S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                   595

                       2013-2014 Regular Sessions

                          I N  A S S E M B L Y

                               (PREFILED)

                             January 9, 2013
                               ___________

Introduced  by  M.  of  A.  DINOWITZ  --  Multi-Sponsored by -- M. of A.
  GABRYSZAK -- read once and  referred  to  the  Committee  on  Consumer
  Affairs and Protection

AN  ACT  to amend the general business law, in relation to the registra-
  tion of home improvement contractors; and to amend the  state  finance
  law, in relation to establishing the home improvement trust fund

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Section 770 of the  general  business  law  is  amended  by
adding six new subdivisions 8, 9, 10, 11, 12 and 13 to read as follows:
  8. "CERTIFICATE" MEANS A CERTIFICATE OF REGISTRATION ISSUED UNDER THIS
ARTICLE.
  9. "BOARD" MEANS THE NEW YORK STATE CONSUMER PROTECTION BOARD.
  10.  "DIRECTOR"  MEANS  THE  EXECUTIVE  DIRECTOR OF THE STATE CONSUMER
PROTECTION BOARD.
  11. "FUND" MEANS THE HOME IMPROVEMENT TRUST FUND ESTABLISHED  PURSUANT
TO SECTION NINETY-NINE-U OF THE STATE FINANCE LAW.
  12. "PRIVATE RESIDENCE" MEANS A SINGLE FAMILY DWELLING, A CONDOMINIUM,
A COOPERATIVE APARTMENT OR A MULTIFAMILY DWELLING CONSISTING OF NOT MORE
THAN TWELVE RENTAL UNITS.
  13.  "FINAL  JUDGMENT" MEANS ANY FINAL JUDGMENT OBTAINED IN A COURT OF
COMPETENT JURISDICTION, FINAL AWARD IN ARBITRATION OR FINAL  DISPOSITION
OF A BANKRUPT'S ESTATE.
  S 2. The general business law is amended by adding eleven new sections
770-a, 770-b, 770-c, 770-d, 770-e, 770-f, 770-g, 770-h, 770-i, 770-j and
770-k to read as follows:
  S  770-A. REGISTRATION REQUIRED. 1. ON OR AFTER MARCH FIRST, TWO THOU-
SAND FOURTEEN, NO  PERSON,  FIRM  OR  CORPORATION  SHALL  HOLD  HIMSELF,
HERSELF,  OR  ITSELF OUT TO BE A HOME IMPROVEMENT CONTRACTOR IN NEW YORK

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD03092-01-3
              

A. 595                              2

STATE WITHOUT FIRST REGISTERING WITH THE BOARD AS PROVIDED IN THIS ARTI-
CLE.
  2.  THE FOLLOWING PERSONS AND ORGANIZATIONS ARE NOT REQUIRED TO REGIS-
TER AS HOME IMPROVEMENT CONTRACTORS:
  (A) THE STATE, MUNICIPALITIES OF THE STATE, OR ANY DEPARTMENT OR AGEN-
CY OF THE STATE OR SUCH MUNICIPALITIES;
  (B) THE UNITED STATES OR ANY OF ITS DEPARTMENTS OR AGENCIES; AND
  (C) ANY SCHOOL, PUBLIC OR PRIVATE, OFFERING AS PART  OF  A  VOCATIONAL
EDUCATION  PROGRAM  COURSES  AND TRAINING IN ANY ASPECT OF HOME IMPROVE-
MENTS.
  S 770-B. INITIAL APPLICATION FOR REGISTRATION. 1. ANY PERSON, FIRM  OR
CORPORATION  SEEKING A CERTIFICATE OF REGISTRATION AS A HOME IMPROVEMENT
