HB 396

Enrolled Copy  H.B. 396
1Public Project Subcontractor Amendments
                                      2026 GENERAL SESSION
                                            STATE OF UTAH
                                 Chief Sponsor: Jefferson S. Burton
                                   Senate Sponsor: Brady Brammer
2
3  LONG TITLE
4  General Description:
5      This bill modifies disclosure requirements for subcontractors.
6  Highlighted Provisions:
7      This bill:
8      ▸ defines terms;
9      ▸ enacts a new workers' compensation insurance attestation requirement for an employer
10  seeking a zero estimated exposure policy, including a mandatory signed statement and
11  criminal fraud warning;
12      ▸ shifts several fixed interest rates and penalty amounts under the Employment Security Act
13  to amounts the division determines by rule;
14      ▸ clarifies enforcement authority and penalty structures related to unemployment insurance
15  reporting, collections, liens, and warrants;
16      ▸ creates new compliance and disclosure obligations for a subcontractor working on a
17  public construction project, including employee reporting and zero estimated exposure
18  policy disclosures;
19      ▸ requires a subcontractor on a public project to provide employee information to the
20  division;
21      ▸ requires a general contractor and a property owner to retain documentation for audit and
22  enforcement purposes;
23      ▸ authorizes the Division of Professional Licensing to make audit recommendations to the
24  State Tax Commission;
25      ▸ expands the definition of unprofessional conduct to include failure to comply with newly
26  enacted subcontractor requirements;
27      ▸ provides a coordination clause to substantively and technically coordinate changes
H.B. 396  Enrolled Copy
28   between this bill and H.B. 40, Utah Construction Trades Licensing Act Amendments;
29   and
30▸ makes technical and conforming changes.
31   Money Appropriated in this Bill:
32None
33   Other Special Clauses:
34This bill provides a coordination clause.
35   Utah Code Sections Affected:
36   AMENDS:
3735A-4-305, as last amended by Laws of Utah 2024, Chapter 110
3858-55-502, as last amended by Laws of Utah 2022, Chapter 415
39   ENACTS:
4031A-22-1017, Utah Code Annotated 1953
4158-55-313, Utah Code Annotated 1953
42   Utah Code Sections affected by Coordination Clause:
4358-55-202, as enacted by H.B. 40 (2026)
4458-55-213, Utah Code Annotated 1953
4558-55-313, Utah Code Annotated 1953
4658-55-603, as last amended by Laws of Utah 2025, Chapter 302
47
48   Be it enacted by the Legislature of the state of Utah:
49Section 1. Section 31A-22-1017 is enacted to read:
5031A-22-1017 . Attestation required.
51   (1) As used in this section, "zero estimated exposure policy" means a policy of insurance
52that an employer obtains to cover the employer's liability to pay compensation under
53Title 34A, Chapter 2, Workers' Compensation Act, or Title 34A, Chapter 3, Utah
54Occupational Disease Act, after reporting the employer's total estimated exposure is zero.
55   (2) An insurer shall require each applicant for a zero estimated exposure policy to sign an
56attestation in capital letters with substantially the following form and content: "I
