1Providing for the regulation of home construction contracts and
2for the registration of certain home builders; prohibiting
3certain acts; providing for penalties; establishing the Home
4Builder Guaranty Fund; and providing for claims against the
5fund.

6TABLE OF CONTENTS

7Section 1. Short title.

8Section 2. Definitions.

9Section 3. Registration of home builders.

10Section 4. Procedures for registration as home builder.

11Section 5. Application fees.

12Section 6. Renewal of certificate.

13Section 7. Proof of registration.

14Section 8. Home construction contracts.

15Section 9. Home construction fraud.

16Section 10. Prohibited acts.

17Section 11. Unfair Trade Practices and Consumer Protection Law.

18Section 12. Consumer information pamphlet.

19Section 13. Regulations.

1Section 14. Preemption of local registration.

2Section 15. Home Builder Guaranty Fund.

3Section 16. Claims against fund.

4Section 17. Procedure for submitting claims.

5Section 18. Reimbursement of fund.

6Section 19. Notice of suspension or revocation.

7Section 20. Exemptions.

8Section 21. Building standards.

9Section 22. Repeal.

10Section 23. Effective date.

11The General Assembly of the Commonwealth of Pennsylvania
12hereby enacts as follows:

13Section 1. Short title.

14This act shall be known and may be cited as the New Home
15Construction Consumer Protection Act.

16Section 2. Definitions.

17The following words and phrases when used in this act shall
18have the meanings given to them in this section unless the
19context clearly indicates otherwise:

20"Arbitration clause." A process in which a neutral
21arbitrator or panel of neutral arbitrators is engaged by the
22parties to settle a dispute between a home builder and a
23consumer.

24"Assurance of Voluntary Compliance." As defined in section 5
25of the act of December 17, 1968 (P.L.1224, No.387), known as the
26Unfair Trade Practices and Consumer Protection Law.

27"Bureau." The Bureau of Consumer Protection in the Office of
28Attorney General.

29"Certificate." A certificate of registration as a home
30builder, issued by the Bureau of Consumer Protection, which

1contains a registration number assigned by the Bureau of
2Consumer Protection.

3"Consumer." A person who enters into a home construction
4contract with a home builder. The term also includes a person
5who has entered into a contract with a home builder to purchase
6a new home but who has not yet settled on the purchase of the
7new home.

8"Fund." The Home Builder Guaranty Fund established in
9section 15.

10"Home builder."

11(1) A person who enters into a home construction
12contract with a consumer. The term includes an installer or
13retailer of a mobile home or industrialized housing.

14(2) The term does not include the following:

15(i) A real estate developer who does not construct
16homes.

17(ii) A financial institution that lends funds for
18the construction or purchase of residential dwellings in
19this Commonwealth.

20(iii) The manufacturer of industrialized housing or
21mobile homes, unless the manufacturer also installs
22mobile homes or industrialized housing.

23"Home construction contract." An agreement between a home
24builder and a consumer for the construction of a new home which
25includes all agreements for labor, services and materials to be
26furnished and performed under the contract.

27"New home." A newly constructed residential dwelling unit
28and the fixtures and structures that are made a part of the unit
29at the time of construction. The term includes the following:

30(1) A residential building as defined by the act of

1November 10, 1999 (P.L.491, No.45), known as the Pennsylvania
2Construction Code Act.

3(2) Industrialized housing as defined by the act of May 
411, 1972 (P.L.286, No.70), known as the Industrialized
5Housing Act.

6(3) A mobile home as defined in 75 Pa.C.S. § 102
7(relating to definitions).

8"Person." An individual, partnership, limited partnership,
9limited liability company, joint venture or corporation.

10"Special order material." Any material, product or equipment
11that is not a stock item and must be specially ordered from the
12factory or distributor and which is produced or processed for a
13specific home construction contract. Special order materials are
14not returnable by the home builder for a refund or credit and
15have no usefulness for other home construction contracts because
16they are specially ordered for a specific home construction
17contract.

18"Specifications." The plans, detailed drawings, lists of
19materials, stated allowances or other methods customarily used
20in the home building industry as a whole to describe with
21particularity the work, workmanship, materials and quality of
22materials for each new home.

23Section 3. Registration of home builders.

24(a) General rule.--No person shall hold himself out as a
25home builder nor shall a person build a new home without first
26registering with the bureau as provided for in this act.

27(b) Public access to registration information.--The bureau
28shall maintain a toll-free telephone number from which a
29consumer can obtain information as to whether a home builder is
30registered with the bureau pursuant to this act, as well as

1information that may be obtained on the bureau's website.

2(c) Confidentiality of personal information.--The bureau
3shall create a policy for the disclosure of personal information
4to the public. The bureau may not disclose to the public a home
5builder's Social Security number, driver's license number or any
6confidential information prohibited by law from being disclosed.

7(d) No dual licenses.--A person registered or required to be
8registered as a home builder under this act shall not be
9eligible to obtain or renew a license under any of the
10following:

11(1) 7 Pa.C.S. Ch. 61 (relating to mortgage loan industry
12licensing and consumer protection).

13(2) The act of December 22, 1989 (P.L.687, No.90), known
14as the Mortgage Bankers and Brokers and Consumer Equity
15Protection Act.

16(e) Liability.--No business entity registered pursuant to
17this act shall be relieved of responsibility under this act for
18the conduct and acts of its agents, employees, officers or
19directors, nor shall any person be relieved of responsibility
20under this act by reason of his employment or relationship with
21such business entity.

22(f) Effects of unregistered status.--No unregistered home
23builder shall have standing to sue, countersue or raise a
24defense of nonpayment in any dispute arising from a home
25construction contract. No unregistered home builder may file a
26mechanic's lien with respect to the construction of a new home.

27Section 4. Procedures for registration as home builder.

28(a) Application.--

29(1) A person shall apply to the bureau in writing, or
30electronically via a secure Internet connection if permitted

1by the bureau, on a form provided by the bureau. The
2application shall include the following information:

3(i) For an individual applicant, all of the
4following:

5(A) Name.

6(B) Date of birth.

7(C) Home address and home telephone number.

8(D) Driver's license number or an identification
9card issued by the state in which the individual
10resides.

11(E) Business name, address and telephone number.

12(F) Federal employer identification number, if
13available.

14(G) Social Security number.

15(H) All prior business names and addresses of
16home construction businesses operated by the
17individual.

18(ii) For a general partnership applicant, all of the
19following:

20(A) Name of each partner.

21(B) Date of birth of each partner.

22(C) Home address and home telephone number of
23each partner.

24(D) Driver's license number or an identification
25card issued by the state in which the partner
26resides, of each partner.

27(E) Partnership name, address and telephone
28number.

29(F) Federal employer identification number, if
30available.

1(G) Social Security number of each partner.

2(H) All prior business names and addresses of
3home construction businesses operated by each
4partner.

5(iii) For a corporation, limited liability company
6or limited partnership, all of the following:

7(A) Name of each officer, manager and general
8partner.

9(B) Date of birth of each officer, manager and
10general partner.

11(C) Home address and home telephone number of
12each officer, manager and general partner.

13(D) Driver's license number or an identification
14card issued by the state in which the individual
15resides, of each officer, manager and general
16partner.

17(E) Entity's name, address and telephone number.

18(F) Federal employer identification number, if
19available.

20(G) Social Security number of each officer,
21manager and general partner.

22(H) The name of each director or each individual
23holding greater than a 5% interest in the entity.

24(iv) For an out-of-State corporation, limited
25liability or limited partnership, the name and address of
26the entity's resident agent or registered office provider
27within this Commonwealth and any registration number or
28license number issued to the entity by its home state or
29political subdivision of such other state, if applicable.

30(v) For a joint venture applicant, the name, address

1and telephone number of the joint venture, as well as the
2name, address and telephone number of each party to the
3joint venture. When the parties to a joint venture
4include business entities, the information required from
5such entities pursuant to subsection (b) shall also be
6provided.

7(vi) A complete description of the nature of the
8contracting business of the applicant.

9(vii) A statement whether:

10(A) The individual or individuals making
11application, even if doing so as part of a business
12entity application, has ever been convicted of a
13criminal offense related to a home building
14transaction, fraud, theft, a crime of deception or a
15crime involving fraudulent business practices, as
16well as a statement whether the applicant has ever
17filed a petition in bankruptcy or within the last ten
18years received a final civil judgment entered against
19the applicant or businesses in which the applicant
20held an interest that was related to a home building
21transaction.

22(B) The applicant's certificate or a similar
23certificate or license issued by any other state or
24political subdivision thereof has ever been revoked
25or suspended pursuant to an order issued by a court
26of competent jurisdiction and, if so, the current
27status of the certificate or similar certificate or
28license. The statement required by this clause shall
29include the same information with respect to any
30other business in which the person making application

1has or has ever had an interest.

