Senate Bill sb2132e1
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SB 2132 First Engrossed (ntc)
1 A bill to be entitled
2 An act relating to the Florida Construction
3 Industries Recovery Fund; amending s. 489.140,
4 F.S.; renaming the fund as the Florida
5 Homeowners' Construction Recovery Fund;
6 creating s. 489.1401, F.S.; declaring
7 legislative intent with respect to use of the
8 fund; creating s. 489.1402, F.S.; defining
9 terms; amending s. 489.141, F.S.; revising
10 conditions for recovery from the fund; amending
11 s. 489.142, F.S.; providing for hearings and
12 for service of notice; amending s. 489.1425,
13 F.S.; conforming to changes in terminology;
14 amending s. 489.143, F.S.; providing a limit on
15 disbursements with respect to a single
16 contract; revising guidelines for making
17 payments from the fund; providing criminal
18 penalties for specified fraudulent acts;
19 amending ss. 489.144, 489.13, 489.131, F.S.;
20 conforming terminology to the changes made by
21 the act; amending s. 468.631, F.S.; requiring
22 certain information relating to building
23 permits to be reported to the Department of
24 Business and Professional Regulation; providing
25 an effective date.
26
27 WHEREAS, the Florida Construction Industries Recovery
28 Fund was created to reimburse a person who has suffered
29 monetary damages as a result of financial mismanagement by a
30 contractor, and
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SB 2132 First Engrossed (ntc)
1 WHEREAS, the Legislature recognizes that homeowners
2 have been caused most monetary damages as a result of
3 financial mismanagement or abandonment by Division I
4 contractors, and
5 WHEREAS, the Legislature desires to provide homeowners
6 with recompense for such monetary damages, and
7 WHEREAS, the Legislature recognizes that the current
8 law places claimants in the position of having to reestablish
9 damages in order to comply with the provisions of the statute,
10 and
11 WHEREAS, the Legislature desires to make clear the
12 circumstances under which an award from the fund shall be
13 made, and
14 WHEREAS, the Legislature wishes to make other
15 clarifying changes and improve the disposition of claims
16 filed, and
17 WHEREAS, the Legislature recognizes that there are
18 claims currently pending from persons who are not homeowners
19 or who have presented claims for monetary damages caused by
20 Division II contractors, and
21 WHEREAS, the Legislature desires to provide a mechanism
22 for those claims if eligible, to be paid, NOW, THEREFORE,
23
24 Be It Enacted by the Legislature of the State of Florida:
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26 Section 1. Section 489.140, Florida Statutes, is
27 amended to read:
28 489.140 Florida Homeowners' Construction Industries
29 Recovery Fund.--There is created the Florida Homeowners'
30 Construction Industries Recovery Fund as a separate account in
31 the Professional Regulation Trust Fund.
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SB 2132 First Engrossed (ntc)
1 (1) The Florida Construction Industries Recovery Fund
2 shall be disbursed as provided in s. 489.143, on order of the
3 board, as reimbursement to any natural person adjudged by a
4 court of competent jurisdiction to have suffered monetary
5 damages, or to whom the licensee has been ordered to pay
6 restitution by the board, where the judgment or restitution
7 order is based on a violation of s. 489.129(1)(g), (j), or
8 (k), committed by any contractor, financially responsible
9 officer, or business organization licensed under the
10 provisions of this part at the time the violation was
11 committed, and providing that the violation occurs after July
12 1, 1993.
13 (2) The Construction Industries recovery fund shall be
14 funded out of the receipts deposited in the Professional
15 Regulation Trust Fund from the one-half cent per square foot
16 surcharge on building permits collected and disbursed pursuant
17 to s. 468.631.
18 Section 2. Section 489.1401, Florida Statutes, is
19 created to read:
20 489.1401 Legislative intent.--
21 (1) It is the intent of the Legislature that actions
22 taken by the Construction Industry Licensing Board with
23 respect to contractor sanctions and pursuant to this chapter
24 are an exercise of the department's regulatory power for the
25 protection of public safety and welfare.
