HB 1169

1	A bill to be entitled
2	An act relating to the Florida Construction Industries
3	Recovery Fund; amending s. 489.140, F.S.; renaming the
4	fund as the Florida Homeowners' Construction Recovery
5	Fund; deleting certain disbursement provisions; creating
6	s. 489.1401, F.S.; declaring legislative intent with
7	respect to use of the fund; creating s. 489.1402, F.S.;
8	defining terms; amending s. 489.141, F.S.; revising
9	conditions for recovery from the fund; amending s.
10	489.142, F.S.; providing certain authority and conditions
11	for the closing of cases for recovery; providing for
12	hearings and for service of notice; amending s. 489.1425,
13	F.S.; conforming terminology; amending s. 489.143, F.S.;
14	providing a limit on disbursements with respect to a
15	single contract; revising guidelines for making payments
16	from the fund; providing criminal penalties for specified
17	fraudulent acts; amending ss. 489.144, 489.13, and
18	489.131, F.S.; conforming terminology; amending s.
19	468.631, F.S.; requiring certain information relating to
20	building permits to be reported to the Department of
21	Business and Professional Regulation; providing an
22	effective date.
23
24	WHEREAS, the Florida Construction Industries Recovery Fund
25	was created to reimburse a person who has suffered monetary
26	damages as a result of financial mismanagement by a contractor,
27	and
28	WHEREAS, the Legislature recognizes that homeowners have
29	been caused most monetary damages as a result of financial
30	mismanagement or abandonment by Division I contractors, and
31	WHEREAS, the Legislature desires to provide homeowners with
32	recompense for such monetary damages, and
33	WHEREAS, the Legislature recognizes that the current law
34	places claimants in the position of having to reestablish
35	damages in order to comply with the provisions of the statute,
36	and
37	WHEREAS, the Legislature desires to make clear the
38	circumstances under which an award from the fund shall be made,
39	and
40	WHEREAS, the Legislature wishes to make other clarifying
41	changes and improve the disposition of claims filed, and
42	WHEREAS, the Legislature recognizes that there are claims
43	currently pending from persons who are not homeowners or who
44	have presented claims for monetary damages caused by Division II
45	contractors, and
46	WHEREAS, the Legislature desires to provide a mechanism for
47	those claims, if eligible, to be paid, NOW, THEREFORE,
48
49	Be It Enacted by the Legislature of the State of Florida:
50
51	Section 1.  Section 489.140, Florida Statutes, is amended
52	to read:
53	489.140  Florida Homeowners' Construction Industries
54	Recovery Fund.--There is created the Florida Homeowners'
55	Construction Industries Recovery Fund as a separate account in
56	the Professional Regulation Trust Fund.
57	(1)  The Florida Construction Industries Recovery Fund
58	shall be disbursed as provided in s. 489.143, on order of the
59	board, as reimbursement to any natural person adjudged by a
60	court of competent jurisdiction to have suffered monetary
61	damages, or to whom the licensee has been ordered to pay
62	restitution by the board, where the judgment or restitution
63	order is based on a violation of s. 489.129(1)(g), (j), or (k),
64	committed by any contractor, financially responsible officer, or
65	business organization licensed under the provisions of this part
66	at the time the violation was committed, and providing that the
67	violation occurs after July 1, 1993.
68	(2)  The Construction Industries recovery fund shall be
69	funded out of the receipts deposited in the Professional
70	Regulation Trust Fund from the one-half cent per square foot
71	surcharge on building permits collected and disbursed pursuant
72	to s. 468.631.
73	Section 2.  Section 489.1401, Florida Statutes, is created
74	to read:
75	489.1401  Legislative intent.--
76	(1)  It is the intent of the Legislature that actions taken
77	by the Construction Industry Licensing Board with respect to
78	contractor sanctions and pursuant to this chapter be an exercise
79	of the department's regulatory power for the protection of
80	public safety and welfare.
