2017 -- H 5826 SUBSTITUTE A

========

LC001826/SUB A

========

     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2017

____________

A N   A C T

RELATING TO BUSINESSES AND PROFESSIONS - CONTRACTORS' REGISTRATION

AND LICENSING BOARD

     Introduced By: Representatives Tanzi, Carson, Ranglin-Vassell, McEntee, and
Donovan

     Date Introduced: March 02, 2017

     Referred To: House Corporations

     It is enacted by the General Assembly as follows:

     SECTION 1. Section 5-65-3 of the General Laws in Chapter 5-65 entitled "Contractors'

Registration and Licensing Board" is hereby amended to read as follows:

     5-65-3. Registration for work on a structure required of contractor -- Issuance of

building permits to unregistered or unlicensed contractors prohibited -- Evidence of activity

as a contractor -- Duties of contractors.

     (a) A person shall not undertake, offer to undertake, or submit a bid to do work as a

contractor on a structure or arrange to have work done unless that person has a current, valid

certificate of registration for all construction work issued by the board. A partnership,

corporation, or joint venture may do the work, offer to undertake the work, or submit a bid to do

the work only if that partnership, corporation, or joint venture is registered for the work. In the

case of registration by a corporation or partnership, an individual shall be designated to be

responsible for the corporation's or partnership's work. The corporation or partnership and its

designee shall be jointly and severally liable for the payment of the registration fee, as requested

in this chapter, and for violations of any provisions of this chapter. Disciplinary action taken on a

registration held by a corporation, partnership, or sole proprietor may affect other registrations

held by the same corporation, partnership, or sole proprietorship, and may preclude future

registration by the principal of that business entity.

     (b) A registered partnership or corporation shall notify the board in writing immediately

upon any change in partners or corporate officers.

     (c) A city, town, or the state shall not issue a building permit to anyone required to be

registered under this chapter who does not have a current, valid certificate of registration

identification card or valid license which shall be presented at the time of issuance of a permit

and shall become a condition of a valid permit. Each city, town, or the state which requires the

issuance of a permit as a condition precedent to construction, alteration, improvement,

demolition, movement or repair of any building or structure or the appurtenance to the structure

shall also require that each applicant for the permit file as a condition to issuing the permit a

written affidavit subject to the penalties of perjury, subscribed by the applicant, that the applicant

is registered under the provisions of this chapter, giving the number of the registration and stating

that the registration is in full force and effect, or, if the applicant is exempt from the provisions of

this chapter, listing the basis for the exemption. The city, town, or the state shall list the

contractor's registration number on the permit obtained by that contractor, and if a homeowner is

issued a permit, the building inspector or official must ascertain registration numbers of each

contractor on the premises and shall inform the registration board of any non-registered

contractors performing work at the site.

     (d) Every city and town which requires the issuance of a business license as a condition

precedent to engaging, within the city or town, in a business which is subject to regulation under

this chapter, shall require that each licensee and each applicant for issuance or renewal of the

license file, or has on file, with the city or town a signed statement that the licensee or applicant is

registered under the provisions of this chapter and stating that the registration is in full force and

effect.

     (e) It shall be prima facie evidence of doing business as a contractor when a person for

that person's own use performs, employs others to perform, or for compensation and with the

intent to sell the structure, arranges to have performed any work described in § 5-65-1(3) if within

any one twelve (12) month period that person offers for sale one or more structures on which that

work was performed.

     (f) Registration under this chapter shall be prima facie evidence that the registrant

conducts a separate, independent business.

     (g) The provisions of this chapter shall be exclusive and no city or town shall require or

shall issue any registrations or licenses nor charges any fee for the regulatory registration of any

contractor registered with the board. Nothing in this subsection shall limit or abridge the authority

of any city or town to license and levy and collect a general and nondiscriminatory license fee

levied upon all businesses, or to levy a tax based upon business conducted by any firm within the

LC001826/SUB A - Page 2 of 7

city or town's jurisdiction, if permitted under the laws of the state.