26 (2) It is the intent of the Legislature that the sole
27 purpose of the Florida Homeowners' Construction Recovery Fund
28 is to compensate any aggrieved claimant who contracted for the
29 construction or improvement of the residence located within
30 this state and who has obtained a final judgment in any court
31 of competent jurisdiction, was awarded restitution by the
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SB 2132 First Engrossed (ntc)
1 Construction Industry Licensing Board, or received an award in
2 arbitration against a licensee on grounds of financial
3 mismanagement or misconduct, abandoning a construction
4 project, or making a false statement with respect to a project
5 and arising directly out of any transaction when the judgment
6 debtor was licensed and performed any of the activities
7 enumerated under s. 489.129(1)(g), (j) or (k) on the
8 homeowner's residence.
9 (3) It is the intent of the Legislature that Division
10 I contractors set apart funds for the specific objective of
11 participating in the fund.
12 Section 3. Section 489.1402, Florida Statutes, is
13 created to read:
14 489.1402 Definitions.--
15 (1) The following definitions apply to
16 ss.489.140-489.144:
17 (a) "Arbitration" means alternative dispute resolution
18 entered into between a claimant and a contractor either
19 pursuant to a construction contract that contains a mandatory
20 arbitration clause or through any binding arbitration under
21 the Florida Arbitration Code.
22 (b) "Board" means the Construction Industry Licensing
23 Board.
24 (c) "Claimant" means a homeowner.
25 (d) "Contractor" means a Division I contractor
26 performing services described in s. 489.105 (3)(a)-(c).
27 (e) "Court of competent jurisdiction" means a civil or
28 criminal court in the state of Florida, or a bankruptcy court.
29 (f) "Homeowner" means the owner of an owner-occupied
30 residence, including a trustee based upon a trust instrument
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1 granting a person a beneficial interest for life in the
2 residence.
3 (g) "Licensee" means a contractor, financially
4 responsible officer, or business organization licensed under
5 this part at the time the violation was committed.
6 (h) "Notice" means service as described in s. 455.275.
7 (i) "Residence" means an individual residential
8 condominium or cooperative unit or a residential building
9 containing not more than two residential units in which the
10 owner contracting for the improvement is residing or will
11 reside 6 months or more each calendar year upon completion of
12 the improvement.
13 (j) "Recovery fund" means the Florida Homeowner's
14 Construction Recovery Fund.
15 (k) "Same transaction" means a contract, or any series
16 of contracts, between a claimant and a contractor or qualified
17 business, when such contract or contracts involve the same
18 property or contiguous properties and are entered into either
19 at one time or serially.
20 (l) "Valid and current license," for the purpose of s.
21 489.141(2)(d), means any license issued pursuant to this part
22 to a licensee, including a license in an active, inactive,
23 delinquent, or suspended status.
24 (2) The following definitions apply to claims made
25 prior to July 1, 2007, when the contract was executed and the
26 violation occurred on or before January 1, 2005.
27 (a) "Claimant" means a natural person.
28 (b) "Licensee" means a contractor, financially
29 responsible officer, or business organization licensed under
30 this part at the time the violation was committed.
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1 Section 4. Section 489.141, Florida Statutes, is
2 amended to read:
3 489.141 Conditions for recovery; eligibility.--
4 (1) Any claimant person is eligible to seek recovery
5 from the Construction Industries recovery fund after having
6 made a claim and exhausting the limits of any available bond,
7 cash bond, surety, guarantee, warranty, letter of credit, or
8 policy of insurance, provided that each of the following
9 conditions is satisfied if:
10 (a) The claimant Such person has received final
11 judgment in a court of competent jurisdiction in this state in
12 any action wherein the cause of action was based on a
13 construction contract or has received an award in arbitration
14 or the Construction Industry Licensing Board has issued a
15 final order directing the licensee to pay restitution to the
16 claimant. The board may waive this requirement if:
17 1. The claimant is unable to secure a final judgment
18 against the licensee due to the death of the licensee; or
19 2. The claimant has sought to have assets involving
20 the transaction that gave rise to the claim removed from the
21 bankruptcy proceedings so that the matter might be heard in a
22 court of competent jurisdiction in this state and, after due
23 diligence, the claimant is precluded by action of the
24 bankruptcy court from securing a final judgment against the
25 licensee.
