SB 263, as amended, Monning. Contractors: unlicensed activity.
The Contractors’ State License Law provides for the licensure and regulation of contractors by the Contractors’ State License Board within the Department of Consumer Affairs.begin delete The law prohibits a person engaged in the business or acting in the capacity of a contractor from bringing an action for collection of compensation for the performance of an act or contract for which a contractor’s license is required without alleging that he or she was a duly licensed contractor at all times during the performance of that act or contract.end delete
This bill would define “duly licensed” for purposes of this provision and purposes of the Contractors’ state License Law, and would make other conforming changes.
end deleteThe Contractors’ State License Law makes it a misdemeanor for a person to engage in the business or act in the capacity of a contractor without having a license, unless the person is particularly exempted.
This bill, instead, would provide that, unless exempted, it is a misdemeanor for a person to engage in the business or act in the capacity of a contractor if the person either has never been licensed pursuant to the Contractors’ State License Law, or the person was a licensee, but performed acts covered by the law under a license that wasbegin delete inactive, expired, revoked, orend delete under suspension forbegin delete any reasonend deletebegin insert failure to pay a civil penalty or comply with an order of correction, or
failure to resolve all outstanding final liabilities, as specifiedend insert.begin delete By changing the definition of a crime, the bill would impose a state-mandated local program.end delete
The Contractors’ State License Law provides that it is a cause for disciplinary action for a person licensed pursuant to that law to enter into a contract with a contractor while the contractor is not licensed. That law also provides that aiding or abetting an unlicensed person to evade the law, or engaging in specified acts with an unlicensed person with the intent to evade the law, constitutes a cause for disciplinary action.
end deleteThis bill, instead, would provide that entering into a contract with any person when that contract is performed during a period in which that person’s license was inactive, expired, revoked, or under suspension is a cause for discipline if the purpose of the contract is for that person to perform an act subject to licensure under the law. The bill also would define “unlicensed person” for purposes of these provisions.
end deleteThe California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
end deleteThis bill would provide that no reimbursement is required by this act for a specified reason.
end deleteVote: majority.
Appropriation: no.
Fiscal committee: begin deleteyes end deletebegin insertnoend insert.
State-mandated local program: begin deleteyes end deletebegin insertnoend insert.
The people of the State of California do enact as follows:
Section 7026.4 is added to the Business and
2Professions Code, to read:
(a) A person shall be deemed “duly licensed” or “duly
4licensed to act in the capacity of a contractor” for purposes of this
5chapter if both of the following conditions are met:
6(1) The act was performed under a board-issued license during
7a period in which the license was not inactive, expired, revoked,
8or under suspension for any reason.
P3 1(2) The act falls within a license classification in which the
2licensee was authorized to engage, or is incidental and
3supplemental as provided under Section 7059, and defined in
4Section 831 of Division 8 of Title 16 of the California Code of
5Regulations.
6(b) Any person that does not meet the conditions specified in
7paragraphs (1) and (2) of subdivision (a) shall be deemed
8unlicensed, except as otherwise provided in this chapter.
Section 7028 of the Business and Professions
11Code is amended to read:
(a) Unless exempted from this chapter, it is a
13misdemeanor for a person to engage in the business or act in the
14capacity of a contractor within this state under either of the
15following conditions:
16(1) The person has never been licensed in accordance with this
17chapter.
18(2) The person was a licensee, as defined in Section 7096, but
19performed acts covered by this chapter under a license that was
20begin deleteinactive, expired, revoked, or end deleteunder suspension forbegin delete any reasonend delete
21begin insert
failure to pay a civil penalty or comply with an order of correction,
22pursuant to Section 7090.1, or failure to resolve all outstanding
23final liabilities, pursuant to Section 7145.5end insert.
24(b) A first conviction for the offense described in this section
25is punishable by a fine not exceeding five thousand dollars ($5,000)
26or by imprisonment in a county jail not exceeding six months, or
27by both that fine and imprisonment.
