Bill Summary – FastDemocracy

General Assembly                      Raised Bill No. 182
       February Session, 2020               LCO No. 1678
     Referred to Committee on GENERAL LAW
     Introduced by:
       (GL)
 AN ACT CONCERNING NEW HOME CONSTRUCTION
 CONTRACTORS AND HOME IMPROVEMENT CONTRACTORS.
 Be it enacted by the Senate and House of Representatives in General
 Assembly convened:
       Section 1. Section 20-417b of the general statutes is repealed and the
    following is substituted in lieu thereof (Effective July 1, 2021):
      (a) No person shall engage in the business of new home construction
   or hold himself or herself out as a new home construction contractor
   unless such person has been issued a certificate of registration by the
   commissioner in accordance with the provisions of sections 20-417a to
   20-417j, inclusive, as amended by this act. No new home construction
   contractor shall be relieved of responsibility for the conduct and acts of
   its agents, employees or officers by reason of such new home
   construction contractor's compliance with the provisions of sections 20-
   417a to 20-417j, inclusive, as amended by this act.
     (b) Any person seeking a certificate of registration shall apply to the
   commissioner, [in writing] online, on a form provided by the
   commissioner. The application shall include (1) the applicant's name,
   business street address and business telephone number, (2) the identity
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 of the insurer that provides the applicant with insurance coverage for
 liability, (3) if such applicant is required by any provision of the general
 statutes to have workers' compensation coverage, the identity of the
 insurer that provides the applicant with such workers' compensation
 coverage, [and] (4) if such applicant is required by any provision of the
 general statutes to have an agent for service of process, the name and
 address of such agent, and (5) proof of general liability insurance
 coverage in an amount not less than six hundred thousand dollars,
 demonstrated by providing the policy number and business name of the
 insurance provider. Each such application shall be accompanied by a fee
 of [two] one hundred [forty] twenty dollars, except that no such
 application fee shall be required if such person has paid the registration
 fee required under section 20-421, as amended by this act, during any
 year in which such person's registration as a new home construction
 contractor would be valid.
   (c) Certificates issued to new home construction contractors shall not
 be transferable or assignable, except when the holder of a certificate,
 who is engaged in the business, changes the name or form of such
 business.
    (d) All certificates issued under the provisions of sections 20-417a to
 20-417j, inclusive, as amended by this act, shall expire [biennially]
 annually. The fee for renewal of a certificate shall be the same as the fee
 charged for an original application, except that no renewal fee is due if
 a person seeking renewal of a certificate has paid the registration fee
 under section 20-427, as amended by this act, during any year in which
 such person's registration as a new home construction contractor would
 be valid.
   (e) All certificates issued under the provisions of this chapter shall
 expire [biennially] annually on the thirty-first day of March. [and may
 be renewed by the applicant not later than six months after the
 expiration date of such certificate.] The fee for renewal of a certificate
 shall be the same as charged for the original application. [but shall be
 charged on a pro rata basis, based upon the application date for such
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 renewal.]
   (f) Failure to receive a notice of expiration or a renewal application
 shall not exempt a new home construction contractor from the
 obligation to renew.
    (g) The holder of a certificate of registration issued by the
 commissioner in accordance with the provisions of sections 20-417a to
 20-417j, inclusive, as amended by this act, may opt to engage in home
 improvement, as defined in section 20-419, as amended by this act. If a
 new home construction contractor does opt to engage in such home
 improvement, such new home construction contractor shall first notify
 the commissioner in writing and shall pay to the Department of
 Consumer Protection all the Home Improvement Guaranty Fund fees
 due pursuant to section 20-432, as amended by this act.
    Sec. 2. (NEW) (Effective July 1, 2021) (a) (1) A contract, as defined in
 section 20-417a of the general statutes, shall not be valid or enforceable
 against a consumer unless it: (A) Is in writing, (B) is signed by the new
 home construction contractor and the consumer, (C) contains the entire
 agreement between the new home construction contractor and the
 consumer, (D) contains the date of the transaction, (E) contains the name
 and address of the new home construction contractor and the
 contractor's registration number, (F) contains a starting date and
 completion date, (G) is entered into by a registered new home
 construction contractor, and (H) includes a provision disclosing each
 corporation, limited liability company, partnership, sole proprietorship
 or other legal entity, which is or has been a new home construction
 contractor pursuant to the provisions of chapter 399a of the general
 statutes, in which the owner or owners of the new home construction
 contractor are or have been a shareholder, member, partner or owner
 during the previous five years.
