BILL ANALYSIS
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THIRD READING
Bill No: AB 678
Author: Papan (D)
Amended: 7/3/01 in Senate
Vote: 21
SENATE BUSINESS & PROFESSIONS COMMITTEE : 6-0, 6/25/01
AYES: Figueroa, Johannessen, Machado, Morrow, O'Connell,
Polanco
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 69-2, 5/14/01 - See last page for vote
SUBJECT : Unlicensed contractors
SOURCE : Judge Quentin L. Kopp
DIGEST : This bill allows individuals who use the
services of an unlicensed contractor to bring an action to
recover all compensation paid to the unlicensed contractor
for performance of any act or contract.
ANALYSIS : Existing law:
1.Requires anyone who contracts to do construction work to
be licensed by the Contractors' State License Board if
the total price of the job is $500 or more.
2.Provides that contracting without a license shall be a
misdemeanor.
CONTINUED
AB 678
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3.Prohibits unlicensed contractors from bringing an action
to collect compensation for the performance of any act or
contract.
This bill authorizes persons who use the services of an
unlicensed contractor to bring an action to recover all
compensation paid to the unlicensed contractor for
performance of any act or contract.
Comments
Purpose . According to the sponsor, Judge Quentin Kopp,
this bill is intended to further encourage unlicensed
contractors to become licensed by specifically authorizing
an individual who has used the services of an unlicensed
contractor to bring an action to recover all compensation
already paid to the unlicensed contractor for performance
of any act or contract. The sponsor believes that
permitting recovery of compensation paid to the unlicensed
contractor will strengthen the law "in a way which criminal
sanctions and enforcement do not seem to do."
Background . In a recent case, Cooper v. Westbrook Torrey
Hills, LP (2000) 81 Cal. App. 4th 1294, the court
referenced Business and Professions Code Section 7031(a) as
prohibiting an unlicensed contractor from recovering fees,
but not requiring any refund of compensation already paid
to the contractor.
Cooper relied on Culbertson v. Cizek (1964) 225 Cal. App.
2d 451, 473, in which the court permitted the unlicensed
contractor to offset "as a defense against sums due the
plaintiffs any amounts that would otherwise be due Cizek
under his contract." This bill is intended to clearly
state that those using the services of unlicensed
contractors are entitled to bring an action for recovery of
compensation paid.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (7/17/01)
Judge Quentin L. Kopp (source)
AB 678
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California Landscape Contractors Association
Construction Industry Legislative Council
Support with amendments
American Fence Contractors' Association, California Chapter
California Fence Contractors' Association
Engineering Contractors' Association
Flasher/Barricade Association
ARGUMENTS IN SUPPORT : The sponsor asserts the
Legislature has intended that the public be protected from
unqualified contractors by requiring that all contractors
be licensed. In order to ensure this requirement is met,
current law specifically prohibits unlicensed contractors
from bringing an action to collect compensation for the
performance of any act or contract, regardless of the
merits of the cause of action brought by the unlicensed
individual. This bill is, according to the sponsor, "not
only consistent with the historical policy of our state but
strengthens that policy substantially."
According to the Senate Business and Professions Committee
analysis, concern has been voiced that this bill could
cause problems for the legitimate contractors in
California. The concern deals with the issue of
incidental/supplemental work.
ASSEMBLY FLOOR
AYES: Aanestad, Alquist, Aroner, Bates, Bogh, Briggs,
Calderon, Bill Campbell, John Campbell, Canciamilla,
Cardenas, Cardoza, Cedillo, Chan, Chavez, Cogdill, Cohn,
Corbett, Correa, Cox, Daucher, Diaz, Dickerson, Dutra,
Firebaugh, Florez, Frommer, Goldberg, Harman, Havice,
Horton, Keeley, Kehoe, Kelley, Koretz, Leach, Leonard,
Leslie, Liu, Longville, Lowenthal, Maddox, Maldonado,
Matthews, Migden, Nakano, Nation, Negrete McLeod,
Oropeza, Papan, Pavley, Pescetti, Reyes, Richman, Runner,
Salinas, Shelley, Steinberg, Strickland, Strom-Martin,
Thomson, Vargas, Washington, Wayne, Wesson, Wiggins,
Wright, Zettel, Hertzberg
NOES: Hollingsworth, Mountjoy
CP:kb 7/17/01 Senate Floor Analyses
AB 678
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SUPPORT/OPPOSITION: SEE ABOVE
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