Rule Proposal

VOLUME 47, ISSUE 3
October 14, 2016

Rule Proposals

Law and Public Safety
Division of Consumer Affairs

Division of Consumer Affairs

Proposed Amendments: N.J.A.C. 13:45A-17A.2, 17A.3, 17A.6, 17A.8, and 17A.9

Proposed New Rule: N.J.A.C. 13:45A-17A.14

Home Elevation Contractors: Definitions; Registration Required; Duty to Update Information; Refusal to Issue, Suspension or Revocation of Registration; Hearing; Other Sanctions; Reinstatement of Suspended Registration; Identification Badges
 
Authorized By: Steve C. Lee, Acting Director, New Jersey Division of Consumer Affairs.
 
Authority: N.J.S.A. 56:8-138.1.
 
Proposal Number: PRN 2015-152.
 
Submit written comments by November 12, 2016, to:
 
   Steve C. Lee
   Acting Director
   New Jersey Division of Consumer Affairs
   124 Halsey Street
   PO Box 45027
   Newark, NJ 07101
   
The agency proposal follows:
 
Summary

The Division of Consumer Affairs (the Division) is proposing to amend the home elevation contractor registration rules and to promulgate a new rule to implement P.L. 2013, c. 144 ( N.J.S.A. 56:8-138.1), which mandates that home improvement contractors (including home elevation contractors) display State-issued identification badges when performing or engaging or attempting to engage in the business of selling home improvements (including home elevations) in this State. Under the proposed amendments and new rule, an individual acting on behalf of a registered home elevation contractor business entity (entity) must wear a badge when engaged in the sale of home elevations. The Division believes the proposed amendments and new rule are consistent with the Legislature's intent to protect consumers from individuals fraudulently representing themselves as home elevation contractors when they are not properly registered. The proposed amendments and new rule also protect the public by giving consumers the ability to determine whether an individual who is attempting to sell the consumer a home elevation project represents a registered home elevation contractor.

At N.J.A.C. 13:45A-17A.2, Definitions, the Division is proposing an amendment to define the terms "badge declaration" and "State-authorized vendor or vendors."

The proposed amendment at N.J.A.C. 13:45A-17A.3(d) requires a contractor who was previously registered as a home elevation contractor, but who is now registered as a home improvement contractor, to obtain a new badge identifying the person as a home improvement contractor.

Proposed new N.J.A.C. 13:45A-17A.6(c) requires home elevation contractors to inform the Division about personnel changes involving individuals required to wear identification badges pursuant to N.J.A.C. 13:45A-17A.14.

Proposed new N.J.A.C. 13:45A-17A.8(a)9 provides that failure to comply with the badge requirements set forth in N.J.A.C. 13:45A-17A.14 is a ground on which the Director may refuse to issue or renew, or may suspend or revoke any registration issued by the Division. The Division proposes to permit an entity to prove that it used its best efforts as an affirmative defense to a charge of failing to return badges to the State-authorized vendor.

The proposed amendment to N.J.A.C. 13:45A-17A.9 provides that if a suspended registration is reinstated, all individuals associated with the reinstated entity required to wear badges pursuant to N.J.A.C. 13:45A-17A.14 must obtain new badges.

Proposed new N.J.A.C. 13:45A-17A.14 sets forth the requirements relating to identification badges for home elevation contractors. Proposed new N.J.A.C. 13:45A-17A.14(a) requires that, on or after six months after the contract for badge creation and other ancillary services related to the badge is awarded, each individual acting on behalf of a home elevation contractor entity wear an identification badge on his or her upper left torso when performing, engaging, or attempting to engage in the sale of home improvements.

Proposed new subsection (b) requires that all entities complete an electronic badge declaration form upon registration identifying the individuals required to wear badges. Proposed new subsection (b) also directs the entities to the Division's website to obtain information identifying the State-authorized vendor or vendors who will be issuing and managing the badges on behalf of the Division.

Proposed new subsection (c) sets forth the conditions that must be satisfied before a badge will be issued by the State-authorized vendor or vendors.