28(c) If a person has been previously convicted of the offense
29described in this section, unless the provisions of subdivision (d)
30are applicable, the court shall impose a fine of 20 percent of the
31contract price, or 20 percent of the aggregate payments made to,
32or at the direction of, the unlicensed person, or five thousand
33dollars ($5,000), whichever
is greater, and, unless the sentence
34prescribed in subdivision (d) is imposed, the person shall be
35confined in a county jail for not less than 90 days, except in an
36unusual case where the interests of justice would be served by
37imposition of a lesser sentence or a fine. If the court imposes only
38a fine or a jail sentence of less than 90 days for second or
39subsequent convictions under this section, the court shall state the
40reasons for its sentencing choice on the record.
P4 1(d) A third or subsequent conviction for the offense described
2in this section is punishable by a fine of not less than five thousand
3dollars ($5,000) nor more than the greater amount of ten thousand
4dollars ($10,000) or 20 percent of the contract price, or 20 percent
5of the aggregate payments made to, or at the direction of, the
6unlicensed person, and by imprisonment in
a county jail for not
7more than one year or less than 90 days. The penalty provided by
8this subdivision is cumulative to the penalties available under all
9other laws of this state.
10(e) A person who violates this section is subject to the penalties
11prescribed in subdivision (d) if the person was named on a license
12that was previously revoked and, either in fact or under law, was
13held responsible for any act or omission resulting in the revocation.
14(f) If the unlicensed person engaging in the business of or acting
15in the capacity of a contractor has agreed to furnish materials and
16labor on an hourly basis, “the contract price” for the purposes of
17this section means the aggregate sum of the cost of materials and
18labor furnished and the cost of completing the work to be
19performed.
20(g) Notwithstanding any other law, an indictment for any
21violation of this section by an unlicensed person shall be found,
22or an information or complaint filed, within four years from the
23date of the contract proposal, contract, completion, or abandonment
24of the work, whichever occurs last.
25(h) For any conviction under this section, a person who utilized
26the services of the unlicensed person is a victim of crime and is
27eligible, pursuant to subdivision (f) of Section 1202.4 of the Penal
28Code, for restitution for economic losses, regardless of whether
29he or she had knowledge that the person was unlicensed.
30(i) The changes made to this section by the act adding
this
31subdivision are declaratory of existing law.
Section 7114 of the Business and Professions Code is
33amended to read:
(a) All of the following shall constitute a cause for
35disciplinary action pursuant to this chapter:
36(1) Aiding or abetting an unlicensed person to evade the
37provisions of this chapter.
38(2) Combining or conspiring with an unlicensed person with
39the intent to evade the provisions of this chapter.
P5 1(3) Allowing one’s license to be used by an unlicensed
person
2with the intent to evade the provisions of this chapter.
3(4) Acting as agent, partner, associate, or otherwise, of an
4unlicensed person with the intent to evade the provisions of this
5chapter.
6(b) A licensee who is found by the registrar to have violated
7subdivision (a) is subject, in accordance with this article, to the
8registrar’s authority to order payment of a specified sum to an
9injured party, including, but not limited to, payment for any injury
10resulting from the acts of the unlicensed person.
11(c) For the purposes of this section, the term “unlicensed person”
12shall apply only to a person that has never been licensed in
13accordance with this chapter, or has performed acts covered by
14this chapter
under a license that was inactive, expired, revoked, or
15under suspension for any reason.
Section 7118 of the Business and Professions Code is
17repealed.
Section 7118 is added to the Business and Professions
19Code, to read:
It is a cause for discipline for any licensee to enter into
21a contract with any person that is not in compliance with paragraph
22(1) of subdivision (a) of Section 7026.4, if the purpose of the
23contract is for that person to perform an act that is subject to
24licensure under this chapter.
No reimbursement is required by this act pursuant to
26Section 6 of Article XIII B of the California Constitution because
27the only costs that may be incurred by a local agency or school
28district will be incurred because this act creates a new crime or
29infraction, eliminates a crime or infraction, or changes the penalty
30for a crime or infraction, within the meaning of Section 17556 of
31the Government Code, or changes the definition of a crime within
32the meaning of Section 6 of Article XIII B of the California
33Constitution.
O
96