Amended in Assembly July 1, 2015

Amended in Senate April 21, 2015

Senate BillNo. 465


Introduced by Senator Hill

February 25, 2015


An act to amend begin deleteSections 7000.5, 7011, and 7071.6 of, and to repeal Section 7067.5 of,end deletebegin insert Section 7124.6 of, and to add Sections 7071.18 and 7071.20 to,end insert the Business and Professions Code, relating to professions and vocations.

LEGISLATIVE COUNSEL’S DIGEST

SB 465, as amended, Hill. begin deleteContractors’ State License Board: licensees: bond requirement. end deletebegin insertContractors: discipline.end insert

begin insert

Existing law, the Contractors’ State License Law, provides for the licensure and regulation of contractors by the Contractors’ State License Board. Existing law requires the board, with the approval of the Director of Consumer Affairs, to appoint a registrar of contractors to serve as the executive officer and secretary of the board.

end insert
begin insert

This bill would require a licensee to report to the registrar within 90 days of the date that the licensee has knowledge of the conviction of the licensee of any felony or any other crime substantially related to the qualifications, functions, and duties of a licensed contractor, or any civil action settlement or administrative action resulting in a settlement worth $50,000 or more, or a binding arbitration or administrative action resulting in binding arbitration worth $25,000 or more, resulting from specified acts. Failure to comply with this requirement would be grounds for disciplinary action. The bill would also require any insurer providing professional liability insurance to a licensee or a state or local government agency that self-insures that licensee to, within 30 days of payment of all or any portion of a civil action settlement or binding arbitration award against the licensee, report to the registrar the name of the licensee, the amount of value of the settlement or binding arbitration award, the amount paid, and the identity of the payee. The bill would make these provisions operative if the Legislature appropriates moneys from the Contractors’ License Fund for these purposes and grants sufficient hiring authority to the board.

end insert
begin insert

The bill would require the registrar to make available to the public all civil action settlements, binding arbitration awards, and administrative actions reported to it pursuant to these provisions.

end insert
begin delete

Under existing law, the Contractors’ State License Law, the Contractors’ State License Board is responsible for the licensure and regulation of contractors and is required to appoint a registrar of contractors. Existing law repeals these provisions establishing the board and requiring it to appoint a registrar on January 1, 2016.

end delete
begin delete

This bill would extend these repeal dates to January 1, 2020.

end delete
begin delete

Existing law requires every applicant for an original license, the reactivation of an inactive license, or the reissuance or reinstatement of a revoked license to evidence financial solvency, as specified, and requires the registrar to deny the application of any applicant who fails to comply with that requirement. Existing law, as a condition precedent to the issuance, reinstatement, reactivation, renewal, or continued maintenance of a license, requires the applicant or licensee to file or have on file a contractor’s bond in the sum of $12,500.

end delete
begin delete

This bill would repeal that evidence of financial solvency requirement and would instead require that bond to be in the sum of $15,000.

end delete

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertSection 7071.18 is added to the end insertbegin insertBusiness and
2Professions Code
end insert
begin insert, to read:end insert

begin insert
3

begin insert7071.18.end insert  

(a) Notwithstanding any other law, a licensee shall
4report to the registrar in writing the occurrence of any of the
5following within 90 days after the licensee obtains knowledge of
6the event:

7(1) The conviction of the licensee for any felony.

P3    1(2) The conviction of the licensee for any other crime that is
2substantially related to the qualifications, functions, and duties of
3a licensed contractor.

4(3) Any civil action settlement or administrative action resulting
5in a settlement against the licensee in any action involving fraud,
6deceit, misrepresentation, breach or violation of contract,
7negligence, incompetence, or recklessness by the licensee in the
8practice of contracting, if the amount or value of the settlement is
9fifty thousand dollars ($50,000) or greater.

10(4) A binding arbitration award or administrative action
11resulting in a binding arbitration award against the licensee in
12any action involving fraud, deceit, misrepresentation, breach or
13violation of contract, negligence, incompetence, or recklessness
14by the licensee in the practice of contracting, if the amount or
15value of the settlement is twenty-five thousand dollars ($25,000)
16or greater.

17(b) Failure of a licensee to report to the registrar pursuant to
18subdivision (a) shall be grounds for disciplinary action.

19(c) For the purposes of this section, “conviction” means a plea
20or verdict of guilty in a criminal proceeding, or a conviction
21following a plea of nolo contendere.

22(d) This section shall become operative only if the Legislature
23appropriates moneys from the Contractors’ License Fund for the
24purposes of this section and grants sufficient hiring authority to
25the board.

end insert
26begin insert

begin insertSEC. 2.end insert  

end insert

begin insertSection 7071.20 is added to the end insertbegin insertBusiness and
27Professions Code
end insert
begin insert, to read:end insert

begin insert
28

begin insert7071.20.end insert  

(a) Within 30 days of payment of all or any portion
29of a civil action settlement or arbitration award against a licensee,
30as described in Section 7017.18, the insurer providing professional
31liability insurance to the licensee shall report to the registrar the
32name of the licensee, the amount of value of the settlement or
33binding arbitration award, the amount paid, and the identity of
34the payee.

35(b) Within 30 days of payment of all or any portion of a civil
36action settlement or arbitration award against a licensee, as
37described in Section 7017.18, a state or local government agency
38that self-insures shall report to the registrar the name of the
39licensee, the amount of value of the settlement or binding
40arbitration award, the amount paid, and the identity of the payee.