    (2) Each change in the terms and conditions of a contract, as defined
 in section 20-417a of the general statutes, shall be in writing and shall be
 signed by the new home construction contractor and the consumer,
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 except that the commissioner may, by regulation, dispense with the
 necessity for complying with the provisions of this subdivision.
    (b) The new home construction contractor shall provide and deliver
 to the consumer, without charge, a completed copy of the new home
 construction contract at the time such contract is executed.
   (c) The commissioner may, by regulation, require the inclusion of
 additional contractual provisions for contracts, as defined in section 20-
 417a of the general statutes.
    (d) Each contract, as defined in section 20-417a of the general statutes,
 in which the consumer agrees to repay the new home construction
 contractor an amount loaned or advanced to the consumer by the
 contractor for the purposes of paying for the goods and services or real
 estate provided in such contract, or which contains a finance charge, (1)
 shall set forth the information required to be disclosed pursuant to the
 Truth-in-Lending Act, sections 36a-675 to 36a-685, inclusive, of the
 general statutes, (2) shall allow the consumer to pay off in advance the
 full amount due and obtain a partial refund of any unearned finance
 charge, and (3) may contain a finance charge set at a rate of not more
 than the rate allowed for loans pursuant to section 37-4 of the general
 statutes. As used in this subsection, "finance charge" means the amount
 in excess of the cash price for goods, services and real estate under the
 new home construction contract to be paid by the consumer for the
 privilege of paying the contract price in installments over a period of
 time.
    (e) Nothing in this section shall preclude a new home construction
 contractor who has complied with subparagraphs (A), (B), (F) and (G)
 of subdivision (1) of subsection (a) of this section from the recovery of
 payment for work performed based on the reasonable value of services
 which were requested by the consumer, provided the court determines
 that it would be inequitable to deny such recovery.
    Sec. 3. Section 20-417i of the general statutes is repealed and the
 following is substituted in lieu thereof (Effective July 1, 2021):
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   (a) The commissioner shall establish and maintain the New Home
 Construction Guaranty Fund.
   (b) Each person who receives a certificate pursuant to sections 20-
 417a to 20-417j, inclusive, as amended by this act, shall pay a fee of four
 hundred eighty dollars biennially to the fund. Such fee shall be payable
 with the fee for an application for a certificate or renewal of a certificate.
    (c) (1) For fiscal years commencing on or after July 1, 2003, payments
 received under subsection (b) of this section shall be credited to the New
 Home Construction Guaranty Fund until the balance in the fund equals
 seven hundred fifty thousand dollars. Annually, if the balance in the
 fund exceeds seven hundred fifty thousand dollars, the first three
 hundred thousand dollars of the excess shall be deposited in the
 consumer protection enforcement account established in section 21a-8a.
 On June 1, 2004, and each June first thereafter, if the balance in the fund
 exceeds seven hundred fifty thousand dollars, the excess shall be
 deposited in the General Fund.
    (2) Any money in the New Home Construction Guaranty Fund may
 be invested or reinvested in the same manner as funds of the state
 employees retirement system and the interest arising from such
 investments shall be credited to the fund.
    (d) Beginning October 1, 2000, whenever a consumer obtains a court
 judgment, order or decree against any new home construction
 contractor holding a certificate or who has held a certificate under
 sections 20-417a to 20-417j, inclusive, as amended by this act, within [the
 past] two years of the date of entering into the contract with the
 consumer, for loss or damages sustained by reason of any violation of
 the provisions of sections 20-417a to 20-417j, inclusive, as amended by
 this act, by a person holding a certificate under said sections, such
 consumer may, upon the final determination of, or expiration of time for
 taking, an appeal in connection with any such judgment, order or
 decree, apply to the commissioner for an order directing payment out
 of the New Home Construction Guaranty Fund of the amount, not
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 exceeding thirty thousand dollars, unpaid upon the judgment, order or
 decree for actual damages and costs taxed by the court against such
 contractor, exclusive of punitive damages. The application shall be
 made on forms provided by the commissioner and shall be
 accompanied by a copy of the court judgment, order or decree obtained
 against the new home construction contractor together with a [notarized
 affidavit,] statement signed and sworn to by the consumer, affirming
 that the consumer has: (1) Complied with all the requirements of this
 subsection; (2) obtained a judgment, order or decree stating the amount
 of the judgment, order or decree and the amount owing on the
 judgment, order or decree at the date of application; and (3) made a
 good faith effort to satisfy any such judgment, order or decree in
 accordance with the provisions of chapter 906 which effort may include
 causing to be issued a writ of execution upon such judgment, order or
 decree but the officer executing the same has made a return showing
 that no bank accounts or personal property of such contractor liable to
 be levied upon in satisfaction of the judgment, order or decree could be
 found, or that the amount realized on the sale of them or of such of them
 as were found, under the execution, was insufficient to satisfy the actual
 damage portion of the judgment, order or decree or stating the amount
 realized and the balance remaining due on the judgment, order or
 decree after application on the judgment, order or decree of the amount
 realized, except that the requirements of this subdivision shall not apply
 to a judgment, order or decree obtained by the consumer in small claims
 court. A true and attested copy of such executing officer's return, when
 required, shall be attached to such application. [and affidavit.]
