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        PRIOR PRINTER'S NO. 3039                      PRINTER'S NO. 3383

THE GENERAL ASSEMBLY OF PENNSYLVANIA


HOUSE BILL

No. 2283 Session of 1998


        INTRODUCED BY WOGAN, McCALL, PERZEL, BELARDI, COY, DeLUCA,
           ROONEY, SERAFINI, MELIO, FICHTER, TRAVAGLIO, WOJNAROSKI,
           BELFANTI, E. Z. TAYLOR, GIGLIOTTI, TRELLO, SURRA, LAUGHLIN,
           OLASZ, J. TAYLOR, STABACK, ORIE, SHANER, MARSICO, VAN HORNE,
           TRICH, D. W. SNYDER, STEELMAN AND LAGROTTA, MARCH 11, 1998

        AS REPORTED FROM COMMITTEE ON CONSUMER AFFAIRS, HOUSE OF
           REPRESENTATIVES, AS AMENDED, APRIL 20, 1998

                                     AN ACT

     1  Providing for the regulation of home improvement contracts and
     2     for registration of certain home improvement contractors;
     3     prohibiting certain acts; prescribing requirements for home
     4     improvement contracts; establishing the Home Improvement
     5     Guaranty Fund; and providing for claims against the fund and
     6     for the offense of home improvement fraud.

     7     The General Assembly of the Commonwealth of Pennsylvania
     8  hereby enacts as follows:
     9                         TABLE OF CONTENTS
    10  Section 1.  Short title.
    11  Section 2.  Definitions.
    12  Section 3.  Registration of contractors and salespersons.
    13  Section 4.  Procedures for registration.
    14  Section 5.  Application fees.
    15  Section 6.  Certificate of registration and renewal.
    16  Section 7.  Certificate holder to exhibit and advertise
    17                 certificate.
    18  Section 8.  Prohibited acts.

     1  Section 9.  Home improvement fraud.
     2  Section 10.  Unfair Trade Practices and Consumer Protection
     3                 Law.
     4  Section 11.  Regulations.
     5  Section 12.  Exemptions.
     6  Section 13.  Home improvement contracts.
     7  Section 14.  Home Improvement Guaranty Fund.
     8  Section 15.  Claims against fund.
     9  Section 16.  Procedure for submitting claims.
    10  Section 17.  Reimbursement of fund.
    11  Section 18.  Notice of suspension or revocation.
    12  Section 19.  Effective date.
    13  Section 1.  Short title.
    14     This act shall be known and may be cited as the Home
    15  Improvement Consumer Protection Act.
    16  Section 2.  Definitions.
    17     The following words and phrases when used in this act shall
    18  have the meanings given to them in this section unless the
    19  context clearly indicates otherwise:
    20     "Bureau."  The Bureau of Consumer Protection within the
    21  Office of Attorney General of the Commonwealth.
    22     "Certificate."  A certificate of registration issued pursuant
    23  to this act.
    24     "Contractor."  Any person, including a subcontractor or
    25  employee of another contractor, who owns and operates a home
    26  improvement business or who undertakes, offers to undertake or
    27  agrees to perform any home improvement. The term does not
    28  include a person for whom the total cash value of all of that
    29  person's home improvements is less than $3,000 during any period
    30  of 12 consecutive months.
    19980H2283B3383                  - 2 -

     1     "Department."  The Department of Labor and Industry of the
     2  Commonwealth.
     3     "Fund."  The Home Improvement Guaranty Fund established in
     4  section 14.
     5     "Home improvement."  The term includes, but is not limited
     6  to, the repair, replacement, remodeling, alteration, conversion,
     7  modernization, improvement, rehabilitation or sandblasting of or
     8  addition to any land or building, or that portion thereof, which
     9  is used or designed to be used as a private residence or the
    10  construction, replacement, installation or improvement of
    11  driveways, swimming pools, porches, garages, roofs, siding,
    12  insulation, solar energy systems, security systems, flooring,
    13  patios, fences, doors and windows and waterproofing in
    14  connection with such land or building or that portion thereof
    15  which is used or designed to be used as a private residence in
    16  which the total cash price for all work agreed upon between the
    17  contractor and owner exceeds $200. The term does not include:
    18         (1)  The construction of a new home.
    19         (2)  The sale of goods or materials by a seller who
    20     neither arranges to perform nor performs, directly or
    21     indirectly, any work or labor in connection with the
    22     installation or application of the goods or materials.
    23         (3)  The sale of services furnished for commercial or
    24     business use or for resale, provided commercial or business
    25     service takes place somewhere other than at a private
    26     residence.
    27         (4)  The sale of appliances, such as stoves,
    28     refrigerators, freezers, room air conditioners and others
    29     which are designed for and are easily removable from the
    30     premises without material alteration thereof.
    19980H2283B3383                  - 3 -

     1         (5)  Any work performed without compensation by the owner
     2     on the owner's private residence or residential rental
     3     property.
     4     "Home improvement contract."  An agreement between a
     5  contractor or salesperson and an owner for the performance of a
     6  home improvement.
     7     "Owner."  A person who owns or resides in a private residence
     8  and includes any agent of that person. An owner of a private
     9  residence shall not be required to reside in such residence to
    10  be deemed an owner under this act. A person who owns four THREE   <--
    11  or more private residences shall not be deemed an owner except
    12  with respect to the person's primary residence or the part of
    13  the building which houses the primary residence of the owner.
    14     "Person."  An individual, partnership, limited partnership,
    15  limited liability company, joint venture or corporation.
    16     "Private residence."  A single family dwelling, a multifamily
    17  dwelling consisting of not more than three units or a single
    18  unit located within any multifamily dwelling, including, but not
    19  limited to, condominiums and co-op units.
    20     "Salesperson."  Any individual who negotiates or offers to
    21  negotiate a home improvement contract with an owner or solicits
    22  or otherwise endeavors to procure by any means whatsoever,
    23  directly or indirectly, a home improvement contract from an
    24  owner.
    25  Section 3.  Registration of contractors and salespersons.
    26     (a)  General rule.--No person shall hold himself out as a
    27  contractor or salesperson, nor shall that person perform any
    28  home improvement, without first obtaining a certificate from the
    29  department as provided in this act, except that a person
    30  registered as a contractor shall not be required to obtain a
    19980H2283B3383                  - 4 -

