BILL ANALYSIS Ó
SB 465
Page 1
SENATE THIRD READING
SB
465 (Hill and Hancock)
As Amended August 29, 2016
Majority vote
SENATE VOTE: 40-0
------------------------------------------------------------------
|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Business & |16-0 |Salas, Brough, Baker, |Baker, Chang, Wilk |
|Professions | |Bloom, Campos, | |
| | |Chávez, Dahle, Dodd, | |
| | |Eggman, Gatto, Gomez, | |
| | |Holden, Jones, | |
| | |Mullin, Ting, Wood | |
| | | | |
| | | | |
------------------------------------------------------------------
SUMMARY: Requires the Division of Occupational Safety and
Health (division), after consultation with the Contractors State
Licensing Board (CSLB), to transmit to the CSLB copies of any
citations or other actions taken by the division against a
contractor, as defined; permits the CSLB to enter into an
interagency agreement with state or local agencies, as
SB 465
Page 2
necessary, to ensure that specified disciplinary information
relating to a contractor is timely reported to the board;
requires a licensee to report to the CSLB the occurrence of any
conviction of any felony or crime, as specified; requires the
California Building Standards Commission (Commission) to convene
a specified working group and recommend any statutory changes or
changes to the California Building Standards Code (CBSC); and
requires the CSLB to report the results of a study to determine
if the CSLB's ability to protect the public would be enhanced by
specified regulations. Specifically, this bill:
1)Requires the division, after consultation with the CSLB, to
transmit to the CSLB copies of any citations or other actions
taken by the division against a contractor, as defined.
2)Permits the CSLB to enter into an interagency agreement with
any state or local agency the CSLB deems to be in possession
of information relevant to its priority to protect the public.
3)Requires a licensee to report to the registrar of the CSLB in
writing within 90 days after the licensee obtains knowledge of
the occurrence of a conviction of any felony or a conviction
of any crime that is substantially related to the
qualifications, functions, and duties of a licensed
contractor.
4)Requires the Commission to convene a working group to
investigate existing building standards associated with the
construction, inspection, and maintenance of exterior elevated
elements and requires the working group to report to the
appropriate policy committees of the Legislature containing
any findings and possible recommendations for statutory
changes or changes to the CBSC. By January 1, 2018, the bill
would also require the working group to provide that report to
the appropriate policy committees of the Legislature.
SB 465
Page 3
5)Requires the working group to 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, the building industry, the wood, steel
and concrete industries, and any other interested parties.
6)Requires the working group to review related documents and
reports, including, but not limited to, any available 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 make recommendations to the appropriate
state agency or agencies for the development of proposed
building standards for exterior elevated elements.
7)Requires the CSLB, by January 1, 2018, to report to the
Legislature the results of a study to determine if the CSLB's
ability to protect the public would be enhanced by regulations
requiring licensees to report judgments, arbitration awards,
or settlement payments of those claims over a certain amount
as determined by the CSLB. This bill would require the CSLB
to consult with licensees, consumers, and other interested
stakeholders during the development of the study.
FISCAL EFFECT: According to the Assembly Appropriations
Committee, this bill will result in:
1) Total costs of approximately $540,000 in 2017-18 and
$490,000 ongoing to the CSLB for enforcement staffing costs,
Attorney General referral costs, and reporting costs
necessary to implement the requirements of this bill.
SB 465
Page 4
2) Annual ongoing costs to the Commission of approximately
$193,000 for the development and ongoing maintenance required
of additional building standards.
COMMENTS:
Purpose. This bill is sponsored by the author. According to
the author, this bill is needed to amend state law because,
"Currently, state law does not require contractors to report
defect settlement cases to the CSLB. Such disclosure
requirements are routine for such professionals as doctors,
architects, and engineers. This bill would empower the CSLB,
like other boards, to be made aware of licensee behavior for
which they may need to take swift action to promote public
health and safety. The bill additionally increases transparency
so that consumers have the tools necessary to make an informed
decision about the quality of the contractor they hire."
Background. According to the author, this bill establishes
greater accountability for contractors by ensuring the public
has critical disciplinary information about licensees. As an
example of this need for transparency, the author notes the
tragic Berkeley, California balcony collapse, which killed six
people. According to the San Francisco Chronicle, the company
responsible for that project reportedly paid out $26.5 million
in construction defect settlements in just three years, yet the
CSLB remained ignorant of such settlements because licensees are
not required by law to report to the registrar the result of
settlements that are not handled directly by the CSLB. As a
result, information that can be used to help consumers protect
themselves from possible fraud or misrepresentation is not
known.
Complaint Investigation Process. The registrar of the CSLB is
required to make available to the public civil action
SB 465
Page 5
settlements, binding arbitration awards, and administrative
actions that are required to be reported to the CSLB if the CSLB
refers those settlements or arbitration awards for investigation
that a probable violation has occurred and involves allegations
that, if proven, would present a risk of harm to the public and
would be appropriate for suspension or revocation of the
licensee, or criminal prosecution.
Similar to other regulatory entities, in order to determine
whether a complaint is appropriate for investigation, the CSLB
reviews information on a case-by-case basis, looking at such
factors as the severity of the allegations, and whether a
licensee has a history of complaints or discipline. Licensees
are required to report unsatisfied final judgments to the CSLB,
and are required to disclose convictions when applying for
licensure. For licensees that have already been fingerprinted
by the CSLB, the CSLB will receive notifications from the
Department of Justice when that licensee is the subject to
additional criminal action; however, not all licensees have
submitted their fingerprints to the CSLB.
California Building Standards Commission (Commission). The
Commission is responsible for developing building standards for
state owned buildings, including University and State College
buildings, and for developing green building standards for most
buildings except for housing, public schools, and hospitals.
The Commission publishes the CBSC every three years and its
supplements, such as the California Green Building Standards
Code, in intervening years.
Similar Reporting Requirements Exist for Other Professions.
Architects, and the companies that insure them, are required to
report to the California Architects Board, any civil action
judgment, settlement, arbitration award, or administrative
action resulting in a judgment, settlement, or arbitration award
against the licensee in any action alleging fraud, deceit,
SB 465
Page 6
negligence, incompetence, or recklessness by the licensee in the
practice of architecture if the amount or value of the judgment,
settlement, or arbitration award is $5,000 or greater. The
report is made within 30 days of payment of all or any portion
of the action. This requirement also applies if a party to
these actions is or was a sole proprietorship, partnership,
firm, corporation, or state or local governmental agency in
which a licensee is or was an owner, partner, member, officer,
or employee and is or was a licensee in responsible control of
that portion of the project that was the subject of the
action(s). The licensee will not be found to have violated a
confidential settlement agreement or other confidential
agreement by providing a report to the CSLB.
Similar reporting requirements exist for other licensed
professionals, including engineers (Business and Professions
Code (BPC) Section 6770), land surveyors (BPC Section 8776),
medical professionals (BPC Section 801), and accountants (BPC
Section 5063).
Analysis Prepared by:
Gabby Nepomuceno / B. & P. / (916) 319-3301 FN:
0004940