SENATE FILE 26

BY  JOCHUM

A BILL FOR

An Act establishing a home inspector licensing program, establishing a home inspector examining board, providing civil and criminal penalties, and including effective date and applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

   Section 1.  NEW SECTION.  104.1  Title.
   This chapter may be known and cited as the “Iowa Home Inspector Licensing Act”.
   Sec. 2.  NEW SECTION.  104.2  Definitions.
   As used in this chapter, unless the context otherwise requires:
   1.  “Applicant” means a person who applies to the board for a license under this chapter.
   2.  “Board” means the home inspector examining board as established pursuant to section 104.3.
   3.  “Department” means the Iowa department of public safety.
   4.  “Governmental subdivision” means any city, county, or combination thereof.
   5.  “Home inspection” means the examination and evaluation of the exterior and interior components of residential real property, which includes the inspection of any two or more of the following components of residential real property in connection with or to facilitate the sale, lease, or other conveyance of, or the proposed sale, lease, or other conveyance of, residential real property:
   a.  Heating, ventilation, or air conditioning system.
   b.  Plumbing system.
   c.  Electrical system.
   d.  Structural composition.
   e.  Foundation.
   f.  Roof.
   g.  Masonry structure.
   h.  Any other residential real property component established by rule under this chapter.
   6.  “Home inspector” means a person who, for compensation either direct or indirect, performs home inspections.
   7.  “Residential real property” means real property that is an owner-occupied single-family or two-family dwelling located in this state and occupied or used or intended to be occupied or used for residential purposes, including an interest in any real property covered under chapter 499B.
   Sec. 3.  NEW SECTION.  104.3  Home inspector examining board.
   1.  A home inspector examining board is created within the Iowa department of public safety.
   2.  The board shall be comprised of nine members as follows:
   a.  The commissioner of public safety or the commissioner’s designee. 
   b.  The director of public health or the director’s designee.
   c.  The state building code commissioner or the commissioner’s designee.
   d.  The state fire marshal or the fire marshal’s designee.
   e.  One plumbing inspector.
   f.  One mechanical inspector.
   g.  One electrical inspector.
   h.  One contractor who primarily works in rural areas.
   i.  One contractor who primarily works in urban areas.
   The board members enumerated in paragraphs “e” through “i”, shall be appointed by the governor and are subject to confirmation by the senate.
   3.  Members enumerated in subsection 2, paragraphs“e”through “i”, shall serve three-year staggered terms and shall serve no more than three full terms. A vacancy in the membership of the board shall be filled in the same manner as the original appointment.
   4.  If a person who has been appointed to serve on the board has ever been disciplined by the board, all board complaints and statements of charges, settlement agreements, findings of fact, and orders pertaining to the disciplinary action shall be made available to the senate committee to which the appointment is referred at the committee’s request before the full senate votes on the person’s appointment.
   5.  The board shall organize annually and shall select a chairperson and a secretary from its membership. A quorum shall consist of a majority of the members of the board.
   6.  Members of the board shall receive actual expenses for their duties as a member of the board. Each member of the board may also be eligible to receive compensation as provided in section 7E.6.
   Sec. 4.  NEW SECTION.  104.4  Rules.
   The board shall adopt all rules necessary to carry out the licensing and other provisions of this chapter.
   Sec. 5.  NEW SECTION.  104.5  Standards of practice.
   1.  All persons licensed under this chapter shall comply with the standards of practice established by the board by rule pursuant to chapter 17A.
   2.  Standards of practice may include recognized standards and codes to be used in a home inspection. The board shall consider nationally recognized standards and codes prior to adopting rules for the standards of practice.
   3.  The board’s standards of practice shall include all of the following:
   a.  Requirements for home inspection reports. A home inspection report is a written evaluation prepared and issued by a home inspector upon completion of a home inspection.
   b.  Requirements for the retention of records by licensed home inspectors.
   Sec. 6.  NEW SECTION.  104.6  Applications for examinations.
   1.  Any person desiring to take an examination for a license issued pursuant to this chapter shall file an application with the board at least fifteen days before a scheduled examination, on a form provided by the board. The application shall be signed by the applicant and shall be accompanied by the examination fee and such documents and affidavits as are necessary to show the eligibility of the applicant to take the examination. The board may require that a recent photograph of the applicant be attached to the application. 
