Arizona Registrar of Contractors Rule Changes Effective July 1, 2014

["Bob La Londe" <none@xxxxxxxxxx>]

If you would like to speak to a ROC employee, please contact our agency at
602-542-1525.

Arizona Contractors;

New and amended rules for the Registrar of Contractors will become effective
on July 1, 2014. Because the changes will impact nearly all licensees, it is
recommended that everyone become familiar with the rule changes. The ROC
website www.azroc.gov has (1) a link to the final rules, and (2) the limited
summary included in this email. The rulemaking action contains many positive
changes.  One positive is reducing license fees for all new license
applications.  Renewal fees for dual license classifications are also
significantly reduced. Another positive is consolidating over 100 of the
current 238 license classifications. This change will make Arizona license
classifications much more comparable to other states. This consolidation
will also allow the impacted contractors to expand their business by
removing the distinction between these specialty residential and commercial
classifications. Overall, this rulemaking will be positive for Arizona
contractors.

This limited summary describes changes to: (1) license classifications, (2)
fees for new licenses, (3) fees for renewal licenses, (4) bond amounts, (5)
applications for new licenses submitted on or after July 1, 2014, and (6)
other key clarifications.

License classifications
This rulemaking changes the letter designation for specialty contractor
classifications:
The specialty residential license designation will change from "C" to "R"
(see R4-9-103).
  The specialty commercial license designation will change from "L" to "C"
(see R4-9-102).
The specialty dual license designation will change from "K" to "CR" (see
R4-9-104).
Many people have been confused and thought that "C" represented commercial
rather than residential. The changes of letter designation will reduce
confusion by having "C" indicate commercial, "R" indicate residential, and
"CR" indicate commercial and residential.
The six digit license numbers will not be impacted by the change in letter
designation. For example, license C-123456 would change to license number
R-123456.
For licenses with dollar maximums, this rulemaking allows the licensee to
perform more projects by increasing the dollar limitation.
The B-2 General Small Commercial Contractor scope increases from $250,000 to
$750,000.
The C-61 Limited Remodeling and Repair Contractor (now CR-61 Carpentry,
Remodeling and Repairs scope increases from $25,000 to $50,000.
The C-62 Minor Home Improvements scope increases from $2,500 to $5,000.
This rulemaking changes the classification of roughly 25% of existing
licensees.
Arizona is unlike other states in the way it differentiates between
commercial and residential contractor licenses. As a result, Arizona has 238
license classifications, which is far more than other states.
This rulemaking reduces the number of license classifications by
consolidating many commercial and residential licenses into the comparable
dual license. For example, the residential sign license (C-38) and the
commercial sign license (L-38) will be consolidated with the dual sign
license (formerly K-38, now CR-38). Currently only one person has a
residential sign license.
License classifications that are affected by these reclassifications were
chosen based on substantial similarities between the work performed on
commercial and residential properties, and low counts of licenses in the
classifications. Most of these classifications already take the same exam
for the commercial, residential and dual license classifications. Where the
reclassifications cause a change in exam, the licensee is "grandfathered in"
without having to take a new exam.
The rule on license reclassifications includes the following table showing
the licenses that will undergo a change in classification (see R4-9-107).



