S.F. 151 Section 1. NEW SECTION . 714.29 Home improvement fraud —— 1 penalties. 2 1. As used in this section, unless the context otherwise 3 requires: 4 a. “Consumer” means an individual who owns, leases, or 5 rents the residential property that is subject to the home 6 improvement contract and engages in the home improvement 7 contract with the contractor. 8 b. “Contract price” means the total price agreed upon in a 9 home improvement contract. 10 c. “Contractor” means a person who engages in home 11 improvement work under a home improvement contract or solicits 12 home improvement contracts whether or not the person interacts 13 directly with the consumer. 14 d. “Fair market value” means the amount for the home 15 improvement which in commercial judgment or under usage of 16 trade would be reasonable for services, materials, and work of 17 similar quality and workmanship. 18 e. “Home improvement” means any alteration, repair, 19 addition, modification, or improvement to a dwelling or the 20 property on which it is situated, including but not limited 21 to the construction, painting or coating, installation, 22 replacement or repair of driveways, sidewalks, swimming pools, 23 unattached structures, porches, kitchens, bathrooms, chimneys, 24 fireplaces, stoves, air conditioning or heating systems, hot 25 water heaters, water treatment systems, electrical wiring or 26 systems, plumbing fixtures or systems, doors, windows, roofs, 27 gutters, downspouts, and siding. 28 f. “Home improvement contract” means a written or oral 29 agreement whereby a contractor offers or agrees to provide 30 a home improvement to a consumer in exchange for payment of 31 moneys, regardless of whether any such payment is made. 32 g. “Material fact” means a fact that a reasonable person 33 would consider important when purchasing a home improvement. 34 h. “Unconscionable home improvement contract” means a home 35 -1- LSB 1058XS (1) 88 asf/jh 1/ 5

S.F. 151 improvement contract in which an unreasonable difference exists 1 between the fair market value of services, materials, and work 2 performed or to be performed and the home improvement contract 3 price. 4 2. A person, who is acting as a contractor, is guilty of 5 home improvement fraud if the person enters, or offers to 6 enter, into a home improvement contract, and intentionally does 7 any of the following: 8 a. Uses or employs a false pretense or false promise to 9 convey that a need exists to enter into a home improvement 10 contract. 11 b. Knowingly creates or reinforces a consumer’s false 12 impression or belief concerning the condition of a consumer’s 13 dwelling or property that is the subject of the home 14 improvement contract. 15 c. Makes a false statement or omits a material fact as to 16 the terms of the home improvement contract or the condition of 17 a person's dwelling or property that is the subject of the home 18 improvement contract. 19 d. Receives moneys for the purpose of paying for services, 20 labor, materials, or equipment and fails to apply such moneys 21 for such purpose by doing any of the following: 22 (1) Failing to substantially complete the home improvement 23 for which the moneys were provided within the following time 24 periods: 25 (a) Within thirty days of the date specified in the contract 26 for substantially completed work, if such a date is specified. 27 (b) Within ninety days of the date of the signed written 28 home improvement contract, if no completion date is specified 29 in the contract. 30 (c) Within ninety days of receipt of moneys paid by the 31 consumer to the contractor, if the contract is oral. 32 This section does not preclude the contractor and consumer 33 from agreeing to change the original, substantial completion 34 date to accommodate situations unknown to either the contractor 35 -2- LSB 1058XS (1) 88 asf/jh 2/ 5

S.F. 151 or consumer at the time of entering into the original contract. 1 (2) Failing to pay for the services, labor, materials, or 2 equipment provided incident to such home improvement. 3 (3) Diverting the moneys to a use other than for which the 4 moneys were received. 5 e. Provides a false individual name or a false business 6 name, address, or telephone number to a consumer. 7 f. Enters into an unconscionable home improvement contract 8 with a consumer. 9 (1) For the purposes of this paragraph, if the contract 10 price is greater than four times the fair market value of the 11 services, material, or work performed or to be performed, it is 12 prima facie evidence that a contract is unconscionable. 13 (2) Fair market value shall be determined as of the date 14 the home improvement contract was entered into. However, if 15 such evidence is not readily available, the fair market value 16 prevailing within any reasonable time before or after the time 17 described, which in commercial judgment or under usage of trade 18 would serve as a reasonable substitute, may be used. 19 3. It shall be evidence of intent that the person, who is 20 acting as a contractor, has committed home improvement fraud if 21 any of the following are applicable: 22 a. The person has previously been convicted under this 23 section or under a similar statute of the United States or of 24 any state within ten years of the home improvement contract in 25 question. 26 b. The person is currently subject to any administrative 27 orders, judgments, or injunctions that relate to home 28 improvements. 29 4. A person who commits an offense under this section is, 30 upon conviction, guilty of a class “D” felony if any of the 31 following circumstances are present: 32 a. The contract price or the total amount paid to the 33 defendant by or on behalf of the consumer is one thousand five 34 hundred dollars or more. 35 -3- LSB 1058XS (1) 88 asf/jh 3/ 5