57ATTEST THAT ALL INFORMATION PROVIDED IN THIS APPLICATION IS
58CURRENT, TRUE, ACCURATE, AND COMPLETE TO THE BEST OF MY
59KNOWLEDGE AND BELIEF. I FURTHER ATTEST THAT I HAVE NO
60EMPLOYEES AND AN ESTIMATED EXPOSURE OF ZERO. IF I EMPLOY ANY
61EMPLOYEES DURING THE POLICY PERIOD, I SHALL PROVIDE WRITTEN
                                                    -2-
Enrolled Copy  H.B. 396
62      NOTICE TO MY WORKERS' COMPENSATION INSURER WITHIN 60 DAYS
63      AFTER THE EMPLOYMENT BEGINS, AND INCLUDE THE ESTIMATED
64      PAYROLL AND CLASSIFICATION CODES FOR THOSE EMPLOYEES. I
65      UNDERSTAND THAT AN OMISSION OR MISREPRESENTATION MADE WITH
66      INTENT TO DEFRAUD IN THIS APPLICATION CONSTITUTES A CRIMINAL
67      ACTION."
68Section 2. Section 35A-4-305 is amended to read:
6935A-4-305 . Collection of contributions -- Unpaid contributions to bear interest --
70  Offer to compromise.
71  (1)(a) Contributions unpaid on the date on which [they] the contributions are due and
72      payable, as [prescribed by the division] the division determines, shall bear interest at [
73      the rate of 1% per month] a rate the division determines by rule the division makes in
74      accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, from
75      and after that date until the division receives payment plus accrued interest[ is
76      received by the division].
77      (b)(i) Contribution reports not made and filed by the date on which [they] the
78contribution reports are due as [prescribed by the division] the division determines
79are subject to a penalty the division determines by rule the division makes in
80accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, to be
81assessed and collected in the same manner as contributions due under this section[
82equal to 5% of the contribution due if the failure to file on time was not more than
8315 days, with an additional 5% for each additional 15 days or fraction thereof
84during which the failure continued, but not to exceed 25% in the aggregate and
85not less than $25 with respect to each reporting period].
86(ii) If a report is filed after the required time and [it is shown to the satisfaction of the
87division or its] the division or the division's authorized representative determines
88that the failure to file was due to a reasonable cause and not to willful neglect, no [
89addition shall be made to the contribution] penalty may be assessed.
90      (c)(i) If contributions are unpaid after 10 days from the date [of the mailing or
91personal delivery by the division or its authorized representative, of] the division
92or the division's authorized representative mails or personally delivers a written
93demand for payment, there shall attach to the contribution, to be assessed and
94collected in the same manner as contributions due under this section, a penalty [
95equal to 5% of the contribution due] the division determines by rule the division
                                                 -3-
 H.B. 396  Enrolled Copy
96makes in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking
97Act.
98(ii) A penalty may not attach if within 10 days after the mailing or personal delivery,
99arrangements for payment [have been] are made with the division, or [its] the
100division's authorized representative, and payment is made in accordance with
101those arrangements.
102(d) The division shall assess as a penalty a service charge, in addition to any other
103penalties that may apply, in an amount not to exceed the service charge imposed by
104Section 7-15-1 for dishonored instruments if:
105(i) any amount due the division for contributions, interest, other penalties or benefit
106overpayments is paid by check, draft, order, or other instrument; and
107(ii) the instrument is dishonored or not paid by the institution against which [it] the
108instrument is drawn.
109(e) Except for benefit overpayments under Subsection 35A-4-405(5), benefit
110overpayments, contributions, interest, penalties, and assessed costs, uncollected three
111years after [they become] becoming due, may be charged as uncollectible and
112removed from the records of the division if:
113(i) no assets belonging to the liable person and subject to attachment [can be] are
114found; and
115(ii) in the opinion of the division there is no likelihood of collection at a future date.
116(f) [Interest ] The division shall deposit interest and penalties collected in accordance
117with this section [shall be deposited ]into the Workforce Initiatives Fund created in
118Section 35A-4-506.
119(g) [Action required for the collection of sums] The division may bring an action to
120collect a sum due under this chapter [is ]subject to [the applicable limitations of
121actions under ]Title 78B, Chapter 2, Statutes of Limitations.
122   (2)(a) If an employer fails to file a report when [prescribed by the division] the division
123prescribes for the purpose of determining the amount of the employer's contribution
124due under this chapter, or if the report when filed is incorrect or insufficient or is not
125satisfactory to the division, the division may determine the amount of wages paid for
126employment during the period or periods with respect to which the reports were or
127should have been made and the amount of contribution due from the employer on the
128basis of any information [it] the division may [be able to ]obtain.
129(b) The division shall give written notice of the determination to the employer.