2(viii) Whether within the last ten years the
3applicant has ever been suspended or debarred from
4participating in any Federal, State or local program
5through which public hearing or other assistance is
6provided to consumers for home building.

7(ix) Proof of general liability insurance covering
8personal injury and property damage caused by the work of
9a home builder.

10(2) Information requested in paragraph (1)(i), (ii),
11(iii), (iv) and (v) shall be for a ten-year period, prior to
12the time of registration. The applicant shall provide
13information prior to the last ten years or as further
14clarification of the information provided, if the bureau
15requests such information.

16(b) Reporting of multiple registrations or licensures.--Any
17registered home builder in this Commonwealth who is registered
18or licensed as a home builder in any other state or political
19subdivision thereof shall report this information to the bureau
20on the initial and each biennial renewal application. Any
21disciplinary action taken in such other jurisdiction shall be
22reported to the bureau on the initial registration application
23or, if such action occurred subsequent to submission of an
24initial application, on the biennial registration application or
25within 90 days of final disposition of the action, whichever is
26sooner. Multiple registrations or licensures shall be noted by
27the bureau on the home builder's registration, and such state or
28political subdivision thereof shall be notified by the bureau of
29any disciplinary actions taken against the home builder in this
30Commonwealth.

1(c) Change of information.--A home builder shall provide the
2bureau written notice of any change in the information submitted
3under this section within ten business days after the change is
4effective.

5Section 5. Application fees.

6Each application for a home builder certificate shall be
7accompanied by a fee of $300. After completion of the
8application and payment of the fee, the bureau shall issue the
9home builder a certificate identifying the name of the
10individual builder, name and address of the business and a
11registration number.

12Section 6. Renewal of certificate.

13(a) General rule.--A home builder that meets the
14requirements of subsection (c) may obtain renewal of a
15registration before the registration expires for an additional
16two-year term. Once expired, a registration may not be renewed.

17(b) Renewal application.--At least 60 days before a home
18builder's registration expires, the bureau shall mail to the
19home builder the following:

20(1) a renewal application form; and

21(2) a notice that states the date on which the current
22registration expires and the date by which the bureau must
23receive the renewal application for a renewal to be issued
24and mailed before the registration expires.

25(c) Renewal procedure.--The bureau shall renew the
26registration of each home builder that:

27(1) Would qualify for an initial registration.

28(2) Submits to the bureau a renewal application on the
29form provided by the bureau.

30(3) Pays to the bureau a nonrefundable renewal fee based

1on the number of building permits for the construction of new
2homes issued to the registrant in the preceding calendar year
3as follows:

4(i) Ten or fewer homes, $150.

5(ii) Eleven or more new homes, $300.

6Section 7. Proof of registration.

7A home builder shall include its registration number in all
8advertisements, including business cards, distributed within
9this Commonwealth and on all contracts, estimates and proposals
10with consumers of home construction services in this
11Commonwealth. A home builder shall display its registration
12number on all properties at which he is performing services
13pursuant to a home construction contract.

14Section 8. Home construction contracts.

15(a) Requirements.--No home construction contract shall be
16valid or enforceable against a consumer unless it:

17(1) is in writing and legible and contains the
18registration number of the home builder;

19(2) is signed by all of the following:

20(i) the consumer or his agent; and

21(ii) the home builder or his agent;

22(3) contains the entire agreement between the consumer
23and the home builder, including attached copies of all
24required notices;

25(4) contains the date the contract was signed;

26(5) contains the name, address and telephone number of
27the home builder. For purposes of this paragraph, a post
28office box number alone shall not be considered an address;

29(6) contains the approximate starting date and
30completion date for the work described in the contract;

1(7) includes a description of the work to be performed,
2the materials to be used and a set of specifications that
3cannot be changed without a written change order signed by
4the consumer and the home builder;

5(8) includes the total sale price due under the
6contract;

7(9) includes the amount of any down payment plus any
8amount advanced for the purchase of special order materials.
9The amount of the down payment and the cost of the special
10order materials must be listed separately;

11(10) includes the names, addresses and telephone numbers
12of all subcontractors on the project known at the date of
13signing the contract. For the purposes of this paragraph, a
14post office box number alone shall not be considered an
15address;

16(11) except as provided in section 14, provides that the
17home builder agrees to maintain liability insurance covering
18personal injury in an amount not less than $300,000 and
19insurance covering property damage caused by the work of a
20home builder in an amount not less than $300,000 and
21identifies the current amount of insurance coverage
22maintained at the time of signing the contract;

23(12) includes the toll-free telephone number under
24section 3(b) and a notice of the right of rescission under
25subsection (b); and

26(13) is accompanied by a copy of the consumer
27information pamphlet established by the bureau and supplied
28to the home builder pursuant to section 12.

