Bill Text: NY A00595 | 2013-2014 | General Assembly | Introduced
Bill Title: Requires registration of home improvement contractors with the department of state; permits denial of registration for convictions for fraud; provides for civil penalties for operating without registration; requires a surety bond be posted by contractors as a condition to obtaining a registration; establishes the home improvement trust fund.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2014-01-08 - referred to consumer affairs and protection [A00595 Detail]
Download: New_York-2013-A00595-Introduced.html
S T A T E O F N E W Y O R K ________________________________________________________________________ 595 2013-2014 Regular Sessions I N A S S E M B L Y (PREFILED) January 9, 2013 ___________ Introduced by M. of A. DINOWITZ -- Multi-Sponsored by -- M. of A. GABRYSZAK -- read once and referred to the Committee on Consumer Affairs and Protection AN ACT to amend the general business law, in relation to the registra- tion of home improvement contractors; and to amend the state finance law, in relation to establishing the home improvement trust fund THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: 1 Section 1. Section 770 of the general business law is amended by 2 adding six new subdivisions 8, 9, 10, 11, 12 and 13 to read as follows: 3 8. "CERTIFICATE" MEANS A CERTIFICATE OF REGISTRATION ISSUED UNDER THIS 4 ARTICLE. 5 9. "BOARD" MEANS THE NEW YORK STATE CONSUMER PROTECTION BOARD. 6 10. "DIRECTOR" MEANS THE EXECUTIVE DIRECTOR OF THE STATE CONSUMER 7 PROTECTION BOARD. 8 11. "FUND" MEANS THE HOME IMPROVEMENT TRUST FUND ESTABLISHED PURSUANT 9 TO SECTION NINETY-NINE-U OF THE STATE FINANCE LAW. 10 12. "PRIVATE RESIDENCE" MEANS A SINGLE FAMILY DWELLING, A CONDOMINIUM, 11 A COOPERATIVE APARTMENT OR A MULTIFAMILY DWELLING CONSISTING OF NOT MORE 12 THAN TWELVE RENTAL UNITS. 13 13. "FINAL JUDGMENT" MEANS ANY FINAL JUDGMENT OBTAINED IN A COURT OF 14 COMPETENT JURISDICTION, FINAL AWARD IN ARBITRATION OR FINAL DISPOSITION 15 OF A BANKRUPT'S ESTATE. 16 S 2. The general business law is amended by adding eleven new sections 17 770-a, 770-b, 770-c, 770-d, 770-e, 770-f, 770-g, 770-h, 770-i, 770-j and 18 770-k to read as follows: 19 S 770-A. REGISTRATION REQUIRED. 1. ON OR AFTER MARCH FIRST, TWO THOU- 20 SAND FOURTEEN, NO PERSON, FIRM OR CORPORATION SHALL HOLD HIMSELF, 21 HERSELF, OR ITSELF OUT TO BE A HOME IMPROVEMENT CONTRACTOR IN NEW YORK EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD03092-01-3 A. 595 2 1 STATE WITHOUT FIRST REGISTERING WITH THE BOARD AS PROVIDED IN THIS ARTI- 2 CLE. 3 2. THE FOLLOWING PERSONS AND ORGANIZATIONS ARE NOT REQUIRED TO REGIS- 4 TER AS HOME IMPROVEMENT CONTRACTORS: 5 (A) THE STATE, MUNICIPALITIES OF THE STATE, OR ANY DEPARTMENT OR AGEN- 6 CY OF THE STATE OR SUCH MUNICIPALITIES; 7 (B) THE UNITED STATES OR ANY OF ITS DEPARTMENTS OR AGENCIES; AND 8 (C) ANY SCHOOL, PUBLIC OR PRIVATE, OFFERING AS PART OF A VOCATIONAL 9 EDUCATION PROGRAM COURSES AND TRAINING IN ANY ASPECT OF HOME IMPROVE- 10 MENTS. 11 S 770-B. INITIAL APPLICATION FOR REGISTRATION. 1. ANY PERSON, FIRM OR 12 CORPORATION SEEKING A CERTIFICATE OF REGISTRATION AS A HOME IMPROVEMENT 13 CONTRACTOR SHALL FILE WITH THE BOARD AN APPLICATION FOR REGISTRATION IN 14 SUCH FORM AND DETAIL AS THE BOARD SHALL PRESCRIBE, INCLUDING THE FOLLOW- 15 ING: 16 (A) THE NAME AND RESIDENCE ADDRESS OF THE APPLICANT; 17 (B) THE BUSINESS NAME, IF OTHER THAN THAT OF THE APPLICANT; 18 (C) THE PLACE, INCLUDING THE CITY, TOWN OR VILLAGE, WITH THE STREET 19 AND NUMBER, WHERE THE BUSINESS IS TO BE LOCATED; 20 (D) THE BUSINESS TELEPHONE OF THE APPLICANT; 21 (E) THE LENGTH OF TIME THAT THE APPLICANT HAS BEEN A HOME IMPROVEMENT 22 CONTRACTOR; AND 23 (F) A SWORN STATEMENT BY THE APPLICANT THAT THE INFORMATION SET FORTH 24 IN THE APPLICATION IS CURRENT AND ACCURATE. 