Current License License Effective July 1, 2014
A-3 Blasting CR-15 Blasting
C-15 Blasting
A-21 Landscaping and Irrigation Systems
L-26 Landscaping
L-44 Irrigation Systems
C-21 Landscaping and Irrigation Systems CR-21 Landscaping and Irrigation
Systems
C-21R Landscaping
C-21R Irrigation Systems
K-26 Landscaping
K-44 Irrigation Systems
AE (As Restricted by the Registrar)  KE (As Restricted by the Registrar)
BE (As Restricted by the Registrar) KO (As Restricted by the Registrar)
L-1 Acoustical Systems CR-1 Acoustical Systems
C-1 Acoustical Systems
L-3 Awnings, Canopies, Carports and Patio Covers CR-3 Awnings, Canopies,
Carports and Patio Covers
C-3 Awnings and Canopies
L-5 (As Restricted by the Registrar) CR-5 (As Restricted by the Registrar)
C-5 (As Restricted by the Registrar)
L-7 Carpentry
C-7 Carpentry
C-7R Doors, Gates, Windows and Accessories CR-7 Carpentry
C-7R Removable Formwork and Shoring
C-7R Nailing and Stapling
L-8 Floor Covering
L-13 Carpets
L-64 Wood Floor Laying and Finishing
C-8 Floor Covering
C-8R Wood Flooring
C-8R Carpet CR-8 Floor Covering
C-8R Composition Flooring
C-8R Nonconventional Floor Covering
C-8R Ceramic and Clay Floor Covering
K-13 Carpet
K-64 Wood Floor Laying and Finishing
C-9R Gunite and Shotcrete
C-9R Lightweight Concrete
C-9R Fence Footings R-9 Concrete
C-9R PreCast Concrete
C-9R Sawing, Coring, Epoxy Panels and Bonding
C-9R Terrazzo
L-10 Drywall CR-10 Drywall
C-10 Drywall
L-12 Elevators CR-12 Elevators
C-18 Elevators
C-13R Asphalt Coating and Parking Appurtenances R-13 Asphalt Paving
L-14 Fencing
C-14 Fencing CR-14 Fencing
C-14R Fencing Other Than Masonry
C-16R CO2, Dry and Wet Chemical Systems R-16 Fire Protection Systems
L-24 Ornamental Metals CR-24 Ornamental Metals
C-17R Ornamental Metals
C-17R Steel Floor, Sub Floor and Form Systems
C-17R Tanks R-17 Structural Steel and Aluminum
C-17R Recreational Equipment
L-29 Machinery (As Restricted by the Registrar) CR-29 Machinery (As
Restricted by the Registrar)
C-29 Machinery (As Restricted by the Registrar)
L-31 Masonry
C-31 Masonry CR-31 Masonry
C-31R Flagstone
C-31R Stone Masonry
L-34 Painting and Wall Covering
C-34 Painting and Wall Covering CR-34 Painting and Wall Covering
C-34R Surface Preparation and Waterproofing
C-34R Wallpaper
L-36 Plastering
C-36 Plastering CR-36 Plastering
C-36R Swimming Pool Plastering
C-36R Lathing
L-38 Sign CR-38 Signs
C-38 Signs
L-40 Insulation
C-40 Insulation CR-40 Insulation
C-40R Foam Insulation
L-41 Septic Tanks and Systems
C-41 Sewage Treatment Systems CR-41 Septic Tanks and Systems
C-41R Precast Waste Treatment Systems
L-42 Roofing
C-42 Roofing
C-42R Foam and Foam Panel Roofing CR-42 Roofing
C-42R Liquid Applied Roofing
C-42R Roofing Shingles and Shakes
L-45 Sheet Metal
C-45 Sheet Metal CR-45 Sheet Metal
C-45R Premanufactured Fire Places
L-48 Ceramic, Plastic and Metal Tile
C-48 Ceramic, Plastic and Metal Tile CR-48 Ceramic, Plastic and Metal Tile
C-48R Swimming Pool Tile
L-54 Water Conditioning Equipment CR-54 Water Conditioning Equipment
C-37R Water Conditioning Equipment
L-56 Welding CR-56 Welding
C-17R Welding
L-57 Wrecking CR-57 Wrecking
C-22R Wrecking
L-60 Finish Carpentry
C-30 Finish Carpentry
C-30R Kitchen and Bathroom Components CR-60 Finish Carpentry
C-30R Doors, Windows, Gates, Tub and Shower Enclosures
C-30R Cultured Marble
C-30R Weather-stripping
L-61 Carpentry, Remodeling and Repairs
C-61 Limited Remodeling and Repair Contractor CR-61 Carpentry, Remodeling
and Repairs
C-68 Mobile Home Remodeling and Repair
L-62 Reinforcing Bar and Wire Mesh CR-62 Reinforcing Bar and Wire Mesh
C-17R Rebar and Wire Mesh
L-63 Appliances CR-63 Appliances
C-63 Appliances
L-65 Glazing
C-65 Glazing
C-65R Skylights CR-65 Glazing
C-65R Storm Windows and Doors
C-65R Mirrors
C-65R Window Treatment
L-67 Low Voltage Communications Systems CR-67 Low Voltage Communication
Systems
C-12 Low Voltage Communication Systems



e. These license reclassifications will occur automatically, without any
action taken by licensees. Where the reclassifications cause a change in
license fee, the different fee amount is not required until the next license
renewal.
f. These license reclassifications will result in some licensees having two
of the same license. For example, if a licensee has both an L-1 and a C-1
license, each will be reclassified into a CR-1 license. In these situations,
the licensee would save money by cancelling one of the licenses. The ROC
will not cancel a license without the person submitting a license
cancellation form for one of the licenses. Previously paid license fees won't
be refunded.


 2. Fees for new licenses
This rulemaking will decrease fees for all new licenses (see R4-9-130).
This rulemaking will clarify the fee amount by showing the application and
license fees separately.



  Current   Effective July 1, 2014
  Application & License Fee Recovery Fund Total   App. Fee Lic. Fee Recovery
Fund Total  Change
General Commercial $890 $0 $890   $200 $580 $0 $780 $(110)
Specialty Commercial $645 $0 $645   $100 $480 $0 $580 $(65)
General Residential $445 $450 $895   $180 $320 $370 $870 $(25)
Specialty Residential $320 $450 $770   $80 $270 $370 $720 $(50)
General Dual $1,105 $450 $1,555   $200 $480 $370 $1,050 $(505)
Specialty Dual $815 $450 $1,265   $100 $380 $370 $850 $(415)


 3. Fees for renewal licenses
Fees for renewal licenses are found in R4-9-130.
For the nearly 75% of licensees not impacted by the reclassifications, this
rulemaking will;
decrease fees for specialty commercial ($10), general dual ($410) and
specialty dual ($380) classifications; and
result in no change of fees for general commercial, general residential and
specialty residential classifications.



