NO. 51.  AN ACT RELATING TO HOME IMPROVEMENT FRAUD AND CHARITABLE SOLICITATIONS.

(S.120)

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1.  13 V.S.A. § 2029 is added to read:

§ 2029.  HOME IMPROVEMENT FRAUD

(a)  As used in this section, “home improvement” includes the fixing, replacing, remodeling, removing, renovation, alteration, conversion, improvement, demolition, or rehabilitation of or addition to any building or land, or any portion thereof, which is used or designed to be used as a residence or dwelling unit.  Home improvement shall include the construction, replacement, installation, paving, or improvement of driveways, roofs, and sidewalks, and the limbing, pruning, and removal of trees or shrubbery and other improvements to structures or upon land that is adjacent to a dwelling house.

(b)  A person commits the offense of home improvement fraud when he or she knowingly enters into a contract or agreement, written or oral, for $500.00 or more, with an owner for home improvement, or into several contracts or agreements for $2,500.00 or more in the aggregate, with more than one owner for home improvement, and he or she knowingly:

(1)  promises performance that he or she does not intend to perform or knows will not be performed, in whole or in part;

(2)  misrepresents a material fact relating to the terms of the contract or agreement or to the condition of any portion of the property involved;

(3)  uses or employs any unfair or deceptive act or practice in order to induce, encourage, or solicit such person to enter into any contract or agreement or to modify the terms of the original contract or agreement; or

(4)  when there is a declared state of emergency, charges for goods or services related to the emergency a price that exceeds two times the average price for the goods or services and the increase is not attributable to the additional costs incurred in connection with providing those goods or services.

(c)  It shall be a permissive inference that the person acted knowingly under subdivision (b)(1) of this section if the person fails to perform the contract or agreement and, when the owner requests performance of the contract or agreement or a refund of payments made, the person fails to:

(1)  return the payments or deliver the materials or make and comply with a reasonable written repayment plan for the return of the payments; or

(2)  make and comply with a reasonable written plan for completion of the contract or agreement.

(d)  A person convicted of home improvement fraud shall register with the department of labor and industry.  The court shall notify the department of labor and industry of a conviction under this section.  A person who is sentenced pursuant to subdivisions (e)(2), (3), or (4) of this section shall not engage in home improvement activities for compensation unless he or she has filed a surety bond or an irrevocable letter of credit with the department of labor and industry in an amount of not less than $50,000.00.  The department shall release the letter of credit at such time when:

(1)  any claims against the person relating to home improvement fraud have been paid;

(2)  there are no pending actions or claims against the person for home improvement fraud; and

(3)  the person has not been engaged in home improvement activities for at least six years and has signed an affidavit attesting to such.

(e)(1)  A person who violates subsection (b) of this section shall be imprisoned not more than two years or fined not more than $1,000.00, or both, if the loss to a single consumer is less than $1,000.00.

(2)  A person who is convicted of a second or subsequent violation of subdivision (1) of this subsection shall be imprisoned not more than three years or fined not more than $5,000.00, or both. 

(3)  A person who violates subsection (b) of this section shall be imprisoned not more than three years or fined not more than $5,000.00, or both, if:

(A)  the loss to a single consumer is $1,000.00 or more; or

(B)  the loss to more than one consumer is $2,500.00 or more in the aggregate.

(4)  A person who is convicted of a second or subsequent violation of subdivision (3) of this subsection shall be imprisoned not more than five years or fined not more than $10,000.00, or both. 

(5)  A person who violates subsection (d) of this section shall be imprisoned for not more than two years or fined not more than $1,000.00, or both.

Sec. 2.  9 V.S.A. § 2472 is amended to read:

§ 2472.  CONTRACTS BETWEEN PAID FUNDRAISERS AND

              CHARITABLE ORGANIZATIONS

(a)  Prior to soliciting in this state, a paid fundraiser shall enter into a written contract with the charitable organization on whose behalf solicitations are to be made.  The contract shall contain the following:

* * *

(5)  A provision that prohibits the paid fundraiser from restricting in any way the use by the charitable organization of the list of donors to the campaign.

* * *

(d)  Upon application for state funds received through a grant or contract, a charitable organization shall disclose:

(1)  the actual percentage of gross receipts of any fundraising campaign paid to the charitable organization within the two previous fiscal years; and

(2)  the minimum contracted percentage of gross receipts to be paid by a paid fundraiser to the charitable organization in any current or known future fundraising campaign.

Sec. 3.  9 V.S.A. § 2475 is amended to read:

§ 2475.  SOLICITATIONS

* * *

(e)  No paid fundraiser shall solicit a contribution from any person in this state without clearly and conspicuously disclosing to the person, prior to the time the person makes or authorizes payment of a donation both orally, if the paid fundraiser is soliciting in whole or in part by telephone, and in writing, if the paid fundraiser is soliciting in whole or in part by means of writing:

(1)  that the solicitor is being paid by the charitable organization on whose behalf the solicitation is being made; and

(2)  how the potential contributor may obtain information from the state on the respective percentages of contributions that will be paid to the charitable organization and to the paid fundraiser.

Approved:  June 2, 2003