BILL NUMBER: AB 1534	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member V. Manuel Perez

                        FEBRUARY 27, 2009

   An act to add Section 7192 to the Business and Professions Code,
relating to contractors.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1534, as introduced, V. Manuel Perez. Contractors: mortgage
loans.
   The Contractors' State License Law provides for the licensure and
regulation of contractors, as defined, by the Contractors' State
License Board. Upon a violation of the law by a contractor, the board
is authorized to institute disciplinary proceedings, revoke or
suspend a license, issue citations, collect civil penalties, and
apply for injunctive relief, as specified.
   This bill would prohibit a general building contractor from
originating, directly or through a related entity, a consumer loan,
as defined, to be used for the purchase of a home that is for sale by
the contractor or a related entity of the contractor. A violation of
that provision would subject a contractor to the provisions
described above.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.

   AB 1534, as introduced, V. Manuel Perez. Contractors: mortgage
loans.
   The Contractors' State License Law provides for the licensure and
regulation of contractors, as defined, by the Contractors' State
License Board. Upon a violation of the law by a contractor, the board
is authorized to institute disciplinary proceedings, revoke or
suspend a license, issue citations, collect civil penalties, and
apply for injunctive relief, as specified.
   This bill would prohibit a general building contractor from
originating, directly or through a related entity, a consumer loan,
as defined, to be used for the purchase of a home that is for sale by
the contractor or a related entity of the contractor. A violation of
that provision would subject a contractor to the provisions
described above.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

  SECTION 1.  Section 7192 is added to the Business and Professions
Code, to read:
   7192.  (a) A home builder may not, directly or through an
affiliate, subsidiary, or partner of the home builder, originate a
consumer loan to be used for the purchase of a home that is for sale
by the home builder or an affiliate, subsidiary, or partner of the
home builder.
   (b) As used in this section:
   (1) "Consumer loan" means a consumer credit transaction that is
secured by real property located in this state used, or intended to
be used or occupied, as the principal dwelling of the consumer that
is improved by a one-to-four residential unit. "Consumer loan" does
not include a reverse mortgage, an open line of credit as defined in
Part 226 of Title 12 of the Code of Federal Regulations (Regulation
Z), or a consumer credit transaction that is secured by rental
property or second homes. "Consumer loan" does not include a bridge
loan. For purposes of this section, a bridge loan is any temporary
loan, having a maturity of one year or less, for the purpose of
acquisition or construction of a dwelling intended to become the
consumer's principal dwelling.
   (2) "Home" includes a single-family residence or townhome, but
does not include apartment buildings or condominiums.
   (3) "Home builder" means a general building contractor engaged in
the construction of new homes.
   (4) "Originate" means to arrange, negotiate, or make a consumer
loan.
  SECTION 1.  Section 7192 is added to the Business and Professions
Code, to read:
   7192.  (a) A home builder may not, directly or through an
affiliate, subsidiary, or partner of the home builder, originate a
consumer loan to be used for the purchase of a home that is for sale
by the home builder or an affiliate, subsidiary, or partner of the
home builder.
   (b) As used in this section:
   (1) "Consumer loan" means a consumer credit transaction that is
secured by real property located in this state used, or intended to
be used or occupied, as the principal dwelling of the consumer that
is improved by a one-to-four residential unit. "Consumer loan" does
not include a reverse mortgage, an open line of credit as defined in
Part 226 of Title 12 of the Code of Federal Regulations (Regulation
Z), or a consumer credit transaction that is secured by rental
property or second homes. "Consumer loan" does not include a bridge
loan. For purposes of this section, a bridge loan is any temporary
loan, having a maturity of one year or less, for the purpose of
acquisition or construction of a dwelling intended to become the
consumer's principal dwelling.
   (2) "Home" includes a single-family residence or townhome, but
does not include apartment buildings or condominiums.
   (3) "Home builder" means a general building contractor engaged in
the construction of new homes.
   (4) "Originate" means to arrange, negotiate, or make a consumer
loan.