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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| SENATE BILL |
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| INTRODUCED BY TARTAGLIONE, FONTANA, SCHWANK AND HUGHES, OCTOBER 20, 2011 |
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| REFERRED TO CONSUMER PROTECTION AND PROFESSIONAL LICENSURE, OCTOBER 20, 2011 |
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| AN ACT |
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1 | Providing for commingling of funds held in trust by contractors. |
2 | The General Assembly of the Commonwealth of Pennsylvania |
3 | hereby enacts as follows: |
4 | Section 1. Short title. |
5 | This act shall be known and may be cited as the Contractor |
6 | Commingling of Funds Held in Trust Act. |
7 | Section 2. Definitions. |
8 | The following words and phrases when used in this act shall |
9 | have the meanings given to them in this section unless the |
10 | context clearly indicates otherwise: |
11 | "Home improvement." Any contract for improvements to a |
12 | residential property as defined as a home improvement within the |
13 | act of October 17, 2008 (P.L.1645, No.132), known as the Home |
14 | Improvement Consumer Protection Act. |
15 | "Managing agent." An employee of a contractor who is |
16 | responsible for the direction or control of funds held in trust |
17 | by the contractor under section 3. |
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1 | "Residential property." Property on which there is or will |
2 | be constructed a residential building not more than three |
3 | stories in height, not including any basement level, regardless |
4 | of whether any portion of that basement is at grade level, or |
5 | which is zoned or otherwise approved for residential development |
6 | on which there is or will be constructed a residential building |
7 | not more than three stories in height, not including any |
8 | basement level, regardless of whether any portion of that |
9 | basement is at grade level, planned residential development or |
10 | agricultural use, or for which a residential subdivision or land |
11 | development plan or planned residential development plan has |
12 | received preliminary, tentative or final approval on which there |
13 | is or will be constructed a residential building not more than |
14 | three stories in height, not including any basement level, |
15 | regardless of whether any portion of that basement is at grade |
16 | level, pursuant to the act of July 31, 1968 (P.L.805, No.247), |
17 | known as the Pennsylvania Municipalities Planning Code. |
18 | Section 3. Funds to be held in trust. |
19 | (a) Paid under contract.--Funds paid under a contract by an |
20 | owner to a contractor for work done or materials furnished or |
21 | both for or about a building by a subcontractor shall be held in |
22 | trust by the contractor as trustee for the subcontractors who |
23 | did work or furnished materials or both for or about the |
24 | building. The funds held in trust under this subsection shall be |
25 | for the purposes of paying subcontractors who did work or |
26 | furnished materials or both for or about the building. |
27 | (b) Trustee.--An officer, director or managing agent of a |
28 | contractor who has direction over or control of funds held in |
29 | trust by a contractor under subsection (a) is a trustee for the |
30 | purpose of paying the funds to the subcontractors who are |
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1 | entitled to the funds. |
2 | Section 4. Commingling. |
3 | (a) Commingling.--If a contractor commingles funds held in |
4 | trust under section 3 with other funds, the mere commingling |
5 | does not constitute a violation of civil or criminal law. |
6 | (b) Separate account.--Nothing contained in this act shall |
7 | be construed as requiring funds held in trust by a contractor |
8 | under section 3 to be placed in a separate account. |
9 | Section 5. Liability for retention or use of funds held in |
10 | trust. |
11 | An officer, director or managing agent of a contractor who |
12 | knowingly retains or uses funds held in trust under this act for |
13 | a purpose other than paying the contractors for whom the funds |
14 | are held in trust shall be personally liable to a person damaged |
15 | by his action. |
16 | Section 6. Exemption. |
17 | Section 3 shall not apply to any contract involving |
18 | residential property or a home improvement contract. |
19 | Section 20. Effective date. |
20 | This act shall take effect in 60 days. |
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