CHAPTER 476

FORMERLY

HOUSE BILL NO, 558

AS AMENDED BY HOUSE AMENDMENT NO. 1

AN ACT TO AMEND CHAPTERS 3 AND 25, TITLE 30 OF THE DELAWARE CODE, RELATING TO BONDING AND LICENSING REQUIREMENTS OF CONTRACTORS.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE (Two- thirds of all members elected to each House thereof concurring therein):

Section 1. Amend §375, Chapter 3, Title 30 of the Delaware Code by striking subsection (a)(1) of said section in its entirety and by substituting in lieu thereof a new subsection (a)(1) to read as follows:

"(I) The amount of the surety bond to be required of any non resident contractor or subcontractor required to be licensed under Chapter 25 of this Title shall be as follows: 6% of the contract or subcontract price on all contracts of $20,000 or more, or 6% of contractor's or subcontractor's estimated cost-and-profit under a cost- plus contract of $20,000 or more. When the aggregate of 2 or more contracts in 1 calendar year is $20,000 or more, the amount of the bond or bonds shall be 6% of the aggregate amount of such contracts. The Division of Revenue may by regulation prescribe cash bonds in lieu of the foregoing where the aggregate amount of the contracts do not exceed 8100,000 and shall deposit such cash bonds in a special fund of the State to be established for this purpose."

Section 2. Amend §375. Chapter 3, Title 30 of the Delaware Code by striking subsection (a)(2) of said section in its entirety and by substituting in lieu thereof a new subsection (a) (2) as follows:

"(2) The surety bond shall be filed before construction is begun in this State by the non resident contractor or subcontractor on any contract the price of which is 820.000 or more, or the estimated cost and- profit of which is $20,000 or more, and before construction is begun in this State by such non resident contractor or subcontractor on any contract for less than $20,000 when the amount of the contract when aggregated with any other contracts on which construction was begun by such non resident contractor or subcontractor in the same calendar year equals or exceeds $20,000."

Section 3. Amend §375, Chapter 3, Title 30 of the Delaware Code by striking subsection (c) of said section in its entirety and by substituting in lieu thereof a new subsection (e) to read as follows:

"(c) In the case of any person or firm failing or refusing to comply with the provisions of this section, there shalt be assessed by the Secretary of Finance a civil penalty of not more than $14,000 for each such occurrence."

Section 4. Amend §375, Chapter 3, Title 30, of the Delaware Code by striking existing subsection (d) of said section in its entirety and by substituting in lieu thereof a new subsection (d) to read as follows:

"(d) Any person or firm who wilfully or knowingly fails or refuses to comply with the provisions of this section shall be guilty of a misdemeanor and shall upon conviction be punishable by a fine not to exceed $3,000, or imprisonment not to exceed 6 months, or both."

Section 5. Amend g375, Chapter 3, Title 30 of the Delaware Code by adding thereto two new subsections to follow immediately after subsection (d) and to be known as subsections (e) and (f) respectively, to read as follows:

"(e) The definition of the terms 'non resident contractor' or 'subcontractor' as used in paragraphs (I) and (2) of subsection (a) of this §375 If the same as defined at 30 Del. C. §2501.

(f) As to each specific construction project in this State, upon the request of the non resident engaged as a contractor or subcontractor within the meaning of subsection (e) of this Section who establishes to the satisfaction of the Department that such non resident is in compliance with alt the provisions of this Section applicable to such non resident, the Department shall issue to such non resident a certificate of compliance on a form prescribed by the Department."

Section 6. Amend §2501, Chapter 25, Title 30 of the Delaware Code, by inserting after the definition of "contractor" three new definitions for the terms "subcontractor," "resident contractor," and "non resident contractor", numbered as paragraphs (2), (3), and (4) respectively, to read as follows:

"(2) 'Subcontractor' Mafia any person, partnership, firm, corporation or other business association or entity which enters into a contract (oral or written) directly with a prime contractor or directly with another subcontractor, to perform labor or to perform labor and provide materials in connection with such labor, on a site of contract construction located in this State.

