Rule-Making Notices
Notice of Hearing
Commerce
Licenses, Certifications and Registrations, Ch.
Comm 5NOTICE IS HEREBY GIVEN that pursuant to ss.
101.02 and
101.147, Stats., the Department of Commerce will hold a public hearing on proposed rules under Chapter
Comm 5, relating to building contractor registration.
Hearing Information
The public hearing will be held as follows:
Date and Time:
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Location:
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May 5, 2010
10:00 a.m.
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Thompson Commerce Building
3rd Floor Conference Room #3C
201 W. Washington Avenue
Madison, Wisconsin
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This hearing is held in an accessible facility. If you have special needs or circumstances that may make communication or accessibility difficult at the hearing, please call (608) 266-8741 or (608) 264-8777 (TTY) at least 10 days prior to the hearing date. Accommodations such as interpreters, English translators, or materials in audio tape format will, to the fullest extent possible, be made available upon a request from a person with a disability.
Appearances at Hearing and Submission of Written Comments
Interested persons are invited to appear at the hearing and present comments on the proposed rules. Persons making oral presentations are requested to submit their comments in writing. Persons submitting comments will not receive individual responses. The hearing record on this proposed rulemaking will remain open until
May 17, 2010, to permit submittal of written comments from persons who are unable to attend the hearing or who wish to supplement testimony offered at the hearing. Written comments should be submitted to James Quast, at the Department of Commerce, P.O. Box 2689, Madison, WI 53701-2689, or Email at
jim.quast@wisconsin.gov.
Copies of Proposed Rules
The proposed rules and an analysis of the proposed rules are available on the Internet at the Safety and Buildings Division Web site at
www.commerce.wi.gov/SB/. Paper copies may be obtained without cost from James Quast, at the Department of Commerce, Program Development Bureau, P.O. Box 2689, Madison, WI 53701-2689, or Email at
jim.quast@wisconsin.gov, or at telephone (608) 266-9292 or (608) 264-8777 (TTY). Copies will also be available at the public hearing.
The small business regulatory coordinator for the Department of Commerce is Carol Dunn, who may be contacted at telephone (608) 267-0297, or Email at
carol.dunn@wisconsin.gov.
Analysis Prepared by Department of Commerce
Statutes interpreted
Statutory authority
Related statute or rule
None.
Explanation of agency authority
Under chapters 101 and 145 of the Wisconsin Statutes, the Department of Commerce protects public health, safety, and welfare by promulgating comprehensive requirements for design, construction, use and maintenance of public buildings and places of employment, public swimming pools and water attractions and adopts rules that establish uniform, statewide standards for the construction of one- and 2-family dwellings.
These statutes also provide the Department with oversight of various mechanical systems and devices to protect public safety and health. The Department administers and enforces codes that address amusement rides, ski lifts and tows, boilers and pressure vessels, gas systems and mechanical refrigeration systems to accomplish its statutory objectives.
The construction trades and equipment installers share a responsibility with owners and designers to ensure that the buildings and equipment relative to the respective trade's work, do not pose risk to public safety and health.
Summary of proposed rules
Effective October 2, 2009, the various construction trades involved in building or modifying these types of structures are required to register as a building contractor. The department administers a registration program for businesses engaged in building construction as contractors or subcontractors under ch.
Comm 5. The proposed rules expand the building contractor registration which is a credential for a contracting business and is not required for each partner or employee involved with physically constructing or modifying the structures.
As mandated by Wisconsin Act 28, the definition of “construction business" has been broadened to include additional trades that are regulated by departmental codes. The proposed rules require the registration of trades and businesses that construct, install or alter mechanical equipment and devices such as boilers, gas systems, piping, mechanical refrigeration systems serving a building or structure. In addition, the proposed rules expand the registration requirement to those trades or businesses involved in the construction, installation or alteration of permanent devices or structures regulated under the amusement rides code and the sanitation code.
The proposed rules create administrative procedures and a forfeiture process for those persons or entities doing construction- or installation-related work without a registration number.
