BILL ANALYSIS
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|Hearing Date:April 2, 2001 |Bill No:SB |
| |135 |
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SENATE COMMITTEE ON BUSINESS AND PROFESSIONS
Senator Liz Figueroa, Chair
Bill No: SB 135Author:Figueroa
As Amended:March 26, 2001Fiscal: Yes
SUBJECT: Contractors State License Board: complaint
disclosure.
SUMMARY: Revises the Contractors State License Board's
current complaint disclosure system by: 1) requiring the
disclosure of complaints which have been referred for
investigation due to a probable violation; and 2) limiting
the amount of time citations and legal actions shall be
disclosed.
Existing law, the Contractors' State Licensing Law:
1)Establishes the Contractors State License Board (CSLB) as
responsible for licensing and regulating contractors.
2)Requires the Registrar of the CSLB to make available to
the public all complaint information against a contractor
which has been referred for legal action.
3)Prohibits the CSLB from disclosing complaints that have
been resolved in the favor of a contractor.
4)Does not place a time limit on how long the CSLB is able
to disclose complaint information.
This bill:
1)Requires the CSLB to maintain a system of information
regarding the disclosure and disposition of complaints.
2)Requires the Registrar of the CSLB to make available to
the public the date, nature, and status of all complaints
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that have been referred to investigation and specifies
that this shall only occur after a determination by the
CSLB enforcement staff that a probable violation has
occurred.
3)Requires the CSLB to establish a disclaimer in
regulations that shall accompany the disclosure of a
complaint. At a minimum, the disclaimer shall state that
the compliant is an allegation.
4)Specifies that citations issued shall be disclosed from
the date of issuance.
5)Limits the disclosure of:
a) Citations to five years from the date of
compliance, as specified.
b) Legal actions, such as suspensions, revocations,
and terms and conditions of probation, to seven years,
as specified.
6)States clarifying legislative intent language.
FISCAL EFFECT: Unknown
COMMENTS:
1.Purpose. This bill is sponsored by the Contractors State
License Board. According to the CSLB, consumers are not
getting contractor complaint information in sufficient time to
protect themselves and can be harmed by the CSLB's delay in
disclosing complaints. Under the present system of the CSLB,
disclosing complaints before they are referred for legal
action is prohibited. Moreover, once legal action has been
taken, there is no limit on how long the CSLB discloses the
action. Both of these legislative policies can be considered
harmful or unfair.
It is the belief of the CSLB that SB 135 creates a fair and
useful system of disclosure and provides benefits which are
twofold. It will benefit the consumer by providing more
timely and accurate information and will benefit the
contractor by setting forth time limitations on the disclosure
of complaints and legal actions.
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2.Background. The CSLB's current disclosure policy is governed
by Board Rule 863, entitled Public Access to Information, and
has been in place since 1992. This policy allows complaints
against contractors to be made public if the Board, through an
investigation, has demonstrated a violation of contractors
license law and has referred the case either to a DA or the
Attorney General's office. Since this rule has been in place
for nine years, the Board established in its current strategic
plan a goal of revisiting this policy to see if it is in need
of updating.
3.CSLB Complaint Disclosure Task Force Findings. The CSLB
Complaint Disclosure Task Force reviewed the current system
and its weaknesses, focusing on the two main policy issues
that underlie the Board's present complaint disclosure system.
First, the Board's inability to disclose complaints until
they are referred for legal action. Second, once legal action
has been taken, the length of time complaint information is
made available to the public. SB 135 reflects the Task
Force's recommended action in both areas.
4.Joint Legislative Sunset Review Committee (JLSRC)
Recommendations. During the review of the CSLB last year, the
JLSRC recommended that the Board re-examine its disclosure
policy due to: 1) the increase in the use of technology now
available to provide instant access to information, and 2)
consumers complaints that they are misled by information
provided by the Board concerning the status of a contractor's
license. It was of particular concern to the JLSRC that the
CSLB's statement that a licensee is in good standing is no
guarantee that there are not a number of outstanding
complaints against the contractor, or that they are under
investigation or that there are past civil or criminal
judgments against the licensee. Without such information,
consumers are unable to make informed decisions about hiring a
contractor.
The CSLB is sponsoring this measure in an attempt to address the
lack of consumer protection in their current complaint
disclosure policy.
5.Department of Consumer Affairs Stresses Importance of
Complaint Disclosure. As part of this year's sunset review
hearings, the DCA has identified complaint disclosure as an
issue which is affecting all boards. The DCA believes that a
key component of consumer protection is ensuring the
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availability of information to consumers when they make
decisions about selecting practitioners. Providing data
regarding complaints filed against the DCA licensees is a
fundamental part of that information.
6.Bill is Result of Numerous Meetings. The language of SB 135
was crafted after many meetings which were facilitated by the
CSLB with industry representatives and consumers. A
compromise was met at these meetings and CSLB believes will
benefit both consumers and honest and competent contractors.
7.Expansion of Disclosure. Under the proposed process, once a
complaint is referred to Investigation, an Enforcement
Representative from the CSLB will determine from the evidence
whether a probable violation has occurred and whether legal
action should be pursued. If either are decided in the
affirmative, the CSLB will disclose the complaint information
along with a disclaimer describing the process and informing
interested parties that the CSLB is investigating an
allegation. If the complaint is closed without being referred
to legal action, disclosure will cease. The criteria for
disclosure would be further described in regulation, with
particular focus on what a probable violation is and how an
enforcement representative makes the determination that a
complaint is being investigated for legal action. (See
attached Table #1 for a detailed description of CSLB current
and proposed complaint processes.)
