Bill Text: IA SSB1097 | 2019-2020 | 88th General Assembly | Introduced
Bill Title: A bill for an act relating to registration and bonding requirements for contractors, and providing criminal and civil penalties.
Spectrum: Unknown
Status: (N/A - Dead) 2019-02-04 - Subcommittee: Chapman, Hogg and Schultz. [SSB1097 Detail]
Download: Iowa-2019-SSB1097-Introduced.html
Senate
Study
Bill
1097
-
Introduced
SENATE/HOUSE
FILE
_____
BY
(PROPOSED
ATTORNEY
GENERAL
BILL)
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:
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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.
Section
91C.6,
Code
2019,
is
amended
to
read
as
10
follows:
11
91C.6
Rules.
12
The
labor
commissioner
shall
adopt
rules,
pursuant
to
13
chapter
17A
,
determined
to
be
reasonably
necessary
for
phasing
14
in,
administering,
and
enforcing
the
system
of
contractor
15
registration
and
bonding
established
by
this
chapter
.
16
Sec.
3.
NEW
SECTION
.
91C.6A
State
contracts
with
17
unregistered
contractors
prohibited.
18
A
contractor
who
is
not
registered
with
the
labor
19
commissioner
as
required
by
this
chapter
shall
not
be
awarded
20
a
contract
to
perform
work
for
the
state
or
an
agency
of
the
21
state.
22
Sec.
4.
NEW
SECTION
.
91C.6B
Home
improvement
contractor
23
performance
bond
——
penalty.
24
1.
For
purposes
of
this
section:
25
a.
“Division”
means
the
division
of
labor
services
of
the
26
department
of
workforce
development.
27
b.
“Home
improvement
contract”
means
any
contract
for
the
28
improvement
or
repair
of
existing
residential
property
and
the
29
appurtenances
of
such
property,
including
but
not
limited
to
30
landscaping,
garages,
storage
sheds,
sidewalks,
driveways,
and
31
retaining
walls,
but
does
not
include
contracts
for
less
than
32
two
hundred
dollars
in
the
aggregate.
33
2.
Any
contractor,
prior
to
entering
into
a
home
improvement
34
contract
in
Iowa,
shall
file
with
the
division
a
surety
bond.
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The
bond
shall
be
in
the
amount
of
seventy-five
thousand
1
dollars
and
shall
be
for
the
benefit
of
any
person
who,
in
2
connection
with
a
home
improvement
contract
with
a
contractor,
3
is
damaged
by
the
contractor’s
breach
of
the
home
improvement
4
contract
or
by
the
contractor’s
violation
of
section
714.16,
5
regardless
of
whether
the
person
has
a
direct
cause
of
action
6
pursuant
to
section
714.16.
Any
person
so
damaged
may
bring
7
suit
directly
on
the
bond
without
assignment,
and
may
recover
8
from
bond
proceeds
actual
damages,
court
costs,
and
reasonable
9
attorney
fees.
10
3.
A
person
filing
suit
pursuant
to
this
section
shall
11
notify
the
division
at
the
time
the
suit
is
filed,
and
the
12
division
shall
maintain
a
record,
available
for
public
13
inspection
and
copying,
of
all
suits
commenced.
Notification
14
is
not
a
precondition
to
the
filing
of
a
suit,
and
failure
to
15
notify
the
division
shall
in
no
way
affect
the
validity
of
a
16
lawsuit.
However,
notification
pursuant
to
this
section
must
17
be
completed
prior
to
payout
of
any
bond
proceeds
pursuant
to
18
this
section.
19
4.
The
attorney
general
may
make
a
direct
claim
on
a
20
bond
or
bring
an
action
in
equity
on
behalf
of
the
state
21
to
recover
bond
proceeds
for
persons
who
incur
damage
due
22
to
a
contractor’s
breach
of
a
home
improvement
contract
or
23
violation
of
section
714.16
in
connection
with
a
person’s
home
24
improvement
contract
with
a
contractor.
25
5.
Priority
for
payment
of
the
proceeds
of
a
bond
filed
26
pursuant
to
this
section
shall
be
based
upon
the
time
of
filing
27
a
notice
of
suit
with
the
division,
except
that
any
claim
or
28
action
by
the
attorney
general
to
recover
bond
proceeds
shall
29
take
precedence
over
all
other
claims
on
the
bond,
regardless
30
of
the
time
of
filing.
31
6.
The
issuer
of
a
surety
bond
filed
pursuant
to
this
32
section
shall
notify
the
labor
commissioner
upon
the
33
cancellation
of
such
bond.
If
a
surety
bond
filed
pursuant
to
34
this
section
is
canceled
or
otherwise
ceases
to
be
in
effect,
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the
contractor’s
registration
pursuant
to
this
chapter
shall
be
1
void.
