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H0477......................................................by STATE AFFAIRS
CONTRACTORS - Adds to existing law to require that contractors entering
into a contract for $5,000 or more to construct, alter or repair any
improvements on residential property must provide the homeowner with a
disclosure statement containing specified information concerning the rights
of the homeowner and duties of the contractor; and to provide criminal
penalties for violations.
02/01 House intro - 1st rdg - to printing
02/02 Rpt prt - to St Aff
02/28 Rpt out - rec d/p - to 2nd rdg
02/29 2nd rdg - to 3rd rdg
03/02 3rd rdg - PASSED - 38-28-4
AYES -- Alltus, Bell, Bieter, Black, Bruneel, Callister, Campbell,
Cheirrett, Crow, Deal, Denney, Ellsworth, Field(13), Field(20),
Geddes, Hansen(23), Hansen(29), Hornbeck, Loertscher, Mader, Meyer,
Moss, Moyle, Pischner, Ridinger, Ringo, Robison, Sali, Shepherd,
Smylie, Stevenson, Stoicheff, Stone, Taylor, Trail, Wheeler, Wood,
Zimmermann
NAYS -- Barraclough, Barrett, Boe, Chase, Clark, Cuddy, Gagner,
Hadley, Hammond, Henbest, Jones, Judd, Kellogg, Kempton, Kendell,
Kunz, Lake, Linford, Marley, McKague, Mortensen, Pearce, Pomeroy,
Reynolds, Schaefer(Tiegs), Sellman, Smith, Tilman
Absent and excused -- Gould, Jaquet, Montgomery, Mr Speaker
Floor Sponsor - Callister
Title apvd - to Senate
03/03 Senate intro - 1st rdg - to Com/HuRes
03/30 Rpt out - to 14th Ord
04/04 Rpt out w/o amen - to Comm/HuRes
H0477
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-fifth Legislature Second Regular Session - 2000
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 477
BY STATE AFFAIRS COMMITTEE
1 AN ACT
2 RELATING TO CONTRACTORS; AMENDING CHAPTER 5, TITLE 45, IDAHO CODE, BY THE
3 ADDITION OF A NEW SECTION 45-525, IDAHO CODE, TO REQUIRE THAT CONTRACTORS
4 ENTERING INTO A CONTRACT FOR FIVE THOUSAND DOLLARS OR MORE TO CONSTRUCT,
5 ALTER OR REPAIR ANY IMPROVEMENTS ON RESIDENTIAL PROPERTY PROVIDE THE
6 HOMEOWNER WITH A DISCLOSURE STATEMENT CONTAINING SPECIFIED INFORMATION
7 CONCERNING THE RIGHTS OF THE HOMEOWNER AND DUTIES OF THE CONTRACTOR, TO
8 PROVIDE FOR PROMULGATION OF RULES BY THE ATTORNEY GENERAL ESTABLISHING THE
9 FORM OF THE DISCLOSURE AND OTHER RULES NECESSARY TO IMPLEMENT THE SECTION,
10 TO PROVIDE PENALTIES FOR FAILURE TO PROVIDE THE DISCLOSURE FORM PRIOR TO
11 THE INITIATION OF THE PROPOSED PROJECT, TO PROVIDE THAT SUCH FAILURE SHALL
12 BE A DECEPTIVE ACT OR PRACTICE UNDER THE IDAHO CONSUMER PROTECTION ACT AND
13 TO PROVIDE PENALTIES FOR FAILURE OF THE CONTRACTOR TO APPLY PAYMENTS
14 RECEIVED ON THE CONTRACT FIRST TO THE PAYMENT OF SUBCONTRACTORS PERFORMING
15 SERVICES OR PROVIDING MATERIALS FOR THE PROJECT FOR WHICH THE CONTRACTOR
16 RECEIVED PAYMENT; AND PROVIDING AN EFFECTIVE DATE.
17 Be It Enacted by the Legislature of the State of Idaho:
18 SECTION 1. That Chapter 5, Title 45, Idaho Code, be, and the same is
19 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
20 ignated as Section 45-525, Idaho Code, and to read as follows:
21 45-525. CONTRACTORS -- RESIDENTIAL PROPERTY -- DISCLOSURES TO HOMEOWNERS.
