Amended in Senate April 20, 2015

Senate BillNo. 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 vocationsbegin delete, and making an appropriation thereforend delete.

LEGISLATIVE COUNSEL’S DIGEST

SB 561, as amended, 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.begin delete 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.end delete

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. begin deleteThe 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. end delete

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: begin deleteyes end deletebegin insertnoend insert. Fiscal committee: yes. State-mandated local program: yes.

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

P3    1

SECTION 1.  

Section 7152 of the Business and Professions
2Code
is amended to read:

3

7152.  

(a) “Home improvement salesperson” is a person, who
4is registered under this chapter, employed by a home improvement
5contractor licensed under this chapter to solicit, sell, negotiate, or
6execute contracts for home improvements, for the sale, installation
7or furnishing of home improvement goods or services, or of
8swimming pools, spas, or hot tubs.

9(b) The following shall not be required to be registered as home
10improvement salespersons:

11(1) An officer of record of a corporation licensed pursuant to
12this chapter, or a manager, member, or officer of record of a limited
13liability company licensed pursuant to this chapter.

14(2) A general partner listed on the license record of a partnership
15licensed pursuant to this chapter.

16(3) A qualifying person, as defined in Section 7025.

17(4) A salesperson whose sales are all made pursuant to
18negotiations between the parties if the negotiations are initiated
19by the prospective buyer at or with a general merchandise retail
20establishment that operates from a fixed location where goods or
21services are offered for sale.

22(5) A person who contacts the prospective buyer for the
23exclusive purpose of scheduling appointments for a registered
24home improvement salesperson.

25(6) A bona fide service repairperson who is in the employ of a
26licensed contractor and whose repair or service call is limited to
27the service, repair, or emergency repair initially requested by the
28buyer of the service.

P4    1(c) The exemption to registration provided under paragraphs
2(1), (2), and (3) of subdivision (b) shall apply only to those
3individuals who, at the time of the sales transaction, are listed as
4personnel of record for the licensee responsible for soliciting,
5negotiating, or contracting for a service or improvement that is
6subject to regulation under this article.

7

SEC. 2.  

Section 7153 of the Business and Professions Code is
8amended to read:

9

7153.  

(a) It is a misdemeanor for any person to engage in the
10occupation of salesperson for one or more home improvement
11contractors within this state without having, at the time of the sales
12transaction, a current and valid home improvement salesperson
13registration issued by the registrar. If, upon investigation, the
14registrar has probable cause to believe that a salesperson is in
15violation of this section, the registrar may issue a citation pursuant
16to Section 7028.7.

17It is a misdemeanor for any person to engage in the occupation
18of salesperson of home improvement goods or services within this
19state without having, at the time of the sales transaction, a current
20and valid home improvement salesperson registration issued by
21the registrar.

22(b) Any security interest taken by a contractor, to secure any
23payment for the performance of any act or conduct described in
24Section 7151 that occurs on or after January 1, 1995, is
25unenforceable if the person soliciting the act or contract was not
26a duly registered salesperson or was not exempt from registration
27pursuant to Section 7152 at the time the homeowner signs the
28home improvement contract solicited by the salesperson.

29

SEC. 3.  

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

31

7153.2.  

All home improvement salesperson registrations issued
32under the provisions of this article shall expire two years from the
33last day of the month in which the registration was issued, or two
34years from the date on which the renewed registration last expired.

35

SEC. 4.  

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

37

7153.3.  

(a) To renew a home improvement salesperson
38registration, which has not expired, the registrant shall before the
39time at which the registration would otherwise expire, apply for
40renewal on a form prescribed by the registrar and pay a renewal
P5    1fee prescribed by this chapter. Renewal of an unexpired registration
2shall continue the registration in effect for the two-year period
3following the expiration date of the registration, when it shall
4expire if it is not again renewed.

5(b) An application for renewal of registration is delinquent if
6the application is not postmarked by the date on which the
7registration would otherwise expire. A registration may, however,
8still be renewed at any time within three years after its expiration
9upon the filing of an application for renewal on a form prescribed
10by the registrar and the payment of the renewal fee prescribed by
11this chapter and a delinquent renewal penalty inbegin delete an amount equal
12to 50 percent of the renewal fee, if the registration is renewed after
13its expiration.end delete
begin insert the amount of twenty-five dollars ($25).end insert If a
14registration is not renewed within three years, the person shall
15make a new application for registration pursuant to Section 7153.1.

16(c) The registrar may refuse to renew a registration for failure
17by the registrant to complete the application for renewal of
18registration. If a registrant fails to return the application rejected
19for insufficiency or incompleteness within 90 days from the
20original date of rejection, the application and fee shall be deemed
21abandoned. Any application abandoned may not be reinstated.
22However, the person may file a new application for registration
23pursuant to Section 7153.1.

24The registrar may review and accept the petition of a person who
25disputes the abandonment of his or her renewal application upon
26a showing of good cause. This petition shall be received within 90
27days of the date the application for renewal is deemed abandoned.

28

SEC. 5.  

Section 7154 of the Business and Professions Code is
29amended to read:

30

7154.  

(a) A home improvement contractor licensed under this
31chapter shall notify the registrar in writing, on a form prescribed
32by the registrar, about the pending employment of a registered
33home improvement salesperson, pursuant to the terms of this
34article. This notification requirement shall include, but not be
35limited to, the name and registration number of the home
36improvement salesperson who is pending employment by the
37contractor. The form shall be submitted prior to the home
38improvement salesperson beginning work for the contractor.

39(b) A home improvement contractor shall notify the registrar
40in writing, on a form prescribed by the registrar, when a registered
P6    1home improvement salesperson ceases to be employed by the
2contractor. This notification requirement shall include, but not be
3limited to, the name and registration number of the home
4improvement salesperson who had been employed by the
5contractor. The form shall be submitted within 90 days after the
6home improvement salesperson ceases to be employed by the
7contractor.

8(c) A home improvement contractor who employs a registered
9home improvement salesperson to sell home improvement
10contracts, but who fails to report to the registrar pursuant to
11subdivision (a) or (b), is subject to disciplinary action by the
12registrar.

13(d) A home improvement contractor who employs a person to
14sell home improvement contracts while that person is not registered
15by the registrar as a home improvement salesperson as provided
16in this article, is subject to disciplinary action by the registrar.

17

SEC. 6.  

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

19

7155.5.  

Violations of any provisions of this chapter by a home
20improvement salesperson likewise constitute cause for disciplinary
21action against the contractor by whom he or she was employed at
22the time the violation occurred, whether or not the contractor had
23knowledge of or participated in the act or omission constituting
24violations of this chapter.

25

SEC. 7.  

Section 7156 of the Business and Professions Code is
26amended to read:

27

7156.  

It shall be a misdemeanor and a cause for disciplinary
28action to commit any of the following acts:

29(a) For any home improvement salesperson to fail to account
30for or to remit to his or her employing contractor any payment
31received in connection with any home improvement transaction
32or any other transaction involving a work of improvement.

33(b) For any person to use a contract form in connection with
34any home improvement transaction or any other transaction
35involving a work of improvement if the form fails to disclose the
36name of the contractor principal by whom he or she is employed.

37

SEC. 8.  

No reimbursement is required by this act pursuant to
38Section 6 of Article XIII B of the California Constitution because
39the only costs that may be incurred by a local agency or school
40district will be incurred because this act creates a new crime or
P7    1infraction, eliminates a crime or infraction, or changes the penalty
2for a crime or infraction, within the meaning of Section 17556 of
3the Government Code, or changes the definition of a crime within
4the meaning of Section 6 of Article XIII B of the California
5Constitution.



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