29(b) Right of rescission.--A person signing a home
30construction contract, except as provided in the emergency

1provisions of section 7 of the act of December 17, 1968 
2(P.L.1224, No.387), known as the Unfair Trade Practices and
3Consumer Protection Law, shall be permitted to rescind the
4contract without penalty regardless of where the contract was
5signed, within three business days following the date of
6signing. A home construction contract that does not contain a
7notice of this right of rescission is voidable by the consumer.

8(c) Copy to be provided.--A home builder shall provide and
9deliver to the consumer, without charge, a completed copy of the
10home building contract at the time the contract is executed.

11(d) Arbitration clause.--Nothing in this act shall preclude
12the court from setting aside an arbitration clause on any basis
13permitted under Pennsylvania law. If the contract contains an
14arbitration clause, it shall meet the following requirements or
15be deemed void by the court upon motion of either party, filed
16prior to the commencement of arbitration:

17(1) the text of the clause must be in capital letters;

18(2) the text shall be printed in 12-point boldface type,
19and the arbitration clause must appear on a separate page
20from the rest of the contract;

21(3) the clause shall contain a separate line for each of
22the parties to indicate their assent to be bound thereby;

23(4) the clause shall not be effective unless both
24parties have assented as evidenced by signature and date,
25which shall be the date on which the contract was executed;

26(5) the clause shall state clearly whether the decision
27of the arbitration is binding on the parties or may be
28appealed to the court of common pleas; and

29(6) the clause shall state whether the facts of the
30dispute, related documents and the decision are confidential.

1(e) Voidable clause.--If a home construction contract
2contains any of the following clauses, the home construction
3contract shall be voidable by the consumer:

4(1) A hold harmless clause in favor of the home builder.

5(2) A waiver of Federal, State or local health, life,
6safety or building code requirements.

7(3) A confession of judgment clause against the
8consumer.

9(4) A waiver by the consumer of any right to a jury
10trial in any action brought by or against the consumer.

11(5) An assignment by the consumer of or order for
12payment of wages or other compensation by the consumer for
13services performed by the home builder.

14(6) A provision by which the consumer agrees not to
15assert any claim or defense arising out of the contract.

16(7) A provision that the home builder shall be awarded
17attorney fees and costs.

18(8) A clause by which the consumer relieves the home
19builder from liability for acts committed by the home builder
20or the home builder's agents in the collection of any
21payments or in repossession of any goods.

22(9) A waiver by the consumer of any rights provided
23under this act.

24(10) A provision providing for the automatic or
25recurring renewal of any provisions of the agreement, unless:

26(i) the contract establishes a procedure by which
27the consumer can choose not to renew the provision or
28provisions, thereby avoiding any new fees or charges, by
29providing written notice to the home builder via first
30class mail postmarked no later than three business days

1prior to any renewal;

2(ii) such procedure is clearly and conspicuously
3disclosed in the agreement; and

4(iii) the contract includes a provision requiring
5the home builder to notify the consumer of any automatic
6or recurring renewal, and the consumer's option to cancel
7such renewal, by mail not earlier than 20 days and not
8later than ten days prior to the date of any such
9renewal.

10(f) Home builder's recovery right.--Nothing in this section
11shall preclude a home builder who has complied with subsection
12(a) from the recovery of payment for work performed based on the
13reasonable value of services which were requested by the
14consumer if a court determines that it would be inequitable to
15deny such recovery.

16Section 9. Home construction fraud.

17(a) Offense defined.--A person commits the offense of home
18construction fraud if the person intentionally or knowingly:

19(1) makes a materially false statement to induce,
20encourage or solicit a person to enter into any written or
21oral agreement for home building services or to justify an
22increase in the previously agreed-upon price;

23(2) receives any advance payment for home building
24services and fails to perform or provide such services when
25specified in the contract taking into account any force
26majeure or unforeseen labor strike that would extend the time
27frame or unless extended by agreement with the consumer and
28fails to return the payment received for such services which
29were not provided by that date;

30(3) while soliciting a person to enter into an agreement

1for home building services, misrepresents or conceals the
2home builder's real name, the name of the home building
3business, liability insurance information or home builder's
4business address or any other identifying information;

5(4) subsequent to entering into an agreement for home
6building services, changes the name of the home building
7business, liability insurance information, the home builder's
8address or any other identifying information without advising
9the consumer in writing within ten days following any such
10change;

11(5) misrepresents an item as a special order material or
12misrepresents the cost of the special order material;

13(6) alters a home construction contract, mortgage,
14promissory note or other document incident to building a new
15home without the consent of the consumer; or

16(7) directly or indirectly publishes a false or
17deceptive advertisement in violation of State law governing
18advertising about home building.