   2.  The form of the application shall be in accordance with the rules of the department and the board.
   Sec. 7.  NEW SECTION.  104.7  Examinations.
   1.  The board shall give public notice of the time and place of examinations to be held under this chapter. Such notice shall be given in such manner as the board deems necessary to provide adequate time to allow applicants for licensure to comply with the provisions of this chapter.
   2.  Examinations for the licenses which may be issued pursuant to this chapter shall be conducted by the board. Examinations shall be conducted at least two times per year at such time and location as the department, in consultation with the board, may fix. Applicants who fail to pass an examination shall be allowed to retake the examination at the next scheduled time. If an applicant fails twice to pass an examination, any subsequent opportunities to take the examination shall be available only at the discretion of the board. An applicant who has failed an examination may request in writing information from the board concerning the examination grade and subject areas or questions that the applicant failed to answer correctly, except that if the board administers a uniform, standardized examination, the board shall only be required to provide to the applicant the examination grade and such other information concerning the applicant’s examination results that are available to the board. 
   3.  An examination shall be evaluated in accordance with the rules of the board. After each examination, the board shall certify the names of the successful applicants to the department in the manner prescribed by the department. The department shall then issue the proper license and make the required entry in the registry pursuant to section 104.14.
   4.  All matters connected with an examination for a license shall be filed with the department and preserved for such period of time as specified by the state records commission as a part of the records of the department. The records, except for records which reveal the performance on an examination of an identified candidate, shall be open to public inspection.
   Sec. 8.  NEW SECTION.  104.8  Examination rules.
   The board shall adopt rules relating to all of the following:
   1.  The qualifications required for applicants seeking to take examinations.
   2.  The denial of applicants seeking to take examinations.
   3.  The conducting of examinations.
   4.  The grading of examinations and passing upon the technical qualifications of applicants, as shown by such examinations.
   5.  The minimum scores required for passing examinations. 
   6.  The selection of nationally recognized vendors providing examinations. 
   Sec. 9.  NEW SECTION.  104.9  Examination assistance.
   Upon the request of the board, the department shall assign one or more employees of the department to assist with conducting an examination. A member of the board shall be present and shall have charge of all candidates during the examination. An employee assigned by the department shall perform such duties to assist with the examination process as the board may direct. If the duties of such employee are performed away from the seat of government, the employee shall receive necessary travel expenses which shall be reimbursed by the board for costs incurred.
   Sec. 10.  NEW SECTION.  104.10  Fees.
   1.  The board shall set the fees for the examination of all applicants, by rule, which fees shall be based upon the cost of administering the examinations.
   2.  The board shall set the license fees and renewal fees for all licenses issued pursuant to this chapter, by rule, based upon the costs of sustaining the board and the actual costs of licensing.
   3.  All fees collected under this chapter and penalties collected under section 104.26 shall be retained by the board. The moneys retained by the board shall be used for any of the board’s duties under this chapter, including but not limited to the addition of full-time equivalent positions for program services and investigations. Revenues retained by the board pursuant to this section shall be considered repayment receipts as defined in section 8.2. Notwithstanding section 8.33, moneys retained by the board pursuant to this section are not subject to reversion to the general fund of the state.
   4.  Commencing July 2012 and every biennium thereafter, the board shall review its revenue, including amounts generated from license fees set pursuant to this chapter, and its expenses for purposes of reevaluating its fee structures.
   Sec. 11.  NEW SECTION.  104.11  License required—— exception.
   1.  A person shall not perform a home inspection without obtaining a license issued under this chapter.
   2.  A person shall not engage in the business of home inspections unless at all times a licensed home inspector is employed by the person and is actively in charge of performing the home inspections. An individual who performs home inspections pursuant to a business operated as a sole proprietorship shall be a licensed home inspector.
   3.  The licensing requirements of this chapter shall not apply to an employee of any unit of state or local government, including but not limited to cities, counties, or school corporations, performing home inspections while acting within the scope of the government employee’s employment.
