An applicant for licensure as a contractor, and a licensee applying for renewal or reinstatement of a contractor’s license shall demonstrate to the division and the commission the applicant’s or licensee’s financial responsibility before the issuance of or the renewal or reinstatement of a license by:
Construction trade: means any trade or occupation involving:
(a)
(i)
construction, alteration, remodeling, repairing, wrecking or demolition, addition to, or improvement of any building, highway, road, railroad, dam, bridge, structure, excavation or other project, development, or improvement to other than personal property; and
(ii)
constructing, remodeling, or repairing a manufactured home or mobile home as defined in Section 15A-1-302; or
(b)
installation or repair of a residential or commercial natural gas appliance or combustion system. See Utah Code 58-55-102
Contractor: means any person who for compensation other than wages as an employee undertakes any work in the construction, plumbing, or electrical trade for which licensure is required under this chapter and includes:
(i)
a person who builds any structure on the person's own property for the purpose of sale or who builds any structure intended for public use on the person's own property;
(ii)
any person who represents that the person is a contractor, or will perform a service described in this Subsection (17)by advertising on a website or social media, or any other means;
(iii)
any person engaged as a maintenance person, other than an employee, who regularly engages in activities set forth under the definition of "construction trade";
(iv)
any person engaged in, or offering to engage in, any construction trade for which licensure is required under this chapter; or
(v)
a construction manager, construction consultant, construction assistant, or any other person who, for a fee:
(A)
performs or offers to perform construction consulting;
(B)
performs or offers to perform management of construction subcontractors;
(C)
provides or offers to provide a list of subcontractors or suppliers; or
(D)
provides or offers to provide management or counseling services on a construction project. See Utah Code 58-55-102
Credit report: A detailed report of an individual's credit history prepared by a credit bureau and used by a lender in determining a loan applicant's creditworthiness. Source: OCC
Financial responsibility: means a demonstration of a current and expected future condition of financial solvency evidencing a reasonable expectation to the division and the board that an applicant or licensee can successfully engage in business as a contractor without jeopardy to the public health, safety, and welfare. See Utah Code 58-55-102
completing a questionnaire developed by the division; and
(ii)
signing the questionnaire, certifying that the information provided is true and accurate; or
(b)
submitting a bond in an amount and form determined by the commission with the concurrence of the director.
(2)
A licensee, including an individual who holds an ownership interest in an unincorporated entity licensee, shall maintain financial responsibility throughout the period of licensure.
(3)
The division may audit the financial responsibility of an applicant or licensee on a random basis or upon finding of a reasonable need.
(4)
The burden to demonstrate financial responsibility is upon the applicant, licensee, or owner of an unincorporated entity licensee, as the case may be.
(5)
(a)
In determining the financial responsibility of an applicant or licensee described in Subsection (1) that is an unincorporated entity, the division:
(i)
shall consider the personal financial information of each individual who holds an ownership interest in the unincorporated entity; and
(ii)
may, at any time:
(A)
audit the personal financial information of any individual who holds an ownership interest in the unincorporated entity; or
(B)
request and obtain a credit report on the individual.
(b)
If, based on the personal financial information of one or more individuals who hold an ownership interest in the unincorporated entity, the division determines that the applicant or licensee lacks financial responsibility to engage successfully in business as a contractor, the division may:
(i)
prohibit the individual or individuals from engaging in a construction trade;
(ii)
prohibit the applicant or licensee from engaging in a construction trade, unless the individual or individuals dissociate from the applicant or licensee within 10 days after the division makes the determination of a lack of financial responsibility; or
(iii)
require the individual or individuals, applicant, or licensee to submit a bond that is in a form determined by the commission with the concurrence of the director and in an amount that is:
(A)
determined by the commission with the concurrence of the director; or
(B)
20% of the annual gross distributions from the unincorporated entity to its owners and that includes coverage for unpaid obligations incurred by the licensee contractor and any failure of the licensee contractor owners to pay income taxes and self-employment taxes on the gross distributions from the unincorporated entity to its owners.