     (h) (1) Every contractor shall maintain a list which shall include the following

information about all subcontractors or other contractors performing work on a structure for that

contractor:

     (i) Names and addresses.

     (ii) Registration numbers or other license numbers.

     (2) The list referred to in subdivision (h)(1) of this subsection shall be delivered to the

board within twenty-four (24) hours after a request is made during reasonable working hours, or a

fine of twenty-five dollars ($25.00) may be imposed for each offense.

     (i) The following subcontractors who are not employees of a registered contractor must

obtain a registration certificate prior to conducting any work: (1) carpenters, including finish

carpenters and framers; (2) siding installers; (3) roofers; (4) foundation installers, including

concrete installers and form installers; (5) drywall installers; (6) plasterers; (7) insulation

installers; (8) ceramic tile installers; (9) floor covering installers; (10) swimming pool installers,

both above ground and in ground; (11) masons, including chimney installers, fireplace installers,

and general masonry erectors. This list is not all inclusive and shall not be limited to the above

referenced contractors. No subcontractor licensed by another in-state agency pursuant to § 5-65-2

shall be required to register, provided that said work is performed under the purview of that

license.

     (j) A contractor including, but not limited to, a general contractor, shall not hire any

subcontractor or other contractor to work on a structure unless the contractor is registered under

this chapter or exempt from registration under the provisions of § 5-65-2.

     (k) A summary of this chapter, prepared by the board and provided at cost to all

registered contractors, shall be delivered by the contractor to the owner when the contractor

begins work on a structure; failure to comply may result in a fine.

     (l) The registration number of each contractor shall appear in any advertising by that

contractor. Advertising in any form by an unregistered contractor shall be prohibited, including

alphabetical or classified directory listings, vehicles, business cards, and all other forms of

advertisements. The violations could result in a penalty being assessed by the board per

administrative procedures established.

     (i) The board may publish, revoke or suspend registrations and the date the registration

was suspended or revoked on a quarterly basis.

     (ii) Use of the word "license" in any form of advertising when only registered may

subject the registrant or those required to be registered to a fine of one hundred dollars ($100) for

LC001826/SUB A - Page 3 of 7

each offense at the discretion of the board.

     (m) The contractor must see that permits required by the state building code are secured

on behalf of the owner prior to commencing the work involved. The contractor's registration

number must be affixed to the permit as required by the state building code.

     (n) The board may assess an interest penalty of twelve percent (12%) annually when a

monetary award is ordered by the board.

(o) All work performed, including labor and materials, in excess of one thousand dollars

($1,000) shall be accompanied by a contract in writing. Contracts required pursuant to this

subsection shall include a location on or near the signature line location on or in which the parties

to the contract shall initial to evidence the receipt of certain consumer education materials or

information approved and provided by the board to the contractor. Said educational materials

and/or information shall include, but not be limited to, the following notice and shall be provided

by the contractor to the homeowner: NOTICE OF POSSIBLE MECHANIC'S LIEN

     To: Insert name of owner, lessee or tenant, or owner of less than the simple fee.

     The undersigned is about to perform work and/or furnish materials for the construction,

erection, alterations or repair upon the land at (INSERT ADDRESS) under contract with you.

This is a notice that the undersigned and any other persons who provide labor and materials for

the improvement under contract with the undersigned may file a mechanic's lien upon the land in

the event of nonpayment to them. It is your responsibility to assure yourself that those other

persons under contract with the undersigned receive payment for their work performed and

materials furnished for the construction, erection, alteration or repair upon the land. Failure to

adhere to the provisions of this subsection may result in a one thousand dollar ($1,000) fine

against the contractor and shall not affect the right of any other person performing work or

furnishing materials of claiming a lien pursuant to Chapter 34-28. However, such person failing

to provide such notice shall indemnify and hold harmless any owner, lessee or tenant, or owner of

less than the fee simple from any payment or costs incurred on account of any liens claims by

those not in privity with them, unless such owner, lessee or tenant, or owner of less than the fee

simple shall not have paid such person.