No change in Classification Current   Effective July 1, 2014
  License Fee Recovery Fund Total   License Fee Recovery Fund Total Change
General Commercial $580 $0 $580   $580 $0 $580 $0
Specialty Commercial $490 $0 $490   $480 $0 $480 $(0)
General Residential $290 $300 $590   $320 $270 $590 $0
Specialty Residential $240 $300 $540   $270 $270 $540 $0
General Dual $860 $300 $1,160   $480 $270 $750 $(410)
Specialty Dual $730 $300 $1,030   $380 $270 $650 $(380)



c. For the roughly 25% of licensees impacted by the reclassifications, this
rulemaking will increase fees for the general commercial ($170), specialty
commercial ($160), general residential ($160) and specialty residential
($110) classifications.



Change from commercial or residential into a dual classification Current
Effective July 1, 2014
  License Fee Recovery Fund Total   License Fee Recovery Fund Total Change
General Commercial $580 $0 $580   $480 $270 $750 $170
Specialty Commercial $490 $0 $490   $380 $270 $650 $160
General Residential $290 $300 $590   $480 $270 $750 $160
Specialty Residential $240 $300 $540   $380 $270 $650 $110



d. License fees have not changed since 2001. These fee increases are less
than would have occurred under an inflation adjustment.
e. These licenses may benefit from an expanded license scope from solely
residential or commercial to both residential and commercial.


  4. Bond amounts
This rulemaking increases nearly all bond amounts (see R4-9-112).
Most bonds have not changed since at least 1973. These bond increases are
significantly less than would have occurred under an inflation adjustment.
These bond increases will provide additional protection for those
(homeowners and contractors) injured by a licensee.
Bond changes don't become enforceable until the next license renewal after
June 30, 2014. For example, a license renewed in June 2014 will not need to
update their bond amount until their next renewal period in June 2016; but a
license due to be renewed in July 2014 will be required to provide an
updated bond with their renewal during July 2014. This will allow the bond
changes to be spaced out over a period of two years.



License Category Estimated Annual Volume (Per License Category) Current Bond
Amount Bomd Amount on Licenses Renewed After July 1, 2014 Change
1. General Commercial Contracting and Engineering Contracting Less than
$150,000 $5,000 $5,000 $0
  $150,000 or more, but less than $500,000 $10,000 $15,000 $5,000
  $500,000 or more, but less than $1,000,000 $15,000
  $25,000 $10,000
  $1,000,000 or more, but less than $5,000,000 $40,000 $50,000 $10,000
  $5,000,000 or more, but less than $10,000,000 $65,000
  $75,000 $10,000
  $10,000,000 or more $90,000 $100,000 $10,000
2. Specialty Commercial Contracting Less than $150,000 $2,500 $2,500 $0
  $150,000 or more, but less than $500,000 $5,000 $7,000 $2,000
  $500,000 or more, but less than $1,000,000 $10,000 $17,500 $7,500
  $1,000,000 or more, but less than $5,000,000 $20,000 $25,000 $5,000
  $5,000,000 or more, but less than $10,000,000  $32,500 $37,500 $5,000
  $10,000,000 or more $45,000 $50,000 $5,000
3. General Residential Contracting Less than $150,000 $5,000 $9,000 $4,000
  $150,000 or more, but less than $750,000 $9,000 $9,000 $0
  $750,000 or more $15,000 $15,000 $0
4. Specialty Residential Contracting Less than $100,000 $1,000 $4,250 $3,250
  $100,000 or more, but less than $375,000 $4,250 $4,250 $0
  $375,000 or more $7,500 $7,500 $0


  5. Applications for new licenses submitted on or after July 1, 2014
As described in the sections above, this rulemaking makes changes to license
classifications, fees and bonds. Please make sure any application submitted
on or after July 1, 2014 adapt to these changes.
The application must be for a classification that is available after the
changes, and should contain the correct letter designation for the
classification (see section above).
The applicant must have taken the correct trade exam (see section above).
Nearly 70% of the affected classifications have the same trade exam;
approximately 26% of the affected classifications change from no trade exam
to a trade exam; and roughly 4% of the classifications require a different
exam.
The application must contain the correct fee amount (see section above).
The application must contain the correct bond amount (see section above).


 6. Other key clarifications
Rewording of license scopes to address common confusion in scopes of work
(see R4-9-102, R4-9-103, R4-9-104).
Noting that the Registrar may waive a trade exam where the qualifying party
has been the qualifying party within the preceding five years for a license
in good standing in the same classification in this state, or a
classification the Registrar deems comparable in another state (see
R4-9-106).
Updating the rule on "workmanship standards" to use gender-neutral language
and clarify the meaning of "professional industry standards" (see R4-9-108).
Adding a rule describing communication with the agency that is unauthorized
to avoid the possibility of prejudice in proceedings before the agency (see
R4-9-121).

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If you would like to speak to a ROC employee, please contact our agency at
602-542-1525.