1.1                          A bill for an act 
  1.2             relating to occupations; providing for the licensure 
  1.3             of mechanical/HVAC contractors and employees; 
  1.4             requiring rulemaking; providing penalties; 
  1.5             appropriating money; proposing coding for new law as 
  1.6             Minnesota Statutes, chapter 326B. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  [326B.01] [DEFINITIONS.] 
  1.9      Subdivision 1.  [APPLICABILITY.] The definitions in this 
  1.10  section apply to this chapter. 
  1.11     Subd. 2.  [BOARD.] "Board" means the Mechanical Board. 
  1.12     Subd. 3.  [MECHANICAL/HVAC CONTRACTOR.] "Mechanical/HVAC 
  1.13  contractor" means a person, sole proprietor, partnership, joint 
  1.14  venture, corporation, or other organization having or employing 
  1.15  a master license holder which is in the business of erection, 
  1.16  design, installation, alteration, repair, relocation, 
  1.17  replacement, or addition to any heating, ventilating, cooling, 
  1.18  process piping, air conditioning or refrigeration systems, 
  1.19  incinerators, or other miscellaneous heat-producing appliance, 
  1.20  piping, or equipment or appliances associated with those systems.
  1.21     Sec. 2.  [326B.05] [MECHANICAL BOARD.] 
  1.22     Subdivision 1.  [COMPOSITION.] The Mechanical Board shall 
  1.23  consist of 11 members, residents of the state, appointed by the 
  1.24  governor.  A minimum of four must be holders of at least one 
  1.25  unlimited master endorsement, two must be holders of at least 
  1.26  one limited master endorsement, four must be licensed as 
  2.1   mechanical contractors, and one must be a public member.  
  2.2   Membership terms, compensation of members, removal of members, 
  2.3   the filling of membership vacancies, and fiscal year and 
  2.4   reporting requirements are as provided in sections 214.07 to 
  2.5   214.09.  The provision of staff, administrative services, and 
  2.6   office space; the review and processing of complaints; and other 
  2.7   provisions relating to board operations are as provided in 
  2.8   chapter 214. 
  2.9      Subd. 2.  [POWERS.] (a) The board has the power to elect 
  2.10  its own officers, engage and fix the compensation of inspectors, 
  2.11  and hire employees.  The salary of the executive secretary must 
  2.12  be established under chapter 43A.  All agents and employees, 
  2.13  other than contract inspectors, must be in the classified 
  2.14  service and compensated under chapter 43A.  All inspectors must 
  2.15  hold licenses as master or journeyman and give bond in an amount 
  2.16  fixed by the board, conditioned upon the faithful performance of 
  2.17  their duties. 
  2.18     (b) The board may also: 
  2.19     (1) pay other expenses necessary to perform its duties, 
  2.20  including rent, supplies, and the like; 
  2.21     (2) enforce the provisions of this chapter, and provide, 
  2.22  upon request, additional voluntary inspections and reviews it 
  2.23  finds appropriate; 
  2.24     (3) issue, renew, refuse to renew, suspend, temporarily 
  2.25  suspend, and revoke licenses, censure licensees, assess civil 
  2.26  penalties, issue cease and desist orders, and seek injunctive 
  2.27  relief and civil penalties in court as authorized by this 
  2.28  chapter and other provisions of Minnesota law; and 
  2.29     (4) adopt rules to carry out its duties under this chapter. 
  2.30     Sec. 3.  [326B.10] [LICENSES.] 
  2.31     Subdivision 1.  [PERSONS REQUIRED TO BE LICENSED.] (a) A 
  2.32  person or entity that meets the definition of a mechanical/HVAC 
  2.33  contractor must be licensed as a mechanical/HVAC contractor with 
  2.34  at least one of the endorsements in subdivisions 2 to 11.  The 
  2.35  endorsement authorizes the holder to work on the elements 
  2.36  described in the subdivisions. 
  3.1      (b) The board shall adopt rules providing for master's and 
  3.2   journeyman levels of licensing. 
  3.3      Subd. 2.  [LIMITED AIR HANDLING SYSTEMS.] A limited air 
  3.4   handling system endorsement is limited to air handling equipment 
  3.5   and air distribution systems for heating, ventilating, or air 
  3.6   conditioning systems including chimneys, vents, and vent 
  3.7   connectors that serve an individual dwelling unit. 