CONTRACTOR SHALL FILE WITH THE BOARD AN APPLICATION FOR REGISTRATION  IN
SUCH FORM AND DETAIL AS THE BOARD SHALL PRESCRIBE, INCLUDING THE FOLLOW-
ING:
  (A) THE NAME AND RESIDENCE ADDRESS OF THE APPLICANT;
  (B) THE BUSINESS NAME, IF OTHER THAN THAT OF THE APPLICANT;
  (C)  THE  PLACE,  INCLUDING THE CITY, TOWN OR VILLAGE, WITH THE STREET
AND NUMBER, WHERE THE BUSINESS IS TO BE LOCATED;
  (D) THE BUSINESS TELEPHONE OF THE APPLICANT;
  (E) THE LENGTH OF TIME THAT THE APPLICANT HAS BEEN A HOME  IMPROVEMENT
CONTRACTOR; AND
  (F)  A SWORN STATEMENT BY THE APPLICANT THAT THE INFORMATION SET FORTH
IN THE APPLICATION IS CURRENT AND ACCURATE.
  2. SUCH APPLICATION SHALL INCLUDE A STATEMENT  INDICATING  WHETHER  OR
NOT THE APPLICANT HAS:
  (A)  BEEN CONVICTED OF ANY CRIME DEFINED IN ARTICLE ONE HUNDRED FIFTY-
FIVE OF THE PENAL LAW OR ARTICLE TWENTY-TWO-A OF THIS CHAPTER  OR  IS  A
DEBTOR  ON ANY UNPAID CIVIL JUDGMENT RELATING TO WORK AS A HOME IMPROVE-
MENT CONTRACTOR; AND
  (B) AT ANY TIME IN THE PAST BEEN ISSUED  A  REGISTRATION  PURSUANT  TO
THIS  ARTICLE,  AND IF SO, WHETHER SUCH REGISTRATION WAS EVER REVOKED OR
SUSPENDED.
  3. EXCEPT AS OTHERWISE PROVIDED IN OR INCONSISTENT WITH THE PROVISIONS
OF THIS ARTICLE, ALL OF THE PROVISIONS OF THE BUSINESS  CORPORATION  LAW
PERTAINING  TO  THE  STATUTORY  DESIGNATION OF THE SECRETARY OF STATE AS
AGENT FOR SERVICE OF PROCESS, THE DESIGNATION OF A REGISTERED AGENT  FOR
SERVICE  OF  PROCESS,  THE MANNER OF EFFECTUATION OF SERVICE OF PROCESS,
AND MATTERS INCIDENTAL OR RELATED THERETO SHALL APPLY TO  THE  REGISTRA-
TION  REQUIRED  BY THIS ARTICLE WITH SUCH MODIFICATIONS AS MAY BE NECES-
SARY TO ADAPT SUCH LANGUAGE TO THE REGISTRATION REQUIRED BY  THIS  ARTI-
CLE.  SUCH  PROVISIONS  SHALL APPLY WITH THE SAME FORCE AND EFFECT AS IF
THOSE PROVISIONS HAD BEEN SET FORTH IN FULL IN THIS  ARTICLE  EXCEPT  TO
THE EXTENT THAT ANY PROVISION IS EITHER INCONSISTENT WITH A PROVISION OF
THIS  ARTICLE OR NOT RELEVANT TO THE REGISTRATION REQUIRED BY THIS ARTI-
CLE, UNLESS A DIFFERENT MEANING IS CLEARLY REQUIRED.
  4.  THE BOARD MAY REFUSE TO ISSUE A REGISTRATION TO ANY PERSON WHOM IT
FINDS HAS BEEN CONVICTED OF ANY CRIME  DESCRIBED  IN  PARAGRAPH  (A)  OF
SUBDIVISION  TWO OF THIS SECTION, OR FAILED TO PAY ANY FINAL CIVIL JUDG-
MENT, RELATING TO WORK AS A HOME IMPROVEMENT CONTRACTOR, IF SUCH REFUSAL
WILL, IN ITS JUDGMENT, BEST PROMOTE THE INTERESTS OF THE PEOPLE OF  THIS
STATE.
  S 770-C.  TERMS. A REGISTRATION ISSUED OR RENEWED UNDER THE PROVISIONS
OF  THIS  ARTICLE  SHALL  ENTITLE  A  PERSON TO ACT AS A REGISTERED HOME
IMPROVEMENT CONTRACTOR IN THE STATE OF NEW YORK  FOR  A  PERIOD  OF  TWO
YEARS FROM THE EFFECTIVE DATE OF THE REGISTRATION.

