Senate Bill No. 45
Introduced By holden
A Bill for an Act entitled: "An Act generally revising the laws governing contractors and contractor registration; amending sections 39-3-703, 39-3-705, 39-9-101, 39-9-102, 39-9-201, 39-9-202, 39-9-204, 39-9-206, 39-9-207, 39-9-211, 39-9-301, 39-9-303, 39-9-401, 39-9-402, 39-9-403, 39-9-404, 39-9-405, 39-9-406, 39-9-407, 39-9-408, 39-9-409, 39-9-410, and 39-71-120, MCA; repealing section 39-9-302, MCA; and providing an effective date."
Be it enacted by the Legislature of the State of Montana:
Section 1. Section 39-3-703, MCA, is amended to read:
"39-3-703. Contractor to furnish bond -- bond requirements -- deposit. (1) Except as provided in subsection (3), a contractor who contracts with any person or entity to do any work or perform any services for the person or entity shall furnish a surety bond or other form of security that must be:
(a) approved by the commissioner;
(b) in an amount:
(i) of $6,000 $10,000 for a general contractor or $4,000 for a specialty contractor if the contractor is a sole proprietor, or an
independent contractor, or a corporate officer working as an individual without employees; or
(ii) equal to a contractor's average monthly employee payroll, based on 12 consecutive months' payroll, as estimated by the
commissioner. However, the amount may not be less than $6,000 for a general contractor or $4,000 for a specialty
contractor and may not exceed $25,000 for any contractor. Security is not required if a contractor does not have
employees.
(c) in the name of the state of Montana;
(d) for the purpose of guaranteeing:
(i) the wages and fringe benefits of all workers employed by the contractor for the contracted work;
(ii) all taxes and contributions due to the state unemployment insurance contributions and workers' compensation insurance
liability;
(iii) payment to persons furnishing labor;
(e) filed with the commissioner within 1 week of the making of the contract or the commencement of work under the contract, whichever comes first.
(2) Only one bond is required on any contractor for each year, and when the bond is filed with and approved by the commissioner, the commissioner shall certify to any person contracting with a contractor that the bond is in full force and effect.
(3) In lieu of the surety bond required by subsection (1), the contractor may file with the department a deposit consisting of cash or other security acceptable to the department.
(4) A change in the name of a business or a change in the type of business may not impair a bond for the purposes of this section as long as one of the original applicants for the bond maintains partial ownership in the business covered by the bond."
Section 2. Section 39-3-705, MCA, is amended to read:
"39-3-705. Suit on bond. (1) Any person, firm, or corporation having a claim against the contractor for any of the items referred to in 39-3-703 may bring an action on the surety bond in the district court in the county in which the work was performed or in any county that has jurisdiction over the contractor.
(2) The surety issuing the bond must be named as a party to any suit upon the bond. Action upon the bond or deposit must
be commenced by filing the summons and complaint with the clerk of the appropriate district court within 1 year from the
date of expiration of the certificate of registration that was in force at the time the claimed labor was performed and benefits
accrued, the taxes and contribution owing the state became due, or the claimed contract work was completed. Service of
process in an action against the contractor, the contractor's bond, or the deposit must be exclusively by service upon the
department. Three copies of the summons and complaint and a fee of $10 for handling costs must be served by certified
mail upon the department at the time that suit is started. The $10 fee must be deposited in the state special revenue fund to
the credit of the department. The department shall maintain a record, available for public inspection, of all suits served.
Service is not complete until the department receives the $10 fee and three copies of the summons and complaint. The
service constitutes service on the registrant and the surety for suit upon the bond or deposit. The department shall mail the
summons and complaint or a copy of the summons and complaint to the registrant at the address listed in the registrant's
application and to the surety within 48 72 hours after it has been received.
(3) The surety is not liable in an aggregate amount in excess of the amount named in the bond or for any penalty assessed pursuant to Title 39, chapter 9. The liability for the surety may not accumulate when the bond has been renewed, continued, reinstated, reissued, or otherwise extended. The surety may, upon notice to the department and the parties, tender to the clerk of the court that has jurisdiction over the claim an amount equal to the claims under the bond or the amount of the bond less any judgments, if any, previously satisfied from the bond and exonerate the bond to the extent of the tender. However, if the actions commenced and pending at any one time exceed the amount of the bond then unimpaired, claims must be satisfied from the bond in the following order:
(a) labor, including employee benefits;
(b) taxes and contributions due to the state; and
(c) any court costs, interest, and attorney fees that a plaintiff may be entitled to recover.
