SSB 3094

The bill defines “home improvement contract” to mean any contract in the amount of $200 or more for the improvement or repair of existing residential property and the appurtenances of such property. The bill provides that the filing of the bond with the division may satisfy bonding requirements for local governments so long as the local bond is used solely for the benefit of the homeowner or materials supplier. The bill provides that when a lawsuit is filed, the person who sues on the bond shall notify the division of labor services of the department of workforce development, which shall maintain a public record of all suits commenced. Notification is not a precondition to filing a suit and failure to notify the division does not invalidate a lawsuit. However, bond proceeds cannot be distributed to anyone who has not filed notification and claimants who file notice first have priority over other claimants in the same lawsuit. The bill provides that the attorney general may also make a direct claim on a bond or bring an action in equity against the bond on behalf of the state to recover bond proceeds for persons damaged due to a contractor’s breach of contract or violation of the consumer fraud statute in connection with a home improvement contract. The attorney general’s action shall take precedence over all other claims on the bond regardless of the time of filing. The bill requires the issuer of a bond to notify the labor commissioner upon the cancellation of the bond. _____ canceled or otherwise ceases to be in effect, the contractor’s registration shall be void. The failure of a contractor to have a valid bond on file as of the date the home improvement contract is entered into renders the contract and related documents voidable. The bill provides that a home improvement contractor who violates the bill’s provisions is guilty of a simple misdemeanor. A simple misdemeanor is punishable by confinement for no more than days or a fine of at least $65 but not more than $625 or by both. The bill further provides that a violation under this Act is an unlawful practice pursuant to the consumer fraud statute, which allows the attorney general to investigate, issue subpoenas, and commence civil proceedings seeking restraining orders or injunctions prohibiting persons from engaging in unlawful practices or seeking termination of the business affairs of a person engaging in unlawful practices. A court may also impose a civil penalty of up to $40,000 per violation against a person found to have committed an unlawful practice. The bill is applicable to home improvement contracts entered into on or after the bill’s effective date.