     1  salesperson's certificate. An individual who has provided
     2  personal information to the department when registering on
     3  behalf of a business is not required to register as an
     4  individual so long as the person performs home improvements
     5  solely on behalf of the registered business.
     6     (b)  Salespersons.--
     7         (1)  No contractor shall employ or use the services of
     8     any salesperson to procure business from an owner unless the
     9     salesperson is registered under this act.
    10         (2)  No individual shall act as a home improvement
    11     salesperson on behalf of an unregistered contractor.
    12     (c)  Liability.--No business entity registered pursuant to
    13  this act shall be relieved of responsibility under this act for
    14  the conduct and acts of its agents, employees, officers or
    15  directors, nor shall any individual be relieved of
    16  responsibility under this act by reason of his employment or
    17  relationship with such business entity.
    18     (d)  Effects of unregistered status.--No unregistered
    19  contractor or salesperson shall have standing to sue, countersue
    20  or raise a defense of nonpayment in any dispute arising from a
    21  home improvement. No unregistered contractor or salesperson may
    22  file a mechanic's lien with respect to a home improvement.
    23     (e)  Public access to registration information.--The
    24  department shall maintain a toll-free telephone number from
    25  which a caller can obtain information as to whether a contractor
    26  or salesperson is registered with the department pursuant to
    27  this act.
    28  Section 4.  Procedures for registration.
    29     (a)  Application.--A person desiring a certificate as a
    30  contractor or salesperson shall apply to the department in
    19980H2283B3383                  - 5 -

     1  writing on a form provided by the department. The application
     2  shall include, but not be limited to, the following information:  <--
     3         (1)  For an individual applicant, the name, home address,
     4     home telephone number and driver's license identification
     5     number of the applicant, as well as the individual's business
     6     name, address and telephone number if different.
     7         (2)  For a partnership applicant, the name, home address,
     8     home telephone number and driver's license identification
     9     number of each partner as well as the partnership name,
    10     address and telephone number.
    11         (3)  For a corporation, limited liability company or
    12     limited partnership applicant, the name, home address, home
    13     telephone number and driver's license identification number
    14     of each officer, each director or each individual holding
    15     greater then a 10% stake in the business, as well as the
    16     entity's business name, address and telephone number.
    17         (4)  For an out-of-State corporation, limited liability
    18     or limited partnership, the name and address of the entity's
    19     resident agent or registered office provider within this
    20     Commonwealth.
    21         (5)  For a joint venture applicant, the name, address and
    22     telephone number of the joint venture, as well as the name,
    23     address and telephone number of each party to the joint
    24     venture. When the parties to a joint venture include business
    25     entities, the information required from such entities
    26     pursuant to paragraphs (2) and (3) shall also be provided.
    27         (6)  If the applicant is applying for a contractor
    28     registration, a complete description of the nature of the
    29     contracting business of the applicant.
    30         (7)  A statement whether:
    19980H2283B3383                  - 6 -

     1             (i)  The individual making application, even if doing
     2         so as part of a business entity application, has ever
     3         been convicted of a criminal offense related to a home
     4         improvement transaction, fraud, theft, a crime of
     5         deception or a crime involving fraudulent business
     6         practices, as well as a statement whether the applicant
     7         has ever had a civil judgment entered against the
     8         applicant or a business in which the applicant held an
     9         interest that was related to a home improvement
    10         transaction.
    11             (ii)  Whether the applicant's certificate or the
    12         certificate of a business with which the individual
    13         making application held an interest, has ever been
    14         revoked or suspended pursuant to an order issued by a
    15         court of competent jurisdiction.
    16         (8)  Any financial information deemed appropriate by the   <--
    17     department or the bureau.
    18         (9) (8)  Whether within the last ten years the applicant   <--
    19     has ever been suspended or debarred from participating in any
    20     Federal, State or local program through which funding or
    21     other assistance is provided to consumers for home
    22     improvements.
    23         (9)  IF THE DEPARTMENT OR THE BUREAU DETERMINES THAT       <--
    24     ADDITIONAL INFORMATION IS NECESSARY TO EFFECTUATE THE PURPOSE
    25     OF THIS ACT, THE DEPARTMENT OR THE BUREAU SHALL PROMULGATE
    26     REGULATIONS TO REQUIRE THE SUBMISSION OF THE ADDITIONAL
    27     INFORMATION.
    28     (b)  Grounds for refusal of certificate.--The department may
    29  not provide a certificate of registration to any applicant:
    30         (1)  who has had a certificate of registration revoked
    19980H2283B3383                  - 7 -

     1     within five years preceding the application; or                <--
     2         (2)  whose officer or principal has had his registration
     3     revoked within five years preceding the application; OR        <--
     4         (3)  WHO HAS BEEN SUSPENDED OR DEBARRED WITHIN THE LAST
     5     TEN YEARS FROM PARTICIPATING IN ANY FEDERAL, STATE OR LOCAL
     6     PROGRAM WHICH PROVIDES FUNDING TO CONSUMERS FOR HOME
     7     IMPROVEMENTS.
     8     (c)  Contractual relationships.--In addition to the
     9  information required in subsection (a), a contractor shall be
    10  required to notify the department of any employment or other
    11  contractual relationship between the contractor and any
    12  salesperson. Information under this subsection shall be updated   <--
    13  by the contractor, on a form provided by the department, on an
    14  as-needed basis throughout the period of registration. A
    15  contractor shall be required to submit said information within
    16  ten days of entering into that relationship with a salesperson.
    17  SALESPERSON. A CONTRACTOR SHALL BE REQUIRED TO SUBMIT SUCH        <--
    18  INFORMATION WITHIN 20 DAYS OF ENTERING INTO AN EMPLOYMENT OR
    19  OTHER CONTRACTUAL RELATIONSHIP WITH A SALESPERSON. INFORMATION
    20  UNDER THIS SUBSECTION SHALL BE UPDATED BY THE CONTRACTOR, ON A
    21  FORM PROVIDED BY THE DEPARTMENT, ON AN AS-NEEDED BASIS
    22  THROUGHOUT THE PERIOD OF REGISTRATION.
    23     (D)  REPORTING OF MULTIPLE REGISTRATION OR LICENSURE.--ANY
    24  REGISTERED CONTRACTOR OR SALESPERSON IN THIS COMMONWEALTH WHO IS
    25  REGISTERED OR LICENSED AS A HOME IMPROVEMENT CONTRACTOR OR
    26  SALESPERSON IN ANY OTHER STATE, OR POLITICAL SUBDIVISION
    27  THEREOF, SHALL REPORT THIS INFORMATION TO THE DEPARTMENT ON THE
    28  INITIAL REGISTRATION AND BIENNIAL REGISTRATION APPLICATION. ANY
    29  DISCIPLINARY ACTION TAKEN IN SUCH OTHER JURISDICTION SHALL BE
    30  REPORTED TO THE DEPARTMENT ON THE INITIAL REGISTRATION
    19980H2283B3383                  - 8 -

