SENATE BILL No. 351

March 21, 2001, Introduced by Senators STEIL, DUNASKISS, HAMMERSTROM, NORTH, DINGELL and SHUGARS and referred to the Committee on Economic Development, International Trade and Regulatory Affairs.

A bill to amend 1980 PA 299, entitled

"Occupational code,"

by amending sections 2411 and 2412 (MCL 339.2411 and 339.2412),

section 2411 as amended by 1991 PA 166 and section 2412 as

amended by 1980 PA 496.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1 Sec. 2411. (1) A complaint filed as prescribed in UNDER

2 THIS SECTION OR article 5, OR BOTH, shall be made within 18

3 months after completion, occupancy, or purchase, whichever occurs

4 later, of a residential structure or a combination of residential

5 and commercial structure.

6 (2) A licensee or applicant who commits 1 or more of the

7 following shall be subject to the penalties set forth in

8 article 6:

00502'01 *** LBO

2

1 (a) Abandonment without legal excuse of a contract,

2 construction project, or operation engaged in or undertaken by

3 the licensee.

4 (b) Diversion of funds or property received for prosecution

5 or completion of a specific construction project or operation, or

6 for a specified purpose in the prosecution or completion of a

7 construction project or operation, and the funds or property

8 application or use for any other construction project or opera-

9 tion, obligation, or purposes.

10 (c) Failure to account for or remit money coming into the

11 person's possession which belongs to others.

12 (d) A willful departure from or disregard of plans or speci-

13 fications in a material respect and prejudicial to another, with-

14 out consent of the owner or an authorized representative and

15 without the consent of the person entitled to have the particular

16 construction project or operation completed in accordance with

17 the plans and specifications.

18 (e) A willful violation of the building laws of the state or

19 of a political subdivision of the state.

20 (f) In a maintenance and alteration contract, failure to

21 furnish to a lender the purchaser's signed completion certificate

22 executed upon completion of the work to be performed under the

23 contract.

24 (g) If a licensed residential builder or licensed residen-

25 tial maintenance and alteration contractor, failure to notify the

26 department within 10 days of a change in the control or direction

27 of the business of the licensee resulting from a change in the

00502'01 ***

3

1 licensee's partners, directors, officers, or trustees, or a

2 change in the control or direction of the business of the

3 licensee resulting from any other occurrence or event.

4 (h) Failure to deliver to the purchaser the entire agreement

5 of the parties including finance and any other charge arising out

6 of or incidental to the agreement when the agreement involves

7 repair, alteration, or addition to, subtraction from, improvement

8 of, wrecking of, or demolition of a residential structure or com-

9 bination of residential and commercial structure, or building of

10 a garage, or laying of concrete on residential property, or manu-

11 facture, assembly, construction, sale, or distribution of a resi-

12 dential or combination residential and commercial structure which

13 is prefabricated, preassembled, precut, packaged, or shell

14 housing.

15 (i) If a salesperson, failure to pay over immediately upon

16 receipt money received by the salesperson, in connection with a

17 transaction governed by this article to the residential builder

18 or residential maintenance and alteration contractor under whom

19 the salesperson is licensed.

20 (j) Aiding or abetting an unlicensed person to evade this

21 article, or knowingly combining or conspiring with, or acting as

22 agent, partner, or associate for an unlicensed person, or allow-

23 ing one's license to be used by an unlicensed person, or acting

24 as or being an ostensible licensed residential builder or

25 licensed residential maintenance and alteration contractor for an

26 undisclosed person who does or shall control or direct, or who

00502'01 ***

4

1 may have the right to control or direct, directly or indirectly,

2 the operations of a licensee.

3 (k) Acceptance of a commission, bonus, or other valuable

4 consideration by a salesperson for the sale of goods or the per-

5 formance of service specified in the article from a person other

6 than the residential builder or residential maintenance and

7 alteration contractor under whom the person is licensed.

