BILL NUMBER: AB 2658	CHAPTERED
	BILL TEXT

	CHAPTER  123
	FILED WITH SECRETARY OF STATE  JULY 24, 2006
	APPROVED BY GOVERNOR  JULY 24, 2006
	PASSED THE SENATE  JUNE 26, 2006
	PASSED THE ASSEMBLY  APRIL 20, 2006
	AMENDED IN ASSEMBLY  MARCH 27, 2006

INTRODUCED BY   Assembly Member Harman

                        FEBRUARY 24, 2006

   An act to amend Sections 7102 and 7113.5 of the Business and
Professions Code, relating to contractors.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2658, Harman  Contractors.
   Under existing law, the Contractors' State License Board may
suspend or revoke a contractor's license upon specified grounds, and
as a condition of reinstatement, the contractor may be required to
fully satisfy any resulting monetary obligation or debt, except if
the obligation or debt was adjudicated in a bankruptcy proceeding.
   This bill would instead provide that the contractor may not be
required to satisfy the monetary obligation or debt to the extent it
was discharged in a bankruptcy proceeding.
   Existing law makes it a cause for discipline if a contractor
avoids or settles an obligation for less than the full amount of the
obligation, except if the contractor avoids or settles in bankruptcy,
or by composition, arrangement, or reorganization with creditors
under federal law for less than the full amount.
   This bill would also require the contractor to satisfy that
obligation to the extent it is not discharged under federal law.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 7102 of the Business and Professions Code is
amended to read:
   7102.  After suspension of a license upon any of the grounds set
forth in this chapter, the registrar may reinstate the license upon
proof of compliance by the contractor with all provisions of the
decision as to reinstatement or, in the absence of a decision or any
provisions of reinstatement, in the sound discretion of the
registrar.
   After revocation of a license upon any of the grounds set forth in
this chapter, the license shall not be reinstated or reissued and a
license shall not be issued to any member of the personnel of the
revoked licensee found to have had knowledge of or participated in
the acts or omissions constituting grounds for revocation, within a
minimum period of one year and a maximum period of five years after
the final decision of revocation and then only on proper showing that
all loss caused by the act or omission for which the license was
revoked has been fully satisfied and that all conditions imposed by
the decision of revocation have been complied with.
   The board shall promulgate regulations covering the criteria to be
considered when extending the minimum one-year period. The criteria
shall give due consideration to the appropriateness of the extension
of time with respect to the following factors:
   (a) The gravity of the violation.
   (b) The history of previous violations.
   (c) Criminal convictions.
   When any loss has been reduced to a monetary obligation or debt,
however, the satisfaction of the monetary obligation or debt as a
prerequisite for the issuance, reissuance, or reinstatement of a
license shall not be required to the extent the monetary obligation
or debt was discharged in a bankruptcy proceeding. However, any
nonmonetary condition not discharged in a bankruptcy proceeding shall
be complied with prior to the issuance, the reissuance, or
reinstatement of the license.
  SEC. 2.  Section 7113.5 of the Business and Professions Code is
amended to read:
   7113.5.  The avoidance or settlement by a licensee for less than
the full amount of the lawful obligations of the licensee incurred as
a contractor, whether by (a) composition, arrangement, or
reorganization with creditors under state law, (b) composition,
arrangement, or reorganization with creditors under any agreement or
understanding, (c) receivership as provided in Chapter 5 (commencing
at Section 564) of Title 7 of Part 2 of the Code of Civil Procedure,
(d)  assignment for the benefit of creditors, (e) trusteeship, or (f)
dissolution, constitutes a cause for disciplinary action.
   This section shall not apply to an individual settlement of the
obligation of a licensee by the licensee with a creditor that is not
a part of or in connection with a settlement with other creditors of
the licensee.
   No disciplinary action shall be commenced against a licensee for
avoiding or settling in bankruptcy, or by composition, arrangement,
or reorganization with creditors under federal law, the licensee's
lawful obligations incurred as a contractor for less than the full
amount of the obligations, so long as the licensee satisfies all of
those lawful obligations, to the extent the obligations are not
discharged under federal law.