25 2. SUCH APPLICATION SHALL INCLUDE A STATEMENT INDICATING WHETHER OR 26 NOT THE APPLICANT HAS: 27 (A) BEEN CONVICTED OF ANY CRIME DEFINED IN ARTICLE ONE HUNDRED FIFTY- 28 FIVE OF THE PENAL LAW OR ARTICLE TWENTY-TWO-A OF THIS CHAPTER OR IS A 29 DEBTOR ON ANY UNPAID CIVIL JUDGMENT RELATING TO WORK AS A HOME IMPROVE- 30 MENT CONTRACTOR; AND 31 (B) AT ANY TIME IN THE PAST BEEN ISSUED A REGISTRATION PURSUANT TO 32 THIS ARTICLE, AND IF SO, WHETHER SUCH REGISTRATION WAS EVER REVOKED OR 33 SUSPENDED. 34 3. EXCEPT AS OTHERWISE PROVIDED IN OR INCONSISTENT WITH THE PROVISIONS 35 OF THIS ARTICLE, ALL OF THE PROVISIONS OF THE BUSINESS CORPORATION LAW 36 PERTAINING TO THE STATUTORY DESIGNATION OF THE SECRETARY OF STATE AS 37 AGENT FOR SERVICE OF PROCESS, THE DESIGNATION OF A REGISTERED AGENT FOR 38 SERVICE OF PROCESS, THE MANNER OF EFFECTUATION OF SERVICE OF PROCESS, 39 AND MATTERS INCIDENTAL OR RELATED THERETO SHALL APPLY TO THE REGISTRA- 40 TION REQUIRED BY THIS ARTICLE WITH SUCH MODIFICATIONS AS MAY BE NECES- 41 SARY TO ADAPT SUCH LANGUAGE TO THE REGISTRATION REQUIRED BY THIS ARTI- 42 CLE. SUCH PROVISIONS SHALL APPLY WITH THE SAME FORCE AND EFFECT AS IF 43 THOSE PROVISIONS HAD BEEN SET FORTH IN FULL IN THIS ARTICLE EXCEPT TO 44 THE EXTENT THAT ANY PROVISION IS EITHER INCONSISTENT WITH A PROVISION OF 45 THIS ARTICLE OR NOT RELEVANT TO THE REGISTRATION REQUIRED BY THIS ARTI- 46 CLE, UNLESS A DIFFERENT MEANING IS CLEARLY REQUIRED. 47 4. THE BOARD MAY REFUSE TO ISSUE A REGISTRATION TO ANY PERSON WHOM IT 48 FINDS HAS BEEN CONVICTED OF ANY CRIME DESCRIBED IN PARAGRAPH (A) OF 49 SUBDIVISION TWO OF THIS SECTION, OR FAILED TO PAY ANY FINAL CIVIL JUDG- 50 MENT, RELATING TO WORK AS A HOME IMPROVEMENT CONTRACTOR, IF SUCH REFUSAL 51 WILL, IN ITS JUDGMENT, BEST PROMOTE THE INTERESTS OF THE PEOPLE OF THIS 52 STATE. 53 S 770-C. TERMS. A REGISTRATION ISSUED OR RENEWED UNDER THE PROVISIONS 54 OF THIS ARTICLE SHALL ENTITLE A PERSON TO ACT AS A REGISTERED HOME 55 IMPROVEMENT CONTRACTOR IN THE STATE OF NEW YORK FOR A PERIOD OF TWO 56 YEARS FROM THE EFFECTIVE DATE OF THE REGISTRATION. A. 595 3 1 S 770-D. REGISTRATION RENEWAL. 1. ANY REGISTRATION GRANTED UNDER THIS 2 ARTICLE MAY BE RENEWED BY THE BOARD UPON APPLICATION AND PAYMENT OF THE 3 FEE FOR SUCH RENEWAL BY THE HOLDER THEREOF, IN SUCH FORM AS THE BOARD 4 MAY PRESCRIBE. 5 2. THE BOARD SHALL HAVE THE AUTHORITY TO ASSIGN STAGGERED EXPIRATION 6 DATES FOR REGISTRATIONS AT THE TIME OF RENEWAL. IF THE ASSIGNED DATE 7 RESULTS IN A TERM THAT EXCEEDS TWENTY-FOUR MONTHS, THE APPLICANT SHALL 8 PAY AN ADDITIONAL PRO-RATED ADJUSTMENT TOGETHER WITH THE REGULAR RENEWAL 9 FEE. 10 3. THE BOARD MAY REFUSE TO RENEW, OR MAY REVOKE OR SUSPEND, THE REGIS- 11 TRATION OF ANY HOME IMPROVEMENT CONTRACTOR IF SUCH REFUSAL, SUSPENSION 12 OR REVOCATION IS REASONABLY NECESSARY TO PROTECT THE INTERESTS OF THE 13 PEOPLE OF THIS STATE. THE BOARD MAY REINSTATE SUCH REGISTRATION WHERE 14 SUCH GROUNDS FOR REFUSAL, SUSPENSION, OR REVOCATION NO LONGER EXIST. 15 S 770-E. FEES. 1. EACH ORIGINAL APPLICATION OR APPLICATION FOR RENEWAL 16 FOR REGISTRATION AS A HOME IMPROVEMENT CONTRACTOR SHALL BE ACCOMPANIED 17 BY A FEE OF ONE HUNDRED FIFTY DOLLARS FOR EACH BIENNIAL REGISTRATION 18 PERIOD. 19 2. NOTICE IN WRITING IN THE MANNER AND FORM PRESCRIBED BY THE BOARD 20 SHALL BE GIVEN TO THE BOARD AT ITS OFFICES IN ALBANY WITHIN TEN DAYS OF 21 CHANGES OF NAME OR ADDRESS BY REGISTERED HOME IMPROVEMENT CONTRACTORS, 22 EXCEPT THOSE MADE ON A RENEWAL APPLICATION. THE FEE FOR FILING EACH 23 CHANGE OF NAME OR ADDRESS NOTICE SHALL BE TEN DOLLARS. 24 3. IN THE CASE OF LOSS, DESTRUCTION OR DAMAGE, THE BOARD MAY, UPON 25 SUBMISSION OF A REQUEST IN SUCH FORM AND MANNER AS THE BOARD MAY 26 PRESCRIBE, ISSUE A DUPLICATE REGISTRATION UPON PAYMENT OF A FEE OF TEN 27 DOLLARS. 