(4) If a final judgment impairs the liability of the surety to the extent that the bond is no longer in effect in the full amount required in 39-3-703, the department shall suspend the registration of the contractor until the bond liability has been furnished in the required amount, unimpaired by unsatisfied judgment claims. If the bond becomes fully impaired, a new bond must be furnished in the amount prescribed by 39-3-703.
(5) A person who filed and served a summons and complaint as required by this section and who has an unsatisfied final judgment against the registrant for any items referred to in 39-3-703 may execute upon the security held by the department by serving a certified copy of the unsatisfied final judgment within 1 year of the date of the entry of the judgment. Upon the receipt of service of the certified copy, the department shall pay or order to be paid from the deposit, through the district court that rendered the judgment, a payment toward the unsatisfied judgment. The priority of payment by the department must be the order of receipt by the department, but the department has no liability for payment in excess of the amount of the deposit."
Section 3. Section 39-9-101, MCA, is amended to read:
"39-9-101. Purpose. It is the purpose of this chapter to ensure that all construction contractors are competing fairly and in compliance with state laws."
Section 4. Section 39-9-102, MCA, is amended to read:
"39-9-102. Definitions. As used in this chapter, the following definitions apply:
(1) "Contractor Construction contractor" means a person, firm, or corporation that:
(a) in the pursuit of an independent business, offers to undertake, undertakes, or submits a bid to construct, alter, repair, add to, subtract from, improve, move, wreck, or demolish for another a building, highway, road, railroad, excavation, or other structure, project, development, or improvement attached to real estate, including the installation of carpeting or other floor covering, the erection of scaffolding or other structures or works, or the installation or repair of roofing or siding; or
(b) in order to do work similar to that described in subsection (1)(a) upon the construction contractor's property, employs members of more than one trade on a single job or under a single building permit, except as otherwise provided.
(2) "Department" means the department of labor and industry.
(3) "General contractor" means a contractor whose business operations require the use of more than two unrelated
building trades or crafts that the contractor intends to supervise or perform in whole or in part.
(4) "Specialty contractor" means a contractor whose operations do not fall within the definition of general contractor.
(5) "Verification" means the receipt and duplication by a political subdivision of a contractor registration card that is
current on its face."
Section 5. Section 39-9-201, MCA, is amended to read:
"39-9-201. Registration required -- prohibited acts -- criminal penalty. (1) On or before July 1, 1996, each Each
construction contractor shall register with the department.
(2) It is a misdemeanor for a construction contractor to:
(a) advertise, offer to perform work, submit a bid, or perform work as a construction contractor:
(i) without being registered as required by this chapter; or
(ii) when the construction contractor's registration is suspended;
(b) use a false or expired registration number in purchasing or offering to purchase an advertisement for which a contractor
registration number is required; or
(c)(b) transfer a valid registration to an unregistered construction contractor to work under a registration issued to another
construction contractor.
(3) The department may cause the criminal proceedings for a misdemeanor action under this chapter to be initiated for prosecution in the lowest court of concurrent jurisdiction in the county where the infraction occurs."
Section 6. Section 39-9-202, MCA, is amended to read:
"39-9-202. Application for registration -- grounds for denial. (1) An applicant for registration as a construction contractor shall submit an application under oath on a form to be provided by the department that must include the following information:
(a) the applicant's social security number;
(b) proof of compliance with workers' compensation laws;
(c) proof of compliance with unemployment insurance laws;
(d) the I.R.S. employer identification number, if any;
(e) the type of contracting activity, such as general or specialty, and, if applicable, the type of specialty; and
(f) the name and address of:
(i) each partner if the applicant is a firm or partnership;
(ii) the owner if the applicant is an individual proprietorship;
(iii) the corporate officers and registered agent if the applicant is a corporation; or
(iv) the manager of a manager-managed limited liability company or the members of a member-managed limited liability company and the registered agent if the applicant is a limited liability company.
