RIA Advocate Update | 10.26.26
October updates on payment and contractor requirements
Payment agreements, emergency authorizations and subcontractor licensing are the main issues in this month’s legislative update. Pennsylvania has enacted changes to its public-adjuster law, while New Jersey is considering proposals affecting home-improvement contracts and construction businesses.
The nine tracked items below are at different stages. Each summary identifies whether the measure is enacted, pending or still being drafted. Proposed requirements are described as proposals, and questions about a company’s legal obligations belong with qualified counsel.
Planning the rebuild. AI-generated illustration of a fictional scene.
Key takeaways
• Pennsylvania HB 1972 is enacted, with a 180-day delayed effective date. Its provisions address assignments of benefits and public-adjuster practices.
• New Jersey’s four measures remain proposals. They address cancellation rights, emergency authorizations, regulated subcontractor work and general contracting.
• California SB 342 has been signed. Illinois and federal disaster-related bills remain pending; Montana LC 631 is a drafting request.
Restoration insurance
Pennsylvania changes payment and public-adjuster rules
HB 1972 became Act 77 of 2026 on October 22. Its changes take effect 180 days after enactment. The law includes provisions relevant to contractors using assignments of benefits or working with public adjusters.
An assignment of benefits, or AOB, transfers certain insurance rights or benefits to another party. Subject to a policy’s assignment terms, the law permits restrictions on assignments to repair contractors. It does not impose a blanket ban on every AOB. Questions about your company’s agreements and payment arrangements should be reviewed and updated as needed.
The law sets public-adjuster fee limits of 10% of catastrophic claim settlements and 20% of other claim settlements, prohibits fees before settlement, and raises the minimum adjuster bond to $40,000. Those percentage limits concern public-adjuster compensation, not restoration invoices. It also prohibits certain financial interests and compensated referrals connected with claims being adjusted.
The law expressly prohibits repair contractors from using a customer’s power of attorney to bypass public-adjuster licensing requirements.
Pennsylvania members using assignments of benefits (AOBs) or referral arrangements should review their business forms and practices. Customers with questions about their insurance coverage or policy wording should be directed to their insurer or qualified insurance counsel.HB 1972 enactment and history | Final passed text
Restorer rights
New Jersey examines the emergency authorization
A 3341 was reported from the Assembly Consumer Affairs Committee with amendments on October 5. It would give consumers age 65 and older five business days after receiving the signed home-improvement contract to cancel. It also would permit a waiver for defined emergency restoration services through a signed authorization containing a cost estimate.
The proposal includes another important condition: if the emergency services cost more than the estimate, the contractor would need a new signed emergency authorization. The bill defines the services covered by this provision. It remains a proposal and should not be treated as authority to change current cancellation practices.
A 3341 amended text of October 5
New Jersey checks who is doing the regulated work
A 5574, introduced October 5, and S 4813, introduced October 15, propose the Subcontractor Licensing Enforcement Act. Both remain pending. They address regulated trades, including electrical, plumbing, heating and air conditioning work.
Under the proposals, subcontractors would need their own appropriate licenses; a prime contractor’s license would not cover an unlicensed subcontractor. Proof would be required before work starts and when permits are filed. Contractors would retain license, contract and permit records for three years. Proposed consequences include fines, stop-work orders and license discipline. Knowingly hiring or retaining an unlicensed subcontractor would also carry shared legal responsibility for that subcontractor’s violations.
These bills address licensing for regulated trade work. They do not create a separate emergency-restoration license. Members with questions about their subcontracting arrangements should consult the applicable licensing authority or qualified counsel.
A 5574 introduced text | S 4813 introduced text
General contracting
New Jersey considers a broader licensing framework
A 3899 has passed the Assembly and was referred to the Senate Budget and Appropriations Committee on September 28. The June 23 amended text proposes a state board, licensing for general contractors and registration for general contracting businesses. Its definition of a general contractor refers to specified state construction classifications. It remains pending; whether a particular restoration business would be covered requires analysis of the bill’s definitions and the work performed.
A 3899 second reprint | September 28 legislative digest
California has enacted a measure on unlicensed work
Governor Gavin Newsom’s September 30 signing announcement lists SB 342, titled Contractors: unlicensed work, among the bills signed that day. California members with questions about the law’s application should consult the final statute, the Contractors State License Board or qualified California counsel.
Governor’s signing announcement | SB 342 legislative record
Montana is at the drafting stage
Montana LC 631 is a drafting request for the 2027 session to revise construction-contractor license requirements. PolicyNote and FastDemocracy list a drafter assignment on September 30. A drafting request is not an enacted law and does not itself establish new contractor requirements.
LC 631 tracking record | Montana legislative record
Disaster response
Illinois proposes local disaster relief funding
HB 5819, filed October 6, remains pending in the House. The proposal would provide grants, subject to appropriation, to local governments in 15 specified counties for disaster-relief and restoration expenses associated with the Governor’s August 18, 2026 disaster proclamation. The proposed recipients are local governments. The bill does not establish a direct grant entitlement for restoration contractors.
Illinois HB 5819 official summary
Congress considers floodplain recovery
S 1564, the Floodplain Enhancement and Recovery Act, passed the Senate September 30 and remains pending in the House. It concerns ecosystem restoration in aquatic areas and floodplains. The Senate-passed text would waive certain flood-map review fees and change approval procedures for qualifying ecosystem projects. It does not create a grant program for drying buildings or repairing individual properties.
Stay connected and support advocacy
Has a payment agreement, emergency authorization or licensing requirement complicated a restoration project? Send a brief, nonconfidential example to vscarfo@restorationindustry.org. Please omit customer names, insurance-policy documents, claim numbers and other identifying information. Member experiences help inform RIA’s advocacy discussions.
This update is general educational information, not legal advice. Proposals may change. Confirm current requirements with the responsible agency or qualified counsel before making business decisions.