58-55-205. Financial responsibility.

405 words·~2 min read·/ut/title-58/chapter-55/58-55-205·

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

Effective 1/1/2027

(1)Before issuing, renewing, or reinstating a contractor license, the division shall require an applicant to demonstrate financial responsibility by:

(i)completing a financial responsibility questionnaire the division prepares; and

(ii)signing the questionnaire and certifying the accuracy of the information provided; or

(b)submitting a bond in the form and amount the commission determines by rule, made with the concurrence of the director and in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.

(2)An applicant, a licensee, or a person that holds an ownership interest in an unincorporated contractor licensee shall maintain financial responsibility throughout the period of licensure.

(3)At the division's discretion, the division may audit the financial responsibility of an applicant, a licensee, or a person that holds an ownership interest in an unincorporated entity licensee.

(4)The applicant, the licensee, and a person that holds an ownership interest in an unincorporated entity licensee bear the burden of demonstrating financial responsibility.

(a)When reviewing the financial responsibility of an unincorporated entity, the division:

(i)shall consider the personal financial information of each person that holds an ownership interest in the entity; and

(ii)may at any time:

(A)audit the personal financial information of a person that holds an ownership interest; or

(B)request and obtain a credit report for a person that holds an ownership interest.

(b)If the division determines, based on the financial information of the applicant, the licensee, or a person that holds an ownership interest in an unincorporated entity that an applicant or licensee lacks the financial responsibility to engage successfully in business as a contractor, the division may:

(i)prohibit the person from engaging in a construction trade;

(ii)prohibit the applicant or licensee from engaging in a construction trade unless the applicant or licensed entity dissociates from the person the division determines lacks financial responsibility within 10 days after the division makes the determination of lack of financial responsibility; or

(iii)require the applicant or licensee to post a bond that is:

(A)in the amount and form the commission determines by rule, made with the concurrence of the director and in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act; or

(B)equal to 20% of the applicant or licensee's annual gross distributions to the licensee's owners, including coverage for unpaid obligations including taxes.

Enacted by Chapter 42 , 2026 General Session