The
failure
of
a
contractor
to
have
a
valid
surety
bond
2
on
file
with
the
division
as
of
the
date
of
a
home
improvement
3
contract
shall
make
the
contract
and
any
note,
instrument,
or
4
other
evidence
of
indebtedness
executed
or
entered
into
in
5
connection
with
the
contract
voidable,
and
shall
constitute
a
6
complete
defense
in
any
action
based
on
the
contract,
note,
7
instrument,
or
other
evidence
of
indebtedness
brought
by
the
8
contractor
or
the
contractor’s
successors
or
assigns.
9
7.
a.
A
contractor
who
violates
any
provision
of
this
10
section
is
guilty
of
a
simple
misdemeanor.
11
b.
A
violation
of
this
section
is
an
unlawful
practice
12
pursuant
to
section
714.16.
13
Sec.
5.
Section
91C.7,
subsection
1,
Code
2019,
is
amended
14
by
striking
the
subsection.
15
EXPLANATION
16
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
17
the
explanation’s
substance
by
the
members
of
the
general
assembly.
18
This
bill
relates
to
contractor
registration
and
bonding
19
requirements.
20
The
bill
requires
in
new
Code
section
91C.6B
that
a
21
contractor,
prior
to
entering
into
a
home
improvement
contract
22
in
Iowa,
obtain
a
surety
bond
of
$75,000.
The
new
bond
is
in
23
addition
to
any
other
bond
requirements
in
Code
chapter
91C.
24
The
bond
benefits
a
person
who
is
damaged
by
the
contractor’s
25
breach
of
contract
or
by
the
contractor’s
breach
of
Code
26
section
714.16,
the
consumer
fraud
statute,
regardless
of
27
whether
the
person
has
a
direct
cause
of
action
under
that
Code
28
section.
Any
person
damaged
in
either
way
may
sue
directly
29
on
the
bond
and
may
recover
actual
damages,
court
costs,
and
30
reasonable
attorney
fees.
The
bill
defines
“home
improvement
31
contract”
to
mean
any
contract
for
the
improvement
or
repair
32
of
existing
residential
property
and
the
appurtenances
of
such
33
property,
as
specified
in
the
bill,
but
not
including
contracts
34
of
less
than
$200
in
total.
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The
bill
provides
that
when
a
suit
is
filed,
the
person
who
1
sues
on
the
bond
shall
notify
the
division
of
labor
services
of
2
the
department
of
workforce
development,
which
shall
maintain
3
a
public
record
of
all
suits
commenced.
Notification
is
not
4
a
precondition
to
filing
a
suit
and
failure
to
notify
the
5
division
does
not
in
any
way
invalidate
a
lawsuit.
However,
6
bond
proceeds
cannot
be
paid
out
to
anyone
who
has
not
filed
7
notification.
8
The
bill
provides
that
the
attorney
general
may
also
make
9
a
direct
claim
on
a
bond
or
bring
an
action
in
equity
against
10
the
bond
on
behalf
of
the
state
to
recover
bond
proceeds
for
11
persons
damaged
due
to
a
contractor’s
breach
of
contract
or
12
violation
of
the
consumer
fraud
statute
in
connection
with
a
13
home
improvement
contract.
The
attorney
general’s
action
shall
14
take
precedence
over
all
other
claims
on
the
bond
regardless
15
of
the
time
of
filing.
16
The
bill
requires
the
issuer
of
a
bond
to
notify
the
labor
17
commissioner
upon
the
cancellation
of
the
bond.
If
a
bond
is
18
canceled
or
otherwise
ceases
to
be
in
effect,
the
contractor’s
19
registration
pursuant
to
Code
chapter
91C
shall
be
void.
The
20
failure
of
a
contractor
to
have
a
valid
bond
on
file
as
of
the
21
date
of
a
home
improvement
contract
makes
the
contract
and
any
22
note
or
instrument
of
indebtedness
executed
or
entered
into
23
in
connection
with
the
contract
to
the
contractor
voidable,
24
and
shall
be
a
complete
defense
in
any
action
based
on
the
25
contract
or
evidence
of
indebtedness
by
the
contractor
of
the
26
contractor’s
successors
or
assigns.
27
The
bill
provides
that
a
contractor
who
violates
any
28
provision
of
new
Code
section
91C.6B
is
guilty
of
a
simple
29
misdemeanor.
A
simple
misdemeanor
is
punishable
by
confinement
30
for
no
more
than
30
days
or
a
fine
of
at
least
$65
but
31
not
more
than
$625
or
by
both.
The
bill
further
provides
32
that
a
violation
of
new
Code
section
91C.6B
is
an
unlawful
33
practice
pursuant
to
Code
section
714.16,
which
allows
the
34
attorney
general
to
investigate,
issue
subpoenas,
and
commence
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civil
proceedings
seeking
restraining
orders
or
injunctions
1
prohibiting
persons
from
engaging
in
unlawful
practices
2
or
seeking
termination
of
the
business
affairs
of
a
person
3
engaging
in
unlawful
practices.
A
court
may
also
impose
a
4
civil
penalty
of
up
to
$40,000
per
violation
against
a
person
5
found
to
have
committed
an
unlawful
practice.
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