BILL ANALYSIS                                                                                                                                                                                                    Ó




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          |SENATE RULES COMMITTEE            |                       AB 1874|
          |Office of Senate Floor Analyses   |                              |
          |(916) 651-1520    Fax: (916)      |                              |
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                                       CONSENT


          Bill No:  AB 1874
          Author:   Wood (D)
          Amended:  6/14/16 in Senate
          Vote:     21  

           SENATE BUS., PROF. & ECON. DEV. COMMITTEE:  9-0, 6/20/16
           AYES: Hill, Bates, Block, Gaines, Galgiani, Hernandez, Jackson,  
            Mendoza, Wieckowski

          SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

           ASSEMBLY FLOOR:  76-0, 4/28/16 (Consent) - See last page for  
            vote

           SUBJECT:   Structural pest control


          SOURCE:    Author


          DIGEST:  This bill 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 requires that the days be  
          documented and provided to the Structural Pest Control Board  
          upon request.


          ANALYSIS:  
          
          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.  








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          (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.



             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  








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            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  
            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.


          Background 

          In California, a "registered company" is defined as any business  








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          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.  The SPCB 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.


          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   Yes








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          SUPPORT:   (Verified8/2/16)


          Pest Control Operators of California (source)
          Newport Exterminating 
          Omega Termite Control Inc.
          Orkin Pest Control
          The Structural Pest Control Board
          Western Exterminator Company


          OPPOSITION:   (Verified8/2/16)


          None received


          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 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."



           ASSEMBLY FLOOR:  76-0, 4/28/16
           AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,  
            Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,  
            Calderon, Campos, Chang, Chau, Chiu, Chu, Cooley, Cooper,  
            Dababneh, Dahle, Dodd, Eggman, Frazier, Beth Gaines,  
            Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson,  
            Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger  








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            Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey,  
            Levine, Linder, Lopez, Low, Maienschein, Mayes, McCarty,  
            Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell,  
            Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago,  
            Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber,  
            Wilk, Williams, Wood, Rendon
           NO VOTE RECORDED: Chávez, Daly, Mathis, Olsen



          Prepared by:  Mark Mendoza / B., P. & E.D. / (916) 651-4104
          8/4/16 9:15:00


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