                                                   -4-
 Enrolled Copy  H.B. 396
130      (c) The determination is considered correct unless:
131(i) the employer, within 10 days after mailing or personal delivery of notice of the
132determination, applies to the division for a review of the determination as
133provided in Section 35A-4-508; or
134(ii) [unless ]the division or [its] the division's authorized representative [of its own
135motion ]reviews the determination.
136      (d) The amount of contribution determined under Subsection (2)(a) is subject to
137penalties and interest as provided in Subsection (1).
138      (e) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
139division shall make rules making a penalty for an employer who fails to file a report
140or files an incorrect report due to the employer's misclassification of an employee, as
141defined in Section 34-47-102.
142  (3)(a) If, after due notice, an employer defaults in the payment of contributions, interest,
143      or penalties on the contributions, or a claimant defaults in a repayment of benefit
144      overpayments and penalties on the overpayments, the amount due shall be collectible
145      by civil action in the name of the division, and the employer adjudged in default shall
146      pay the costs of the action.
147      (b) Civil actions brought under this section to collect contributions, interest, or penalties
148from an employer, or benefit overpayments and penalties from a claimant shall be:
149(i) heard by the court at the earliest possible date; and
150(ii) entitled to preference upon the calendar of the court over all other civil actions
151except:
152(A) petitions for judicial review under this chapter; and
153(B) cases arising under the workers' compensation law of this state.
154      (c)(i)(A) To collect contributions, interest, or penalties, or benefit overpayments
155and penalties due from employers or claimants located outside Utah, the
156division may employ private collectors providing debt collection services
157outside Utah.
158(B) Accounts may be placed with private collectors only after the employer or
159claimant has been given a final notice that the division intends to place the
160account with a private collector for further collection action.
161(C) The notice shall advise the employer or claimant of the employer's or
162claimant's rights under this chapter and the applicable rules of the department.
163(ii)(A) A private collector may receive as compensation up to 25% of the lesser of
                                                 -5-
 H.B. 396  Enrolled Copy
164the amount collected or the amount due, plus the costs and fees of any civil
165action or postjudgment remedy instituted by the private collector with the
166approval of the division.
167(B) The employer or claimant shall be liable to pay the compensation of the
168collector, costs, and fees in addition to the original amount due.
169(iii) A private collector is subject to the federal Fair Debt Collection Practices Act, 15
170U.S.C. Sec. 1692 et seq.
171(iv)(A) [A civil action may not be maintained by a] A private collector may not
172maintain a civil action without specific prior written approval [of] from the
173division.
174(B) When division approval is given for civil action against an employer or
175claimant, the division may cooperate with the private collector [to the extent
176necessary ]to effect the civil action.
177(d)(i) Notwithstanding Section 35A-4-312, the division may disclose the
178contribution, interest, penalties or benefit overpayments and penalties, costs due,
179the name of the employer or claimant, and the employer's or claimant's address
180and telephone number when any collection matter is referred to a private collector
181under Subsection (3)(c).
182(ii) A private collector is subject to the confidentiality requirements and penalty
183provisions provided in Sections 35A-4-312 and 76-8-1304, except to the extent
184disclosure is necessary in a civil action to enforce collection of the amounts due.
185(e) An action taken by the division under this section may not be construed to be an
186election to forego other collection procedures by the division.
187   (4)(a) In the event of a distribution of an employer's assets under an order of a court
188under the laws of Utah, including a receivership, assignment for benefits of creditors,
189adjudicated insolvency, composition, or similar proceedings, contributions then or
190thereafter due shall be paid in full prior to all other claims except taxes and claims for
191wages of not more than $400 to each claimant, earned within five months of the
192commencement of the proceeding.
193(b) If an employer commences a proceeding in the Federal Bankruptcy Court under a
194chapter of 11 U.S.C. 101 et seq., as amended by the Bankruptcy Abuse Prevention
195and Consumer Protection Act of 2005, contributions, interest, and penalties then or
196thereafter due shall be entitled to the priority provided for taxes, interest, and
197penalties in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.
