Senate Bill No. 561

Introduced by Senator Monning

(Coauthor: Assembly Member Achadjian)

February 26, 2015

An act to amend Sections 7152, 7153, 7153.2, 7153.3, 7154, 7155.5, and 7156 of the Business and Professions Code, relating to professions and vocations, and making an appropriation therefor.

LEGISLATIVE COUNSEL’S DIGEST

SB 561, as introduced, Monning. Home improvement salespersons.

Existing law, the Contractors’ State License Law, provides for the licensure and regulation of contractors, including home improvement contractors, by the Contractors’ State License Board within the Department of Consumer Affairs. Existing law also provides for the registration and regulation of home improvement salespersons by the board. Existing law requires the board to appoint a registrar of contractors who is the executive officer and secretary of the board and is responsible for carrying out specified administrative duties. Existing law requires the fees and civil penalties received under this law to be deposited in the Contractors’ License Fund, a continuously appropriated fund.

Under existing law, a home improvement salesperson is a person employed by a licensed home improvement contractor to solicit, sell, negotiate, or execute contracts for home improvements, for the sale, installation, or furnishing of home improvement goods or services, or of swimming pools, spas, or hot tubs.

This bill would provide that such a salesperson also be registered under the law.

Existing law makes it a crime for any person to engage in the occupation of home improvement salesperson for one or more home improvement contractors without a registration for each of the home improvement contractors by whom he or she is employed. Existing law makes it a crime for any person to engage in the occupation of salesperson of home improvement goods or services, as defined, without a registration.

This bill would instead make it a crime for any person to engage in the occupation of home improvement salesperson for one or more home improvement contractors without having, at the time of the sales transaction, a current and valid registration. The bill would instead make it a crime for any person to engage in the occupation of salesperson of home improvement goods or services without having, at the time of the sales transaction, a current and valid registration. By changing the definitions of these crimes, the bill would impose a state-mandated local program.

Under existing law, home improvement salesperson registrations expire subject to board determination, as described. Existing law makes an application for renewal of registration delinquent if the application is not postmarked by the date on which the registration would otherwise expire. However, existing law authorizes a registration to be renewed at any time within 3 years after its expiration upon the filing of an application for renewal on a specified form, the payment of the renewal fee, and a delinquent renewal penalty in the amount of $25.

This bill would provide that these registrations expire 2 years from the last day of the month in which the registration was issued or 2 years from the date on which the renewed registration last expired. The bill would make that delinquent renewal penalty equal to 50% of the renewal fee. Because this additional delinquent amount would be deposited into the Contractors’ License Fund, a continuously appropriated fund, the bill would make an appropriation.

Under existing law, a home improvement contractor who employs a person to sell home improvement contracts while that person is not registered by the registrar as a home improvement salesperson is subject to disciplinary action.

This bill would require a home improvement contractor to notify the registrar in writing about the pending employment of a registered home improvement salesperson. The bill would also require a home improvement contractor to notify the registrar when a registered home improvement salesperson ceases to be employed by the contractor. The bill would make a home improvement contractor who fails to report this information subject to disciplinary action by the registrar.

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.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: yes. Fiscal committee: yes. State-mandated local program: yes.

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

SECTION 1.  

Section 7152 of the Business and Professions
Code is amended to read:

7152.  

(a) “Home improvement salesperson” is a person begin insert , who
is registered under this chapter, end insert employed by a home improvement
contractor licensed under this chapter to solicit, sell, negotiate, or
execute contracts for home improvements, for the sale, installation
or furnishing of home improvement goods or services, or of
swimming pools, spas, or hot tubs.

(b) The following shall not be required to be registered as home
improvement salespersons:

(1) An officer of record of a corporation licensed pursuant to
this chapter, or a manager begin insert , member, or officer end insert of record of a limited
liability company licensed pursuant to this chapter.

(2) A general partner listed on the license record of a partnership
licensed pursuant to this chapter.

(3) A qualifying person, as defined in Section 7025.

(4) A salesperson whose sales are all made pursuant to
negotiations between the parties if the negotiations are initiated
by the prospective buyer at or with a general merchandise retail
establishment that operates from a fixed location where goods or
services are offered for sale.

(5) A person who contacts the prospective buyer for the
exclusive purpose of scheduling appointments for a registered
home improvement salesperson.

(6) A bona fide service repairperson who is in the employ of a
licensed contractor and whose repair or service call is limited to
the service, repair, or emergency repair initially requested by the
buyer of the service.

(c) The exemption to registration provided under paragraphs
(1), (2), and (3) of subdivision (b) shall apply only to those
individuals who, at the time of the sales transaction, are listed as
personnel of record for the licensee responsible for soliciting,
negotiating, or contracting for a service or improvement that is
subject to regulation under this article.

SEC. 2.  

Section 7153 of the Business and Professions Code is
amended to read:

7153.  

(a) It is a misdemeanor for any person to engage in the
occupation of salesperson for one or more home improvement
contractors within this state without having begin delete a end delete begin insert , at the time of the
sales transaction, a current and valid home improvement
salesperson end insert registration issued by the begin delete registrar for each of the home
improvement contractors by whom he or she is employed as a
home improvement salesperson end delete begin insert registrar end insert . If, upon investigation,
the registrar has probable cause to believe that a salesperson is in
violation of this section, the registrar may issue a citation pursuant
to Section 7028.7.

