BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  SB 662
                                                                  Page  1

          Date of Hearing:   July 3, 2013

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                SB 662 (Galgiani) - As Introduced:  February 22, 2013 

          Policy Committee:                             Business and  
          Professions  Vote:                            9 - 3

          Urgency:     No                   State Mandated Local Program:  
          Yes    Reimbursable:              No

           SUMMARY  

          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.

           FISCAL EFFECT  

          Any costs associated with this legislation should be minor and  
          absorbable within the Structural Pest Control Board's (SPCB)  
          current resources. 

           COMMENTS  

           Purpose  . This bill is intended to increase the minimum liability  
          insurance and surety bond requirements that a registered pest  
          control company must carry in order to provide a guaranteed  
          source of funds to satisfy consumer claims that might arise over  
          work performance issues. The author 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.

          This bill would increase the general liability insurance  
          coverage pest control companies must cover from $25,000 to  
          $500,000 to reflect present day property values in California  
          and the amount of coverage needed to repair damage that may  








                                                                  SB 662
                                                                  Page  2

          occur to those properties.  

          The minimum surety bond requirement was enacted in 1969 and set  
          at $2,000, and was increased in 1991 to $4,000.  However, the  
          SPCB notes that the bond amount can be easily depleted if  
          multiple claims are filed against a pest control company's  
          surety bond, leaving consumers unable to recoup their losses.   
          This bill would increase the surety bond amount a pest control  
          operator is required to maintain to $12,500, similar to the bond  
          required of contractors.  



           Analysis Prepared by  :    Julie Salley-Gray / APPR. / (916)  
          319-2081