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SB1190 - 572R - I Ver
REFERENCE TITLE:
registrar of contractors; successors; discipline
State of Arizona
Senate
Fifty-seventh Legislature
Second Regular Session
2026
SB 1190
Introduced by
Senator
Shope
AN
ACT
Amending section 32-1154, Arizona Revised
Statutes; relating to contractors.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 32-1154, Arizona Revised
Statutes, is amended to read:
START_STATUTE
32-1154.
Grounds for suspension or revocation of license; continuing
jurisdiction; civil penalties
A. The holder of a license or any person named on a
license pursuant to this chapter may not commit any of the following acts or
omissions:
1. Abandonment of a contract or refusal to perform
after submitting a bid on work without
a
legal excuse for
the abandonment or refusal.
2. Departure from or
disregard of:
(a) Plans or
specifications in any material respect that is prejudicial to another without
the
consent of the owner or the owner's duly authorized
representative and without the consent of the person entitled to have the
particular construction project or operation completed in accordance with such
plans and specifications and code.
(b) A building code of this state or any political
subdivision of this state in any material respect that is prejudicial to
another.
3. Violation of any rule adopted by the registrar.
4. Failure to comply with the statutes or rules
governing social security, workers' compensation or unemployment insurance.
5. Misrepresentation of a material fact by the applicant
in obtaining a license.
6. The doing of a fraudulent act by the licensee as
a contractor resulting in another person being substantially injured.� For the
purposes of this paragraph, "fraudulent act" means a material
misrepresentation that a licensee makes, that is relied on by another person
and that results in damage to that person or that person's property.
7. Conviction of a felony.
8. Failure in a material respect by the licensee to
complete a construction project or operation for the price stated in the
contract, or in any modification of the contract.
9. Attempting to evade this chapter by:
(a) Aiding or abetting a licensed or unlicensed
person.
(b) Acting or conspiring with a licensed or
unlicensed person.
(c) Allowing one's license to be used by a licensed
or unlicensed person.
(d) Acting as agent, partner, associate or otherwise
of a licensed or unlicensed person.
10. Failure by a licensee or
an
agent
or official of a licensee to pay monies in excess of $750 when due for
materials or services rendered in connection with the licensee's operations as
a contractor unless the licensee proves that the licensee lacks the capacity to
pay and has not received sufficient monies as payment for the particular
construction work project or operation for which the services or materials were
rendered or purchased.
11. Failure of a contractor to comply with any
safety or labor laws or codes of the federal government, this state or
political subdivisions of this state.
12. Failure in any material respect to comply with
this chapter.
13. Knowingly entering into a contract with a
contractor for work to be performed for which a license is required with a
person that is not duly licensed in the required classification.
14. Acting in the capacity of a contractor under any
license issued under this chapter in a name other than as set forth on the
license.
15. False, misleading or deceptive advertising
whereby any member of the public was misled and injured.
16. Knowingly contracting beyond the scope of the
license or licenses of the licensee.
17. Contracting or offering to contract or
submitting a bid while the license is under suspension or while the license is
on inactive status.
18. Failure to notify the registrar in writing
within a period of fifteen days of any disassociation of the person who
qualified for the license. The licensee must qualify through another
person within sixty days after the date of disassociation.
19. Subsequent discovery of facts that if known at
the time of issuance of a license or the renewal of a license would have been
grounds to deny the issuance or renewal of the license.
20. Having a person named on the license who is or
was named on any other license in this state or in another state that is under
suspension or revocation for any act or omission that occurs while the person
is or was named on the license unless the prior revocation was based solely on
a violation of this paragraph.
21. Continuing a new single-family residential
construction project with actual knowledge that a pretreatment wood-destroying
pests or organisms application was either:
(a) Not performed at the required location.
(b) Performed in a manner inconsistent with label
requirements, state law or rules.
22. Failure to take appropriate corrective action to
comply with this chapter or with rules adopted pursuant to this chapter without
valid justification within a reasonable period of time after receiving a
written directive from the registrar
.� The written directive must
set
that sets
forth the time within which the
contractor is to complete the remedial action. The time
permitted
allowed
for compliance may not
be less than fifteen days
from
after
the date of issuance of the directive.� A license may not be revoked or
suspended
nor may
and
any other
penalty
may not
be imposed for a violation of this
paragraph until after a hearing has been held.
