BILL NUMBER: AB 249	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Bill Berryhill

                        FEBRUARY 3, 2011

   An act to amend Section 7031 of the Business and Professions Code,
relating to contractors.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 249, as introduced, Bill Berryhill. Contractors.
   Existing law, the Contractors' State License Law, creates the
Contractors' State License Board within the Department of Consumer
Affairs and provides for the licensure and regulation of contractors.
Existing law authorizes a person who utilizes an unlicensed
contractor to bring an action in any court of competent jurisdiction
in this state for recovery of all compensation paid to the unlicensed
contractor for performance of any act or contract.
   This bill would, instead, authorize a person who utilizes the
services of an unlicensed contractor for the construction or
improvement of residential property, as specified, to bring an action
in any court of competent jurisdiction in this state to recover all
compensation paid to the contractor for performance of any act or
contract during the time the contractor was not properly licensed.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


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

  SECTION 1.  Section 7031 of the Business and Professions Code is
amended to read:
   7031.  (a) Except as provided in subdivision (e), no person
engaged in the business or acting in the capacity of a contractor
 ,  may bring or maintain any action, or recover in
law or equity in any action, in any court of this state for the
collection of compensation for the performance of any act or contract
where a license is required by this chapter without alleging that he
or she was a duly licensed contractor at all times during the
performance of that act or contract, regardless of the merits of the
cause of action brought by the person, except that this prohibition
shall not apply to contractors who are each individually licensed
under this chapter but who fail to comply with Section 7029.
   (b) Except as provided in subdivision (e), a person who utilizes
the services of an unlicensed contractor  for the construction or
improvement of residential property consisting of one to four units
 may bring an action in any court of competent jurisdiction in
this state to recover all compensation paid to the 
unlicensed  contractor for performance of any act or
contract  during the time the contractor was not properly
licensed  .
   (c) A security interest taken to secure any payment for the
performance of any act or contract for which a license is required by
this chapter is unenforceable if the person performing the act or
contract was not a duly licensed contractor at all times during the
performance of the act or contract.
   (d) If licensure or proper licensure is controverted, then proof
of licensure pursuant to this section shall be made by production of
a verified certificate of licensure from the Contractors' State
License Board which establishes that the individual or entity
bringing the action was duly licensed in the proper classification of
contractors at all times during the performance of any act or
contract covered by the action. Nothing in this subdivision shall
require any person or entity controverting licensure or proper
licensure to produce a verified certificate. When licensure or proper
licensure is controverted, the burden of proof to establish
licensure or proper licensure shall be on the licensee.
   (e) The judicial doctrine of substantial compliance shall not
apply under this section where the person who engaged in the business
or acted in the capacity of a contractor has never been a duly
licensed contractor in this state. However, notwithstanding
subdivision (b) of Section 143, the court may determine that there
has been substantial compliance with licensure requirements under
this section if it is shown at an evidentiary hearing that the person
who engaged in the business or acted in the capacity of a contractor
(1) had been duly licensed as a contractor in this state prior to
the performance of the act or contract, (2) acted reasonably and in
good faith to maintain proper licensure, (3) did not know or
reasonably should not have known that he or she was not duly licensed
when performance of the act or contract commenced, and (4) acted
promptly and in good faith to reinstate his or her license upon
learning it was invalid.
   (f) The exceptions to the prohibition against the application of
the judicial doctrine of substantial compliance found in subdivision
(e) shall apply to all contracts entered into on or after January 1,
1992, and to all actions or arbitrations arising therefrom, except
that the amendments to subdivisions (e) and (f) enacted during the
1994 portion of the 1993-94 Regular Session of the Legislature shall
not apply to either of the following:
   (1) Any legal action or arbitration commenced prior to January 1,
1995, regardless of the date on which the parties entered into the
contract.
   (2) Any legal action or arbitration commenced on or after January
1, 1995, if the legal action or arbitration was commenced prior to
January 1, 1995, and was subsequently dismissed.