BILL ANALYSIS Ó
AB 2486
Page 1
Date of Hearing: April 19, 2016
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Rudy Salas, Chair
AB 2486
(Baker) - As Amended March 28, 2016
SUBJECT: Contractors' State License Board: license search by
location.
SUMMARY: Authorizes the Contractors' State License Board (CSLB)
to update its website to allow consumers to search for a
licensed contractor by zip code or geographic locator.
EXISTING LAW:
1)Creates the CSLB, within the Department of Consumer Affairs,
and provides that the protection of the public shall be its
highest priority in exercising its licensing, regulatory, and
disciplinary functions. (Business and Professions Code (BPC)
Sections 7000, 7000.1)
2)Requires the CSLB to investigate complaints and enforce the
provisions of the Contractors State License law, prohibit all
forms of unlicensed activity, and enforce the obligation to
secure the payment of valid and current workers' compensation
insurance in accordance with Section 3700.5 of the Labor Code.
(BPC Sections 7011.4, 7011.7)
3)Defines "contractor" to include any person , consultant to an
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owner-builder, firm, association, organization, partnership,
business, trust, corporation, or company, who or which
undertakes, offers to undertake, purports to have the capacity
to undertake, or submits a bid to construct any building or
home improvement project, or part thereof. (BPC Section
7026.1(a)(2)(A)))
THIS BILL:
1)Authorizes the CSLB to add an enhancement to the current
contractor license check search function that would permit
consumers to search for a licensed contractor by zip code or
location.
2)Provides that the CSLB may implement this feature when funds
are available, or during a scheduled update of the boards
Internet Website.
FISCAL EFFECT: Unknown. This bill is keyed fiscal by the
Legislative Counsel.
COMMENTS:
Purpose. This bill is sponsored by the Associated Builders and
Contractors of California (ABC) . According to the author, "This
bill will help combat the use of unlicensed contractors
operating in the multi-billion dollar underground economy and
will help further the Board's mission of consumer protection by
making it easier for consumers to get information about licensed
contractors in their area. This bill also will support the
Board's 2015- 2016 Strategic Plan recommendation to develop ways
to make their website more user-friendly by providing a search
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by location function."
Background. The CSLB is the regulatory entity responsible for
licensing contractors and enforcing the Contractors State
License Law. The mission of CSLB is to, "protect consumers by
regulating the construction industry through policies that
promote the health, safety, and general welfare of the public in
matters relating to construction." The CSLB licenses all
businesses and individuals who construct or alter, or offer to
construct or alter, any building, highway, road, parking
facility, railroad, excavation, or other structure in
California. The CSLB licenses approximately 290,000 contractors
in 44 license classifications and two certifications.
California requires licensed contractors to be used on any
construction project that costs more than five hundred dollars.
The CSLB currently collects information about its licensees that
it in turn, publishes to its website.
Currently, the CSLB's website only permits a consumer to search
for a contractor by personal name, business name, or license
number. The author asserts that as a result, unless the
consumer searching for a reputable licensed contractor already
has a specific contractor's name or license number, the consumer
cannot fully and efficiently utilize the CSLB's consumer
protection resources. The CSLB has published a strategic plan
for the current 2015/2016 fiscal year. Under the "Public
Affairs Objectives", the CSLB outlined a goal to add a licensee
search feature to the CSLB's website, similar to the feature
proposed by this bill. The CSLB planned to have a schedule
adopted by February of 2016, for the implementation of an opt-in
"Find a Contractor" feature to help consumers locate nearby
licensees. Currently, the project is still outstanding.
The Underground Economy. The CSLB has attested to the
prevalence of unlicensed activity and an underground economy
that affects the construction industry. Unscrupulous businesses
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are able to underbid law-abiding businesses by failing to obtain
required licenses and building permits, failing to pay payroll
or other taxes, subverting insurance laws, and by various other
means. When consumers do not use a licensed contractor, the
consumer may be left with little recourse for fraud, financial
losses, and incomplete or unsafe work. The CSLB currently
combats this issue with various task forces. This bill aims to
additionally mitigate the problem of an underground economy by
making it easier for consumers to find contractors in good
standing in the consumer's local region.
ARGUMENTS IN SUPPORT:
The Associated Builders and Contractors of California (ABC)
writes, "More and more, Californians are asking for tools that
help them find local sources for a variety of services in order
to support their local communities. . . [This bill] will ask
CSLB, in accordance with their 2015-2016 Strategic Plan, to
include as part of their next scheduled website update, the
ability for consumers to search for licensed contractors by zip
code or location. This small policy change will also bolster
local construction employment and further combat the use of
unlicensed contractors operating in the underground economy."
ABC California also notes that other states including Arizona,
Nevada, Oregon, and Texas already permit consumers to search for
contractors by geographic location.
California Pool and Spa Association (CPSA) writes, "CPSA is in
support of measures to try and stop the underground economy.
The Berkeley Study, published in 2007 reports that in 2002, the
California Department of Labor declared unreported labor in the
state to be more than $100 billion [...] The main source of this
underreporting is the construction industry. By reducing their
overhead, [dishonest contractors] substantially underbid on
projects [...] This means honest, licensed industry
professionals lose market share and profits, compromising future
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business opportunities."
IMPLEMENTATION ISSUE(S):
The CSLB asserts that it currently does not have a set
implementation date for the geographic search feature, as it
will require some additional information gathering and
information technology work before it can be accomplished, but
is still planning to move forward with this concept. The author
may wish to designate a date, or allow the CSLB to designate a
date by which this feature may be implemented.
AMENDMENT(S):
The author should amend the bill to add an implementation date
as follows:
1)Page 2, in line 4, strike "scheduled update of the board's
Internet Web site,", strike line 3 and insert:
2) 7018.By January 1, 2019, the board shall
3)Page 2, at the end of line 7 insert:
4)Prior to January 1, 2019, if funds are available or a
scheduled update of the board's Internet Web site allows for
the addition of the enhancement described under this section,
the board may add the enhancement.
REGISTERED SUPPORT:
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The Associated Builders and Contractors of California (sponsor)
California Pool and Spa Association
Contractors State License Board
REGISTERED OPPOSITION:
None on file.
Analysis Prepared by:Tessa Nevarez / B. & P. / (916) 319-3301