19(b) Grading.--

20(1) A violation of subsection (a)(1), (2), (3), (4), (5)
21or (6) constitutes a felony of the third degree.

22(2) Where a person commits an offense under subsection
23(a) and the victim is 60 years of age or older, the grading
24of the offense shall be one grade higher than specified in
25paragraph (1). This paragraph shall not be applicable to a
26person whose sentence would be enhanced pursuant to paragraph
27(3).

28(3) Notwithstanding any other provisions of this
29section, where a person commits a second or subsequent
30offense described in subsection (a), the offense will

1constitute a felony of the second degree. For this paragraph
2to be applicable, the second or subsequent offense must have
3occurred after the first conviction. Paragraph (2) shall not
4be applicable to a person whose sentence would be enhanced
5pursuant to this paragraph.

6(4) In addition to any other penalty imposed by this
7act, the court may revoke or suspend the certificate of
8registration issued under section 5. At the time of
9sentencing, the court shall state the reasons for such
10revocation or suspension. A person whose registration has
11been revoked or suspended may petition the court of original
12jurisdiction for reinstatement after a period of five years
13from the date of revocation or suspension, or as specified in
14the court's order.

15(c) Jurisdiction.--

16(1) The district attorneys of the several counties shall
17have the authority to investigate and to institute criminal
18proceedings for any violation of this section.

19(2) In addition to the authority conferred upon the
20Attorney General by the act of October 15, 1980 (P.L.950, 
21No.164), known as the Commonwealth Attorneys Act, the
22Attorney General shall have the authority to investigate and
23institute criminal proceedings for any violation of this
24section or any series of such violations involving more than
25one county of this Commonwealth or involving any county of
26this Commonwealth and another state. No person charged with a
27violation of this section by the Attorney General shall have
28standing to challenge the authority of the Attorney General
29to investigate or prosecute the case, and, if any such
30challenge is made, the challenge shall be dismissed and no

1relief shall be available in the courts of this Commonwealth
2to the person making the challenge.

3Section 10. Prohibited acts.

4(a) Specific conduct.--No person shall:

5(1) Fail to register as required by this act.

6(2) Fail to refund the amount paid under a home
7construction contract within ten days of either the
8acceptance and execution of a return receipt for certified
9mail containing a written request for a refund or the refusal
10to accept the certified mail sent to the home builder's last
11known address if all of the following apply:

12(i) no substantial portion of the contracted work
13has been performed at the time of the request; and

14(ii) more than 45 days have elapsed since the
15starting date specified in the written contract.

16(3) Accept a municipal certificate of occupancy or other
17proof that performance of a home construction contract is
18complete or satisfactorily concluded with knowledge that the
19document or proof is false and the performance is incomplete.

20(4) Utter, offer or use a completion certificate or
21other proof that a home construction contract is complete or
22satisfactorily concluded when the person knows or has reason
23to know that the document or proof is false and is made to
24accomplish any of the following:

25(i) Make or accept an assignment or negotiation of
26the right to receive payment under a home construction
27contract.

28(ii) Get or grant credit or a loan on security of
29the right to receive payment under a home construction
30contract.

1(5) Abandon or fail to perform, without justification,
2any home construction contract. For purposes of this
3paragraph, the term "justification" shall include nonpayment
4by the consumer as required under the contract or any other
5violation of the contract by the consumer.

6(6) Deviate from or disregard plans or specifications,
7in any material respect, without a written change order dated
8and signed by both the home builder and consumer, which
9contains the accompanying price changes for each deviation.

10(7) Prepare, arrange, accept or participate in the
11financing of a home construction contract with knowledge that
12the home construction contract states a greater monetary
13obligation than the actual price.

14(8) Advertise or offer, by any means, to build new homes
15if the person does not intend to do any of the following:

16(i) Accept a home construction contract.

17(ii) Perform a home construction contract.

18(9) Demand or receive any payment for a home
19construction contract before the home construction contract
20is signed.