A. 595                              3

  S  770-D. REGISTRATION RENEWAL. 1. ANY REGISTRATION GRANTED UNDER THIS
ARTICLE MAY BE RENEWED BY THE BOARD UPON APPLICATION AND PAYMENT OF  THE
FEE  FOR  SUCH  RENEWAL BY THE HOLDER THEREOF, IN SUCH FORM AS THE BOARD
MAY PRESCRIBE.
  2.  THE  BOARD SHALL HAVE THE AUTHORITY TO ASSIGN STAGGERED EXPIRATION
DATES FOR REGISTRATIONS AT THE TIME OF RENEWAL.  IF  THE  ASSIGNED  DATE
RESULTS  IN  A TERM THAT EXCEEDS TWENTY-FOUR MONTHS, THE APPLICANT SHALL
PAY AN ADDITIONAL PRO-RATED ADJUSTMENT TOGETHER WITH THE REGULAR RENEWAL
FEE.
  3. THE BOARD MAY REFUSE TO RENEW, OR MAY REVOKE OR SUSPEND, THE REGIS-
TRATION OF ANY HOME IMPROVEMENT CONTRACTOR IF SUCH  REFUSAL,  SUSPENSION
OR  REVOCATION  IS  REASONABLY NECESSARY TO PROTECT THE INTERESTS OF THE
PEOPLE OF THIS STATE. THE BOARD MAY REINSTATE  SUCH  REGISTRATION  WHERE
SUCH GROUNDS FOR REFUSAL, SUSPENSION, OR REVOCATION NO LONGER EXIST.
  S 770-E. FEES. 1. EACH ORIGINAL APPLICATION OR APPLICATION FOR RENEWAL
FOR  REGISTRATION  AS A HOME IMPROVEMENT CONTRACTOR SHALL BE ACCOMPANIED
BY A FEE OF ONE HUNDRED FIFTY DOLLARS  FOR  EACH  BIENNIAL  REGISTRATION
PERIOD.
  2.  NOTICE  IN  WRITING IN THE MANNER AND FORM PRESCRIBED BY THE BOARD
SHALL BE GIVEN TO THE BOARD AT ITS OFFICES IN ALBANY WITHIN TEN DAYS  OF
CHANGES  OF  NAME OR ADDRESS BY REGISTERED HOME IMPROVEMENT CONTRACTORS,
EXCEPT THOSE MADE ON A RENEWAL APPLICATION.  THE  FEE  FOR  FILING  EACH
CHANGE OF NAME OR ADDRESS NOTICE SHALL BE TEN DOLLARS.
  3.  IN  THE  CASE  OF LOSS, DESTRUCTION OR DAMAGE, THE BOARD MAY, UPON
SUBMISSION OF A REQUEST IN  SUCH  FORM  AND  MANNER  AS  THE  BOARD  MAY
PRESCRIBE,  ISSUE  A DUPLICATE REGISTRATION UPON PAYMENT OF A FEE OF TEN
DOLLARS.
  4. THE FEES PROVIDED FOR BY THIS SECTION SHALL NOT BE REFUNDABLE.
  S 770-F. PRACTICES OF REGISTRANTS. 1. EACH HOME IMPROVEMENT CONTRACTOR
ENGAGED IN MAKING HOME IMPROVEMENT CONTRACTS SHALL EXHIBIT HIS, HER,  OR
ITS CERTIFICATE UPON THE REQUEST OF ANY INTERESTED PARTY.
  2. NO PERSON, FIRM OR CORPORATION SHALL:
  (A) PRESENT OR ATTEMPT TO PRESENT, AS HIS, HER, OR ITS OWN, THE REGIS-
TRATION OF ANOTHER;
  (B)  KNOWINGLY  GIVE  FALSE EVIDENCE OF A MATERIAL NATURE TO THE BOARD
FOR THE PURPOSE OF PROCURING A REGISTRATION;
  (C) FALSELY REPRESENT HIMSELF, HERSELF, OR ITSELF AS A REGISTERED HOME
IMPROVEMENT CONTRACTOR;
  (D) USE OR ATTEMPT TO USE A REGISTRATION WHICH HAS EXPIRED;
  (E) OFFER TO MAKE OR  MAKE  ANY  HOME  IMPROVEMENT  WITHOUT  HAVING  A
CURRENT REGISTRATION AS IS REQUIRED UNDER THIS ARTICLE;
  (F) REPRESENT IN ANY MANNER THAT HIS, HER, OR ITS REGISTRATION CONSTI-
TUTES  AN ENDORSEMENT OF THE QUALITY OF WORKMANSHIP OR COMPETENCY OF THE
CONTRACTOR.
  3. REGISTRATIONS ISSUED TO HOME IMPROVEMENT CONTRACTORS SHALL  NOT  BE
TRANSFERABLE OR ASSIGNABLE.
  S  770-G. SURETY BONDING REQUIREMENT. 1. AS A CONDITION TO OBTAINING A
REGISTRATION PURSUANT TO THIS ARTICLE, EVERY HOME IMPROVEMENT CONTRACTOR
APPLICANT WHO IS APPLYING FOR A REGISTRATION AND FOR WHOM THE TOTAL CASH
PRICE OF ALL OF HIS, HER, OR ITS HOME  IMPROVEMENT  CONTRACTS  WITH  ALL
HIS,  HER,  OR  ITS CUSTOMERS IS LESS THAN FIVE HUNDRED THOUSAND DOLLARS
DURING THE PERIOD OF TWELVE CONSECUTIVE MONTHS PRIOR TO APPLYING  FOR  A
REGISTRATION  SHALL  OBTAIN  AND CONTINUE IN EFFECT A SURETY BOND IN THE
AMOUNT OF TEN THOUSAND DOLLARS EXECUTED BY A SURETY  COMPANY  AUTHORIZED
TO TRANSACT BUSINESS IN THIS STATE.