(3) 'Resident contractor' or 'resident subcontractor' includes any general contractor, prime contractor, subcontractor or other type of construction contractor whose principal place of business and main office is regularly maintained in this State. If any such contractor entity is comprised of more than one entity in a partnership, joint venture, or some other legal relationship establishing such contractor entity. the contractor entity shall itself be treated as a separate entity which must comply with the provisions of $375 of this Title to the extent they are otherwise applicable. If at least one of the constituent entities making up the contractor entity maintains his or its principal place of business and main office in this State, such contractor entity shall be construed to be a 'resident' or 'resident person' or 'resident contractor' of this State. If none of such constituent entities maintains his or its principal place of business and main office regularly in this State, such contractor entity shall be construed to be a 'non- resident person desiring to engage in business in this State as a contractor', a 'non resident' and a 'non- resident person.' If any contractor is not comprised of more than one constituent entity in a partnership or joint venture or some other legal relationship establishing such contractor, and if such contractor shall regularly maintain his or Its principal place of business and main office in this State, such contractor shall be construed to be a 'resident contractor'.

(4) 'Non-resident contractor' or 'non- resident subcontractor' is a general contractor, prime contractor, subcontractor or other type of construction contractor who is not a resident contractor; or one who does not regularly maintain a principal place of business and main office in this State."

Section 7. Amend 52501, Chapter 25, Title 30 of the Delaware Code by renumbering paragraph (2) and (3) as (5) and (6) respectively.

Section 8. Amend §2502, Chapter 25, Title 30 of the Delaware Code by deleting the word "resident" as it appears in the first sentence of subsection (a) of said section.

Section 9. Amend §2502, Chapter 25, Title 30 of the Delaware Code, by striking subsection (b) in its entirety and substitute in lieu thereof a new subsection (b) as follows:

"(b) The Division of Revenue shall not issue any license to any person until and unless such person, (I) is in compliance with all the provisions of §375 of this Title applicable to such person (II) has filed a certificate of notice issued by the Delaware Department of Labor certifying that such person has notified the Department of Labor that such person has entered into or will be entering into contracts to perform labor on or to perform labor on and furnish material for a construction project located in Delaware, and (iii) has filed a certificate of insurance showing that he has insured his liability in the amount and manner, and when due, and as required. under the provisions of the workmen's compensation laws of this State, or a certificate on a form prescribed by the Industrial Accident Board of this State that he has been declared to be a qualified self- insurer by the Industrial Accident Board of this State pursuant to the provisions of the workmen's compensation laws of this State."

Section 10. Amend §2502. Chapter 25. Title 30 of the Delaware Code, by striking the words "and (b), as they appear together in subsection (c) of said section.

Section II. Amend §2503, Chapter 25, Title 30 of the Delaware Code, by striking §2503 in its entirety and by substituting in lieu thereof a new §2503 to read as follows:

"§2503. Duties of Architects, Professional Engineers. Contractors, and Construction Managers as to Non- Resident Contractor Licenses.

(a) Every architect or professional engineer or contractor or construction manager engaging in the practice of such profession shall furnish the Department of Finance within 10 days after entering into any contract with a contractor or subcontractor not a resident of this State, a statement of the total value of such contract or contracts together with the names and addresses of the contracting parties.

(b) In the case of any person or firm failing or refusing to comply with the provisions of this Section, there shall be assessed by the Secretary of Finance a civil penalty of not more than $10.000 for each occurrence.

(c) Any person or firm who wilfully or knowingly fails or refuses to comply with the provisions of this Section shall be guilty of a misdemeanor and upon conviction shall be fined not more than $3,000, or imprisoned not more than 6 months, or both."

Section 12. If any provisions of this Act or the application thereof to any person or circumstance is held invalid. such invalidity shall nut affect other provisions or applications of the Act which can be given effect without the invalid provision or application, and to this end the provisions of this Act are declared to be severable.

Section 13. This Act shall be effective for all contracts executed or first effective on or after January 1, 1987.

Approved July 8, 1986.