81	(2)  It is the intent of the Legislature that the sole
82	purpose of the Florida Homeowners' Construction Recovery Fund be
83	to compensate any aggrieved claimant who contracted for the
84	construction or improvement of a residence located within this
85	state and who has obtained a final judgment in any court of
86	competent jurisdiction, was awarded restitution by the
87	Construction Industry Licensing Board, or received an award in
88	arbitration against a licensee on grounds of financial
89	mismanagement or misconduct, abandoning a construction project,
90	or making a false statement with respect to a project and
91	arising directly out of any transaction when the judgment debtor
92	was licensed and performed any of the activities enumerated
93	under s. 489.129(1)(g), (j), or (k) on the homeowner's
94	residence.
95	(3)  It is the intent of the Legislature that Division I
96	contractors set apart funds for the specific objective of
97	participating in the fund.
98	Section 3.  Section 489.1402, Florida Statutes, is created
99	to read:
100	489.1402  Definitions.--
101	(1)  The following definitions apply to ss. 489.140-
102	489.144:
103	(a)  "Arbitration" means alternative dispute resolution
104	entered into between a claimant and a contractor either pursuant
105	to a construction contract that contains a mandatory arbitration
106	clause or through any binding arbitration under the Florida
107	Arbitration Code.
108	(b)  "Board" means the Construction Industry Licensing
109	Board.
110	(c)  "Claimant" means a homeowner.
111	(d)  "Contractor" means a Division I contractor performing
112	services described in s. 489.105(3)(a)-(c).
113	(e)  "Court of competent jurisdiction" means a civil or
114	criminal court in this state or a bankruptcy court.
115	(f)  "Homeowner" means the owner of an owner-occupied
116	residence, including a trustee based upon a trust instrument
117	granting a person a beneficial interest for life in the
118	residence.
119	(g)  "Licensee" means a contractor, financially responsible
120	officer, or business organization licensed under this part at
121	the time the violation was committed.
122	(h)  "Notice" means service as described in s. 455.275.
123	(i)  "Recovery fund" means the Florida Homeowner's
124	Construction Recovery Fund.
125	(j)  "Residence" means an individual residential
126	condominium or cooperative unit or a residential building
127	containing not more than two residential units in which the
128	owner contracting for the improvement is residing or will reside
129	6 months or more each calendar year upon completion of the
130	improvement.
131	(k)  "Same transaction" means a contract, or any series of
132	contracts, between a claimant and a contractor or qualified
133	business, when such contract or contracts involve the same
134	property or contiguous properties and are entered into either at
135	one time or serially.
136	(l)  "Valid and current license," for the purpose of s.
137	489.141(2)(d), means any license issued pursuant to this part to
138	a licensee, including a license in an active, inactive,
139	delinquent, or suspended status.
140	(2)  The following definitions apply to claims made prior
141	to July 1, 2007, when the contract was executed and the
142	violation occurred on or before January 1, 2005:
143	(a)  "Claimant" means a natural person.
144	(b)  "Licensee" means a contractor, financially responsible
145	officer, or business organization licensed under this part at
146	the time the violation was committed.
147	Section 4.  Section 489.141, Florida Statutes, is amended
148	to read:
149	489.141  Conditions for recovery; eligibility.--
150	(1)  Any claimant person is eligible to seek recovery from
151	the Construction Industries recovery fund after having made a
152	claim and exhausting the limits of any available bond, cash
153	bond, surety, guarantee, warranty, letter of credit, or policy
154	of insurance, provided that each of the following conditions is
155	satisfied if:
156	(a)  The claimant Such person has received final judgment
157	in a court of competent jurisdiction in this state in any action
158	wherein the cause of action was based on a construction contract
159	or has received an award in arbitration or the Construction
160	Industry Licensing Board has issued a final order directing the
161	licensee to pay restitution to the claimant. The board may waive
162	this requirement if:
163	1.  The claimant is unable to secure a final judgment
164	against the licensee due to the death of the licensee; or
165	2.  The claimant has sought to have assets involving the
166	transaction that gave rise to the claim removed from the
167	bankruptcy proceedings so that the matter might be heard in a
168	court of competent jurisdiction in this state and, after due
169	diligence, the claimant is precluded by action of the bankruptcy
170	court from securing a final judgment against the licensee.
