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  is
    11  entered  into on or after the first day of March, nineteen hundred nine-
    12  ty].
    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.
                                                                   LBD07774-02-3

        S. 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  and

        S. 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  member

        S. 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 and
     7  disability benefits coverage issued by an insurance carrier  in  a  form
     8  satisfactory to the chair of the workers' compensation board as provided
     9  for  in  section  fifty-seven of the workers' compensation law is effec-
    10  tive] 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.
feedback