A5712

An Act concerning HVACR contractor and subcontractor licensing and amending and supplementing P.L.2007, c.211 and amending P.L.1999, c.238.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. (New section) As used in sections 1 through 9 of P.L. , c. (C. ) (pending before the Legislature as this bill):

“Board” means the State Board of Examiners of Heating, Ventilating, Air Conditioning and Refrigeration Contractors.

“Covered HVACR work” means contracting work in heating, ventilating, air conditioning and refrigeration as defined in section 2 of P.L.2007, c.211 (C.45:16A-2), and shall include the assembly, furnishing, installation, alteration, maintenance, repair, replacement, or servicing of: (1) piping, refrigerant piping, hydronic piping, fittings, valves, supports, hangers, and other components used for the conveyance, distribution, circulation, supply, return, or control of refrigerants, water, steam, condensate, or other fluids used as part of a heating, ventilating, air conditioning, or refrigeration system; and (2) ductwork, plenums, dampers, louvers, air-intake components, exhaust components, air-distribution components, fittings, supports, hangers, curbs, and other sheet metal or mechanical components used for the movement, distribution, supply, return, intake, exhaust, ventilation, treatment, or control of air as part of a heating, ventilating, air conditioning, refrigeration, air movement, air distribution, exhaust, intake, or plenum system.

“Master HVACR contractor’s license” means a current and valid

license issued by the board pursuant to P.L.2007, c.211 (C.45:16A-1 et seq.), authorizing only the person, firm, partnership, corporation, limited liability company, or other legal entity named on the license to engage in heating, ventilating, air conditioning and refrigeration contracting in this State. A Master HVACR contractor’s license shall not authorize any other person or separate legal entity to engage in HVACR contracting.

“HVACR system component” means any component, material, or

assembly used or intended to be used in covered HVACR work, including, but not limited to, piping, refrigerant piping, hydronic piping, fittings, valves, and related components used for the conveyance, distribution, circulation, or control of fluids, and ductwork, plenums, dampers, louvers, air-intake components, exhaust components, air-distribution components, fittings, supports, hangers, curbs, and related sheet metal or mechanical components used for the movement, distribution, intake, exhaust, ventilation, or control of air.

“Responsible contracting entity” means any contractor, general contractor, construction manager, subcontractor, owner, developer, or other person or entity that hires, permits, directs, awards, administers, or contracts for covered HVACR work.

“Qualifying apprenticeship program” means a registered apprenticeship program approved by the United States Department of Labor, Office of Apprenticeship, or by a federally recognized State Apprenticeship Agency or State Apprenticeship Council, provided that the program maintains records of enrollment and completion, issues proof of completion or enrollment, satisfies applicable federal apprenticeship standards, and has not been deregistered, suspended, or found by the approving agency to be out of compliance with applicable apprenticeship standards; and demonstrates that not less than 85 percent of the apprentices enrolled in the program who become eligible for completion successfully complete and graduate from the program.

2. Section 5 of P.L.2007, c.211 (C.45:16A-5) is amended to read as follows:

5. a. Any person desiring to obtain a [State] Master HVACR contractor's license shall make application for licensure to the board and shall pay all the fees required in connection with the application, and be examined as required by this act.

b. Upon the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), any person, firm, partnership, corporation, limited liability company, or other legal entity who engages in the business of heating, ventilating, air conditioning, or refrigeration contracting shall hold a Master HVACR contractor’s license or designate a bona fide representative within 45 days. Failure to obtain the Master HVACR contractor’s license or designate a bona fide representative upon the expiration of the 45-day period shall constitute a violation under section 7 of P.L.2007, c.211 (C.45:16A-7), and shall also be subject to any penalty authorized pursuant to the provisions of section 12 of P.L.1978, c.73 (C.45:1-25).

c. A person designated as a bona fide representative in accordance with subsection b. of this section shall:

(1) be a natural person who is licensed to work as a Master HVACR contractor pursuant to P.L.2007, c.211 (C. 45:16A-1 et seq.);

(2) be employed on a full-time basis by the person or entity;

(3) exercise direct supervision and control over all covered HVACR work performed; and

(4) not serve as a bona fide representative for more than one person or entity.

d. Any license issued pursuant to P.L.2007, c.211 (C.45:16A-1 et seq.) shall authorize only the person or specific entity named on the license to perform covered HVACR work. The license shall not be assigned, transferred, shared, or otherwise utilized by any other person or entity, including, but not limited to, affiliated entities, subsidiaries, parent companies, or entities under common ownership or control.

e. Failure to comply with this section shall result in suspension and potential revocation of registration and licensure.

f. The board shall provide reasonable access to licensing examinations during the 45-day period provided in subsection a. of this section.

