BILL NUMBER: SB 263 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JUNE 5, 2013
AMENDED IN SENATE APRIL 22, 2013
AMENDED IN SENATE APRIL 1, 2013
INTRODUCED BY Senator Monning
(Principal coauthor: Assembly Member Achadjian)
FEBRUARY 13, 2013
An act to amend Sections Section
7028 and 7114 of , to add Section
7026.4to, and to repeal and add Section 7118 of, the
Business and Professions Code, relating to contractors.
LEGISLATIVE COUNSEL'S DIGEST
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. 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.
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.
The 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
was inactive, expired, revoked, or under
suspension for any reason failure to pay a
civil penalty or comply with an order of correction, or
failure to resolve all outstanding final liabilities, as specified
. By changing the definition of a crime, the bill
would impose a state-mandated local program.
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.
This 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.
The 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.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes
no . State-mandated local program: yes
no .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 7026.4 is added to the
Business and Professions Code, to read:
7026.4. (a) A person shall be deemed "duly licensed" or "duly
licensed to act in the capacity of a contractor" for purposes of this
chapter if both of the following conditions are met:
(1) The act was performed under a board-issued license during a
period in which the license was not inactive, expired, revoked, or
under suspension for any reason.
(2) The act falls within a license classification in which the
licensee was authorized to engage, or is incidental and supplemental
as provided under Section 7059, and defined in Section 831 of
Division 8 of Title 16 of the California Code of Regulations.
(b) Any person that does not meet the conditions specified in
paragraphs (1) and (2) of subdivision (a) shall be deemed unlicensed,
except as otherwise provided in this chapter.
SEC. 2. SECTION 1. Section 7028 of
the Business and Professions Code is amended to read:
7028. (a) Unless exempted from this chapter, it is a misdemeanor
for a person to engage in the business or act in the capacity of a
contractor within this state under either of the following
conditions:
(1) The person has never been licensed in accordance with this
chapter.
(2) The person was a licensee, as defined in Section 7096, but
performed acts covered by this chapter under a license that was
inactive, expired, revoked, or under suspension
for any reason failure to pay a civil penalty
or comply with an order of correction, pursuant to Section 7090.1,
or failure to resolve all outstanding final liabilities, pursuant to
Section 7145.5 .
(b) A first conviction for the offense described in this section
is punishable by a fine not exceeding five thousand dollars ($5,000)
or by imprisonment in a county jail not exceeding six months, or by
both that fine and imprisonment.
(c) If a person has been previously convicted of the offense
described in this section, unless the provisions of subdivision (d)
are applicable, the court shall impose a fine of 20 percent of the
contract price, or 20 percent of the aggregate payments made to, or
at the direction of, the unlicensed person, or five thousand dollars
($5,000), whichever is greater, and, unless the sentence prescribed
in subdivision (d) is imposed, the person shall be confined in a
county jail for not less than 90 days, except in an unusual case
where the interests of justice would be served by imposition of a
lesser sentence or a fine. If the court imposes only a fine or a jail
sentence of less than 90 days for second or subsequent convictions
under this section, the court shall state the reasons for its
sentencing choice on the record.
(d) A third or subsequent conviction for the offense described in
this section is punishable by a fine of not less than five thousand
dollars ($5,000) nor more than the greater amount of ten thousand
dollars ($10,000) or 20 percent of the contract price, or 20 percent
of the aggregate payments made to, or at the direction of, the
unlicensed person, and by imprisonment in a county jail for not more
than one year or less than 90 days. The penalty provided by this
subdivision is cumulative to the penalties available under all other
laws of this state.
(e) A person who violates this section is subject to the penalties
prescribed in subdivision (d) if the person was named on a license
that was previously revoked and, either in fact or under law, was
held responsible for any act or omission resulting in the revocation.
(f) If the unlicensed person engaging in the business of or acting
in the capacity of a contractor has agreed to furnish materials and
labor on an hourly basis, "the contract price" for the purposes of
this section means the aggregate sum of the cost of materials and
labor furnished and the cost of completing the work to be performed.
(g) Notwithstanding any other law, an indictment for any violation
of this section by an unlicensed person shall be found, or an
information or complaint filed, within four years from the date of
the contract proposal, contract, completion, or abandonment of the
work, whichever occurs last.
(h) For any conviction under this section, a person who utilized
the services of the unlicensed person is a victim of crime and is
eligible, pursuant to subdivision (f) of Section 1202.4 of the Penal
Code, for restitution for economic losses, regardless of whether he
or she had knowledge that the person was unlicensed.
(i) The changes made to this section by the act adding this
subdivision are declaratory of existing law.
SEC. 3. Section 7114 of the Business and
Professions Code is amended to read:
7114. (a) All of the following shall constitute a cause for
disciplinary action pursuant to this chapter:
(1) Aiding or abetting an unlicensed person to evade the
provisions of this chapter.
(2) Combining or conspiring with an unlicensed person with the
intent to evade the provisions of this chapter.
(3) Allowing one's license to be used by an unlicensed person with
the intent to evade the provisions of this chapter.
(4) Acting as agent, partner, associate, or otherwise, of an
unlicensed person with the intent to evade the provisions of this
chapter.
(b) A licensee who is found by the registrar to have violated
subdivision (a) is subject, in accordance with this article, to the
registrar's authority to order payment of a specified sum to an
injured party, including, but not limited to, payment for any injury
resulting from the acts of the unlicensed person.
(c) For the purposes of this section, the term "unlicensed person"
shall apply only to a person that has never been licensed in
accordance with this chapter, or has performed acts covered by this
chapter under a license that was inactive, expired, revoked, or under
suspension for any reason.
SEC. 4. Section 7118 of the Business and
Professions Code is repealed.
SEC. 5. Section 7118 is added to the Business
and Professions Code, to read:
7118. It is a cause for discipline for any licensee to enter into
a contract with any person that is not in compliance with paragraph
(1) of subdivision (a) of Section 7026.4, if the purpose of the
contract is for that person to perform an act that is subject to
licensure under this chapter.
SEC. 6. No reimbursement is required by this
act pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution.