Bill Text: NY S04066 | 2023-2024 | General Assembly | Amended
Bill Title: Establishes the home improvement fraud prevention act relating to the responsibilities of home improvement contractors and requiring home improvement contractors to register with the secretary of state.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced) 2024-01-03 - REFERRED TO CONSUMER PROTECTION [S04066 Detail]
Download: New_York-2023-S04066-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 4066--A 2023-2024 Regular Sessions IN SENATE February 2, 2023 ___________ Introduced by Sen. MANNION -- read twice and ordered printed, and when printed to be committed to the Committee on Consumer Protection -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the general business law, the penal law, the general municipal law and the executive law, in relation to the registration of home improvement contractors The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. This act shall be known and may be cited as the "home 2 improvement fraud prevention act". 3 § 2. Subdivision 7 of section 770 of the general business law, as 4 added by chapter 32 of the laws of 1989, is amended and a new subdivi- 5 sion 9 is added to read as follows: 6 7. "Custom home" means a new single family residence or a two family 7 dwelling designed for and occupied exclusively by two families living 8 separately to be constructed on premises owned of record by the purchas- 9 er at the time of contract, provided that such residence is intended for 10 residential occupancy by such purchaser [and the contract of sale is11entered into on or after the first day of March, nineteen hundred nine-12ty]. 13 9. "Subcontractor" means a person who enters into a contract with a 14 home improvement contractor or with a subcontractor of a home improve- 15 ment contractor to furnish home improvement services to the owner's real 16 property and has no direct contract with the owner. 17 § 3. Paragraph (a) of subdivision 1 of section 771 of the general 18 business law, as added by chapter 421 of the laws of 1987, is amended to 19 read as follows: 20 (a) The name, address, telephone number, registration number from the 21 department of state, and license number, if applicable, of the contrac- 22 tor. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD07774-02-3S. 4066--A 2 1 § 4. Section 771-a of the general business law, as added by chapter 2 626 of the laws of 2002, is amended to read as follows: 3 § 771-a. Responsibilities of home improvement contractors. No home 4 improvement contractor shall engage in any activity, transaction, or 5 course of business or pay or receive any fee, payment, money, or other 6 thing of value in connection with the financing of a home improvement 7 contract without fully disclosing such activity, transaction, or course 8 of business and any fees, payment, or other thing of value paid or to be 9 paid in connection therewith, [and] without having obtained the agree- 10 ment in writing from all parties to the transaction to such activity and 11 the payment therefor, and without obtaining a certificate of registra- 12 tion from the department of state. 13 § 5. The general business law is amended by adding five new sections 14 771-c, 771-d, 771-e, 771-f and 771-g to read as follows: 15 § 771-c. Responsibilities of home improvement contractors to obtain 16 certificates of registration. 1. It shall be unlawful for a person to 17 solicit, canvass, sell, perform, or obtain a home improvement contract 18 as a contractor from an owner without first obtaining a certificate of 19 registration issued by the secretary under the provisions of this arti- 20 cle. 21 2. Any person desiring to be a home improvement contractor in this 22 state shall be registered biennially pursuant to this article. Such 23 person shall file with the secretary of state an application to be 24 registered as a home improvement contractor. The department of state 25 shall examine each application and issue a certificate of registration 26 if the following criteria are satisfied: 27 (a) the applicant is eighteen years of age or older; 28 (b) the applicant is of good moral character as determined by the 29 secretary. In consideration of good moral character, the secretary may 30 consider whether the applicant has: (i) been convicted of a crime that, 31 in this state, is considered to be a crime involving moral turpitude or 32 is a felony; (ii) been found guilty of fraud or deceit in the practice 33 of home improvement; (iii) made a materially false, misleading, decep- 34 tive or fraudulent representation in the application or as a home 35 improvement contractor in any county or state; (iv) a history of consum- 36 er complaints reasonably related to failure to complete their work as a 37 home improvement contractor in any state; and (v) had a registration or 38 licensure as a home improvement