26 (b) The judgment, award, or restitution is based upon
27 a violation of s. 489.129(1)(g), (j), or (k) or s. 713.35.,
28 where the
29 (c) The violation was committed by a licensee.
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1 (d) The judgment, award, or restitution order
2 specifies the actual damages suffered as a consequence of such
3 violation.
4 (e) The contract was executed and the violation
5 occurred on or after July 1, 1993, and provided that:
6 1.a. The claimant Such person has caused to be issued
7 a writ of execution upon such judgment, and the officer
8 executing the writ has made a return showing that no personal
9 or real property of the judgment debtor or licensee liable to
10 be levied upon in satisfaction of the judgment can be found or
11 that the amount realized on the sale of the judgment debtor's
12 or licensee's property pursuant to such execution was
13 insufficient to satisfy the judgment; or
14 2.b. If the claimant such person is unable to comply
15 with subparagraph 1. sub-subparagraph a. for a valid reason to
16 be determined by the board, the claimant such person has made
17 all reasonable searches and inquiries to ascertain whether the
18 judgment debtor or licensee is possessed of real or personal
19 property or other assets subject to being sold or applied in
20 satisfaction of the judgment and by his or her search has
21 discovered no property or assets or has discovered property
22 and assets and has taken all necessary action and proceedings
23 for the application thereof to the judgment but the amount
24 thereby realized was insufficient to satisfy the judgment; and
25 or
26 3.2. The claimant has made a diligent attempt, as
27 defined by board rule, to collect the restitution awarded by
28 the board.;
29 (f)(b) A claim for recovery is made within 2 years
30 from the time of the act giving rise to the claim or within 2
31 years from the time the act is discovered or should have been
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SB 2132 First Engrossed (ntc)
1 discovered with the exercise of due diligence; however, in no
2 event may a claim for recovery be made more than 4 years after
3 the date of the act giving rise to the claim or more than 1
4 year after the conclusion of any civil, criminal, or
5 administrative action or award in arbitration based on the
6 act. This paragraph applies to any claim filed with the board
7 after October 1, 1998., whichever is later;
8 (g)(c) Any amounts recovered by the claimant such
9 person from the judgment debtor or licensee, or from any other
10 source, have been applied to the damages awarded by the court
11 or the amount of restitution ordered by the board.; and
12 (h)(d) The claimant Such person is not a person who is
13 precluded by this act from making a claim for recovery.
14 (2) A claimant person is not qualified to make a claim
15 for recovery from the Construction Industries Recovery Fund,
16 if:
17 (a) The claimant is the spouse of the judgment debtor
18 or licensee or a personal representative of such spouse;
19 (b) The claimant is a licensee who acted as the
20 contractor in the transaction which is the subject of the
21 claim;
22 (c) The Such person's claim is based upon a
23 construction contract in which the licensee was acting with
24 respect to the property owned or controlled by the licensee;
25 (d) The Such person's claim is based upon a
26 construction contract in which the contractor did not hold a
27 valid and current license at the time of the construction
28 contract; or
29 (e) The claimant Such person was associated in a
30 business relationship with the licensee other than the
31 contract at issue;.
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1 (f) The claimant Such person has suffered damages as
2 the result of making improper payments to a contractor as
3 defined in part I of chapter 713; or.
4 (g) The claimant has contracted with a licensee to
5 perform a scope of work described in paragraphs
6 489.105(3)(d)-(q).
7 (3) The board may determine by rule documentation that
8 is required to complete a claim.
9 Section 5. Section 489.142, Florida Statutes, is
10 amended to read:
11 489.142 Board powers relating to recovery; conduct of
12 hearings and service.--
13 (1) With respect to actions for recovery from the
14 Construction Industries recovery fund, the board may
15 intervene, enter an appearance, file an answer, defend the
16 action, or take any action it deems appropriate and may take
17 recourse through any appropriate method of review on behalf of
18 the State of Florida. The board may delegate to the department
19 by rule the authority to close any case when a claimant is not
20 qualified to make a claim for recovery from the recovery fund
21 under s. 489.141(2); when after notice the claimant has failed
22 to provide documentation in support of the claim as required
23 by the board; or when the licensee has reached the aggregate
24 limit.
