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PAG LIN 1 1 Section 1. Section 91C.4, Code 1995, is amended to read as 1 2 follows: 1 3 91C.4 FEES. 1 4 The labor commissioner shallprescribe thecollect an 1 5 annual fee for registration, which fee shall not exceed1 6twenty-five dollars every two years. All fees collected shall1 7be deposited in the general fund of the stateas follows: 1 8 1. Fifty dollars from every person who acts as a general 1 9 contractor, as defined in section 91C.15, engaged in the 1 10 business of new home construction. Of the amount collected 1 11 pursuant to this subsection, twenty-five dollars shall be 1 12 retained by the division of labor services to be used for 1 13 costs related to the administration of this chapter. The 1 14 division shall transfer the remaining twenty-five dollars to 1 15 the office of the attorney general to be used for costs 1 16 related to the administration of this chapter. 1 17 2. Thirty-five dollars from every other person engaged in 1 18 business as a contractor. Amounts collected pursuant to this 1 19 subsection shall be retained by the division of labor services 1 20 to be used for costs related to the administration of this 1 21 chapter. 1 22 Sec. 2. NEW SECTION. 91C.15 DEFINITIONS. 1 23 As used in this subchapter, unless the context otherwise 1 24 requires: 1 25 1. "General contractor" means a person who owns or 1 26 operates a new home construction business, or who offers to 1 27 undertake, or agrees to perform, the construction of a new 1 28 home. "General contractor" does not include a subcontractor 1 29 who contracts or subcontracts with a general contractor for 1 30 the provision of property, materials, or services for a new 1 31 home construction contract. 1 32 2. "Home" means a new single-family residence. 1 33 Sec. 3. NEW SECTION. 91C.16 GENERAL CONTRACTOR BONDS. 1 34 1. In addition to the bonding requirements of subchapter 1 35 1, a general contractor doing business in this state, before 2 1 offering or entering into a new home construction contract, 2 2 shall furnish a surety bond to the attorney general, executed 2 3 by the contractor as principal and executed by a surety 2 4 company licensed and qualified to do business in this state. 2 5 2. The bond shall be in a form approved by the attorney 2 6 general and shall be in the amount of fifty thousand dollars 2 7 and for the indemnification of any person who enters into a 2 8 new home construction contract with the general contractor 2 9 from any loss or damage caused by the failure of the general 2 10 contractor to comply with the provisions of this chapter, 2 11 chapter 537, or section 714.16, or rules adopted by the 2 12 attorney general under these provisions. The aggregate 2 13 liability of the surety shall not exceed the amount of the 2 14 bond. 2 15 3. The attorney general may file an action in district 2 16 court to recover bond proceeds on behalf of persons who have 2 17 incurred loss or damage caused by the failure of a general 2 18 contractor, required to furnish a bond pursuant to this 2 19 section, to comply with this chapter, chapter 537, or section 2 20 714.16. 2 21 4. A person who has incurred loss or damage caused by the 2 22 failure of a general contractor, required to furnish a bond 2 23 pursuant to this section, to comply with this chapter, chapter 2 24 537, or section 714.16, may file an action in district court 2 25 to recover against the bond an amount sufficient to recover 2 26 such loss or damage. 2 27 Sec. 4. NEW SECTION. 91C.17 ADDITIONAL GENERAL 2 28 CONTRACTOR BOND – DEPOSIT. 2 29 1. A general contractor, in addition to the bond 2 30 requirements under sections 91C.7 and 91C.16, shall maintain 2 31 as security, evidence of financial responsibility as approved 2 32 by the labor commissioner, in consultation with the attorney 2 33 general. The security shall be either a bond or cash deposit 2 34 in an amount which is equal to a minimum of two percent of the 2 35 total contract amount associated with the construction of a 3 1 new home. The labor commissioner shall approve the security 3 2 before commencement of construction by the general contractor. 