     1  APPLICATION OR, IF SUCH ACTION OCCURRED SUBSEQUENT TO SUBMISSION
     2  OF AN INITIAL APPLICATION, ON THE BIENNIAL REGISTRATION
     3  APPLICATION OR WITHIN 90 DAYS OF FINAL DISPOSITION, WHICHEVER IS
     4  SOONER. MULTIPLE REGISTRATION OR LICENSURE SHALL BE NOTED BY THE
     5  DEPARTMENT ON THE CONTRACTOR'S OR SALESPERSON'S RECORD, AND SUCH
     6  STATE, OR POLITICAL SUBDIVISION THEREOF, SHALL BE NOTIFIED BY
     7  THE DEPARTMENT OF ANY DISCIPLINARY ACTIONS TAKEN AGAINST SUCH
     8  CONTRACTOR OR SALESPERSON IN THIS COMMONWEALTH.
     9  Section 5.  Application fees.
    10     (a)  General rule.--Each application for a certificate for:
    11         (1)  A home improvement contractor or renewal of that
    12     certificate shall be accompanied by a fee of $100 $50.         <--
    13         (2)  A salesperson or renewal of that certificate shall
    14     be accompanied by a fee of $25.
    15     (b)  Dedicated use of fees.--Fifty percent of the application
    16  fees collected shall be used by the department for the purposes
    17  of fulfilling its obligations under this act relating to
    18  registration. The balance of the application fees collected
    19  shall be used by the bureau for the purposes of carrying out and
    20  enforcing the provisions of this act. The department and the
    21  bureau shall establish rules or regulations regarding payment,
    22  collection and distribution of money payable to and received by
    23  the department pursuant to this section.
    24     (c)  Multiple registrations.--Business entity applicants
    25  shall be required to pay the application fee in this section and
    26  the fund fee set forth in section 14 only as a business entity,
    27  regardless of the number of individuals who provide registration
    28  information pursuant to this act.
    29  Section 6.  Certificate of registration and renewal.
    30     (a)  Duty of department.--Upon receipt of a completed
    19980H2283B3383                  - 9 -

     1  application and fee, the department shall issue and deliver to
     2  the applicant a certificate to engage in the business for which
     3  the application was made or refuse to issue the certificate
     4  pursuant to this act or an order of a court of competent
     5  jurisdiction WITHIN SEVEN DAYS.                                   <--
     6     (b)  Nontransferability.--Certificates issued to home
     7  improvement contractors or salespersons shall not be
     8  transferable or assignable.
     9     (c)  Duration of certificate.--All certificates issued under
    10  this act shall expire biennially. The expiration date shall be
    11  placed upon the certificate. The fee for renewal of a
    12  certificate shall be the same as the fee charged for an original
    13  application under section 5. The information required pursuant
    14  to section 4 shall also be required for renewal of
    15  certification, as well as any additional information the          <--
    16  department or bureau deems appropriate. The department shall
    17  CERTIFICATION. THE DEPARTMENT SHALL provide a form for renewal    <--
    18  of registration.
    19     (d)  Renewal obligation.--Failure to receive a notice of       <--
    20  expiration or a renewal application shall not exempt a
    21  contractor or salesperson from the obligation to renew.
    22     (e) (D)  Grounds for denial and revocation of registration.--  <--
    23  The department shall deny registration to any contractor or
    24  salesperson against whom a civil judgment has been entered in
    25  favor of an owner that was related to a home improvement
    26  transaction if the transaction occurred after the effective date
    27  of this act and the judgment remains unsatisfied. The
    28  department, with bureau approval, may permit a contractor or
    29  salesperson to receive a new or renewed certificate after the
    30  contractor has entered into a written agreement whereby the
    19980H2283B3383                 - 10 -

     1  contractor agrees to pay the judgment in full in the form of
     2  periodic payments over a specific period of time. If the
     3  contractor or salesperson does not pay in accordance with the
     4  terms of the agreement, the department shall immediately revoke
     5  the contractor's or salesperson's certificate of registration.
     6  Section 7.  Certificate holder to exhibit and advertise
     7                 certificate.
     8     Contractors and salespersons shall exhibit their certificates
     9  upon request by any interested party, state in any advertisement
    10  the fact that they are registered, and include their
    11  registration numbers.
    12  Section 8.  Prohibited acts.
    13     No person shall:
    14         (1)  Present or attempt to present, as his own, the
    15     certificate of another person.
    16         (2)  Knowingly give false information when applying for a
    17     certificate or a renewal of a certificate.
    18         (3)  Present himself falsely as or impersonate a
    19     registered home improvement contractor or salesperson.
    20         (4)  Use or attempt to use a certificate which has
    21     expired or which has been revoked.
    22         (5)  Offer to make or make any home improvement without
    23     having a current certificate under this act.
    24         (6)  Represent in any manner that his registration
    25     constitutes an endorsement of the quality of his workmanship
    26     or of his competency by the department or the bureau.
    27         (7)  Fail to refund the amount paid for a home
    28     improvement within ten days of a written request mailed or
    29     delivered to the contractor's last known address, if:
    30             (i)  No substantial portion of the contracted work
    19980H2283B3383                 - 11 -

