Senate Bill No. 355
(By Senators Bowman, Bailey and Minear)
____________
[Introduced January 25, 2002; referred to the Committee
on Energy, Industry and Mining; and then to the Committee on
Finance.]
____________
A BILL to amend article eleven, chapter twenty-one of the code
of West Virginia, one thousand nine hundred thirty-one, as
amended, by adding thereto a new section, designated
section twenty-one, relating to requirements for a
contractor's license; requiring financial assurance as
condition of licensure; providing for rule-making
authority; and providing for termination of financial
assurance.
Be it enacted by the Legislature of West Virginia:
That article eleven, chapter twenty-one of the code of West
Virginia, one thousand nine hundred thirty-one, as amended, be
amended by adding thereto a new section, designated section
twenty-one, to read as follows:
ARTICLE 11. WEST VIRGINIA CONTRACTOR LICENSING ACT.
ยง21-11-21. F
inancial assurance required as condition of
licensure.
(a) Pursuant to the legislative rule to be promulgated as
provided in this section, the board may require each contractor
licensed under the provisions of this article to furnish a
surety bond or other form of financial assurance of the
contractor's financial responsibility. The form of financial
assurance may include, but not be limited to, a surety bond,
cash bond, certificate of deposit, irrevocable letter of credit
or performance insurance as specified by the board by
legislative rule.
(b) The surety bond or other form of financial assurance
shall be in an amount equal to thirty percent of the
contractor's gross volume of business, or thirty percent of the
contractor's projected gross volume of business, or fifty
thousand dollars, whichever is greater.
(c) The surety bond or other form of financial assurance
shall be payable to the board and shall protect against any
misappropriation of funds of a consumer or prospective consumer,
any deceptive or false or fraudulent representations or
deceitful practices, breach of contract written or implied, any
failure by a licensee because of bankruptcy, insolvency or other reason to fulfill warranty obligations and any failure of the
contractor, its agents or employees to comply with any state
law, this article or any rules promulgated by the board pursuant
to this article.
(d) The contractor shall maintain the surety bond or other
form of financial assurance as a condition of licensure under
this article.
(e) If there is a forfeiture of any surety bond or other
form of financial assurance, the proceeds shall be deposited in
the special revenue account created under section seventeen of
this article. The proceeds of the forfeiture may be used by the
board to repay consumers for their actual losses, but may not
exceed the value of the surety bond or other form of assurance.
The board may not award punitive damages.
(f) A contractor who ceases to do business in this state,
and who has no consumer complaints pending before the board, is
exempt from the financial assurance requirements of this
article.
(g) Prior to requiring financial assurance as a condition
of licensure, the board shall propose rules for legislative
approval in accordance with the provisions of article three,
chapter twenty-nine-a of this code, which shall specify the
forms, terms and conditions of the financial assurance required, the conditions and procedures for payment for actual losses of
consumers, and any other provisions necessary to carry out the
provisions of this section.
NOTE: The purpose of this bill is to require contractors
to provide a surety bond or other form of financial assurance to
protect consumers from loss in the event the contractor fails to
fulfill all legal obligations to the consumer.
This section is new; therefore, strike-throughs and
underscoring have been omitted.
This bill is recommended by the Joint Committee on
Government Operations for passage during the 2002 Regular
Session of the Legislature.