comm005_EmR0904.pdf Commerce – Revises Ch. Comm 5 – EmR0904
Publication Date: March 2, 2009
Effective: March 2, 2009 through July 29, 2009
(except ss. Comm 5.30 (1) and 61.295 (2)
Effective: July 1, 2009 through November 27, 2009
Hearing Date: March 31, 2009
DEPARTMENT OF COMMERCE
EMERGENCY RULE RELATING TO BUILDING CONTRACTORS
The Department of Commerce finds that an emergency exists within the state of Wisconsin and that adoption of an emergency rule is necessary for the immediate preservation of the public health, safety and welfare. A statement of the facts constituting the emergency is as follows.
1. Under Chapter 560 of the Statutes, the department of commerce is charged with facilitating the establishment and retention of business enterprises in Wisconsin, and with seeking closer cooperation and coordination between units of state government, so that the economy of the state may continue to develop fully and meet citizen and community needs.
2. Under Chapters 101 and 145 of the statutes, the department of commerce has oversight over the design, construction, alteration and maintenance of public buildings and places of employment, one- and two- family dwellings, public swimming pools and public water attractions in order to protect public safety, health and welfare and the waters of the state.
3. The department has proposed an administrative rule that would require the registration of various types of building contractors not already credentialed by the department under existing administrative rules. Under the proposed rules contractors must be registered with the department by January 1, 2010. A public hearing on that proposal was held on January 21, 2009.
4. The proposed rule has three main benefits to Wisconsin: first, it will enhance the department’s ability to communicate with and educate building contractors throughout the state about their obligations to limit safety and health risks for the citizens of Wisconsin; second, it will enhance the ability of the department to cooperate and coordinate with the Department of Workforce Development relative to their administration of unemployment insurance and workers compensation insurance programs; and third, it will enhance the ability of the department to cooperate and coordinate with the Department of Revenue relative to their administration of the state income tax program.
5. Due to the current economic circumstances, the department has determined that the implementation for building contractor registration should be July 1, 2009 in order for the benefits to be in effect for the 2009 building construction season.
Analysis of Rule
1. Statutes Interpreted: ss. 101.02 (1), 101.02 (4), 101.02 (13) (b), 101.02 (15) (a), (b), (f), (h), (k) and (L), 101.12 (3) (h), 101.19 (1) (f), 101.63 (1), 145.02 (2) and (3), 560.01 (1) and (2), and 560.02 (4), Stats.
2. Statutory Authority: ss. 101.02 (1), 101.02 (4), 101.02 (13) (b), 101.02 (15) (a), (b), (f), (h), (k) and (L), 101.12 (3) (h), 101.63 (1), 145.02 (2) and (3), 560.01 (1) and (2), and 560.02 (4), Stats.
3. Related Statute or Rule
Statutes: 101.148, 101.178,
101.654, 101.862, 101.94, 101.95, 101.951, 101.96, 101.985 (1), and 895.07 (13)
Administrative Rules: Comm 5.31, 5.32, 5.323, 5.327, 5.41, 5.42, 5.70 and
5.9905
4. Explanation of Agency Authority
Under chapter 560 of the Wisconsin Statutes, the Department of Commerce is charged with facilitating the establishment and retention of business enterprises in Wisconsin, and seeking closer cooperation and coordination between units of state government, so that the economy of the state may continue to develop fully and meet citizen and community needs.
Under chapters 101 and 145 of the Wisconsin Statutes, the Department of Commerce also 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. Various construction trades are involved in building or modifying these types of structures. Together with building owners and designers, construction trades share a responsibility to ensure that the buildings, relative to the respective trade’s work, do not pose risk to public health and safety.
The registration would enhance the department’s communication, education and oversight efforts for those businesses that contribute in various ways and aspects to the creation or alteration of buildings that limit the safety and health risks for the citizens of Wisconsin. Utilizing the registry of building contractors the department will more efficiently and effectively inform contractors about safety regulations and consumer protection regulations, such as the consumer notice required under s. 101.148 (2), Stats., pertaining to procedures for addressing construction defects.
The department recognizes that by registering Wisconsin building contractors and subcontractors, information pertaining to such registrants can be posted on the internet and made available to the Wisconsin Departments of Workforce Development and Revenue for use in their administration of unemployment insurance, workers compensation insurance and income tax programs, respectively. The registry of building contractors can be used by the aforementioned agencies to reinforce their efforts to minimize the misclassification of employees and to maximize proper participation in unemployment insurance and workers compensation insurance programs and proper payment of income taxes.