171	(b)  The judgment, award, or restitution is based upon a
172	violation of s. 489.129(1)(g), (j), or (k) or s. 713.35., where
173	the
174	(c)  The violation was committed by a licensee.
175	(d)  The judgment, award, or restitution order specifies
176	the actual damages suffered as a consequence of such violation.
177	(e)  The contract was executed and the violation occurred
178	on or after July 1, 1993, and provided that:
179	1.a.  The claimant Such person has caused to be issued a
180	writ of execution upon such judgment, and the officer executing
181	the writ has made a return showing that no personal or real
182	property of the judgment debtor or licensee liable to be levied
183	upon in satisfaction of the judgment can be found or that the
184	amount realized on the sale of the judgment debtor's or
185	licensee's property pursuant to such execution was insufficient
186	to satisfy the judgment; or
187	2.b.  If the claimant such person is unable to comply with
188	subparagraph 1. sub-subparagraph a. for a valid reason to be
189	determined by the board, the claimant such person has made all
190	reasonable searches and inquiries to ascertain whether the
191	judgment debtor or licensee is possessed of real or personal
192	property or other assets subject to being sold or applied in
193	satisfaction of the judgment and by his or her search has
194	discovered no property or assets or has discovered property and
195	assets and has taken all necessary action and proceedings for
196	the application thereof to the judgment but the amount thereby
197	realized was insufficient to satisfy the judgment; and or
198	3.2.  The claimant has made a diligent attempt, as defined
199	by board rule, to collect the restitution awarded by the board.;
200	(f)(b)  A claim for recovery is made within 2 years from
201	the time of the act giving rise to the claim or within 2 years
202	from the time the act is discovered or should have been
203	discovered with the exercise of due diligence; however, in no
204	event may a claim for recovery be made more than 4 years after
205	the date of the act giving rise to the claim or more than 1 year
206	after the conclusion of any civil, criminal, or administrative
207	action or award in arbitration based on the act. This paragraph
208	applies to any claim filed with the board after October 1,
209	1998., whichever is later;
210	(g)(c)  Any amounts recovered by the claimant such person
211	from the judgment debtor or licensee, or from any other source,
212	have been applied to the damages awarded by the court or the
213	amount of restitution ordered by the board.; and
214	(h)(d)  The claimant Such person is not a person who is
215	precluded by this act from making a claim for recovery.
216	(2)  A claimant person is not qualified to make a claim for
217	recovery from the Construction Industries recovery fund, if:
218	(a)  The claimant is the spouse of the judgment debtor or
219	licensee or a personal representative of such spouse;
220	(b)  The claimant is a licensee who acted as the contractor
221	in the transaction which is the subject of the claim;
222	(c)  The Such person's claim is based upon a construction
223	contract in which the licensee was acting with respect to the
224	property owned or controlled by the licensee;
225	(d)  The Such person's claim is based upon a construction
226	contract in which the contractor did not hold a valid and
227	current license at the time of the construction contract; or
228	(e)  The claimant Such person was associated in a business
229	relationship with the licensee other than the contract at
230	issue;.
231	(f)  The claimant Such person has suffered damages as the
232	result of making improper payments to a contractor as defined in
233	part I of chapter 713; or
234	(g)  The claimant has contracted with a licensee to perform
235	a scope of work described in s. 489.105(3)(d)-(q).
236	(3)  The board may determine by rule documentation that is
237	required to complete a claim.
238	Section 5.  Section 489.142, Florida Statutes, is amended
239	to read:
240	489.142  Board powers relating to recovery; conduct of
241	hearings and service.--
242	(1)  With respect to actions for recovery from the
243	Construction Industries recovery fund, the board may intervene,
244	enter an appearance, file an answer, defend the action, or take
245	any action it deems appropriate and may take recourse through
246	any appropriate method of review on behalf of the State of
247	Florida. The board may delegate to the department by rule the
248	authority to close any case when a claimant is not qualified to
249	make a claim for recovery from the recovery fund under s.
250	489.141(2), when after notice the claimant has failed to provide
251	documentation in support of the claim as required by the board,
252	or when the licensee has reached the aggregate limit.