25 (2) Notwithstanding any other provision of law, the
26 board shall cause a notice of hearing to be served 14 days in
27 advance of the hearing on the claimant and on the licensee
28 whose license is subject to suspension by s. 489.143. Each
29 notice shall inform the recipient of any administrative
30 hearing or judicial review that is available under s. 120.569,
31 s. 120.57, or s. 120.68; shall indicate the procedure that
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SB 2132 First Engrossed (ntc)
1 must be followed to obtain the hearing or judicial review; and
2 shall state the time limits that apply. Service of the notice
3 on the licensee shall be made in accordance with s. 455.275.
4 Service of the notice on the claimant shall be by regular
5 United State mail at the address provided on the claim. The
6 service of notice in accordance with this section is complete
7 upon expiration of 14 days after deposit in the United States
8 mail. Proof of service of a notice shall be made by entry in
9 the records of the department that the notice was given. The
10 entry shall be admissible in judicial and administrative
11 proceedings of this state and shall constitute sufficient
12 proof that notice was given.
13 (3) Notwithstanding any other provision of law, board
14 hearings on claims shall be conducted in accordance with ss.
15 120.569 and 120.57(2). All claim hearings shall be conducted
16 at the board's regular meeting at the place, date, and time
17 published. Orders of the board denying or awarding funds to a
18 claimant constitute final orders that may be appealed in
19 accordance with s. 120.68. Orders awarding or denying claims
20 shall be served in the same manner as notices of hearing in
21 this section.
22 Section 6. Section 489.1425, Florida Statutes, is
23 amended to read:
24 489.1425 Duty of contractor to notify residential
25 property owner of recovery fund.--
26 (1) Any agreement or contract for repair, restoration,
27 improvement, or construction to residential real property must
28 contain a written statement explaining the consumer's rights
29 under the Construction Industries recovery fund, except where
30 the value of all labor and materials does not exceed $2,500.
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SB 2132 First Engrossed (ntc)
1 The written statement must be substantially in the following
2 form:
3
4 FLORIDA HOMEOWNERS' CONSTRUCTION
5 INDUSTRIES RECOVERY FUND
6
7 PAYMENT MAY BE AVAILABLE FROM THE FLORIDA
8 HOMEOWNERS' CONSTRUCTION INDUSTRIES RECOVERY
9 FUND IF YOU LOSE MONEY ON A PROJECT PERFORMED
10 UNDER CONTRACT, WHERE THE LOSS RESULTS FROM
11 SPECIFIED VIOLATIONS OF FLORIDA LAW BY A
12 LICENSED STATE-LICENSED CONTRACTOR. FOR
13 INFORMATION ABOUT THE RECOVERY FUND AND FILING
14 A CLAIM, CONTACT THE FLORIDA CONSTRUCTION
15 INDUSTRY LICENSING BOARD AT THE FOLLOWING
16 TELEPHONE NUMBER AND ADDRESS:
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18 The statement shall be immediately followed by the board's
19 address and telephone number as established by board rule.
20 (2)(a) Upon finding a first violation of subsection
21 (1), the board may fine the contractor up to $500, and the
22 moneys must be deposited into the Construction Industries
23 recovery fund.
24 (b) Upon finding a second or subsequent violation of
25 subsection (1), the board shall fine the contractor $1,000 per
26 violation, and the moneys must be deposited into the
27 Construction Industries recovery fund.
28 Section 7. Section 489.143, Florida Statutes, is
29 amended to read:
30 489.143 Payment from the fund.--
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SB 2132 First Engrossed (ntc)
1 (1) The fund shall be disbursed as provided in s.
2 489.141 on a final order of the board.
