HB 396: Public Project Subcontractor Amendments - Utah

Substitute #1 → Substitute #2 · 5 edits

MODERATE

This bill modifies Utah's Employment Security Act to shift fixed interest rates and penalty amounts to be determined by the Division of Workforce Services via rule, rather than being set by statute. It also enacts a new requirement for employers seeking 'zero estimated exposure' insurance policies to sign a sworn attestation warning of criminal fraud for misrepresentation. Additionally, the bill updates the definition of 'public project' to 'special project' and expands unprofessional conduct to include non-compliance with new subcontractor reporting rules.

Scope change

The bill changes the applicability of interest and penalty calculations under the Employment Security Act, allowing the Division to adjust these amounts via administrative rules instead of legislative amendment. It also broadens the scope of unprofessional conduct for licensed contractors to include failures in subcontractor compliance.

REQUIREMENT

Fixed interest rates and specific penalty percentages under the Employment Security Act are removed and replaced with language allowing the Division to determine these amounts by rule.

A new attestation requirement is added for employers applying for zero estimated exposure insurance policies, mandating a signed statement with a criminal fraud warning.

DEFINITION

The term 'public project' in subcontractor disclosure sections is changed to 'special project' to align with related legislation.

ENFORCEMENT

The definition of unprofessional conduct is expanded to include failure to comply with newly enacted subcontractor reporting and disclosure requirements.

TECHNICAL

The bill includes a coordination clause to align changes with H.B. 40, which will take effect on January 1, 2027.

Amended 3/6/2026 19:03:239 → Substitute #1 · 5 edits

MODERATE

This bill modifies Utah's Employment Security Act to shift fixed interest rates and penalty amounts for late filings to rules set by the Division of Workforce Services, while adding a new requirement for employers to sign a fraud warning attestation when seeking zero-exposure workers' compensation policies. It also expands the definition of unprofessional conduct to include failure to comply with new subcontractor reporting rules and coordinates with H.B. 40 to streamline public construction project regulations.

Scope change

The bill expands regulatory authority by allowing the Division of Workforce Services to set specific interest rates and penalties via rule rather than fixing them in statute, and it adds new compliance obligations for subcontractors on public projects.

REQUIREMENT

Fixed interest rates and penalty percentages for late unemployment insurance filings are now set by administrative rule rather than being hardcoded in the statute.

Employers seeking zero-exposure workers' compensation policies must now sign a mandatory attestation containing a criminal fraud warning.

New requirements for subcontractors on public projects to provide employee lists, license numbers for second-tier subcontractors, and zero-exposure policy disclosures to general contractors and property owners.

ENFORCEMENT

The definition of unprofessional conduct for contractors now includes failure to comply with new subcontractor disclosure and reporting requirements.

TIMELINE

Includes a coordination clause to align changes with H.B. 40, effective January 1, 2027.

Amended Excerpts 3/6/2026 19:03:239 → Amended 3/6/2026 19:03:239 · 4 edits

MODERATE

This bill modifies Utah's employment security and workers' compensation laws by shifting fixed interest rates and penalty amounts to be determined by the Division of Employment Security via rule, rather than being set directly in the statute. It also introduces new requirements for subcontractors on public projects to report employee information and mandates a signed attestation with criminal fraud warnings for employers seeking zero-exposure workers' compensation policies.

Scope change

The bill expands the scope of subcontractor obligations on public construction projects and alters the enforcement mechanism for unemployment insurance penalties by allowing the Division to set rates via administrative rule.

REQUIREMENT

Subcontractors working on public projects must now provide specific employee information (name, license number) to the Division, and general contractors/owners must retain this data for audits.

Employers applying for a zero estimated exposure workers' compensation policy must sign a new attestation statement in capital letters that includes a specific warning about criminal fraud.

ENFORCEMENT

Fixed interest rates for unpaid contributions and specific penalty percentages for late filings are removed from the statute and delegated to the Division to be set by administrative rule.

The penalty for unpaid contributions after a demand for payment is changed from a fixed 5% to an amount determined by the Division via rule.

Enrolled → Amended Excerpts 3/6/2026 19:03:239 · 2 edits

MINOR

Senate amendments modified the subcontractor reporting requirements to streamline the employee information provided to the Division of Professional Licensing. Specifically, the requirement for subcontractors to provide the last four digits of an employee's Social Security Number was removed, and the formatting of the professional license number requirement was adjusted to appear as a single item rather than a separate subsection.

Scope change

The scope of the bill remains focused on public project subcontractors, but the specific data points subcontractors must report to the state division were reduced.

REQUIREMENT

Removed the requirement for subcontractors to provide the last four digits of employee Social Security numbers when reporting to the Division of Professional Licensing.

Consolidated the requirement to report professional license numbers with the employee name requirement, removing the previous separate subsection structure.

Introduced → Enrolled · 7 edits · Mar 19, 2026

MODERATE

This bill updates Utah's Employment Security Act to allow interest rates and penalties to be set by administrative rule rather than fixed amounts, and it introduces new reporting requirements for subcontractors on public construction projects. It also expands the definition of unprofessional conduct to include failure to comply with these new subcontractor rules.

Scope change

The bill expands the scope of the Employment Security Act by shifting penalty structures to rulemaking and adds new compliance obligations specifically for subcontractors working on public projects.

REQUIREMENT

Fixed interest rates and penalty amounts for late unemployment insurance filings and payments are now determined by the Division of Workforce Services through administrative rules instead of being set by statute.

Subcontractors on public projects must now provide employee lists, second-tier subcontractor details, and zero estimated exposure policy disclosures to general contractors and property owners.

Subcontractors must provide specific employee data (name and last four SSN digits) to the Division of Workforce Services upon request.

The Division of Professional Licensing is authorized to make audit recommendations to the State Tax Commission regarding subcontractor compliance.

ENFORCEMENT

General contractors and property owners are now required to retain subcontractor documentation for three years for audit purposes.

Failure to comply with the new subcontractor reporting and disclosure requirements is now classified as unprofessional conduct.

DEFINITION

New definitions for 'public project,' 'first-tier subcontractor,' and 'second-tier subcontractor' are established to clarify compliance obligations.

Public Project Subcontractor Amendments

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