BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 561|
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UNFINISHED BUSINESS
Bill No: SB 561
Author: Monning (D), et al.
Amended: 6/17/15
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
SENATE FLOOR: 38-0, 5/22/15
AYES: Allen, Anderson, Bates, Beall, Berryhill, Block,
Cannella, De León, Gaines, Galgiani, Hall, Hancock, Hernandez,
Hertzberg, Hill, Hueso, Huff, Jackson, Lara, Leno, Leyva, Liu,
McGuire, Mendoza, Mitchell, Monning, Moorlach, Morrell,
Nguyen, Nielsen, Pan, Pavley, Roth, Runner, Stone, Vidak,
Wieckowski, Wolk
NO VOTE RECORDED: Fuller
ASSEMBLY FLOOR: 79-0, 7/16/15 (Consent) - See last page for
vote
SUBJECT: Contractors: home improvement salespersons
SOURCE: Author
DIGEST: This bill eliminates the requirement that a home
improvement salesperson (HIS) register separately with the
Contractors State License Board (CSLB) for each home improvement
contractor he or she works for, and instead allows an HIS to
utilize a single registration with one or more licensed
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Page 2
contractors; and authorizes the CSLB to adopt regulations
providing for the electronic transmission of initial and renewal
applications for HIS registration and for a contractor license,
including the acceptance of a digital or electronic signature.
Assembly Amendments (1) authorize CSLB to implement a system,
through regulations, that provides for the electronic
transmission of a contractor's license application, as
specified, and acceptance of a digital or electronic signature
as part of the filing of those applications; and (2) make
technical changes to the definition of a "home improvement
salesperson".
ANALYSIS:
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 CSLB within the Department of
Consumer Affairs. 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
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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)
This bill:
1) Authorizes CSLB to implement a system, through regulations,
that provides for the electronic transmission of a
contractor's license application, as specified, and
acceptance of a digital or electronic signature as part of
the filing of those applications.
2) Makes technical changes to the definition of a "home
improvement salesperson".
3) 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
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the business of an HIS.
4) 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.
5) 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.
6) Specifies that a contractor who employs a registered HIS,
but fails to comply with the CSLB notification requirements,
is subject to disciplinary action.
7) 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.
8) Makes other technical and clarifying changes.
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
active HIS registrants, nearly 5,500 expired registrants, and
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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 Assembly Appropriations Committee, this bill
creates one-time costs to the Contractors License Fund for CSLB
programming and IT 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. This bill will also
result in minor and absorbable costs to CSLB in 2016-17 to adopt
regulations.
SUPPORT: (Verified8/4/15)
Contractors State License Board (source)
California Fence Contractors
California Solar Energy Industries Association
Flasher Barricade Association
Gallagher's Plumbing, Heating, and Air Conditioning
OPPOSITION: (Verified8/4/15)
None received
ARGUMENTS IN SUPPORT: Supporters believe that the change
proposed by this bill will improve the current registration
process and provide increased flexibility for HIS registrants.
ASSEMBLY FLOOR: 79-0, 7/16/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang,
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Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle,
Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina
Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gray,
Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones,
Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low,
Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin,
Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea,
Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago,
Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber,
Wilk, Williams, Wood, Atkins
NO VOTE RECORDED: Gordon
Prepared by:Mark Mendoza / B., P. & E.D. / (916) 651-1868
8/13/15 13:07:52
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