BILL NUMBER: S4066A
SPONSOR: MANNION
 
TITLE OF BILL:
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
 
PURPOSE OF BILL:
The purpose of this bill is to reduce fraudulent acts by home improve-
ment contractors by requiring contractors to register with the state.
 
SUMMARY OF PROVISIONS:
Section 1 of this bill would establish the "Home Improvement Fraud
Prevention Act".
Section 2 of this bill would amend section 770 of the General Business
Law (GBL) to expand the definition of a "custom home" to include two-fa-
mily dwellings in addition to single-family residences.
Section 3 of this bill would amend Section 771 of the General Business
Law to require home improvement contractors to include their registra-
tion number in their written contracts.
Section 4 of this bill would amend Section 771-A of the General Business
Law to require home improvement contractors to obtain a certificate of
registration before doing business in New York.
Section 5 of this bill would add multiple new sections to the General
Business Law to require home improvement contractors to obtain a certif-
icate of registration in the State and would line out the necessary
requirements to obtain the registration, which includes being of good
moral character. Applicants must also provide information to the Secre-
tary of State such as their business address, the contact information of
the business and proof of insurance. Under the General Business Law a
state home improvement contractor board would be formed to oversee
multiple registration requirements created under this bill. It also
allows for the suspension, revocation, or refusal to renew registration.
Section 6 of this bill would increase civil penalties under the General
Business Law from $500 to $1000 for home improvement contractors who
fraudulently represent themselves to induce the signing of a contract.
Section 7 bill of this bill would amend paragraph (d) of subdivision 2
of section 155.05 of the Penal Law by adding language that would clarify
that partial performance of a promise, by itself, does not defeat a
larceny charge for disaster relief victims.
Section 8 of this bill would amend the General Municipal Law to require
proof of a valid registration for the issuance of building permits.
Section 9 of this bill would amend the Executive Law to create a central
state registry of home improvement contractors.
Section 10 of this bill provides that the effective date shall take
effect two years after it shall have become a law.
 
JUSTIFICATION:
Following the devastation of superstorm Sandy, unscrupulous contractors
exploited unsuspecting homeowners, promising to repair and mend their
homes and requesting hefty down payments. After receiving substantial
up-front payment, some contractors took the money and completely failed
to commence the work they were paid to perform or absconded after
performing just a small amount of work. As a result, hundreds of home-
owners were left with no remedy and had difficulty re-procuring the
funds needed to repair their homes ("Sandy Contractor Disputes Bedevil
LI Homeowners," Newsday, March 21, 2018).
Prosecutors in New York have seen an increasing amount of home improve-
ment fraud complaints, specifically in instances where public funds were
involved. Sadly, prosecutors have found that they have tremendous diffi-
culty prosecuting these cases, due to the high legal standard demanded
by statute in cases of larceny and fraud under a false promise. Specif-
ically, prosecutors must exclude to a moral certainty any hypothesis
other than the contractor's fraudulent intent, from the start, to fail
to perform the work. This standard is too stringent for disaster relief
victims, and it has unnecessarily prevented otherwise meritorious fraud
cases from going forward. Even the Department of Justice has found that
natural disasters increase opportunities for criminals to exploit people
during vulnerable times, which has led to forming the National Center
for Disaster Fraud.
To address this issue, the bill will create a special carve-out for
disaster relief victims from the larceny by false promise statute, since
they are a particularly vulnerable population, and will instead require
a lower mens rea standard. Meaning, if someone commits fraud against a
disaster relief victim, proof of partial performance of that false prom-
ise, by itself, will no longer prevent a reasonable jury from making a
fraud finding from all the facts and circumstances. This simplified
standard will allow prosecutors to successfully bring more contractor
fraud cases to court.
Furthermore, requiring home improvement contractors to register to do
business will allow for oversight of contractors in New York by requir-
ing the state to set forth requirements for doing business such as
ensuring contractors carry insurance, do not have a history of fraud,
and are of good moral character. A registration requirement also means
both the State and the homeowner have a record of the contractor in case
the contractor does not fulfill his or her contractual obligation to the
consumer. In the registration process, the contractor is required to
include all of their business contact information in their filing and
such information is important in instances where a contractor does not
finish a project and the consumer does not have the necessary tools or
resources to track them down.
 
PRIOR LEGISLATIVE HISTORY:
2021-22: S.1165-A (Kaminsky) - Passed Senate.
2019-20: S.6780-A (Kaminsky) - Referred to Consumer Protection.
 
FISCAL IMPLICATIONS:
To be determined.
 
EFFECTIVE DATE:
This act shall take effect two years after it shall have become a law.
Effective immediately, the addition, amendment, and/or repeal of any
rule or regulation necessary for the implementation of this act on its
effective date are authorized to be made and completed on or before such
effective date.

Statutes affected:
S4066: 770 general business law, 770(7) general business law, 771-a general business law, 772 general business law, 155.05 penal law, 155.05(2) penal law, 125 general municipal law
S4066A: 770 general business law, 770(7) general business law, 771-a general business law, 772 general business law, 155.05 penal law, 155.05(2) penal law, 125 general municipal law