3 3 2. A surety who issues a bond must be approved by the 3 4 labor commissioner. A copy of the bond shall be filed in a 3 5 manner and according to procedures approved by the labor 3 6 commissioner. A cash deposit shall be filed with the 3 7 treasurer of state in a manner and according to procedures 3 8 approved by the treasurer of state in consultation with the 3 9 labor commissioner and the attorney general. The treasurer of 3 10 state shall not refund a deposit until notified by the 3 11 attorney general that the general contractor has satisfied the 3 12 requirements of this chapter related to the deposit, a bond 3 13 has been filed with the commissioner in compliance with this 3 14 section, or after one year, whichever occurs first. 3 15 3. The security shall be in favor of the state for the 3 16 benefit of any person entering into a contract with the 3 17 general contractor for the construction of a new home and who 3 18 incurs a loss or damage caused by the general contractor but 3 19 which is not discovered until after completion of the 3 20 contract. 3 21 4. The attorney general shall adopt rules establishing a 3 22 mediation procedure for determining the validity of claims and 3 23 the amount, if any, to be paid to the injured home owner. 3 24 5. This section shall not be construed to limit any other 3 25 rights or duties of the general contractor or the home owner 3 26 provided by statute or common law. 3 27 Sec. 5. NEW SECTION. 91C.18 LIEN RELEASES. 3 28 A general contractor and a subcontractor shall provide to a 3 29 purchaser of a new home a release or waiver of any liens or 3 30 encumbrances on the property related to the construction of 3 31 such home at the time of, or prior to, the closing of the 3 32 financing agreement between the mortgagee and the purchaser. 3 33 Sec. 6. Sections 91C.15 through 91C.18, as enacted by this 3 34 Act, shall be codified as a separate subchapter in chapter 3 35 91C. 4 1 EXPLANATION 4 2 This bill establishes new sections relating to new home 4 3 construction. The bill establishes definitions for terms 4 4 including "general contractor" and "home". "Home" is defined 4 5 as a new single-family residence. 4 6 The bill requires a general contractor doing business in 4 7 this state, before offering or entering into a new home 4 8 construction contract, to furnish a surety bond to the 4 9 attorney general, executed by the contractor as principal and 4 10 executed by a surety company licensed and qualified to do 4 11 business in this state, in the amount of $50,000 and for the 4 12 indemnification of any person who enters into a new home 4 13 construction with the general contractor from any loss or 4 14 damage caused by the failure of the contractor to comply with 4 15 the provisions of chapter 91C, chapter 537, or section 714.16, 4 16 or rules adopted by the commissioner of labor or the attorney 4 17 general under these provisions. The aggregate liability of 4 18 the surety shall not exceed the amount of the bond. 4 19 An action for indemnification of an injured party may be 4 20 brought by the attorney general or the person who has incurred 4 21 loss or damage caused by the failure of a general contractor, 4 22 required to furnish a bond pursuant to this section, to comply 4 23 with chapter 91C, chapter 537, or section 714.16. 4 24 In addition to the bonding requirements of section 91C.16, 4 25 a general contractor doing business in this state, before 4 26 offering or entering into a new home construction contract, is 4 27 also to furnish a deposit or a surety bond to the attorney 4 28 general, executed by the contractor as principal and executed 4 29 by a surety company licensed and qualified to do business in 4 30 this state, which is equal to a minimum of 2 percent of the 4 31 value of the contract. The deposit or bond shall be 4 32 maintained for a period of one year after the completion of 4 33 the contract and available to compensate a new home owner who 4 34 incurs a loss or damage caused by the general contractor but 4 35 which is not discovered until after completion of the 5 1 contract. 5 2 The attorney general shall adopt rules establishing a 5 3 procedure for determining the validity of claims and the 5 4 amount, if any, to be paid to the injured home owner. 5 5 The bill also provides that a general contractor and a 5 6 subcontractor are to provide to a purchaser of a new home a 5 7 release of any liens or encumbrances on the property related 5 8 to the construction of such home at the time of, or prior to, 5 9 the closing of the financing agreement between the mortgagee 5 10 and the purchaser. 5 11 LSB 4300SC 76 5 12 mj/jj/8
Text: SSB02236 Text: SSB02238 Text: SSB02200 - SSB02299 Text: SSB Index Bills and Amendments: General Index Bill History: General Index
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