Proposed new subsection (d) requires that badges be unalterable and lists the information to be printed on the badges.

Proposed new subsection (e) establishes that a badge is valid for two years and sets forth the renewal process. This subsection also prohibits an entity from allowing an individual to sell home elevations without a valid badge; an entity that permits such selling without a badge will be deemed to be in violation of the subchapter and subject to the penalty provisions of N.J.S.A. 56:8-143.

Proposed new subsection (f) prohibits the transfer of badges between individuals and sets forth the procedure that must be followed when the association between a salesperson and an entity is terminated.

Proposed new subsection (g) sets forth the procedure that must be followed when an individual changes his or her name or if a badge is lost [page=189] or stolen. In the case of a lost or stolen badge, until the badge is replaced, the individual is prohibited from engaging in the sales of home elevations.

Proposed new subsection (h) requires an entity to surrender for destruction all badges that have been issued on its behalf if the entity's registration has been suspended, revoked, or not renewed and sets forth the procedure for surrendering the badges. Proposed new N.J.A.C. 13:45A-17A.14(h) and the proposed amendment at N.J.A.C. 13:45A-17A.9 require an entity to obtain new badges if the entity's registration is subsequently reinstated.

The Division has determined that the comment period for this notice of proposal shall be 60 days; therefore, pursuant to N.J.A.C. 1:30-3.3(a)5, this notice is excepted from the rulemaking calendar requirement.
 
Social Impact

The proposed amendments and new rule may have a positive social impact on consumers who use the services of home elevation contractors by allowing consumers to determine that an individual with a badge seeking to sell them a home elevation is acting on behalf of a registered entity. This may discourage unregistered home elevation contractors, or charlatans posing as home elevation contractors, from entering into contracts with consumers, taking their deposits, and disappearing. The badge will display the individual's name and photograph, the entity's name and registration number, and the badge's expiration date, making it easier for consumers who wish to check the identity of the salesperson and/or the status of an entity's registration to do so.
 
Economic Impact

The proposed amendments and new rule will have an economic impact on all registered home elevation contractors. The entities will pay badge fees to the vendors for the issuance and management of identification badges for all of its salespersons, as well as computer access charges, if any, to complete and maintain the electronic badge declaration. Either the entities or salespersons will pay for transportation costs associated with traveling to the State-authorized vendor for issuance of the badges. The Division notes that many public libraries offer Internet access at little or no charge. The Division anticipates that the proposed amendments and new rule will have no direct financial impact on consumers.
 
Federal Standards Statement

A Federal standards analysis is not required because the proposed amendments and new rule are subject to State statutory requirements and are not subject to any Federal requirements.
 
Jobs Impact

The Division does not anticipate that the proposed amendments and new rule will increase or decrease the number of jobs.
 
Agriculture Industry Impact

The proposed amendments and new rule will have no impact on the agriculture industry in the State.
 
Regulatory Flexibility Analysis

If, for purposes of the Regulatory Flexibility Act, N.J.S.A. 52:14B-16 et seq., all registered home elevation contractors are considered "small businesses," then the following compliance requirements apply.

The proposed amendments and new rule will require all registered entities to electronically complete a badge declaration form listing the individuals associated with the entity who are required to wear an identification badge. All such individuals must obtain the badges from the State-authorized vendor or vendors before conducting sales of home elevations. The badges must be renewed every two years.

If an individual who has been issued a badge changes his or her name, loses the badge, or is the victim of theft, he or she must obtain a new badge. If an entity severs its association with a salesperson, it must collect the badge and surrender it to the State-authorized vendor within three business days. If an entity's registration is suspended, revoked, or has not been renewed, the entity must surrender all identification badges associated with the entity within three business days; if the Division reinstates its registration, all of the entity's salespersons must obtain new badges. The badge declaration must be updated within three business days of any change to an entity's sales force. A violation of the badge requirements will be deemed a violation within the meaning of N.J.A.C. 13:45A-17A.8 and will subject the entity to the penalty provisions of N.J.S.A. 56:8-143.

