BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 561|
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THIRD READING
Bill No: SB 561
Author: Monning (D), et al.
Amended: 5/12/15
Vote: 21
SENATE BUS, PROF. & ECON. DEV. COMMITTEE: 9-0, 4/27/15
AYES: Hill, Bates, Berryhill, Block, Galgiani, Hernandez,
Jackson, Mendoza, Wieckowski
SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/18/15
AYES: Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen
SUBJECT: Home improvement salespersons
SOURCE: Author
DIGEST: This bill eliminates the requirement that a home
improvement salesperson (HIS) be registered with the Contractors
State License Board (CSLB) for each licensed contractor by whom
the HIS is employed; authorizes the HIS to have a single CSLB
registration and requires a licensed contractor to notify CSLB
when he or she employs an HIS; authorizes 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.
ANALYSIS:
Existing law:
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1) Provides for the licensure and regulation of more than
300,000 contractors under the Contractors State License Law
(Contractors Law) by the 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" 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)
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 an
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
three 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 an HIS, is subject to
disciplinary action. (BPC § 7154)
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This bill:
1) Deletes the requirement that an HIS have a registration for
each contractor by whom he or she is employed and instead
requires the HIS to register with CSLB in order to engage in
the business of an HIS.
2) Specifies that an 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.
3) Requires 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.
4) Specifies that a contractor who employs a registered HIS,
but fails to comply with the CSLB notification requirements,
is subject to disciplinary action.
5) Authorizes 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.
Background
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.
According to CSLB, there are currently approximately 11,170
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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.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: Yes
According to the Senate Appropriations Committee:
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 absorb
regulatory costs within existing resources.
SUPPORT: (Verified5/19/15)
Contractors State License Board (source)
California Fence Contractors
California Solar Energy Industry Association
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Flasher Barricade Association
Gallagher's Plumbing, Heating, and Air Conditioning
OPPOSITION: (Verified5/19/15)
None received
ARGUMENTS IN SUPPORT: According to the Contractors State
License Board (source), "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."
Prepared by:Mark Mendoza / B., P. & E.D. / (916) 651-1868
5/20/15 16:22:26
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