BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 993
                                                                  Page  1

          Date of Hearing:   May 15, 2013

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                    AB 993 (Linder) - As Amended:  April 24, 2013 

          Policy Committee:                              Business and  
          Professions  Vote:                            13 - 0 
                        Judiciary                             10 - 0 

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              

          SUMMARY  

          This bill revises statute relating to the Contractor's State  
          License Board (CSLB) arbitration program, which allows for an  
          alternative dispute resolution process between consumers and  
          contractors for claims up to $50,000. Specifically, this bill:

          1)Prohibits an arbitrator from requiring specific performance  
            criteria or any other non-monetary remedy that is not  
            authorized.

          2)Provides that a party submitting a dispute to arbitration  
            waives any right to recover attorney's fees, or to challenge  
            an arbitrator's award of attorney's fees, in a civil action  
            regarding the dispute.

          3)Removes the current procedure for scheduling an arbitration  
            hearing and instead requires the arbitrator to fix the time,  
            date, and location of the hearing after considering the  
            responses of the parties' availability.

           FISCAL EFFECT  

          Costs associated with this legislation should be minor and  
          absorbable within existing CSLB resources. 

           COMMENTS  

           1)Rationale  . This bill, sponsored by CSLB, makes  
            non-controversial revisions to the CSLB Arbitration Program,  
            including a prohibition on specific performance awards. The  








                                                                  AB 993
                                                                  Page  2

            arbitration program provides an alternative dispute resolution  
            process to resolve consumer complaints equitably and  
            efficiently. Although the relevant law provides a detailed  
            guide for the arbitration process, there are practical changes  
            that could improve and clarify the process for both consumers  
            and contractors.

           2)CSLB Arbitration Program  . CSLB offers voluntary arbitration  
            for consumers to resolve disputes involving claims less than  
            $50,000 as a speedier, less costly alternative to litigation. 

            CSLB pays for the hearing, the arbitrator, and the services of  
            one state-appointed expert witness per complaint. For claims  
            less than $12,500, arbitration is mandatory for the contractor  
            if the consumer wishes to compel arbitration. For claims  
            between $12,500 and $50,000, both the consumer and the  
            contractor must consent to the arbitration process. The  
            arbitration itself is binding for both parties, which means  
            that both consumer and contractor are legally required to  
            comply with the arbitrator's decision. 


           Analysis Prepared by  :    Julie Salley-Gray / APPR. / (916)  
          319-2081