   Sec. 12.  NEW SECTION.  104.12  Form of license—— term of license.
   1.
  a.  A home inspector license shall be in the form of a certificate under the seal of the department, signed by the Iowa director of public safety, and shall be issued in the name of the board. The license number shall be noted on the face of the license.
   b.  In addition to the certificate, the board shall provide each licensee with a wallet-sized licensing identification card.
   2.  A license issued pursuant to this chapter shall be issued for a term of two years.
   Sec. 13.  NEW SECTION.  104.13  License presumptive evidence.
   A license issued under this chapter shall be presumptive evidence of the right of the holder to perform home inspections in this state.
   Sec. 14.  NEW SECTION.  104.14  Registry of licenses.
   The name, location, license number, and date of issuance of the license of each person to whom a license has been issued shall be entered in a registry kept in the office of the department to be known as the home inspector registry. The registry may be electronic and shall be open to public inspection. However, the licensee’s home address, home telephone number, and other personal information as determined by rule shall be confidential.
   Sec. 15.  NEW SECTION.  104.15  Change of residence. 
   If a person licensed to perform home inspections under this chapter changes the person’s residence or place of practice, the person shall so notify the board.
   Sec. 16.  NEW SECTION.  104.16  Preemption of local licensing requirements.
   1.  The provisions of this chapter regarding the licensing of home inspectors shall supersede and preempt all home inspector licensing provisions of all governmental subdivisions. On and after the effective date of this Act, all home inspector licensing provisions promulgated by any governmental subdivision shall be null and void and of no further force and effect, and a governmental subdivision may not prohibit a home inspector licensed pursuant to this chapter from performing services for which that person is licensed.
   2.  Nothing in this chapter shall prohibit a governmental subdivision from assessing and collecting inspection fees related to inspections performed by a licensed home inspector.
   Sec. 17.  NEW SECTION.  104.17  Qualifications and requirements.
   1.  The board shall adopt, by rule, general qualifications for licensure. The board may consider the past felony record of an applicant only if the felony conviction relates directly to the practice of home inspections. References may be required as part of the licensing process.
   2.  An applicant for a home inspector license shall be at least twenty-one years of age at the time the applicant completes the examination under this chapter.
   3.  Notwithstanding section 17A.9A, the board shall waive the written examination requirements established by the board if the applicant meets either of the following requirements:
   a.  The applicant has previously passed a written examination which the board deems to be substantially similar to the licensing examination otherwise required by the board to obtain a license and the applicant has completed at least eight classroom hours of continuing education in courses or seminars approved by the board within the two-year period immediately preceding the date of the applicant’s license application.
   b.  The applicant can demonstrate to the satisfaction of the board that the applicant has five or more years of experience prior to the effective date of this Act in home inspection business, which experience is of a nature that the board deems to be sufficient to demonstrate continuous professional competency consistent with that expected of an individual who passes the applicable licensing examination which the applicant would otherwise be required to pass.
   Sec. 18.  NEW SECTION.  104.18  Insurance and surety bond requirements.
   1.  An applicant for a license or renewal of an active license shall provide evidence of a public liability insurance policy and surety bond in an amount determined sufficient by the board by rule.
   2.  If the applicant performs home inspections individually through a business conducted as a sole proprietorship, the applicant shall personally obtain the insurance and surety bond required by this section. If the applicant is engaged in the home inspection business as an employee or owner of a legal entity, the insurance and surety bond required by this section shall be obtained by the entity and shall cover all home inspections performed by the entity.
   3.  The insurance and surety bond shall be written by an entity licensed to do business in this state and each licensed home inspector shall maintain on file with the department a certificate evidencing that the insurance or surety bond shall not be canceled without the entity first giving fifteen days written notice to the department.
   Sec. 19.  NEW SECTION.  104.19  Renewal and reinstatement of licenses—— fees and penalties—— continuing education.
   1.  A license issued under this chapter may be renewed as provided by rule adopted by the board upon application by the licensee pursuant to this section. A renewal license shall be displayed in connection with the original license.
   2.  The department shall notify each licensee by mail at least sixty days prior to the expiration of a license.
   3.  Applications for renewal shall be made in writing to the department accompanied by the required renewal licensing fee at least thirty days prior to the expiration date of the license.
