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Committee reviews S183 to reintroduce 'intent to defraud' into home‑improvement fraud law
Summary
A Judiciary committee reviewed S183, a bill that would clarify that an intent‑to‑defraud mental state is required under the home‑improvement fraud statute. Members questioned wording, constitutional risk under the Thirteenth Amendment, and whether prosecution should be centralized in the Attorney General’s Office; no vote was taken.
A legislative committee on Jan. 28 examined S183, a proposal to clarify that an intent‑to‑defraud mental state is required for criminal liability under the state’s home‑improvement fraud statute. Legal counsel told the panel the draft restores language closer to the statute before 2015 and adds the word "knowingly" to show the deceptive mindset must exist when a homeowner signs a contract.
Speaker 2, identified in the transcript as legal counsel, said the bill "clarify[s] the intent that intention of fraud is a requirement under the statute" and explained that some trial courts have read the 2015 edits as removing an intent requirement. "If the home improvement fraud statute did not have an intent to the fraud requirement," the counsel warned, "several trial court decisions based on United States Supreme Court precedent have found that there would be an issue with the Thirteenth Amendment." The committee discussed how the draft treats mens rea across pages 1–3 of the bill.
Committee members pressed staff on how adding the word "knowingly" interacts with the phrase "intent to defraud." One member said the phrasing felt redundant and asked whether the bill could be tightened so the statute clearly requires a fraudulent mindset at the time of contracting. Counsel replied that the statute contains multiple, independent ways to violate the law (several subdivisions), and that the committee had focused on subdivision 1 because it is where trial courts and prosecutions have centered.
Members also explored fact patterns prosecutors use to show intent. Counsel described cases in which contractors repeatedly sought advance payments and failed to order materials or complete work; juries in those cases have found sufficient circumstantial evidence of intent to defraud. Counsel cautioned, however, that proving a defendant never intended to complete a contract is typically circumstantial and can be difficult if the contractor simply abandons work later for reasons such as bankruptcy or fire.
The committee debated whether conduct such as using substandard materials would be captured by the criminal statute or instead be a civil breach. "If a contractor intended to use substandard materials from the beginning and there is evidence—such as purchases made before contracting—that could be covered," counsel said. Absent evidence of intent at formation, later use of inferior materials is often treated as breach of contract rather than fraud.
Members discussed prospective changes to prosecutorial jurisdiction. Several committee members said testimony from the Attorney General’s Office suggested centralizing these prosecutions there could reduce confusion; others noted district attorneys also have jurisdiction and expressed concern about slowing cases if jurisdiction were restricted. The committee agreed to invite the Attorney General’s Office and local prosecutors for further input before making structural changes.
No formal amendments or votes were taken. The committee recessed and said it would return for the next witness at about 10:25.
The measure remains under committee consideration; staff indicated they will seek additional written material and testimony from relevant prosecutorial offices before drafting further amendments.