28 4. THE FEES PROVIDED FOR BY THIS SECTION SHALL NOT BE REFUNDABLE. 29 S 770-F. PRACTICES OF REGISTRANTS. 1. EACH HOME IMPROVEMENT CONTRACTOR 30 ENGAGED IN MAKING HOME IMPROVEMENT CONTRACTS SHALL EXHIBIT HIS, HER, OR 31 ITS CERTIFICATE UPON THE REQUEST OF ANY INTERESTED PARTY. 32 2. NO PERSON, FIRM OR CORPORATION SHALL: 33 (A) PRESENT OR ATTEMPT TO PRESENT, AS HIS, HER, OR ITS OWN, THE REGIS- 34 TRATION OF ANOTHER; 35 (B) KNOWINGLY GIVE FALSE EVIDENCE OF A MATERIAL NATURE TO THE BOARD 36 FOR THE PURPOSE OF PROCURING A REGISTRATION; 37 (C) FALSELY REPRESENT HIMSELF, HERSELF, OR ITSELF AS A REGISTERED HOME 38 IMPROVEMENT CONTRACTOR; 39 (D) USE OR ATTEMPT TO USE A REGISTRATION WHICH HAS EXPIRED; 40 (E) OFFER TO MAKE OR MAKE ANY HOME IMPROVEMENT WITHOUT HAVING A 41 CURRENT REGISTRATION AS IS REQUIRED UNDER THIS ARTICLE; 42 (F) REPRESENT IN ANY MANNER THAT HIS, HER, OR ITS REGISTRATION CONSTI- 43 TUTES AN ENDORSEMENT OF THE QUALITY OF WORKMANSHIP OR COMPETENCY OF THE 44 CONTRACTOR. 45 3. REGISTRATIONS ISSUED TO HOME IMPROVEMENT CONTRACTORS SHALL NOT BE 46 TRANSFERABLE OR ASSIGNABLE. 47 S 770-G. SURETY BONDING REQUIREMENT. 1. AS A CONDITION TO OBTAINING A 48 REGISTRATION PURSUANT TO THIS ARTICLE, EVERY HOME IMPROVEMENT CONTRACTOR 49 APPLICANT WHO IS APPLYING FOR A REGISTRATION AND FOR WHOM THE TOTAL CASH 50 PRICE OF ALL OF HIS, HER, OR ITS HOME IMPROVEMENT CONTRACTS WITH ALL 51 HIS, HER, OR ITS CUSTOMERS IS LESS THAN FIVE HUNDRED THOUSAND DOLLARS 52 DURING THE PERIOD OF TWELVE CONSECUTIVE MONTHS PRIOR TO APPLYING FOR A 53 REGISTRATION SHALL OBTAIN AND CONTINUE IN EFFECT A SURETY BOND IN THE 54 AMOUNT OF TEN THOUSAND DOLLARS EXECUTED BY A SURETY COMPANY AUTHORIZED 55 TO TRANSACT BUSINESS IN THIS STATE. A. 595 4 1 2. AS A CONDITION OF OBTAINING A REGISTRATION PURSUANT TO THIS ARTI- 2 CLE, EVERY HOME IMPROVEMENT CONTRACTOR APPLICANT WHO IS APPLYING FOR A 3 REGISTRATION AND FOR WHOM THE TOTAL CASH PRICE OF ALL OF HIS, HER, OR 4 ITS HOME IMPROVEMENT CONTRACTS WITH ALL HIS, HER, OR ITS CUSTOMERS IS 5 BETWEEN FIVE HUNDRED THOUSAND DOLLARS BUT LESS THAN ONE MILLION DOLLARS 6 DURING THE PERIOD OF TWELVE CONSECUTIVE MONTHS PRIOR TO APPLYING FOR A 7 REGISTRATION SHALL OBTAIN AND CONTINUE IN EFFECT A SURETY BOND IN AN 8 AMOUNT OF TWENTY-FIVE THOUSAND DOLLARS EXECUTED BY A SURETY COMPANY 9 AUTHORIZED TO TRANSACT BUSINESS IN THIS STATE. 10 3. AS A CONDITION OF OBTAINING A REGISTRATION PURSUANT TO THIS ARTI- 11 CLE, EVERY HOME IMPROVEMENT CONTRACTOR APPLICANT WHO IS APPLYING FOR A 12 REGISTRATION AND FOR WHOM THE TOTAL CASH PRICE OF ALL OF HIS, HER, OR 13 ITS HOME IMPROVEMENT CONTRACTS WITH ALL HIS, HER, OR ITS CUSTOMERS IS 14 ONE MILLION DOLLARS OR GREATER DURING THE PERIOD OF TWELVE CONSECUTIVE 15 MONTHS PRIOR TO APPLYING FOR A REGISTRATION SHALL OBTAIN AND CONTINUE IN 16 EFFECT A SURETY BOND IN AN AMOUNT OF FIFTY THOUSAND DOLLARS EXECUTED BY 17 A SURETY COMPANY AUTHORIZED TO TRANSACT BUSINESS IN THIS STATE. 18 4. THE BOND SHALL BE CONDITIONED ON THE HOME IMPROVEMENT CONTRACTOR'S 19 PAYMENT OF ANY FINAL JUDGMENT ENTERED AGAINST SUCH HOME IMPROVEMENT 20 CONTRACTOR FOR LOSSES OR DAMAGES SUSTAINED BY THE OWNER AS A RESULT OF 21 THE BREACH OF THE HOME IMPROVEMENT CONTRACT WITHIN THIS STATE, AND ANY 22 CIVIL PENALTIES ASSESSED AGAINST A HOME IMPROVEMENT CONTRACTOR FOR 23 VIOLATIONS OF THIS ARTICLE. 24 5. RECOVERY AGAINST ANY BOND SHALL BE MADE BY THE BOARD ON BEHALF OF 25 AN OWNER OR OWNERS WHO OBTAIN A JUDGMENT AGAINST THE HOME IMPROVEMENT 26 CONTRACTOR FOR AN ACT OR OMISSION ON WHICH THE BOND IS CONDITIONED, IF 27 THE ACT OR OMISSION OCCURRED DURING THE TERM OF THE BOND. THE TOTAL 28 LIABILITY IMPOSED ON THE SURETY BOND UNDER THIS SECTION FOR ALL BREACHES 29 OF THE BOND CONDITION IS LIMITED TO THE FACE AMOUNT OF THE BOND. SUCH 30 LIABILITY IS LIMITED TO THE AMOUNT OF THE JUDGMENT. IN NO EVENT SHALL 31 THE SURETY ON A BOND BE LIABLE FOR TOTAL CLAIMS IN EXCESS OF THE BOND 32 AMOUNT, REGARDLESS OF THE NUMBER OR NATURE OF CLAIMS MADE AGAINST THE 33 BOND OR THE NUMBER OF YEARS THE BOND REMAINED IN FORCE. 