                                                   -6-
 Enrolled Copy  H.B. 396
198  (5)(a) In addition and as an alternative to any other remedy [provided by this chapter]
199      this chapter provides, and provided that no appeal or other proceeding for review [
200      provided by this chapter] this chapter provides is [then ]pending and the time for
201      taking it has expired, the division may issue a warrant in duplicate, under [its] the
202      division's official seal, directed to the sheriff of any county of the state, commanding
203      the sheriff to levy upon and sell the real and personal property of a delinquent
204      employer or claimant found within the sheriff's county for the payment of the
205      contributions due, with the added penalties, interest, or benefit overpayment and
206      penalties, and costs, and to return the warrant to the division and pay into the fund the
207      money collected by virtue of the warrant by a time to be specified in the warrant, not
208      more than 60 days from the date of the warrant.
209      (b)(i) Immediately upon receipt of the warrant in duplicate, the sheriff shall file the
210duplicate with the clerk of the district court in the sheriff's county.
211(ii) The clerk shall enter in the judgment docket, in the column for judgment debtors,
212the name of the delinquent employer or claimant mentioned in the warrant, and in
213appropriate columns the amount of the contribution, penalties, interest, or benefit
214overpayment and penalties, and costs, for which the warrant is issued and the date
215when the duplicate is filed.
216      (c) The amount of the docketed warrant shall:
217(i) have the force and effect of an execution against all personal property of the
218delinquent employer; and
219(ii) become a lien upon the real property of the delinquent employer or claimant in
220the same manner and to the same extent as a judgment duly rendered by a district
221court and docketed in the office of the clerk.
222      (d) After docketing, the sheriff shall:
223(i) proceed in the same manner as is prescribed by law with respect to execution
224issued against property upon judgments of a court of record; and
225(ii) be entitled to the same fees for the sheriff's services in executing the warrant, to
226be collected in the same manner.
227  (6)(a) Contributions [imposed by this chapter] this chapter imposes are a lien upon the
228      property of an employer liable for the contribution required to be collected under this
229      section who shall sell out the employer's business or stock of goods or shall quit
230      business, if the employer fails to make a final report and payment on the date [
231      subsequent to] after the date of selling or quitting business on which [they] the
                                                 -7-
 H.B. 396  Enrolled Copy
232contributions are due and payable as prescribed by rule.
233(b)(i) An employer's successor, successors, or assigns, if any, are required to
234withhold sufficient of the purchase money to cover the amount of the [
235contributions and interest or penalties] contributions, interest, and penalties due
236and payable until the former owner produces a receipt from the division showing
237that [they] the contributions, interest, and penalties have been paid or a certificate
238stating that no amount is due.
239(ii) If the purchaser of a business or stock of goods fails to withhold sufficient
240purchase money, the purchaser is personally liable for the payment of the amount
241of the contributions required to be paid by the former owner, interest and penalties
242accrued and unpaid by the former owner, owners, or assignors.
243   (7)(a) If an employer is delinquent in the payment of a contribution, the division may
244give notice of the amount of the delinquency by registered mail to all persons having
245in their possession or under their control, any credits or other personal property
246belonging to the employer, or owing any debts to the employer at the time of the
247receipt by them of the notice.
248(b) A person notified under Subsection (7)(a) shall neither transfer nor make any other
249disposition of the credits, other personal property, or debts until:
250(i) the division has consented to a transfer or disposition; or
251(ii) 20 days after the receipt of the notice.
252(c) All persons notified under Subsection (7)(a) shall, within five days after receipt of
253the notice, advise the division of credits, other personal property, or other debts in
254their possession, under their control or owing by them, as the case may be.
255   (8)(a)(i) Each employer shall furnish the division necessary information for the
256proper administration of this chapter and shall include wage information for each
257employee, for each calendar quarter.
258(ii) The information shall be furnished at a time, in the form and manner, and to those
259individuals as the department may [by rule require] require by rule the department
260makes in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking
261Act.
262(iii) The division may require an employer to post a bond for failure to comply with
263the rules required by Subsection (8)(a)(i).
