaluating the performance of the task or procedure.

"Supervisor" means the licensed master or journeyman tradesman who has the responsibility to ensure that the installation is in accordance with the applicable provisions of the Virginia Uniform Statewide Building Code and provides supervision to helpers and laborers as defined in this chapter.

"Temporary license" means a license issued by the board pursuant to § 54.1-201.1 of the Code of Virginia that authorizes a person to engage in the practice of contracting until such time as the license is issued or 45 days from the date of issuance of the temporary license, whichever occurs first.

"Tenants by the entirety" means a tenancy which is created between a husband and wife and by which together they hold title to the whole with right of survivorship so that, upon death of either, the other takes whole to exclusion of the deceased's remaining heirs.

18VAC50-22-65. Temporary licenses.

A. A firm applying for a temporary license must meet all of the requirements of § 54.1-201.1 of the Code of Virginia, including the simultaneous submission of a completed application for licensure, and the provisions of this section.

B. A firm must hold a comparable license or certificate in another state and provide verification of current licensure or certification from the other state in a format acceptable to the board. The license or certificate, as applicable, must be in good standing and have comparable qualifications to the Virginia license applied for by the firm.

C. The following provisions apply to a temporary license issued by the board:

1. A temporary license shall not be renewed.

2. A firm shall not be issued more than one temporary license.

3. The issuance of the license shall void the temporary license.

4. If the board denies approval of the application for a license, the temporary license shall be automatically suspended.

D. Any firm continuing to practice as a contractor after a temporary license has expired or been suspended and who has not obtained a comparable license or certificate may be prosecuted and fined by the Commonwealth under § 54.1-111 A 1 of the Code of Virginia.

18VAC50-22-66. Board's disciplinary authority over temporary license holders.

A. A temporary licensee shall be subject to all laws and regulations of the board and shall remain under and be subject to the disciplinary authority of the board during the period of temporary licensure.

B. The license shall be subject to disciplinary action for any violations of Virginia statutes or regulations during the period of temporary licensure.

18VAC50-22-100. Fees.

Each check or money order shall be made payable to the Treasurer of Virginia. All fees required by the board are nonrefundable. In the event that a check, money draft or similar instrument for payment of a fee required by statute or regulation is not honored by the bank or financial institution named, the applicant or regulant shall be required to remit fees sufficient to cover the original fee, plus an additional processing charge set by the department:

Fee Type	When Due	Amount Due
Class C Initial License	with license application	$210
Class B Initial License	with license application	$345
Class A Initial License	with license application	$360
Temporary License	with license application and applicable initial license fee	$50
Qualified Individual Exam Fee	with exam application	$20
Class B Exam Fee	with exam application ($20 per section)	$40
Class A Exam Fee	with exam application ($20 per section)	$60

Note: A $25 Recovery Fund assessment is also required with each initial license application. If the applicant does not meet all requirements and does not become licensed, this assessment will be refunded. The examination fees approved by the board but administered by another governmental agency or organization shall be determined by that agency or organization.

FORMS (18VAC50-22)

Contractor Licensing Information, 27INTRO (5/09).

Trade-Related Examinations and Qualifications Information, 27EXINFO (5/09).

License Application, 27LIC (rev. 4/10).

Class C License Application (Short Form), 27CSF (rev. 4/10).

Additional License Classification/Specialty Designation Application, 27ADDCL (rev. 4/10).

Change of Qualified Individual Application, 27CHQI (rev. 4/10).

Change of Designated Employee Application, 27CHDE (rev. 4/10).

Changes of Responsible Management Form, 27CHRM (eff. 5/09).

Experience Reference, 27EXP (8/07).

Certificate of License Termination, 27TERM (5/09).

Education Provider Registration/Course Approval Application; Contractors Prelicense and Continuing Education, 27EDREG (rev. 6/09).

Certificate of License Termination, 27TERM (5/09).

Education Provider Listing Form, 27EDLIST (5/09).

Financial Statement, 27FINST (5/09).

Additional Qualified Individual Experience Reference Form, 27QIEXP (5/09).

Additional Specialty Designation Application, A503-27ADDSP (rev. 9/12).

Additional Qualified Individual Experience Reference Form, A503-27QIEXP (rev. 3/11).

Certificate of License Termination, A503-27TERM (rev. 3/11).

Change in Qualified Individual and Designated Employee Application, A503-27CH_QIDE (rev. 9/12).

Change of Responsible Management Application, A503-27CHRM (rev. 7/11).

Class C License Application (Short Form), A503-27CSF (rev. 9/12).

Contractor Licensing Information, A503-27INTRO_v3 (rev. 9/12).

Education Provider Registration/Course Approval Application, A503-27EDREG-v4 (rev. 10/11).

Education Provider Listing Application, A503-27EDLIST (rev. 3/11).

Expedited Class A License Application, A503-2705A_ELIC (rev. 9/12).

Financial Statement, A503-27FINST (rev. 7/11).

License Application, A503-27LIC (rev. 9/12).

Requirements for Qualified Individuals, A503-27EXINFO-v2 (rev. 9/12).

Trade-Related Examinations and Qualifications Information, 27EXINFO (rev. 3/10).