SENATE BILL NO. 986

June 25, 2020, Introduced by Senator MCBROOM and referred to the Committee on Regulatory Reform.

"Occupational code,"

by amending sections 2401 and 2403 (MCL 339.2401 and 339.2403), section 2401 as amended by 1991 PA 166 and section 2403 as amended by 2016 PA 412.

the people of the state of michigan enact:

Sec. 2401. As used in this article:

(a) "Residential builder" means a any of the following:

(i) A person engaged in the construction of a residential structure or a combination residential and commercial structure who, that, for a fixed sum, price, fee, percentage, valuable consideration, or other compensation, other than wages for personal labor only, undertakes with another or offers to undertake, or purports to have the capacity to undertake with another, for the erection, construction, replacement, repair, alteration, or an addition to, subtraction from, improvement, wrecking of, or demolition of, a residential structure. or combination residential and commercial structure; a

(ii) A person who that manufactures, assembles, constructs, deals in, or distributes a residential or combination residential and commercial structure which that is prefabricated, preassembled, precut, packaged, or shell housing; or a housing.

(iii) A person who that erects a residential structure or combination residential and commercial structure except for the person's own use and occupancy on the person's property.

(b) "Residential maintenance and alteration contractor" means a person who, that, for a fixed sum, price, fee, percentage, valuable consideration, or other compensation, other than wages for personal labor only, undertakes does any of the following:

(i) Undertakes with another for the repair, alteration, or an addition to, subtraction from, improvement of, wrecking of, or demolition of a residential structure, or combination residential and commercial structure, or building of a garage, or laying of concrete on residential property. , or who engages

(ii) Engages in the purchase, substantial rehabilitation or improvement, and resale of a residential structure, engaging structure or property and engages in that activity on the same structure more than twice in 1 calendar year, except in the following instances:

(A) (i) If the work is for the person's own use and occupancy.

(B) (ii) If the rehabilitation or improvement work of on the residential type property or a structure is contracted for, with, or hired entirely to be done and performed for the owner by a person licensed under this article.

(C) (iii) If work is performed by a person employed by the owner to perform work for which the person is licensed by the state.

(c) "Residential structure" means a premises used or intended to be used for a residence purpose and related facilities appurtenant to the premises, used or intended to be used, as an adjunct of residential occupancy.

(d) "Salesperson" means an employee or agent, other than a qualifying officer, of a licensed residential builder or residential maintenance and alteration contractor, who for a salary, wage, fee, percentage, commission, or other consideration, sells or attempts to sell, negotiates or attempts to negotiate, solicits for or attempts to solicit for, obtains or attempts to obtain a contract or commitment for, or furnishes or attempts or agrees to furnish, the goods and services of a residential builder or residential maintenance and alteration contractor, except a person an individual working for a licensed residential builder or residential maintenance and alteration contractor who makes sales which that are occasional and incidental to the person's individual's principal employment.

(e) "Wages" means money paid or to be paid on an hourly or daily basis by an owner, lessor, or occupant of a residential structure or combination residential and commercial structure as consideration for the performance of personal labor on the structure by a person an individual who does not perform or promise to perform the labor for any other fixed sum, price, fee, percentage, valuable consideration, or other compensation and who does not furnish or agree to furnish the material or supplies required to be used in the performance of the labor or an act defined described in subdivision (a) or (b).

Sec. 2403. Notwithstanding article 6, a person may engage in the business of or act in the capacity of a residential builder or a residential maintenance and alteration contractor or salesperson in this state without a license under this article, if the person is 1 of the following:

(a) An authorized representative of the United States government, this state, or a county, township, city, village, or other political subdivision of this state.

(b) An owner of property, with reference to a structure on the property for the owner's own use and occupancy.

(d) An officer of a court who is acting within the scope of that office.

(e) A person other than the salesperson that engages solely in the business of performing work and services under contract with a residential builder or a residential maintenance and alteration contractor that is licensed under this article.

(f) A person that is working on 1 undertaking or project by 1 or more contracts, if the aggregate contract price for the labor, material, and any other items for the undertaking or project is less than $600.00. The exemption described in this subdivision does not apply if the work of a construction is only a part of a larger or major operation, whether undertaken by the same or a different residential builder or residential maintenance and alteration contractor, or in which a division of the operation is made in contracts of amounts less than $600.00, to evade this act.

(g) An electrical contractor that is licensed under article 7 of the skilled trades regulation act, 2016 PA 407, MCL 339.5701 to 339.5739. The exemption described in this subdivision applies only to the electrical installation, electrical maintenance, or electrical repair work that is performed by the electrical contractor.

(h) A plumbing contractor that is licensed under article 11 of the skilled trades regulation act, 2016 PA 407, MCL 339.6101 to 339.6133. The exemption described in this subdivision applies only to plumbing installation, plumbing maintenance, or plumbing repair work that is performed by the plumbing contractor.

(i) A mechanical contractor that is licensed under article 8 of the skilled trades regulation act, 2016 PA 407, MCL 339.5801 to 339.5819. The exemption described in this subdivision applies only to mechanical installation, mechanical maintenance, or mechanical repair work that is performed by the mechanical contractor.

(j) Beginning on the effective date of the amendatory act that added this subdivision, a general contractor, design-builder, or construction manager engaged in the construction of a residential group R-1, R-2, R-3, R-4 structure, or a mixed occupancy structure, as those terms are defined in the Michigan building code. This subdivision is retroactive for a period of 6 years immediately preceding the effective date of the amendatory act that added this subdivision.

(k) Beginning on the effective date of the amendatory act that added this subdivision, a person that engages in the business of performing work and services under contract with a general contractor, design-builder, or construction manager that is engaged in the construction of a residential group R-1, R-2, R-3, R-4 structure, or a mixed occupancy structure, as those terms are defined in the Michigan building code. This subdivision is retroactive for a period of 6 years immediately preceding the effective date of the amendatory act that added this subdivision.

Enacting section 1. It is the intent of the legislature that section 2403 (j) and (k) of the occupational code 1980 PA 299, MCL 339.2403 as amended in this amendatory act apply retroactively for a period of 6 years immediately preceding the effective date of this amendatory act.