   4.  Failure to renew a license within a reasonable time after the expiration of the license shall not invalidate the license for purposes of renewal or reinstatement, but a penalty may be assessed as adopted by rule, in addition to the license renewal fee, to allow reinstatement of the license.
   5.
  a.  A licensee who allows a license to lapse for a period of one month or less may reinstate and renew the license without examination upon payment of the applicable renewal and reinstatement fees and any penalties if assessed.
   b.  A licensee who allows a license to lapse for a period of time greater than one month is required to retake and pass the applicable licensing examination, and pay the license renewal fee and penalty if assessed, in addition to the examination fee, in order to obtain reinstatement and renewal of that person’s license.
   6.  The board shall establish continuing education requirements pursuant to section 272C.2. The basic continuing education requirement for renewal of a license shall be the completion, during the immediately preceding license term, of the number of classroom hours of instruction required by the board in courses or seminars which have been approved by the board. The board shall require at least eight classroom hours of instruction during each two-year licensing term.
   Sec. 20.  NEW SECTION.  104.20  Reciprocal licenses.
   The board may license without examination a nonresident applicant who is licensed under home inspector licensing statutes of another state having similar licensing requirements as those set forth in this chapter and rules adopted under this chapter if the other state grants the same reciprocal licensing privileges to residents of Iowa who have obtained Iowa home inspector licenses under this chapter. The department and the board shall adopt the necessary rules, not inconsistent with the law, for carrying out the reciprocal licensing relations with other states.
   Sec. 21.  NEW SECTION.  104.21  Grounds for denial, revocation, or suspension of license.
   A license to practice as a home inspector may be revoked or suspended, or an application for licensure may be denied, pursuant to procedures established pursuant to chapter 272C by the board, or the licensee may be otherwise disciplined in accordance with that chapter, when the licensee commits any of the following acts or offenses:
   1.  Fraud in procuring a license.
   2.  Professional incompetence.
   3.  Knowingly making misleading, deceptive, untrue, or fraudulent misrepresentations in the practice of the profession or engaging in unethical conduct or practice harmful or detrimental to the public. Proof of actual injury need not be established.
   4.  Conviction of a felony related to the profession or occupation of the licensee or the conviction of any felony that would affect the licensee’s ability to practice within the profession. A copy of the record of conviction or plea of guilty shall be conclusive evidence of such conviction.
   5.  Fraud in representations as to skill or ability.
   6.  Use of untruthful or improbable statements in advertisements.
   7.  Willful or repeated violations of this chapter.
   8.  Aiding and abetting a person who is not licensed pursuant to this chapter in that person’s pursuit of an unauthorized and unlicensed home inspection practice.
   9.  Failure to meet the commonly accepted standards of professional competence.
   10.  Any other such grounds as established by rule by the board.
   Sec. 22.  NEW SECTION.  104.22  Jurisdiction of revocation and suspension proceedings.
   The board shall have exclusive jurisdiction of all proceedings to revoke or suspend a license issued pursuant to this chapter. The board may initiate proceedings under this chapter or chapter 272C, following procedures set out in section 272C.6, either on its own motion or on the complaint of any person. Before scheduling a hearing, the board may request the department to conduct an investigation into the charges to be addressed at the board hearing. The department shall report its findings to the board. The board, in connection with a proceeding under this chapter, may issue subpoenas to compel attendance and testimony of witnesses and the disclosure of evidence and may request the attorney general to bring an action to enforce the subpoena.
   Sec. 23.  NEW SECTION.  104.23  Notice and default.
   1.  A written notice stating the nature of the charge or charges against a licensee and the time and place of the hearing before the board on the charges shall be served on the licensee, either personally or by mailing a copy by certified mail to the last known address of the licensee, not less than thirty days prior to the date of the hearing.
   2.  If, after having been served with the notice of hearing, the licensee fails to appear at the hearing, the board may proceed to hear evidence against the licensee and may enter such order as is justified by the evidence.
   Sec. 24.  NEW SECTION.  104.24  Advertising—— violations——criminal penalties.