  3.8      Subd. 3.  [LIMITED FUEL, PIPING, AND BURNERS.] A limited 
  3.9   fuel, piping, and burners endorsement is limited to fuel gas, 
  3.10  oil, and solid fuel burning equipment systems including 
  3.11  chimneys, vents, and vent connectors for buildings having a 
  3.12  total installed heating system capacity of less than 400,000 
  3.13  Btu/hr. 
  3.14     Subd. 4.  [LIMITED STEAM AND HOT WATER.] A limited steam 
  3.15  and hot water endorsement is limited to steam heating systems 
  3.16  with less than 15 psi pressure or hot water heating systems with 
  3.17  less than 30 psi pressure and an operating temperature of less 
  3.18  than 250 degrees Fahrenheit for both. 
  3.19     Subd. 5.  [LIMITED AIR CONDITIONING/REFRIGERATION.] A 
  3.20  limited air conditioning/refrigeration endorsement is limited to 
  3.21  refrigerant or air conditioning systems or cooling equipment 
  3.22  having a capacity not greater than 90,000 Btu/hr per piece of 
  3.23  equipment and having refrigerants with an as installed (AI) 
  3.24  safety classification according to the American Society of 
  3.25  Heating, Refrigerating and Air-Conditioning Engineers, Inc., 
  3.26  (ASHRAE) 34 standard. 
  3.27     Subd. 6.  [UNLIMITED AIR HANDLING SYSTEMS.] The unlimited 
  3.28  air handling systems endorsement includes all air handling 
  3.29  equipment and air distribution for heating, ventilating, air 
  3.30  conditioning systems, and product conveying duct systems and 
  3.31  equipment and includes all chimneys, vents, and vent connectors. 
  3.32     Subd. 7.  [UNLIMITED FUEL, PIPING, AND BURNERS.] The 
  3.33  unlimited fuel, piping, and burners endorsement includes all 
  3.34  fuel gas, oil, and solid fuel burning equipment and piping 
  3.35  systems including all chimneys, vents, and vent connectors. 
  3.36     Subd. 8.  [UNLIMITED STEAM AND HOT WATER.] The unlimited 
  4.1   steam and hot water endorsement is as defined in high-pressure 
  4.2   piping and limited steam and hot water rules adopted under 
  4.3   section 326.46. 
  4.4      Subd. 9.  [UNLIMITED AIR CONDITIONING/REFRIGERATION.] The 
  4.5   unlimited air conditioning/refrigeration endorsement is all air 
  4.6   conditioning and refrigeration piping and equipment not 
  4.7   regulated by high-pressure piping rules adopted under section 
  4.8   326.46. 
  4.9      Subd. 10.  [MEDICAL GASES.] The medical gases endorsement 
  4.10  includes all medical gas systems and piping as regulated by the 
  4.11  most recent edition of the National Fire Protection Association 
  4.12  (NFPA) 99C. 
  4.13     Subd. 11.  [NONMEDICAL GASES.] The nonmedical gases 
  4.14  endorsement includes all nonmedical gas systems and piping used 
  4.15  for manufacturing or industrial uses. 
  4.16     Sec. 4.  [326B.15] [PROHIBITION.] 
  4.17     (a) Except as provided in paragraph (b), a person or entity 
  4.18  required to be licensed by section 326B.10 may not act or hold 
  4.19  out as a mechanical/HVAC contractor without a valid license 
  4.20  issued by the board.  A mechanical/HVAC contractor must be or 
  4.21  employ a master license holder with endorsement applicable to 
  4.22  the work done by the contractor.  A master license holder may 
  4.23  not represent more than one contractor.  
  4.24     (b) The contractor license requirement does not apply to: 
  4.25     (1) an employee of a licensee performing work for the 
  4.26  licensee; 
  4.27     (2) an owner who physically performs mechanical work on 
  4.28  premises the person owns and has actually occupied as a 
  4.29  residence for at least one year; 
  4.30     (3) a plumber or high-pressure pipefitter licensed under 
  4.31  chapter 326, a person licensed by the Board of Electricity, or a 
  4.32  fire sprinkler installer licensed by the state, if the person 
  4.33  meets the minimum liability insurance and surety bond 
  4.34  requirements when engaged in the activity that is the subject of 
  4.35  that licensure; or 
  4.36     (4) an unlicensed person working under the direct 
  5.1   supervision of a master or journeyman. 
  5.2      (c) An unlicensed person performing work under authority of 
  5.3   paragraph (b), clause (4), must register with the board, report 
  5.4   annually to the board the number of hours the person works in 
  5.5   each endorsement category, and pay an annual fee of $....... 