     1         has been performed at the time of the request.
     2             (ii)  More than 30 days has elapsed since the
     3         starting date specified in the written contract or the
     4         date of the contract if such contract does not specify a
     5         starting date.
     6         (8)  Accept a completion certificate MUNICIPAL             <--
     7     CERTIFICATE OF OCCUPANCY or other proof that performance of a
     8     home improvement contract is complete or satisfactorily
     9     concluded with knowledge that the document or proof is false
    10     and the performance is incomplete.
    11         (9)  Utter, offer or use a completion certificate or
    12     other proof that a home improvement contract is complete or
    13     satisfactorily concluded:
    14             (i)  to make or accept an assignment or negotiation
    15         of the right to receive payment under a home improvement
    16         contract; or
    17             (ii)  to get or grant credit or a loan on security of
    18         the right to receive payment under a home improvement
    19         contract;
    20     when the person knows or has reason to know that such
    21     document or proof is false.
    22         (10)  Abandon or fail to perform, without justification,
    23     a home improvement contract. THE TERM "WITHOUT JUSTIFICATION"  <--
    24     SHALL INCLUDE, BUT NOT BE LIMITED TO, NONPAYMENT BY THE OWNER
    25     AS REQUIRED UNDER THE CONTRACT OR ANY OTHER VIOLATION OF THE
    26     CONTRACT BY THE OWNER.
    27         (11)  Deviate materially from the plans or specifications
    28     without the express, verifiable consent of the owner.
    29         (12)  Prepare, arrange, accept or participate in
    30     arranging a mortgage, promissory note or other evidence of
    19980H2283B3383                 - 12 -

     1     debt for performing or selling a home improvement with
     2     knowledge that the evidence of debt states a greater monetary
     3     obligation than the consideration, including a time sale
     4     price, for a home improvement.
     5         (13)  Advertise or offer, by any means, to perform a home
     6     improvement if the person does not intend:
     7             (i)  to accept a home improvement contract;
     8             (ii)  to perform the home improvement; or
     9             (iii)  to charge for the home improvement at the
    10         price advertised or offered.
    11         (14)  Violate a building law or ordinance of this
    12     Commonwealth or political subdivision, a safety or labor law
    13     of this Commonwealth or political subdivision, or the act of
    14     June 2, 1915 (P.L.736, No.338), known as the Workers'
    15     Compensation Act.
    16         (15)  Fail to pay all taxes associated with home
    17     improvement sales or contracting.
    18         (16)  Perform or sell a home improvement with or through
    19     another person who is required to hold a certificate pursuant
    20     to this act but who does not hold the certificate.
    21         (17)  Act as a contractor or sell a home improvement
    22     under a name other than that which is stated on the person's
    23     certificate.
    24         (18)  Demand or receive any payment for a home
    25     improvement before the home improvement contract is signed.
    26         (19)  Receive a deposit of more than one-third of the
    27     home improvement contract price UNLESS THE TOTAL PRICE OF THE  <--
    28     CONTRACT IS LESS THAN $500.
    29         (20)  While acting as a salesperson, fail to account for
    30     or remit to the contractor whom the salesperson represents a
    19980H2283B3383                 - 13 -

     1     payment received in connection with a home improvement.
     2         (21)  Fail to pay fees or assessments required by this
     3     act.
     4         (22)  Be suspended or debarred from a Federal, State or
     5     local program as described in section 4(a)(9) 4(A)(8).         <--
     6  Section 9.  Home improvement fraud.
     7     (a)  Offense defined.--A person commits the offense of home
     8  improvement fraud if, with intent to defraud or injure anyone or
     9  with knowledge that he is facilitating a fraud or injury to be
    10  perpetrated by anyone, the actor:
    11         (1)  makes a false or misleading statement for the         <--
    12     purpose of inducing, encouraging or soliciting a person to
    13     enter into any written or oral contract or agreement for a
    14     home improvement or purchase of home improvement materials;
    15         (2)  performs services or uses materials which cause the
    16     cost of the home improvement to exceed any previously agreed-
    17     to price without the permission of the consumer;
    18         (3)  misrepresents or conceals, while soliciting for a
    19     home improvement or purchasing home improvement materials,
    20         (1)  MAKES A FALSE OR MISLEADING STATEMENT TO INDUCE,      <--
    21     ENCOURAGE OR SOLICIT A PERSON TO ENTER INTO ANY WRITTEN OR
    22     ORAL AGREEMENT FOR HOME IMPROVEMENT SERVICES OR PROVISION OF
    23     HOME IMPROVEMENT MATERIALS OR TO JUSTIFY AN INCREASE IN THE
    24     PREVIOUSLY AGREED UPON PRICE;
    25         (2)  RECEIVES ANY ADVANCE PAYMENT FOR PERFORMING HOME
    26     IMPROVEMENT SERVICES OR PROVIDING HOME IMPROVEMENT MATERIALS,
    27     FAILS TO PERFORM OR PROVIDE SUCH SERVICES OR MATERIALS WITHIN
    28     THE DATE SPECIFIED IN THE AGREEMENT UNLESS EXTENDED BY
    29     AGREEMENT WITH THE CONSUMER AND FAILS TO RETURN THE PAYMENT
    30     RECEIVED FOR SUCH SERVICES OR MATERIALS WHICH WERE NOT
    19980H2283B3383                 - 14 -