3 (2)(1) Any claimant person who meets all of the
4 conditions prescribed in s. 489.141 s. 489.141(1) may apply to
5 the board to cause payment to be made to a claimant such
6 person from the Construction Industries recovery fund in an
7 amount equal to the judgment, award, or restitution order,
8 exclusive of postjudgment interest, against the licensee or
9 $25,000, whichever is less, or an amount equal to the
10 unsatisfied portion of such person's judgment, award, or
11 restitution order, exclusive of postjudgment interest, or
12 $25,000, whichever is less, but only to the extent and amount
13 of actual damages suffered by the claimant reflected in the
14 judgment or restitution order as being actual or compensatory
15 damages. Payment from the fund for other costs related to or
16 pursuant to civil proceedings such as postjudgment interest,
17 attorney's fees, court costs, medical damages, and punitive
18 damages is prohibited. The recovery fund is not obligated to
19 pay any judgment, award, or restitution order, or any portion
20 thereof, which is not expressly based on one of the grounds
21 for recovery set forth in s. 489.141 s. 489.140(1). Beginning
22 January 1, 2005, for each contract entered after July 1, 2004,
23 payment from the recovery fund shall be subject to a $50,000
24 maximum payment.
25 (3)(2) Upon receipt by a claimant under subsection (2)
26 (1) of payment from the Construction Industries recovery fund,
27 the claimant shall assign his or her additional right, title,
28 and interest in the judgment, award, or restitution order, to
29 the extent of such payment, to the board, and thereupon the
30 board shall be subrogated to the right, title, and interest of
31 the claimant; and any amount subsequently recovered on the
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SB 2132 First Engrossed (ntc)
1 judgment, award, or restitution order by the board, to the
2 extent of the right, title, and interest of the board therein,
3 shall be for the purpose of reimbursing the Construction
4 Industries recovery fund.
5 (4)(3) Payments for claims arising out of the same
6 transaction shall be limited, in the aggregate, to the lesser
7 of the judgment, award, or restitution order or the maximum
8 payment allowed $25,000, regardless of the number of claimants
9 involved in the transaction.
10 (5)(4) Payments for claims against any one licensee
11 shall not exceed, in the aggregate, $100,000 annually, up to a
12 total aggregate of $250,000. Beginning January 1, 1998, For
13 any claim approved by the board which is in excess of the
14 annual cap, the amount in excess of $100,000 up to the total
15 aggregate cap of $250,000 is eligible for payment in the next
16 and succeeding fiscal years, but only after all claims for the
17 then-current calendar year have been paid. Payments may not
18 exceed the aggregate annual or per claimant limits under law.
19 Beginning January 1, 2005, for each contract entered into
20 after July 1, 2004, payment from the recovery fund is subject
21 only to a total aggregate cap of $500,000.
22 (6)(5) Claims shall be paid in the order filed, up to
23 the aggregate limits for each transaction and licensee and to
24 the limits of the amount appropriated to pay claims against
25 the fund for the fiscal year in which the claims were filed.
26 (7)(6) If the annual appropriation is exhausted with
27 claims pending, such claims shall be carried forward to the
28 next fiscal year. Any moneys in excess of pending claims
29 remaining in the Construction Industries recovery fund at the
30 end of the fiscal year shall be paid as provided in s.
31 468.631.
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SB 2132 First Engrossed (ntc)
1 (8)(7) Upon the payment of any amount from the
2 Construction Industries recovery fund in settlement of a claim
3 in satisfaction of a judgment, award, or restitution order
4 against a licensee as described in s. 489.141 s. 489.141(1),
5 the license of such licensee shall be automatically suspended,
6 without further administrative action, upon the date of
7 payment from the fund. The license of such licensee shall not
8 be reinstated until he or she has repaid in full, plus
9 interest, the amount paid from the fund. A discharge of
10 bankruptcy does not relieve a person from the penalties and
11 disabilities provided in this section.
12 (9) Any firm, corporation, partnership, or
13 association, or any person acting in his or her individual
14 capacity, who aids, abets, solicits, or conspires with any
15 person to knowingly present or cause to be presented any false
16 or fraudulent claim for the payment of a loss under this act
17 is guilty of a third-degree felony, punishable as provided in
18 s. 775.082 or s. 775.084 and by a fine not exceeding $30,000,
19 unless the value of the fraud exceed $30,000 in which event
20 the fine may not exceed double the value of the fraud.
21 (10) All payments and disbursements from the recovery
22 fund shall be made by the Chief Financial Officer upon a
23 voucher signed by the secretary of the department or the
24 secretary's designee.
