BILL ANALYSIS Ó
SENATE COMMITTEE ON
BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT
Senator Jerry Hill, Chair
2015 - 2016 Regular
Bill No: AB 1874 Hearing Date: June 20,
2016
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|Author: |Wood |
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|Version: |June 14, 2016 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Mark Mendoza |
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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 nine days every three consecutive
calendar months, and to require that the days be documented and
provided to the Structural Pest Control Board upon request.
Existing law:
1)Establishes the Structural Pest Control Board (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
by those pests or organisms.
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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
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
AB 1874 (Wood) Page 3
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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 nine days every three consecutive calendar months to
supervise and assist the company's employees
2) Requires the qualifying manager to document the days and
provide the documentation to the SPCB upon request.
FISCAL
EFFECT: This bill has been keyed "fiscal" by Legislative
Counsel. According to the Assembly Appropriations Committee
analysis dated February 10, 2016, this bill would impose minor
and absorbable costs to the DCA.
COMMENTS:
1. Purpose. The Pest Control Operators of California are the
Sponsor of this bill. 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 nine days 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."
2. 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
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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.
The Board also reports that many individuals sell their
license number on online ads. 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 nine days in a
three-consecutive-month period. Although the bill does not
specify how the nine days must be divided, the intent was to
allow the qualifying manager flexibility to do so. The goal
of the requirement is to deter the practice of using the
loophole to avoid having to actually supervise.
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.
This nine day requirement was worked out with industry
stakeholders. The approval was adopted by the SPCB last year
at its January 14, 2015 meeting.
3. Arguments in Support. The Structural Pest Control Board
writes, "Through enforcement activity, the SPCB has become
aware of the practice of operators 'renting' their license.
When this occurs, a registered company will pay a recurring
fee to an individual licensed as an operator and in return
that individual will serve as the company's 'qualifying
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manager' without ever having any actual involvement with the
company. This results in registered companies practicing
structural pest control absent of the necessary
supervision?The Board feels the amendments proposed in AB
1874 will address this issue and strengthen consumer
protection by helping to ensure that all registered companies
are operating under the necessary levels of qualified
supervision."
SUPPORT AND OPPOSITION:
Support:
Pest Control Operators of California (Sponsor)
Newport Exterminating
Omega Termite Control Inc.
The Structural Pest Control Board
Western Exterminator Company
Opposition:
None on file as of June 14, 2016.
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