(cf: P.L.2007, c.211, s.5)

3. (New section) a. The Division of Consumer Affairs, in consultation with the board, shall establish and maintain an electronic license verification system for the real-time verification of Master HVACR contractor licenses, bona fide representative designations, and any license suspension, revocation, expiration, or other public disciplinary restriction affecting the authority of a person or entity to perform covered HVACR work.

b. The electronic license verification system shall be made available to public bodies, municipalities, enforcement agencies, construction officials, subcode officials, and the public. The system shall identify, at a minimum:

(1) whether a Master HVACR contractor license is active, expired, suspended, revoked, or otherwise restricted;

(2) the person or entity authorized to perform covered HVACR work under the license;

(3) the bona fide representative, if any, associated with the person or entity;

(4) the expiration date of the license; and

(5) any public disciplinary action or restriction affecting the license or the ability of the person or entity to perform covered HVACR work.

c. At the time an application is made for a permit involving covered HVACR work and prior to issuance of the permit, the enforcement agency, construction official, or other appropriate permitting authority shall verify that each contractor or subcontractor identified as performing covered HVACR work holds an active Master HVACR contractor license, has designated a bona fide representative where required, or is otherwise lawfully authorized to perform covered HVACR work pursuant to P.L.2007, c.211 (C.45:16A-1 et seq.) and P.L. , c. (C. ) (pending before the Legislature as this bill). No permit shall be issued unless the required verification has been completed.

d. Upon implementation of the electronic license verification system, municipalities, enforcement agencies, construction officials, and subcode officials shall use the system to verify licensure and bona fide representative status prior to issuing a permit for covered HVACR work and for enforcement purposes under this act.

e. Until the electronic license verification system is operational, or during any temporary outage or unavailability of the system, verification may be completed through records maintained by the board or the Division of Consumer Affairs, or through other official licensing records made available by the division or board.

f. A municipality, enforcement agency, construction official, or subcode official that relies in good faith on the electronic license verification system, or on official records provided by the board or the Division of Consumer Affairs pursuant to subsection e. of this section, shall be deemed to have satisfied the verification obligation under this section.

g. The Division of Consumer Affairs may adopt rules and regulations, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), as necessary to implement this section.

h. This section shall become operative on the first day of the 13th month next following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill).

4. Section 7 of P.L.2007, c.211 (C.45:16A-7) is amended to read as follows:

7. a. A person shall not work as a Master HVACR contractor or use the title or designation of "licensed Master HVACR contractor" or "Master HVACR contractor" unless licensed pursuant to the provisions of P.L.2007, c.211 (C.45:16A-1 et seq.), and that person shall hold the license prior to the registration of an HVACR contracting business in the State. A person shall not engage in or perform contracting work in heating, ventilating, air conditioning and refrigeration, as defined in section 2 of P.L.2007, c.211 (C.45:16A-2), without holding a Master HVACR contractor’s license.

b. A person, firm, partnership, corporation or other legal entity shall not engage in the business of HVACR contracting or advertise in any manner as a Master HVACR contractor or use the title or designation of "licensed Master HVACR contractor" or "Master HVACR contractor" unless authorized to act as a Master HVACR contractor pursuant to the provisions of P.L.2007, c.211 (C.45:16A-1 et seq.).

c. A responsible contracting entity shall not hire, permit, direct, or contract with a subcontractor to perform heating, ventilating, air conditioning and refrigeration contracting work unless the subcontractor is independently licensed as a Master HVACR contractor pursuant to the provisions of P.L.2007, c.211 (C.45:16A-1 et seq.). Where a responsible contracting entity hires, permits, directs, awards, administers, or contracts with multiple subcontractors, each subcontractor shall be independently licensed to work as a Master HVACR contractor.

d. In addition to any penalty authorized pursuant to the provisions of section 12 of P.L.1978, c.73 (C.45:1-25), any person, firm, partnership, corporation or other legal entity that knowingly violates any provision of this section shall be guilty of a crime of the fourth degree.

e. A person who violates any provision of P.L.2007, c.211 (C.45:16A-1 et seq.) or P.L. , c. (pending before the Legislature as this bill) shall be subject to the following penalties:

(1) for the first offense, a penalty of up to $10,000;

(2) for the second offense, a penalty of up to $25,000;

(3) for the third or any subsequent offense, a penalty of up to $50,000; and

(4) the board may suspend or revoke the person’s license.

f. Each day of noncompliance with the provisions of P.L.2007, c.211 (C.45:16A-1 et seq.) or P.L. , c. (pending before the legislature as this bill) and the daily continuation of each project during the period of noncompliance shall constitute a separate violation.

g. A Master HVACR contractor who knows or reasonably should have known that a subcontractor with whom the Master HVACR contractor hires, permits, directs, awards, administers, or contracts with to perform contracting work in heating, ventilating, air conditioning and refrigeration contracting work is not licensed and registered pursuant to P.L.2007, c.211 (C.45:16A-1 et seq.), shall be jointly and severally liable for any violation of the subcontractor.

h. A knowing violation of P.L.2007, c.211 (C.45:16A-1 et seq.) or P.L. , c. (pending before the Legislature as this bill) shall constitute a crime of the fourth degree and shall be subject to enhanced penalties up to $75,000.