5. Summary of Proposed Rules
The proposed rules require a registration credential for various building contactors who are involved in the construction or modification of public buildings and places of employment and one- and 2-family dwellings, unless the contractor already holds another type of contractor credential issued by the department. The registration credential is for a contracting business and is not required for each partner or employee who is involved with physically constructing or modifying the structures.
6. Summary of, and Comparison with, Existing or Proposed Federal Regulations
An internet-based search of the code of federal regulations and the federal register did not indentify any federal requirements relating to contractor registrations.
7. Comparison with Rules in Adjacent States
An Internet-based search for the states of Illinois, Iowa, Michigan and Minnesota found the following:
Illinois: The state of Illinois does not have any regulations regarding the licensure of building contractors, except roofers.
Iowa: The state of Iowa requires all individual contractors and businesses performing construction work in Iowa to be registered. The fee is $25 for a two year registration. The prerequisites for registration include the demonstration of compliance with worker’s compensation insurance requirements and compliance with unemployment tax requirements.
Michigan: The state of Michigan requires licenses for persons and businesses that contract with property owners to build new homes or remodel homes. The license types are: Residential Builder, and Maintenance and Alteration Contractor. The Maintenance and Alteration Contractor is restricted to perform only specific trades and services for which they are licensed. The fee is $225 for a three year license. Applicants for the license must complete 60 hours of approved education and pass an examination. Michigan does not have a licensing law regulating builders of commercial buildings.
Minnesota: The state of Minnesota requires certifications for persons and businesses that contract 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 must include a qualifying person who must take the required examination and fulfill the continuing education requirements for the licensee.
Also under the Minnesota Independent Contractor Certification Law, as of January 1, 2009, a certification is required for building contractors where contractors must establish that they are independent contractors versus employees utilizing the “9 Items” test related to Worker’s Compensation. The fee for a two year certification is $250.
8. Summary of Factual Data and Analytical Methodologies
The registration provisions of the proposed rules were developed by analyzing and comparing the current administrative rules under chapter Comm 5 for other types of building contractors currently licensed, certified or registered by the department. The concept of the contractor registration was developed in light of proposed Wisconsin legislation under 2007 SB 228 and AB466, and with consideration of legislation in the states adjacent to Wisconsin.
9. Analysis and Supporting Documents used to Determine Effect on Small Business or in Preparation of Economic Impact Report
The proposed rules require the registration of individuals and entities that act as building contractors or subcontractors who are involved in the construction or modification of public buildings, places of employment and one- and 2- family dwellings and who are not already credentialed by the department. The department currently credentials several contracting trades, including dwelling contractors, HVAC contractors, electrical contractors and elevator contractors. The rules would apply to those persons and entities engaged in the business of commercial general construction, drywall, plastering, electrical wiring, finish carpentry, flooring, framing carpentry, glass and glazing, insulation, masonry and stone work, plumbing, concrete work, roofing, siding, building site preparation and/or stabilization, structural steel, tile and terrazzo, wall coverings, and other building or equipment specialties.
The department estimates that the number of contractors to be registered under the rules would be 30,000. A contractor registration would cost $100 for a 4-year term if applied for electronically and $115 if applied for via paper. The department does not believe that this registration and fee would pose a significant impact on businesses. An economic impact report has not been required to be prepared.
10. Agency Contact.
Robert DuPont, Bureau Director, robert.dupont@wisconsin.gov, (608) 266-8984
11. Public Hearing Comments.
The hearing record on this emergency rule will remain open until April 10, 2009. Written comments on the proposed may 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.
TEXT OF RULE
SECTION 1. Comm 5.01 (4) (h) is created to read:
Comm 5.01 (4) (h) Building contractor.
SECTION 2. Comm 5.02 Table 5.02 line 8m. is created to read:
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Table 5.02 (Partial) |
|||||
|
|
License, Certification or Registration Category |
Type |
Application Fee |
Examination Fee |
License, Certification or Registration Fee |
|
|
Subchapter III |
|
|
|
|
|
8m. |
Building Contractor |
Registration |
$15a |
NA |
$100 |
SECTION 3. Comm 5.02 Table 5.02 footnote a is created to read:
a No fee if application is submitted electronically; $15 application fee for a late renewal per s. Comm 5.07 (2) (b) 1. a.
SECTION 4. Comm 5.06 Table 5.06 line 8m. is created to read:
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Table 5.06 (Partial) |
||||
|
|
License, Certification or Registration Category |
Term |
Expiration Date |
Continuing Education Cycle |
|
|
Subchapter III |
|
|
|
|
8m. |
Building Contractor |
4 years |
Date of Issuance |
NA |
SECTION 5. Comm 5.30 is created to read:
Comm 5.30 Building contractor. (1) GENERAL. (a) Except as provided in par. (b), no person or entity may engage in a construction business or offer to engage in a construction business that affects public buildings, places of employment, one- and 2- family dwellings, public swimming pools and water attractions, unless the person or entity holds a registration issued by the department as a registered building contractor.