21(b) Criminal penalty.--In addition to any other penalty
22provided by law, a person who knowingly violates any provision
23of this act for which a criminal penalty is not otherwise
24provided commits a summary offense subject to the fine
25established in 18 Pa.C.S. § 1105 (relating to sentence of
26imprisonment for summary offenses).

27Section 11. Unfair Trade Practices and Consumer Protection Law.

28A violation of any of the provisions of this act shall be
29deemed a violation of the act of December 17, 1968 (P.L.1224, 
30No.387), known as the Unfair Trade Practices and Consumer

1Protection Law. Nothing in this act shall preclude a consumer
2from exercising any right provided under the Unfair Trade
3Practices and Consumer Protection Law.

4Section 12. Consumer information pamphlet.

5The bureau shall develop, in consultation with the home
6building industry, a consumer information pamphlet that sets
7forth the rights and remedies for consumers as provided for in
8this act, the toll-free number established under section 3 and
9any other information that the bureau considers reasonably
10necessary to assist consumers. The bureau shall provide each
11registered home builder with copies of this pamphlet to
12distribute to consumers.

13Section 13. Regulations.

14The bureau may adopt rules and regulations necessary to carry
15out the provisions of this act.

16Section 14. Preemption of local registration.

17Registration under this act shall preclude any requirement of
18payment of a fee or registration or licensing of any home
19builder by any political subdivision. Political subdivisions
20shall be permitted to require building permits and local
21enforcement of the building code for that political subdivision,
22for which a reasonable fee may be charged. Except for a building
23permit for construction to be performed directly by a landowner
24solely for the landowner's own use, the political subdivision
25may not issue a permit for home building unless the permit
26includes the home builder's registration number. This provision
27does not affect a political subdivision's responsibilities or
28authority under the act of November 10, 1999 (P.L.491, No.45),
29known as the Pennsylvania Construction Code Act, or the
30requirements under section 302(e) of the act of June 2, 1915 

1(P.L.736, No.338), known as the Workers' Compensation Act,
2regarding workers' compensation. This provision does not affect
3existing licensing standards in effect on the effective date of
4this act with respect to electricians, plumbers, sheet metal
5workers, warm air installers and fire suppression workers, where
6licensing is conditioned on requirements of testing or
7possession of certificates obtained through specific training in
8electricity, plumbing, sheet metal work, warm air installation
9and fire suppression. This provision does not affect standards
10for liability insurance adopted by a political subdivision prior
11to January 1, 2008, and which are in effect on the effective
12date of this section.

13Section 15. Home Builder Guaranty Fund.

14(a) Establishment.--The Home Builder Guaranty Fund is hereby
15established in the State Treasury and shall be administered by
16the bureau in accordance with this act. All moneys deposited in
17the fund shall not be considered general revenue of the
18Commonwealth but shall be used only to effectuate the purposes
19of this act.

20(b) Guaranty fund fee.--A home builder must pay a guaranty
21fund fee of $50 for each construction or building permit issued
22by a political subdivision. The fee shall be collected by the
23political subdivision issuing the permit and be in addition to
24any other fees imposed for a permit.

25(c) Deposit of guaranty fund fees into fund.--On a quarterly
26basis, each political subdivision must remit the guaranty fund
27fees collected to the bureau for deposit into the fund.

28(d) Minimum balance.--

29(1) Payments received under subsection (b) shall be
30credited to the fund, which shall maintain a balance of at

1least $2,000,000. If the bureau finds that, because of
2pending claims, the amount of the fund may fall below
3$1,000,000, the bureau shall assess each home builder $25.
4However, under this subsection the bureau may not make more
5than one assessment in any calendar year.

6(2) Failure to make payments to the fund as required by
7this act shall result in suspension of registration. Barring
8the existence of other grounds for suspension or revocation
9of registration, the certificate shall be reinstated upon
10full payment of all required fees.

11(e) Investment.--The moneys of the fund shall be invested
12and the interest arising from the investments shall be credited
13to the fund.

14(f) Waiver of biennial fund fee.--In the event that the
15bureau finds that the fund is adequately funded, the bureau
16shall, during the first month of each fiscal year, adjust or
17waive any biennial fund fee for the fiscal year.

18Section 16. Claims against fund.