It is a misdemeanor for any person to engage in the occupation
of salesperson of home improvement goods or services within this
state without having begin delete a end delete begin insert , at the time of the sales transaction, a current
and valid home improvement salesperson end insert registration issued by
the registrar.

(b) Any security interest taken by a contractor, to secure any
payment for the performance of any act or conduct described in
Section 7151 that occurs on or after January 1, 1995, is
unenforceable if the person soliciting the act or contract was not
a duly registered salesperson or was not exempt from registration
pursuant to Section 7152 at the time the homeowner signs the
home improvement contract solicited by the salesperson.

SEC. 3.  

Section 7153.2 of the Business and Professions Code
is amended to read:

7153.2.  

All begin insert home improvement salesperson end insert registrations issued
under the provisions of this article shall expire begin delete on a date established
pursuant to Section 152.6. end delete begin insert two years from the last day of the month
in which the registration was issued, or two years from the date
on which the renewed registration last expired. end insert

SEC. 4.  

Section 7153.3 of the Business and Professions Code
is amended to read:

7153.3.  

(a) To renew a begin insert home improvement salesperson end insert
registration, begin insert which has not expired, end insert the registrant shall before the
time at which the registration would otherwise expire, apply for
renewal on a form prescribed by the registrar and pay a renewal
fee prescribed by this chapter. begin insert Renewal of an unexpired registration
shall continue the registration in effect for the two-year period
following the expiration date of the registration, when it shall
expire if it is not again renewed. end insert

(b) An application for renewal of registration is delinquent if
the application is not postmarked by the date on which the
registration would otherwise expire. A registration may, however,
still be renewed at any time within three years after its expiration
upon the filing of an application for renewal on a form prescribed
by the registrar and the payment of the renewal fee prescribed by
this chapter and a delinquent renewal penalty in begin delete the end delete begin insert an end insert amount begin delete of
twenty-five dollars ($25). end delete begin insert equal to 50 percent of the renewal fee,
if the registration is renewed after its expiration. end insert If a registration
is not renewed within three years, the person shall make begin insert a new end insert
application for registration pursuant to Section 7153.1.

(c) The registrar may refuse to renew a registration for failure
by the registrant to complete the application for renewal of
registration. If a registrant fails to return the application rejected
for insufficiency or incompleteness within 90 days from the
original date of rejection, the application and fee shall be deemed
abandoned. Any application abandoned may not be reinstated.
However, the person may file a new application for registration
pursuant to Section 7153.1.

The registrar may review and accept the petition of a person who
disputes the abandonment of his or her renewal application upon
a showing of good cause. This petition shall be received within 90
days of the date the application for renewal is deemed abandoned.

SEC. 5.  

Section 7154 of the Business and Professions Code is
amended to read:

7154.  

begin insert

(a) A home improvement contractor licensed under this
chapter shall notify the registrar in writing, on a form prescribed
by the registrar, about the pending employment of a registered
home improvement salesperson, pursuant to the terms of this
article. This notification requirement shall include, but not be
limited to, the name and registration number of the home
improvement salesperson who is pending employment by the
contractor. The form shall be submitted prior to the home
improvement salesperson beginning work for the contractor.

end insert begin insert

(b) A home improvement contractor shall notify the registrar
in writing, on a form prescribed by the registrar, when a registered
home improvement salesperson ceases to be employed by the
contractor. This notification requirement shall include, but not be
limited to, the name and registration number of the home
improvement salesperson who had been employed by the
contractor. The form shall be submitted within 90 days after the
home improvement salesperson ceases to be employed by the
contractor.

end insert begin insert

(c) A home improvement contractor who employs a registered
home improvement salesperson to sell home improvement
contracts, but who fails to report to the registrar pursuant to
subdivision (a) or (b), is subject to disciplinary action by the
registrar.

end insert

begin insert (d) end insert begin insert   end insert A home improvement contractor who employs a person to
sell home improvement contracts while begin delete such end delete begin insert that end insert person is not
registered by the registrar as a home improvement begin delete salesman end delete
begin insert salesperson end insert as provided in this article, is subject to disciplinary
action by the registrar.

SEC. 6.  

Section 7155.5 of the Business and Professions Code
is amended to read:

7155.5.  

Violations of any provisions of this chapter by a home
improvement salesperson begin delete , end delete likewise begin delete constitutes a end delete begin insert constitute end insert cause
for disciplinary action against the contractor begin insert by whom he or she
was employed at the time the violation occurred end insert , whether or not
begin delete he or she end delete begin insert the contractor end insert had knowledge of or participated in the
act or omission constituting violations of this chapter.

SEC. 7.  

Section 7156 of the Business and Professions Code is
amended to read:

7156.  

It shall be a misdemeanor and a cause for disciplinary
action to commit any of the following acts:

(a) For any begin insert home improvement end insert salesperson to fail to account
for or to remit to his or her employing contractor any payment
received in connection with any home improvement transaction
or any other transaction involving a work of improvement.

(b) For any person to use a contract form in connection with
any home improvement transaction or any other transaction
involving a work of improvement if the form fails to disclose the
name of the contractor principal by whom he or she is employed.

SEC. 8.  

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.