BILL ANALYSIS Ó
AB 2286
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ASSEMBLY THIRD READING
AB
2286 (Mullin)
As Introduced February 18, 2016
Majority vote
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Business & |13-1 |Salas, Baker, Bloom, |Dahle |
|Professions | |Campos, Chávez, Dodd, | |
| | |Eggman, Gatto, Gomez, | |
| | |Holden, Mullin, Ting, | |
| | |Wood | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |11-0 |Gonzalez, Bloom, | |
| | |Bonilla, Bonta, | |
| | |Calderon, Daly, | |
| | |Eggman, Roger | |
| | |Hernández, Quirk, | |
| | |Santiago, Wood | |
| | | | |
| | | | |
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SUMMARY: Increases the fee cap for the Contractors State
Licensing Board (CSLB) fee schedule, authorizes a fee for making
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changes to the personnel associated with a license, and provides
the CSLB the authority to adopt regulations to provide for
expedited processing of license applications. Specifically,
this bill:
1)Increases the maximum fees the CSLB may set by regulation for:
a) An application for an original license in a single
classification from $300 to $360;
b) An application for each additional classification, as
specified, from $75 to $300;
c) The application fee to replace a responsible managing
officer, responsible managing manager, responsible managing
member, or responsible managing employee, from $75 to $300;
d) The initial license fee for an active and renewal for an
inactive license from $180 to $220;
e) The renewal of an active license from $360 to $430;
f) The registration of a home improvement salesperson (HIS)
from $75 to $90;
g) The renewal of a HIS registration from $75 to $90;
h) The application for an asbestos certification
examination from $75 to $90;
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i) The application for a hazardous substance removal or
remedial action certification examination from $75 to $90;
and,
j) The delinquency penalty for a HIS registration renewal
application that is not postmarked or received by the
registration's expiration from $25 to 50% of the renewal
fee.
2)Specifies that the application fee for each additional
classification applied for in connection with an original
license to be limited to no more than $75.
3)Specifies that the application fee to add personnel, other
than a qualifying individual, to an existing license is to be
limited to no more than $150.
4)Requires the CSLB to establish by regulation, an expedited
process for applications for registration as a HIS for
applicants; authorizes the CSLB to establish by regulation the
criteria for approval of this expedited process.
5)Exempts from these regulations an application that is required
to be expedited pursuant to other law, including, but not
limited to, the applications of applicants who have, among
other things, served as an active duty member of the Armed
Forces of the United States (AFUS) or have a specified
relationship with such an active duty member.
FISCAL EFFECT: According to the Assembly Appropriations
Committee, increasing the statutory caps on several fees for the
CSLB will lead to:
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1)An anticipated increase in fee revenue of approximately $12
million (Contractor License Fund) beginning in Fiscal Year
(FY) 2017-18 and on-going, if the CSLB's fees are increased to
the proposed statutory caps and include the new fees, and
regulations are adopted, but would be less to the extent that
some fees are increased to less than the proposed caps;
2)A one-time cost of approximately $3,500 for Information
Technology costs associated with increasing the fees. The CSLB
indicates these costs are minor and absorbable; and,
3)Minor and absorbable costs for adopting regulations.
COMMENTS:
Purpose. This bill increases the fee cap for the CSLB fee
schedule, authorizes a fee for making changes to the personnel
associated with a license, and provides authority to adopt
regulations to provide for expedited processing of license
applications.
This bill is sponsored by the CSLB. According to the author,
"this proposal raises the statutory cap on CSLB's authorized
fees. CSLB will need to adopt regulations to set actual fee
amounts, and will continue to work with industry and interested
parties through that process. If CSLB is able to obtain
approval for a fee increase, [it] will be able to continuing
working to provide online license application and renewal
services, which will benefit all licensees. If CSLB is not able
to implement a fee increase, [it] will have to reduce costs in
Enforcement. These cuts will begin with cuts to [its] proactive
enforcement program. Certain positions will be held vacant
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which will lead to backlogs in license application and complaint
handling processing."
Background. The CSLB was established as a board within the
Department of Consumer Affairs (DCA) and upholds its mission to
protect consumers by regulating the construction industry
through licensure, enforcement, and education. The CSLB
regulates contractors in 43 license classifications and two
certifications, which amounts to approximately 285,000
licensees.
The CSLB receives no General Fund support, relying solely on
fees set by statute and collected from contractors and
applicants. Renewal fees constitute the main source of revenue,
and are collected every two years from contractors with active
licenses. Active contractor licenses expire two years from the
last day of the month in which the license was issued.
When a board or bureau under the DCA requests a fee increase,
the Assembly Committee on Business and Professions (Committee)
requests that the board or bureau complete its "Fee
Questionnaire." The information provided on this questionnaire
is the result of the board or bureau working with the DCA's
Budget Office throughout the year. The Budget Office can help
to prepare expenditure projections and fund conditions, as well
as monitor these projections to manage and watch for imbalances.
Expenditures that are projected to exceed revenues do not
always indicate that a program is in need of a fee increase.
The DCA works closely with each program that appears to have
potential reserve shortages to understand the potential
implications.
Fund Condition. According to the CSLB and its responses to the
Committee's questionnaire, the CSLB will face a deficit of
approximately $6 million by FY 2018-19. The most significant
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contribution to this deficit is increased costs in personal
services, which includes salary, benefits, and retirements, the
DCA Pro Rata, and Enforcement. In the current budget year, the
CSLB is expected to spend approximately $61 million. Of that
increased spending, $8.5 million, nearly half went to personal
services. During that time period, the CLSB added four
positions, which were approved through the annual budget
process.
The amount the CSLB pays to the DCA recently increased by $2
million. A significant portion of that $2 million increase is
due to DCA's new BreEZe system - a computer upgrade system that
centralizes licensing and enforcement. While the CSLB was
previously scheduled to be included in Release 3 of the BreEZe
system, it is now not currently scheduled to be included.
The boards have no control over the Pro Rata charges regardless
of the quality or quantity of services provided by the DCA. The
DCA's pro rata calculations are based on position authority
rather than the actual number of employees, which may ultimately
inflate pro rata charges.
The CSLB also had increased enforcement costs of about $2
million, the majority of which were costs for the use of
services by the Attorney General's (AG) Office and the Office of
Administrative Hearings. This increase is in part due to
reporting requirements of the AG's office as a result of SB 467
(Hill), Chapter 656, Statutes of 2015. This bill required the
AG's office report on specific statistical information regarding
accusation matters referred to the AG for each constituent
entity within the DCA represented by the Licensing Section and
Health Quality Enforcement Section of the Office of the AG, and
additionally extended the operation of several boards within the
DCA.
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Veteran's Assistance Program. SB 1226 (Correa), Chapter 657,
Statutes of 2014 required boards under the DCA, beginning July
1, 2016, to expedite the initial licensure process for veterans,
and requires boards and bureaus to accept military experience
towards licensure. This bill sought to assist veterans
transitioning into civilian life by reducing licensure delays
and making it easier to find work by giving them credit for the
skills developed during their time in the military.
Related Prior Legislation. SB 1953 (Figueroa), Chapter 744,
Statutes of 2002 increased the statutory limit for all fees for
the CSLB. The CSLB promulgated regulations to implement this
fee increase in 2011.
Analysis Prepared by:
Gabby Nepomuceno / B. & P. / (916) 319-3301 FN:
0002769