 Whenever the consumer satisfies the commissioner or the
 commissioner's designee that it is not practicable to comply with the
 requirements of subdivision (3) of this subsection and that the consumer
 has taken all reasonable steps to collect the amount of the judgment,
 order or decree or the unsatisfied part of the judgment, order or decree
 and has been unable to collect the same, the commissioner or the
 commissioner's designee may, in the commissioner's or the
 commissioner's designee's discretion, dispense with the necessity for
 complying with such requirement. No application for an order directing
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 payment out of the fund shall be made later than two years from the
 final determination of, or expiration of time for taking, an appeal of such
 court judgment, order or decree and no such application shall be for an
 amount in excess of thirty thousand dollars.
    (e) Upon receipt of such application together with such copy of the
 court judgment, order or decree, [notarized affidavit] statement and,
 except as otherwise provided in subsection (d) of this section, true and
 attested copy of the executing officer's return, the commissioner or the
 commissioner's designee shall inspect such documents for their veracity
 and upon a determination that such documents are complete and
 authentic and that the consumer has not been paid, the commissioner
 shall order payment out of the New Home Construction Guaranty Fund
 of the amount not exceeding thirty thousand dollars unpaid upon the
 judgment, order or decree for actual damages and costs taxed by the
 court against the contractor, exclusive of punitive damages.
    (f) Beginning October 1, 2000, whenever a consumer is awarded an
 order of restitution against any new home construction contractor for
 loss or damages sustained as a result of any violation of the provisions
 of sections 20-417a to 20-417j, inclusive, as amended by this act, by a
 person holding a certificate or who has held a certificate under said
 sections within [the past] two years of the date of entering into the
 contract with the consumer, in (1) a proceeding brought by the
 commissioner pursuant to subsection (h) of this section or subsection (d)
 of section 42-110d, (2) a proceeding brought by the Attorney General
 pursuant to subsection (a) of section 42-110m or subsection (d) of section
 42-110d, or (3) a criminal proceeding pursuant to section 20-417e, such
 consumer may, upon the final determination of, or expiration of time for
 taking, an appeal in connection with any such order of restitution, apply
 to the commissioner for an order directing payment out of the New
 Home Construction Guaranty Fund of the amount not exceeding thirty
 thousand dollars unpaid upon the order of restitution. The
 commissioner may issue such order upon a determination that the
 consumer has not been paid.
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    (g) Before the commissioner may issue any order directing payment
 out of the New Home Construction Guaranty Fund to a consumer
 pursuant to subsection (e) or (f) of this section, the commissioner shall
 first notify the new home construction contractor of the consumer's
 application for an order directing payment out of the fund and of the
 new home construction contractor's right to a hearing to contest the
 disbursement in the event that such contractor has already paid the
 consumer. Such notice shall be given to the new home construction
 contractor not later than fifteen days after receipt by the commissioner
 of the consumer's application for an order directing payment out of the
 fund. If the new home construction contractor requests a hearing, in
 writing, by certified mail not later than fifteen days after receiving the
 notice from the commissioner, the commissioner shall grant such
 request and shall conduct a hearing in accordance with the provisions
 of chapter 54. If the commissioner does not receive a written request for
 a hearing by certified mail from the new home construction contractor
 on or before the fifteenth day from the contractor's receipt of such notice,
 the commissioner shall conclude that the consumer has not been paid,
 and the commissioner shall issue an order directing payment out of the
 fund for the amount not exceeding thirty thousand dollars unpaid upon
 the judgment, order or decree for actual damages and costs taxed by the