In order to comply with this rule, an entity will need access to a computer. The entity will incur badge fees and incidental costs that will vary according to the size of the business' sales force (see the Economic Impact statement above).

The Division believes that no professional services are likely to be needed to comply with the proposed amendments and new rule. The Division believes that the proposed amendments and new rule should be uniformly applied to all registrants to protect consumers; and, therefore, no differing compliance requirements for any registrant are provided.
 
Housing Affordability Impact Analysis

The proposed amendments and new rule will have an insignificant impact on the affordability of housing in New Jersey and there is an extreme unlikelihood that the rules would evoke a change in the average costs associated with housing because the proposed amendments and new rules concern the issuance of identification badges for home elevation contractors.
 
Smart Growth Development Impact Analysis

The proposed amendments and new rule will have an insignificant impact on smart growth development and there is an extreme unlikelihood that the rules would evoke a change in housing production in Planning Areas 1 or 2, or within designated centers, under the State Development and Redevelopment Plan in New Jersey because the proposed rules concern the issuance of identification badges for home elevation contractors.
 
Full text of the proposed amendments and new rule follows (additions indicated in boldface thus; deletions indicated in brackets [thus]):
 
SUBCHAPTER 17A.     HOME ELEVATION CONTRACTOR REGISTRATION
 
13:45A-17A.2   Definitions
 
The following words and terms, as used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise:
 
. . .
 
"Badge declaration" means the electronic form that a registered entity must complete, as set forth in N.J.A.C. 13:45A-17A.14(b), which identifies individuals performing, engaging, or attempting to engage in the sale of home improvements.
 
. . .
 
"State-authorized vendor or vendors" means the business or businesses with which the State has contracted to act on behalf of the Director for the issuance and management of home improvement and home elevation contractor identification badges.
 
13:45A-17A.3   Registration required
 
(a)-(c) (No change.)
 
(d) A person registered as a home elevation contractor shall be exempt from the requirement to register as a home improvement contractor pursuant to N.J.A.C. 13:45A-17.3(a)9; provided that if a person's home elevation registration is surrendered, suspended, revoked, not renewed, or otherwise is no longer valid, such person shall register as a home improvement contractor under N.J.A.C. 13:45A-17.3 prior to engaging in the business of making or selling home improvements and shall obtain a new badge identifying the person as a home improvement contractor.
 
(e)-(f) (No change.)
 
13:45A-17A.6   Duty to update information
 
(a)-(b) (No change.)
 
(c) [(Reserved)] Whenever there is a deletion or addition to the list of individuals required to wear identification badges pursuant to N.J.A.C. 13:45A-17A.14, the registered home elevation contractor shall inform the Division within three business days of the deletion or addition by logging on to the Division's website and amending the badge declaration. Any additions to the list shall be accompanied by the badge fee. Any individual added to the entity's list of individuals required to wear a badge shall not perform, engage, or attempt to engage in the sale of home elevations until the individual has obtained and is wearing a badge.
 
[page=190] (d) (No change.)
 
13:45A-17A.8   Refusal to issue[,]; suspension[,] or revocation of registration; hearing; other sanctions
 
(a) The Director may refuse to issue or renew, or may suspend or revoke any registration issued by the Division upon proof that an applicant or registrant or any of its officers, directors, principals, or persons with an ownership interest of 10 percent or more in the entity:
 
1.-8. (No change.)
 
9. [(Reserved)] Has failed to comply with the badge requirements set forth in N.J.A.C. 13:45A-17A.14. It shall be an affirmative defense to a charge of failing to return a badge to the State-authorized vendor that the entity used its best efforts to collect and surrender the badge;
 
10.-13. (No change.)
 
(b)-(e) (No change.)
 
