BILL ANALYSIS Ó AB 1874 Page 1 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 AB 1874 Page 2 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 AB 1874 Page 3 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." AB 1874 Page 4 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. AB 1874 Page 5 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 AB 1874 Page 6