264(b)(i) Each employer shall furnish each individual worker who is separated that
265information as the department may by rule require, and shall furnish within 48
                                                   -8-
 Enrolled Copy  H.B. 396
266hours of the receipt of a request from the division a report of the earnings of any
267individual during the individual's base-period.
268(ii) The report shall be on a form prescribed by the division and contain all
269information prescribed by the division.
270      (c)(i) For each failure by an employer to conform to this Subsection (8) the division
271shall, unless good cause is shown, assess a [$50 penalty if the filing was not more
272than 15 days late] penalty that the division determines by rule the division makes
273in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
274[(ii) If the filing is more than 15 days late, the division shall assess an additional
275penalty of $50 for each 15 days, or a fraction of the 15 days that the filing is late,
276not to exceed $250 per filing.]
277[(iii)] (ii) The penalty is to be collected in the same manner as contributions due under
278this chapter.
279      [(d)(i) The division shall prescribe rules providing standards for determining which
280contribution reports shall be filed on magnetic or electronic media or in other
281machine-readable form.]
282[(ii) In prescribing these rules, the division:]
283[(A) may not require an employer to file contribution reports on magnetic or
284electronic media unless the employer is required to file wage data on at least
285250 employees during any calendar quarter or is an authorized employer
286representative who files quarterly tax reports on behalf of 100 or more
287employers during any calendar quarter;]
288[(B) shall take into account, among other relevant factors, the ability of the
289employer to comply at reasonable cost with the requirements of the rules; and]
290[(C) may require an employer to post a bond for failure to comply with the rules
291required by this Subsection (8)(d).]
292  (9)(a)(i) An employer liable for payments in lieu of contributions shall file
293      Reimbursable Employment and Wage Reports.
294(ii) The reports are due on the last day of the month that follows the end of each
295calendar quarter unless the division, after giving notice, changes the due date.
296(iii) A report postmarked on or before the due date is considered timely.
297      (b)(i) Unless the employer can show good cause, the division shall assess a [$50
298penalty ] penalty that the division determines by rule the division makes in
299accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
                                                 -9-
 H.B. 396  Enrolled Copy
300against an employer who does not file Reimbursable Employment and Wage
301Reports within the time limits set out in Subsection (9)(a) if the filing was not
302more than 15 days late.
303[(ii) If the filing is more than 15 days late, the division shall assess an additional
304penalty of $50 for each 15 days, or a fraction of the 15 days that the filing is late,
305not to exceed $250 per filing.]
306[(iii)] (ii) The division shall assess and collect the penalties referred to in this
307Subsection (9)(b) in the same manner as prescribed in Sections 35A-4-309 and
30835A-4-311.
309   (10) If a person liable to pay a contribution or benefit overpayment [imposed by this chapter]
310that this chapter imposes neglects or refuses to pay [it] the contribution or benefit
311overpayment after demand, the amount, including any interest, additional amount,
312addition to contributions, or assessable penalty, together with any additional accruable
313costs, shall be a lien in favor of the division upon all property and rights to property,
314whether real or personal belonging to the person.
315   (11)(a) The lien imposed by Subsection (10) arises at the time the assessment, as defined
316in the department rules, is made and continues until the liability for the amount
317assessed, or a judgment against the taxpayer arising out of the liability, is satisfied.
318(b)(i) The lien imposed by Subsection (10) is not valid as against a purchaser, holder
319of a security interest, mechanics' lien holder, or judgment lien creditor until the
320division files a warrant with the clerk of the district court.
321(ii) For the purposes of this Subsection (11)(b):
322(A) "Judgment lien creditor" means a person who obtains a valid judgment of a
323court of record for recovery of specific property or a sum certain of money, and
324who in the case of a recovery of money, has a perfected lien under the
325judgment on the property involved. A judgment lien does not include inchoate
326liens such as attachment or garnishment [liens until they ripen] until the
327inchoate lien ripens into a judgment. A judgment lien does not include the
328determination or assessment of a quasi-judicial authority, such as a state or
329federal taxing authority.
