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RULE PROPOSAL
VOLUME 43, ISSUE 21
ISSUE DATE:NOVEMBER 7, 2011
LAW AND PUBLIC SAFETY
DIVISION OF CONSUMER AFFAIRS
STATE BOARD OF EXAMINERS OF MASTER PLUMBERS

Proposed Amendment: N.J.A.C. 13:32-3.2

Bona Fide Representative; Reporting Responsibilities
 
Authorized By: New Jersey Board of Examiners of Master Plumbers, Lawrence DeMarzo, Deputy Director, Division of Consumer Affairs.
 
Authority: N.J.S.A. 45:14C-7.
 
Calendar Reference: See Summary below for explanation of exception to calendar requirement.
 
Proposal Number: PRN 2011-231.
 
Submit written comments by January 6, 2012 to:
   Lawrence DeMarzo, Deputy Director
   New Jersey Board of Examiners of Master Plumbers
   Post Office Box 45008
   124 Halsey Street
   Newark, New Jersey 07101
 
The agency proposal follows:
 
Summary

N.J.S.A. 45:14C-2 defines "bona fide representative" as a licensed master plumber, who owns not less than 10 percent of an entity, and who is engaging in the business of plumbing contracting in the State of New Jersey. N.J.A.C. 13:32-3.2 imposes reporting requirements for a licensed master plumber seeking to act as a bona fide representative for a plumbing contractor. Existing N.J.A.C. 13:32-3.2(a)2 requires that a bona fide representative owns at least 10 percent of a plumbing contractor. Existing paragraph (a)2 also requires that a licensed master plumber who own less than 50 percent of a plumbing contractor must provide a written affidavit attesting to the ownership interest held by the licensed master plumber. If a licensed master plumber owns more than 50 percent of the plumbing contractor, he or she is required to submit such an affidavit upon request from the New Jersey Board of Examiners of Master Plumbers (Board).

The Board is concerned that an affidavit does not provide sufficient assurance that a licensed master plumber actually owns a percentage of a plumbing contractor. In order to ensure that a licensed master plumber in fact owns part or all of a plumbing contractor, the Board proposes to delete existing paragraph (a)2 and add new paragraph (a)2 to require that a licensed master plumber who seeks to be the bona fide representative of any firm, partnership, corporation, or any legal entity, submit documentary proof of his or her ownership interest.

The Board also proposes to add new paragraph (a)5 to require that a licensed master plumber, who is seeking to act as a bona fide representative, provide the name of the licensed master plumber who previously acted as the plumbing contractor's bona fide representative. The Board imposes this requirement so that it can more easily track whether licensed master plumbers are complying with N.J.A.C. 13:32-3.3(a)5, which requires that a licensed master plumber act as the bona fide representative for only one plumbing contractor.

The Board has determined that the comment period for this notice of proposal will 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 to N.J.A.C. 13:32-3.2 will provide greater assurance that a bona fide representative has the ownership interest in a plumbing contractor required by law. This ownership interest is important as it provides a bona fide representative with the authority to ensure that a plumbing contractor is conducting its business in compliance with the laws and regulations governing the practice of plumbing.
 
Economic Impact

The proposed amendments to N.J.A.C. 13:32-3.2 will have a small economic impact on licensed master plumbers who seeks to be bona fide representatives. The proposed amendments require licensed master plumbers to submit documentary proof of his or her ownership interest to the Board. This documentation should be easily available to licensed master plumbers and the only cost associated with the proposed amendments will be the nominal costs of copying and mailing these documents to the Board. These minimal costs are outweighed by the benefit of ensuring that a bona fide representative actually owns part or all of a plumbing contractor.
 
Federal Standards Statement

A Federal standards analysis is not required because there are no Federal laws or standards applicable to the proposed amendments.
 
Jobs Impact

The Board believes that the proposed amendments will not increase or decrease the number of jobs in New Jersey.
 
[page=2721] Agriculture Industry Impact

The Board does not believe that the proposed amendments will have any impact on the agriculture industry of this State.
 