25 Section 8. Section 489.144, Florida Statutes, is
26 amended to read:
27 489.144 Investment of the fund.--The funds in the
28 Construction Industries recovery fund may be invested by the
29 Chief Financial Officer under the same limitations as apply to
30 the investment of other state funds, and the interest earned
31 thereon shall be deposited to the credit of the Construction
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SB 2132 First Engrossed (ntc)
1 Industries recovery fund and shall be available for the same
2 purposes as other moneys deposited in the Construction
3 Industries recovery fund.
4 Section 9. Paragraph (c) of subsection (4) of section
5 489.13, Florida Statutes, is amended to read:
6 489.13 Unlicensed contracting; notice of
7 noncompliance; fine; authority to issue or receive a building
8 permit; web page.--
9 (4)
10 (c) The balance of any fines collected under this
11 section shall be used to maintain the department's unlicensed
12 contractor website page, as specified in subsection (6), and
13 to fund the Florida Homeowners' Construction Industries
14 Recovery Fund. Nothing in this paragraph shall be construed to
15 permit recovery from the Construction Industries Recovery Fund
16 if the contractor is unlicensed.
17 Section 10. Paragraph (e) of subsection (3) of section
18 489.131, Florida Statutes, is amended to read:
19 489.131 Applicability.--
20 (3) Nothing in this part limits the power of a
21 municipality or county:
22 (e) To require one bond for each contractor in an
23 amount not to exceed $5,000, which bond shall be conditioned
24 only upon compliance with the Florida Building Code adopted
25 pursuant to s. 553.73. Any such bond must be equally
26 available to all contractors without regard to the period of
27 time a contractor has been certified or registered and without
28 regard to any financial responsibility requirements. Any such
29 bonds shall be payable to the Florida Homeowners' Construction
30 Industry Recovery Fund and filed in each county or
31 municipality in which a building permit is requested. Bond
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1 reciprocity shall be granted statewide. All such bonds shall
2 be included in meeting any financial responsibility
3 requirements imposed by any statute or rule. Any contractor
4 who provides a third party insured warranty policy in
5 connection with a new building or structure for the benefit of
6 the purchaser or owner shall be exempt from the bond
7 requirements under this subsection with respect to such
8 building or structure.
9 Section 11. Section 468.631, Florida Statutes, is
10 amended to read:
11 468.631 Building Code Administrators and Inspectors
12 Fund.--
13 (1) The provisions of This part shall be funded
14 through a surcharge, to be assessed pursuant to s. 125.56(4)
15 or s. 166.201 at the rate of one-half cent per square foot of
16 under-roof floor space permitted, including new construction,
17 renovations, alterations, and additions. The unit of
18 government responsible for collecting permit fees pursuant to
19 s. 125.56(4) or s. 166.201 shall collect such surcharge and
20 shall remit the funds to the department on a quarterly
21 calendar basis beginning not later than December 31, 1993, for
22 the preceding quarter, and continuing each third month
23 thereafter; and such unit of government may retain an amount
24 up to 10 percent of the surcharge collected to fund projects
25 and activities intended to improve the quality of building
26 code enforcement. There is created within the Professional
27 Regulation Trust Fund a separate account to be known as the
28 Building Code Administrators and Inspectors Fund, which shall
29 deposit and disburse funds as necessary for the implementation
30 of this part. The department shall annually establish the
31 amount needed to fund the certification and regulation of
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1 building code administrators, plans examiners, and building
2 code inspectors. Any funds collected in excess of the amount
3 needed to adequately fund the certification and regulation of
4 building code administrators, plans examiners, and building
5 code inspectors shall be deposited into the Florida
6 Homeowners' Construction Industries Recovery Fund established
7 by s. 489.140. If the Florida Homeowners' Construction
8 Industries Recovery Fund is fully funded as provided by s.
9 489.140, any remaining funds shall be distributed to the
10 Construction Industry Licensing Board for use in the
11 regulation of certified and registered contractors.
12 (2) The unit of government responsible for collecting
13 permit fees under this section shall report to the department
14 quarterly the number of permits issued for under-roof floor
15 space during the quarter, the total square footage for the
16 number of permits issued for under-roof floor space during the
17 quarter, and the calculation of the amount of funds being
18 remitted to the department. The report shall be attested to by
19 the officer in charge of collecting permit fees.
20 Section 12. This act shall take effect July 1, 2004.
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