BILL NUMBER: AB 2219	AMENDED
	BILL TEXT

	AMENDED IN SENATE  AUGUST 6, 2012
	AMENDED IN ASSEMBLY  MARCH 27, 2012

INTRODUCED BY   Assembly Member Knight
   (Coauthors: Assembly Members Hagman and Jeffries)
   (Coauthor: Senator Strickland)

                        FEBRUARY 24, 2012

   An act to amend and repeal Section 7125 of the Business and
Professions Code, and to amend Section 11665 of the Insurance Code,
relating to contractors.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2219, as amended, Knight. Contractors' workers' compensation
insurance coverage.
   (1) Existing law, the Contractors' State License Law, provides for
the licensing and regulation of contractors by the Contractors'
State License Board within the Department of Consumer Affairs.
Existing law requires every licensed contractor  , or applicant
for licensure,  to have on file at all times with the board a
current and valid Certificate of Workers' Compensation Insurance or
Certification of Self-Insurance, or a statement certifying that he or
she has no employees and is not required to obtain or maintain
workers' compensation insurance. Existing law, until January 1, 2013,
requires a contractor with a C-39 roofing classification to obtain
and maintain workers' compensation insurance even if he or she has no
employees.
   This bill would extend the operation of these provisions
indefinitely.  The bill would require the current and valid
Certificate of Workers' Compensation Insurance or Certification of
Self-Insurance to be in the applicant's or licensee's business name.