253	(2)  Notwithstanding any other provision of law, the board
254	shall cause a notice of hearing to be served 14 days in advance
255	of the hearing on the claimant and on the licensee whose license
256	is subject to suspension by s. 489.143. Each notice shall inform
257	the recipient of any administrative hearing or judicial review
258	that is available under s. 120.569, s. 120.57, or s. 120.68,
259	shall indicate the procedure that must be followed to obtain the
260	hearing or judicial review, and shall state the time limits that
261	apply. Service of the notice on the licensee shall be made in
262	accordance with s. 455.275. Service of the notice on the
263	claimant shall be by regular United States mail at the address
264	provided on the claim. The service of notice in accordance with
265	this section is complete upon expiration of 14 days after
266	deposit in the United States mail. Proof of service of a notice
267	shall be made by entry in the records of the department that the
268	notice was given. The entry shall be admissible in judicial and
269	administrative proceedings of this state and shall constitute
270	sufficient proof that notice was given.
271	(3)  Notwithstanding any other provision of law, board
272	hearings on claims shall be conducted in accordance with ss.
273	120.569 and 120.57(2). All claim hearings shall be conducted at
274	the board's regular meeting at the place, date, and time
275	published. Orders of the board denying or awarding funds to a
276	claimant constitute final orders that may be appealed in
277	accordance with s. 120.68. Orders awarding or denying claims
278	shall be served in the same manner as notices of hearing in this
279	section.
280	Section 6.  Section 489.1425, Florida Statutes, is amended
281	to read:
282	489.1425  Duty of contractor to notify residential property
283	owner of recovery fund.--
284	(1)  Any agreement or contract for repair, restoration,
285	improvement, or construction to residential real property must
286	contain a written statement explaining the consumer's rights
287	under the Construction Industries recovery fund, except where
288	the value of all labor and materials does not exceed $2,500.
289	The written statement must be substantially in the following
290	form:
291
292	FLORIDA HOMEOWNERS' CONSTRUCTION INDUSTRIES RECOVERY FUND
293
294	PAYMENT MAY BE AVAILABLE FROM THE FLORIDA HOMEOWNERS'
295	CONSTRUCTION INDUSTRIES RECOVERY FUND IF YOU LOSE
296	MONEY ON A PROJECT PERFORMED UNDER CONTRACT, WHERE THE
297	LOSS RESULTS FROM SPECIFIED VIOLATIONS OF FLORIDA LAW
298	BY A LICENSED STATE-LICENSED CONTRACTOR.  FOR
299	INFORMATION ABOUT THE RECOVERY FUND AND FILING A
300	CLAIM, CONTACT THE FLORIDA CONSTRUCTION INDUSTRY
301	LICENSING BOARD AT THE FOLLOWING TELEPHONE NUMBER AND
302	ADDRESS:
303
304	The statement shall be immediately followed by the board's
305	address and telephone number as established by board rule.
306	(2)(a)  Upon finding a first violation of subsection (1),
307	the board may fine the contractor up to $500, and the moneys
308	must be deposited into the Construction Industries recovery
309	fund.
310	(b)  Upon finding a second or subsequent violation of
311	subsection (1), the board shall fine the contractor $1,000 per
312	violation, and the moneys must be deposited into the
313	Construction Industries recovery fund.
314	Section 7.  Section 489.143, Florida Statutes, is amended
315	to read:
316	489.143  Payment from the fund.--
317	(1)  The fund shall be disbursed as provided in s. 489.141
318	on a final order of the board.
319	(2)(1)  Any claimant person who meets all of the conditions
320	prescribed in s. 489.141(1) may apply to the board to cause
321	payment to be made to a claimant such person from the
322	Construction Industries recovery fund in an amount equal to the
323	judgment, award, or restitution order, exclusive of postjudgment
324	interest, against the licensee or $25,000, whichever is less, or
325	an amount equal to the unsatisfied portion of such person's
326	judgment, award, or restitution order, exclusive of postjudgment
327	interest, or $25,000, whichever is less, but only to the extent
328	and amount of actual damages suffered by the claimant reflected
329	in the judgment or restitution order as being actual or
330	compensatory damages. Payment from the fund for other costs
331	related to or pursuant to civil proceedings such as postjudgment
332	interest, attorney's fees, court costs, medical damages, and
333	punitive damages is prohibited. The recovery fund is not
334	obligated to pay any judgment, award, or restitution order, or
335	any portion thereof, which is not expressly based on one of the
336	grounds for recovery set forth in s. 489.141 489.140(1).
