It is enacted by the General Assembly as follows:

SECTION 1. Sections 5-65-1, 5-65-8, 5-65-10, 5-65-11, 5-65-12 and 5-65-16 of the General Laws in Chapter 5-65 entitled "Contractors' Registration" are hereby amended to read as follows:

5-65-1. Definitions -- As used in this chapter:

(1) "Board" means the seven (7) nine (9) member appointed contractors' registration board.

(2) (i) "Contractor" means a person who, in the pursuit of an independent business, undertakes or offers to undertake or submits a bid, or for compensation and with or without the intent to sell the structure arranges to construct, alter, repair, improve, move over public highways, roads or streets or demolish a structure or to perform any work in connection with the construction, alteration, repair, improvement, moving over public highways, roads or streets or demolition of a structure, and the appurtenances thereto. "Contractor" includes, but is not limited to, any person who purchases or owns property and constructs or for compensation arranges for the construction of one or more structures.

(ii) A certificate of registration is necessary for each "Business Entity" regardless of the fact that each entity may be owned by the same individual.

(3) "Dwelling Unit" means a single unit providing complete independent living facilities for one or more persons, including permanent provisions for living, sleeping, eating, cooking, and sanitation.

(4) "State" means the state of Rhode Island.

(5) "Structure" means a residence, including a site-built home, a modular home constructed off-site, a condominium, a manufactured home, a mobile home, and duplex or multi-unit residential building, consisting of four (4) dwelling units or less. This definition includes and is pre-empted by the regulations promulgated by the state building commission rules and regulations for family dwellings and multi-family dwellings.

(6) "Staff" means the executive director for the contractors' registration board, and any other staff necessary to carry out the powers, functions and duties of the board including inspector(s), hearing officer(s) and other supportive staff.

(7) "Hearing officer" means a person designated by the executive director, with the approval of the director of administration to hear contested claims or cases, contested enforcement proceedings, and contested administrative fines, in accordance with the Administrative Procedures Act.

5-65-8. Term of registration -- Renewal -- Registration identification card -- (a) A certificate of registration is valid for one year from the date of issuance unless the registration is revoked or suspended as described in section 5-65-10. It may be renewed by the same procedure provided for an original registration upon application and furnishing of any additional supplemental information that the board may require by rule.

(b) The board issues a pocket-card certificate of registration to a contractor registered under this chapter.

(c) The board may vary the dates of registration renewal by giving to the registrant written notice of the renewal date assigned and by making appropriate adjustments in the renewal fee.

(d) The presentation of the registration or license identification card is mandatory at the time of permit application.

(e) If a registrant files in bankruptcy court, the board must be notified in writing by the registrant and kept informed of the status of the case until dismissed, discharged or resolved in court.

5-65-10. Grounds for discipline -- Injunctions -- (a) The board or commission may revoke, suspend, or refuse to issue, reinstate, or reissue a certificate of registration if the board or commission determines after notice and opportunity for a hearing:

(1) That the registrant or applicant has violated section 5-65-3.

(2) That the insurance required by section 5-65-7 is not currently in effect.

(3) That the registrant or applicant has engaged in conduct as a contractor that is dishonest or fraudulent that the board finds injurious to the welfare of the public.

(4) Has violated a rule or order of the board.

(5) That the registrant has knowingly assisted an unregistered person to act in violation of this chapter.

(6) That a lien was filed on a structure under chapter 28 of title 34 because the registrant or applicant wrongfully failed to perform a contractual duty to pay money to the person claiming the lien.

(7) That the registrant has knowingly and willfully substantially violated state or local building codes.

(8) That the registrant has made false or fraudulent statements on his or her application.

(9) That a registrant has engaged in repeated acts in violation to this chapter and the board's rules and regulations.

(b) In addition to all other remedies, when it appears to the board that a person has engaged in, or is engaging in, any act, practice or transaction which violates the provisions of this chapter, the board may direct the attorney general to apply to the court for an injunction restraining the person from violating the provisions of this chapter. An injunction is not issued for failure to maintain the list provided for in section 5-65-3(h) unless the court determines that the failure is intentional.

(c) (1) The board may, after a hearing, impose a fine in an amount not to exceed five hundred dollars ($500) for the first violation of this chapter, or any rules or regulations promulgated by the board. In addition, when claims are filed, the board may impose a fine upon the contractor in an amount not to exceed ten thousand dollars ($10,000) when a contractor fails to complete work as ordered by the board. Said fine may include the contract price or the value of corrective measures, the dollar amount of an imposed lien, as well as incidental damages incurred by the prevailing party. Where corrective work is completed as ordered by the board, said fine shall not be imposed.

(2) For each second violation of a particular subsection of this chapter or of a rule or regulation promulgated by the board, a fine of a minimum of five hundred dollars ($500) but not to exceed one thousand dollars ($1,000) may be imposed after a hearing by the board. All subsequent violations shall impose fines at a minimum of one thousand dollars ($1,000) but not to exceed five thousand dollars ($5,000). All fines collected by the board are deposited as general revenues.

(d) The hearing officer, upon rendering a conclusion may require the registrant, in lieu of a fine, to attend continuing education courses as appropriate. Failure to adhere to the requirement could result in immediate revocation of registration.

5-65-11. Types of allowable claims -- The board only accepts and makes determinations of the following types of claims for damages against contractors registered under this chapter. This section applies to the following types of claims:

(1) Claims against a contractor by the owner of a structure for the following in performing any work subject to this chapter:

(i) Negligent work.