(cf: P.L.2017, c.173, s.2)

5. (New section) a. Any person or entity engaged in the fabrication, manufacturing, or assembly of ductwork, piping, or HVACR system components within the State for installation within the State shall hold a Master HVACR contractor’s license. Failure to hold a Master HVACR contractor’s license shall constitute a violation under section 7 of P.L.2007, c.211 (C.45:16A-7), and shall also be subject to any penalty authorized pursuant to the provisions of section 12 of P.L.1978, c.73 (C.45:1-25) for a violation of P.L.2007, c.211 (C.45:16A-1 et seq.) or P.L. , c. (pending before the Legislature as this bill).

b. Any person or entity subject to the provisions of subsection a. of this section who fabricates or manufactures ductwork, piping, or HVACR system components shall ensure that all fabricated materials meet or exceed applicable standards, including those promulgated by American Society of Mechanical Engineers (ASME), American Society for Testing and Materials International (ASTM), Sheet Metal and Air Conditioning Contractors' National Association (SMACNA), or other recognized standards organizations.

c. A person or entity shall remain subject to the provisions of this section if the person or entity does not perform on-site installation of ductwork, piping, or HVACR system components as authorized pursuant to section 2 of P.L.2007, c.211 (C.45:16A-2).

d. The licensing requirements of this section shall become operative on the first day of the seventh month next following the effect date of this act.

6. (New section) a. For the purposes of satisfying experience, training, and qualification requirements for licensure as a Master HVACR contractor, the board shall recognize and accept the following without limitation:

(1) completion of a registered apprenticeship program approved by the United States Department of Labor, Office of Apprenticeship; and

(2) completion of a registered apprenticeship program approved by a federally recognized State Apprenticeship Agency (SAA) or State Apprenticeship Council (SAC), including but not limited to programs registered in states recognized pursuant to 29 CFR s. 29.13.

b. (1) Any apprenticeship program registered with a SAA or SAC recognized by the United States Department of Labor shall be deemed equivalent in all respects to a program registered directly with the United States Department of Labor.

(2) Completion of a SAA-approved or SAC-approved apprenticeship program shall automatically satisfy all apprenticeship training requirements of P.L.2007, c.211 (C.45:16A-1 et seq.) or P.L. , c. (C. ) (pending before the Legislature as this bill) without additional coursework, testing, or verification beyond proof of completion.

c. The board shall not deny, restrict, delay, or otherwise limit licensure eligibility if an applicant meets standards established pursuant to subsections a. or b. of this section.

d. The board shall accept and recognize out-of-State apprenticeship credentials and training hours on a full and equal basis, and shall provide reciprocity for applicants who have completed qualifying programs in other states.

f. No additional burdens, fees, examinations, or administrative requirements shall be imposed on an applicant solely because the applicant’s apprenticeship credentials were obtained through a SAA or SAC rather than the United States Department of Labor.

g. The construction manager, general contractor, prime contractor, or other lead contractor responsible for a project involving covered HVACR work shall ensure that the craft labor workers employed to perform covered HVACR work on the project are comprised of either journeyperson workers who have successfully completed a qualifying apprenticeship program, or apprentices currently registered in such a program. The apprenticeship participation required pursuant to this subsection shall be in the same trade or craft for which the workers are employed on the project. To demonstrate compliance with this subsection, the construction manager, general contractor, prime contractor, or other lead contractor responsible for the project shall provide a list of all qualified workers performing covered HVACR work and proof from the United States Department of Labor, a federally recognized SAA, or a SAC of each worker’s graduation from, or current enrollment in, a qualifying apprenticeship program.

h. The provisions of this section shall be liberally construed to promote safety and workforce training and ensure the recognition of high-quality apprenticeship training programs.

i. Any rule, regulation, or policy inconsistent with this section shall be deemed void and unenforceable.