     1     PROVIDED BY THAT DATE;
     2         (3)  WHILE SOLICITING A PERSON TO ENTER INTO AN AGREEMENT
     3     FOR HOME IMPROVEMENT SERVICES OR MATERIALS, MISREPRESENTS OR
     4     CONCEALS the contractor's or salesperson's real name, the
     5     name of the contractor's business, the contractor's business
     6     address or any other identifying information;
     7         (4)  damages the property of a person with the intent of   <--
     8     having that person enter into a written or oral agreement or
     9     contract for home improvement or purchase of home improvement
    10     materials;
    11         (5)  misrepresents himself, herself or another to be an
    12     employee or agent of any unit of the Federal, Commonwealth or
    13     municipal government or any other governmental unit, or an
    14     employee or agent of any public utility, with the intent to
    15     cause a person to enter into, with himself, herself or
    16     another, any contract or agreement for home improvement or
    17     purchase of home improvement materials;
    18         (6)  executes or materially alters a home improvement
    19     contract
    20         (4)  DAMAGES A PERSON'S PROPERTY WITH THE INTENT TO        <--
    21     INDUCE, ENCOURAGE OR SOLICIT THAT PERSON TO ENTER INTO A
    22     WRITTEN OR ORAL AGREEMENT FOR PERFORMING HOME IMPROVEMENT
    23     SERVICES OR PROVIDING HOME IMPROVEMENT MATERIALS;
    24         (5)  MISREPRESENTS HIMSELF OR ANOTHER AS AN EMPLOYEE OR
    25     AGENT OF THE FEDERAL, COMMONWEALTH OR MUNICIPAL GOVERNMENT,
    26     ANY OTHER GOVERNMENTAL UNIT OR ANY PUBLIC UTILITY, WITH THE
    27     INTENT TO CAUSE A PERSON TO ENTER INTO ANY AGREEMENT FOR
    28     PERFORMING HOME IMPROVEMENT SERVICES OR PROVIDING HOME
    29     IMPROVEMENT MATERIALS;
    30         (6)  ALTERS A HOME IMPROVEMENT AGREEMENT, mortgage,
    19980H2283B3383                 - 15 -

     1     promissory note or other document incident to performing or
     2     selling a home improvement WITHOUT THE CONSENT OF THE          <--
     3     CONSUMER; or
     4         (7)  directly or indirectly publishes a false, OR          <--
     5     deceptive or misleading advertisement about home improvement.  <--
     6     (b)  Grading of the offense.--                                 <--
     7         (1)  A violation of subsection (a)(1), (3), (4), (5) or    <--
     8     (6), (6) OR (7) constitutes:                                   <--
     9             (i)  a felony of the third degree if the amount of     <--
    10         the contract or agreement solicited, or the amount of the
    11         damage pursuant to paragraph (4), exceeds $1,000;
    12         INVOLVED EXCEEDS $2,000; OR                                <--
    13             (ii)  a misdemeanor of the first degree if the amount
    14         of the contract or agreement solicited, or the amount of   <--
    15         the damage pursuant to paragraph (4), is $1,000 or less;
    16         or
    17             (iii)  a misdemeanor of the first degree if the
    18         amount involved cannot be satisfactorily ascertained.
    19         INVOLVED IS $2,000 OR LESS OR IF THE AMOUNT INVOLVED       <--
    20         CANNOT BE SATISFACTORILY ASCERTAINED.
    21         (2)  A violation of subsection (a)(2) constitutes:
    22             (i)  a felony of the third degree if the amount of
    23         the overcharge is greater than 25% over the previously     <--
    24         agreed-to price; THE PAYMENT RETAINED EXCEEDS $2,000; OR   <--
    25             (ii)  a misdemeanor of the first degree if the amount
    26         of the overcharge is 25% or less of the previously         <--
    27         agreed-to price; or
    28             (iii)  a misdemeanor of the first degree if the
    29         amount of the overcharge cannot be satisfactorily
    30         ascertained.
    19980H2283B3383                 - 16 -

     1         (3)  A violation of subsection (a)(7) constitutes a
     2     misdemeanor of the first degree. OF THE PAYMENT RETAINED IS    <--
     3     $2,000 OR LESS OR IF THE AMOUNT OF THE OVERCHARGE CANNOT BE
     4     SATISFACTORILY ASCERTAINED.
     5         (4) (3)  Amounts involved pursuant to one scheme or        <--
     6     course of conduct, whether involving one or more victims, may
     7     be aggregated in determining the grade of the offense
     8     pursuant to paragraph (1) or (2). TO SUBSECTION (A).           <--
     9         (5)  Where the (4)  WHERE A person commits an offense      <--
    10     under subsection (a) and the victim of the offense is 60       <--
    11     years of age or older, the grading of the offense shall be
    12     one grade higher than specified in paragraphs (1), (2) and
    13     (3). THIS PARAGRAPH SHALL NOT BE APPLICABLE TO INDIVIDUALS     <--
    14     WHOSE SENTENCE WOULD BE ENHANCED PURSUANT TO PARAGRAPH (5).
    15         (6) (5)  Notwithstanding any other provisions of this      <--
    16     section, where the A person commits a second or subsequent     <--
    17     offense described in subsection (a), the offense will
    18     constitute a felony of the second degree regardless of the
    19     amount of money involved. For this paragraph to be
    20     applicable, each element of the second or subsequent offense   <--
    21     must have occurred after the first conviction. Paragraph (5)   <--
    22     (4) shall not be applicable to individuals convicted WHOSE     <--
    23     SENTENCES WOULD BE ENHANCED pursuant to this paragraph.
    24         (7) (6)  In addition to any other penalty imposed by the   <--
    25     court THIS ACT, the court may revoke or suspend the            <--
    26     certificate of registration issued under 12 Pa.C.S. Ch. 53     <--
    27     (relating to home improvement practices) SECTION 6. At the     <--
    28     time of sentencing, the court shall state the reasons for
    29     such revocation or suspension.
    30     (c)  Jurisdiction.--
    19980H2283B3383                 - 17 -