A. 595                              4

  2.  AS  A CONDITION OF OBTAINING A REGISTRATION PURSUANT TO THIS ARTI-
CLE, EVERY HOME IMPROVEMENT CONTRACTOR APPLICANT WHO IS APPLYING  FOR  A
REGISTRATION  AND  FOR  WHOM THE TOTAL CASH PRICE OF ALL OF HIS, HER, OR
ITS HOME IMPROVEMENT CONTRACTS WITH ALL HIS, HER, OR  ITS  CUSTOMERS  IS
BETWEEN  FIVE HUNDRED THOUSAND DOLLARS BUT LESS THAN ONE MILLION DOLLARS
DURING THE PERIOD OF TWELVE CONSECUTIVE MONTHS PRIOR TO APPLYING  FOR  A
REGISTRATION  SHALL  OBTAIN  AND  CONTINUE IN EFFECT A SURETY BOND IN AN
AMOUNT OF TWENTY-FIVE THOUSAND DOLLARS  EXECUTED  BY  A  SURETY  COMPANY
AUTHORIZED TO TRANSACT BUSINESS IN THIS STATE.
  3.  AS  A CONDITION OF OBTAINING A REGISTRATION PURSUANT TO THIS ARTI-
CLE, EVERY HOME IMPROVEMENT CONTRACTOR APPLICANT WHO IS APPLYING  FOR  A
REGISTRATION  AND  FOR  WHOM THE TOTAL CASH PRICE OF ALL OF HIS, HER, OR
ITS HOME IMPROVEMENT CONTRACTS WITH ALL HIS, HER, OR  ITS  CUSTOMERS  IS
ONE  MILLION  DOLLARS OR GREATER DURING THE PERIOD OF TWELVE CONSECUTIVE
MONTHS PRIOR TO APPLYING FOR A REGISTRATION SHALL OBTAIN AND CONTINUE IN
EFFECT A SURETY BOND IN AN AMOUNT OF FIFTY THOUSAND DOLLARS EXECUTED  BY
A SURETY COMPANY AUTHORIZED TO TRANSACT BUSINESS IN THIS STATE.
  4.  THE BOND SHALL BE CONDITIONED ON THE HOME IMPROVEMENT CONTRACTOR'S
PAYMENT OF ANY FINAL JUDGMENT  ENTERED  AGAINST  SUCH  HOME  IMPROVEMENT
CONTRACTOR  FOR  LOSSES OR DAMAGES SUSTAINED BY THE OWNER AS A RESULT OF
THE BREACH OF THE HOME IMPROVEMENT CONTRACT WITHIN THIS STATE,  AND  ANY
CIVIL  PENALTIES  ASSESSED  AGAINST  A  HOME  IMPROVEMENT CONTRACTOR FOR
VIOLATIONS OF THIS ARTICLE.
  5. RECOVERY AGAINST ANY BOND SHALL BE MADE BY THE BOARD ON  BEHALF  OF
AN  OWNER  OR  OWNERS WHO OBTAIN A JUDGMENT AGAINST THE HOME IMPROVEMENT
CONTRACTOR FOR AN ACT OR OMISSION ON WHICH THE BOND IS  CONDITIONED,  IF
THE  ACT  OR  OMISSION  OCCURRED  DURING THE TERM OF THE BOND. THE TOTAL
LIABILITY IMPOSED ON THE SURETY BOND UNDER THIS SECTION FOR ALL BREACHES
OF THE BOND CONDITION IS LIMITED TO THE FACE AMOUNT OF  THE  BOND.  SUCH
LIABILITY  IS  LIMITED  TO THE AMOUNT OF THE JUDGMENT. IN NO EVENT SHALL
THE SURETY ON A BOND BE LIABLE FOR TOTAL CLAIMS IN EXCESS  OF  THE  BOND
AMOUNT,  REGARDLESS  OF  THE NUMBER OR NATURE OF CLAIMS MADE AGAINST THE
BOND OR THE NUMBER OF YEARS THE BOND REMAINED IN FORCE.
  6. ANY SURETY ISSUING  A  BOND  PURSUANT  TO  THIS  SECTION  SHALL  BE
REQUIRED TO PROVIDE THIRTY DAYS' NOTICE TO THE BOARD PRIOR TO THE EFFEC-
TIVE DATE OF CANCELLATION OF THE BOND.
  7.  THE  FAILURE  OF  A HOME IMPROVEMENT CONTRACTOR TO MAINTAIN SUCH A
BOND AND SATISFY ALL CLAIMS AGAINST THE BOND, SHALL RESULT IN THE  IMME-
DIATE  REVOCATION  OF THE REGISTRATION OF SUCH HOME IMPROVEMENT CONTRAC-
TOR.
  S 770-H. HOME IMPROVEMENT TRUST FUND. 1. THE  HOME  IMPROVEMENT  TRUST
FUND  ESTABLISHED PURSUANT TO SECTION NINETY-NINE-U OF THE STATE FINANCE
LAW SHALL PROVIDE FOR THE PAYMENT OF  OUTSTANDING  AWARDS  TO  AGGRIEVED
CONSUMERS AND FINES OWED TO THE BOARD.
  (A)  HOME IMPROVEMENT CONTRACTORS MAY ELECT TO PARTICIPATE IN THE FUND
IN LIEU OF FURNISHING A BOND AS REQUIRED BY SECTION SEVEN HUNDRED SEVEN-
TY-G OF THIS ARTICLE.
  (B) ANY HOME IMPROVEMENT CONTRACTOR APPLICANT WHO  ELECTS  TO  PARTIC-
IPATE  IN THE FUND MUST SUBMIT TO THE BOARD A CHECK IN THE AMOUNT OF TWO
HUNDRED DOLLARS, MADE PAYABLE TO THE BOARD, BEFORE A REGISTRATION  SHALL
BE ISSUED. ANY BONDED REGISTRANT MAY ELECT TO PARTICIPATE IN THE FUND IN
LIEU  OF  CONTINUED  COMPLIANCE WITH THE BOND REQUIREMENT BY CAUSING THE
BOARD TO RECEIVE A CHECK IN THE AMOUNT  OF  TWO  HUNDRED  DOLLARS,  MADE
PAYABLE  TO  THE  BOARD, PRIOR TO THE EXPIRATION OR CANCELLATION DATE OF
THE REGISTRANT'S BOND. ALL FUND PARTICIPANTS WHO ELECT  TO  CONTINUE  TO
PARTICIPATE  IN  THE FUND SHALL CONTRIBUTE TWO HUNDRED DOLLARS UPON EACH

