BILL ANALYSIS �
SB 261
Page 1
SENATE THIRD READING
SB 261 (Monning)
As Introduced February 13, 2013
Majority vote
SENATE VOTE :37-0
BUSINESS & PROFESSIONS 12-0 APPROPRIATIONS 16-1
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|Ayes:|Gordon, Jones, Bocanegra, |Ayes:|Gatto, Harkey, Bigelow, |
| |Campos, Dickinson, | |Bocanegra, Bradford, Ian |
| |Eggman, Hagman, | |Calderon, Campos, Eggman, |
| |Maienschein, Mullin, | |Gomez, Hall, Holden, |
| |Skinner, Ting, Wilk | |Linder, Pan, Quirk, |
| | | |Wagner, Weber |
|-----+--------------------------+-----+--------------------------|
| | |Nays:|Donnelly |
| | | | |
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SUMMARY : Authorizes the Contractors' State License Board (CSLB)
to take administrative action against any licensed or unlicensed
person for the improper use of a contractor's license, as
specified. Specifically, this bill :
1)Authorizes the CSLB to take administrative action against any
licensed or unlicensed person for the improper use of a
contractor's license, as specified.
2)Specifies that any authorized administrative actions shall be
separate from, and in addition to, other civil or criminal
remedies, unless otherwise expressly provided.
EXISTING LAW :
1)Specifies that improper use of a Department of Consumer
Affairs (DCA)-issued license is a misdemeanor when an
individual:
a) Displays, permits to be displayed or has in his or her
possession, a cancelled, revoked, suspended or fraudulently
altered license, or a fictitious license or document
simulating a license;
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b) Lends or knowingly permits his or her license to be used
by another;
c) Displays or represents any license not issued to him or
her as being his or her license;
d) Fails or refuses to surrender to the issuing board or
bureau upon a lawful written demand any license,
registration, permit, or certificate which has been
suspended, revoked, or canceled;
e) Knowingly permits any unlawful use of a license issued
to him or her;
f) Photographs, copies, duplicates, manufactures, or in any
way reproduces a license in a manner that it could be
mistaken for a valid license, or displays or has in their
possession a photograph, copy, duplicate, reproduction, or
facsimile unless authorized by the Business and Professions
Code (BPC); and,
g) Knowingly buys or receives a fraudulent, forged, or
counterfeit license. (BPC Section 119)
2)Makes it a misdemeanor for any person to advertise for
construction or work of improvement covered by the
Contractors' State License Law (Contractors' Law) unless that
person holds a valid contractor's license in the
classification advertised, except that a licensed building or
engineering contractor may advertise as a general contractor.
(BPC Section 7027.1)
3)Provides that the willful and intentional fraudulent use of a
contractor's license number is punishable by a fine up to
$10,000 or imprisonment in a county jail up to one year, or
both. (BPC Section 7027.3)
4)Provides that it is a misdemeanor for an individual to engage
in the business of a contractor without licensure, and
establishes a fine and imprisonment schedule based on
individual's record of previous violations. (BPC Section
7028)
5)Authorizes the CSLB Registrar to issue a citation which may
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include an order of abatement and a civil penalty to an
unlicensed individual acting as a licensed contractor. (BPC
Section 7028.7)
6)Authorizes the CSLB Registrar to issue a citation, instead of
disciplinary proceedings, to a licensee when there is probable
cause to believe that the licensee has committed acts in
violation of the Contractors' Law; and further provides that
the citation may include an order for payment by a licensee of
a specified sum to an injured party. (BPC Section 7099)
7)Authorizes CSLB to promulgate regulations covering the
assessment of civil penalties and prohibits a citation greater
than $5,000, unless otherwise provided for under the
Contractors' Law. (BPC Section 7099.2)
8)States that the following are grounds for disciplinary action
against a licensed contractor:
a) Aiding or abetting an unlicensed person to evade the
Contractors' Law;
b) Allowing an unlicensed person to use his or her license;
c) Acting in the capacity of a contractor under an inactive
or suspended license; or,
d) Conviction of a crime substantially related to the
qualifications, functions, and duties of a contractor. (BPC
Sections 7114, 7117.5, and 7123)
FISCAL EFFECT : According to the Assembly Appropriations
Committee, there are no significant costs associated with this
legislation.
COMMENTS :
1)Purpose of this bill . This bill expands CSLB's administrative
authority to encompass additional instances when a licensed or
unlicensed contractor has improperly or fraudulently used a
contractor's license. This would permit CSLB to punish the
violation of general restrictions on license usage with
warning letters, citations or fines, or even suspension or
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revocation of a contractor's license, without having to rely
on local law enforcement. This bill is sponsored by CSLB.
2)Author's statement . According to the author, "SB 261 would
add a new section to the Contractors' Law that would authorize
CSLB to take administrative action [against individuals] who
violate BPC 119. Individuals who commit BPC 119 violations
represent a risk to the public and legitimate licensees.
Under existing law, the CSLB does not have administrative
authority to impose discipline upon licensed or unlicensed
persons [for BPC 119] violations.
"Furthermore, prosecutors routinely refuse to charge licensees
who violate BPC 119 unless it is included with additional
criminal charges, i.e., elder abuse, grand theft, etc.
Workload considerations and budgetary constraints preclude
some district attorneys (DAs) from pursuing criminal charges
against unlicensed individuals.
"This bill would allow CSLB to issue administrative citations
whether or not these violations are pursued by a DA, thereby
enabling the CSLB to establish a relevant record of [BPC 119
violations] for licensees and unlicensed individuals."
3)Existing CSLB enforcement authority . CSLB licenses and
regulates over 300,000 contractors in this state, and reviews
and investigates complaints made against contractors. Under
current law, CSLB can take action against a licensee who
violates the Contractors' Law, and against licensed and
unlicensed persons for unlicensed contracting activity and the
fraudulent use of a contractor's license. Depending on the
severity of the violation, CSLB may issue a warning letter, a
citation or fine, or it might even suspend or revoke a
contractor's license. This bill is intended to permit the
imposition of such sanctions for violation of the general
restrictions on license usage contained in BPC 119.
4)Additional authority under BPC 119 . According to CSLB, there
are instances in which an unscrupulous contractor whose
license has been suspended for failing to pay taxes fabricates
an active contractor's license and advertises and performs
construction work under that counterfeit license. While CSLB
can take action against the suspended contractor for
unlicensed activity, CSLB cannot take action against the
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contractor for creating a counterfeit license.
Under current law, CSLB must refer all counterfeit license cases
to the DA to prosecute as a misdemeanor under BPC 119. CSLB
contends that the DA generally does not prosecute licensed or
unlicensed contractors under BPC 119 unless there are
additional charges and depending on workload and budget
considerations. This bill allows CSLB to take administrative
action by issuing a citation up to $5,000, or denying,
suspending or revoking a licensee against any person who
violates BPC 119 as it relates to contracting activity.
Analysis Prepared by : Hank Dempsey / B.,P. & C.P. / (916)
319-3301
FN: 0001490