PRINTER'S NO.  1699

  

THE GENERAL ASSEMBLY OF PENNSYLVANIA

  

SENATE BILL

 

No.

1227

Session of

2011

  

  

INTRODUCED BY TARTAGLIONE, FONTANA, SCHWANK AND HUGHES, OCTOBER 20, 2011

  

  

REFERRED TO CONSUMER PROTECTION AND PROFESSIONAL LICENSURE, OCTOBER 20, 2011  

  

  

  

AN ACT

  

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Providing for commingling of funds held in trust by contractors.

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The General Assembly of the Commonwealth of Pennsylvania

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hereby enacts as follows:

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Section 1.  Short title.

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This act shall be known and may be cited as the Contractor

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Commingling of Funds Held in Trust Act.

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Section 2.  Definitions.

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The following words and phrases when used in this act shall

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have the meanings given to them in this section unless the

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context clearly indicates otherwise:

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"Home improvement."  Any contract for improvements to a

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residential property as defined as a home improvement within the

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act of October 17, 2008 (P.L.1645, No.132), known as the Home

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Improvement Consumer Protection Act.

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"Managing agent."  An employee of a contractor who is

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responsible for the direction or control of funds held in trust

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by the contractor under section 3.

 


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"Residential property."  Property on which there is or will

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be constructed a residential building not more than three

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stories in height, not including any basement level, regardless

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of whether any portion of that basement is at grade level, or

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which is zoned or otherwise approved for residential development

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on which there is or will be constructed a residential building

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not more than three stories in height, not including any

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basement level, regardless of whether any portion of that

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basement is at grade level, planned residential development or

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agricultural use, or for which a residential subdivision or land

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development plan or planned residential development plan has

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received preliminary, tentative or final approval on which there

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is or will be constructed a residential building not more than

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three stories in height, not including any basement level,

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regardless of whether any portion of that basement is at grade

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level, pursuant to the act of July 31, 1968 (P.L.805, No.247),

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known as the Pennsylvania Municipalities Planning Code.

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Section 3.  Funds to be held in trust.

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(a)  Paid under contract.--Funds paid under a contract by an

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owner to a contractor for work done or materials furnished or

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both for or about a building by a subcontractor shall be held in

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trust by the contractor as trustee for the subcontractors who

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did work or furnished materials or both for or about the

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building. The funds held in trust under this subsection shall be

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for the purposes of paying subcontractors who did work or

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furnished materials or both for or about the building.

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(b)  Trustee.--An officer, director or managing agent of a

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contractor who has direction over or control of funds held in

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trust by a contractor under subsection (a) is a trustee for the

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purpose of paying the funds to the subcontractors who are

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entitled to the funds.

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Section 4.  Commingling.

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(a)  Commingling.--If a contractor commingles funds held in

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trust under section 3 with other funds, the mere commingling

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does not constitute a violation of civil or criminal law.

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(b)  Separate account.--Nothing contained in this act shall

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be construed as requiring funds held in trust by a contractor

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under section 3 to be placed in a separate account.

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Section 5.  Liability for retention or use of funds held in

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trust.

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An officer, director or managing agent of a contractor who

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knowingly retains or uses funds held in trust under this act for

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a purpose other than paying the contractors for whom the funds

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are held in trust shall be personally liable to a person damaged

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by his action.

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Section 6.  Exemption.

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Section 3 shall not apply to any contract involving

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residential property or a home improvement contract.

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Section 20.  Effective date.

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This act shall take effect in 60 days.

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