TITLE 34

Property

CHAPTER 34-27.2

The Rhode Island Construction Trust Act

SECTION 34-27.2-2



   § 34-27.2-2  Legislative findings. –

The general assembly finds and declares that the uniqueness of the construction

industry requires a special system to ensure that payment is received by those

businesses, contractors and owners who expend materials and/or labor prior to

the completion of a construction project, but then must wait to be made

financially compensated for the materials and/or labor. The general assembly

also recognizes that once the materials and labor are placed into the building,

or other construction project, it is impossible to reclaim the goods or

services so that the only means of compensation is to receive monetary payment.

In addition, the general assembly finds that the Comprehensive Bankruptcy

Reform Act of 2005 expanded § 523(a) of the Uniform Code of chapter 13,

and created a new section known as UC Bankruptcy Code 1328 that gives building

material suppliers recourse when a contractor, "commits fraud or defalcation

while acting in a fiduciary capacity." Under the new UC Bankruptcy Code 1328,

if any person commits fraud or defalcation while acting in a fiduciary

capacity, embezzlement, or larceny the debt is nondischargeable under chapter 7

(liquidation), chapter 11 (adjustment of debt) or chapter 13 (reorganization).



History of Section.

(P.L. 2007, ch. 150, § 1; P.L. 2007, ch. 288, § 1.)