(ii) Improper work.

(iii) Breach of contract.

(2) Claims against a contractor by the owner of a structure to discharge or to recoup funds expended in discharging a lien established under chapter 28 of title 34 and under circumstances described under this subsection. The board may reduce any amount adjudged by the board under this section by any amount the claimant owes the contractor. The board only determines claims under this subsection if:

(i) The owner has paid the contractor for that contractor's work subject to this chapter; and

(ii) A lien is filed against the structure of the owner under chapter 28 of title 34 because the contractor failed to pay the person claiming the lien for that person's contribution toward completion of the structure.

(3) Claims against a registered contractor by a registered contractor for the following in performing any work subject to this chapter:

(i) Negligent work;

(ii) Improper work;

(iii) Breach of contract; or

(iv) Furnishing labor or material or renting or supplying equipment to a contractor.

(4) Claims by an employee of a registered contractor.

(5) If at a hearing the contractor's registration number is not on the contract, or recession clause when required by law, or mechanics lien notice; the registrant shall be subject to a fine.

5-65-12. Procedure for making claims against a contractor -- Investigation by board -- Disciplinary action -- (a) Any person having a claim against a contractor of the type referred to in section 5-65-11, may file with the board a statement of the claim in any form and with any fee that the board prescribes. The filing fee may be reimbursed to the claimant by the respondent, if the respondent is found to be at fault. Claims resolved prior to issuance of an order are may be removed from the contractor's registration board record pursuant to administrative regulations.

(1) All claims filed with the contractor's registration board are heard by a designated hearing officer, unless either party prior to the administrative hearing, files a civil action on the matter in a state court. Upon receipt of written notice and a copy of the filed civil complaint the board discontinues processing the claim. If documentation is not received the hearing will be conducted.

(2) A court judgment may constitute the basis for regulatory action against a contractor's registration which may result in the imposition of fines and penalties.

(b) The board may refuse to accept, or refuse at any time to continue processing a claim if:

(1) The same facts and issues involved in the claim have been submitted to any other entity authorized by law or the parties to effect a resolution and settlement;

(2) The claimant does not permit the contractor against whom the claim is filed to be present at any inspection made by the board;

(3) The board determines that the contractor against whom the claim is filed is capable of complying with the recommendations made by the board relative to the claim, but the claimant does not permit the contractor to comply with the recommendations. However, the board may refuse to accept further process of a claim under this paragraph only if the contractor was registered at the time the work was first performed and is registered at the time the board makes its recommendations; or

(4) The board determines that the nature or complexity of the claim is such that a court is the appropriate forum for the adjudication of the claim.

(c) The board does not process a claim unless it is filed in a timely manner as follows:

(1) If the owner of a new structure files the claim, the board must receive the claim not later than one year after the date the structure was first occupied as determined from the date of issuance of the certificate of occupancy, or one year after the date of the closing on the structure, whichever occurs later.

(2) If the owner of an existing structure files the claim, the board must receive the claim not later than one year after the date the work was substantially completed as determined by the certificate of occupancy, or the date that work ceased.

(3) Regardless of whether the claim involves a new or existing structure, if the owner files the claim because the contractor failed to begin the work pursuant to a written contract, the board must receive the claim not later than one year after the date the parties entered into a written contract.

(4) Regardless of whether the claim involves a new or existing structure, if the owner files a claim because the contractor failed to substantially complete the work, the board must receive the claim not later than one year after the date the contractor ceased work on the structure.

(5) If a registered general contractor files the claim against a registered subcontractor, because the subcontractor failed to substantially complete the work, the board must receive the claim not later than one year after the date the subcontractor ceased to work on the structure.

(6) If a material or equipment supplier, an employee, or a registered subcontractor files the claim, the board must receive the claim not later than one year after the date the registrant incurred the indebtedness.

(7) Any corrective work performed to resolve a claim is the responsibility of the contractor for one year beyond the completion date but only for corrective work performed.

(d) Upon acceptance of the statement of claim, the board gives notice to the party against whom the claim is made and initiates proceedings to determine the validity of the claim. If, after investigation, the board determines that a violation of this chapter or of any rule promulgated under this chapter has occurred, the board recommends to the registrant any action that the board considers appropriate, including revocation of the registrant's certificate, to compensate the claimant for any damages incurred as the result of the violation. If the contractor performs accordingly, the board gives that fact due consideration in any subsequent disciplinary proceeding brought by the board; provided, that the board suspends for a period of one year certification of any registrant who is found by final determination to have willfully and knowingly violated any provisions of this chapter with respect to three (3) or more structures within a one year period.

5-65-16. Investigatory powers of board -- Use of city or county inspectors -- Conduct of hearings -- (a) The board may investigate the activities of any person engaged in the building and construction industry to determine compliance with this chapter.

(b) With the assistance of the city or town, the board may conduct investigations with the assistance of the local building officials.

(c) The board has the power to administer oaths, issue notices and subpoenas in the name of the board, compel the attendance of witnesses and the production of evidence, hold hearings and perform any other acts that are reasonably necessary to carry out its duties under this chapter.

(d) If any person fails to comply with a subpoena issued under subsection (c) or refuses to testify on matters on which the person may be lawfully interrogated, the board may compel obedience.

SECTION 2. This act shall take effect upon passage.