BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 561 (Monning) - Home improvement salespersons
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|Version: May 12, 2015 |Policy Vote: B., P. & E.D. 9 - |
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|Urgency: No |Mandate: Yes |
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|Hearing Date: May 18, 2015 |Consultant: Mark McKenzie |
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This bill does not meet the criteria for referral to the
Suspense File.
Bill
Summary: SB 561 make several changes to the laws governing home
improvement salespersons (HIS) that are licensed and regulated
by the Contractors' State License Board (CSLB). Specifically,
the bill would eliminate a requirement that a HIS be registered
with CSLB for each licensed contractor by whom the HIS is
employed. The bill would instead authorize the HIS to have a
single CSLB registration, and require a licensed contractor to
notify CSLB when he or she employs a HIS.
Fiscal
Impact:
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One-time CSLB programming costs in the range of $110,000 to
$130,000 in 2015-16 to provide for the changes to HIS
registration and contractor notification requirements.
(Contractors License Fund)
Estimated CSLB costs of up to $50,000 in 2016-17 to adopt
regulations regarding electronic submission of HIS
registration applications and contractor notifications.
(Contractors License Fund) CSLB indicates it can regulatory
absorb costs within existing resources.
Background: Existing law, the Contractors State License Law, provides for
the licensure and regulation of more than 300,000 contractors
the CSLB. A "home improvement salesperson" is defined 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. 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 CSLB
registration for each of the home improvement contractors by
whom he or she is employed. A home improvement contractor who
employs a person to sell home improvement contracts while that
person is not registered with CSLB is subject to disciplinary
action. Existing law also authorizes a HIS registration to be
renewed at any time within 3 years after its expiration, if the
applicant pays the renewal fee and a $25 delinquent renewal
penalty.
According to CSLB, there are currently approximately 11,170
active HIS registrants, nearly 5,500 expired registrants, and
almost 85,000 invalid registrants. In the 2013-14 fiscal year,
CSLB received approximately 800 HIS applications a month, a 40%
increase over the previous three years. This significant
increase has led to a backlog of applications and processing
delays.
Proposed Law:
SB 561 would make the following changes to the HIS statutes:
Delete the requirement that a HIS have a registration for each
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contractor by whom he or she is employed, and instead require
the HIS to register with CSLB in order to engage in the
business of a HIS.
Specify that a HIS registration expires two years from the
last day of the month in which the registration was issued, or
two years from the date on which a renewed registration last
expired.
Require a licensed home improvement contractor to notify the
CSLB registrar about the employment of a registered HIS, as
specified, and to also notify the CSLB when a registered HIS
ceases to be employed by the contractor.
Specify that a contractor who employs a registered HIS, but
fails to comply with the CSLB notification requirements, is
subject to disciplinary action.
Authorize CSLB to implement a system, through regulations,
that provides for the electronic transmission of an initial or
renewal application for HIS registration, and for transmission
of contractor notices.
Staff
Comments: This bill would require CSLB to make changes to the
current IT system to account for the issuance of a single HIS
registration and to track businesses with that registration.
The work would also entail consolidating and converting existing
HIS registrations with multiple expiration dates to a single
registration number. Total programming and IT costs are
projected to be in the range of $108,000 to $129,000 in the
2015-16 fiscal year. Staff estimates that CSLB workload to
develop and adopt regulations to provide for electronic
submission of HIS registration applications and contractor
notifications regarding HIS employment could result in
additional costs of up to $50,000 in the 2016-17 fiscal year, to
the extent CSLB opts to implement the electronic system.
Providing for electronic transmission could also drive
additional IT workload costs.
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