Senate
File
456
-
Introduced
SENATE
FILE
456
BY
CELSI
A
BILL
FOR
An
Act
relating
to
registration
and
bonding
requirements
for
1
contractors,
and
providing
criminal
and
civil
penalties.
2
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
3
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Section
1.
Section
91C.2,
subsection
3,
Code
2019,
is
1
amended
to
read
as
follows:
2
3.
An
In
addition
to
any
bond
required
by
section
91C.6B,
3
an
out-of-state
contractor
shall
either
file
a
surety
bond,
4
as
provided
in
section
91C.7
,
with
the
division
of
labor
5
services
in
the
amount
of
twenty-five
thousand
dollars
or
6
shall
provide
a
statement
to
the
division
of
labor
services
7
that
the
contractor
is
prequalified
to
bid
on
projects
for
the
8
department
of
transportation
pursuant
to
section
314.1
.
9
Sec.
2.
NEW
SECTION
.
91C.5A
Registered
contractors
——
10
unpaid
court
orders.
11
1.
The
labor
commissioner
shall
make
available
on
the
12
division
of
labor
services
of
the
department
of
workforce
13
development’s
internet
site
a
searchable
database
of
all
14
contractors
registered
under
this
chapter
with
unpaid
court
15
orders.
16
2.
The
labor
commissioner
shall
adopt
rules
to
implement
17
this
section.
18
Sec.
3.
Section
91C.6,
Code
2019,
is
amended
to
read
as
19
follows:
20
91C.6
Rules.
21
The
labor
commissioner
shall
adopt
rules,
pursuant
to
22
chapter
17A
,
determined
to
be
reasonably
necessary
for
phasing
23
in,
administering,
and
enforcing
the
system
of
contractor
24
registration
and
bonding
established
by
this
chapter
.
25
Sec.
4.
NEW
SECTION
.
91C.6A
State
contracts
with
26
unregistered
contractors
prohibited.
27
A
contractor
who
is
not
registered
with
the
labor
28
commissioner
as
required
by
this
chapter
shall
not
be
awarded
29
a
contract
to
perform
work
for
the
state
or
an
agency
of
the
30
state.
31
Sec.
5.
NEW
SECTION
.
91C.6B
Home
improvement
contractor
32
performance
bond
——
penalty.
33
1.
For
purposes
of
this
section:
34
a.
“Division”
means
the
division
of
labor
services
of
the
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department
of
workforce
development.
1
b.
“Home
improvement
contract”
means
any
contract
for
the
2
improvement
or
repair
of
existing
residential
property
and
the
3
appurtenances
of
such
property,
including
but
not
limited
to
4
landscaping,
garages,
storage
sheds,
sidewalks,
driveways,
and
5
retaining
walls,
but
does
not
include
contracts
for
less
than
6
two
hundred
dollars
in
the
aggregate.
7
2.
Any
contractor,
prior
to
entering
into
a
home
improvement
8
contract
in
Iowa,
shall
file
with
the
division
a
surety
bond.
9
The
bond
shall
be
in
the
amount
of
seventy-five
thousand
10
dollars
and
shall
be
for
the
benefit
of
any
person
who,
in
11
connection
with
a
home
improvement
contract
with
a
contractor,
12
is
damaged
by
the
contractor’s
breach
of
the
home
improvement
13
contract
or
by
the
contractor’s
violation
of
section
714.16,
14
regardless
of
whether
the
person
has
a
direct
cause
of
action
15
pursuant
to
section
714.16.
Any
person
so
damaged
may
bring
16
suit
directly
on
the
bond
without
assignment,
and
may
recover
17
from
bond
proceeds
actual
damages,
court
costs,
and
reasonable
18
attorney
fees.
19
3.
A
person
filing
suit
pursuant
to
this
section
shall
20
notify
the
division
at
the
time
the
suit
is
filed,
and
the
21
division
shall
maintain
a
record,
available
for
public
22
inspection
and
copying,
of
all
suits
commenced.
Notification
23
is
not
a
precondition
to
the
filing
of
a
suit,
and
failure
to
24
notify
the
division
shall
in
no
way
affect
the
validity
of
a
25
lawsuit.
However,
notification
pursuant
to
this
section
must
26
be
completed
prior
to
payout
of
any
bond
proceeds
pursuant
to
27
this
section.
28
4.
The
attorney
general
may
make
a
direct
claim
on
a
29
bond
or
bring
an
action
in
equity
on
behalf
of
the
state
30
to
recover
bond
proceeds
for
persons
who
incur
damage
due
31
to
a
contractor’s
breach
of
a
home
improvement
contract
or
32
violation
of
section
714.16
in
connection
with
a
person’s
home
33
improvement
contract
with
a
contractor.
34
5.
Priority
for
payment
of
the
proceeds
of
a
bond
filed
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pursuant
to
this
section
shall
be
based
upon
the
time
of
filing
1
a
notice
of
suit
with
the
division,
except
that
any
claim
or
2
action
by
the
attorney
general
to
recover
bond
proceeds
shall
3
take
precedence
over
all
other
claims
on
the
bond,
regardless
4
of
the
time
of
filing.
5
6.
The
issuer
of
a
surety
bond
filed
pursuant
to
this
6
section
shall
notify
the
labor
commissioner
upon
the
7
cancellation
of
such
bond.
If
a
surety
bond
filed
pursuant
to
8
this
section
is
canceled
or
otherwise
ceases
to
be
in
effect,
9
the
contractor’s
registration
pursuant
to
this
chapter
shall
be
10
void.