330(B) "Mechanics' lien holder" means any person who has a lien on real property, or
331on the proceeds of a contract relating to real property, for services, labor, or
332materials furnished in connection with the construction or improvement of the
333property. A person has a lien on the earliest date the lien becomes valid
                                                   - 10 -
 Enrolled Copy  H.B. 396
334against subsequent purchasers without actual notice, but not before the person
335begins to furnish the services, labor, or materials.
336(C) "Person" means:
337(I) an individual;
338(II) a trust;
339(III) an estate;
340(IV) a partnership;
341(V) an association;
342(VI) a company;
343(VII) a limited liability company;
344(VIII) a limited liability partnership; or
345(IX) a corporation.
346(D) "Purchaser" means a person who, for adequate and full consideration in
347money or money's worth, acquires an interest, other than a lien or security
348interest, in property which is valid under state law against subsequent
349purchasers without actual notice.
350(E) "Security interest" means any interest in property acquired by contract for the
351purpose of securing payment or performance of an obligation or indemnifying
352against loss or liability. A security interest exists at any time:
353(I) the property is in existence and the interest has become protected under the
354law against a subsequent judgment lien arising out of an unsecured
355obligation; and
356(II) to the extent that, at that time, the holder has parted with money or money's
357worth.
358  (12)(a) Except in cases involving a violation of unemployment compensation provisions
359      under Sections 76-8-1301, 76-8-1302, 76-8-1303, 76-8-1304, Subsection
360      35A-4-304(5), or Subsection 35A-4-405(5), and at the discretion of the division, the
361      division may accept an offer in compromise from an employer or claimant to reduce
362      past due debt arising from contributions or benefit overpayments imposed under this
363      chapter.
364      (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
365division shall make rules for allowing an offer in compromise provided under
366Subsection (12)(a).
367  The following section is affected by a coordination clause at the end of this bill.
                                                   - 11 -
 H.B. 396  Enrolled Copy
368Section 3. Section 58-55-313 is enacted to read:
36958-55-313 . Subcontractors.
370   (1) As used in this section:
371(a) "First-tier subcontractor" means a subcontractor who contracts directly with the
372general contractor.
373(b) "Public project" means the contract is with or authorized by a public entity as defined
374in Section 63G-6a-103.
375(c) "Second-tier subcontractor" means a subcontractor that contracts with a
376subcontractor.
377(d)(i) "Subcontractor" means a person under contract with a general contractor or
378another subcontractor to provide services or labor for the construction,
379installation, or repair of an improvement to real property.
380(ii) "Subcontractor" includes a trade contractor or specialty contractor.
381(iii) "Subcontractor" includes a first-tier subcontractor and a second-tier
382subcontractor.
383(iv) "Subcontractor" does not include a supplier that provides only materials,
384equipment, or supplies to a general contractor or subcontractor.
385(e) "Zero estimated exposure policy" means the same as that term is defined in Section
38631A-22-1017.
387   (2) Before engaging in a construction trade on a public project, a subcontractor shall:
388(a) provide a list of current employees to the general contractor and the property owner
389for which the subcontractor engages in a construction trade;
390(b) provide the general contractor and the property owner the second-tier subcontractor's
391name and the second-tier subcontractor's license number if the subcontractor intends
392to accept a contract with a second-tier subcontractor related to construction trade on a
393public project;
394(c) if the subcontractor holds a zero estimated exposure policy, provide to a person that
395contracts with the subcontractor for construction trade on a public project:
396(i) written notice that the subcontractor has a zero estimated exposure policy; and
397(ii) a copy of the zero estimated exposure policy;
398(d) ensure that each of the subcontractor's employees on the construction site possess
399photo identification and shall ensure that the identification will be presented to the
400division upon request; and
401(e) provide to the general contractor and the property owner the estimated number of
                                                  - 12 -
 Enrolled Copy  H.B. 396
402labor hours for their portion of the project.
403  (3) At the division's request, a subcontractor shall provide the following for each current
404      employee of the subcontractor:
405      (a) the name of the employee;
406      (b) the last four digits of the social security number of the employee; and
407      (c) if the employee possesses a professional license, the professional license number of
408the employee.
