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PRINTER'S NO. 763
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
678
Session of
2021
INTRODUCED BY YUDICHAK, MENSCH, BOSCOLA AND J. WARD,
MAY 17, 2021
REFERRED TO LABOR AND INDUSTRY, MAY 17, 2021
AN ACT
Providing for verification of construction contractors and for
procedures for verification; establishing the Construction
Contractor Verification Account; making an appropriation; and
imposing penalties.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Short title.
This act shall be known and may be cited as the Contractor
Verification Act.
Section 2. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Account." The Construction Contractor Verification Account
established under section 5(b).
"Bureau." The Bureau of Consumer Protection in the Office of
Attorney General.
"Construction contractor." As follows:
(1) A person who, in any capacity for compensation,
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other than as an employee of another person, engages in the
erection, reconstruction, demolition, alteration,
modification, custom fabrication, building, assembling, site
preparation and repair or maintenance work on real property
or premises under a contract, including work for a public
body or work paid for from public funds. The term includes
any of the following:
(i) A person who performs any work in connection
with a construction project, including the erection of
scaffolding.
(ii) A subcontractor of any tier.
(iii) A staffing agency that supplies workers under
contract.
(iv) A construction or project manager.
(2) The term does not include any of the following:
(i) A supplier or seller of goods, materials or
equipment who does not arrange or perform work or labor
in connection with the products.
(ii) An installer of finished goods, materials or
equipment that is not fabricated into or a fixed part of
the structure.
(iii) An individual who performs or solicits work on
a property that the individual owns or leases or an
individual who performs work as a bone fide employee of
the property owner or occupant.
(iv) An architect, engineer, geologist, land
surveyor, real estate agent or real estate appraiser who
holds a professional license or certification from an
oversight board or commission within the Department of
State of the Commonwealth and does not perform work as a
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construction contractor.
"Person." An individual, firm, sole proprietorship,
partnership, corporation, association or other entity.
Section 3. Verification of construction contractors.
(a) Prohibition.--A person may not hold oneself out or
engage in any act as a construction contractor without
satisfying the verification requirements under this act.
(b) Home improvement contractors.--Nothing in this act shall
be construed to affect the requirements specified under the act
of October 17, 2008 (P.L.1645, No.132), known as the Home
Improvement Consumer Protection Act. A construction contractor
who only engages in the business of home improvement as defined
in section 2 of the Home Improvement Consumer Protection Act,
and who has registered in accordance with the Home Improvement
Consumer Protection Act, shall be deemed to satisfy the
verification requirements under this act.
(c) Proof of verification.--A construction contractor shall
include the construction contractor's verification number issued
by the bureau in all advertisements distributed within this
Commonwealth and on all contracts, estimates and related
documents created after the effective date of this section.
(d) Verification system.--The bureau shall develop and
maintain a list of completed verifications under this act on the
bureau's publicly accessible Internet website, which shall
include each construction contractor's legal business name, any
assumed business name, business address, verification number and
verification expiration date.
Section 4. Procedures for verification.
(a) Application.--
(1) A construction contractor shall apply, in writing or
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electronically, for verification to the bureau in a manner
and on a form prescribed by the bureau. The application shall
include all the following information:
(i) For any individual, sole proprietor, primary
owner or officer of a business entity, all of the
following information:
(A) The applicant's full legal name and title at
the applicant's business.
(B) The applicant's business address and
telephone number.
(C) The applicant's Social Security number and
date of birth.
(D) The percentage of the applicant's business
owned by the applicant.
(E) All prior business names and addresses of
the applicant.
(ii) The legal business name, an assumed business
name, designated business address, physical address,
telephone number and email address of the applicant.
(iii) For an out-of-State business entity, the name
and address of the applicant's resident agent or office
within this Commonwealth and any identification number
issued to the applicant by the applicant's state or
political subdivision where the applicant has a principal
place of business through other registration, licensing
or verification systems, if applicable.
(iv) The applicant's Federal employer identification
number, if applicable.
(v) For any individual, sole proprietor, primary
owner or officer of a business entity, the name of all
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other persons with an ownership interest in the applicant
who are not identified under subparagraph (i) and the
percentage of the interest owned by each person. This
subparagraph shall not apply to shareholders with less
than a 5% ownership interest in a publicly traded
corporation.
(vi) A description of the nature of the business of
the applicant.
(vii) Documentation of compliance with the act of
June 2, 1915 (P.L.736, No.338), known as the Workers'
Compensation Act, and the act of December 5, 1936 (2nd
Sp.Sess., 1937 P.L.2897, No.1), known as the Unemployment
Compensation Law.
(viii) Documentation of enrollment in the E-Verify
program as required to be used for new hires under the
act of October 7, 2019 (P.L.454, No.75), known as the
Construction Industry Employee Verification Act.
(ix) Proof of financial responsibility, which may
include liability insurance or bonding, or self-
insurance.
(x) The fee specified under section 5(a).
(xi) A signed statement by the applicant that the
information in the application is true and accurate and
any individual signing the application is an authorized
agent of the applicant.
(b) Expiration and renewal.--The verification shall be
completed on a fixed, biennial basis on a date determined by the
bureau. The bureau shall accept an application for a
verification renewal before the expiration of an active
verification in a time frame specified by the bureau.
