BILL ANALYSIS                                                                                                                                                                                                    Ó




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair


          AB 2237 (Monning) - Contractors: definition.
          
          Amended: April 9, 2012          Policy Vote: B,P&ED 8-0
          Urgency: No                     Mandate: No
          Hearing Date: July 2, 2012      Consultant: Bob Franzoia
          
          This bill does not meet the criteria for referral to the 
          Suspense File.


          Bill Summary: AB 2237 would define the term consultant for 
          purposes of the definition of a contractor to include a person 
          who provides a bid, or who arranges for and sets up work 
          schedules and maintains oversight of a construction project, 
          with respect to a home improvement contract.  Because 
          consultants who provide the above described services would be 
          required to pay license fees which are deposited into the 
          Contractors' License Fund, a continuously appropriated fund, 
          this bill would make an appropriation.

          Fiscal Impact: Unknown, likely minor annual increase in penalty 
          revenue to the Contractors' License Fund.
              Unknown, likely minor increased workload associated with 
              increased licensing and enforcement.

          Background: The Contractors' State License Board (board) 
          protects consumers by licensing and regulating California's 
          construction industry.  There are about 300,000 licensed 
          contractors in the state, in 43 different licensing 
          classifications.  In addition to educating consumers about 
          contractors and construction law, board activities include 
          administering examinations to test prospective licensees, 
          issuing licenses, investigating complaints against licensed and 
          unlicensed contractors, issuing citations, suspending or 
          revoking licenses, and seeking administrative, criminal, and 
          civil sanctions against violators.

          As noted in the policy committee analysis, in 2008, the board 
          adopted Precedential Decision No. 1, establishing that someone 
          acting in the capacity of a swimming pool consultant is a 
          contractor.  In 2009, the Appellate Court decision The Fifth Day 
          v. Bolotin found that someone acting in the capacity of a 








          AB 2237 (Monning)
          Page 1


          construction manager is not required to be licensed as a 
          contractor.  The Fifth Day v. Bolotin decision undermined the 
          board's Precedential Decision, and the board thinks the law 
          should be amended to clarify that a person performing these 
          services is required to be licensed as a contractor and comply 
          with the law.  

          The board further indicates that recently, an unlicensed 
          contractor facing criminal prosecution for violating Business & 
          Professions Code 7028 (engaging in business of a contractor 
          without a license) claimed to have been a project coordinator 
          and asserted exemption from licensure, citing The Fifth Day v. 
          Bolotin decision.  Although the unlicensed contractor was not 
          overseeing a contract between the project owner and a general 
          contractor as in the Fifth Day v. Bolotin case, the defense 
          strategy was nonetheless of concern to the prosecutor and 
          ultimately resulted in a plea bargain dismissing the charge, 
          according to the board.

          Proposed Law: This bill would define consultant for the purposes 
          of the definition of a contractor to include a person who meets 
          either of the following criteria as it relates to work performed 
          pursuant to a home improvement contract:

          (1) Provides or oversees a bid for a construction project.
          (2) Arranges for and sets up work schedules for contractors and 
          subcontractors and maintains oversight of a construction 
          project.