In addition, the proposed rules consolidate two types of weld tester certifications into one category.
Comparison with federal regulations
An Internet-based search of the Code of Federal Regulations (CFR) and the Federal Register did not find any federal regulations relating to contractor registration.
Comparison with rules in adjacent states
An Internet-based search of contractor registration in the states of Illinois, Iowa, Michigan and Minnesota found the following:
Illinois:
Except for roofers, the state of Illinois does not have any regulations for the licensure of building contractors.
Iowa:
All individual contractors and businesses performing construction work in the state of Iowa are required to be registered. The 2-year registration fee is $25. The prerequisites for registration include the demonstration of compliance with worker's compensation insurance requirements and with unemployment tax requirements.
If a contractor does not register or falsifies registration information, then Iowa assesses a penalty of not more than $500 for a first violation and not more than $5,000 for a second or subsequent violation.
Michigan:
Persons and businesses that contract with property owners to build new homes or remodel homes are required to have licenses in the state of Michigan. The license types are 1) residential builder and 2) residential maintenance and alteration contractor, which is restricted to perform only specific trades and services. The fee is $225 for a 3-year license, and applicants must complete 60 hours of approved education and pass an examination. Michigan does not have a licensing law regulating builders of commercial buildings.
In Michigan, a person who is not licensed as a residential builder or a residential maintenance and alteration contractor can be found guilty and fined as follows:
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In the case of a first offense, a misdemeanor punishable by a fine of not less than $5,000 or more than $25,000, or imprisonment for not more than 1 year, or both.
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In the case of a second or subsequent offense, a misdemeanor punishable by a fine of not less than $5,000 or more than $25,000, or imprisonment for not more than 2 years, or both.
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In the case of an offense that causes death or serious injury, a felony punishable by a fine of not less than $5,000 or more than $25,000, or imprisonment for not more than 4 years, or both.
Minnesota:
The state of Minnesota requires certifications for a person or business that contracts with property owners to construct or improve dwellings for habitation by one- to four-families and where the person or business is involved with two or more special building skills. The Residential Contractor license and Remodeler license are annual licenses. The fees, which are based upon gross receipts, are $260 to $360. The application for the license requires a qualifying person to take the required examination and fulfill the continuing education requirements for the business.
Effective January 1, 2009, the Minnesota Independent Contractor Certification Law requires building contractors to certify that they are independent contractors versus employees using a “9 Items" test related to Worker's Compensation. The fee for a 2-year certification is $250.
Minnesota assesses a penalty of up to $5,000 for each violation if a person performs work without first obtaining a certificate or falsifies or alters a certificate. The penalty also applies to anyone who uses coercion, misrepresentation or fraudulent means to require another individual to adopt independent contractor status.
Factual data and analytical methodologies
The proposed rules were developed by reviewing the provisions under
2009 Wisconsin Act 28 in conjunction with the current rules relating to contractor registration under s.
Comm 5.30. For consistency, the proposed forfeitures are modeled after other penalties currently used by the department to enforce compliance with other construction-related licenses, certifications and registrations.
Small Business Impact
The proposed rules implement the mandates imposed by
2009 Wisconsin Act 28. The effect on small businesses is minor and ensures that the construction trades comply with Wisconsin worker's compensation insurance and unemployment tax requirements. Identifying contractor businesses will help prevent unfair competition which is a common problem for contractors.
An economic impact report has not been required pursuant to s.
227.137, Stats.
Fiscal Estimate
Assumptions used in arriving at fiscal estimate
The department estimates that there would be about 400 new businesses that would be required to register. The building contractor registration is $100 for 4 years. There is also a $15 initial application fee that would be waived if the applicant applies and pays for the registration via the Internet. The department estimates that it would realize about $10,750 in revenue annually.
The department anticipates that the workload associated with the registration and the enforcement of the program can be managed with current information technology and within current staff levels.
State fiscal effect
None. Increase costs — may be possible to absorb within agency's budget.
Local government costs
None.
Fund sources affected
PRO.
