BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 465|
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UNFINISHED BUSINESS
Bill No: SB 465
Author: Hill (D) and Hancock (D)
Amended: 8/29/16
Vote: 21
PRIOR VOTES NOT RELEVANT
SENATE BUS., PROF. & ECON. DEV. COMMITTEE: (pursuant to Senate
Rule 29.10) (ROLL CALL NOT AVAILABLE)
ASSEMBLY FLOOR: 62-0, 8/31/16 (ROLL CALL NOT AVAILABLE)
SUBJECT: Building construction: contractors: discipline:
reporting: building standards
SOURCE: Author
DIGEST: This bill permits the Contractors State Licensing Board
(CSLB or Board) to enter into an interagency agreement with
state or local agencies to ensure that the Board receives
specified disciplinary information relating to a contractor in a
timely manner; 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
(CBSC) to convene a specified working group and recommend any
statutory changes or changes to CBSC; requires the Division of
Occupational Safety and Health (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; 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.
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Page 2
Assembly Amendments delete the Senate version of the bill,
dealing with the sunset extension of the CSLB, and instead add
the current language.
ANALYSIS:
Existing law:
1) Provides for the licensure and regulation of more than
300,000 contractors under the Contractors' State License Law
by the CSLB within the Department of Consumer Affairs. The
CSLB is under the direction of the Registrar of Contractors
(Registrar). (Business and Professions Code (BPC) § 7000 et
seq.)
2) Requires licensees to notify the Registrar in writing of any
unsatisfied final judgment imposed on the licensee, and
authorizes the Registrar to automatically suspend the license
on the date the Registrar is informed of an unsatisfied final
judgment if the licensee failed to notify the Registrar in
writing within 90 days of that judgment, as specified. (BPC
§ 7071.17(b))
3) Provides that a conviction of a crime, substantially related
to the qualifications, functions and duties of a contractor,
constitutes a cause for disciplinary action, and that the
record of the conviction shall be conclusive evidence
thereof. (BPC § 7123)
4) Provides that a plea or verdict of guilty, or a conviction
following a plea of nolo contendere, is deemed to be a
conviction, and that the CSLB may order a license to be
suspended or revoked, or may decline to issue a license, when
the time for appeal has elapsed, or the judgment of
conviction has been affirmed on appeal, as specified. (BPC §
7124)
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5) Requires the Registrar to make available to the public the
date, nature, and status of all complaints on file against a
licensee that do either of the following:
a) Have been referred for accusation; or,
b) Have been referred for investigation, after a
determination by CSLB enforcement staff, that a probable
violation has occurred, and have been reviewed by a
supervisor, and involve 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.
(BPC § 7124.6 (a))
6) Requires the CSLB to create a disclaimer to accompany the
disclosure stating that it is an allegation and any other
information the CSLB determines would be relevant to a person
evaluating the complaint. (BPC § 7124.6 (b))
7) Provides that a complaint resolved in favor of the
contractor shall not be subject to disclosure. (BPC §
7124.6(c))
8) Requires the Registrar to make available to the public the
date, nature, and disposition of all legal actions, subject
to the following:
a) Limits the disclosure of legal actions for citations
from the date of issuance for five years after the date of
compliance if no additional disciplinary actions have been
taken against the licensee during that period;
b) Limits the disclosure of accusations that result in
suspension, stayed suspension, or stayed revocation of the
contractor's license from the date accusation is filed for
seven years if no additional disciplinary actions have
been taken against the licensee during that period; and,
c) All revocations that are not stayed shall be disclosed
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Page 4
indefinitely from the effective date of the revocation.
(BPC § 7124.6(e))
9) Provides that the Division 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. (Labor Code § 6307)
10)Creates CBSC under the Department of General Services.
Provides that CBSC review the standards of adopting state
agencies and approve, return for amendment with recommended
changes, or reject building standards submitted to CBSC for
its approval, as provided. (Health and Safety Code §
18912;18931)
This bill:
1) 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.
2) 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.
3) Requires CSLB to consult with licensees, consumers, and
other interested stakeholders in order to prepare a study of
judgments, arbitration awards, and settlements that were the
result of claims for construction defects for rental
residential units and, by January 1, 2018. Requires the CSLB
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to report to the Legislature, by January 1, 2018, the results
of this study to determine if the Board's ability to protect
the public would be enhanced by regulations requiring
licensees to report judgments, arbitration awards, or
settlement payments of those claims.
4) Requires that the records or documents obtained by the Board
during the course of performing the study that are exempt
from public disclosure under the California Public Records
Act remain exempt from disclosure.
5) Requires CBSC to convene a working group to study recent
exterior elevated element failures in California and requires
the working group to report to the appropriate policy
committees of the Legislature, by January 1, 2018, containing
any findings and possible recommendations for statutory
changes or changes to the CBSC.
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 working group to solicit technical expertise as
appropriate from, but not 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.
8) Requires that if, at any time, it is determined by the
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working group that one or more changes to the CBSC are needed
as soon as possible in order to protect the public, the
working group will submit the recommended changes to the
appropriate state agency or agencies for consideration as
soon as possible.
9) Sunsets the composition and duties of the working group to
January 1, 2018.
10)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 in the
Contractors State License Law.
11)Provides that, by allowing records and documents exempt from
disclosure to be shared with the CSLB and remain nonpublic
under the Public Records Act, this act would encourage
private individuals and entities to provide the Board with
information that is vital to the success of its study and
report to determine whether additional regulations are
appropriate. Provides that this act properly balances the
public's right to access to public records in the possession
of the Board with the need for the state to obtain otherwise
private information.
Background
According to the author, "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."
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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 was unaware of these 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.
Informational hearing. On April 26, 2016, the Senate Committee
on Business, Professions, and Economic Development held an
informational hearing on the Berkeley Balcony Collapse and
discussed what next steps the Legislature should take to
ensure the public's protection against shoddy workmanship.
While the hearing discussed a broad range of issues, it was
agreed upon that this issue of reporting requirements for
contractors required additional conversations and the
inclusion of all interested stakeholders.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Assembly Appropriations Committee, this bill
would result in 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. The bill will also
result in annual ongoing costs to CBSC of approximately $193,000
for the development and ongoing maintenance required of
additional building standards.
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SUPPORT: (Verified8/30/16)
California Newspaper Publishers Association
Center for Public Interest Law
City of Berkeley, Office of the Mayor
Consulate General of Ireland
The Conference of California Bar Associations
Victims' Families
OPPOSITION: (Verified8/30/16)
None received
ARGUMENTS IN SUPPORT: The California Newspapers Publishers
Association writes in support, "By requiring contractors to
report this information, [this bill] will improve oversight of
these operations and assist the public in identifying repeat
offenders, or the existence of unsafe and unsettling patterns
and practices in the industry."
The Center for Public Interest Law writes in support, "Whereas
in every other example, the requirements for self-reporting are
set by fiat, in statute, by the Legislature, the author has
amended SB 465 to empower the expert CSLB to simply to review
the issue and offer its nonbinding observations?"
The Conference of California Bar Associations writes in support,
"For far too long, contractors, builders and their lawyers, in
cooperation with plaintiffs and their lawyers, have been able to
keep the facts about substandard, dangerous and toxic conditions
secret from public view by agreeing to settlements in public
litigation that keep the facts of the case secret. [This bill]
would take a small but crucial step towards increased public
protection by laying the groundwork for prohibiting these
dangerous secrets relating to builders and contractors from
being hidden from the [CSLB]."
Prepared by:Mark Mendoza / B., P. & E.D. / (916) 651-4104
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8/31/16 21:29:58
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