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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          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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