     (p) Contracts entered into must contain notice of right of rescission as stipulated in all

pertinent Rhode Island consumer protection laws and/or §5-65-27 if applicable.

     (q) The contractor must stipulate whether or not all the proper insurances are in effect for

each job contracted.

     (r) Contractors who are in compliance with the provisions of this subsection shall be

exempt from the requirements of § 34-28-4.1.

LC001826/SUB A - Page 4 of 7

     (s) In addition to the requirements of this chapter, contractors engaged in well drilling

activities shall also be subject to regulations pertaining to licensing and registration promulgated

by the contractors' registration and licensing board pursuant to chapter 5-65.2 and § 46-13.2-4.

     SECTION 2. Chapter 5-65 of the General Laws entitled "Contractors' Registration and

Licensing Board" is hereby amended by adding thereto the following section:

     5-65-27. Elderly person in-home solicitation - Right to cancel.

     (a) Definitions. For purposes of this section:

     (1) "Consumer" means an individual who contracts with a person offering to undertake or

submit a bid to do work as a contractor.

     (2) "Elderly person" is defined in §42-66-4.1.

     (3) "Emergency" means an urgent and immediate need for services, assistance or repairs,

which must be addressed without delay to avoid substantial harm to persons or property.

     (4) "In-home solicitation" means any transaction made at the consumer's primary

residence, including telephonic or online, except those transactions initiated by the consumer. A

consumer response to an advertisement is not an in-home solicitation.

     (5) "Person" means an individual, partnerships, corporation, limited-liability company,

association, or other group, however organized.

     (6) "Services" means work, labor, and services as a contractor pursuant to chapter 65 of

title 5, as well as other disciplines governed by the board pursuant to statutory law.

     (b) In addition to all other methods of consumer protection provided by federal or state

law, any contract which originates from an in-home solicitation of an elderly person for the

purposes of performing work as a contractor pursuant to chapter 65 of title 5, as well as other

disciplines governed by the board pursuant to statutory law, shall provide that any consumer who

is an elderly person shall, in the absence of an emergency as defined herein, have three (3) days

within which to cancel the in-home solicitation contract for contractor services.

     (c) The contractor shall, at the time of the agreement in accordance with §5-65-3, give

notice to the elderly person of all the rights that substantially comply with this section. The notice

must:

     (1) Appear in the agreement under the conspicuous caption: "Notice of Cancellation";

and

     (2) Read as follows:

     ... (date of transaction) "You may cancel this agreement, without any penalty or

obligation, within three (3) business days from the above date. If you cancel, your cancellation

notice must state that you do not wish to be bound by the agreement and mailed by registered or

LC001826/SUB A - Page 5 of 7

certified mail not later than midnight three (3) days following the consumer's signing the

agreement, excluding Sunday and any holiday on which regular mail deliveries are not made. All

cancellations must be mailed to:

     (insert name and address of the seller)."

     (d) Whenever the agreement fails to conform to the provisions of this section and the

consumer or their agent has notified the seller of their intent to cancel the agreement by registered

mail, return receipt requested, the contractor shall, within twenty (20) days, return any deposit

made by the consumer. Failure to return any deposit shall enable the consumer to recover from

the contractor double damages in any subsequent legal proceeding.

     SECTION 3. This act shall take effect upon passage.

========

LC001826/SUB A

========

LC001826/SUB A - Page 6 of 7

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO BUSINESSES AND PROFESSIONS - CONTRACTORS' REGISTRATION

AND LICENSING BOARD

***

     This act would provide that elderly persons may, absent an emergency, cancel any

agreement for contractor services within three (3) days if the contract originated in an in-home

solicitation by the contractor.

     This act would take effect upon passage.

========

LC001826/SUB A

========

LC001826/SUB A - Page 7 of 7