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(c) Nominal business operations.--The bureau may elect to
waive a verification renewal for a construction contractor whose
total gross annual receipts for work as a construction
contractor are less than $12,400 per year for both years
immediately before the renewal date specified by the bureau
under subsection (b).
(d) Certification of compliance.--After a construction
contractor completes an application for verification or
verification renewal under this section and pays the fee
specified under section 5(a), the bureau shall issue a
certificate of compliance to the construction contractor that
includes a verification number.
(e) Reporting changes.--A construction contractor shall
update its verification within 30 days of any change in personal
or business information required to be provided to the bureau
under this section.
Section 5. Fees and account.
(a) Fees.--An applicant for verification or verification
renewal under section 4 shall pay an application fee of not more
than $500 to the bureau. Fees shall be deposited into the
account established in subsection (b).
(b) Construction Contractor Verification Account.--
(1) The Construction Contractor Verification Account is
established as a restricted revenue, interest-bearing account
in the General Fund.
(2) The bureau shall deposit fees and penalties
collected under sections 5(a) and 8 into the account.
(3) Funds in the account and interest earned on the
funds are appropriated on a continuing basis to the Office of
Attorney General for administering and enforcing the
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provisions of this act and the act of October 7, 2019
(P.L.454, No.75), known as the Construction Industry Employee
Verification Act.
Section 6. Prohibited acts.
On and after the effective date of this section, a person who
holds oneself out or engages in any act as a construction
contractor may not:
(1) fail to complete the verification as a construction
contractor as required under this act;
(2) fail to display or identify its verification number
as required by section 3(c);
(3) knowingly contract with or perform work as a
construction contractor for another person without first
completing the verification required under this act or after
the construction contractor's verification has expired or has
been suspended; or
(4) knowingly contract with or pay another person for
work as a construction contractor if the person has not
completed the verification required under this act or the
person's verification has expired or has been suspended.
Section 7. Enforcement.
The bureau may enforce this act and investigate alleged
violations of this act. In enforcing this act and investigating
alleged violations of this act, the bureau may take any of the
following actions:
(1) Enter and inspect the place of business or a
worksite of a construction contractor at any reasonable time
for the purposes of examining and inspecting records of the
construction contractor that relate to compliance with this
act.
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(2) Subpoena witnesses, administer oaths, examine
witnesses and take testimony or compel the production of
documents for the purpose of ascertaining a construction
contractor's compliance with this act.
(3) Petition the Commonwealth Court to enforce any
subpoena or order issued by the bureau under this act.
Section 8. Penalties.
(a) Imposition.--
(1) A person who violates section 6(1) or (2) shall be
subject to the following:
(i) For a first violation, the bureau shall issue a
warning letter to the person detailing the omission and
provide 30 days to correct the violation.
(ii) For a second or subsequent violation, the
bureau shall bring an action in a court of competent
jurisdiction to assess a fine of up to $2,000 per day
when the person is in violation of section 6(1) or (2).
(2) The bureau shall bring an action in a court of
competent jurisdiction to assess a fine of up to $10,000 per
violation for a person who violates section 6(3) or (4).
(b) Suspensions of verifications.--If a construction
contractor's verification is suspended by court order, including
an order under the act of October 7, 2019 (P.L.454, No.75),
known as the Construction Industry Employee Verification Act,
the suspension shall take effect by operation of law on the date
that the court's order is entered, unless the suspension is
stayed by subsequent court order, pending appeal. The Office of
Attorney General shall provide notice of a court order affecting
the validity of a contractor's verification to the bureau and
the bureau shall update the verification system consistent with
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the court order no later than 30 days from the date of receipt
of the notice.
(c) Other relief.--In addition to the penalties specified
under this section, the bureau may seek other relief, including
injunctive relief, restitution and costs under the act of
December 17, 1968 (P.L.1224, No.387), known as the Unfair Trade
Practices and Consumer Protection Law, and any violation of this
act shall be considered a violation of the Unfair Trade
Practices and Consumer Protection Law.
Section 9. Protection from retaliation.
(a) Retaliation prohibited.--A construction contractor
may not discharge, threaten or otherwise retaliate or
discriminate against an employee regarding compensation or other
terms or conditions of employment because the employee
participates in an investigation, hearing or inquiry by the
bureau or reports an alleged violation of this act to the
bureau.
(b) Actions.--An employee who suffers retaliation or
discrimination under subsection (a) may bring an action in a
court of common pleas in accordance with the Pennsylvania Rules
of Civil Procedure. The action must be brought within three
years from the date the employee knew of the retaliation or
discrimination.
(c) Relief.--If an employee prevails in an action commenced
under subsection (b), the employee shall be entitled to the
following relief:
(1) Reinstatement of the employee, if applicable.
(2) Restitution equal to three times the amount of the
employee's wages and fringe benefits calculated from the date
of the retaliation or discrimination.
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(3) Reasonable attorney fees and costs of the action.
(4) Any other legal and equitable relief as the court
deems appropriate.
Section 10. Construction.
Nothing in this act shall be construed to alleviate,
substitute or otherwise impact licensing or certification
standards or requirements for individuals or businesses that may
be required under any other Federal or State law or regulation
or local ordinance.
Section 11. Effective date.
The act shall take effect in 180 days.
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