Alabama Advisory Opinions October 05, 2001: AGO 2002-015 (October 5, 2001)

Alabama Attorney General Opinions

2001.

AGO 2002-015.

Dear Ms. Brown:

This opinion of the Attorney General is issued in response to your request on behalf of the State Licensing Board for General Contractors.

QUESTION ONE

Whether the State Licensing Board for General Contractors ("the Board") is authorized to pay $50 per subcontractor's license to qualified institutions.

FACTS AND ANALYSIS

In your letter of request, you provided the following information:

Pursuant to Section 34-8-28 of the Code of Alabama, One Hundred Dollars ($100) from the fee each general contractor is required to pay as an application fee for their license and for the renewal of their license is to be distributed to accredited public institutions of higher education offering certain courses and/or degrees in building sciences or civil engineering.

Effective January 1, 1998, the Board began licensing subcontractors. Subcontractors' application fee[s] and renewal fee[s] are less than those required from general contractors. In addition to lower fees, information requested or required of subcontractors to become licensed is less than that of a general contractor.

When the licensing statute for subcontractors took effect in January 1998, the section of the Code dealing with the funds to be distributed to the institutions of higher education, section 34-8-28 of the Code of Alabama , was not amended to provide for a portion of the fees from subcontractors' application and renewal fee to also be given to these institutions of higher education. However, since the One Hundred Dollars ($100.00) distributed to the institutions from the general contractors' fees was one-third of the fee paid by a general contractor, the Board has distribute[d] one-third (or $50.00) from the subcontractors' application and renewal fees to qualified institutions of higher education.

When the Examiners of Public Accounts audited the Board's records this year, the discrepancy in what was actually provided for in the state and our practice was pointed out to us.

Although there are separate provisions in the Code dealing with subcontractors as to their application process, licensing, and the amount of their application and renewal fees, in section 34-8-1(c), a subcontractor is defined "to be a `general contractor' as defined in subsection (a), who performs work under a contract to another general contractor."

* * *

The established fees by the Board are Three Hundred Dollars ($300.00) for a new license by a General Contractor and a Two Hundred Dollars ($200.00) fee for their renewal. Pursuant to this statute $100.00 of each of these fees goes to the qualified institutions of higher education. The established fees for a new subcontractor license is One Hundred Fifty Dollars ($150.00) and for a renewal is One Hundred Dollars ($100.00). We have been distributing Fifty Dollars ($50.00) per subcontractor's license application and renewal fee to the qualifying institutions of higher education since 1998 when we began licensing subcontractors. To require One Hundred Dollars ($100.00) for each new subcontractor's license and renewal would leave virtually nothing for administrative costs to the Board.

There are several sections of state law that are relevant in answering your first question. Section 34-8-28 provides:

(a) An amount of one hundred dollars ($100) from the fees required for application and renewal for certification and registration of general contractors in Section 34-8-2 shall be distributed by the State Licensing Board for General Contractors at the end of each fiscal year to all accredited public institutions of higher education offering American Council for Construction Education accredited courses in building science, and to all accredited public institutions of higher education offering courses in building science which are in the candidate status of the American Council for Construction Education and to institutions of higher education offering courses leading to a bachelor of civil engineering degree which offers courses in highway engineering and construction at the undergraduate and graduate levels and whose civil engineering program is accredited by the Engineering Accreditation Commission of the Accreditation Board for Engineering and Technology (ABET).

ALA. CODE § 34-8-28 (1997).

Section 34-8-7 provides:

(c) A subcontractor, as defined in subsection (c) of Section 34-8-1, is subject to and shall comply with all the provisions of this chapter as specified for general contractors except as follows:

(1) A subcontractor shall pay one-half the fees as required in this chapter for general contractor.

ALA. CODE § 34-8-7 (Supp. 2000).

As I understand the facts, based on this provision, the Board has been remitting one-third of the fee paid by subcontractors to qualified institutions of higher education. This is the same proportionate share of the license fee that is paid from the license fees collected from general contractors. You have asked whether this procedure is consistent with state law.

Subcontractors are a subclass of general contractors. Those sections of state law governing general contractors, therefore, also govern subcontractors unless there is a specific provision to the contrary. See ALA. CODE § 34-8-7 (Supp. 2000). For instance, there is a specific statutory exception from the applicability of the general contractor provisions of law to subcontractors that levies a reduced license fee on subcontractors. No such distinction is made between general contractors and subcontractors for the distribution of monies to the institutions of higher education. Instead, section 34-8-28 of the Code of Alabama requires that "$100 from the fees required for application and renewal for certification and registration of general contractors in Section 34-8-2 shall be distributed by the State Licensing Board for General Contractors at the end of each fiscal year to all accredited public institutions of higher education offering American Council for Construction Education accredited courses" in the various disciplines. ALA. CODE § 34-8-28 (1997). This section makes no distinction between whether the fees were collected from a general contractor or from a subcontractor. Because state law does not specify that a certain percentage of the license and renewal fees collected from general contractors be remitted to the qualified institutions of higher education, the Board must remit one hundred dollars of the license and renewal fees of both general contractors and subcontractors to these institutions of higher education.

CONCLUSION

Absent any specific authority to the contrary, subcontractors should be treated as general contractors for the purposes of calculating payments to qualifying institutions of higher education.

QUESTION TWO

If the $50 fee per license was paid and it should not have been paid, must the Board recover the funds from the qualified institutions that received them?

FACTS, ANALYSIS, and CONCLUSION

Based on the answer to Question One, this question need not be answered.

QUESTION THREE

Whether the Board should treat subcontractors as general contractors for the purposes of calculating payments to the qualifying institutions.

FACTS, ANALYSIS, and CONCLUSION

As discussed in the response to Question One, subcontractors should be treated as general contractors for the purposes of calculating payments to qualifying institutions of higher education.

QUESTION FOUR

If the Board should have treated subcontractors as general contractors and, thereby, paid $100 per license to the qualifying institutions, must the Board now go back to past years (specifically, to years 1998, 1999, and 2000) and pay any difference between the amount paid and the amount that should have been paid?

FACTS, ANALYSIS, and CONCLUSION

Although the Board should have remitted $100 per subcontractor license or renewal to the qualified institutions of higher education in 1998, 1999, and 2000, they lack any authority to now pay the difference between what they remitted and what they should have remitted in past fiscal years. The qualified institutions could, however, seek the additional payments by petitioning the Alabama Board of Adjustment, which could authorize the Board to pay them. See ALA. CODE §§ 41-9-60, et seq . (2000).

I hope this opinion answers your questions. If this Office can be of further assistance, please contact Troy King of my staff.

Sincerely,

BILL PRYOR

Attorney General

By: CAROL JEAN SMITH

Chief, Opinions Division

BP/CJS/TRK

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