Arizona SB 1565: occupational licenses; apprenticeships.

Bill Text

SB1565 - 572R - I Ver 

 REFERENCE TITLE: registrar of contractors; recovery fund

 State of Arizona

 Senate

 Fifty-seventh Legislature

 Second Regular Session

 2026

 SB 1565

 Introduced by 

 Senator 
 Dunn

AN 
ACT

Amending sections 32-1132, 32-1132.01, 
32-1133, 32-1133.01, 32-1134 and 32-1139, Arizona 
Revised Statutes; RELATING to the residential contractors' recovery fund.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 32-1132, Arizona Revised 
Statutes, is amended to read:

START_STATUTE32-1132. Residential contractors' recovery fund; claimants; eligibility; 
definition

A. The residential contractors' recovery fund is 
established to be administered by the registrar for the benefit of claimants 
that are damaged by an act, representation, transaction or conduct of a 
residential contractor that is licensed pursuant to this chapter and that is in 
violation of this chapter or the rules adopted pursuant to this chapter. 

B. Only the following claimants are eligible for an 
award from the residential contractors' recovery fund:

1. An individual who both:

(a) Owns residential real property that is damaged 
by the failure of a residential contractor to adequately build or improve a 
residential structure or appurtenance.

(b) Actually occupies or intends to occupy the 
residential real property described in subdivision (a) of this paragraph as the 
individual's primary residence. The criteria 
prescribed pursuant to section 42-12053, subsection B may be used to 
establish whether an individual occupies or intends to occupy the residential 
real property as the individual's primary residence.

2. A limited liability company to which both of the 
following apply:

(a) The limited liability company owns the 
residential real property that is damaged by the failure of a residential 
contractor to adequately build or improve a residential structure or 
appurtenance.

(b) At least one of the limited liability company's 
members actually occupy occupies or 
will occupy the residential real property as described in subdivision (a) of 
this paragraph as their the member's 
primary residence. The criteria prescribed pursuant 
to section 42-12053, subsection B may be used to establish whether a 
member occupies or intends to occupy the residential real property as the 
member's primary residence.

3. A trust to which all of the following apply:

(a) The trust is a revocable living trust.

(b) The trust owns the residential real property 
that is damaged by the failure of a residential contractor to adequately build 
or improve a residential structure or appurtenance.

(c) All of the trust's trustors actually occupy or 
intend to occupy the residential real property described in subdivision (b) of 
this paragraph as their primary residence. The 
criteria prescribed pursuant to section 42-12053, subsection B may be 
used to establish whether the trustors occupy or intend to occupy the 
residential real property as the trustorS' primary residence.

4. A planned community as defined in section 33-1802 
or unit owners' association as defined in section 33-1202 if both:

(a) The builder or developer transferred control to 
the planned community as defined in section 33-1802 or unit owners' 
association as defined in section 33-1202.

(b) A licensed residential contractor's failure to 
adequately build or improve a residential structure or appurtenance caused 
damage to the common elements within the complex.

5. A lessee of residential real property that meets 
all of the following:

(a) Contracts directly with a residential contractor 
or indirectly with a subcontractor of the residential contractor.

(b) Actually occupies or intends to occupy the 
residential real property described in subdivision (a) of this paragraph as the 
lessee's primary residence. The criteria prescribed 
pursuant to section 42-12053, subsection B may be used to establish 
whether a lessee occupies or intends to occupy the residential real property as 
the lessee's primary residence.

(c) Is damaged by the licensed residential 
contractor's failure to adequately build or improve a residential structure or 
appurtenance.

C. In order for a claimant to be eligible for an 
award from the residential contractors' recovery fund, the contractor whose 
actions damaged the claimant must have been appropriately licensed at one of 
the following times:

1. The date that the underlying contract was signed.

2. The date that the first payment was made.

3. The date that the underlying work first 
commenced.

D. For the purposes of this section, 
"appropriately licensed" means the residential contractor held a 
valid residential contractor license that was issued pursuant to this chapter 
and that was not canceled, in inactive status, expired, suspended or revoked. END_STATUTE

Sec. 2. Section 32-1132.01, Arizona Revised 
Statutes, is amended to read:

START_STATUTE32-1132.01. Actu