BILL NUMBER: SB 465 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JULY 1, 2015
AMENDED IN SENATE APRIL 21, 2015
INTRODUCED BY Senator Hill
FEBRUARY 25, 2015
An act to amend Sections 7000.5, 7011, and 7071.6 of, and
to repeal Section 7067.5 of, Section 7124.6 of, and
to add Sections 7071.18 and 7071.20 to, the Business and
Professions Code, relating to professions and vocations.
LEGISLATIVE COUNSEL'S DIGEST
SB 465, as amended, Hill. Contractors' State License
Board: licensees: bond requirement. Contractors:
discipline.
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.
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.
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.
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.
This bill would extend these repeal dates to January 1, 2020.
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.
This bill would repeal that evidence of financial solvency
requirement and would instead require that bond to be in the sum of
$15,000.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 7071.18 is added to the
Business and Professions Code , to read:
7071.18. (a) Notwithstanding any other law, a licensee shall
report to the registrar in writing the occurrence of any of the
following within 90 days after the licensee obtains knowledge of the
event:
(1) The conviction of the licensee for any felony.
(2) The conviction of the licensee for any other crime that is
substantially related to the qualifications, functions, and duties of
a licensed contractor.
(3) Any civil action settlement or administrative action resulting
in a settlement against the licensee in any action involving fraud,
deceit, misrepresentation, breach or violation of contract,
negligence, incompetence, or recklessness by the licensee in the
practice of contracting, if the amount or value of the settlement is
fifty thousand dollars ($50,000) or greater.
(4) A binding arbitration award or administrative action resulting
in a binding arbitration award against the licensee in any action
involving fraud, deceit, misrepresentation, breach or violation of
contract, negligence, incompetence, or recklessness by the licensee
in the practice of contracting, if the amount or value of the
settlement is twenty-five thousand dollars ($25,000) or greater.
(b) Failure of a licensee to report to the registrar pursuant to
subdivision (a) shall be grounds for disciplinary action.
(c) For the purposes of this section, "conviction" means a plea or
verdict of guilty in a criminal proceeding, or a conviction
following a plea of nolo contendere.
(d) This section shall become operative only if the Legislature
appropriates moneys from the Contractors' License Fund for the
purposes of this section and grants sufficient hiring authority to
the board.
SEC. 2. Section 7071.20 is added to the
Business and Professions Code , to read:
7071.20. (a) Within 30 days of payment of all or any portion of a
civil action settlement or arbitration award against a licensee, as
described in Section 7017.18, the insurer providing professional
liability insurance to the licensee shall 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.
(b) Within 30 days of payment of all or any portion of a civil
action settlement or arbitration award against a licensee, as
described in Section 7017.18, a state or local government agency that
self-insures shall 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.
(c) This section shall become operative only if the Legislature
appropriates moneys from the Contractors' License Fund for the
purposes of this section and grants sufficient hiring authority to
the board.
SEC. 3. Section 7124.6 of the Business
and Professions Code is amended to read:
7124.6. (a) The registrar shall make available to members of the
public the date, nature, and status of all complaints on file against
a licensee that do either of the following:
(1) Have been referred for accusation.
(2) Have been referred for investigation after a determination by
board enforcement staff that a probable violation has occurred, and
have been reviewed by a supervisor, and regard allegations that if
proven would present a risk of harm to the public and would be
appropriate for suspension or revocation of the contractor's license
or criminal prosecution.
(b) The board shall create a disclaimer that shall accompany the
disclosure of a complaint that shall state that the complaint is an
allegation. The disclaimer may also contain any other information the
board determines would be relevant to a person evaluating the
complaint.
(c) A complaint resolved in favor of the contractor shall not be
subject to disclosure.
(d) Except as described in subdivision (e), the registrar shall
make available to members of the public the date, nature, and
disposition of all legal actions.