13:45A-17A.9   Reinstatement of suspended registration
 
A registration that is suspended by the Director may be reinstated upon the home elevation contractor satisfying the conditions for reinstatement as determined by the Director and paying all outstanding fees, fines, penalties, and restitution, including the payment of the reinstatement fee specified in N.J.A.C. 13:45A-17A.13. If a suspended registration is reinstated, all individuals associated with the reinstated entity required to wear badges pursuant to N.J.A.C. 13:45A-17A.14 shall obtain new badges.
 
13:45A-17A.14   [(Reserved)] Identification badges
 
(a) On or after six months after the award of the contract for badge creation and other ancillary services related to the badges, each individual performing, engaging, or attempting to engage in the sale of home elevations shall wear an identification badge on the upper left corner of the individual's torso in a plainly visible fashion. An individual shall not engage in the sale of home improvements or elevations until the individual has obtained and is wearing a valid identification badge.
 
(b) For the purpose of identifying those individuals who are required to obtain and wear an identification badge, each entity shall, upon registration, complete a badge declaration setting forth the name and address of residence of each individual who will perform, engage, or attempt to engage in the sales of home elevations or home improvements on behalf of the entity. Access to the electronic form shall be available by logging on to the Division website. The name, address, and contact information for the State-authorized vendor or vendors issuing identification badges shall be posted on the Division website.
 
(c) An individual shall not be issued a badge unless:
 
1. The registration of the entity with which the individual is associated is in good standing;
 
2. The individual is listed on the entity's badge declaration, as supplemented and amended from time to time;
 
3. The badge fee has been paid by the entity to the vendor; and
 
4. The individual presents to the State-authorized vendor a form of government-issued photo identification containing the individual's current address of residence, which shall match the address listed on the entity's badge declaration.
 
(d) The Division, through the State-authorized vendor or vendors, shall issue an identification badge that shall be unalterable and shall include the following information:
 
1. The name, color photograph, and signature of the individual to whom the badge has been issued;
 
2. The business name and registration number of the entity;
 
3. The badge's expiration date; and
 
4. A clear and visible statement that the badge is not for an electrical contractor, plumbing contractor, or HVACR contractor.
 
(e) The badge shall be valid for two years. Each entity on whose behalf a badge has been issued shall apply for renewal of the badge at least 45 days prior to its expiration date, at which time the entity shall pay the badge renewal fee and shall obtain from the State-authorized vendor a new badge showing an updated photo and expiration date. An entity that permits an individual required to have a badge to work without a valid badge shall be deemed to be in violation of this subchapter within the meaning of N.J.A.C. 13:45A-17A.8 and shall also be subject to the penalty provisions of N.J.S.A. 56:8-143.
 
(f) Identification badges are not transferable. Upon termination of an association between an entity and an individual to whom an identification badge was issued, the entity shall:
 
1. Inform the Division within three business days of the date of termination by logging on to the Division's website and amending the badge declaration; and
 
2. Collect the individual's identification badge and surrender it to the State-authorized vendor for destruction within three business days of the date of termination.
 
i. Failure of an entity to collect and surrender an identification badge shall be deemed to be a violation within the meaning of N.J.A.C. 13:45A-17A.8. The address for surrender shall be set forth on the Division's website.
 
(g) If an individual's badge is lost or stolen, or a badge holder has legally changed his or her name through marriage or court order, the entity with which the individual is associated shall, within three business days of the event, report the event to the Division by logging on to the Division's website and:
 
1. In the case of a name change, amend the badge declaration; or
 
2. In the case of a lost or stolen badge, report the loss or theft.
 
i. In the case of a lost or stolen badge, the individual shall not perform, engage, or attempt to engage in the sales of home elevations on behalf of the entity until the individual obtains and is wearing a new badge.
 
(h) An entity whose registration has been suspended or revoked, or has not been renewed shall, within three business days of that suspension, revocation, or nonrenewal, surrender all identification badges issued under the registration number of the entity to the State-authorized vendor. The address for surrender shall be set forth on the Division's website. All surrendered badges shall be destroyed. Any subsequent reinstatement of registration shall require the issuance of a new badge.