(2) The information contained in the application is a matter of public record and is open to public inspection.
(3)(2) The department may verify the workers' compensation coverage information provided by the applicant in subsection
(1)(b), including but not limited to information regarding the coverage of an individual employee of the applicant. If
coverage is provided under the laws of another state, the department may notify the other state that the applicant is
employing employees in Montana.
(4)(3) Registration must be denied if:
(a) the applicant has been previously registered as a sole proprietor, partnership, limited liability company, or corporation and was a principal or officer of the corporation; and
(b) the applicant has an unsatisfied final judgment in an action based on Title 39, chapter 3, part 7, that was incurred during a previous registration under this chapter."
Section 7. Section 39-9-204, MCA, is amended to read:
"39-9-204. Certificate of registration -- issuance -- duration -- renewal -- suspension. (1) The department shall issue to the applicant a certificate of registration upon compliance with the registration requirements of this chapter.
(2) If the department approves an application, it shall issue a certificate of registration to the applicant. The department shall place the expiration date, as determined by rule, on the certificate. Except as provided in subsection (3), the certificate is valid until the earliest date of:
(a) 1 year the expiration date, which must be for a period of at least 2 years but less than 3 years;
(b) the date that the bond expires; or
(c) the date that the workers' compensation or unemployment insurance expires or any applicable exemption terminates.
(3) The certificate issued under this section to an independent contractor is invalid on the date that the independent contractor hires employees unless the independent contractor provides proof to the department of workers' compensation coverage for those employees.
(4) A construction contractor may supply a short-term bond or insurance policy to bring its registration period to the full 1 year.
(5) If a construction contractor's surety bond or other security has an unsatisfied judgment against it or it is canceled, the construction contractor's registration is automatically suspended on the effective date of the impairment or cancellation. The department shall give notice of the suspension to the construction contractor."
Section 8. Section 39-9-206, MCA, is amended to read:
"39-9-206. Fees -- education program. (1) The department shall charge fees for:
(a) issuance, renewal, and reinstatement of certificates of registration; and
(b) changes of name, address, or business structure.
(2) The department shall set the fees by administrative rule. The fees shall cover the full cost of issuing certificates, filing papers and notices, and administering and enforcing this chapter. The costs include reproduction, travel, per diem, and administrative and legal support costs.
(3) The fees charged in subsection (1)(a) may not exceed $80 a year, prorated for the period for which the registration certificate is issued.
(4) The fees collected under this section must be deposited in the state special revenue account to the credit of the department for the administration and enforcement of this chapter.
(5) The department shall establish, cooperatively with representatives of the building industry, an industry and consumer information program, funded with 15% of the fees, to educate the building industry about the registration program and to educate the public regarding the hiring of building construction contractors.
(6) The fee for a joint application for a certificate of registration and an independent contractor exemption may not exceed the fee charged for a certificate of registration."
Section 9. Section 39-9-207, MCA, is amended to read:
"39-9-207. Registration prerequisite to suit or lien claim -- limiting liability. (1) A person engaged in the business or acting in the capacity of a construction contractor may not bring or maintain an action in any court of this state for the collection of compensation for the performance of any work or for breach of contract for which registration is required under this chapter without alleging and proving that the construction contractor was a registered construction contractor and held a current and valid certificate of registration at the time that the construction contractor entered the contract for the performance of work.
(2) For the purposes of this section, the court may not find a construction contractor in compliance with the registration requirements of this chapter unless:
(a) the department has on file the information required by 39-9-202; and
(b) the construction contractor has a current bond or other security as required by 39-9-203.
(3) In determining whether a construction contractor is in compliance with the registration requirements of this chapter, the court shall consider the length of time during which the construction contractor did not hold a valid certificate of registration.
(4) A construction contractor may not bring or maintain a lien claim under Title 71, chapter 3, part 5, unless the construction contractor is registered at the time of entering into a contract.
(5) A person, including a construction contractor engaging the services of another a registered construction contractor, is
not liable as an employer for workers' compensation and unemployment insurance coverage or for wages and fringe
benefits pursuant to 39-3-706 for the other registered construction contractor or for any employee of the other registered
construction contractor if the contractor person verifies with the department that the other construction contractor with
whom the contractor is contracting for services is registered as provided under this chapter. Proof of verification is
demonstrated by having a copy of the construction contractor's registration certificate that covers the time period during
which the construction contractor performs the services."