Regulatory Flexibility Analysis

Since licensed master plumbers are individually licensed by the Board, they may be considered "small businesses" under the Regulatory Flexibility Act (the Act), N.J.S.A. 52:14B-16 et seq.

The proposed amendments impose the same costs on small businesses as on all businesses as discussed in the Economic Impact statement above. The Board does not believe that licensed master plumbers will need to employ any professional services to comply with the proposed amendments. The proposed amendments do not impose any recordkeeping or compliance requirements but do impose reporting requirements, by requiring licensed master plumbers to submit documentary proof of his or her ownership interest when he or she seeks to act as a bona fide representative, as well as requiring master plumbers seeking to act as a new bona fide representative to report to the Board the previous licensed master plumber who served as the bona fide representative for the plumber contractor.

As the reporting requirements contained in the proposed amendments are necessary to ensure that a licensed master plumber's ownership claims in a plumbing contractor are valid, and monitor compliance with N.J.A.C. 13:32-3.3(a)5, the Board believes that the rules must be uniformly applied to all licensed master plumbers and no exemptions are provided based on the size of a licensed master plumber's business.
 
Smart Growth Impact

The Board does not anticipate that the proposed amendments will have any impact on the achievement of smart growth and implementation of the State Development and Redevelopment Plan.
 
Housing Affordability Impact Analysis

The proposed amendments will have an insignificant impact on affordable housing in New Jersey and there is an extreme unlikelihood that the rule would evoke a change in the average costs associated with housing because the proposed amendments concern the submission of documentary proof when a licensed master plumber seeks to act as a bona fide representative, and requiring master plumbers seeking to act as a new bona fide representative to report to the Board the previous licensed master plumber who served as the bona fide representative for the plumber contractor.
 
Smart Growth Development Impact Analysis

The proposed amendments will have an insignificant impact on smart growth development and there is an extreme unlikelihood that the rule 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 amendments concern the submission of documentary proof when a licensed master plumber seeks to act as a bona fide representative, and requiring master plumbers seeking to act as a new bona fide representative to report to the Board the previous licensed master plumber who served as the bona fide representative for the plumber contractor.
 
Full text of the proposal follows (additions indicated in bold thus; deletions indicated in brackets [thus]):
 
SUBCHAPTER 3.    IDENTIFICATION OF LICENSEES; BONA FIDE REPRESENTATIVE; SUPERVISION
 
13:32-3.2   Bona fide representative; reporting responsibilities
 
(a) A licensed master plumber seeking to act as a bona fide representative for any firm, partnership, corporation, or other legal entity shall comply with the following within 30 days of assuming the role of a bona fide representative:
 
1. (No change.)
 
[2. Attest to the bona fide representative's ownership interest in the plumbing contractor as follows:
 
i. If a licensed master plumber claims to hold 10 percent or more but less than 50 percent of the issued and outstanding stock or capital of the plumbing contractor, the licensed master plumber shall provide the Board with a written affidavit which states the percentage of outstanding shares held by the licensed master plumber. The affidavit shall be executed by the corporate secretary or other appropriate representative of the plumbing contractor;
 
ii. If a licensed master plumber claims to hold 50 percent or more of the issued and outstanding stock or capital of the plumbing contractor, the licensed master plumber shall provide a written affidavit which states the percentage of outstanding shares held by the licensed master plumber upon a request by the Board. The affidavit shall be executed by the corporate secretary or other appropriate representative of the plumbing contractor;]
 
2. Provide the Board documentary proof of his or her ownership interest in the business;
 
3. Provide to the Board proof that the plumbing contractor has consented that the bona fide representative will act as the agent for service of process within this State. Such proof shall be in writing and on a form provided by the Board; [and]
 
4. Provide to the Board the acceptance of liability by the plumbing contractor for any monetary penalty, monies to be paid for restoration to consumers of fees paid for services or for delays suffered by consumers and costs assessed against the bona fide representative while acting within the scope of his or her employment on behalf of the plumbing contractor. Such acceptance of liability shall be in writing and on a form provided by the Board[.]; and
 
5. Provide the Board with the name of the licensed master plumber who previously acted as the bona fide representative for the plumbing contractor, if any.
 
(b)-(d) (No change.)

   
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