   1.  Only a person who is duly licensed pursuant to this chapter may advertise the fact that the person is licensed as a home inspector by the state of Iowa.
   2.  All written advertisements distributed in this state by a person who is engaged in the business of home inspections shall include the listing of at least one home inspector’s license number. A licensed home inspector shall not allow the home inspector’s license number to be used in connection with the advertising for more than one person engaged in the business of home inspections.
   3.  A person who fraudulently claims to be a licensed home inspector pursuant to this chapter, either in writing, cards, signs, circulars, advertisements, or other communications, is guilty of a simple misdemeanor.
   4.  In order to be entitled to use a home inspector’s license number, the home inspector must be employed by the person in whose name the business of inspecting homes is being performed. A person who fraudulently lists a home inspector’s license number in connection with that person’s advertising or falsely displays a home inspector’s license number is guilty of a simple misdemeanor. 
   Sec. 25.  NEW SECTION.  104.25  Injunction.
   A person performing home inspections without a license issued under this chapter may be restrained by injunction.
   Sec. 26.  NEW SECTION.  104.26  Civil penalty.
   1.  In addition to any other penalties provided for in this chapter, the board may, by order, impose a civil penalty, not to exceed five thousand dollars per offense, upon a person violating any provision of this chapter. Each day of a continued violation constitutes a separate offense. Before issuing an order under this section, the board shall provide the person written notice and the opportunity to request a hearing on the record. The hearing must be requested within thirty days of the issuance of the notice.
   2.  A person aggrieved by the imposition of a civil penalty under this section may seek judicial review in accordance with section 17A.19.
   3.  If a person fails to pay a civil penalty within thirty days after entry of an order under subsection 1 or, if the order is stayed pending an appeal, within ten days after the court enters a final judgment in favor of the board, the board shall notify the attorney general. The attorney general may commence an action to recover the amount of the penalty, including reasonable attorney fees and costs.
   4.  An action to enforce an order under this section may be joined with an action for an injunction under section 104.25.
   5.  Civil penalties collected under this section shall be deposited in the same account that fees under section 104.10 are deposited.
   Sec. 27.  NEW SECTION.  104.27  Enforcement.
   The board shall enforce the provisions of this chapter. Every licensee and member of the board shall furnish the board with such evidence as the licensee or member may have relative to any alleged violation of this chapter that is being investigated.
   Sec. 28.  NEW SECTION.  104.28  Report of violators.
   Each licensee and each member of the board shall report to the department the name of any person who is practicing as a home inspector without a license issued pursuant to this chapter, according to the knowledge or reasonable belief of the person making the report. The opening of an office or place of business for the purpose of providing any services for which a license is required by this chapter, the announcing to the public in any way the intention to provide any such service, the use of any professional designation, or the use of any sign, card, circular, device, vehicle, or advertisement, as a provider of any such services shall be prima facie evidence of engaging in the practice of home inspections.
   Sec. 29.  NEW SECTION.  104.29  Attorney general.
   Upon request of the board, the attorney general shall institute in the name of the state the proper proceedings against any person charged by the department with violating any provision of this chapter.
   Sec. 30.  Section 272C.1, subsection 6, Code 2011, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  ag.  The home inspector examining board, created pursuant to chapter 104.
   Sec. 31.  Section 272C.3, subsection 2, paragraph a, Code 2011, is amended to read as follows:
   a.  Revoke a license, or suspend a license either until further order of the board or for a specified period, upon any of the grounds specified in section 100D.5, 104.21, 105.22, 147.55, 148.6, 148B.7, 152.10, 153.34, 154A.24, 169.13, 455B.219, 542.10, 542B.21, 543B.29, 544A.13, 544B.15, or 602.3203 or chapter 151 or 155, as applicable, or upon any other grounds specifically provided for in this chapter for revocation of the license of a licensee subject to the jurisdiction of that board, or upon failure of the licensee to comply with a decision of the board imposing licensee discipline.