(b) Paragraph (a) does not apply to any of the following:
1. A person or entity that holds any of the following credentials issued by the department:
a. A dwelling contractor certification.
b. A dwelling contractor – restricted certification.
c. A manufactured home manufacturer license.
d. A manufactured home dealer license.
e. A manufactured home installer license.
f. An electrical contractor certification.
g. An electrical contractor – restricted certification.
h. An HVAC contractor registration.
i. An elevator contractor license.
2. A person or entity that works only on real estate or property they own or lease.
(c) Under this section:
1. "Construction business" means a trade that installs, alters or repairs any building element, component, material or device that is regulated under the commercial building code, chs. Comm 60 to 66, the uniform dwelling code, chs. Comm 20 to 25, the electrical code, ch. Comm 16, the plumbing code, chs. Comm 81 to 87, or the public swimming pools and water attractions code, ch. Comm 90. The term does not include the delivery of building supplies or materials, or the manufacture of a building product not on the building site.
Note: Examples of construction businesses that are to register:
|
Building site preparation/stabilization |
Masonry and stone work |
|
Drywall and plastering |
Plumbing |
|
Electric Wiring |
Poured concrete foundations and structures |
|
Finish carpentry |
Precast concrete |
|
Fire protection |
Public swimming pools and water attractions |
|
Flooring |
Roofing |
|
Framing carpentry |
Siding |
|
General building construction |
Structural steel |
|
Glass and glazing |
Tile and terrazzo |
|
Insulation |
Wall coverings |
|
|
Other building or equipment specialties |
2. “Dwelling unit” means a structure or that part of a structure which is used or intended to be used as a home, residence or sleeping place by one person or by 2 or more persons maintaining a common household, to the exclusion of all others.
3. “One- and 2- family dwelling” means any building that contains one or 2 dwelling units that construction of which commenced on or after December 1, 1978.
(2) APPLICATION FOR BUILDING CONTRACTOR REGISTRATION. A person applying for a building contractor registration shall submit all of the following:
(a) An application in accordance with s. Comm 5.01.
(b) An application fee and a registration fee in accordance with s. Comm 5.02, Table 5.02.
(c) The social security number or federal employer identification number for the business.
(d) A statement certifying compliance with worker’s compensation requirements under ch. 102, Stats., and unemployment compensation requirements under ch. 108, Stats.
(3) QUALIFICATIONS FOR REGISTRATION. The person applying for a building contractor registration shall be the owner of the construction business, a partner in the construction business applying on behalf of a partnership, or the chairman of the board or chief executive officer applying on behalf of the construction corporation.
(4) RESPONSIBILITIES. A person or entity that holds a building contractor registration shall do all of the following:
(a) Include their registration number on all construction bids and contracts.
(b) Not contract with another person or entity to engage in construction business activities unless the person or entity holds a credential under sub. (1) (a) or (b) 1.
(c) Not commence a construction business activity until a permit is issued for the construction for any project that requires a uniform building permit under s. Comm 20.08.
(d) Not commence a construction business activity until a permit is issued for the construction for any project that requires a municipal building permit involving a public building, a place of employment or a one- or 2- family dwelling.
(e) Not commence a construction business activity until plan approval has been obtained as required under ss. Comm 61.30, 82.20, 83.22, or 90.04.
(5) RENEWAL. (a) A person may renew a building contractor registration.
(b) A building contractor registration shall be renewed in accordance with s. Comm 5.07.
SECTION 6. Comm 61.295 is created to read:
Comm 61.295 Administrative coordination. (1) Pursuant to ss. 101.02 (13) (b) and 101.12 (3) (h), Stats., if plans are required to be submitted to the department for review under s. Comm 61.30, a municipality may not issue a building permit to commence construction or use of the building until the plans have been approved by the department or its agent.
(2) Pursuant to s. 101.02 (13) (b) Stats., a municipality may not issue a building permit to commence a construction business activity to a person or entity unless the person or entity holds a registration issued by the department under s. Comm 5.30 as a building contractor or holds one of the credentials listed under s. Comm 5.30 (1) (b) 1., except as provided in s. Comm 5.30 (1) (b) 2.
EFFECTIVE DATE
Pursuant to s. 227.24, Stats., this rule shall take effect as an emergency rule upon publication in the official state newspaper, except ss. Comm 5.30 (1) and Comm 61.295 (2) which shall take effect on July 1, 2009.
(Note: Publication Date, March 2, 2009)