A. 595                              5

RENEWAL OF THEIR REGISTRATION. ANY FUND PARTICIPANT WHO  ELECTS  NOT  TO
CONTINUE TO PARTICIPATE IN THE FUND AT THE TIME OF RENEWAL SHALL FURNISH
A  BOND IN ACCORDANCE WITH SECTION SEVEN HUNDRED SEVENTY-G OF THIS ARTI-
CLE BEFORE THE RENEWAL REGISTRATION SHALL BE ISSUED.
  (C)  FUND PARTICIPANTS MAY DISCONTINUE THEIR PARTICIPATION IN THE FUND
AT ANY TIME BY FILING A BOND PURSUANT TO SECTION SEVEN HUNDRED SEVENTY-G
OF THIS ARTICLE.
  (D) PARTICIPATION IN THE FUND SHALL NOT RELIEVE A  REGISTRANT  OF  ANY
OBLIGATION  TO  PAY AWARDS OR FINES IMPOSED BY THE BOARD OR JUDGMENTS OR
ARBITRATION AWARDS RENDERED AGAINST A REGISTRANT BY A COURT OF COMPETENT
JURISDICTION. IN THE EVENT THAT A CONTRACTOR'S REGISTRATION IS  REVOKED,
SURRENDERED  OR  THE CONTRACTOR FAILS TO RENEW HIS, HER OR ITS REGISTRA-
TION, AND THE FUND IS INVADED TO PAY AN AWARD, FINE OR JUDGMENT THAT WAS
RENDERED AGAINST SUCH CONTRACTOR PURSUANT TO THE PROVISIONS  HEREIN,  NO
REGISTRATION  SHALL BE ISSUED OR REINSTATED TO SUCH CONTRACTOR OR TO ANY
HOME IMPROVEMENT BUSINESS IN WHICH SUCH CONTRACTOR IS AN OFFICER, SHARE-
HOLDER, PARTNER OR PRINCIPAL, UNLESS THE AMOUNT OR AMOUNTS PAID  OUT  OF
THE  FUND  ON BEHALF OF SUCH CONTRACTOR IS REIMBURSED BY SUCH CONTRACTOR
IN FULL.
  (E) IN THE EVENT THAT A HOME IMPROVEMENT CONTRACTOR'S REGISTRATION  IS
REVOKED,  SURRENDERED  OR  THE CONTRACTOR FAILS TO RENEW HIS, HER OR ITS
REGISTRATION AND THE FUND IS INVADED TO PAY AN AWARD, FINE  OR  JUDGMENT
THAT  WAS  RENDERED  AGAINST SUCH CONTRACTOR, PURSUANT TO THE PROVISIONS
HEREIN, THE DIRECTOR OR HIS OR HER DESIGNEE  SHALL  HAVE  DISCRETION  TO
EXCLUDE  SUCH CONTRACTOR, OR ANY HOME IMPROVEMENT BUSINESS IN WHICH SUCH
CONTRACTOR IS A PRINCIPAL, FROM FUTURE PARTICIPATION IN  THE  FUND.  THE
DIRECTOR  OR  HIS OR HER DESIGNEE MAY, IN HIS OR HER DISCRETION, REQUIRE
SUCH HOME IMPROVEMENT CONTRACTOR TO OBTAIN A BOND  PURSUANT  TO  SECTION
SEVEN HUNDRED SEVENTY-G OF THIS ARTICLE.
  2.  (A)  THE  DIRECTOR MAY REQUIRE THAT DISBURSEMENTS BE MADE FROM THE
FUND TO PAY OUTSTANDING AWARDS TO CONSUMERS AND FINES OWED TO THE  BOARD
WHEN:
  (I)  THE BOARD HAS CONDUCTED AN ADMINISTRATIVE HEARING THAT RESULTS IN
A FINDING THAT A HOME IMPROVEMENT CONTRACTOR IS IN VIOLATION OF A LAW OR
REGULATION ENFORCED BY THE BOARD AND THE BOARD OR A COURT  OF  COMPETENT
JURISDICTION   HAS RENDERED A DECISION, JUDGMENT OR AN ARBITRATION AWARD
AGAINST THE CONTRACTOR FOR DAMAGES SUFFERED BY A CONSUMER ARISING OUT OF
A HOME IMPROVEMENT CONTRACT;
  (II) THE CONTRACTOR IS ORDERED BY THE BOARD  TO  PAY  AN  AWARD  TO  A
CONSUMER, A FINE OR TO SATISFY A JUDGMENT OR ARBITRATION AWARD;
  (III)  THE  CONTRACTOR  HAS  FAILED TO PAY SUCH AWARD TO A CONSUMER, A
FINE OR SATISFY A JUDGMENT OR ARBITRATION AWARD, WITHIN THIRTY  DAYS  OF
THE DATE OF THE BOARD'S ORDER; AND
  (IV)  THE  BOARD  HAS  REVOKED  THE  CONTRACTOR'S  REGISTRATION OR THE
CONTRACTOR HAS SURRENDERED OR FAILED TO RENEW  SUCH  REGISTRATION  AFTER
THE BOARD'S ORDER.
  NOTWITHSTANDING  THIS  PARAGRAPH, IF A CONTRACTOR HAS FILED A PETITION
FOR RELIEF UNDER ANY CHAPTER OF TITLE 11 OF THE UNITED STATES CODE,  THE
BOARD  MAY WAIVE THE REQUIREMENTS SET FORTH IN SUBPARAGRAPHS (II), (III)
AND (IV) OF THIS PARAGRAPH AND REQUIRE DISBURSEMENTS TO BE MADE FROM THE
FUND.
  (B) DISBURSEMENTS SHALL NOT BE MADE FROM THE FUND  TO  PAY  AN  AWARD,
FINE OR JUDGEMENT THAT IS RENDERED AGAINST:
  (I)  A  REGISTRANT WHO HAS FURNISHED A BOND, PURSUANT TO SECTION SEVEN
HUNDRED SEVENTY-G OF THIS ARTICLE; OR