  5.6      Sec. 5.  [326B.20] [INSURANCE REQUIRED.] 
  5.7      Each mechanical/HVAC contractor shall have and maintain in 
  5.8   effect general liability insurance, including premises and 
  5.9   operations insurance and products and completed operations 
  5.10  insurance, with limits of at least $100,000 per occurrence, 
  5.11  $300,000 aggregate limit for bodily injury, and property damage 
  5.12  insurance with limits of at least $25,000, or a policy with a 
  5.13  single limit for bodily injury and property damage of $300,000 
  5.14  per occurrence and $300,000 aggregate limits.  This insurance 
  5.15  must be written by an insurer licensed to do business in the 
  5.16  state of Minnesota.  Each contractor shall maintain on file with 
  5.17  the board a certificate evidencing this insurance.  The 
  5.18  insurance must provide that it cannot be canceled without the 
  5.19  insurer first giving 15 days' written notice to the board.  An 
  5.20  insurer must pay a $100 civil penalty to the board for each 
  5.21  failure to give the required notice. 
  5.22     Sec. 6.  [326B.25] [LICENSING FEES.] 
  5.23     The licensing fees under this chapter are $....... per year 
  5.24  for a contractor license, $....... per year for a master 
  5.25  license, and $....... for a journeyman license with one 
  5.26  endorsement.  The fee for each additional endorsement is 
  5.27  $........ 
  5.28     Sec. 7.  [326B.30] [CONTINUING EDUCATION.] 
  5.29     The board shall adopt rules containing standards for 
  5.30  continuing education requirements and course approval.  
  5.31     Sec. 8.  [326B.35] [NOTICE OF CHANGE.] 
  5.32     Written notice must be given to the board by each licensee 
  5.33  of any change in personal name, trade name, qualifying person, 
  5.34  address, or business location not later than 15 business days 
  5.35  after the change.  The board shall issue an amended license, if 
  5.36  required, for the unexpired period. 
  6.1      Sec. 9.  [326B.40] [APPLICATION AND EXAMINATION.] 
  6.2      Subdivision 1.  [FORM.] An applicant for a license under 
  6.3   this chapter must submit an application to the board, under 
  6.4   oath, on a form prescribed by the board.  Within 30 business 
  6.5   days of receiving all required information, the board must act 
  6.6   on the license request.  If one of the categories in the 
  6.7   application does not apply, the applicant must state the 
  6.8   reason.  The board may refuse to issue a license if the 
  6.9   application is not complete or contains unsatisfactory 
  6.10  information.  
  6.11     Subd. 2.  [CONTENTS AND EXAMINATION.] The board shall adopt 
  6.12  rules governing the contents of the application; the levels of 
  6.13  experience, related training, and education required for 
  6.14  licensure; and examination requirements for a contractor 
  6.15  license, and for each contractor, master, and journeyman license 
  6.16  endorsement area.  The rules must contain continuing education 
  6.17  requirements for license renewal.  The rules must provide that 
  6.18  before taking a journeyman examination, an applicant must have a 
  6.19  minimum of four years verifiable work experience and must have 
  6.20  successfully completed a minimum of 800 hours of related 
  6.21  training.  The rules must provide that a minimum of seven years 
  6.22  of verifiable work experience in an endorsement category 
  6.23  satisfies both the requirement for four years of experience and 
  6.24  for 800 hours of related training. 