23. Prohibit, threaten to prohibit, retaliate
against, threaten to retaliate against or otherwise intimidate any contractor
or materialman from serving a preliminary notice pursuant to section 33-992.01.
24. For contractors, failure to comply with title
44, chapter 11, article 11.
B. The registrar:
1. May investigate the acts of a contractor in this
state on the registrar's own motion.
2. Shall investigate the acts of a contractor in
this state on the written complaint of any owner or contractor that is a party
to a construction contract or a person who suffers a material loss or injury as
a result of a contractor's failure to perform work in a professional and
workmanlike manner or in accordance with any applicable building codes and
professional industry standards. For the purposes of this paragraph:
(a) "Construction contract" means a
written or oral agreement relating to the construction, alteration, repair,
maintenance, moving or demolition of any building, structure or improvement or
relating to the contractor's excavation of or other development or improvement
to land if the registrar investigates the contractor's actions under this
subsection.
(b) "Owner" means any person, firm,
partnership, corporation, association or other organization, or a combination
of any of them, that causes a building, structure or improvement to be
constructed, altered, repaired, maintained, moved or demolished or that causes
land to be excavated or otherwise developed or improved, whether the interest
or estate of the person is in fee, as vendee under a contract to purchase, as
lessee or another interest or estate less than fee, pursuant to a construction
contract.
(
c
) "Person
who suffers a material loss or injury" includes a person who suffers a
loss or injury due to the contractor's violation arising out of work performed
under a construction contract under any provision of title 23.
3. May temporarily suspend, with or without
imposition of specific conditions in addition to increased surety bond or cash
deposit requirements, or permanently revoke any or all licenses issued under
this chapter if the holder of the license issued pursuant to this chapter
or any successor
is guilty of or commits any of the acts or
omissions set forth in subsection A of this section.
For
the purposes of this paragraph, there is a rebuttable presumption that an
applicant or licensee is a successor if the applicant or licensee shares two or
more of the following with the holder of a license issued pursuant to this
chapter:
(
a
) Performance
of similar work in the same geographic area.
(
b
) Premises.
(
c
) A telephone
number, fax number, email address or website.
(
d
) Substantially
the same workforce or ADMINISTRATIVE staff.
(
e
) Tools,
equipment or facilities.
(
f
) Employment
or engagement of any person who exercised SUBSTANTIAL discretionary control
over the disciplined contractor.
(
g
) Listed work
EXPERIENCE of project history.
C. Pursuant to this
chapter, the registrar shall suspend by operation of law a license issued to a
person under this chapter on notice from the department of revenue that a tax
debt related to income taxes, withholding taxes or any tax imposed or
administered by title 42, chapter 5 that was incurred in the operation of the
licensed business has become final and the person neglects to pay or refuses to
pay the tax debt.
D. The expiration, cancellation, suspension or
revocation of a license by operation of law or by
a
decision
and order of the registrar or a court of law or the voluntary surrender of a
license by a licensee does not deprive the registrar of jurisdiction to proceed
with any investigation of or action or disciplinary proceeding against such a
licensee, or to render a decision suspending or revoking such a license, or
denying the renewal or right of renewal of such a license.
E. The registrar may impose a civil penalty of not
to exceed
more than
$500 on a contractor
for each violation of subsection A, paragraph 22 of this section.� Civil
penalties collected pursuant to this subsection shall be deposited in the
residential contractors' recovery fund. The failure by the licensee
to pay any civil penalty imposed under this subsection results in the automatic
revocation of the license thirty days after the effective date of the order
providing for the civil penalty. A person who is or was named on a
license of a contractor when an act or omission occurs that results in a civil
penalty may not receive a new license under this chapter until the entire civil
penalty is paid.
F. The registrar may impose a civil penalty of not
to exceed
more than
$1,000 on a contractor
for each violation of subsection A, paragraph 17 of this
section. Civil penalties collected pursuant to this subsection shall
be deposited in the residential contractors' recovery fund. The
failure by the licensee to pay any civil penalty imposed under this subsection
results in the automatic permanent revocation of the license thirty days after
the effective date of the order providing for the civil penalty.� A person who
is or was named on a license of a contractor when an act or omission occurs
that results in a civil penalty may not receive a new license under this
chapter until the entire civil penalty is paid.
END_STATUTE