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 27,
2015
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|Author: |Monning |
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|Version: |April 20, 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
separately needs to register to work for each contractor; allows
a properly registered home improvement salesperson 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 home improvement
salesperson; requires reporting guidelines for a home
improvement salesperson 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) Provides that HIS registrations expire subject to board
determination. (BPC § 152.6)
3) Defines "Home improvement salesperson" (HIS) 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
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or furnishing of home improvement goods or services, or of
swimming pools, spas, or hot tubs. (BPC § 7152)
4) Provides that 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 a
registration issued by the Registrar for each of the home
improvement contractors by whom he or she is employed as a
HIS. (BPC § 7153)
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 HIS, 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 HIS 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 HIS 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) Requires a home improvement contractor to notify the
Registrar in writing about the pending employment of a
registered HIS.
6) Requires a home improvement contractor to notify the
Registrar when a registered HIS ceases to be employed by the
contractor.
7) Subjects a home improvement contractor to disciplinary action
if they fail to report employment information.
8) Provides that it is a misdemeanor and cause for disciplinary
action for any HIS 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.
9) 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
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
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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."
The California Fence Contractors , Flasher Barricade
Association , and Gallagher's Plumbing, Heating, and Air
Conditioning highlight that "this redundancy within the
current law is costing these companies and their new
salespeople literally thousands of dollars in lost revenue as
they cannot legally go to work until their registration
application is processed through the CSLB?All of this can and
will be solved simply by approving SB 561 (Monning)."
According to the California Solar Energy Industry
Association , "As the solar industry ramps up our work to help
the state meet its clean energy goals, it is imperative that
we reduce soft costs wherever and whenever we can. The
current delays in hiring and employing salespersons is adding
to the cost of going solar. Streamlining and modernizing the
process, while maintaining critically important consumer
protections, is a significant step in the right direction of
lowering the cost of solar power for all California
consumers."
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SUPPORT AND OPPOSITION:
Support:
Contractors State License Board (Sponsor)
California Fence Contractors
California Solar Energy Industry Association (CALSEIA)
Flasher Barricade Association
Gallagher's Plumbing, Heating, and Air Conditioning.
Opposition: None on file as of April 21, 2015.
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