34 6. ANY SURETY ISSUING A BOND PURSUANT TO THIS SECTION SHALL BE 35 REQUIRED TO PROVIDE THIRTY DAYS' NOTICE TO THE BOARD PRIOR TO THE EFFEC- 36 TIVE DATE OF CANCELLATION OF THE BOND. 37 7. THE FAILURE OF A HOME IMPROVEMENT CONTRACTOR TO MAINTAIN SUCH A 38 BOND AND SATISFY ALL CLAIMS AGAINST THE BOND, SHALL RESULT IN THE IMME- 39 DIATE REVOCATION OF THE REGISTRATION OF SUCH HOME IMPROVEMENT CONTRAC- 40 TOR. 41 S 770-H. HOME IMPROVEMENT TRUST FUND. 1. THE HOME IMPROVEMENT TRUST 42 FUND ESTABLISHED PURSUANT TO SECTION NINETY-NINE-U OF THE STATE FINANCE 43 LAW SHALL PROVIDE FOR THE PAYMENT OF OUTSTANDING AWARDS TO AGGRIEVED 44 CONSUMERS AND FINES OWED TO THE BOARD. 45 (A) HOME IMPROVEMENT CONTRACTORS MAY ELECT TO PARTICIPATE IN THE FUND 46 IN LIEU OF FURNISHING A BOND AS REQUIRED BY SECTION SEVEN HUNDRED SEVEN- 47 TY-G OF THIS ARTICLE. 48 (B) ANY HOME IMPROVEMENT CONTRACTOR APPLICANT WHO ELECTS TO PARTIC- 49 IPATE IN THE FUND MUST SUBMIT TO THE BOARD A CHECK IN THE AMOUNT OF TWO 50 HUNDRED DOLLARS, MADE PAYABLE TO THE BOARD, BEFORE A REGISTRATION SHALL 51 BE ISSUED. ANY BONDED REGISTRANT MAY ELECT TO PARTICIPATE IN THE FUND IN 52 LIEU OF CONTINUED COMPLIANCE WITH THE BOND REQUIREMENT BY CAUSING THE 53 BOARD TO RECEIVE A CHECK IN THE AMOUNT OF TWO HUNDRED DOLLARS, MADE 54 PAYABLE TO THE BOARD, PRIOR TO THE EXPIRATION OR CANCELLATION DATE OF 55 THE REGISTRANT'S BOND. ALL FUND PARTICIPANTS WHO ELECT TO CONTINUE TO 56 PARTICIPATE IN THE FUND SHALL CONTRIBUTE TWO HUNDRED DOLLARS UPON EACH A. 595 5 1 RENEWAL OF THEIR REGISTRATION. ANY FUND PARTICIPANT WHO ELECTS NOT TO 2 CONTINUE TO PARTICIPATE IN THE FUND AT THE TIME OF RENEWAL SHALL FURNISH 3 A BOND IN ACCORDANCE WITH SECTION SEVEN HUNDRED SEVENTY-G OF THIS ARTI- 4 CLE BEFORE THE RENEWAL REGISTRATION SHALL BE ISSUED. 5 (C) FUND PARTICIPANTS MAY DISCONTINUE THEIR PARTICIPATION IN THE FUND 6 AT ANY TIME BY FILING A BOND PURSUANT TO SECTION SEVEN HUNDRED SEVENTY-G 7 OF THIS ARTICLE. 8 (D) PARTICIPATION IN THE FUND SHALL NOT RELIEVE A REGISTRANT OF ANY 9 OBLIGATION TO PAY AWARDS OR FINES IMPOSED BY THE BOARD OR JUDGMENTS OR 10 ARBITRATION AWARDS RENDERED AGAINST A REGISTRANT BY A COURT OF COMPETENT 11 JURISDICTION. IN THE EVENT THAT A CONTRACTOR'S REGISTRATION IS REVOKED, 12 SURRENDERED OR THE CONTRACTOR FAILS TO RENEW HIS, HER OR ITS REGISTRA- 13 TION, AND THE FUND IS INVADED TO PAY AN AWARD, FINE OR JUDGMENT THAT WAS 14 RENDERED AGAINST SUCH CONTRACTOR PURSUANT TO THE PROVISIONS HEREIN, NO 15 REGISTRATION SHALL BE ISSUED OR REINSTATED TO SUCH CONTRACTOR OR TO ANY 16 HOME IMPROVEMENT BUSINESS IN WHICH SUCH CONTRACTOR IS AN OFFICER, SHARE- 17 HOLDER, PARTNER OR PRINCIPAL, UNLESS THE AMOUNT OR AMOUNTS PAID OUT OF 18 THE FUND ON BEHALF OF SUCH CONTRACTOR IS REIMBURSED BY SUCH CONTRACTOR 19 IN FULL. 20 (E) IN THE EVENT THAT A HOME IMPROVEMENT CONTRACTOR'S REGISTRATION IS 21 REVOKED, SURRENDERED OR THE CONTRACTOR FAILS TO RENEW HIS, HER OR ITS 22 REGISTRATION AND THE FUND IS INVADED TO PAY AN AWARD, FINE OR JUDGMENT 23 THAT WAS RENDERED AGAINST SUCH CONTRACTOR, PURSUANT TO THE PROVISIONS 24 HEREIN, THE DIRECTOR OR HIS OR HER DESIGNEE SHALL HAVE DISCRETION TO 25 EXCLUDE SUCH CONTRACTOR, OR ANY HOME IMPROVEMENT BUSINESS IN WHICH SUCH 26 CONTRACTOR IS A PRINCIPAL, FROM FUTURE PARTICIPATION IN THE FUND. THE 27 DIRECTOR OR HIS OR HER DESIGNEE MAY, IN HIS OR HER DISCRETION, REQUIRE 28 SUCH HOME IMPROVEMENT CONTRACTOR TO OBTAIN A BOND PURSUANT TO SECTION 29 SEVEN HUNDRED SEVENTY-G OF THIS ARTICLE. 