8 (l) Becoming insolvent, filing a bankruptcy action, becoming

9 subject to a receivership, assigning for the benefit of credi-

10 tors, failing to satisfy judgments or liens, or failing to pay an

11 obligation as it becomes due in the ordinary course of business.

12 (m) Poor workmanship or workmanship not meeting the stan-

13 dards of the custom or trade verified by a building code enforce-

14 ment official.

15 (3) The department shall suspend or revoke the license of a

16 person licensed under this article whose failure to pay a lien

17 claimant results in a payment being made from the homeowner con-

18 struction lien recovery fund pursuant to the construction lien

19 act, Act No. 497 of the Public Acts of 1980, being sections

20 570.1101 to 570.1305 of the Michigan Compiled Laws 1980 PA 497,

21 MCL 570.1101 TO 570.1305, regardless of whether the person was

22 performing services as a licensee under this article; under the

23 electrical administrative act, Act No. 217 of the Public Acts of

24 1956, as amended, being sections 338.881 to 338.892 of the

25 Michigan Compiled Laws 1956 PA 217, MCL 338.881 TO 338.892; or

26 under Act No. 266 of the Public Acts of 1929, as amended, being

27 sections 338.901 to 338.917 of the Michigan Compiled Laws 1929

00502'01 ***

5

1 PA 266, MCL 338.901 TO 338.917. The license DEPARTMENT shall

2 not be renewed nor shall RENEW A LICENSE OR ISSUE a new license

3 be issued until the licensee has repaid in full to the fund the

4 amount paid out plus the costs of litigation and interest at the

5 rate set by section 6013 of the revised judicature act of 1961,

6 Act No. 236 of the Public Acts of 1961, as amended, being sec-

7 tion 600.6013 of the Michigan Compiled Laws 1961 PA 236,

8 MCL 600.6013.

9 (4) The department shall conduct a review upon notice by the

10 department of public COMMUNITY health that the licensee has

11 violated the asbestos abatement contractors licensing act, Act

12 No. 135 of the Public Acts of 1986, being sections 338.3101 to

13 338.3319 of the Michigan Compiled Laws, or sections 57 to 60f of

14 the Michigan occupational safety and health act, Act No. 154 of

15 the Public Acts of 1974, being sections 408.1057 to 408.1060f of

16 the Michigan Compiled Laws and 1986 PA 135, MCL 338.3101 TO

17 338.3319. THE DEPARTMENT may suspend or revoke that person's

18 license for a knowing violation of those acts THE ASBESTOS

19 ABATEMENT CONTRACTORS LICENSING ACT, 1986 PA 135, MCL 338.3101 TO

20 338.3319.

21 (5) NOTWITHSTANDING ARTICLE 5, THE FOLLOWING APPLY TO ADMIN-

22 ISTRATIVE PROCEEDINGS REGARDING WORKMANSHIP UNDER SUBSECTION

23 (2)(M):