     1         (1)  The district attorneys of the several counties shall
     2     have the authority to investigate and to institute criminal
     3     proceedings for any violation of this section.
     4         (2)  In addition to the authority conferred upon the
     5     Attorney General by the act of October 15, 1980 (P.L.950,
     6     No.164), known as the Commonwealth Attorneys Act, the
     7     Attorney General shall have the authority to investigate and
     8     institute criminal proceedings for any violation of this
     9     section or any series of such violations involving more than
    10     one county of this Commonwealth or involving any county of
    11     this Commonwealth and another state. No person charged with a
    12     violation of this section by the Attorney General shall have
    13     standing to challenge the authority of the Attorney General
    14     to investigate or prosecute the case, and, if any such
    15     challenge is made, the challenge shall be dismissed and no
    16     relief shall be available in the courts of this Commonwealth
    17     to the person making the challenge.
    18     (d)  Definition.--As used in this section, the term "home      <--
    19  improvement" means the same as "home improvement" in 12 Pa.C.S.
    20  § 5302 (relating to definitions).
    21  Section 10.  Unfair Trade Practices and Consumer Protection Law.
    22     (a)  General rule.--A violation of any of the provisions of
    23  this act shall be deemed a violation of the act of December 17,
    24  1968 (P.L.1224, No.387), known as the Unfair Trade Practices and
    25  Consumer Protection Law. COMPLIANCE WITH THIS ACT SHALL BE        <--
    26  DEEMED TO BE COMPLIANCE WITH THE UNFAIR TRADE PRACTICES AND
    27  CONSUMER PROTECTION LAW AS IT APPLIES TO HOME IMPROVEMENT
    28  CONTRACTS.
    29     (b)  Suspension or revocation of registration.--Upon the
    30  request of the Attorney General or a district attorney, a court
    19980H2283B3383                 - 18 -

     1  may, FOR JUST CAUSE AND AFTER NOTICE AND HEARING, suspend or      <--
     2  revoke a certificate of registration for violations of this act.
     3  The court may suspend or revoke a certificate of registration as
     4  follows:
     5         (1)  For the first violation, a suspension of up to one    <--
     6     year SIX MONTHS.                                               <--
     7         (2)  For the second violation, a suspension of up to two   <--
     8     years ONE YEAR.                                                <--
     9         (3)  For the third and all subsequent violations, the
    10     court may impose any term of suspension or revoke a
    11     certificate of registration.
    12  Section 11.  Regulations.
    13     The department may adopt rules and regulations necessary to
    14  carry out the provisions of this act relating to registration,
    15  and the bureau may adopt rules and regulations necessary to
    16  carry out and enforce the other provisions of this act.
    17  Section 12.  Exemptions.
    18     Sections 3, 4, 5, 6, 7, 12, 13, 14, 15, 16 and 18 shall not
    19  apply to any of the following persons or organizations:
    20         (1)  The Commonwealth, municipalities and political
    21     subdivisions within the Commonwealth or any department or
    22     agency of the Commonwealth or such municipalities.
    23         (2)  The government of the United States or any of its
    24     departments or agencies.
    25         (3)  Any school, public or private, offering as part of a
    26     vocational education program, courses and training in any
    27     aspect of home improvement.
    28  Section 13.  Home improvement contracts.
    29     (a)  Requirements.--No home improvement contract shall be
    30  valid or enforceable against an owner unless it:
    19980H2283B3383                 - 19 -

     1         (1)  Is in writing and legible.
     2         (2)  Is signed by the owner and the contractor, or a
     3     salesperson on behalf of a contractor.
     4         (3)  Contains the entire agreement between the owner and
     5     the contractor.
     6         (4)  Contains the date of the transaction.
     7         (5)  Contains the name, address and certificate number of
     8     the contractor.
     9         (6)  Contains the approximate starting date and
    10     completion date.
    11         (7)  Is entered into by a registered contractor or a
    12     registered salesperson.
    13         (8)  Provides a notice that gives the toll-free telephone
    14     number of the department and states that:
    15             (i)  each contractor and salesperson must be
    16         registered by the department; and
    17             (ii)  anyone may inquire of the department regarding
    18         the status of a contractor or salesperson.
    19     (b)  Rescission right.--All home improvement contracts shall
    20  be subject to section 7 of the act of December 17, 1968
    21  (P.L.1224, No.387), known as the Unfair Trade Practices and
    22  Consumer Protection Law, UNLESS THE HOMEOWNER HAS WAIVED THIS     <--
    23  RIGHT PURSUANT TO SECTION 7(J) OF THE UNFAIR TRADE PRACTICES AND
    24  CONSUMER PROTECTION LAW.
    25     (c)  Copy to be provided.--A contractor or salesperson shall
    26  provide and deliver to the owner, without charge, a completed
    27  copy of the home improvement contract at the time the contract
    28  is executed.
    29  Section 14.  Home Improvement Guaranty Fund.
    30     (a)  Establishment.--The Home Improvement Guaranty Fund is
    19980H2283B3383                 - 20 -

     1  hereby established in the State Treasury and shall be
     2  administered by the bureau in accordance with this act.
     3     (b)  Biennial fund fee.--Each salesperson who applies for a
     4  certificate or renewal thereof pursuant to this act shall pay a
     5  fee of $50 biennially, and each contractor who applies for a
     6  certificate, or renewal thereof, pursuant to this act shall pay
     7  a fee of $100 biennially to the fund. The fee shall be payable
     8  with the fee for an application for a certificate or renewal
     9  thereof as provided in section 5 and shall be refunded in full
    10  in the event the applicant is denied a certificate.
    11     (c)  Minimum balance.--
    12         (1)  Payments received under subsection (b) shall be
    13     credited to the fund which shall maintain a balance of at
    14     least $2,000,000. If the bureau finds that, because of
    15     pending claims, the amount of the fund may fall below
    16     $1,000,000, the bureau shall assess each contractor $25 and
    17     each salesperson $10. However, under this subsection the
    18     bureau may not make more than two such assessments ONE         <--
    19     ASSESSMENT in any calendar year.
    20         (2)  Failure to make payments to the fund as required by
    21     this act shall result in suspension of registration. Barring
    22     the existence of other grounds for suspension or revocation
    23     of registration, the contractor's or salesperson's
    24     certificate of registration shall be reinstated upon full
    25     payment of all the required fees.
    26     (d)  Investment.--The moneys of the fund shall be invested
    27  and the interest arising from the investments shall be credited
    28  to the fund.
    29     (e)  Waiver of biennial fund fee.--In the event that the
    30  bureau finds that the fund is adequately funded, the bureau may   <--
    19980H2283B3383                 - 21 -