P4    1(c) This section shall become operative only if the Legislature
2appropriates moneys from the Contractors’ License Fund for the
3purposes of this section and grants sufficient hiring authority to
4the board.

end insert
5begin insert

begin insertSEC. 3.end insert  

end insert

begin insertSection 7124.6 of the end insertbegin insertBusiness and Professions Codeend insert
6begin insert is amended to read:end insert

7

7124.6.  

(a) The registrar shall make available to members of
8the public the date, nature, and status of all complaints on file
9against a licensee that do either of the following:

10(1) Have been referred for accusation.

11(2) Have been referred for investigation after a determination
12by board enforcement staff that a probable violation has occurred,
13and have been reviewed by a supervisor, and regard allegations
14that if proven would present a risk of harm to the public and would
15be appropriate for suspension or revocation of the contractor’s
16license or criminal prosecution.

17(b) The board shall create a disclaimer that shall accompany
18the disclosure of a complaint that shall state that the complaint is
19an allegation. The disclaimer may also contain any other
20information the board determines would be relevant to a person
21evaluating the complaint.

22(c) A complaint resolved in favor of the contractor shall not be
23subject to disclosure.

24(d) Except as described in subdivision (e), the registrar shall
25make available to members of the public the date, nature, and
26disposition of all legal actions.

27(e) Disclosure of legal actions shall be limited as follows:

28(1) Citations shall be disclosed from the date of issuance and
29for five years after the date of compliance if no additional
30disciplinary actions have been filed against the licensee during the
31five-year period. If additional disciplinary actions were filed against
32the licensee during the five-year period, all disciplinary actions
33shall be disclosed for as long as the most recent disciplinary action
34is subject to disclosure under this section. At the end of the
35specified time period, those citations shall no longer be disclosed.

36(2) Accusations that result in suspension, stayed suspension, or
37stayed revocation of the contractor’s license shall be disclosed
38from the date the accusation is filed and for seven years after the
39accusation has been settled, including the terms and conditions of
40probation if no additional disciplinary actions have been filed
P5    1against the licensee during the seven-year period. If additional
2disciplinary actions were filed against the licensee during the
3seven-year period, all disciplinary actions shall be posted for as
4long as the most recent disciplinary action is subject to disclosure
5under this section. At the end of the specified time period, those
6accusations shall no longer be disclosed.

7(3) All revocations that are not stayed shall be disclosed
8indefinitely from the effective date of the revocation.

begin insert

9(f) The registrar shall make available to the public all civil
10action settlements, binding arbitration awards, and administrative
11actions reported to it pursuant to Section 7071.18.

end insert
begin delete
12

SECTION 1.  

Section 7000.5 of the Business and Professions
13Code
is amended to read:

14

7000.5.  

(a) There is in the Department of Consumer Affairs
15a Contractors’ State License Board, which consists of 15 members.

16(b) Notwithstanding any other provision of law, the repeal of
17this section renders the board subject to review by the appropriate
18policy committees of the Legislature.

19(c) This section shall remain in effect only until January 1, 2020,
20and as of that date is repealed, unless a later enacted statute, that
21is enacted before January 1, 2020, deletes or extends that date.

22

SEC. 2.  

Section 7011 of the Business and Professions Code is
23amended to read:

24

7011.  

(a) The board, by and with the approval of the director,
25shall appoint a registrar of contractors and fix his or her
26compensation.

27(b) The registrar shall be the executive officer and secretary of
28the board and shall carry out all of the administrative duties as
29provided in this chapter and as delegated to him or her by the
30board.

31(c) For the purpose of administration of this chapter, there may
32be appointed a deputy registrar, a chief reviewing and hearing
33officer, and, subject to Section 159.5, other assistants and
34subordinates as may be necessary.

35(d) Appointments shall be made in accordance with the
36 provisions of civil service laws.

37(e) This section shall remain in effect only until January 1, 2020,
38and as of that date is repealed, unless a later enacted statute, that
39is enacted before January 1, 2020, deletes or extends that date.

P6    1

SEC. 3.  

Section 7067.5 of the Business and Professions Code
2 is repealed.

3

SEC. 4.  

Section 7071.6 of the Business and Professions Code
4 is amended to read:

5

7071.6.  

(a) The board shall require as a condition precedent
6to the issuance, reinstatement, reactivation, renewal, or continued
7maintenance of a license, that the applicant or licensee file or have
8on file a contractor’s bond in the sum of fifteen thousand dollars
9($15,000).

10(b) Excluding the claims brought by the beneficiaries specified
11in subdivision (a) of Section 7071.5, the aggregate liability of a
12surety on claims brought against a bond required by this section
13shall not exceed the sum of seven thousand five hundred dollars
14($7,500). The bond proceeds in excess of seven thousand five
15hundred dollars ($7,500) shall be reserved exclusively for the
16claims of the beneficiaries specified in subdivision (a) of Section
177071.5. However, nothing in this section shall be construed so as
18to prevent any beneficiary specified in subdivision (a) of Section
197071.5 from claiming or recovering the full measure of the bond
20required by this section.

21(c) No bond shall be required of a holder of a license that has
22been inactivated on the official records of the board during the
23period the license is inactive.

24(d) Notwithstanding any other law, as a condition precedent to
25licensure, the board may require an applicant to post a contractor’s
26bond in twice the amount required pursuant to subdivision (a) until
27the time that the license is renewed, under the following conditions:

28(1) The applicant has either been convicted of a violation of
29Section 7028 or has been cited pursuant to Section 7028.7.

30(2) If the applicant has been cited pursuant to Section 7028.7,
31the citation has been reduced to a final order of the registrar.

32(3) The violation of Section 7028, or the basis for the citation
33issued pursuant to Section 7028.7, constituted a substantial injury
34to the public.

end delete


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