Senate Bill No. 662

Introduced by Senator Galgiani

February 22, 2013

An act to amend Sections 8690, 8691, 8692, 8697, and 8697.3 of, and to repeal Sections 8693 and 8697.5 of, the Business and Professions Code, relating to structural pest control operators.

LEGISLATIVE COUNSEL’S DIGEST

SB 662, as introduced, Galgiani. Structural pest control operators: financial responsibility.

Existing law requires, in order to be allowed to do business in this state, that structural pest control operators file with the Structural Pest Control Board written evidence of an insurance policy approved by the board or a bond, as specified, in effect at the time of the issuance of the company’s registration by the board. The insurance policy is required to provide minimum limits of $25,000 for any one loss due to bodily injury, sickness, or disease, including death, sustained by a person, and $25,000 minimum for any one loss due to injury or destruction of property, including loss of use. A violation of the financial responsibility provisions for structural pest control operators is a crime.

This bill would delete the option of obtaining a bond, in order to be issued registration by the board, to do business as a structural pest control operator. The bill would delete the requirement that written evidence of an insurance policy be filed, and increase the minimum limits for the insurance policy to $500,000. Because the bill would expand the scope of a crime, it would create a state-mandated local program.

Existing law requires structural pest control operators to maintain a surety bond in the amount of $4,000 in order to maintain its license or company registration. If a structural pest control operator’s license or company registration is suspended or revoked, on specified grounds, the registrar of the board shall require the applicant, licensee, or registered company, as a condition of the issuance, reissuance, or restoration of the license or company registration, to file a surety bond in a sum to be determined by the registrar based upon the seriousness of the violation, but not less than $1,000 nor more than $8,000.

This bill would raise the amount of the surety bond, needed to maintain the license or company registration, from $4,000 to $12,500, and would raise the upper limits of the amount of the surety bond required for an issuance, reissuance, or restoration of the license or company registration, after a suspension or revocation, from $8,000 to $25,000.

This bill would also make conforming changes.

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. State-mandated local program: yes.

The people of the State of California do enact as follows:

SECTION 1.  

Section 8690 of the Business and Professions
Code is amended to read:

8690.  

The board shall not issue any company registration under
this chapter unless the applicant shall have filed with the board on
a form prescribed by the board begin delete written end delete evidence of an insurance
policy approved by the board begin delete or a bond end delete as specified in this article,
being in effect at the time of the issuance of the company
registration. This begin delete written end delete evidence shall include a provision that
the board shall be given a 10-day notice by the insurance company
begin delete or bonding company end delete should the policy begin delete or bond end delete be canceled or
changed during the policy begin delete or bond end delete period in a manner as to affect
the begin delete written end delete evidence. begin insert Another method of deposit, including a
certificate of deposit, or other undertaking shall not satisfy this
requirement. end insert

SEC. 2.  

Section 8691 of the Business and Professions Code is
amended to read:

8691.  

begin delete No end delete begin insert A end insert registered company shall begin insert not end insert engage in begin delete any of end delete the
practices for which it is required to be registered by this chapter
unless it maintains begin delete such end delete begin insert an end insert insurance policy begin delete or bond end delete as specified
in this article.

SEC. 3.  

Section 8692 of the Business and Professions Code is
amended to read:

8692.  

begin insert (a) end insert begin insert   end insert An “insurance policy” as used in this article means
a contract of liability insurance issued by an insurance company
authorized to transact business in this state or one issued by a
nonadmitted carrier whose activities in this state are controlled by
the Surplus Line Association, which insures the policyholder
against loss from legal liability for damages on property upon
which work is being performed or has been completed, including
third party losses, as a result of an accident or occurrence due to
participation in begin delete any end delete control, prevention, or repair activities begin delete which end delete
begin insert that end insert require a license under this chapter. The insurance policy shall
provide minimum limits of begin delete twenty-five thousand dollars ($25,000) end delete
begin insert five hundred thousand dollars ($500,000) end insert for any one loss due to
bodily injury, sickness begin insert , end insert or disease, including death at any time
resulting therefrom, sustained by any person begin delete or persons end delete , and
begin delete twenty-five thousand dollars ($25,000) end delete begin insert five hundred thousand
dollars ($500,000) end insert minimum for any one loss due to injury or
destruction of property, including the loss of use begin delete thereof end delete begin insert of the
property end insert .

begin delete

This

end delete

begin insert (b) end insert begin insert   end insert begin insert This end insert section shall not be construed to require errors and
omissions insurance for all activities relating to or during
inspections, inspection reports, recommendations, estimates, and
bids, whether oral or written.

SEC. 4.  

Section 8693 of the Business and Professions Code is
repealed.

begin delete

8693.  

In lieu of the insurance policy specified in this article an
applicant for a company registration may file with the board a
bond executed by an admitted surety insurer in the penalty of
twenty-five thousand dollars ($25,000) with the State of California
as obligee.

end delete

SEC. 5.  

Section 8697 of the Business and Professions Code is
amended to read:

8697.  

Each company registered under the provisions of this
chapter shall maintain a bond executed by an admitted surety
insurer in the amount of begin delete four thousand dollars ($4,000) end delete begin insert twelve
thousand five hundred dollars ($12,500). Another method of
deposit, including a certificate of deposit, or other undertaking
shall not satisfy this requirement end insert .

SEC. 6.  

Section 8697.3 of the Business and Professions Code
is amended to read:

8697.3.  

begin insert (a) end insert begin insert   end insert If, after a hearing conducted in accordance with
Chapter 5 (commencing with Section 11500) of Part 1 of Division
3 of Title 2 of the Government Code, a license or company
registration is suspended or revoked upon the grounds set forth in
Article 7 (commencing with Section 8620) begin delete of this chapter end delete , the
registrar shall require the applicant, licensee, or registered
company, as a condition to the issuance, reissuance, or restoration
of the license or company registration, to file a surety bond in the
sum to be determined by the registrar based upon the seriousness
of the violation, but begin delete which end delete begin insert the end insert sum shall not be less than one
thousand dollars ($1,000) nor more than begin delete eight thousand dollars
($8,000) end delete begin insert twenty-five thousand dollars ($25,000) end insert .

begin delete

The

end delete

begin insert (b) end insert begin insert   end insert begin insert The end insert bond required by this section shall be in addition to the
bond required by Section 8697 of this article.

begin delete

Each

end delete

begin insert (c) end insert begin insert   end insert begin insert Each end insert applicant, licensee, or registered company required to
maintain a bond of the type provided in this section shall post begin delete such end delete
begin insert the end insert bond with the registrar for a period of at least two years and
during begin delete such end delete begin insert the end insert additional time as there may be unsatisfied claims
outstanding against the same.

SEC. 7.  

Section 8697.5 of the Business and Professions Code
is repealed.

begin delete

8697.5.  

Such bonds as are required by this article shall be in
addition to any bond which may be maintained pursuant to the
provisions of Article 9 (commencing with Section 8690) of this
chapter.

end delete

SEC. 8.  

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.