BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 662|
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THIRD READING
Bill No: SB 662
Author: Galgiani (D)
Amended: As introduced
Vote: 21
SENATE BUSINESS, PROF. & ECON. DEVELOP. COMM. : 8-0, 4/22/13
AYES: Price, Block, Corbett, Galgiani, Hernandez, Hill,
Padilla, Yee
NO VOTE RECORDED: Emmerson, Wyland
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Structural pest control operators: financial
responsibility
SOURCE : Author
DIGEST : This bill increases the minimum limit for liability
insurance to $500,000 for a structural pest control company;
increases the amount of the surety bond required to maintain a
license or company registration to $12,500; and increases the
upper limit of a surety bond required for issuance, reissuance,
or restoration of a license or company registration, after a
suspension or revocation, to $25,000.
ANALYSIS :
Existing law:
1.Licenses and regulates more than 24,000 structural pest
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control operators, field representatives, applicators and
registered structural pest control companies by the Structural
Pest Control Board (SPCB) within the Department of Pesticide
Regulation (DPR), and provides for a registrar as the Board's
executive officer.
2.As of July 1, 2013, transfers the SPCB from DPR into the
Department of Consumer Affairs.
3.Licenses structural pest control operators, field
representatives, and applicators in three specified areas of
pest control: Branch 1 - Fumigation, Branch 2 - General pest,
and Branch 3 - Termite.
4.Provides that a "registered company" is a sole proprietorship,
partnership, corporation or other organization that is
registered with SPCB to engage in the practice of pest
control, and provides that a "qualifying manager" is a
licensed operator designated by the registered company to
supervise the daily business of the company and the company's
employees.
5.Requires a registered company to file with SPCB written
evidence of an insurance policy approved by SPCB or a bond, as
specified as a condition of the company's registration by
SPCB:
A. Requires an insurance policy to provide minimum
liability 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.
B. Provides that in lieu of insurance that a company may
file a $25,000 surety bond with SPCB.
1.Provides that violation of the financial responsibility
provisions for structural pest control operators is a
misdemeanor (crime).
2.Requires a registered company to maintain a $4,000 surety bond
payable for the benefit of any person damaged by fraud or
dishonesty of the registered company in the performance of a
contract, or any person who is damaged as a result of a
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violation by the registered company.
3.Provides that If a structural pest control operator license or
company registration is suspended or revoked, the registrar
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 determined by the registrar based upon the seriousness
of the violation, but not less than $1,000 nor more than
$8,000.
This bill:
1.Deletes the option for a company to obtain a bond in order to
be issued registration by SPCB.
2.Increases the minimum limit for liability insurance to
$500,000.
3.Increases the amount of the surety bond required to maintain a
license or company registration, from $4,000 to $12,500.
4.Increases the upper limit of the amount of the surety bond
required for issuance, reissuance, or restoration of a license
or company registration, after a suspension or revocation,
from $8,000 to $25,000.
5.Specifies that another method of deposit, including a
certificate of deposit, shall not satisfy the insurance or
bonding requirements of the law.
6.Makes technical conforming changes.
Background
Structural pest control is the control of household pests
(including but not limited to rodents, vermin and insects) and
wood-destroying pests and organisms or such other pests which
may invade households or structures, including railroad cars,
ships, docks, trucks, airplanes, or the contents thereof. The
practice of structural pest control includes the engaging in,
offering to engage in, advertising for, soliciting, or the
performance of any of the following: identification of
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infestations or infections; the making of an inspection for the
purpose of identifying or attempting to identify infestations or
infections of household or other structures by such pests or
organisms; the making of inspection reports; recommendations,
estimates, and bids, whether oral or written, with respect to
such infestation or infections; and the making of contracts, or
the submitting of bids for, or the performance of any work
including the making of structural repairs or replacements, or
the use of pesticides, insecticides, rodenticides, fumigants, or
allied chemicals or substances, or mechanical devices for the
purpose of eliminating, exterminating, controlling or preventing
infestations or infections of such pests, or organisms.
The SPCB was created in 1935 to provide for the registration and
licensing of persons engaged in the practice, and for the
protection of the public in the practice of structural pest
control. In 2009, as a part of the consolidations of regulatory
boards, the SPCB was moved from under the oversight of DCA into
the DPR by AB 20X4 (Strickland, Chapter 18, Statutes of 2009-10,
Fourth Extraordinary Session). In 2012, the Governor's
Reorganization Proposal No. 2 moved the SPCB back into the DCA.
Currently, the SPCB is composed of seven members of which, four
are public members, and three are members of the pest control
industry. The Governor appoints two public members and the
three licensed members, and the Senate Rules Committee and the
Speaker of the Assembly each appoint one public member.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 4/30/13)
California Association of Realtors
ARGUMENTS IN SUPPORT : The author's office states that there
have been numerous consumer complaint cases throughout the state
where the only option for a consumer, once a pest control
company went out of business or was revoked, was to attempt to
file a claim against the bond. However, $4,000 does not cover a
lot of damage when dealing with home repairs. Compared to other
states, California has some of the most expensive real estate,
yet the lowest minimum requirements to protect consumers.
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The author's office further argues that the current minimum
insurance amounts have not been increased since the requirement
for insurance was first enacted by legislation in 1960. The
minimum bond requirement has not been increased since 1991, when
it was raised from $2,000 to $4,000.
MW:nl 5/1/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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