A. 595                              6

  (II) A HOME IMPROVEMENT CONTRACTOR WHO WAS  NEVER  REGISTERED  BY  THE
BOARD OR A PARTICIPANT IN THE FUND.
  (C)  DISBURSEMENTS FROM THE FUND WILL BE MADE AT THE DISCRETION OF THE
DIRECTOR OR HIS OR HER DESIGNEE, PROVIDED, HOWEVER, THAT INVASION OF THE
FUND SHALL BE LIMITED TO NO MORE THAN TWENTY THOUSAND  DOLLARS  FOR  ALL
AWARDS,  FINES  AND  JUDGEMENTS ARISING OUT OF A SINGLE HOME IMPROVEMENT
CONTRACT AND ONE HUNDRED THOUSAND DOLLARS FOR ALL AWARDS,  CIVIL  PENAL-
TIES, AND JUDGEMENTS ATTRIBUTABLE TO ONE HOME IMPROVEMENT CONTRACTOR.
  (D) THE DIRECTOR OR HIS OR HER DESIGNEE MAY ORDER THAT PARTIAL PAYMENT
OF AWARDS, FINES OR JUDGMENTS BE MADE FROM THE FUND.
  (E)  NOTHING CONTAINED IN THIS SECTION SHALL BE CONSTRUED TO LIMIT THE
RIGHTS AND REMEDIES OF ANY PARTY, INCLUDING THE BOARD, TO PURSUE A CAUSE
OF ACTION AGAINST A HOME IMPROVEMENT CONTRACTOR WHO IS A PARTICIPANT  IN
THE FUND.
  (F)  NOTHING  CONTAINED IN THIS SECTION SHALL BE CONSTRUED TO CREATE A
RIGHT OF ANY PERSON TO A PORTION OF ANY OF THE FUND, EXCEPT IN THE  CASE
OF AN AWARD DULY MADE BY THE DIRECTOR PURSUANT TO THE PROVISIONS OF THIS
SECTION.
  (G)  NOTHING  CONTAINED  IN THIS SECTION SHALL BE CONSTRUED TO PROVIDE
FOR THE PAYMENT OF AWARDS OR JUDGMENTS  RENDERED  AGAINST  FUND  PARTIC-
IPANTS IN PERSONAL INJURY ACTIONS.
  3.  THE DIRECTOR SHALL, BY JANUARY THIRTY-FIRST OF EACH YEAR, CAUSE AN
ACCOUNTING TO BE MADE OF ALL OF THE FUND'S ACTIVITIES DURING THE PRECED-
ING CALENDAR YEAR.
  S 770-I. POWERS OF THE BOARD. 1. THE BOARD SHALL PROMULGATE SUCH RULES
AND REGULATIONS AS ARE DEEMED NECESSARY TO EFFECTUATE  THE  PURPOSES  OF
THIS  ARTICLE,  AND SHALL PROVIDE WRITTEN NOTIFICATION OF THE PROVISIONS
OF THIS ARTICLE TO ALL HOME IMPROVEMENT CONTRACTORS REGISTERED  PURSUANT
TO THIS ARTICLE.
  2.  THE  BOARD  SHALL HAVE THE POWER TO ENFORCE THE PROVISIONS OF THIS
ARTICLE AND UPON COMPLAINT OF ANY PERSON, OR UPON THE DIRECTOR'S  INITI-
ATIVE,  TO INVESTIGATE ANY VIOLATION THEREOF OR TO INVESTIGATE THE BUSI-
NESS, BUSINESS PRACTICES AND  BUSINESS  METHODS  OF  ANY  PERSON,  FIRM,
LIMITED  LIABILITY  COMPANY,  PARTNERSHIP OR CORPORATION APPLYING FOR OR
HOLDING A REGISTRATION AS A DOCUMENT DESTRUCTION CONTRACTOR, IF  IN  THE
OPINION  OF  THE  DIRECTOR  SUCH  INVESTIGATION  IS WARRANTED. EACH SUCH
APPLICANT OR REGISTRANT SHALL BE OBLIGED, ON REQUEST OF THE DIRECTOR, TO
SUPPLY SUCH INFORMATION, BOOKS, PAPERS OR RECORDS  AS  MAY  BE  REQUIRED
CONCERNING  HIS,  HER  OR  ITS  BUSINESS, BUSINESS PRACTICES OR BUSINESS
METHODS, OR PROPOSED BUSINESS PRACTICES OR METHODS.  FAILURE  TO  COMPLY
WITH  A  LAWFUL REQUEST OF THE DIRECTOR SHALL BE A GROUND FOR DENYING AN
APPLICATION FOR A REGISTRATION, OR FOR REVOKING, SUSPENDING, OR  FAILING
TO RENEW A REGISTRATION ISSUED UNDER THIS ARTICLE.
  3.  THE  BOARD SHALL HAVE THE POWER TO REVOKE OR SUSPEND ANY REGISTRA-
TION, OR IN LIEU THEREOF TO IMPOSE A FINE  NOT  EXCEEDING  ONE  THOUSAND
DOLLARS  PAYABLE  TO  THE  BOARD, OR REPRIMAND ANY REGISTRANT OR DENY AN
APPLICATION FOR A REGISTRATION OR RENEWAL THEREOF UPON  PROOF  THAT  THE
APPLICANT OR REGISTRANT HAS:
  (A)  VIOLATED  ANY  OF THE PROVISIONS OF THIS ARTICLE OR THE RULES AND
REGULATIONS PROMULGATED PURSUANT TO THIS ARTICLE;
  (B) PRACTICED FRAUD, DECEIT OR MISREPRESENTATION;
  (C) MADE A MATERIAL MISSTATEMENT IN THE APPLICATION FOR OR RENEWAL  OF
HIS OR HER REGISTRATION;
  (D)  DEMONSTRATED  INCOMPETENCE  OR  UNTRUSTWORTHINESS  IN  HIS OR HER
ACTIONS.