(e) Disclosure of legal actions shall be limited as follows:
(1) Citations shall be disclosed from the date of issuance and for
five years after the date of compliance if no additional
disciplinary actions have been filed against the licensee during the
five-year period. If additional disciplinary actions were filed
against the licensee during the five-year period, all disciplinary
actions shall be disclosed for as long as the most recent
disciplinary action is subject to disclosure under this section. At
the end of the specified time period, those citations shall no longer
be disclosed.
(2) Accusations that result in suspension, stayed suspension, or
stayed revocation of the contractor's license shall be disclosed from
the date the accusation is filed and for seven years after the
accusation has been settled, including the terms and conditions of
probation if no additional disciplinary actions have been filed
against the licensee during the seven-year period. If additional
disciplinary actions were filed against the licensee during the
seven-year period, all disciplinary actions shall be posted for as
long as the most recent disciplinary action is subject to disclosure
under this section. At the end of the specified time period, those
accusations shall no longer be disclosed.
(3) All revocations that are not stayed shall be disclosed
indefinitely from the effective date of the revocation.
(f) The registrar shall make available to the public all civil
action settlements, binding arbitration awards, and administrative
actions reported to it pursuant to Section 7071.18.
SECTION 1. Section 7000.5 of the Business and
Professions Code is amended to read:
7000.5. (a) There is in the Department of Consumer Affairs a
Contractors' State License Board, which consists of 15 members.
(b) Notwithstanding any other provision of law, the repeal of this
section renders the board subject to review by the appropriate
policy committees of the Legislature.
(c) This section shall remain in effect only until January 1,
2020, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2020, deletes or extends
that date.
SEC. 2. Section 7011 of the Business and
Professions Code is amended to read:
7011. (a) The board, by and with the approval of the director,
shall appoint a registrar of contractors and fix his or her
compensation.
(b) The registrar shall be the executive officer and secretary of
the board and shall carry out all of the administrative duties as
provided in this chapter and as delegated to him or her by the board.
(c) For the purpose of administration of this chapter, there may
be appointed a deputy registrar, a chief reviewing and hearing
officer, and, subject to Section 159.5, other assistants and
subordinates as may be necessary.
(d) Appointments shall be made in accordance with the provisions
of civil service laws.
(e) This section shall remain in effect only until January 1,
2020, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2020, deletes or extends
that date.
SEC. 3. Section 7067.5 of the Business and
Professions Code is repealed.
SEC. 4. Section 7071.6 of the Business and
Professions Code is amended to read:
7071.6. (a) The board shall require as a condition precedent to
the issuance, reinstatement, reactivation, renewal, or continued
maintenance of a license, that the applicant or licensee file or have
on file a contractor's bond in the sum of fifteen thousand dollars
($15,000).
(b) Excluding the claims brought by the beneficiaries specified in
subdivision (a) of Section 7071.5, the aggregate liability of a
surety on claims brought against a bond required by this section
shall not exceed the sum of seven thousand five hundred dollars
($7,500). The bond proceeds in excess of seven thousand five hundred
dollars ($7,500) shall be reserved exclusively for the claims of the
beneficiaries specified in subdivision (a) of Section 7071.5.
However, nothing in this section shall be construed so as to prevent
any beneficiary specified in subdivision (a) of Section 7071.5 from
claiming or recovering the full measure of the bond required by this
section.
(c) No bond shall be required of a holder of a license that has
been inactivated on the official records of the board during the
period the license is inactive.
(d) Notwithstanding any other law, as a condition precedent to
licensure, the board may require an applicant to post a contractor's
bond in twice the amount required pursuant to subdivision (a) until
the time that the license is renewed, under the following conditions:
(1) The applicant has either been convicted of a violation of
Section 7028 or has been cited pursuant to Section 7028.7.
(2) If the applicant has been cited pursuant to Section 7028.7,
the citation has been reduced to a final order of the registrar.
(3) The violation of Section 7028, or the basis for the citation
issued pursuant to Section 7028.7, constituted a substantial injury
to the public.