Amended in Assembly June 8, 2016

Amended in Assembly July 8, 2015

Amended in Assembly July 1, 2015

Amended in Senate April 21, 2015

Senate Bill No. 465

Introduced by begin delete Senator Hill end delete begin insert Senators Hill and Hancock end insert

February 25, 2015

begin delete An act to amend Section 7124.6 of, and to add Sections 7071.18 and 7071.20 to, the Business and Professions Code, relating to professions and vocations. end delete begin insert An act to add Sections 7021 and 7071.18 to end insert begin insert the Business and Professions Code, and to add Section 18924.5 to the Health and Safety Code, relating to building construction. end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 465, as amended, Hill. begin delete Contractors: discipline. end delete begin insert Building construction: contractors: discipline: reporting: building standards. end insert

begin insert

(1) Existing law, the Contractors’ State License Law, provides for the licensure, regulation, and discipline 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. Under existing law, protection of the public is required to be the highest priority for the Contractors’ State License Board in exercising its licensing, regulatory, and disciplinary functions.

end insert begin insert

Under existing law, the Division of Occupational Safety and Health has the power, jurisdiction, and supervision over every employment and place of employment in this state, which is necessary to adequately enforce and administer all laws and lawful standards and orders, or special orders requiring such employment and place of employment to be safe, and requiring the protection of the life, safety, and health of every employee in such employment or place of employment.

end insert begin insert

This bill, by January 1, 2018, would require the board to enter into an interagency agreement with the Division of Occupational Safety and Health to ensure that specified disciplinary information relating to a licensed contractor is timely reported to the board. The bill, by January 1, 2018, would also require the board to enter into an interagency agreement with any other state or local agency the board deems to be in possession of information relevant to its priority to protect the public. By requiring a local agency to enter into an interagency agreement with the board, the bill would impose a state-mandated local program.

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 for any felony or any other crime substantially related to the qualifications, functions, and duties of a licensed contractor.

end insert begin insert

By January 1, 2018, this bill would require the board to report to the Legislature the results of a study to determine if the boards’ ability to protect the public would be enhanced by regulations requiring licensees to report judgments, arbitration awards against them, or settlement payments of claims for construction defects they have made in excess of a certain amount to be determined by the board, as provided. The bill would require the board to consult with licensees, insurers, consumers, and other interested parties during the development of the study.

end insert begin insert

(2) Under existing law, there exists the California Building Standards Commission. Existing law requires the California Building Standards Commission to, among other things, review the standards of adopting state agencies and approve, return for amendment with recommended changes, or reject building standards submitted to the commission for its approval, as provided.

end insert begin insert

This bill would require the California Building Standards Commission to convene a specified working group to investigate existing building standards associated with the construction, inspection, and maintenance of exterior elevated elements. By January 1, 2018, the bill would require the working group to report to the California Building Standards Commission any findings and possible recommendations for statutory changes or changes to the California Building Standards Code. By January 1, 2018, the bill would also require the working group to provide that report to a specified legislative committee. However, if, at any time, it is determined by the working group that one or more changes to the California Building Standards Code are needed as soon as possible in order to protect the public, the bill would require the working group to submit the proposed changes to the California Building Standards Commission for consideration as soon as possible.

end insert begin insert

(3) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

end insert begin insert

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.

end insert begin delete

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 delete begin delete

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 delete begin delete

Existing law requires the registrar of contractors to make available to the public the date, nature, and status of complaints against a licensee that have been referred for investigation regarding allegations that if proven would present a risk of harm to the public.

end delete begin delete

The bill would require the registrar to make available to the public all civil action settlements, binding arbitration awards, and administrative actions pursuant to that provision.

end delete

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program:  begin delete no end delete begin insert yes end insert .

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

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 7021 is added to the end insert begin insert Business and
Professions Code end insert begin insert , to read: end insert

begin insert

begin insert 7021. end insert   

(a) By January 1, 2018, the board shall enter into an
interagency agreement with the Division of Occupational Safety
and Health to ensure that any citation, fine, or any other actions
taken by the division against a licensed contractor, along with any
other information the division may possess regarding a licensed
contractor, is timely reported to the board.

(b) By January 1, 2018, the board shall enter into an interagency
agreement with any other state or local agency the board deems
to be in possession of any information relevant to its priority to
protect the public described in Section 7000.6.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 7071.18 is added to the end insert begin insert Business and
Professions Code end insert begin insert , to read: end insert

begin insert

begin insert 7071.18. end insert   

(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.

(b) By January 1, 2018, the board shall report to the Legislature
the results of a study to determine if the boards’ ability to protect
the public as described in Section 7000.6 would be enhanced by
regulations requiring licensees to report judgments, arbitration
awards against them, or settlement payments of claims for
construction defects they have made in excess of a certain amount
to be determined by the board. The board shall consult with
licensees, insurers, consumers, and other interested parties during
the development of the study. The study shall include, but not be
limited to, criteria used by insurers or others to differentiate
between settlements that are for nuisance value and those that are
not, the practice of other boards within the department, and any
other criteria considered reasonable by the board. The board shall
submit the report to the Legislature in accordance with Section
9795 of the Government Code.

end insert

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 18924.5 is added to the end insert begin insert Health and Safety
Code end insert begin insert , to read: end insert

begin insert

begin insert 18924.5. end insert   

(a) The California Building Standards Commission
shall convene a working group to investigate existing building
standards associated with the construction, inspection, and
maintenance of exterior elevated elements.

(b) The working group shall include, but not be limited to,
representatives from the Department of Housing and Community
Development, the Division of the State Architect- Structural Safety,
the Office of the State Fire Marshal, local building officials and
plan checkers, structural engineers, apartment owners and
managers, building industry, wood, steel and concrete industries,
and any other interested parties.

(c) The working group shall review related documents and
reports, including, but not limited to, forensic reports related to
exterior elevated element failures in California, reports and studies
used in the development of national and state building codes, and
any other material deemed relevant to determine if any changes
need to be made to the construction specifications or inspection
requirements, excluding routine inspections that occur after project
completion, contained within the California Building Standards
Code.

(d) (1) By January 1, 2018, the working group shall report to
the California Building Standards Commission any findings and
possible recommendations for statutory changes or changes to the
California Building Standards Code. By January 1, 2018, the
working group shall also provide that report to the Senate
Committee on Business, Professions and Economic Development.

(2) Notwithstanding paragraph (1), if, at any time, it is
determined by the working group that one or more changes to the
California Building Standards Code are needed as soon as possible
in order to protect the public, the working group shall submit the
proposed changes to the California Building Standards
Commission for consideration as soon as possible.

end insert

begin insert

begin insert SEC. 4. end insert   

end insert begin insert

If the Commission on State Mandates determines that
this act contains costs mandated by the state, reimbursement to
local agencies and school districts for those costs shall be made
pursuant to Part 7 (commencing with Section 17500) of Division
4 of Title 2 of the Government Code.

end insert

begin delete

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
pursuant to paragraph (2) of subdivision (a).

end delete