30 2. (A) THE DIRECTOR MAY REQUIRE THAT DISBURSEMENTS BE MADE FROM THE 31 FUND TO PAY OUTSTANDING AWARDS TO CONSUMERS AND FINES OWED TO THE BOARD 32 WHEN: 33 (I) THE BOARD HAS CONDUCTED AN ADMINISTRATIVE HEARING THAT RESULTS IN 34 A FINDING THAT A HOME IMPROVEMENT CONTRACTOR IS IN VIOLATION OF A LAW OR 35 REGULATION ENFORCED BY THE BOARD AND THE BOARD OR A COURT OF COMPETENT 36 JURISDICTION HAS RENDERED A DECISION, JUDGMENT OR AN ARBITRATION AWARD 37 AGAINST THE CONTRACTOR FOR DAMAGES SUFFERED BY A CONSUMER ARISING OUT OF 38 A HOME IMPROVEMENT CONTRACT; 39 (II) THE CONTRACTOR IS ORDERED BY THE BOARD TO PAY AN AWARD TO A 40 CONSUMER, A FINE OR TO SATISFY A JUDGMENT OR ARBITRATION AWARD; 41 (III) THE CONTRACTOR HAS FAILED TO PAY SUCH AWARD TO A CONSUMER, A 42 FINE OR SATISFY A JUDGMENT OR ARBITRATION AWARD, WITHIN THIRTY DAYS OF 43 THE DATE OF THE BOARD'S ORDER; AND 44 (IV) THE BOARD HAS REVOKED THE CONTRACTOR'S REGISTRATION OR THE 45 CONTRACTOR HAS SURRENDERED OR FAILED TO RENEW SUCH REGISTRATION AFTER 46 THE BOARD'S ORDER. 47 NOTWITHSTANDING THIS PARAGRAPH, IF A CONTRACTOR HAS FILED A PETITION 48 FOR RELIEF UNDER ANY CHAPTER OF TITLE 11 OF THE UNITED STATES CODE, THE 49 BOARD MAY WAIVE THE REQUIREMENTS SET FORTH IN SUBPARAGRAPHS (II), (III) 50 AND (IV) OF THIS PARAGRAPH AND REQUIRE DISBURSEMENTS TO BE MADE FROM THE 51 FUND. 52 (B) DISBURSEMENTS SHALL NOT BE MADE FROM THE FUND TO PAY AN AWARD, 53 FINE OR JUDGEMENT THAT IS RENDERED AGAINST: 54 (I) A REGISTRANT WHO HAS FURNISHED A BOND, PURSUANT TO SECTION SEVEN 55 HUNDRED SEVENTY-G OF THIS ARTICLE; OR A. 595 6 1 (II) A HOME IMPROVEMENT CONTRACTOR WHO WAS NEVER REGISTERED BY THE 2 BOARD OR A PARTICIPANT IN THE FUND. 3 (C) DISBURSEMENTS FROM THE FUND WILL BE MADE AT THE DISCRETION OF THE 4 DIRECTOR OR HIS OR HER DESIGNEE, PROVIDED, HOWEVER, THAT INVASION OF THE 5 FUND SHALL BE LIMITED TO NO MORE THAN TWENTY THOUSAND DOLLARS FOR ALL 6 AWARDS, FINES AND JUDGEMENTS ARISING OUT OF A SINGLE HOME IMPROVEMENT 7 CONTRACT AND ONE HUNDRED THOUSAND DOLLARS FOR ALL AWARDS, CIVIL PENAL- 8 TIES, AND JUDGEMENTS ATTRIBUTABLE TO ONE HOME IMPROVEMENT CONTRACTOR. 9 (D) THE DIRECTOR OR HIS OR HER DESIGNEE MAY ORDER THAT PARTIAL PAYMENT 10 OF AWARDS, FINES OR JUDGMENTS BE MADE FROM THE FUND. 11 (E) NOTHING CONTAINED IN THIS SECTION SHALL BE CONSTRUED TO LIMIT THE 12 RIGHTS AND REMEDIES OF ANY PARTY, INCLUDING THE BOARD, TO PURSUE A CAUSE 13 OF ACTION AGAINST A HOME IMPROVEMENT CONTRACTOR WHO IS A PARTICIPANT IN 14 THE FUND. 15 (F) NOTHING CONTAINED IN THIS SECTION SHALL BE CONSTRUED TO CREATE A 16 RIGHT OF ANY PERSON TO A PORTION OF ANY OF THE FUND, EXCEPT IN THE CASE 17 OF AN AWARD DULY MADE BY THE DIRECTOR PURSUANT TO THE PROVISIONS OF THIS 18 SECTION. 19 (G) NOTHING CONTAINED IN THIS SECTION SHALL BE CONSTRUED TO PROVIDE 20 FOR THE PAYMENT OF AWARDS OR JUDGMENTS RENDERED AGAINST FUND PARTIC- 21 IPANTS IN PERSONAL INJURY ACTIONS. 22 3. THE DIRECTOR SHALL, BY JANUARY THIRTY-FIRST OF EACH YEAR, CAUSE AN 23 ACCOUNTING TO BE MADE OF ALL OF THE FUND'S ACTIVITIES DURING THE PRECED- 24 ING CALENDAR YEAR. 25 S 770-I. POWERS OF THE BOARD. 1. THE BOARD SHALL PROMULGATE SUCH RULES 26 AND REGULATIONS AS ARE DEEMED NECESSARY TO EFFECTUATE THE PURPOSES OF 27 THIS ARTICLE, AND SHALL PROVIDE WRITTEN NOTIFICATION OF THE PROVISIONS 28 OF THIS ARTICLE TO ALL HOME IMPROVEMENT CONTRACTORS REGISTERED PURSUANT 29 TO THIS ARTICLE. 