7. Section 4 of P.L.1999, c.238 (C.34:11-56.51) is amended to read as follows:

4. a. No contractor shall bid on any contract for public work as defined in section 2 of P.L.1963, c.150 (C.34:11-56.26), or for which payment of the prevailing wage is required by any other provision of law, unless the contractor is registered pursuant to this act. No contractor shall list a subcontractor in a bid proposal for the contract unless the subcontractor is registered pursuant to P.L.1999, c.238 (C.34:11-56.48 et seq.) at the time the bid is made. No contractor or subcontractor, including a subcontractor not listed in the bid proposal, shall engage in the performance of any public work subject to the contract, unless the contractor or subcontractor is registered pursuant to that act.

b. A partnership or joint venture shall be permitted to bid on heavy infrastructure projects, if each party to the partnership or joint venture is independently registered in compliance with this section.

(1) Prior to being awarded a contract, a partnership or joint venture shall register with the Department of Labor and Workforce Development to obtain a Public Works Contractor Registration certificate and designate a primary contract manager to oversee contract administration and compliance.

(2) If any party to the partnership or joint venture fails to perform or comply with a contract or a portion thereof, all parties to the partnership or joint venture shall be held jointly and severally liable. Such failure to perform or comply may result in penalties to the partnership or joint venture, including cancellation of the contract.

c. As used in this section, “heavy infrastructure project” means a public works project that involves the planning, design, construction, or maintenance of essential facilities and systems, including, but not limited to, roads, bridges, tunnels, railways, airports, seaports, transit systems, water and wastewater treatment facilities, stormwater systems, utilities, and environmental remediation efforts.

d. (1) No contractor shall bid on any contract for public work as defined in section 2 of P.L.1963, c.150 (C.34:11-56.26), or for which payment of the prevailing wage is required by any other provision of law, if the work concerns heating, ventilating, air conditioning and refrigeration, as defined in section 2 of P.L.2007, c.211 (C.45:16A-2), without holding a Master HVACR contractor’s license.

(2) A public body contracting for work concerning heating, ventilating, air conditioning and refrigeration, as defined in section 2 of P.L.2007, c.211 (C.45:16A-2), shall verify the licensing requirements of P.L.2007, c.211 (C.45:16A-1 et seq.) and P.L. , c. (C. ) (pending before the Legislature as this bill) are met prior to the award of a contract.

(3) If a contractor fails to comply with the requirements of this subsection, the contractor shall be disqualified from accepting the contract. The commissioner may debar violators from public work for a minimum of three years.

(cf: P.L.2025, c.242, s.1)

8. (New section) Any person or entity performing HVACR work under the North American Industry Classification System (NAICS) used by federal statistical agencies for classifying business establishments classifications, including 238220, 561790, 333415, and 236210, shall be subject to the provisions of P.L.2007, c.211 (C.45:16A-1 et seq.) and P.L. , c. (C. ) (pending before the Legislature as this bill).

9. This act shall take 90 days after the date of enactment, except that section 3 shall become operative 12 months next following the effective date of this act and section 5 shall become operative on the first day of the seventh month next following the effective date of this act, and the Director of the Division of Consumer Affairs and the board may take anticipatory administrative action in advance thereof as shall be necessary for implementation.

STATEMENT

This bill revises “The State Heating, Ventilating, Air Conditioning and Refrigeration Contracting License Law.” Specifically, the bill provides that a person is required to hold a Master HVACR contractor’s license prior to the registration of an HVACR contracting business in the State. Additionally, the bill clarifies that a person is prohibited from engaging in or performing heating, ventilating, air conditioning and refrigeration contracting work, as a Master HVACR, without holding a Master HVACR contractor’s license.

The bill prohibits a responsible contracting entity from hiring, permitting, directing, or contracting with a subcontractor to perform heating, ventilating, air conditioning and refrigeration work unless the subcontractor is independently licensed as a Master HVACR contractor.

Under the bill, any person who works as a Master HVACR contractor but does not hold a Master HVACR contractor’s license will have the first day of the seventh month next following the effective date of the bill to obtain a Master HVACR contractor’s license or designate a bona fide representative before the failure to hold the license constitutes a violation of the law.

The bill requires any person or entity engaged in the fabrication, manufacture, or assembly of ductwork, piping, or HVACR system components within the State for installation within the State to hold a Master HVACR contractor’s license.

The bill provides for penalties of violations of its provisions as follows:

(1) for the first offense, a penalty of up to $10,000;

(2) for the second offense, a penalty of up to $25,000;

(3) for the third or any subsequent offense, a penalty of up to $50,000; and

(4) the board may suspend or revoke the person’s license.

Additionally, each day of noncompliance with the provisions of the bill and each project will constitute a separate violation.

The bill provides for reciprocity standards for licensing issued by other states.

Finally, the bill amends “The Public Works Contractor Registration Act” to require that any person bidding on a contract or work subject to that law if the work concerns heating, ventilating, air conditioning and refrigeration is to hold a Master HVACR contractor’s license.