337	Beginning January 1, 2005, for each contract entered after July
338	1, 2004, payment from the recovery fund shall be subject to a
339	$50,000 maximum payment.
340	(3)(2)  Upon receipt by a claimant under subsection (2) (1)
341	of payment from the Construction Industries recovery fund, the
342	claimant shall assign his or her additional right, title, and
343	interest in the judgment, award, or restitution order, to the
344	extent of such payment, to the board, and thereupon the board
345	shall be subrogated to the right, title, and interest of the
346	claimant; and any amount subsequently recovered on the judgment,
347	award, or restitution order by the board, to the extent of the
348	right, title, and interest of the board therein, shall be for
349	the purpose of reimbursing the Construction Industries recovery
350	fund.
351	(4)(3)  Payments for claims arising out of the same
352	transaction shall be limited, in the aggregate, to the lesser of
353	the judgment, award, or restitution order or the maximum payment
354	allowed $25,000, regardless of the number of claimants involved
355	in the transaction.
356	(5)(4)  Payments for claims against any one licensee shall
357	not exceed, in the aggregate, $100,000 annually, up to a total
358	aggregate of $250,000. Beginning January 1, 1998, For any claim
359	approved by the board which is in excess of the annual cap, the
360	amount in excess of $100,000 up to the total aggregate cap of
361	$250,000 is eligible for payment in the next and succeeding
362	fiscal years, but only after all claims for the then-current
363	calendar year have been paid. Payments may not exceed the
364	aggregate annual or per claimant limits under law. Beginning
365	January 1, 2005, for each contract entered into after July 1,
366	2004, payment from the recovery fund is subject only to a total
367	aggregate cap of $500,000.
368	(6)(5)  Claims shall be paid in the order filed, up to the
369	aggregate limits for each transaction and licensee and to the
370	limits of the amount appropriated to pay claims against the fund
371	for the fiscal year in which the claims were filed.
372	(7)(6)  If the annual appropriation is exhausted with
373	claims pending, such claims shall be carried forward to the next
374	fiscal year. Any moneys in excess of pending claims remaining in
375	the Construction Industries recovery fund at the end of the
376	fiscal year shall be paid as provided in s. 468.631.
377	(8)(7)  Upon the payment of any amount from the
378	Construction Industries recovery fund in settlement of a claim
379	in satisfaction of a judgment, award, or restitution order
380	against a licensee as described in s. 489.141(1), the license of
381	such licensee shall be automatically suspended, without further
382	administrative action, upon the date of payment from the fund.
383	The license of such licensee shall not be reinstated until he or
384	she has repaid in full, plus interest, the amount paid from the
385	fund. A discharge of bankruptcy does not relieve a person from
386	the penalties and disabilities provided in this section.
387	(9)  Any firm, corporation, partnership, or association, or
388	any person acting in his or her individual capacity, who aids,
389	abets, solicits, or conspires with any person to knowingly
390	present or cause to be presented any false or fraudulent claim
391	for the payment of a loss under this act commits a felony of the
392	third degree, punishable as provided in s. 775.082 or s. 775.084
393	and by a fine not exceeding $30,000, unless the value of the
394	fraud exceeds $30,000, in which event the fine may not exceed
395	double the value of the fraud.
396	(10)  All payments and disbursements from the recovery fund
397	shall be made by the Chief Financial Officer upon a voucher
398	signed by the secretary of the department or the secretary's
399	designee. Amounts transferred to the recovery fund shall not be
400	subject to any limitation imposed by an appropriations act of
401	the Legislature.