30 2. THE BOARD SHALL HAVE THE POWER TO ENFORCE THE PROVISIONS OF THIS 31 ARTICLE AND UPON COMPLAINT OF ANY PERSON, OR UPON THE DIRECTOR'S INITI- 32 ATIVE, TO INVESTIGATE ANY VIOLATION THEREOF OR TO INVESTIGATE THE BUSI- 33 NESS, BUSINESS PRACTICES AND BUSINESS METHODS OF ANY PERSON, FIRM, 34 LIMITED LIABILITY COMPANY, PARTNERSHIP OR CORPORATION APPLYING FOR OR 35 HOLDING A REGISTRATION AS A DOCUMENT DESTRUCTION CONTRACTOR, IF IN THE 36 OPINION OF THE DIRECTOR SUCH INVESTIGATION IS WARRANTED. EACH SUCH 37 APPLICANT OR REGISTRANT SHALL BE OBLIGED, ON REQUEST OF THE DIRECTOR, TO 38 SUPPLY SUCH INFORMATION, BOOKS, PAPERS OR RECORDS AS MAY BE REQUIRED 39 CONCERNING HIS, HER OR ITS BUSINESS, BUSINESS PRACTICES OR BUSINESS 40 METHODS, OR PROPOSED BUSINESS PRACTICES OR METHODS. FAILURE TO COMPLY 41 WITH A LAWFUL REQUEST OF THE DIRECTOR SHALL BE A GROUND FOR DENYING AN 42 APPLICATION FOR A REGISTRATION, OR FOR REVOKING, SUSPENDING, OR FAILING 43 TO RENEW A REGISTRATION ISSUED UNDER THIS ARTICLE. 44 3. THE BOARD SHALL HAVE THE POWER TO REVOKE OR SUSPEND ANY REGISTRA- 45 TION, OR IN LIEU THEREOF TO IMPOSE A FINE NOT EXCEEDING ONE THOUSAND 46 DOLLARS PAYABLE TO THE BOARD, OR REPRIMAND ANY REGISTRANT OR DENY AN 47 APPLICATION FOR A REGISTRATION OR RENEWAL THEREOF UPON PROOF THAT THE 48 APPLICANT OR REGISTRANT HAS: 49 (A) VIOLATED ANY OF THE PROVISIONS OF THIS ARTICLE OR THE RULES AND 50 REGULATIONS PROMULGATED PURSUANT TO THIS ARTICLE; 51 (B) PRACTICED FRAUD, DECEIT OR MISREPRESENTATION; 52 (C) MADE A MATERIAL MISSTATEMENT IN THE APPLICATION FOR OR RENEWAL OF 53 HIS OR HER REGISTRATION; 54 (D) DEMONSTRATED INCOMPETENCE OR UNTRUSTWORTHINESS IN HIS OR HER 55 ACTIONS. A. 595 7 1 4. THE BOARD SHALL, BEFORE DENYING AN APPLICATION FOR A REGISTRATION 2 OR BEFORE REVOKING OR SUSPENDING ANY REGISTRATION, OR IMPOSING ANY FINE 3 OR REPRIMAND, AND AT LEAST FIFTEEN DAYS PRIOR TO THE DATE SET FOR THE 4 HEARING, AND UPON DUE NOTICE TO THE COMPLAINANT OR OBJECTOR, NOTIFY IN 5 WRITING THE APPLICANT FOR, OR THE HOLDER OF SUCH REGISTRATION OF ANY 6 CHARGE MADE AND SHALL AFFORD SUCH APPLICANT OR REGISTRANT AN OPPORTUNITY 7 TO BE HEARD IN PERSON OR BY COUNSEL IN REFERENCE THERETO. SUCH WRITTEN 8 NOTICE MAY BE SERVED BY DELIVERY OF SAME PERSONALLY TO THE APPLICANT OR 9 REGISTRANT, OR BY MAILING SAME BY REGISTERED MAIL TO THE LAST KNOWN 10 BUSINESS ADDRESS OF SUCH APPLICANT OR REGISTRANT. 11 5. THE HEARING ON SUCH CHARGES SHALL BE AT SUCH TIME AND PLACE AS THE 12 BOARD SHALL PRESCRIBE AND SHALL BE CONDUCTED BY SUCH OFFICER OR PERSON 13 IN THE BOARD AS THE SECRETARY OF STATE MAY DESIGNATE, WHO SHALL HAVE THE 14 POWER TO SUBPOENA AND BRING BEFORE THE OFFICER OR PERSON SO DESIGNATED 15 ANY PERSON IN THIS STATE, AND ADMINISTER AN OATH TO AND TAKE TESTIMONY 16 OF ANY PERSON OR CAUSE HIS OR HER DEPOSITION TO BE TAKEN. A SUBPOENA 17 ISSUED UNDER THIS SECTION SHALL BE REGULATED BY THE CIVIL PRACTICE LAW 18 AND RULES. SUCH OFFICER OR PERSON IN THE BOARD DESIGNATED TO TAKE SUCH 19 TESTIMONY SHALL NOT BE BOUND BY COMMON LAW OR STATUTORY RULES OF 20 EVIDENCE OR BY TECHNICAL OR FORMAL RULES OF PROCEDURE. 21 6. IN THE EVENT THAT THE BOARD SHALL DENY THE APPLICATION FOR, OR 22 REVOKE OR SUSPEND ANY SUCH REGISTRATION, OR IMPOSE ANY FINE OR REPRI- 23 MAND, ITS DETERMINATION SHALL BE IN WRITING AND OFFICIALLY SIGNED. THE 24 ORIGINAL OF SUCH DETERMINATIONS, WHEN SO SIGNED, SHALL BE FILED IN THE 25 OFFICE OF THE BOARD AND COPIES THEREOF SHALL BE MAILED TO THE APPLICANT 26 OR REGISTRANT AND TO THE COMPLAINANT WITHIN TWO DAYS AFTER SUCH FILING. 27 7. THE BOARD, ACTING BY THE OFFICE OR PERSON DESIGNATED TO CONDUCT THE 28 HEARING PURSUANT TO SUBDIVISION FIVE OF THIS SECTION OR BY SUCH OTHER 29 OFFICER OR PERSON IN THE BOARD AS THE DIRECTOR MAY DESIGNATE, SHALL HAVE 30 THE POWER TO SUSPEND THE REGISTRATION OF ANY REGISTRANT WHO HAS BEEN 31 CONVICTED IN THIS STATE OR ANY OTHER STATE OR TERRITORY OF A FELONY OR 32 OF ANY MISDEMEANOR FOR A PERIOD NOT EXCEEDING THIRTY DAYS PENDING A 33 HEARING AND A DETERMINATION OF CHARGES MADE AGAINST HIM OR HER. IF SUCH 34 HEARING IS ADJOURNED AT THE REQUEST OF THE REGISTRANT, OR BY REASON OF 35 ANY ACT OR OMISSION BY HIM OR HER OR ON HIS OR HER BEHALF, SUCH SUSPEN- 36 SION MAY BE CONTINUED FOR THE ADDITIONAL PERIOD OF SUCH ADJOURNMENT. 