The
failure
of
a
contractor
to
have
a
valid
surety
bond
11
on
file
with
the
division
as
of
the
date
of
a
home
improvement
12
contract
shall
make
the
contract
and
any
note,
instrument,
or
13
other
evidence
of
indebtedness
executed
or
entered
into
in
14
connection
with
the
contract
voidable,
and
shall
constitute
a
15
complete
defense
in
any
action
based
on
the
contract,
note,
16
instrument,
or
other
evidence
of
indebtedness
brought
by
the
17
contractor
or
the
contractor’s
successors
or
assigns.
18
7.
a.
A
contractor
who
violates
any
provision
of
this
19
section
is
guilty
of
a
simple
misdemeanor.
20
b.
A
violation
of
this
section
is
an
unlawful
practice
21
pursuant
to
section
714.16.
22
Sec.
6.
Section
91C.7,
subsection
1,
Code
2019,
is
amended
23
by
striking
the
subsection.
24
EXPLANATION
25
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
26
the
explanation’s
substance
by
the
members
of
the
general
assembly.
27
This
bill
relates
to
contractor
registration
and
bonding
28
requirements.
29
The
bill
requires
the
labor
commissioner
of
the
division
of
30
labor
services
of
the
department
of
workforce
development
to
31
make
available
on
the
division’s
internet
site
a
searchable
32
database
of
all
contractors
registered
under
Code
chapter
33
91C
with
unpaid
court
orders.
The
bill
requires
the
labor
34
commissioner
to
adopt
rules
to
implement
this
requirement.
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The
bill
requires
in
new
Code
section
91C.6B
that
a
1
contractor,
prior
to
entering
into
a
home
improvement
contract
2
in
Iowa,
obtain
a
surety
bond
of
$75,000.
The
new
bond
is
in
3
addition
to
any
other
bond
requirements
in
Code
chapter
91C.
4
The
bond
benefits
a
person
who
is
damaged
by
the
contractor’s
5
breach
of
contract
or
by
the
contractor’s
breach
of
Code
6
section
714.16,
the
consumer
fraud
statute,
regardless
of
7
whether
the
person
has
a
direct
cause
of
action
under
that
Code
8
section.
Any
person
damaged
in
either
way
may
sue
directly
9
on
the
bond
and
may
recover
actual
damages,
court
costs,
and
10
reasonable
attorney
fees.
The
bill
defines
“home
improvement
11
contract”
to
mean
any
contract
for
the
improvement
or
repair
12
of
existing
residential
property
and
the
appurtenances
of
such
13
property,
as
specified
in
the
bill,
but
not
including
contracts
14
of
less
than
$200
in
total.
15
The
bill
provides
that
when
a
suit
is
filed,
the
person
who
16
sues
on
the
bond
shall
notify
the
division
of
labor
services,
17
which
shall
maintain
a
public
record
of
all
suits
commenced.
18
Notification
is
not
a
precondition
to
filing
a
suit
and
19
failure
to
notify
the
division
does
not
in
any
way
invalidate
a
20
lawsuit.
However,
bond
proceeds
cannot
be
paid
out
to
anyone
21
who
has
not
filed
notification.
22
The
bill
provides
that
the
attorney
general
may
also
make
23
a
direct
claim
on
a
bond
or
bring
an
action
in
equity
against
24
the
bond
on
behalf
of
the
state
to
recover
bond
proceeds
for
25
persons
damaged
due
to
a
contractor’s
breach
of
contract
or
26
violation
of
the
consumer
fraud
statute
in
connection
with
a
27
home
improvement
contract.
The
attorney
general’s
action
shall
28
take
precedence
over
all
other
claims
on
the
bond
regardless
29
of
the
time
of
filing.
30
The
bill
requires
the
issuer
of
a
bond
to
notify
the
labor
31
commissioner
upon
the
cancellation
of
the
bond.
If
a
bond
is
32
canceled
or
otherwise
ceases
to
be
in
effect,
the
contractor’s
33
registration
pursuant
to
Code
chapter
91C
shall
be
void.
The
34
failure
of
a
contractor
to
have
a
valid
bond
on
file
as
of
the
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date
of
a
home
improvement
contract
makes
the
contract
and
any
1
note
or
instrument
of
indebtedness
executed
or
entered
into
2
in
connection
with
the
contract
to
the
contractor
voidable,
3
and
shall
be
a
complete
defense
in
any
action
based
on
the
4
contract
or
evidence
of
indebtedness
by
the
contractor
of
the
5
contractor’s
successors
or
assigns.
6
The
bill
provides
that
a
contractor
who
violates
any
7
provision
of
new
Code
section
91C.6B
is
guilty
of
a
simple
8
misdemeanor.
A
simple
misdemeanor
is
punishable
by
confinement
9
for
no
more
than
30
days
or
a
fine
of
at
least
$65
but
10
not
more
than
$625
or
by
both.
The
bill
further
provides
11
that
a
violation
of
new
Code
section
91C.6B
is
an
unlawful
12
practice
pursuant
to
Code
section
714.16,
which
allows
the
13
attorney
general
to
investigate,
issue
subpoenas,
and
commence
14
civil
proceedings
seeking
restraining
orders
or
injunctions
15
prohibiting
persons
from
engaging
in
unlawful
practices
16
or
seeking
termination
of
the
business
affairs
of
a
person
17
engaging
in
unlawful
practices.
A
court
may
also
impose
a
18
civil
penalty
of
up
to
$40,000
per
violation
against
a
person
19
found
to
have
committed
an
unlawful
practice.
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