Section 10. Section 39-9-211, MCA, is amended to read:
"39-9-211. Exemptions. This chapter does not apply:
(1) to an authorized representative of the United States government, the state of Montana, or any incorporated municipality, county, alternative form of local government, irrigation district, reclamation district, or other municipal or political corporation or subdivision of this state;
(2) to an officer of a court acting within the scope of office;
(3) to a public utility operating under the regulations of the public service commission or to a rural cooperative utility operating under Title 35, chapter 18, in construction, maintenance, or development work incidental to its own business;
(4) to the repair or operation incidental to the discovery or production of oil or gas or incidental to the drilling, testing,
abandoning, or other operation of an oil or gas well or a surface or underground mine or mineral deposit when performed
by an owner or lessee;
(5) to the sale or installation of finished products, materials, or articles of merchandise that are not actually fabricated into and do not become a permanent fixed part of a structure;
(6) to the construction, alteration, improvement, or repair carried on within the limits and boundaries of a site or reservation under the exclusive legal jurisdiction of the federal government;
(7) to a person who only furnished materials, supplies, or equipment without fabricating them into or consuming them in the performance of the work of the construction contractor;
(8) to work or operation on one undertaking or project considered of a casual, minor, or inconsequential nature, by one or
more contracts, the aggregate contract price of which, for labor and materials and all other items, is less than $500 $2,500 a
job. The exemption prescribed in this subsection does not apply when the work or construction is only a part of a larger or
major operation, whether undertaken by the same or a different construction contractor, or in which a division of the
operation is made into contracts of amounts of less than $500 $2,500 a job for the purpose of evasion of this chapter or
otherwise. The exemption prescribed in this subsection does not apply to a person who advertises or puts out any sign or
card or other device that might indicate to the public that the person is a construction contractor or is qualified to engage in
the business of a construction contractor.
(9) except when work is performed by a registered contractor, to a construction or operation incidental to the construction
or repair: farmer or rancher while engaged in a farming, dairying, agriculture, viticulture, horticulture, or stock or poultry
operation;
(a)(10) of irrigation and drainage ditches of to an irrigation district or reclamation district;
(b) of a farming, dairying, agriculture, viticulture, horticulture, or stock or poultry operation; or
(c)(11) to an operation related to clearing or other work upon land in rural districts for fire prevention purposes;
(10)(12) to an owner who contracts for a project with work to be performed by a registered construction contractor, but this
exemption does not apply to an owner who is otherwise covered by this chapter who constructs a residence on the owner's
property with the intention and for the purpose of promptly selling the improved property;
(11)(13) to a person an owner working on the person's owner's property, whether occupied by the person owner or not, and
a person working on the person's residence, whether owned by the person or not, but this exemption does not apply to a
person an owner who is otherwise covered by this chapter who constructs an improvement on the person's owner's property
with the intention and for the purpose of promptly selling the improved property, unless the owner has continuously
occupied the property as the owner's primary residence for at least the last 12 months;
(12)(14) to owners of commercial properties who use their own employees to do maintenance, repair, and alteration work in
or upon their own properties;
(13)(15) to a licensed architect, or civil or professional engineer, or professional land surveyor, licensed in Montana and
acting solely in a professional capacity;
(14)(16) to an electrician or plumber, licensed in Montana, operating within the scope of the license;
(15)(17) to a contract security company, licensed under Title 37, chapter 60, operating within the scope of the license; or
(16)(18) to a person who engages in the activities regulated as an employee of a registered construction contractor with
wages as the sole compensation or as an employee with wages as the sole compensation;
(19) to a person or business, other than an independent contractor, that holds a professional license issued by the state;
(20) to a water well contractor licensed under Title 37, chapter 43, performing the work of a water well contractor;
(21) to an enrolled tribal member or an association, business, corporation, or other entity, at least 51% of which is owned by an enrolled tribal member or members and whose business is conducted solely within the exterior boundaries of an Indian reservation; or
(22) to a person working on the person's own residence, if the residence is owned by a person other than the resident."