37 8. THE ACTION OF THE BOARD IN GRANTING OR REFUSING TO GRANT OR TO 38 RENEW A REGISTRATION UNDER THIS ARTICLE OR IN REVOKING OR SUSPENDING OR 39 REFUSING TO REVOKE OR SUSPEND SUCH A REGISTRATION OR IMPOSING ANY FINE 40 OR REPRIMAND SHALL BE SUBJECT TO REVIEW BY A PROCEEDING INSTITUTED UNDER 41 ARTICLE SEVENTY-EIGHT OF THE CIVIL PRACTICE LAW AND RULES AT THE 42 INSTANCE OF THE APPLICANT FOR SUCH REGISTRATION, THE HOLDER OF A REGIS- 43 TRATION SO REVOKED, SUSPENDED, FINED OR REPRIMANDED OR THE PERSON 44 AGGRIEVED. 45 S 770-J. REGISTRY. THE BOARD SHALL MAINTAIN AND PUBLISH A REGISTRY OF 46 ALL REGISTERED HOME IMPROVEMENT CONTRACTORS, WHICH SHALL LIST AND IDEN- 47 TIFY, ON A COUNTY BY COUNTY BASIS, ALL REGISTERED HOME IMPROVEMENT 48 CONTRACTORS DOING BUSINESS IN THIS STATE. SUCH REGISTRY SHALL BE MADE 49 AVAILABLE ON THE BOARD'S INTERNET WEB SITE AND UPDATED AS FREQUENTLY AS 50 PRACTICABLE. THE BOARD SHALL ALSO MAINTAIN A TOLL-FREE STATEWIDE TELE- 51 PHONE NUMBER WHICH SHALL ALLOW THE PUBLIC TO ACCESS THE INFORMATION 52 CONTAINED ON SUCH REGISTRY. ANY INFORMATION REGARDING COMPLAINTS AND 53 CLAIMS FILED AGAINST A HOME IMPROVEMENT CONTRACTOR, INCLUDING THE RESOL- 54 UTION OF SUCH COMPLAINTS AND CLAIMS, SHALL BE MADE AVAILABLE TO THE 55 PUBLIC UPON REQUEST. A. 595 8 1 S 770-K. PENALTIES. 1. ANY PERSON WHO OPERATES AS A HOME IMPROVEMENT 2 CONTRACTOR WITHOUT BEING REGISTERED SHALL BE REQUIRED TO PAY A CIVIL 3 PENALTY IN THE SUM OF TWO THOUSAND DOLLARS PER HOME IMPROVEMENT CONTRACT 4 ENTERED INTO IN VIOLATION OF THE REGISTRATION REQUIREMENT. HOWEVER, ANY 5 SUCH PERSON AGAINST WHOM SUCH PENALTY HAS BEEN ASSESSED MAY AVOID ALL 6 BUT ONE THOUSAND DOLLARS OF SUCH PENALTY BY OBTAINING A REGISTRATION AS 7 REQUIRED BY THIS ARTICLE; PROVIDED THAT APPLICATION FOR SUCH REGISTRA- 8 TION IS MADE NOT MORE THAN TEN DAYS AFTER THE IMPOSITION OF SUCH PENAL- 9 TY. ALL CIVIL PENALTIES COLLECTED PURSUANT TO THIS SECTION SHALL BE 10 DEPOSITED TO THE CREDIT OF THE HOME IMPROVEMENT TRUST FUND ESTABLISHED 11 PURSUANT TO SECTION NINETY-NINE-U OF THE STATE FINANCE LAW. 12 2. A HOME IMPROVEMENT CONTRACTOR MAY NOT MAINTAIN A CIVIL ACTION TO 13 RECOVER PAYMENT FOR WORK UNDER A HOME IMPROVEMENT CONTRACT PERFORMED IF 14 SUCH CONTRACTOR IS NOT REGISTERED AS REQUIRED UNDER THIS ARTICLE. 15 S 3. Paragraph (a) of subdivision 1 of section 771 of the general 16 business law, as added by chapter 421 of the laws of 1987, is amended to 17 read as follows: 18 (a) The name, address, telephone number, STATE REGISTRATION NUMBER, 19 and license number, if applicable, of the contractor AND THE TOLL-FREE 20 TELEPHONE NUMBER AND INTERNET WEBSITE ADDRESS MAINTAINED BY THE BOARD 21 PURSUANT TO SECTION SEVEN HUNDRED SEVENTY-J OF THIS ARTICLE. 22 S 4. Section 773 of the general business law, as amended by chapter 23 587 of the laws of 1990, is amended to read as follows: 24 S 773. Violations. 1. Technical violations. Every home improvement 25 contractor who violates any of the provisions of this article shall be 26 subject to a civil penalty not to exceed [one] TWO hundred FIFTY dollars 27 FOR EACH VIOLATION. 28 2. Substantial violations. Every home improvement contractor who fails 29 to deposit funds in an escrow account or provide a bond or contract of 30 indemnity or irrevocable letter of credit in compliance with the 31 requirements of section seventy-one-a of the lien law, or who fails to 32 provide a written contract substantially in compliance with the require- 33 ments of this article, shall be subject to a civil penalty not to exceed 34 [the greater of two hundred fifty] FIFTEEN HUNDRED dollars for each 35 violation or five percent of the aggregate contract price specified in 36 the home improvement contract; provided, however, that in no event shall 37 the total penalty exceed twenty-five hundred dollars for each contract. 