   Sec. 32.  Section 272C.4, subsection 6, Code 2011, is amended to read as follows:
   6.  Define by rule acts or omissions that are grounds for revocation or suspension of a license under section 100D.5, 104.21, 105.22, 147.55, 148.6, 148B.7, 152.10, 153.34, 154A.24, 169.13, 455B.219, 542.10, 542B.21, 543B.29, 544A.13, 544B.15, or 602.3203 or chapter 151 or 155, as applicable, and to define by rule acts or omissions that constitute negligence, careless acts, or omissions within the meaning of section 272C.3, subsection 2, paragraph “b”, which licensees are required to report to the board pursuant to section 272C.9, subsection 2.
   Sec. 33.  Section 272C.5, subsection 2, paragraph c, Code 2011, is amended to read as follows:
   c.  Shall state whether the procedures are an alternative to or an addition to the procedures stated in sections 100D.5, 104.22, 104.23, 105.23, 105.24, 148.6 through 148.9, 152.10, 152.11, 153.33, 154A.23, 542.11, 542B.22, 543B.35, 543B.36, and 544B.16.
   Sec. 34.  Section 558A.4, subsection 2, Code 2011, is amended to read as follows:
   2.  The disclosure statement may include a report or written opinion prepared by a home inspector licensed under chapter 104 or a person qualified to make judgment based on education or experience, as provided by rules adopted by the commission, including but not limited to a land surveyor licensed pursuant to chapter 542B, a geologist, a structural pest control operator licensed pursuant to section 206.6, or a building contractor. The report or opinion on a matter within the scope of the home inspector’s or person’s practice, profession, or expertise shall satisfy the requirements of this section or rules adopted by the commission regarding that matter required to be disclosed. If the report or opinion is in response to a request made for purposes of satisfying the disclosure statement, the report or opinion shall indicate which part of the disclosure statement the report or opinion satisfies.
   Sec. 35.  Section 558A.6, subsection 2, Code 2011, is amended to read as follows:
   2.  The home inspector or person submitting a report or opinion within the scope of the home inspector’s or person’s practice, profession, or expertise, as provided in section 558A.4, for purposes of satisfying the disclosure statement, shall not be liable under this chapter for any matter other than a matter within the home inspector’s or person’s practice, profession, or expertise, and which is required by the disclosure statement, unless the home inspector or person failed to use care ordinary in the home inspector’s or person’s profession, practice, or area of expertise in preparing the information.
   Sec. 36.  EFFECTIVE DATE.  This Act takes effect July 1, 2012.
EXPLANATION
   This bill establishes a home inspector licensing program in new Code chapter 104. The bill supersedes and preempts all licensing requirements of government subdivisions that relate to home inspections, as defined in the bill.
   The bill establishes a home inspector examining board to test, license, and discipline persons licensed under the bill. The board is comprised of nine members, including the heads of the department of public safety and the department of public health, the state building code commissioner, the state fire marshal, and five members from various industries related to home construction. The board is created as part of the Iowa department of public safety, which is required to provide staff support for certain board operations. The board is required to adopt all rules necessary to carry out the board’s duties and is authorized to establish standards of practice for home inspectors by rule.
   The bill specifies certain requirements for home inspector license applications, examinations administered by the board, license documents, and the home inspector license registry. The bill imposes restrictions on the business of home inspections without a license, imposes insurance requirements for licensees, and authorizes the imposition and collection of examination and license fees by the board.
   The bill requires the board to adopt, by rule, general qualifications for licensure and requires that an applicant for a home inspector license be at least 21 years old at the time the applicant takes the licensing examination. The bill also identifies the grounds for denial, revocation, or suspension of a license, specifies the conditions under which the board may waive the written examination requirement, establishes requirements and procedures for the renewal and reinstatement of licenses, and directs the board to establish continuing education requirements for licensees.
   The bill limits advertising for home inspection services to those persons who are licensed or those businesses who employ a licensed home inspector. The bill provides for the issuance of reciprocal licenses if certain conditions are met.
   The bill specifies the enforcement authority of the board and authorizes the board to impose a civil penalty, not to exceed $5,000 per offense upon a person who violates any provision of new Code chapter 104. The bill also provides that specified violations of new Code chapter 104 are simple misdemeanors.
   A simple misdemeanor is punishable by confinement for no more than 30 days or a fine of at least $65 but not more than $625 or by both.
   The bill takes effect July 1, 2012.