contractor, or substantially equivalent 39 registration or licensure, suspended, revoked or denied, or been refused 40 renewal of registration or licensure as a home improvement contractor, 41 in any county or state; 42 (c) in the case of a person either registered or licensed as a home 43 improvement contractor pursuant to a local law, the applicant shall 44 forward such registration or license to the secretary together with any 45 additional information required by the department of state. After 46 review of the registration or license, the secretary shall issue a 47 registration to such applicant. The fee for such registration shall be 48 fifteen dollars, which may be passed on to the registered or licensed 49 home improvement contractor, and shall be paid to the department of 50 state by the municipality which issued the registration or license to 51 such person; and 52 (d) the applicant has paid the appropriate fees according to the 53 provisions of this section. 54 3. An application for a certificate of registration as a home improve- 55 ment contractor shall be filed with the secretary in such form andS. 4066--A 3 1 detail as the secretary shall prescribe, duly signed, and verified, 2 setting forth: 3 (a) the address of the business; 4 (b) the name and address of the owner or partner and if a corporation, 5 trade group or association, the names and addresses of the directors and 6 principal officers; 7 (c) the telephone number of the business; 8 (d) proof of workers' compensation insurance, disability benefit 9 coverage and liability and property damage insurance in an amount to be 10 set by the home improvement contract board; and 11 (e) any further information deemed necessary and prescribed by rule or 12 regulation by the secretary, except as otherwise provided herein. 13 4. A certificate of registration shall expire two years from the date 14 issued by the secretary and the fee for a certificate of registration 15 shall be three hundred dollars, except as provided in paragraph (c) of 16 subdivision two of this section. 17 § 771-d. Suspension, revocation or refusal to renew registration. 1. 18 The secretary may suspend, revoke or refuse to renew a registration for 19 substantial violations of any of the provisions of this article or for 20 any conduct that would have justified denial of a registration under 21 paragraph (b) of subdivision two of section seven hundred seventy-one-c 22 of this article. 23 2. The secretary may deny, suspend, revoke or refuse to renew a 24 certificate of registration only after proper notice and an opportunity 25 for a hearing as provided pursuant to the provisions of the state admin- 26 istrative procedure act. 27 § 771-e. State home improvement contractor board. 1. There is hereby 28 established within the department of state a state home improvement 29 contractor board which shall consist of the secretary of state, super- 30 intendent of financial services, and thirteen additional members. At 31 least five members shall be home improvement contractors, at least two 32 of whom shall have more than fifty percent of their business volume 33 requiring the issuance of building permits, each of whom, at the time of 34 appointment, shall be licensed and qualified as a home improvement 35 contractor under the laws of New York state and shall have been engaged 36 in the home improvement business in this state for a period of not less 37 than ten years prior to appointment. The remaining members shall be 38 "public members" who shall not be home improvement contractors. 39 2. The thirteen members shall be appointed as follows: seven members 40 shall be appointed by the governor, three of whom shall be home improve- 41 ment contractors and four of whom shall be public members; two members 42 shall be appointed by the temporary president of the senate, one of whom 43 shall be a home improvement contractor and one of whom shall be a public 44 member; two members shall be appointed by the speaker of the assembly, 45 one of whom shall be a home improvement contractor and one of whom shall 46 be a public member; one member shall be appointed by the minority leader 47 of the senate, who shall be either a home improvement contractor or a 48 public member; and one member shall be appointed by the minority leader 49 of the assembly, who shall be either a home improvement contractor or a 50 public member. 51 3. Each appointed member shall serve for a term of two years; at any 52 point during such term the appointed member may be removed by the person 53 who appointed such member. In the event that any members shall die or 54 resign during the term of office, a successor shall be appointed in the 55 same way and with the same qualifications as set forth above. A memberS. 4066--A 4 1 may be reappointed for successive terms but no member shall serve more 2 than ten years in his or her lifetime. 