19(a) General rule.--A consumer may be compensated from the
20fund for an actual loss that results from an act or omission by
21a home builder in the performance of a home construction
22contract or a violation of this act by a home builder as found
23by a court of competent jurisdiction, upon the final
24determination of or expiration of time for appeal in connection
25with any such judgment or if a consumer is prevented from
26collecting the entirety of a final judgment as a result of the
27home builder's filing for bankruptcy protection under Federal
28law. In the event the bureau and the home builder enter into an
29assurance of voluntary compliance, which requires payment of
30restitution to a consumer and the home builder fails to pay as

1required by the terms of the assurance of voluntary compliance,
2the bureau shall issue an order of payment from the fund to the
3consumer. The payment made pursuant to an assurance of voluntary
4compliance shall be considered a claim for the purposes of
5reimbursement of the fund; however, subsection (f) shall not be
6applicable.

7(b) Acts of subcontractors and employees.--For purposes of
8recovery from the fund, the act or omission of a home builder
9includes the act or omission of a subcontractor or employee of
10the home builder whether or not any express agency relationship
11exists so long as the subcontractor or employee acted within the
12scope of the home construction contract.

13(c) Limitation on recovery.--

14(1) The bureau may not provide from the fund:

15(i) More than $30,000 to one consumer for acts or
16omissions of one home builder.

17(ii) More than $200,000 to all consumers for acts or
18omissions of one home builder unless, after the bureau
19has paid out $200,000 on account of acts or omissions of
20the home builder, the home builder reimburses the fund.
21However, in no case shall any one home builder be
22indebted, at any one time, to the fund for more than
23$200,000.

24(iii) An amount for any attorney fees, consequential
25damages, court costs, interest, personal injury damages
26or punitive damages, except as may be provided in an
27assurance of voluntary compliance.

28(2) In addition to the limits set forth in paragraph
29(1), a consumer may not recover from the fund more than that
30consumer's actual loss, to a maximum of $30,000, for a claim

1made on one contract.

2(3) Nothing in this section shall preclude a consumer
3from recovering or seeking to recover from a home builder:

4(i) the difference between the amount of the
5judgment against the home builder received by the
6consumer and the amount actually paid to the consumer
7from the fund; or

8(ii) the difference between the amount a home
9builder agrees to pay a consumer under an assurance of
10voluntary compliance and the amount actually paid to the
11consumer from the fund.

12In the event the consumer does not receive payment in
13full of a judgment amount from the fund, the judgment shall
14be deemed to be satisfied only to the extent of the payment
15received, and the judgment shall continue in full force and
16effect with respect to the amount still owed until the
17consumer receives payment in full.

18(d) Excluded claimants.--A claim against the fund based on
19the act or omission of a particular builder shall not be made
20by:

21(1) a spouse or other immediate relative of the home
22builder, or of a party which holds a financial stake in the
23business of the home builder;

24(2) an employee, officer, director, partner or other
25party which holds a financial interest in the business of the
26home builder; or

27(3) an immediate relative of an employee, officer,
28director, partner or other party which holds a financial
29interest in the business of the home builder.

30(e) Limitation period.--A claim must be made against the

1fund within two years after the consumer obtains an entry of
2final judgment or decree against the home builder and all appeal
3rights have expired or been exhausted, or, in the case of an
4assurance of voluntary compliance, within the later of two years
5of entry into such assurance or one year after nonpayment
6according to the terms of the assurance.

7(f) Offer of proof.--In order to recover from the fund a
8consumer must offer proof to the bureau that the consumer has
9exhausted all reasonable actions available at law and in equity
10to collect the unpaid amount of a final judgment.

11(g) Partial payments for fund integrity.--In order to
12preserve the integrity of the fund, the bureau may order payment
13out of the fund of an amount less than the judgment amount or
14the amount agreed to be paid in an assurance of voluntary
15compliance. The balance remaining due to the consumer shall be
16paid from the fund pursuant to subsection (h).

17(h) Special order of payment.--If the money in the fund is
18insufficient to satisfy any duly authorized claim or portion
19thereof, the bureau shall, when sufficient money exists in the
20fund, satisfy the unpaid claims or portions thereof, in the
21order that those claims or portions thereof were originally
22determined.

23(i) Investigation by bureau.--As provided in section 17, if
24the bureau pays any amount from the fund as a result of a claim
25against a home builder, the bureau may conduct an investigation
26to determine if the home builder is possessed of assets liable
27to be sold or applied in satisfaction of the claim on the fund.
28If the bureau discovers any such assets, the bureau may take any
29lawful action necessary for the reimbursement of the fund.