38 3. Mitigating factors; defenses. In an instance where the contractor 39 has been shown to have committed multiple violations of this article or 40 the provisions of section seventy-one-a of the lien law, the court shall 41 consider the following factors in assessing a civil penalty pursuant to 42 subdivision two of this section: the volume of business which the home 43 improvement contractor performs on an annual basis, the number of 44 contracts in violation, the actual financial loss or exposure to finan- 45 cial loss suffered by any owner as a result of the violations, and 46 whether the home improvement contractor acted in good faith or willfully 47 with respect to such violations. No home improvement contractor shall be 48 subject to the increased penalties provided by subdivision two of this 49 section if such contractor shows by a preponderance of the evidence that 50 the violation was not intentional and resulted from a bona fide error 51 made notwithstanding the maintenance of procedures reasonably adopted to 52 avoid such a violation. 53 4. ALL CIVIL PENALTIES COLLECTED PURSUANT TO THIS SECTION SHALL BE 54 DEPOSITED TO THE CREDIT OF THE HOME IMPROVEMENT TRUST FUND ESTABLISHED 55 PURSUANT TO SECTION NINETY-NINE-U OF THE STATE FINANCE LAW. A. 595 9 1 S 5. Section 775 of the general business law, as added by chapter 421 2 of the laws of 1987, is amended to read as follows: 3 S 775. Applicability. 1. This article shall not exempt any contractor 4 subject to its provisions from complying with any local law with respect 5 to the regulation of home improvement contractors, provided, however, 6 that after the effective date of this article, no political subdivision 7 may enact a local law inconsistent with the provisions of section seven 8 hundred seventy-one of this article. 9 2. SECTIONS SEVEN HUNDRED SEVENTY-A, SEVEN HUNDRED SEVENTY-B, SEVEN 10 HUNDRED SEVENTY-C, SEVEN HUNDRED SEVENTY-D, SEVEN HUNDRED SEVENTY-E, 11 SEVEN HUNDRED SEVENTY-F, SEVEN HUNDRED SEVENTY-G, SEVEN HUNDRED SEVEN- 12 TY-H, SEVEN HUNDRED SEVENTY-I, SEVEN HUNDRED SEVENTY-J AND SEVEN HUNDRED 13 SEVENTY-K OF THIS ARTICLE SHALL NOT APPLY TO HOME IMPROVEMENT CONTRAC- 14 TORS OPERATING WITHIN ANY CITY WITH A POPULATION OF ONE MILLION OR MORE. 15 3. ANY LOCAL LAW REGULATING HOME IMPROVEMENT CONTRACTORS THAT IS AT 16 LEAST AS STRICT AS THE PROVISIONS OF THIS ARTICLE SHALL NOT BE DEEMED TO 17 BE PREEMPTED BY THE PROVISIONS OF THIS ARTICLE. 18 S 6. The state finance law is amended by adding a new section 99-u to 19 read as follows: 20 S 99-U. HOME IMPROVEMENT TRUST FUND. 1. THERE IS HEREBY ESTABLISHED IN 21 THE JOINT CUSTODY OF THE STATE COMPTROLLER AND THE COMMISSIONER OF THE 22 DEPARTMENT OF TAXATION AND FINANCE A SPECIAL REVENUE FUND TO BE KNOWN AS 23 THE "HOME IMPROVEMENT TRUST FUND". SUCH FUND SHALL CONSIST OF ALL MONIES 24 COLLECTED PURSUANT TO PARAGRAPH (B) OF SUBDIVISION ONE OF SECTION SEVEN 25 HUNDRED SEVENTY-H, SECTION SEVEN HUNDRED SEVENTY-K, AND SECTION SEVEN 26 HUNDRED SEVENTY-THREE OF THE GENERAL BUSINESS LAW. 27 2. MONIES OF THE FUND SHALL BE AVAILABLE FOR THE PAYMENT OF OUTSTAND- 28 ING AWARDS TO AGGRIEVED CONSUMERS PURSUANT TO SECTION SEVEN HUNDRED 29 SEVENTY-H OF THE GENERAL BUSINESS LAW. 30 3. THE STATE CONSUMER PROTECTION BOARD SHALL ADOPT SUCH RULES AND 31 REGULATIONS AS MAY BE NECESSARY FOR THE ADMINISTRATION OF THE FUND. 32 S 7. This act shall take effect on the one hundred twentieth day after 33 it shall have become a law; provided that the state consumer protection 34 board and the department of state are authorized to promulgate any and 35 all rules and regulations and take any other measures necessary to 36 implement this act on its effective date on or before such date.