8.Bill to Limit Length of Time Disclosure Permitted.
Contractors who have been subjected to a legal action any time
over their careers now have that legal action disclosed no
matter how long ago the action was taken or how trivial the
violation. This practice is unfair for contractors and
potentially misleading to consumers trying to differentiate
between 20-year-old technical violations and more serious
legal actions. This bill would provide a remedy such
situations.
9.Arguments in Support. The CSLB believes that SB 135 will
provide fairness to consumers as well as contractors. The
proposed disclosure policy has safeguards built in to ensure
that disclosure of false and unsubstantiated allegations does
not occur. Complaints will have to be reviewed by a minimum
of three CSLB staff: Intake and Mediation personnel, an
investigator, and a supervisor.
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To put the proposal into perspective, a complaint would have
to meet all of the following criteria in order to be subject
to disclosure:
been referred to investigation (after intake and
mediation where the contractor is first contacted)
reviewed by a supervisor (after intake and mediation and
review by an investigator)
necessary to protect the public from dishonest and
incompetent contractors
been determined that a probable violation had occurred
been accompanied by a disclaimer
not resolved in the contractor's favor
not referred to arbitration
if proven, would present a risk of harm to the public
if proven, would be appropriate for referral for legal
action
Please see attached Table #2.
1.Arguments in Opposition. The California Spa and Pool
Industry Education Council opposes this bill on the basis
that this bill will allow "raw, uninvestigated" complaint
information to be released to the public before a
"determination has been made that violation has
occurred." Additionally, SPEC feels that such disclosure
would be an infringement on a contractor's due process
rights.
SUPPORT AND OPPOSITION:
Support:Contractors State License Board (sponsor)
Opposition:California Spa and Pool Industry Education
Council
Consultant:Robin M. Hartley
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Attachment to SB 135 (Figueroa) Analysis
Table #1:
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|Complaint |Current |Proposed System |
|Process |System | |
|-----------+-----------+---------------------------------------|
|Intake and |Do not |Do not disclose |
|Mediation |disclose |During Intake and Mediation |
|(I&M) | |contractors and consumers are |
| | |contacted to focus on the dispute and |
| | |attempt to settle the case. More |
| | |than 40% of the complaints will be |
| | |closed here. |
| | |Cases identified through the Board's |
| | |"triage" process are immediately |
| | |referred to investigation. |
|-----------+-----------+---------------------------------------|
|Arbitration|Do not |Do not disclose |
| |disclose |If not settled in I&M and a consumer |
| | |services representative determines |
| | |that a possible violation has |
| | |occurred, legal action is not |
| | |necessary to protect the public, and |
| | |the complaint qualifies, refer to |
| | |arbitration. |
| | |(Pursuant to B&P 7085.9, complaints |
| | |referred to arbitration are not |
| | |subject to disclosure.) |
|-----------+-----------+---------------------------------------|
|Investigati|Do not |Disclose after enforcement |
|on |disclose |representative determines from the |
| | |evidence that a probable violation of |
| | |law has occurred and that the |
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| | |complaint should be further |
| | |investigated for legal action. |
| | |Stop disclosing if complaint is closed |
| | |without being referred for legal |
| | |action. |
|-----------+-----------+---------------------------------------|
|Arbitration|Do not |Pursuant to B&P 7085.9, complaints |
| (referred |disclose |referred to arbitration are not |
|after | |subject to disclosure. Where |
|Investigati| |possible, the enforcement |
|on) | |representative should refer the |
| | |complaint to arbitration during the |
| | |initial review. Otherwise, the |
| | |complaint should be disclosed until it |
| | |is referred. |
|-----------+-----------+---------------------------------------|
|Referred |Disclose |Disclose |
|for Legal | | |
|Action | | |
| | | |
|-----------+-----------+---------------------------------------|
|Legal |Disclose |Disclose citations for a period of 5 |
|Action |with no |years |
|Taken |time limit |after licensee has complied with terms |
| | |and conditions. |
| | |Disclose accusations for a minimum of |
| | |7 years. The Board to set by |
| | |regulation the time frame for |
| | |disclosure as part of the suspension |
| | |or revocation order (for future |
| | |accusations). The Board will also set |
| | |a strategy for addressing past |
| | |accusations and citations. |
| | | |
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Table #2:
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|Probable |Continue |Do not disclose |
|violation |investigating | |
|uncertain |until decision | |
| |can be made | |
|----------------+-----------------------+---------------------|
|Probable |Complaint can be |Do not disclose |
|Violation |promptly referred | |
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|Found |to arbitration | |
|----------------+-----------------------+---------------------|
|Probable |Letter of Warning |Do not disclose |
|Violation |is appropriate | |
|Found | | |
|----------------+-----------------------+---------------------|
|Probable |Notice of Violation is |Do not disclose |
|Violation |appropriate | |
|Found | | |
|----------------+-----------------------+---------------------|
|Probable |Appropriate to pursue |Disclose |
|violation |legal action | |
|found | | |
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