409  (4)(a) The general contractor and the property owner shall retain the information the
410      subcontractor provides for three years from the day after the day on which the
411      general contractor and the property owner receive the information from the
412      subcontractor.
413      (b) The general contractor and the property owner shall provide the information the
414general contractor and the property owner receive from a subcontractor to the
415division at the division's request.
416  (5) The division may:
417      (a) make audit recommendations to the State Tax Commission; and
418      (b) provide information obtained in accordance with this section to the State Tax
419Commission.
420Section 4. Section 58-55-502 is amended to read:
42158-55-502 . Unprofessional conduct.
422     Unprofessional conduct includes:
423  (1) failing to establish, maintain, or demonstrate financial responsibility while licensed as a
424      contractor under this chapter;
425  (2) disregarding or violating through gross negligence or a pattern of negligence:
426      (a) the building or construction laws of this state or any political subdivision;
427      (b) the safety and labor laws applicable to a project;
428      (c) any provision of the health laws applicable to a project;
429      (d) the workers' compensation insurance laws of this state applicable to a project;
430      (e) the laws governing withholdings for employee state and federal income taxes,
431unemployment taxes, Social Security payroll taxes, or other required withholdings; or
432      (f) any reporting, notification, and filing laws of this state or the federal government;
433  (3) any willful, fraudulent, or deceitful act by a licensee, caused by a licensee, or at a
434      licensee's direction which causes material injury to another;
435  (4) contract violations that pose a threat or potential threat to the public health, safety, and
                                                 - 13 -
 H.B. 396  Enrolled Copy
436welfare including:
437(a) willful, deliberate, or grossly negligent departure from or disregard for plans or
438specifications, or abandonment or failure to complete a project without the consent of
439the owner or the owner's duly authorized representative or the consent of any other
440person entitled to have the particular project completed in accordance with the plans,
441specifications, and contract terms;
442(b) failure to deposit funds to the benefit of an employee as required under any written
443contractual obligation the licensee has to the employee;
444(c) failure to maintain in full force and effect any health insurance benefit to an
445employee that was extended as a part of any written contractual obligation or
446representation by the licensee, unless the employee is given written notice of the
447licensee's intent to cancel or reduce the insurance benefit at least 45 days before the
448effective date of the cancellation or reduction;
449(d) failure to reimburse the Residence Lien Recovery Fund as required by Section
45038-11-207;
451(e) failure to provide, when applicable, the information required by Section 38-11-108;
452and
453(f) willfully or deliberately misrepresenting or omitting a material fact in connection
454with an application to claim recovery from the Residence Lien Recovery Fund under
455Section 38-11-204;
456   (5) failing as an alarm company to notify the division of the cessation of performance of [its]
457the alarm company's qualifying agent, or failing to replace [its] the alarm company's
458qualifying agent as required under Section 58-55-304;
459   (6) failing as an alarm company agent to carry or display a copy of the licensee's license as
460required under Section 58-55-311;
461   (7) failing to comply with operating standards established by rule in accordance with
462Section 58-55-308;
463   (8) an unincorporated entity licensed under this chapter having an individual who owns an
464interest in the unincorporated entity engage in a construction trade in Utah while not
465lawfully present in the United States;
466   (9) an unincorporated entity failing to provide the following for an individual who engages,
467or will engage, in a construction trade in Utah for the unincorporated entity:
468(a) workers' compensation coverage to the extent required by Title 34A, Chapter 2,
469Workers' Compensation Act, and Title 34A, Chapter 3, Utah Occupational Disease
                                                  - 14 -
 Enrolled Copy  H.B. 396
470Act; and
471      (b) unemployment compensation in accordance with Title 35A, Chapter 4, Employment
472Security Act, for an individual who owns, directly or indirectly, less than an 8%
473interest in the unincorporated entity, as defined by rule made by the division in
474accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
475  (10) the failure of an alarm company or alarm company agent to inform a potential
476      customer, before the customer's purchase of an alarm system or alarm service from the
477      alarm company, of the policy of the county, city, or town within which the customer
478      resides relating to priority levels for responding to an alarm signal transmitted by the
479      alarm system that the alarm company provides the customer;[ or]
480  (11) failing to continuously maintain insurance and registration as required under
481      Subsection 58-55-302(2)[.] ; or
482  (12) failing to comply with Section 58-55-313.