22 (1) Prior to entering into any contract for five thousand dollars ($5,000) or
23 more with a homeowner to construct, alter or repair any improvements on resi-
24 dential property, the contractor shall provide to the homeowner a disclosure
25 statement setting forth the information specified in this section. The state-
26 ment shall contain an acknowledgment of receipt to be executed by the
27 homeowner. The contractor shall retain proof of receipt and provide a copy to
28 the homeowner. The disclosure shall include the following:
29 (a) The homeowner shall have the right to require that the contractor
30 obtain lien waivers from any subcontractors providing services or mate-
31 rials to the contractor in excess of one thousand dollars ($1,000).
32 (b) The contractor, upon receipt of full payment of the contract price,
33 shall be required to apply the funds first to the payment of all subcon-
34 tractors to whom funds are owing for services performed on, or materials
35 provided for, the project for which the contractor has received payment;
36 except that if any dispute arises with the agreement between the contrac-
37 tor and any subcontractor or supplier, the amount in dispute may be held
38 in reserve until resolution of the dispute.
39 (c) The homeowner shall have the right to receive from the contractor
40 proof that the contractor has a liability insurance policy in effect which
41 provides coverage for damage occurring to, or in connection with, the
42 project through the fault of the contractor, his employees or agents, and
43 proof that the contractor has worker's compensation insurance for his
2
1 employees as required by Idaho law.
2 (d) The homeowner shall be informed of, and shall be given the opportu-
3 nity to, purchase an extended policy of title insurance covering any
4 unfiled or unrecorded liens.
5 (e) The homeowner shall have the right to require a surety bond in an
6 amount up to the value of the construction project, at the homeowner's
7 expense.
8 (2) The attorney general shall promulgate rules establishing the form of
9 the disclosure required by this section on or before September 1, 2000. In
10 addition to the information specified in subsection (1) of this section, the
11 disclosure form shall advise the homeowner to obtain references concerning the
12 contractor and the contractor's performance of other construction projects.
13 The attorney general shall be authorized to promulgate any other rules deemed
14 necessary to implement the provisions of this section including rules govern-
15 ing the manner of reserving funds in dispute between the contractor and a sub-
16 contractor or supplier.
17 (3) It shall be a misdemeanor punishable by a fine of up to five hundred
18 dollars ($500) for any contractor subject to the provisions of this section to
19 fail to provide the disclosure form required by this section to the homeowner
20 prior to the initiation of the proposed project. Failure to provide the dis-
21 closure form required by this section to the homeowner shall also constitute
22 an unlawful, unfair and deceptive act or practice in trade or commerce under
23 the provisions of the Idaho consumer protection act, chapter 6, title 48,
24 Idaho Code.
25 (4) It shall be a misdemeanor punishable by a fine of up to five hundred
26 dollars ($500) for a contractor, upon receipt of full payment of the contract
27 price, to fail to apply such funds first to the payment of subcontractors to
28 whom payment is owing for services performed on, or materials provided for,
29 the project for which the contractor received payment; except that if any dis-
30 pute arises with the agreement between the contractor and any subcontractor or
31 supplier, the amount in dispute may be held in reserve until resolution of the
32 dispute.
33 SECTION 2. This act shall be in full force and effect on and after Janu-
34 ary 1, 2001.
STATEMENT OF PURPOSE
RS RS09848
The purpose of this legislation is to direct the Attorney
General's consumer protection division to construct a consumer
protection disclosure for construction service transactions.
The disclosure is to inform the consumer of available legal
rights and options to protect themselves from unforseeable
events which sometimes occur with construction projects.
FISCAL IMPACT
None
Contact
Name: Representative David Callister
Phone: 208-332-1000
STATEMENT OF PURPOSE/FISCAL NOTE H 477