30(j) Revocation caused by payment of claim.--If the bureau

1makes a payment of an amount as a result of a claim against a
2home builder, the bureau shall revoke the certificate of the
3home builder, and the home builder shall not be eligible to
4receive a new or renewed certificate until the home builder has
5repaid such amount in full, plus interest, from the time the
6payment is made from the fund, except that the bureau may permit
7a home builder to receive a new or renewed certificate after the
8home builder has entered into an agreement with the bureau
9whereby the home builder agrees to repay the fund in full in the
10form of periodic payments over a set period of time. If the home
11builder fails to pay in accordance with the terms of the
12agreement, the bureau shall automatically suspend the home
13builder's certificate.

14Section 17. Procedure for submitting claims.

15(a) Initial claim.--In order to recover from the fund, a
16consumer must submit to the bureau the documentation required
17under section 16(f), together with a copy of the judgment and
18evidence that the judgment has not been appealed or a copy of
19the assurance of voluntary compliance and a certification that
20the home builder has failed to pay or evidence that the consumer
21has been prevented from collecting the entirety of a final
22judgment as a result of the home builder's filing for bankruptcy
23protection under Federal law. In the latter event, the consumer
24shall only be entitled to collect from the fund the amount he
25was prevented from collecting as a result of the filing.

26(b) Copy of claim to home builder.--On receipt of a claim
27pursuant to this section, the bureau shall send a copy of the
28claim to the home builder alleged to be responsible for the
29actual loss. The home builder shall file a response or objection
30to the claim within 30 days of the receipt of the notice of such

1claim. Failure to respond to the claim shall constitute a waiver
2of any defense or objection to the claim. The only defense a
3home builder may raise in his response is a defense of payment
4in full of the claim.

5(c) General order of payment.--Except as otherwise provided
6in this act, the bureau shall pay from the fund approved claims
7in the order that they are submitted.

8Section 18. Reimbursement of fund.

9(a) General rule.--After the bureau pays a claim from the
10fund:

11(1) The bureau shall be subrogated to all rights of the
12consumer in the claim up to the amount paid.

13(2) The consumer shall assign to the bureau all rights
14of the consumer in the claim up to the amount paid.

15(3) The bureau has a right to reimbursement of the fund
16by the home builder for:

17(i) The amount paid from the fund.

18(ii) Interest on the amount at an annual rate of 5%
19as adjusted by the Consumer Price Index on an annual
20basis.

21All money that the bureau recovers on a claim shall be deposited
22in the fund.

23(b) Suit for nonpayment.--If, within 30 days after the
24bureau gives notice, a home builder on whose account a claim was
25paid fails to reimburse the fund in full, the bureau may
26initiate an action against the home builder in a court of
27competent jurisdiction for the unreimbursed amount.

28(c) Judgment.--The bureau is entitled to a judgment for the
29unreimbursed amount if the bureau proves that:

30(1) a claim was paid from the fund on account of the

1home builder;

2(2) the home builder has not reimbursed the fund in
3full; and

4(3) the bureau directed payment based on a final
5judgment of a court of competent jurisdiction or an assurance
6of voluntary compliance.

7(d) Withholding of tax refund.--If a person is delinquent
8for at least one year in making payments to the bureau for the
9purposes of reimbursing the fund, the Department of Revenue
10shall credit the amount of any refundable overpayment of tax
11imposed by Article III of the act of March 4, 1971 (P.L.6, 
12No.2), known as the Tax Reform Code of 1971, against the
13delinquency in respect to this act on the part of the person who
14made the overpayment.

15(e) Bankruptcy proceedings.--For the purpose of excepting to
16a discharge of an individual or business under Federal
17bankruptcy law, the bureau shall be a creditor of the individual
18or business for the amount paid from the fund.

19Section 19. Notice of suspension or revocation.

20The Office of the Court Administrator of Pennsylvania shall
21report to the bureau any suspension or revocation of a
22certificate ordered by a court.

23Section 20. Exemptions.

24This act shall not apply to any of the following persons or
25organizations:

26(1) The Commonwealth or any of its political
27subdivisions.

28(2) The Federal Government.

29Section 21. Building standards.

30All work performed by a home builder under a home

1construction contract shall comply with the requirements of the
2International Residential Code and the International Existing
3Building Code as currently adopted by the Department of Labor
4and Industry under the act of November 10, 1999 (P.L.491, 
5No.45), known as the Pennsylvania Construction Code Act,
6regardless of whether a permit or inspection is required by the
7municipality in which the work is being performed.

8Section 22. Repeal.

9All acts and parts of acts are repealed insofar as they are
10inconsistent with this act.

11Section 23. Effective date.

12This act shall take effect in 180 days.