BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 1091| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: AB 1091 Author: Morrell (R) Amended: 6/8/11 in Senate Vote: 21 SENATE BUSINESS, PROF. & ECON. DEV. COMM. : 8-0, 6/6/11 AYES: Price, Emmerson, Corbett, Correa, Hernandez, Negrete McLeod, Vargas, Wyland NO VOTE RECORDED: Walters ASSEMBLY FLOOR : 70-0, 5/12/11 - See last page for vote SUBJECT : Contractors SOURCE : Contractors State License Board DIGEST : This bill revises and recasts requirements for a licensed contractor to notify the Contractors State License Board when a licensed qualifier disassociates from a contractors license. ANALYSIS : Existing law : 1. Licenses and regulates more than 300,000 contractors under the Contractors State License Law by the Contractors State License Board (CSLB) within the Department of Consumer Affairs (DCA). The CSLB is under the direction of the registrar of contractors CONTINUED AB 1091 Page 2 (Registrar). 2. Provides that a person may qualify on behalf of an individual or firm as a partner, responsible managing officer or responsible managing employee (qualifier). A qualifier is a person who meets the experience requirement and the requirement of passing the licensing examination, thereby meeting the "qualification" for a license to be issued. A qualifier is responsible for exercising direct supervision and control of the licensee's construction operation to secure full compliance with the CSLB law. 3. Requires a licensee or qualifier to notify CSLB in writing and replace the disassociating qualifier within 90 days from the date of disassociation. Upon failure to replace the qualifier within 90 days, the license shall be automatically suspended or the classification removed at the end of those 90 days. 4. Authorizes the Registrar to review and accept the petition of one 90-day extension of a licensee who disputes the date of disassociation or who has failed to notify and replace the qualifier within 90 days, upon a showing of good cause by the contractor. Requires that this petition be received within 90 days from CSLB's notice that the license will be suspended if the qualifier is not replaced. The Registrar may grant only one 90-day extension to replace the qualifier. This bill: 1. Revises and recasts provisions requiring a licensed contractor to notify the CSLB and replace a qualifier within 90 days after a qualifier disassociates from a contractor's license. 2. Specifies that the disassociating qualifier is responsible for the licensee's construction operations until the date of disassociation or the date the CSLB receives the written notification of disassociation, whichever is later. 3. Authorizes the CSLB registrar, upon a showing of good CONTINUED AB 1091 Page 3 cause by the licensee, to review and accept a petition for one 90-day extension to replace the qualifier immediately following the initial 90-day period only under the following circumstances: A. If the licensee is disputing the date of disassociation. B. If the responsible managing officer, employee, member, or manager has died. C. If there has been delay in processing the application to replace the qualifier that is out of the applicant's control and CSLB or another state or federal agency is responsible. 4. Requires the petition for one 90-day extension to be received within 90 days after the date of disassociation or death or delay, and requires the petition to be considered only if an application to replace the qualifier is on file with CSLB. 5. Clarifies that the licensee shall have no more than a total of 180 days after the date of disassociation or death in which to replace the qualifier. Background When a qualifier (the qualifying individual(s), or qualifier, is the person listed in the CSLB records who meets the experience and examination requirements for the license) disassociates from a contractor's license, the qualifier or the licensee is required to notify CSLB within 90 days after the disassociation date. The licensee then has 90 days after the disassociation date in which to replace the qualifier or the license is suspended by operation of law. If the qualifier and licensee fail to notify CSLB of the disassociation within the 90-day deadline, the license will be suspended upon written notification of the disassociation. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No CONTINUED AB 1091 Page 4 SUPPORT : (Verified 6/28/11) Contractors State License Board (source) California Chapter of the American Fence Association California Fence Contractors Association Engineering Contractors Association Flasher Barricade Association Marin Builders Association Southern California Contractor's Association ARGUMENTS IN SUPPORT : This bill is sponsored by the Contractors State License Board to modify and clarify the requirements for licensees to notify the CSLB when a qualifier disassociates from a license. According to the CSLB, "Existing law creates an inequity between the treatment of licensees who comply with and those who do not comply with the 90-day notification requirement inadvertently providing more time for those who do not comply. For example, if a licensee notifies CSLB that their qualifier disassociated one year prior, their license is suspended immediately upon that notification, but they would have already had one year of active license status without the qualifier in place and they would have had one year of opportunity to replace that qualifier. "There is little to discourage a licensee from failing to notify the CSLB in a timely manner when the qualifier disassociates, and it has the potential to cause consumer harm. If the license is suspended for lack of a qualifier and the licensee has a project in the works a consumer could be harmed; i.e. the project would have to stop or if work continued it would technically be by an unlicensed contractor. Further, if the license was suspended while a project was underway and a consumer had a problem and made a claim against the bond, the bonding company may reject the claim since the contractor was not properly licensed." ASSEMBLY FLOOR : AYES: Achadjian, Allen, Ammiano, Atkins, Beall, Bill Berryhill, Block, Blumenfield, Bonilla, Bradford, Brownley, Buchanan, Butler, Charles Calderon, Campos, Carter, Chesbro, Cook, Davis, Dickinson, Donnelly, Eng, Feuer, Fletcher, Fong, Fuentes, Furutani, Beth Gaines, CONTINUED AB 1091 Page 5 Galgiani, Gatto, Gordon, Grove, Hagman, Halderman, Hall, Harkey, Hayashi, Hill, Huber, Hueso, Huffman, Jeffries, Jones, Knight, Lara, Logue, Ma, Mansoor, Mendoza, Miller, Monning, Morrell, Nestande, Nielsen, Norby, Olsen, Pan, Perea, V. Manuel Pérez, Silva, Skinner, Smyth, Solorio, Swanson, Valadao, Wagner, Wieckowski, Williams, Yamada, John A. Pérez NO VOTE RECORDED: Alejo, Cedillo, Conway, Garrick, Gorell, Roger Hernández, Bonnie Lowenthal, Mitchell, Portantino, Torres JJA:do 6/29/11 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED