BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 1874


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          Date of Hearing:  April 5, 2016


                   ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS


                                  Rudy Salas, Chair


          AB 1874  
          (Wood) - As Introduced February 10, 2016


          SUBJECT:  Structural pest control.


          SUMMARY:  Requires a licensed "qualifying manager" to be  
          physically present at the licensee's principal office or branch  
          office location for a minimum of 72 hours every three  
          consecutive calendar months, and to require that the hours be  
          documented and provided to the Structural Pest Control Board  
          (SPCB) upon request.


          EXISTING LAW:


          1)Establishes the SPCB under the Department of Consumer Affairs  
            (DCA) to regulate the practice of structural pest control.   
            (Business and Professions Code (BPC) §§ 8500 - 8697.4)
          2)Defines "structural pest control," with respect to household  
            pests and wood destroying pests or organisms, as performing or  
            offering to perform any of the following:  (BPC § 8505)


             a)   Identification of infestations or infections.
             b)   The making of an inspection or inspections for the  
               purpose of identifying or attempting to identify  
               infestations or infections of household or other structures  








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               by those pests or organisms.


             c)   The making of inspection reports, recommendations,  
               estimates, and bids, whether oral or written, with respect  
               to those infestations or infections.


             d)   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, or mechanical devices for the purpose of  
               eliminating, exterminating, controlling or preventing  
               infestations or infections of those pests, or organisms.


          3)Defines "registered company" as a sole proprietorship,  
            partnership, corporation, or other business organization that  
            is registered with the SPCB to engage in the practice of  
            structural pest control.  (BPC § 8506.1)  
          4)Defines "qualifying manager" as the licensed operator or  
            operators designated by a registered company to supervise the  
            daily business of the company and to be available to supervise  
            and assist the company's employees.  (BPC § 8506.2)


          5)Defines "structural pest control operator" as any individual  
            licensed by the SPBC to practice structural pest control.   
            (BPC § 8506)


          6)Requires every company that engages in the practice of  
            structural pest control, as a sole proprietorship,  
            partnership, corporation, or other organization or any  
            combination thereof, to be registered with the SPCB.  (BPC §  
            8610(a))


          7)Requires each registered company to designate an individual or  








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            individuals who hold an operator's license to act as its  
            qualifying manager or managers. The qualifying manager or  
            managers must be licensed in each branch of pest control in  
            which the company engages in business. The designated  
            qualifying manager or managers shall supervise the daily  
            business of the company and shall be available to supervise  
            and assist all employees of the company, in accordance with  
            regulations which the board may establish. (BPC § 8610(c))


          THIS BILL:


          1)Redefines "qualifying manager" as the licensed operator or  
            operators designated by a registered company to supervise the  
            daily business of the company and to be physically present at  
            the principal office or branch office location for a minimum  
            of 72 hours every three consecutive calendar months to  
            supervise and assist the company's employees.  


          2)Requires the qualifying manager to document the hours and  
            provide the documentation to the SPCB upon request.


          FISCAL EFFECT:  Unknown.  This bill is keyed fiscal by the  
          Legislative Counsel.


          COMMENTS:


          Purpose.  This bill is sponsored by the  Pest Control Operators  
          of California  .  According to the author, this bill "adds a  
          requirement that 'qualifying managers' be physically present in  
          the offices of the companies they qualify for a minimum of 72  
          hours every three consecutive calendar months.  The addition of  
          this requirement will help ensure that the companies performing  
          structural pest control will do so with adequate supervision."








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          Background.  In California, a "registered company" is defined as  
          any business organization, such as a sole proprietorship or  
          corporation.  In order to provide structural pest control  
          services as a registered company, a business organization must  
          register with the SPCB and designate a "qualifying manager."  


          The qualifying manager must be a structural pest control  
          operator, an individual who is licensed by the SPCB and is  
          responsible for supervising the daily business of the  
          organization.  Currently, the qualifying manager must "be  
          available to supervise and assist the company's employees."  
          However, "be available to supervise and assist" is not defined. 


          The sponsor states that the lack of a definition has resulted in  
          a loophole where licensed operators are "renting" their licenses  
          to a registered company that needs to designate a qualifying  
          manager.  Because there is no language specifying that a  
          licensed operator has to be physically available, many simply  
          charge a registered company a recurring fee to use their license  
          number with minimal involvement in the company.  According to  
          the sponsors, bad actors are able to argue that they can satisfy  
          the availability and supervision requirements over the phone or  
          through video conferencing.


          Therefore, this bill seeks to impose a minimum physical presence  
          requirement on operator licensees of 72 hours in a  
          three-consecutive-month period.  Although the bill does not  
          specify how the 72 hours must be divided, the intent was to  
          allow the qualifying manager flexibility to do so.  For  
          instance, the qualifying manager could choose to be present for  
          nine full days or 40 minutes per day.  The goal of the  
          requirement is to deter the practice of using the loophole to  
          avoid having to actually supervise.  









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          The change this bill seeks to make was approved by the SPCB's  
          Act Review Committee, which reviews the structural pest control  
          practice act and recommends changes to the full SPCB.  The  
          approval was adopted by the SPCB last year at its January 14,  
          2015 meeting.


          REGISTERED SUPPORT:  


          Pest Control Operators of California (sponsor)


          Structural Pest Control Board


          Newport Exterminating


          Orkin Pest Control


          Western Terminator Company


          REGISTERED OPPOSITION:  


          None on file.




          Analysis Prepared by:Vincent Chee / B. & P. / (916) 319-3301












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