A. 595                              7

  4. THE BOARD SHALL, BEFORE DENYING AN APPLICATION FOR  A  REGISTRATION
OR  BEFORE REVOKING OR SUSPENDING ANY REGISTRATION, OR IMPOSING ANY FINE
OR REPRIMAND, AND AT LEAST FIFTEEN DAYS PRIOR TO THE DATE  SET  FOR  THE
HEARING,  AND  UPON DUE NOTICE TO THE COMPLAINANT OR OBJECTOR, NOTIFY IN
WRITING  THE  APPLICANT  FOR,  OR THE HOLDER OF SUCH REGISTRATION OF ANY
CHARGE MADE AND SHALL AFFORD SUCH APPLICANT OR REGISTRANT AN OPPORTUNITY
TO BE HEARD IN PERSON OR BY COUNSEL IN REFERENCE THERETO.  SUCH  WRITTEN
NOTICE  MAY BE SERVED BY DELIVERY OF SAME PERSONALLY TO THE APPLICANT OR
REGISTRANT, OR BY MAILING SAME BY REGISTERED  MAIL  TO  THE  LAST  KNOWN
BUSINESS ADDRESS OF SUCH APPLICANT OR REGISTRANT.
  5.  THE HEARING ON SUCH CHARGES SHALL BE AT SUCH TIME AND PLACE AS THE
BOARD SHALL PRESCRIBE AND SHALL BE CONDUCTED BY SUCH OFFICER  OR  PERSON
IN THE BOARD AS THE SECRETARY OF STATE MAY DESIGNATE, WHO SHALL HAVE THE
POWER  TO  SUBPOENA AND BRING BEFORE THE OFFICER OR PERSON SO DESIGNATED
ANY PERSON IN THIS STATE, AND ADMINISTER AN OATH TO AND  TAKE  TESTIMONY
OF  ANY  PERSON  OR  CAUSE HIS OR HER DEPOSITION TO BE TAKEN. A SUBPOENA
ISSUED UNDER THIS SECTION SHALL BE REGULATED BY THE CIVIL  PRACTICE  LAW
AND  RULES.  SUCH OFFICER OR PERSON IN THE BOARD DESIGNATED TO TAKE SUCH
TESTIMONY SHALL NOT BE  BOUND  BY  COMMON  LAW  OR  STATUTORY  RULES  OF
EVIDENCE OR BY TECHNICAL OR FORMAL RULES OF PROCEDURE.
  6.  IN  THE  EVENT  THAT  THE BOARD SHALL DENY THE APPLICATION FOR, OR
REVOKE OR SUSPEND ANY SUCH REGISTRATION, OR IMPOSE ANY  FINE  OR  REPRI-
MAND,  ITS  DETERMINATION SHALL BE IN WRITING AND OFFICIALLY SIGNED. THE
ORIGINAL OF SUCH DETERMINATIONS, WHEN SO SIGNED, SHALL BE FILED  IN  THE
OFFICE  OF THE BOARD AND COPIES THEREOF SHALL BE MAILED TO THE APPLICANT
OR REGISTRANT AND TO THE COMPLAINANT WITHIN TWO DAYS AFTER SUCH FILING.
  7. THE BOARD, ACTING BY THE OFFICE OR PERSON DESIGNATED TO CONDUCT THE
HEARING PURSUANT TO SUBDIVISION FIVE OF THIS SECTION OR  BY  SUCH  OTHER
OFFICER OR PERSON IN THE BOARD AS THE DIRECTOR MAY DESIGNATE, SHALL HAVE
THE  POWER  TO  SUSPEND  THE REGISTRATION OF ANY REGISTRANT WHO HAS BEEN
CONVICTED IN THIS STATE OR ANY OTHER STATE OR TERRITORY OF A  FELONY  OR
OF  ANY  MISDEMEANOR  FOR  A  PERIOD NOT EXCEEDING THIRTY DAYS PENDING A
HEARING AND A DETERMINATION OF CHARGES MADE AGAINST HIM OR HER. IF  SUCH
HEARING  IS  ADJOURNED AT THE REQUEST OF THE REGISTRANT, OR BY REASON OF
ANY ACT OR OMISSION BY HIM OR HER OR ON HIS OR HER BEHALF, SUCH  SUSPEN-
SION MAY BE CONTINUED FOR THE ADDITIONAL PERIOD OF SUCH ADJOURNMENT.
  8.  THE  ACTION  OF  THE  BOARD IN GRANTING OR REFUSING TO GRANT OR TO
RENEW A REGISTRATION UNDER THIS ARTICLE OR IN REVOKING OR SUSPENDING  OR
REFUSING  TO  REVOKE OR SUSPEND SUCH A REGISTRATION OR IMPOSING ANY FINE
OR REPRIMAND SHALL BE SUBJECT TO REVIEW BY A PROCEEDING INSTITUTED UNDER
ARTICLE SEVENTY-EIGHT OF  THE  CIVIL  PRACTICE  LAW  AND  RULES  AT  THE
INSTANCE  OF THE APPLICANT FOR SUCH REGISTRATION, THE HOLDER OF A REGIS-
TRATION SO REVOKED,  SUSPENDED,  FINED  OR  REPRIMANDED  OR  THE  PERSON
AGGRIEVED.
  S  770-J. REGISTRY. THE BOARD SHALL MAINTAIN AND PUBLISH A REGISTRY OF
ALL REGISTERED HOME IMPROVEMENT CONTRACTORS, WHICH SHALL LIST AND  IDEN-
TIFY,  ON  A  COUNTY  BY  COUNTY  BASIS, ALL REGISTERED HOME IMPROVEMENT
CONTRACTORS DOING BUSINESS IN THIS STATE.  SUCH REGISTRY SHALL  BE  MADE
AVAILABLE  ON THE BOARD'S INTERNET WEB SITE AND UPDATED AS FREQUENTLY AS
PRACTICABLE. THE BOARD SHALL ALSO MAINTAIN A TOLL-FREE  STATEWIDE  TELE-
PHONE  NUMBER  WHICH  SHALL  ALLOW  THE PUBLIC TO ACCESS THE INFORMATION
CONTAINED ON SUCH REGISTRY. ANY  INFORMATION  REGARDING  COMPLAINTS  AND
CLAIMS FILED AGAINST A HOME IMPROVEMENT CONTRACTOR, INCLUDING THE RESOL-
UTION  OF  SUCH  COMPLAINTS  AND  CLAIMS, SHALL BE MADE AVAILABLE TO THE
PUBLIC UPON REQUEST.

