OLR Bill Analysis
sHB 5785 (as amended by House "B")*
AN ACT CONCERNING INSURANCE AND TESTING REQUIREMENTS FOR HOME IMPROVEMENT CONTRACTORS.
This bill prohibits the Department of Consumer Protection (DCP) commissioner from issuing a home improvement contractor registration to anyone who has not affirmatively indicated that he or she has and will maintain general commercial liability insurance coverage. It specifies that the commissioner is not required to investigate whether a home improvement contractor has the required insurance unless he receives a complaint alleging that a contractor is noncompliant.
The bill requires the commissioner, or his designee, to make available certain written material on home improvement contractor requirements and related laws to anyone applying for or renewing a home improvement contractor registration. It requires all initial and renewal applicants to sign a statement indicating that they will review the material. The material must be published by DCP and available at no cost. It may be posted online.
Lastly, the bill requires the DCP commissioner to study and report on enforcement and complaint procedures involving registered home improvement contractors.
*House Amendment “B” (1) removes a requirement that certain home improvement contractors pass a written test or course of study, instead requiring them to sign a statement saying they will review certain DCP written material; (2) removes a requirement to present evidence of insurance coverage to DCP and municipalities, instead requiring an indication of insurance on a DCP form; (3) decreases the minimum amount of required liability insurance, from $1 million to $500,000 or $100,000, depending on the contractor's income; (4) limits when the commissioner needs to investigate if a contractor is insured; and (5) requires the DCP study to include information about enforcement.
EFFECTIVE DATE: January 1, 2016
The bill requires anyone seeking to register as a home improvement contractor to affirmatively indicate on a DCP form that he or she has and will maintain general commercial liability insurance coverage while registered. It prohibits DCP from issuing a registration without this indication.
Under the bill, contractors with a gross annual income of at least $30,000 from home improvement services in the past calendar year must have at least $500,000 of insurance coverage. Contractors with less than $30,000 in gross annual income from these services must have at least $100,000 of insurance coverage.
DCP WRITTEN MATERIALS
Under the bill, DCP's written materials on home improvement contracting must at least include:
1. an explanation of registration and renewal requirements for contractors in the state,
2. Connecticut Home Improvement Act requirements, and
3. summaries of (a) the Home Improvement Guaranty and the Consumer Protection Enforcement funds (see BACKGROUND) and (b) other relevant laws.
HOME IMPROVEMENT CONTRACTOR STUDY
The bill requires the DCP commissioner to (1) study enforcement and complaint procedures concerning registered home improvement contractors and (2) report the study's results, by July 1, 2016, to the General Law Committee.
Under the bill, the study must at least include (1) an analysis of the adequacy of DCP's current complaint form, procedures, and enforcement efforts and (2) whether specific changes could improve them.
Home Improvement Guaranty Fund
DCP administers this fund to reimburse, up to $15,000, consumers who are unable to recover from a registered home improvement contractor the losses they suffered because the contractor failed to fulfill a contract.
Registered contractors and salespeople pay annual fees into the fund when renewing their registrations. The fund is capped at a certain amount and excess funds go to the Consumer Protection Enforcement Account and the General Fund (CGS § 20-432).
Consumer Protection Enforcement Account
DCP uses this account to enforce the licensing and registration laws it administers. It is funded with revenue from fines for licensing law violations and funds from the Home Improvement Guaranty Fund (CGS § 21a-8a).
General Law Committee