H. B. 3051
(By Delegates Spencer, Fleischauer,
Marshall, DeLong, Perdue, Caputo and Manchin)
[Introduced February 13, 2007; referred to the
Committee on Industry and Labor, Economic Development and
Small Business then Finance.]
A BILL to amend the Code of West Virginia, 1931, as amended, by
adding thereto a new section, designated §21-11-13a, relating
to creating a contractor recovery fund; legislative findings;
creation of contractor recovery fund control board; granting
rule making authority.
Be it enacted by the Legislature of West Virginia:
That the Code of West Virginia, 1931, as amended, be amended
by adding thereto a new section, designated §21-11-13a, to read as
follows:
ARTICLE 11. WEST VIRGINIA CONTRACTOR LICENSING ACT.
§21-11-13a. Legislative findings, declaration of public policy
and contractor recovery fund.
(a) The Legislature hereby determines and finds that in the
past some contractors have not had the necessary qualifications,
staff, equipment or facilities to adequately serve the public; that some persons engaged in the contracting business have engaged in
unsafe, defective, and unscrupulous conduct relating to their
contracting services; that certain citizens of this state have
sustained significant financial losses as a result thereof; and
that in some of the
cases there has been no adequate means to
prevent the
conduct or protect the interests of the citizens of
West Virginia.
(b) The Legislature further determines and finds that there
exists a significant problem when a contractor goes out of business
or fails to maintain the necessary monetary means to compensate
citizens for losses sustained when a contractor engages in business
practices that cause citizens or businesses of the affected
community, as well as this state substantial financial loss. It
is, therefore determined, that the creation of a contractor
recovery fund is necessary as a remedial measure to allow both the
state and the citizens of this state to recover any taxes which
have not been properly remitted to the state and to provide
financial relief to citizens and businesses of this state who have
suffered financial harm through the failure of a contractor to
properly fulfill its responsibilities and obligations in a
competent and defect free manner.
(c) Therefore, there is hereby created a special fund in the
State Treasury which is to be designated the "contractor recovery
fund." The fund shall consist of certain moneys received from any contractor as defined in section three of this article or from
grants, gifts, bequests or awards arising out of the settlement or
adjudication of a claim. The fund is not to be treated by the
Auditor and Treasurer as part of the general revenue of the state.
The fund is to be a special revolving fund paid out upon order of
the Commissioner of Labor based on the recommendation of the
contractor recovery fund control board created in this section,
solely for the purposes specified in this section. The
commissioner may use up to one percent of funds from the contractor
recovery fund for the administrative expenses of operating the
contractor recovery fund program.
(d) The contractor recovery fund control board shall consist
of the Commissioner of Labor, or his or her designee, the Attorney
General's designee representing the office of Consumer Protection
and one representative selected by the contractor licensing board.
The Commissioner of Labor or his or her designee shall serve as
chair and the board shall meet at least once a year during the
month of July, and as required by the commissioner. The
commissioner may propose rules for promulgation in accordance with
article three, chapter twenty-nine-a of this code that are
necessary to effectuate the provisions of this section. The
commissioner may employ the necessary staff needed to operate the
program. The board may prorate the amount paid on claims when the
amount of valid claims submitted would exceed thirty-three percent of the fund. However, claims presented by the Division of Labor
for taxes and fees shall be paid in full. The board may purchase
insurance at a cost not to exceed one percent of the fund to cover
extraordinary or excess claims from the fund.
(e) Every applicant for either an original contractor license
or renewal of an existing contractor license of the type enumerated
in section three of this section shall pay, in addition to any
other license fee, an annual contractor recovery fund fee of one
hundred fifty dollars. All contractors shall pay the contractor
recovery fund payment unless he or she is exempt pursuant to the
following:
(1) If the contractor recovery fund reaches or exceeds the
amount of three million dollars as of the first day of July of any
year, a contractor who, for the three years immediately preceding
assessment of the fees, has not had a claim paid against them or
against the contractor recovery fund, whose license has not been
suspended or revoked and who has not been assessed any civil or
criminal penalties, is exempt from payment of the annual contractor
recovery fund fee. However, no contractor can submit a claim
against the fund unless it has contributed to the fund for at least
three years.
(2) If the fund should, as of the first day of April of any
year, drop below three million dollars, all contractors, regardless
of any previous exemption shall pay the annual contractor recovery fee of one hundred fifty dollars.
(f) The contractor recovery fund control board may consider
payment after any contractor surety bond, if applicable, has been
exhausted.
(g) When the fund reaches two hundred fifty thousand dollars,
the board shall consider claims for payment.
(h) Claims against the fund are not to be made for any act or
omission which occurred prior to the first day of July, two
thousand seven.
(i) Claims for payment shall be submitted within six months of
the date the claim arose or the date the division is made aware of
the claim.
(j) The commissioner shall promulgate rules to determine the
order of payment and priority of claims, the maximum amount of a
claim that can be made against the fund; and the manner in which
payment shall be made. All rules shall be promulgated by the
commissioner pursuant to chapter twenty-nine-a of this code.
(k) On payment by the board to a claimant from the fund, the
board shall immediately notify the contractor against whom a claim
was paid and request full reimbursement within thirty days of
notification. If a contractor fails to fully reimburse the board
within the specified period of time, the commissioner shall
immediately and without prior hearing revoke the contractor license
of contractor against whom the claim was paid. No applicant with an unpaid claim is eligible for renewal or relicensure until the
full amount of the reimbursement plus interest as determined by the
board is paid to the fund. Nothing in this section shall limit the
authority of the commissioner to suspend, revoke or levy civil
penalties against a contractor, nor shall full repayment of the
amount owed to the fund necessarily nullify or modify the effect of
any action by the commissioner.
(l) Nothing in this section shall limit the right for any
person to seek relief through civil action against any other
person.
(m) The provisions of this section do not apply to those class
of contractors in the business of selling manufactured housing and
covered by the state manufactured housing recovery fund established
by the Division of Labor pursuant to a legislative rule.
(n) Any person adversely affected by a decision of the board
or the commissioner shall be afforded an opportunity for hearing
before the board in accordance with section one, article five,
chapter twenty-nine-a of this code.
NOTE: The purpose of this bill is to create a contractor
recovery fund; legislative findings;
creation of contractor
recovery fund control board; granting rule making authority.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.