   Under existing law, for any license that, on January 1, 2011, is
active and includes a C-39 classification but for which a valid
Certificate of Workers' Compensation or Certification of
Self-Insurance has not been received by the registrar of contractors,
the registrar is required, in lieu of suspending the license, to
remove the C-39 classification from the license.
   This bill would change this date to January 1, 2013, and would
extend the operation of these provisions indefinitely.
   Existing law requires the suspension of any license that, after
January 1, 2011, is active and has had the C-39 classification
removed pursuant to the above-described provisions, if the licensee
is found by the registrar to have employees and to lack a valid
Certificate of Workers' Compensation or Certification of
Self-Insurance.
   This bill would change this date to January 1, 2013, and would
extend the operation of these provisions indefinitely.
   (2) Existing law requires an insurer who issues a workers'
compensation insurance policy to a roofing contractor holding a C-39
license from the Contractor's State License Board to perform an
annual payroll audit for the contractor. The Insurance Commissioner
is further required to direct the rating organization designated as
his or her statistical agent to compile pertinent statistical data on
those holding C-39 licenses, and, on an annual basis, the rating
organization is required to report its data to the commissioner.
Under existing law, the statistical data in the rating organization's
report includes the total annual payroll and loss data reported on
those holding C-39 licenses, as specified. Existing law provides that
these provisions are inoperative and repealed on January 1, 2013.
   This bill would extend the operation of these provisions
indefinitely. The bill would require that the statistical data
compiled by the rating organization pursuant to these provisions
include data regarding the number of employers, total payroll, total
losses, and the losses per $100 of payroll, broken down by reported
annual payroll ranges. The bill would require that the audit
performed by the insurer include an in-person visit to the place of
business of the roofing contractor to verify whether the number of
employees reported by the contractor is accurate.
   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 7125 of the Business and Professions Code, as
amended by Section 1 of Chapter 686 of the Statutes of 2011, is
amended to read:
   7125.  (a) Except as provided in subdivision (b), the board shall
require as a condition precedent to the issuance, reinstatement,
reactivation, renewal, or continued maintenance of a license, that
the applicant or licensee have on file at all times a current and
valid Certificate of Workers' Compensation Insurance or Certification
of Self-Insurance  in the applicant's or licensee's business
name  . A Certificate of Workers' Compensation Insurance shall
be issued and filed, electronically or otherwise, by  one or
more insurers   an insurer  duly licensed to write
workers' compensation insurance in this state. A Certification of
Self-Insurance shall be issued and filed by the Director of
Industrial Relations. If reciprocity conditions exist, as provided in
Section 3600.5 of the Labor Code, the registrar shall require the
information deemed necessary to ensure compliance with this section.
   (b) This section does not apply to an applicant or licensee who
meets both of the following conditions:
   (1) Has no employees provided that he or she files a statement
with the board on a form prescribed by the registrar prior to the
issuance, reinstatement, reactivation, or continued maintenance of a
license, certifying that he or she does not employ any person in any
manner so as to become subject to the workers' compensation laws of
California or is not otherwise required to provide for workers'
compensation insurance coverage under California law.
   (2) Does not hold a C-39 license, as defined in Section 832.39 of
Title 16 of the California Code of Regulations.
   (c) No Certificate of Workers' Compensation Insurance,
Certification of Self-Insurance, or exemption certificate is required
of a holder of a license that has been inactivated on the official
records of the board during the period the license is inactive.
   (d) (1) The insurer, including the State Compensation Insurance
Fund, shall report to the registrar the following information for any
policy required under this section: name, license number, policy
number, dates that coverage is scheduled to commence and lapse, and
cancellation date if applicable.
   (2) A workers' compensation insurer shall also report to the
registrar a licensee whose workers' compensation insurance policy is
canceled by the insurer if all of the following conditions are met:
   (A) The insurer has completed a premium audit or investigation.
   (B) A material misrepresentation has been made by the insured that
results in financial harm to the insurer.
   (C) No reimbursement has been paid by the insured to the insurer.
   (3) Willful or deliberate disregard and violation of workers'
compensation insurance laws constitutes a cause for disciplinary
action by the registrar against the licensee.
   (e) (1) For any license that, on January 1, 2013, is active and
includes a C-39 classification in addition to any other
classification, the registrar shall, in lieu of the automatic license
suspension otherwise required under this article, remove the C-39
classification from the license unless a valid Certificate of Workers'
Compensation Insurance or Certification of Self-Insurance is
received by the registrar.
   (2) For any licensee whose license, after January 1, 2013, is
active and has had the C-39 classification removed as provided in
paragraph (1), and who is found by the registrar to have employees
and to lack a valid Certificate of Workers' Compensation Insurance or
Certification of Self-Insurance, that license shall be automatically
suspended as required under this article.
   (f) The information reported pursuant to paragraph (2) of
subdivision (d) shall be confidential, and shall be exempt from
disclosure under the California Public Records Act (Chapter 3.5
(commencing with Section 6250) of Division 7 of Title 1 of the
Government Code).
  SEC. 2.  Section 7125 of the Business and Professions Code, as
amended by Section 2 of Chapter 686 of the Statutes of 2011, is
repealed.
  SEC. 3.  Section 11665 of the Insurance Code is amended to read:
   11665.  (a) An insurer who issues a workers' compensation
insurance policy to a roofing contractor holding a C-39 license from
the Contractors State License Board shall perform an annual payroll
audit for the contractor. This audit shall include an in-person visit
to the place of business of the roofing contractor to verify whether
the number of employees reported by the contractor is accurate. The
insurer may impose a surcharge on each policyholder audited under
this subdivision in an amount necessary to recoup the reasonable
costs of conducting the annual payroll audits.
   (b) The commissioner shall direct the rating organization
designated as his or her statistical agent to compile pertinent
statistical data on those holding C-39 licenses, as reported by the
appropriate state entity, on an annual basis and provide a report to
him or her each year. The data shall track the total annual payroll
and loss data reported on those holding C-39 licenses in accordance
with the standard workers' compensation insurance classifications
applicable to roofing operations. The data shall include the number
of employers, total payroll, total losses, and the losses per one
hundred dollars ($100) of payroll by the employers' annual payroll
intervals as follows:
                       1 to       4,999
                   5,000 to       9,999
                  10,000 to      14,999
                  15,000 to      19,999
                  20,000 to      24,999
                  25,000 to      29,999
                  30,000 to      39,999
                  40,000 to      49,999
                  50,000 to      74,999
                  75,000 to      99,999
                 100,000 to     199,999
                 200,000 to     299,999
                 300,000 to     399,999
                 400,000 to     499,999
                 500,000 to     599,999
                 600,000 to     699,999
                 700,000 to     799,999
                 800,000 to     899,999
                 900,000 to     999,999
               1,000,000 to   1,099,999
               1,100,000 to   1,199,999
               1,200,000 to   1,299,999
               1,300,000 to   1,399,999
               1,400,000 to   1,499,999
          1,500,000 or more
The report shall also be provided to the Legislature by the
commissioner, in compliance with Section 9795 of the Government Code.