  6.25     Sec. 10.  [326B.45] [DENIAL, SUSPENSION, OR REVOCATION OF 
  6.26  LICENSES.] 
  6.27     Subdivision 1.  [CAUSE.] The board may by order deny, 
  6.28  suspend, or revoke any license or may censure a licensee, and 
  6.29  may impose a civil penalty as provided for in section 45.027, 
  6.30  subdivision 6, if the board finds that the order is in the 
  6.31  public interest, and that the applicant, licensee, or affiliate 
  6.32  of an applicant or licensee, or other agent, owner, partner, 
  6.33  director, governor, shareholder, member, officer, qualifying 
  6.34  person, or managing employee of the applicant or licensee or any 
  6.35  person occupying a similar status or performing similar 
  6.36  functions:  
  7.1      (1) has filed an application for a license that is 
  7.2   incomplete in any material respect or contains any statement 
  7.3   which, in light of the circumstances under which it is made, is 
  7.4   false or misleading with respect to any material fact; 
  7.5      (2) has engaged in a fraudulent, deceptive, or dishonest 
  7.6   practice; 
  7.7      (3) is permanently or temporarily enjoined by any court of 
  7.8   competent jurisdiction from engaging in or continuing any 
  7.9   conduct or practice involving any aspect of the business; 
  7.10     (4) has violated or failed to comply with any provision of 
  7.11  this chapter or any rule or order under this chapter; 
  7.12     (5) has had a judgment entered against that person for 
  7.13  failure to make payments to employees or subcontractors, and all 
  7.14  appeals of the judgment have been exhausted or the period for 
  7.15  appeal has expired; 
  7.16     (6) if unlicensed, has obtained a construction permit by 
  7.17  the fraudulent use of a fictitious license number or the license 
  7.18  number of another, or, if licensed, has knowingly allowed an 
  7.19  unlicensed person to use the licensee's license number for the 
  7.20  purpose of fraudulently obtaining a construction permit; or 
  7.21     (7) has made use of forged mechanics' lien waivers under 
  7.22  chapter 514. 
  7.23     Subd. 2.  [ADMINISTRATIVE ACTION.] Section 45.027 applies 
  7.24  to any action taken by the board in connection with the 
  7.25  administration of this chapter. 
  7.26     Nothing in this section prevents the board from denying, 
  7.27  suspending, revoking, or restricting a license, or from 
  7.28  censuring a licensee based on acts or omissions not specifically 
  7.29  enumerated in this section. 
  7.30     Subd. 3.  [ACTION AGAINST UNLICENSED PERSONS.] Nothing in 
  7.31  this section prevents the board from taking actions, including 
  7.32  cease and desist actions, against persons required to be 
  7.33  licensed under this chapter, based on conduct that would provide 
  7.34  grounds for administrative action against a licensee under this 
  7.35  section. 
  7.36     Sec. 11.  [326B.50] [PENALTIES.] 
  8.1      Subdivision 1.  [MISDEMEANOR.] A person required to be 
  8.2   licensed under this chapter who performs unlicensed work is 
  8.3   guilty of a misdemeanor. 
  8.4      Subd. 2.  [GROSS MISDEMEANOR.] A person required to be 
  8.5   licensed under this chapter who violates an order under 
  8.6   subdivision 4 is guilty of a gross misdemeanor. 
  8.7      Subd. 3.  [LIEN RIGHTS.] An unlicensed person who knowingly 
  8.8   violates this chapter has no right to claim a lien under section 
  8.9   514.01 and the lien is void.  Nothing in this section affects 
  8.10  the lien rights of material suppliers and licensed contractors 
  8.11  to the extent provided by law. 
  8.12     Subd. 4.  [BOARD ACTION.] The board may bring actions, 
  8.13  including cease and desist actions, against any person licensed 
  8.14  or required to be licensed under this chapter to protect the 
  8.15  public health, safety, and welfare. 
  8.16     Sec. 12.  [326B.55] [ADDITIONAL RULES.] 
  8.17     The board shall adopt rules governing: 
  8.18     (1) financial security, including liability insurance and 
  8.19  indemnity bonds or a state mechanical bond; 
  8.20     (2) limitations on the maximum number of unlicensed persons 
  8.21  that may work under the direct supervision of a master or 
  8.22  journeyman; and 
  8.23     (3) grandparenting rights for licensees who are currently 
  8.24  working in the field of mechanical/HVAC contracting. 
  8.25     Clause (3) expires June 30, 2007.  
  8.26     Sec. 13.  [APPROPRIATION.] 
  8.27     $....... is appropriated to the Mechanical Board from the 
  8.28  building codes and standards division fund for the purposes of 
  8.29  this act.  This appropriation is available for the biennium 
  8.30  ending June 30, 2005. 
  8.31     Sec. 14.  [REVISOR INSTRUCTION.] 
  8.32     The revisor of statutes shall recodify Minnesota Statutes 
  8.33  2003 Supplement, section 326.992, into Minnesota Statutes, 
  8.34  chapter 326B, and shall substitute the term "Mechanical Board" 
  8.35  for the term "commissioner of administration." 
  8.36     Sec. 15.  [EFFECTIVE DATE.] 
  9.1      The governor must appoint Mechanical Board members no later 
  9.2   than 90 days following final enactment of this act.  Persons 
  9.3   governed by this act must be licensed no later than January 1, 
  9.4   2006.