402	Section 8.  Section 489.144, Florida Statutes, is amended
403	to read:
404	489.144  Investment of the fund.--The funds in the
405	Construction Industries recovery fund may be invested by the
406	Chief Financial Officer under the same limitations as apply to
407	the investment of other state funds, and the interest earned
408	thereon shall be deposited to the credit of the Construction
409	Industries recovery fund and shall be available for the same
410	purposes as other moneys deposited in the Construction
411	Industries recovery fund.
412	Section 9.  Paragraph (c) of subsection (4) of section
413	489.13, Florida Statutes, is amended to read:
414	489.13  Unlicensed contracting; notice of noncompliance;
415	fine; authority to issue or receive a building permit; web
416	page.--
417	(4)
418	(c)  The balance of any fines collected under this section
419	shall be used to maintain the department's unlicensed contractor
420	website page, as specified in subsection (6), and to fund the
421	Florida Homeowners' Construction Industries Recovery Fund.
422	Nothing in this paragraph shall be construed to permit recovery
423	from the Construction Industries Recovery Fund if the contractor
424	is unlicensed.
425	Section 10.  Paragraph (e) of subsection (3) of section
426	489.131, Florida Statutes, is amended to read:
427	489.131  Applicability.--
428	(3)  Nothing in this part limits the power of a
429	municipality or county:
430	(e)  To require one bond for each contractor in an amount
431	not to exceed $5,000, which bond shall be conditioned only upon
432	compliance with the Florida Building Code adopted pursuant to s.
433	553.73.  Any such bond must be equally available to all
434	contractors without regard to the period of time a contractor
435	has been certified or registered and without regard to any
436	financial responsibility requirements.  Any such bonds shall be
437	payable to the Florida Homeowners' Construction Industry
438	Recovery Fund and filed in each county or municipality in which
439	a building permit is requested.  Bond reciprocity shall be
440	granted statewide.  All such bonds shall be included in meeting
441	any financial responsibility requirements imposed by any statute
442	or rule.  Any contractor who provides a third party insured
443	warranty policy in connection with a new building or structure
444	for the benefit of the purchaser or owner shall be exempt from
445	the bond requirements under this subsection with respect to such
446	building or structure.
447	Section 11.  Section 468.631, Florida Statutes, is amended
448	to read:
449	468.631  Building Code Administrators and Inspectors
450	Fund.--
451	(1)  The provisions of This part shall be funded through a
452	surcharge, to be assessed pursuant to s. 125.56(4) or s. 166.201
453	at the rate of one-half cent per square foot of under-roof floor
454	space permitted, including new construction, renovations,
455	alterations, and additions.  The unit of government responsible
456	for collecting permit fees pursuant to s. 125.56(4) or s.
457	166.201 shall collect such surcharge and shall remit the funds
458	to the department on a quarterly calendar basis beginning not
459	later than December 31, 1993, for the preceding quarter, and
460	continuing each third month thereafter; and such unit of
461	government may retain an amount up to 10 percent of the
462	surcharge collected to fund projects and activities intended to
463	improve the quality of building code enforcement.  There is
464	created within the Professional Regulation Trust Fund a separate
465	account to be known as the Building Code Administrators and
466	Inspectors Fund, which shall deposit and disburse funds as
467	necessary for the implementation of this part. The department
468	shall annually establish the amount needed to fund the
469	certification and regulation of building code administrators,
470	plans examiners, and building code inspectors.  Any funds
471	collected in excess of the amount needed to adequately fund the
472	certification and regulation of building code administrators,
473	plans examiners, and building code inspectors shall be deposited
474	into the Florida Homeowners' Construction Industries Recovery
475	Fund established by s. 489.140. If the Florida Homeowners'
476	Construction Industries Recovery Fund is fully funded as
477	provided by s. 489.140, any remaining funds shall be distributed
478	to the Construction Industry Licensing Board for use in the
479	regulation of certified and registered contractors.
480	(2)  The unit of government responsible for collecting
481	permit fees under this section shall report to the department
482	quarterly the number of permits issued for under-roof floor
483	space during the quarter, the total square footage for the
484	number of permits issued for under-roof floor space during the
485	quarter, and the calculation of the amount of funds being
486	remitted to the department. The report shall be attested to by
487	the officer in charge of collecting permit fees.
488	Section 12.  This act shall take effect July 1, 2004.

CODING: Words stricken are deletions; words underlined are additions.