     1  SHALL, during the first month of each fiscal year, adjust or      <--
     2  waive any biennial fund fee for the fiscal year.
     3  Section 15.  Claims against fund.
     4     (a)  General rule.--An owner may be compensated from the fund
     5  for an actual loss that results from an act or omission or a
     6  violation of this act by a registered contractor or salesperson
     7  as found by a court of competent jurisdiction, upon the final
     8  determination of or expiration of time for appeal in connection
     9  with any such judgment. In the event the bureau and a contractor
    10  or salesperson enter into an assurance of voluntary compliance,
    11  as described in section 5 of the act of December 17, 1968
    12  (P.L.1224, No.387), known as the Unfair Trade Practices and
    13  Consumer Protection Law, which requires payment of restitution
    14  to an owner and the contractor or salesperson fails to pay as
    15  required by the terms of the assurance of voluntary compliance,
    16  the bureau shall issue an order of payment from the fund to the
    17  owner. The payment made pursuant to an assurance of voluntary
    18  compliance shall be considered a claim for purposes of
    19  reimbursement of the fund, however, subsection (g) shall not be
    20  applicable.
    21     (b)  Acts of subcontractors, salespersons and employees.--For
    22  purposes of recovery from the fund, the act or omission of a
    23  registered contractor or registered salesperson includes the act
    24  or omission of a subcontractor, salesperson or employee of the
    25  registered contractor or registered salesperson whether or not
    26  any express agency relationship exists.
    27     (c)  Denial of claim.--The bureau may deny a claim if the
    28  bureau finds that the claimant:
    29         (1)  unreasonably rejected good faith efforts by the
    30     contractor or salesperson to resolve the claim; or
    19980H2283B3383                 - 22 -

     1         (2)  failed to make good faith efforts to collect the
     2     amount due from the contractor or salesperson.
     3     (d)  Limitation on recovery.--
     4         (1)  The bureau may not provide from the fund:
     5             (i)  More than $10,000 to one claimant for acts or
     6         omissions of one contractor or salesperson.
     7             (ii)  More than $50,000 to all claimants for acts or
     8         omissions of one contractor or salesperson unless, after
     9         the bureau has paid out $50,000 on account of acts or
    10         omissions of the contractor or salesperson, the
    11         contractor or salesperson reimburses the fund. However,
    12         in no case shall any one contractor or salesperson be
    13         indebted, at any one time, to the fund for more than
    14         $50,000.
    15             (iii)  An amount for any attorney fees, consequential
    16         damages, court costs, interest, personal injury damages
    17         or punitive damages.
    18             (iv)  An amount as a result of a default judgment in
    19         court.
    20         (2)  In addition to the limits set forth in paragraph
    21     (1), a claimant may not recover from the fund more than that
    22     claimant's actual loss, to a maximum of $10,000, for a claim
    23     made on one contract. A court may, however, allocate
    24     responsibility on one contract between contractors and
    25     salespersons to a maximum combined responsibility of $10,000.
    26     (e)  Excluded claimants.--
    27         (1)  A claim against the fund based on the act or
    28     omission of a particular contractor or salesperson shall not
    29     be made by:
    30             (i)  a spouse or other immediate relative of the
    19980H2283B3383                 - 23 -

     1         contractor or salesperson, or of a party which holds a
     2         financial stake in the business of the contractor or
     3         salesperson;
     4             (ii)  an employee, officer, director, partner or
     5         other party which holds a financial stake in the business
     6         of the contractor or salesperson; or
     7             (iii)  an immediate relative of an employee, officer,
     8         director, partner or other party which holds a financial
     9         stake in the business of the contractor or salesperson.
    10         (2)  An owner may make a claim against the fund only if
    11     the owner:
    12             (i)  resides in the residence as to which the claim
    13         is made; or
    14             (ii)  does not own more than three TWO dwelling        <--
    15         places, unless the dwelling place as to which the claim
    16         is made is the primary residence of the owner or the part
    17         of the building which houses the primary residence of the
    18         owner.
    19     (f)  Limitations period.--A claim must be made against the
    20  fund within two years after the claimant obtains an entry of
    21  final judgment or decree against the contractor or salesperson
    22  and all appeal rights have expired or been exhausted, or, in the
    23  case of an assurance of voluntary compliance, within the later
    24  of two years of entry into such assurance or one year after
    25  nonpayment according to the terms of the assurance.
    26     (g)  Offer of proof.--In order to recover from the fund the
    27  claimant must offer proof to the bureau that the claimant has
    28  caused to be issued a writ of execution upon a judgment obtained
    29  against the contractor or salesperson, and the officer executing
    30  the same has made a return showing that no bank accounts or real
    19980H2283B3383                 - 24 -

     1  property of the contractor liable to be levied upon in
     2  satisfaction of the judgment could be found, or that the amount
     3  realized on the sale of them or of such of them as were found,
     4  under the execution, was insufficient to satisfy the judgment or
     5  stating the amount realized and the balance remaining due on the
     6  judgment after application thereon of the amount realized. A
     7  true and attested copy of the executing officer's return must be
     8  attached to an application for fund reimbursement.
     9     (h)  Partial payments for fund integrity.--In order to
    10  preserve the integrity of the fund, the bureau may order payment
    11  out of the fund of an amount less than the order issued by the
    12  court. The balance remaining due to the claimant shall be paid
    13  from the fund pursuant to subsection (i).
    14     (i)  Special order of payment.--If the money in the fund is
    15  insufficient to satisfy any duly authorized claim or portion
    16  thereof, the bureau shall, when sufficient money exists in the
    17  fund, satisfy the unpaid claims or portions thereof, in the
    18  order that those claims or portions thereof were originally
    19  determined.
    20     (j)  Investigation by bureau.--As provided in section 17, if
    21  the bureau pays any amount from the fund as a result of a claim
    22  against a contractor or salesperson, the bureau may conduct an
    23  investigation to determine if the contractor or salesperson is
    24  possessed of assets liable to be sold or applied in satisfaction
    25  of the claim on the fund. If the bureau discovers any such
    26  assets, the bureau may take any LAWFUL action necessary for the   <--
    27  reimbursement of the fund.
    28     (k)  Revocation caused by payment of claim.--If the bureau
    29  makes a payment of an amount as a result of a claim against a
    30  contractor or salesperson, the department shall revoke the
    19980H2283B3383                 - 25 -