A. 595                              8

  S 770-K. PENALTIES. 1. ANY PERSON WHO OPERATES AS A  HOME  IMPROVEMENT
CONTRACTOR  WITHOUT  BEING  REGISTERED  SHALL BE REQUIRED TO PAY A CIVIL
PENALTY IN THE SUM OF TWO THOUSAND DOLLARS PER HOME IMPROVEMENT CONTRACT
ENTERED INTO IN VIOLATION OF THE REGISTRATION REQUIREMENT.  HOWEVER, ANY
SUCH  PERSON  AGAINST  WHOM SUCH PENALTY HAS BEEN ASSESSED MAY AVOID ALL
BUT ONE THOUSAND DOLLARS OF SUCH PENALTY BY OBTAINING A REGISTRATION  AS
REQUIRED  BY  THIS ARTICLE; PROVIDED THAT APPLICATION FOR SUCH REGISTRA-
TION IS MADE NOT MORE THAN TEN DAYS AFTER THE IMPOSITION OF SUCH  PENAL-
TY.    ALL  CIVIL  PENALTIES COLLECTED PURSUANT TO THIS SECTION SHALL BE
DEPOSITED TO THE CREDIT OF THE HOME IMPROVEMENT TRUST  FUND  ESTABLISHED
PURSUANT TO SECTION NINETY-NINE-U OF THE STATE FINANCE LAW.
  2.  A  HOME  IMPROVEMENT CONTRACTOR MAY NOT MAINTAIN A CIVIL ACTION TO
RECOVER PAYMENT FOR WORK UNDER A HOME IMPROVEMENT CONTRACT PERFORMED  IF
SUCH CONTRACTOR IS NOT REGISTERED AS REQUIRED UNDER THIS ARTICLE.
  S  3.  Paragraph  (a)  of  subdivision 1 of section 771 of the general
business law, as added by chapter 421 of the laws of 1987, is amended to
read as follows:
  (a) The name, address, telephone number,  STATE  REGISTRATION  NUMBER,
and  license  number, if applicable, of the contractor AND THE TOLL-FREE
TELEPHONE NUMBER AND INTERNET WEBSITE ADDRESS MAINTAINED  BY  THE  BOARD
PURSUANT TO SECTION SEVEN HUNDRED SEVENTY-J OF THIS ARTICLE.
  S  4.  Section  773 of the general business law, as amended by chapter
587 of the laws of 1990, is amended to read as follows:
  S 773. Violations. 1. Technical  violations.  Every  home  improvement
contractor  who  violates any of the provisions of this article shall be
subject to a civil penalty not to exceed [one] TWO hundred FIFTY dollars
FOR EACH VIOLATION.
  2. Substantial violations. Every home improvement contractor who fails
to deposit funds in an escrow account or provide a bond or  contract  of
indemnity  or  irrevocable  letter  of  credit  in  compliance  with the
requirements of section seventy-one-a of the lien law, or who  fails  to
provide a written contract substantially in compliance with the require-
ments of this article, shall be subject to a civil penalty not to exceed
[the  greater  of  two  hundred  fifty] FIFTEEN HUNDRED dollars for each
violation or five percent of the aggregate contract price  specified  in
the home improvement contract; provided, however, that in no event shall
the total penalty exceed twenty-five hundred dollars  for each contract.
  3.  Mitigating  factors; defenses. In an instance where the contractor
has been shown to have committed multiple violations of this article  or
the provisions of section seventy-one-a of the lien law, the court shall
consider  the following factors in assessing a civil penalty pursuant to
subdivision two of this section: the volume of business which  the  home
improvement  contractor  performs  on  an  annual  basis,  the number of
contracts in violation, the actual financial loss or exposure to  finan-
cial  loss  suffered  by  any  owner  as a result of the violations, and
whether the home improvement contractor acted in good faith or willfully
with respect to such violations. No home improvement contractor shall be
subject to the increased penalties provided by subdivision two  of  this
section if such contractor shows by a preponderance of the evidence that
the  violation  was  not intentional and resulted from a bona fide error
made notwithstanding the maintenance of procedures reasonably adopted to
avoid such a violation.
  4. ALL CIVIL PENALTIES COLLECTED PURSUANT TO  THIS  SECTION  SHALL  BE
DEPOSITED  TO  THE CREDIT OF THE HOME IMPROVEMENT TRUST FUND ESTABLISHED
PURSUANT TO SECTION NINETY-NINE-U OF THE STATE FINANCE LAW.

A. 595                              9

  S 5. Section 775 of the general business law, as added by chapter  421
of the laws of 1987, is amended to read as follows:
  S  775. Applicability. 1. This article shall not exempt any contractor
subject to its provisions from complying with any local law with respect
to the regulation of home improvement  contractors,  provided,  however,
that  after the effective date of this article, no political subdivision
may enact a local law inconsistent with the provisions of section  seven
hundred seventy-one of this article.
  2.  SECTIONS  SEVEN  HUNDRED SEVENTY-A, SEVEN HUNDRED SEVENTY-B, SEVEN
HUNDRED SEVENTY-C, SEVEN HUNDRED  SEVENTY-D,  SEVEN  HUNDRED  SEVENTY-E,
SEVEN  HUNDRED  SEVENTY-F, SEVEN HUNDRED SEVENTY-G, SEVEN HUNDRED SEVEN-
TY-H, SEVEN HUNDRED SEVENTY-I, SEVEN HUNDRED SEVENTY-J AND SEVEN HUNDRED
SEVENTY-K OF THIS ARTICLE SHALL NOT APPLY TO HOME  IMPROVEMENT  CONTRAC-
TORS OPERATING WITHIN ANY CITY WITH A POPULATION OF ONE MILLION OR MORE.
  3.  ANY  LOCAL  LAW REGULATING HOME IMPROVEMENT CONTRACTORS THAT IS AT
LEAST AS STRICT AS THE PROVISIONS OF THIS ARTICLE SHALL NOT BE DEEMED TO
BE PREEMPTED BY THE PROVISIONS OF THIS ARTICLE.
  S 6. The state finance law is amended by adding a new section 99-u  to
read as follows:
  S 99-U. HOME IMPROVEMENT TRUST FUND. 1. THERE IS HEREBY ESTABLISHED IN
THE  JOINT  CUSTODY OF THE STATE COMPTROLLER AND THE COMMISSIONER OF THE
DEPARTMENT OF TAXATION AND FINANCE A SPECIAL REVENUE FUND TO BE KNOWN AS
THE "HOME IMPROVEMENT TRUST FUND". SUCH FUND SHALL CONSIST OF ALL MONIES
COLLECTED PURSUANT TO PARAGRAPH (B) OF SUBDIVISION ONE OF SECTION  SEVEN
HUNDRED  SEVENTY-H,  SECTION  SEVEN HUNDRED SEVENTY-K, AND SECTION SEVEN
HUNDRED SEVENTY-THREE OF THE GENERAL BUSINESS LAW.
  2. MONIES OF THE FUND SHALL BE AVAILABLE FOR THE PAYMENT OF  OUTSTAND-
ING  AWARDS  TO  AGGRIEVED  CONSUMERS  PURSUANT TO SECTION SEVEN HUNDRED
SEVENTY-H OF THE GENERAL BUSINESS LAW.
  3. THE STATE CONSUMER PROTECTION BOARD  SHALL  ADOPT  SUCH  RULES  AND
REGULATIONS AS MAY BE NECESSARY FOR THE ADMINISTRATION OF THE FUND.
  S 7. This act shall take effect on the one hundred twentieth day after
it  shall have become a law; provided that the state consumer protection
board and the department of state are authorized to promulgate  any  and
all  rules  and  regulations  and  take  any other measures necessary to
implement this act on its effective date on or before such date.