Section 11. Section 39-9-301, MCA, is amended to read:
"39-9-301. Business practices -- advertising -- penalty. (1) Except as provided in 39-9-205, a person who has registered
under one name as provided in this chapter may not engage in the business or act in the capacity of a construction
contractor under any other name unless that name also is registered under this chapter.
(2) Except for telephone books, all advertising, contracts, correspondence, cards, signs, posters, papers, and documents that
show a contractor's name or address must show the contractor's name and address as registered under this chapter.
(3) (a) The alphabetized listing of contractors appearing in the advertising section of directories, excluding telephone
books, and all advertising must show the contractor's current registration number. However, signs on motor vehicles and
on-premises signs do not constitute advertising under this section.
(b) All materials used to directly solicit business from retail customers who are not businesses must show a contractor's
current registration number. A contractor may not use a false or expired registration number in purchasing or offering to
purchase an advertisement. Advertising by radio or television is not subject to this subsection.
(4) A contractor may not advertise that the contractor is bonded because of the bond required to be filed provided in
39-9-203.
(5)(2) A construction contractor may not falsify a registration number and use it in connection with a solicitation or
identification as a construction contractor. An individual construction contractor, partner, associate, agent, salesperson,
solicitor, officer, or employee of a construction contractor shall use a true name and address at all times while engaged in
the business or capacity of a construction contractor or in activities related to a construction contractor.
(6)(3) (a) The finding of a violation of this section by the department at a hearing held in accordance with the Montana
Administrative Procedure Act subjects the person who commits the violation to a penalty of not more than $5,000, as
determined by the department. The required hearing may be held by telephone or by videoconference. A penalty collected
under this section must be deposited in the state special revenue account to the credit of the department for administration
and enforcement of this chapter.
(b) Penalties under this section do not apply to a violation that is determined to be an inadvertent error."
Section 12. Section 39-9-303, MCA, is amended to read:
"39-9-303. Department to compile and update list of registered construction contractors -- availability -- fee. (1) The department shall compile a list of all construction contractors registered under this chapter and update the list at least bimonthly. The list is public information and must be available to the public upon request for a reasonable fee.
(2) The department shall inform a person, firm, or corporation whether a construction contractor is registered. The department shall provide the information without charge, except for a reasonable fee for any copies made."
Section 13. Section 39-9-401, MCA, is amended to read:
"39-9-401. Violation -- infraction. (1) It is a violation of this chapter and an infraction for any construction contractor
to:
(a)(1) advertise, offer to perform work, submit a bid, or perform work as a construction contractor without being registered
as required by this chapter;
(b)(2) advertise, offer to perform work, submit a bid, or perform work as a construction contractor when the construction
contractor's registration is suspended; or
(c)(3) transfer a valid registration to an unregistered construction contractor or allow an unregistered construction
contractor to work under a registration issued to another construction contractor.
(2) Each day that a contractor works without being registered as required by this chapter, works while the contractor's
registration is suspended, or works under a registration issued to another contractor is a separate infraction. Each worksite
at which a contractor works without being registered as required by this chapter, works while the contractor's registration is
suspended, or works under a registration issued to another contractor is a separate infraction."
Section 14. Section 39-9-402, MCA, is amended to read:
"39-9-402. Violations -- investigations -- citations. (1) The department shall appoint compliance inspectors to investigate alleged or apparent violations of this chapter. An authorized compliance inspector, upon presentation of appropriate credentials, may inspect and investigate worksites at which a construction contractor had bid or is presently working to determine whether the construction contractor is registered in accordance with this chapter or rules adopted under 39-9-103 or whether there is a violation of 39-9-401. Upon request of the compliance inspector, a construction contractor or an employee of the construction contractor shall provide information identifying the construction contractor.
(2) If the employee of an unregistered construction contractor is cited by a compliance inspector, that employee is cited as the agent of the unregistered construction contractor, and issuance of the citation to the employee is notice to the construction contractor that the construction contractor is in violation of this chapter. An employee who is cited by a compliance inspector is not liable for any of the alleged violations contained in the citation unless the employee is also the construction contractor."
Section 15. Section 39-9-403, MCA, is amended to read:
"39-9-403. Failure to provide information to identifying construction contractor -- misdemeanor. Willful refusal to
provide information identifying a construction contractor, as required by 39-9-402, is a misdemeanor."