     1  certificate of the contractor or salesperson and the contractor
     2  or salesperson shall not be eligible to receive a new or renewed
     3  certificate until that contractor or salesperson has repaid such
     4  amount in full, plus interest, from the time the payment is made
     5  from the fund, except that the department, with bureau approval,
     6  may permit a contractor or salesperson to receive a new or
     7  renewed certificate after that contractor or salesperson has
     8  entered into an agreement with the bureau whereby the contractor
     9  or salesperson agrees to repay the fund in full in the form of
    10  periodic payments over a set period of time. If the contractor
    11  or salesperson fails to pay in accordance with the terms of the
    12  agreement, the department shall automatically suspend the
    13  contractor's or salesperson's certificate.
    14  Section 16.  Procedure for submitting claims.
    15     (a)  Initial claim.--In order to recover from the fund, a
    16  claimant must submit to the bureau the documentation required
    17  under section 15(g), if applicable, and the following
    18  information on a form provided by the bureau:
    19         (1)  The amount claimed based on the actual loss.
    20         (2)  The facts giving rise to the claim.
    21         (3)  Any other evidence that supports the claim.
    22         (4)  Any other information that the bureau requires.
    23     (b)  Copy of claim to contractor.--On receipt of a claim
    24  pursuant to this section, the bureau shall send a copy of the
    25  claim to the contractor alleged to be responsible for the actual
    26  loss. THE CONTRACTOR SHALL FILE A RESPONSE OR OBJECTION TO THE    <--
    27  CLAIM WITHIN 30 DAYS OF RECEIPT OF THE NOTICE OF SUCH CLAIM.
    28  FAILURE TO RESPOND TO THE CLAIM SHALL CONSTITUTE A WAIVER OF ANY
    29  DEFENSE OR OBJECTION TO THE CLAIM.
    30     (c)  General order of payment.--Except as otherwise provided
    19980H2283B3383                 - 26 -

     1  in this act, the bureau shall pay from the fund approved claims
     2  in the order that they are submitted.
     3  Section 17.  Reimbursement of fund.
     4     (a)  General rule.--After the bureau pays a claim from the
     5  fund:
     6         (1)  The bureau shall be subrogated to all rights of the
     7     claimant in the claim up to the amount paid.
     8         (2)  The claimant shall assign to the bureau all rights
     9     of the claimant in the claim up to the amount paid.
    10         (3)  The bureau has a right to reimbursement of the fund
    11     by the contractor or salesperson for:
    12             (i)  The amount paid from the fund.
    13             (ii)  Interest on the amount at an annual rate of at   <--
    14         least 10%, as set by the bureau 5% AS ADJUSTED BY THE      <--
    15         CONSUMER PRICE INDEX ON AN ANNUAL BASIS.
    16  All money that the bureau recovers on a claim shall be deposited
    17  in the fund.
    18     (b)  Suit for nonpayment.--If, within 30 days after the
    19  bureau gives notice, a contractor or salesperson on whose
    20  account a claim was paid shall fail to reimburse the fund in
    21  full, the bureau may initiate an action against the contractor
    22  or salesperson in a court of competent jurisdiction for the
    23  unreimbursed amount.
    24     (c)  Judgment.--The bureau is entitled to a judgment for the
    25  unreimbursed amount if the bureau proves that:
    26         (1)  A claim was paid from the fund on account of the
    27     contractor or salesperson.
    28         (2)  The contractor or salesperson has not reimbursed the
    29     fund in full.
    30         (3)  The bureau directed payment based on a final
    19980H2283B3383                 - 27 -

     1     judgment of a court of competent jurisdiction or an assurance
     2     of voluntary compliance.
     3     (d)  Withholding of tax refund.--The bureau may refer to the   <--
     4  Department of Revenue for collection, a debt owed to the bureau
     5  by an individual or business on whose account or under whose
     6  business a claim was paid from the fund and who is at least one
     7  year behind in reimbursement payments to the fund.
     8     (D)  WITHHOLDING OF TAX REFUND.--THE BUREAU MAY REQUEST THE    <--
     9  DEPARTMENT OF REVENUE TO WITHHOLD THE ANNUAL TAX REFUND DUE ANY
    10  INDIVIDUAL OR BUSINESS ON WHOSE ACCOUNT OR UNDER WHOSE BUSINESS
    11  A CLAIM WAS PAID FROM THE FUND AND WHO IS DELINQUENT FOR AT
    12  LEAST ONE YEAR IN MAKING PAYMENTS TO THE BUREAU FOR THE PURPOSE
    13  OF REIMBURSING THE FUND. ANY TAX REFUND WITHHELD BY THE
    14  DEPARTMENT OF REVENUE PURSUANT TO THIS SUBSECTION SHALL BE
    15  DEPOSITED IN THE FUND BY THAT DEPARTMENT. THE BUREAU AND THE
    16  DEPARTMENT OF REVENUE SHALL JOINTLY ESTABLISH PROCEDURES TO
    17  CARRY OUT THE REQUIREMENTS OF THIS SUBSECTION.
    18     (e)  Bankruptcy proceedings.--For the purpose of excepting to
    19  a discharge of an individual or business under Federal
    20  bankruptcy law, the bureau shall be a creditor of the individual
    21  or business for the amount paid from the fund.
    22  Section 18.  Notice of suspension or revocation.
    23     The Administrative Office of Pennsylvania Courts shall report
    24  to the department and the bureau any suspension or revocation of
    25  a certificate of registration ordered by a court.
    26  Section 19.  Effective date.
    27     This act shall take effect in 180 days.


    C3L12DMS/19980H2283B3383        - 28 -