BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                  AB 1091|
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                                 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 
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             (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 

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             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


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           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, 

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            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

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