Section 16. Section 39-9-404, MCA, is amended to read:
"39-9-404. Restraining orders -- injunctions. (1) If the authorized compliance inspector, upon investigation or
inspection, reasonably believes that a construction contractor has failed to register in accordance with this chapter or the
rules adopted under 39-9-103, the department may issue an order immediately restraining further construction work at the
worksite by the construction contractor. The order shall must describe the specific violation that necessitated the issuance
of the restraining order. The construction contractor or representative to whom the restraining order is directed may request
a hearing to be conducted pursuant to the Montana Administrative Procedure Act. A request for hearing may not stay the
effect of the restraining order.
(2) In addition to and after having invoked the powers of restraint vested in the department as provided in subsection (1), the department, through the attorney general, may petition the district court to enjoin any activity in violation of this chapter. A prima facie case for issuance of an injunction must be established by affidavits and supporting documentation that a restraining order was served upon the construction contractor and that the construction contractor continued to work after service of the order. Upon the filing of the petition, the district court has jurisdiction to grant injunctive or other appropriate relief, pending the outcome of enforcement proceedings under this chapter, or to enforce restraining orders issued by the department. If the construction contractor fails to comply with a court order, the department shall petition the district court for an order holding the construction contractor in contempt of court and for any other appropriate relief."
Section 17. Section 39-9-405, MCA, is amended to read:
"39-9-405. Notice of infraction -- service. The department may issue a notice of infraction if the department reasonably
believes that the construction contractor required to be registered by this chapter has failed to do so or has otherwise
committed a violation under 39-9-401. A notice of infraction issued under this section may be personally served on the
construction contractor named in the notice by the department's compliance inspectors or service may be made by certified
mail directed to the construction contractor named in the notice of infraction. If the construction contractor named in the
notice of infraction is a firm or corporation, the notice may be personally served on any employee officer of the firm or
corporation. If a notice of infraction is personally served upon an employee of a firm or corporation, the department shall
send a copy of the notice by certified mail within 4 days of service to the contractor if the department is able to obtain the
contractor's address."
Section 18. Section 39-9-406, MCA, is amended to read:
"39-9-406. Notice of infraction -- form. The form of the notice of the infraction issued under this chapter must include a statement:
(1) that the notice represents a determination that the infraction has been committed by the construction contractor named in the notice and that the determination is final unless contested as provided in this chapter;
(2) that the infraction is a civil offense;
(3) of the specific violation that necessitated the issuance of the notice of infraction;
(4) of the penalty involved if the infraction is established;
(5) of the options provided in this chapter for responding to the notice and the procedures necessary to exercise these options;
(6) that at a hearing to contest the notice of infraction, the state has the burden of proving, by a preponderance of the evidence, that the infraction was committed and that the construction contractor may subpoena witnesses, including the compliance inspector who issued and served the notice of infraction;
(7) signed by the person who has been served with the notice of infraction that the construction contractor promises to respond to the notice of infraction in one of the ways provided in this chapter;
(8) that refusal to sign the notice of infraction as directed in subsection (7) is a misdemeanor and may be punished by a
fine, or imprisonment in jail, or both; and
(9) that the construction contractor's failure to respond to a notice of infraction as promised is a misdemeanor and may be
punished by a fine, or imprisonment in jail, or both."
Section 19. Section 39-9-407, MCA, is amended to read:
"39-9-407. Notice of infraction -- determination -- appeal -- duty to respond. (1) Unless contested, the notice of infraction represents a determination that the construction contractor to whom the notice was issued committed the infraction.
(2) If a party desires to contest the determination, the party shall file a notice of appeal with the department within 20 30
days of the issuance of the notice of infraction. The department shall conduct a hearing in accordance with the Montana
Administrative Procedure Act. The department may conduct the hearing by telephone or by videoconference.
(3) A construction contractor who is issued a notice of infraction shall respond within 20 30 days of the date of issuance of
the notice of infraction.
(4) If a construction contractor named in the notice does not elect to contest the notice of infraction, the construction contractor shall pay to the department the amount of the penalty prescribed for the infraction. When payment of the appropriate penalty is received by the department, the department shall make the appropriate entry in its records.
(5) If a construction contractor named in the notice elects to contest the notice of infraction, the construction contractor shall respond by filing an answer of protest with the department, specifying the grounds of protest."
Section 20. Section 39-9-408, MCA, is amended to read:
"39-9-408. Notice of infraction -- failure to respond -- refusal to sign -- penalty. (1) If a construction contractor issued a notice of infraction fails to respond within the prescribed response period, the construction contractor is guilty of a misdemeanor and the department may cause the criminal proceedings to be initiated against the person for prosecution in the lowest court of concurrent jurisdiction in the county where the infraction occurred.
(2) After a final determination by the department that an infraction has been committed, a construction contractor who fails to pay a penalty within 30 days, unless waived, reduced, or suspended pursuant to 39-9-410, and who fails to file an appeal pursuant to 39-9-409 is guilty of a misdemeanor and the department may cause the criminal proceedings to be initiated against the person for prosecution in the lowest court of concurrent jurisdiction in the county in which the infraction occurred.
(3) A construction contractor who fails to pay a penalty within 30 days after exhausting appellate remedies pursuant to 39-9-409 is guilty of a misdemeanor and the department may cause the criminal proceedings to be initiated against the person for prosecution in the lowest court of concurrent jurisdiction in the county where the infraction occurred.
(4) It is a misdemeanor for a person who has been personally served with a notice of infraction to refuse to sign a written promise to respond to the notice.
(5) It is a misdemeanor for a construction contractor who has been personally served with a notice of infraction to willfully violate the written promise to respond to a notice of infraction as provided in this chapter, regardless of the ultimate disposition of the infraction."
Section 21. Section 39-9-409, MCA, is amended to read:
"39-9-409. Infraction -- administrative hearing -- procedure -- burden of proof -- order -- appeal. (1) The department shall conduct a case related to a construction contractor's notice of infraction pursuant to Title 2, chapter 4.
(2) The burden of proof is on the department to establish the commission of the infraction by a preponderance of the evidence. The notice of infraction must be dismissed if the defendant establishes that, at the time the notice was issued, the defendant was registered by the department, was not suspended, or was exempt from registration.
(3) The hearings officer shall dismiss the notice of infraction at any time upon written notification from the department that the construction contractor named in the notice of infraction was registered, was not suspended, or was exempt from registration at the time the notice of infraction was issued.
(4) After consideration of the evidence and argument, the hearings officer shall determine whether the infraction was committed. If it has not been established that the infraction was committed, an order dismissing the notice must be entered in the record of the proceedings. If it has been established that the infraction was committed, the hearings officer shall issue findings of fact and conclusions of law in the decision and order determining whether the infraction was committed.
(5) If it is determined that the infraction was not committed, the hearings officer shall award the construction contractor the reasonable costs incurred in responding to the notice of infraction.
(5)(6) An appeal from the hearings officer's determination or order must be to the district court."
Section 22. Section 39-9-410, MCA, is amended to read:
"39-9-410. Infraction -- penalty. (1) A construction contractor found to have committed an infraction under 39-9-401
must be assessed a penalty of $150 $100 for each day for each infraction in which the construction contractor conducted
business without being registered, beginning with the date the notice of infraction was served to the construction contractor
or to the construction contractor's agent.
(2) The department may waive, reduce, or suspend the penalty imposed for the infraction only upon a showing of good cause that the penalty would be unduly burdensome to the construction contractor.
(3) A penalty collected under this section must be deposited in the state special revenue account to the credit of the department for administration and enforcement of this chapter."
Section 23. Section 39-71-120, MCA, is amended to read:
"39-71-120. Independent contractor defined. (1) An "independent contractor" is one who renders service in the course of an occupation and:
(a) has been and will continue to be free from control or direction over the performance of the services, both under the contract and in fact; and
(b) is engaged in an independently established trade, occupation, profession, or business; and
(c) has received an exemption granted under 39-71-401(3).
(2) An individual performing services for remuneration is considered to be an employee under this chapter unless the requirements of subsection (1) are met."
NEW SECTION. Section 24. Repealer. Section 39-9-302, MCA, is repealed.
NEW SECTION. Section 25. Effective date. [This act] is effective July 1, 1997.
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