3 4. A majority of members currently serving on the board shall be 4 required in order to pass any resolution or to approve any matter before 5 the board. The secretary of state shall be the chairperson of the board. 6 The vice-chairperson and a secretary shall be elected from among the 7 members. A board member who fails to attend three consecutive meetings 8 shall forfeit his or her seat unless the secretary of state, upon writ- 9 ten request from the member, finds that the member should have been 10 excused from a meeting because of illness or death of a family member. 11 5. Members of the board shall receive no compensation other than 12 reimbursement for actual and necessary expenses. 13 6. The board shall meet no fewer than three times per year and at the 14 call of the secretary of state or a majority of the board. In addition 15 to regularly scheduled meetings of the board, there shall be at least 16 one public hearing each year in New York City and one public hearing 17 each year in Albany. At least fifteen days prior to the holding of any 18 public hearing pursuant to this subdivision, the board shall give public 19 notice of the hearing in a newspaper of general circulation in each area 20 where the public meeting is to be held. The purpose of these hearings 21 shall be to solicit from members of the public, suggestions, comments, 22 and observations about home improvement contractor regulation in New 23 York state. 24 § 771-f. Powers and duties of the state home improvement contractor 25 board. 1. The state home improvement contractor board shall have the 26 authority to prescribe the content for courses of study for the examina- 27 tion and education of persons registered under this article. The board 28 shall advise the secretary of state on policies governing the adminis- 29 tration of examinations pursuant to this article. 30 2. The board shall establish the rules and regulations governing the 31 approval by the secretary of state of providers to offer or conduct 32 courses required either for registration under this article or for the 33 satisfaction of the continuing education requirements. For purposes of 34 this section, a "provider" means a national, state or local trade asso- 35 ciation of homebuilders and/or remodelers or other relevant training 36 providers as approved by the board. 37 3. The board shall set the amount of workers' compensation and liabil- 38 ity and property insurance to be maintained by each specific type of 39 home improvement contractor based on their specific category of work. 40 Any workers' compensation insurance coverage rate shall be set in 41 compliance with any obligations imposed by the workers' compensation law 42 and the insurance law. 43 4. The board shall be authorized to develop a public education and 44 outreach campaign via written materials, brochures and the internet to 45 inform the general public of the home improvement fraud prevention act, 46 subject to approval by the secretary of state. 47 5. The board shall advise and assist the secretary of state in carry- 48 ing out the provisions and purposes of this article and make recommenda- 49 tions concerning the programs and activities of the department in 50 connection with the enforcement of this article. 51 6. The department of state shall have the power and duty to administer 52 and enforce the laws and regulations of the state relating to those 53 activities involving home improvement contractors for which registration 54 is required under this article and to instruct and require its agents to 55 refer prosecutions for unauthorized and unlawful practice.S. 4066--A 5 1 § 771-g. Continuing education. 1. As a prerequisite to recertification 2 or renewal of a home improvement contractor registration in the case of 3 any contractor who applies for one or more building permits, a home 4 improvement contractor as previously described shall present evidence 5 satisfactory to the department of having met the continuing education 6 requirements approved by the home improvement contractor board pursuant 7 to this article. 8 2. The basic continuing education requirement for recertification or 9 renewal of a license shall be the completion by the applicant, during 10 the immediately preceding term of registration, of not less than ten 11 classroom hours of instruction in courses or seminars which have 12 received the approval of the home improvement contractor board. Computer 13 based courses may be approved by the board so long as providers demon- 14 strate the ability to monitor and verify participation by the home 15 improvement contractor for the specified time periods. 16 3. A registration as a home improvement contractor who applies for one 17 or more building permits that has been revoked as a result of discipli- 18 nary action by the department shall not be reinstated unless the appli- 19 cant presents evidence of completion of the continuing education 20 required by this article. 