24 (A) A COMPLAINT SUBMITTED BY AN OWNER SHALL DESCRIBE IN

25 WRITING TO THE SATISFACTION OF THE DEPARTMENT THE FACTUAL BASIS

26 FOR THE ALLEGATION AND THE PROPOSED ACTION NECESSARY TO CORRECT

27 OR REMEDY THE CONDITIONS DESCRIBED IN THE COMPLAINT.

00502'01 ***

6

1 (B) THE DEPARTMENT SHALL PRESUME THE INNOCENCE OF THE

2 LICENSEE THROUGHOUT THE PROCEEDING UNTIL THE ADMINISTRATIVE LAW

3 HEARING EXAMINER FINDS OTHERWISE IN A DETERMINATION OF FINDINGS

4 OF FACT AND CONCLUSIONS OF LAW UNDER ARTICLE 5. THE LICENSEE HAS

5 THE BURDEN OF REFUTING EVIDENCE SUBMITTED BY A PERSON DURING THE

6 ADMINISTRATIVE HEARING. THE LICENSEE ALSO HAS THE BURDEN OF

7 PROOF REGARDING THE REASON DEFICIENCIES WERE NOT CORRECTED.

8 (C) THE DEPARTMENT SHALL PROVIDE TO THE LICENSEE A COPY OF

9 THE COMPLAINT BY CERTIFIED MAIL WITHIN 30 DAYS AFTER RECEIPT OF

10 THE COMPLAINT BY THE DEPARTMENT. FAILURE OF THE DEPARTMENT TO

11 SEND A COPY OF THE COMPLAINT WITHIN THE 30-DAY PERIOD INVALIDATES

12 THE COMPLAINT.

13 (D) THE DEPARTMENT SHALL NOT INITIATE A PROCEEDING AGAINST A

14 LICENSEE UNDER THIS SUBSECTION IN THE CASE OF A LICENSEE WHO CON-

15 TRACTUALLY PROVIDES FOR AN ALTERNATE DISPUTE RESOLUTION PROCEDURE

16 THAT HAS NOT BEEN UTILIZED AND COMPLETED UNLESS IT IS DETERMINED

17 THAT THE LICENSEE HAS NOT COMPLIED WITH A DECISION OR ORDER

18 ISSUED AS A RESULT OF THAT ALTERNATE DISPUTE RESOLUTION PROCEDURE

19 OR THAT ALTERNATE DISPUTE RESOLUTION PROCEDURE WAS NOT FULLY COM-

20 PLETED WITHIN 90 DAYS AFTER THE FILING OF THE COMPLAINT WITH THE

21 DEPARTMENT.

22 (E) THE COMPLAINANT SHALL DEMONSTRATE IN A MANNER ACCEPTABLE

23 TO THE DEPARTMENT THAT NOTICE HAS BEEN PROVIDED TO THE LICENSEE

24 DESCRIBING REASONABLE TIMES AND DATES THAT THE RESIDENTIAL STRUC-

25 TURE WAS ACCESSIBLE FOR ANY NEEDED REPAIRS AND PROOF ACCEPTABLE

26 TO THE DEPARTMENT THAT THE REPAIRS WERE NOT MADE WITHIN 60 DAYS

27 AFTER THE SENDING OF THE NOTICE. THIS SUBDIVISION DOES NOT APPLY

00502'01 ***

7

1 WHERE THE DEPARTMENT DETERMINES A NECESSITY TO SAFEGUARD THE

2 STRUCTURE OR TO PROTECT THE OCCUPANT'S HEALTH AND SAFETY AND, IN

3 SUCH CASE, THE DEPARTMENT MAY UTILIZE ANY REMEDY AVAILABLE UNDER

4 SECTION 504(3)(A) THROUGH (D).

5 (F) IN THE CASE WHERE THE OWNER AND LICENSEE HAVE AGREED

6 CONTRACTUALLY ON MUTUALLY ACCEPTABLE PERFORMANCE GUIDELINES

7 RELATING TO WORKMANSHIP, THE DEPARTMENT SHALL CONSIDER THOSE

8 GUIDELINES IN ITS EVALUATION OF A COMPLAINT.

9 Sec. 2412. (1) A person or qualifying officer for a corpo-

10 ration or member of a residential builder or residential mainte-

11 nance and alteration contractor shall not bring or maintain an

12 action in a court of this state for the collection of compensa-

13 tion for the performance of an act or contract for which a

14 license is required by this article without alleging and proving

15 that the person was licensed under this article during the per-

16 formance of the act or contract.

17 (2) FAILURE OF THE PERSON BRINGING A COMPLAINT AGAINST A

18 LICENSEE TO UTILIZE TO COMPLETION A CONTRACTUALLY PROVIDED ALTER-

19 NATE DISPUTE RESOLUTION PROCEDURE SHALL BE AN AFFIRMATIVE DEFENSE

20 TO AN ACTION BROUGHT IN A COURT OF THIS STATE AGAINST A LICENSEE

21 UNDER THIS ARTICLE.

00502'01 *** Final page. LBO