S.F. 151 b. At least one of the consumers who entered into the home 1 improvement contract is sixty-two years of age or older at the 2 time the violation occurred. 3 c. The defendant has previously been convicted under this 4 section. 5 5. If none of the circumstances enumerated in subsection 4 6 are present, a person who commits an offense under this section 7 is, upon conviction, guilty of an aggravated misdemeanor. 8 EXPLANATION 9 The inclusion of this explanation does not constitute agreement with 10 the explanation’s substance by the members of the general assembly. 11 This bill relates to home improvement fraud. The bill 12 defines home improvement as any alteration, repair, addition, 13 modification, or improvement to a dwelling or the property 14 on which it is situated, including but not limited to the 15 construction, painting or coating, installation, replacement 16 or repair of driveways, sidewalks, swimming pools, unattached 17 structures, porches, kitchens, bathrooms, chimneys, fireplaces, 18 stoves, air conditioning or heating systems, hot water 19 heaters, water treatment systems, electrical wiring or systems, 20 plumbing fixtures or systems, doors, windows, roofs, gutters, 21 downspouts, and siding. 22 The bill provides that a person, who is acting as a 23 contractor, is guilty of home improvement fraud if the person 24 enters, or offers to enter, into a home improvement contract, 25 and intentionally does any of the following: uses or employs a 26 false pretense or false promise to convey that there is a need 27 to enter into a home improvement contract; knowingly creates or 28 reinforces a consumer’s false impression or belief concerning 29 the condition of a consumer’s dwelling or property that is 30 the subject of the home improvement contract; makes a false 31 statement or omits a material fact as to the terms of the home 32 improvement contract or the condition of a person’s dwelling or 33 property that is the subject of the home improvement contract; 34 receives moneys for the purpose of paying for services, labor, 35 -4- LSB 1058XS (1) 88 asf/jh 4/ 5

S.F. 151 materials, or equipment and fails to apply such moneys for 1 such purpose by failing to substantially complete the home 2 improvement for which the moneys were provided within specified 3 time periods, failing to pay for the services, labor, materials 4 or equipment provided incident to such home improvement, or 5 diverting the moneys to a use other than for which the moneys 6 were received; provides a false individual name or a false 7 business name, address, or telephone number to a consumer; or 8 enters into an unconscionable home improvement contract with 9 a consumer. 10 The bill provides that it shall be evidence of intent that 11 the person, who is acting as a contractor, has committed home 12 improvement fraud if the person has previously been convicted 13 under this bill or under a similar statute of the United States 14 or of any state within 10 years of entering into the home 15 improvement contract in question or if the person is currently 16 subject to any administrative orders, judgments, or injunctions 17 that relate to home improvements. 18 The bill provides that a person who commits an offense under 19 the bill is, upon conviction, guilty of a class “D” felony if 20 any of the following circumstances are present: the contract 21 price or the total amount paid to the defendant by or on 22 behalf of the consumer is $1,500 or more; at least one of the 23 consumers who entered into the home improvement contract is 62 24 years of age or older at the time the violation occurred; or 25 the defendant has previously been convicted under the bill. If 26 none of these circumstances are present, a person who commits 27 an offense under the bill is, upon conviction, guilty of an 28 aggravated misdemeanor. 29 A class “D” felony is punishable by confinement for no more 30 than five years and a fine of at least $750 but not more than 31 $7,500. An aggravated misdemeanor is punishable by confinement 32 for no more than two years and a fine of at least $625 but not 33 more than $6,250. 34 -5- LSB 1058XS (1) 88 asf/jh 5/ 5