21 § 6. Section 772 of the general business law, as added by chapter 421 22 of the laws of 1987, is amended to read as follows: 23 § 772. Penalty for fraud. 1. Any owner who is induced to contract for 24 a home improvement, in reliance on false or fraudulent written represen- 25 tations or false written statements, may sue and recover from such 26 contractor a penalty of [five hundred] one thousand dollars plus reason- 27 able attorney's fees, in addition to any damages sustained by the owner 28 by reason of such statements or representations. In addition, if the 29 court finds that the suit by the owner was without arguable legal merit, 30 it may award reasonable attorney's fees to the contractor. 31 2. Nothing in this article shall impair, limit, or reduce the statuto- 32 ry, common law or contractual duties or liability of any contractor. 33 § 7. Paragraph (d) of subdivision 2 of section 155.05 of the penal law 34 is amended to read as follows: 35 (d) By false promise. 36 (i) A person obtains property by false promise when, pursuant to a 37 scheme to defraud, he obtains property of another by means of a repre- 38 sentation, express or implied, that he or a third person will in the 39 future engage in particular conduct, and when he does not intend to 40 engage in such conduct or, as the case may be, does not believe that the 41 third person intends to engage in such conduct. 42 In any prosecution for larceny based upon a false promise, the defend- 43 ant's intention or belief that the promise would not be performed may 44 not be established by or inferred from the fact alone that such promise 45 was not performed. Such a finding may be based only upon evidence estab- 46 lishing that the facts and circumstances of the case are wholly consist- 47 ent with guilty intent or belief and wholly inconsistent with innocent 48 intent or belief, and excluding to a moral certainty every hypothesis 49 except that of the defendant's intention or belief that the promise 50 would not be performed; 51 (ii) Subparagraph (i) of this paragraph shall not apply to any prose- 52 cution involving a disaster relief victim. A disaster relief victim 53 shall mean a person who has suffered harm, property damage, or economic 54 loss related to relief efforts for a disaster as defined in section 55 twenty of the executive law.S. 4066--A 6 1 § 8. Section 125 of the general municipal law, as added by chapter 2 439 of the laws of 1998, is amended to read as follows: 3 § 125. Issuance of building permits. No city, town or village shall 4 issue a building permit without obtaining from the permit applicant 5 either: 6 1. proof [duly subscribed that workers' compensation insurance and7disability benefits coverage issued by an insurance carrier in a form8satisfactory to the chair of the workers' compensation board as provided9for in section fifty-seven of the workers' compensation law is effec-10tive] of a valid registration pursuant to article thirty-six-A of the 11 general business law so long as such registration requires proof of 12 workers' compensation insurance and disability coverage, and proof of 13 liability and property damage insurance; or 14 2. an affidavit that such permit applicant has not engaged and does 15 not intend to engage an employer or any employees as those terms are 16 defined in section two of the workers' compensation law to perform any 17 work relating to such building permit. 18 § 9. The executive law is amended by adding a new section 99-a to read 19 as follows: 20 § 99-a. Central state registry of home improvement contractors. 1. 21 The department shall collect information from municipalities which 22 register and/or license home improvement contractors and also directly 23 from home improvement contractors, a registry of all home improvement 24 contractors and applicants for registration cards in the state. Such 25 registry shall include but not be limited to, with respect to each home 26 improvement contractor or applicant as the case may be, their name, 27 address, date of birth, telephone number, email address, and registra- 28 tion and/or license number if applicable, whether the foregoing has been 29 issued, denied, suspended or revoked or has expired, and such other 30 information as may in the discretion of the secretary be appropriate. 31 2. Any municipality which licenses or registers home improvement 32 contractors shall provide such information as requested by the depart- 33 ment of state for purposes of this section. 34 § 10. This act shall take effect two years after it shall have become 35 a law. Effective immediately, the addition, amendment, and/or repeal of 36 any rule or regulation necessary for the implementation of this act on 37 its effective date are authorized to be made and completed on or before 38 such effective date.