BILL NUMBER: AB 249	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  JANUARY 4, 2012
	AMENDED IN ASSEMBLY  AUGUST 22, 2011
	AMENDED IN ASSEMBLY  APRIL 4, 2011
	AMENDED IN ASSEMBLY  MARCH 15, 2011

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 amended, 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 prohibits a person, acting as a contractor, from
bringing an action to collect compensation for performance of any act
or contract requiring a license without alleging that he or she was
licensed at all times during the performance of the act or contract,
except as specified. 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  authorize a person who utilizes those
services for the construction or improvement of residential property,
as specified, to recover 2 times the amount of compensation paid for
work performed during periods when the contractor was not duly
licensed. It would also authorize a person who utilizes the services
of a contractor for the construction or improvement of property other
than specified residential property 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. The bill would
authorize a contractor who was duly licensed with respect to a
portion of work performed, as specified, to bring an action to
recover compensation for that portion of the work  
define an "unlicensed contractor," for these purposes, as a person
who has engaged in the business or acted in the capacity of a
contractor and who has either never been licensed as a contractor
under the Contractors' State License Law or who performed an act or
contract after his or her license was suspended pursuant to a
disciplinary action  . The bill would state the intent of the
Legislature in this regard.
   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  subdivisions 
 subdivision  (e), (g), and (h),  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 subdivisions (e), (g), and (h):
 
   (1) A person that 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 two times
the amount of any compensation paid to the contractor for performance
of any act or contract.  
   (2) 
    (b)     (1)  A person that utilizes
the services of  a   an unlicensed 
contractor  for the construction or improvement of property
other than 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 
that occurred at anytime during which the contractor did not possess
a renewable license in accordance with this chapter, or during which
the contractor's license was under suspension or expired  .

   (2) For purposes of this subdivision, "unlicensed contractor"
means a person who has engaged in the business or acted in the
capacity of a contractor and either of the following applies: 

   (A) The person has never been licensed as a contractor under this
chapter.  
   (B) The person was previously licensed as a contractor under this
chapter and performed an act or contract after his or her license had
been revoked or suspended pursuant to a disciplinary action. 
   (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. 
   (g) If the contractor was duly licensed upon commencement of an
act or contract and reinstated a lapsed or suspended license prior to
completion of the act or contract, the contractor may bring or
maintain an action limited to recovery of compensation payable for
any portion of the work performed during periods when the contractor
was duly licensed. Any action authorized by subdivision (b) may seek
recovery of compensation previously paid to the contractor only for
that portion of the work performed during periods when the contractor
was not duly licensed.  
   (h) If the contractor was licensed during the performance of the
act or contract but contracted for or performed work outside of his
or her license classification, the contractor may bring or maintain
an action limited to recovery of compensation payable for that
portion of the work performed within the scope of work authorized by
his or her license classification. Any action authorized by
subdivision (b) may seek recovery of compensation previously paid to
the contractor for that portion of the work performed that is not
within the scope of work authorized by the contractor's license
classification. 
  SEC. 2.  It is the intent of the Legislature that amendments to
Section 7031 of the Business sand Professions Code made by this act
shall affect only the rights of the parties to a contract to bring a
civil action under that section to recover compensation paid or
payable in connection with a work of improvement. This act shall not
be construed to limit or modify any civil action authorized to be
brought by the registrar of the Contractors' State License Board or
other law enforcement agency to enforce any provision of the
Contractors' State License Law.