483Section 5. Effective Date.
484  This bill takes effect on May 6, 2026.
485Section 6. Coordinating H.B. 396 with H.B. 40.
486  If H.B. 396, Public Project Subcontractor Amendments, and H.B. 40, Utah
487  Construction Trades Licensing Act Amendments, both pass and become law, the Legislature
488  intends that, on January 1, 2027:
489  (1) the following language be inserted as Subsection 58-55-603(9) in H.B. 40:
490  "(9) fails to comply with Section 58-55-213.";
491  (2) the following definitions be inserted alphabetically into Section 58-55-202 in H.B. 40
492  and that the existing subsections in Section 58-55-202 in H.B. 40 be renumbered accordingly:
493  (a) ""First-tier subcontractor" means a subcontractor that contracts directly with the general
494  contractor.";
495  (b) ""Public project" means the contract is with or authorized by a public entity as defined
496  in Section 63G-6a-103.";
497  (c) ""Second-tier subcontractor" means a subcontractor that contracts with a subcontractor.
498  (d) "(a) "Subcontractor" means a person under contract with a general contractor or another
499  subcontractor to provide services or labor for the construction, installation, or repair of an
500  improvement to real property.
501  (b) "Subcontractor" includes a trade contractor or specialty contractor.
502  (c) "Subcontractor" includes a first-tier subcontractor and a second-tier subcontractor.
503  (d) "Subcontractor" does not include a supplier that provides only materials, equipment, or
                                                - 15 -
 H.B. 396  Enrolled Copy
504   supplies to a general contractor or subcontractor."; and
505   (e) ""Zero estimated exposure policy" means the same as that term is defined in Section
506   31A-22-1017.";
507   (3) Section 58-55-313 enacted in H.B. 396 not take effect; and
508   (4) Section 58-55-213 be enacted to read:
509   "58-55-213. Public Project Subcontractors.
510   (1) Before engaging in a construction trade on a public project, a subcontractor shall:
511   (a) provide a list of current employees to the general contractor and the property owner for
512   which the subcontractor engages in a construction trade;
513   (b) provide the general contractor and the property owner the second-tier subcontractor's
514   name and the second-tier subcontractor's license number if the subcontractor intends to accept
515   a contract with a second-tier subcontractor related to construction trade on a public project;
516   (c) if the subcontractor holds a zero estimated exposure policy, provide to a person that
517   contracts with the subcontractor for construction trade on a public project:
518   (i) written notice that the subcontractor has a zero estimated exposure policy; and
519   (ii) a copy of the zero estimated exposure policy;
520   (d) ensure that each of the subcontractor's employees on the construction site possess photo
521   identification and shall ensure that the identification will be presented to the division upon
522   request; and
523   (e) provide to the general contractor and the property owner the estimated number of labor
524   hours for their portion of the project.
525   (2) At the division's request, a subcontractor shall provide the following for each current
526   employee of the subcontractor:
527   (a) the name of the employee; and
528   (b) if the employee possesses a professional license, the professional license number of the
529   employee.
530   (3)(a) The general contractor and the property owner shall retain the information the
531   subcontractor provides for three years from the day after the day on which the general
532   contractor and the property owner receive the information from the subcontractor.
533   (b) The general contractor and the property owner shall provide the information the general
534   contractor and the property owner receive from a subcontractor to the division at the division's
535   request.
536   (4) The division may:
537   (a) make audit recommendations to the State Tax Commission; and
                                                 - 16 -
 Enrolled Copy  H.B. 396
538  (b) provide information obtained in accordance with this section to the State Tax
539  Commission.".
                                              - 17 -