BILL ANALYSIS Ó
SENATE COMMITTEE ON
BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT
Senator Jerry Hill, Chair
2015 - 2016 Regular
Bill No: SB 561 Hearing Date: April 13,
2015
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|Author: |Monning |
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|Version: |February 26, 2015 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Mark Mendoza |
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Subject: Home improvement salespersons.
SUMMARY: Eliminates the requirement that a home improvement salesperson
(HIS) separately needs to register to work for each contractor;
allows a properly registered HIS to utilize a single, individual
registration with one or more licensed contractors; requires a
contractor to notify the Contractors State License Board when
employing a HIS; requires reporting guidelines for a HIS and
home improvement contractors.
Existing law:
1) Provides for the licensure and regulation of more than
300,000 contractors under the Contractors State License Law
(Contractors Law) by the Contractors State License Board
(CSLB) within the Department of Consumer Affairs (DCA). The
CSLB is under the direction of the registrar of contractors
(Registrar). (Business and Professions Code (BPC) § 7000 et
seq.)
2) Defines "Home improvement salesperson" as a person employed
by a home improvement contractor licensed under the
Contractors Law 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. (BPC § 7152)
3) Provides that it is a misdemeanor for any person to engage in
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the occupation of salesperson for one or more home
improvement contractors within this state without having a
registration issued by the Registrar for each of the home
improvement contractors by whom he or she is employed as a
home improvement salesperson.
(BPC § 7153)
4) Provides that home improvement salesperson registrations
expire subject to board determination. (BPC § 152.6)
5) Provides that an application for renewal of registration is
delinquent if the application is not postmarked by the date
on which the registration would otherwise expire. (BPC §
7153.3(a))
6) 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.
(BPC § 7153.3(a))
7) Provides that 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. (BPC § 7154)
This bill:
1) Allows a HIS to register once and utilize a single,
individual registration with one or more licensed
contractors.
2) Provides that it is a misdemeanor 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.
3) Defines that 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 a, at the time of
the sales transaction, a current and valid home improvement
salesperson registration issued by the Registrar.
4) Provides that these registrations expire 2 years from the
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last day of the month in which the registration was issued,
or 2 years from the date on which the renewed registration
last expired.
5) Redefines the delinquent renewal penalty as equal to 50% of
the renewal fee.
6) Requires a home improvement contractor to notify the
Registrar in writing about the pending employment of a
registered home improvement salesperson.
7) Requires a home improvement contractor to notify the
Registrar when a registered home improvement salesperson
ceases to be employed by the contractor.
8) Subjects a home improvement contractor to disciplinary action
if they fail to report employment information.
9) Provides that it is a misdemeanor and cause for disciplinary
action for any home improvement salesperson who fails 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.
10)Makes other technical and conforming changes.
FISCAL
EFFECT: Unknown. This bill has been keyed "fiscal" by
Legislative Counsel.
COMMENTS:
1. Purpose. This bill is sponsored by the Contractors State
License Board (CSLB) . According to the Author, "Under
existing law, a HIS is required to register separately with
the CSLB to work for each individual contractor. However, a
HIS often works for more than one contractor, which
necessitates multiple registrations. The CSLB currently has
approximately 11,300 active registrants and more than 85,000
invalid registrants. The large number of invalid
registrations is due in significant part to salespersons
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registering with a new employer."
2. Backlog in Registering HIS. Last year, the California Solar
Energy Industries Association sent a letter to the Governor
that was forwarded to the CSLB for response, expressing
concern about the amount of time it took to register new HIS
program participants and the impact on the industry due to
the wait times of 4-5 weeks for the CSLB to approve a new
registration.
In the 2013-14 fiscal year CSLB received approximately 800
HIS applications a month, an increase of 40% over the prior 3
years. The number of applications received per month has
continued to grow since then while the number of staff to
process these requests has not increased, thus the processing
time for requests has increased. At the time the letter was
received in the Governor's office, CSLB was already reviewing
the HIS program and the new application processing delays.
3. Arguments in Support. According to the Contractors State
License Board ,
"With this change, the licensed contractor that employs a HIS
would be required to notify CSLB about the pending employment
of any registered HIS, prior to him or her beginning work for
the contractor. Currently, CSLB has approximately 11,170
active HIS registrants, nearly 5,500 expired registrants, and
almost 85,000 invalid registrants. The change proposed by
this bill will improve the current registration process and
provide increased flexibility for HIS registrants."
SUPPORT AND OPPOSITION:
Support:
Contractors State License Board (Sponsor)
Opposition:
None on file as of April 6, 2015.
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