BILL ANALYSIS
AB 880
Page 1
Date of Hearing: May 20, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 880 (Niello) - As Amended: May 5, 2009
Policy Committee: Business and
Professions Vote: 11 - 0
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill requires a person who constructs a "prefabricated
panelized home" (PPH) to obtain a contractor's license from the
Contractor's State License Board (CSLB). Specifically, this
bill:
1)Defines a PPH in the Health and Safety Code as a structure
that meets all of the following requirements:
a) Is transportable in one or more sections or panels,
including exterior siding.
b) Is eight feet or more in width, or 40 feet or more in
length.
c) Is built to be permanently attached to a piece of real
property.
d) Is designed to be used as a single-family dwelling with
or without a foundation when connected to the required
utilities.
2)Amends the definition of "contractor" to include any person
engaged in the business of the construction, installation,
alteration, repair, or preparation for moving or a PPH.
3)States that "contractor" does not include a seller of a PPH
who holds a retail manufactured home or mobilehome dealer's
license if the installation of the PPH is performed by a
contractor.
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4)Requires a PPH structure to comply with the standards
established under the National Manufactured Housing
Construction and Safety Standards Act.
FISCAL EFFECT
1)One-time costs for the Department of Housing and Community
Development (HCD) between $300,000 and $400,000 to develop the
complex regulation package necessary to regulate this
industry.
2)One-time costs for HCD between $100,000 and $150,000 to modify
existing licensing databases and procedures to include PPHs.
3)Unknown, likely significant, on-going costs of hundreds of
thousands of dollars per year for HCD for enforcement
activities related to monitoring the PPH industry.
4)One-time costs of $100,000 for the Contractors State Licensing
Board (CSLB) within the Department of Consumer Affairs (DCA)
to conduct an occupational analysis and create a new licensing
exam for individuals involved with constructing, altering, or
repairing PPHs.
5)Unknown, on-going enforcement costs related to CSLB licensing
and investigating PPH licensees. Those costs may be offset by
increased licensing revenue.
COMMENTS
1)Purpose of the bill . According to the author, the purpose of
the bill is to define an industry that is currently not
specifically recognized in California code. He notes that
similar industries are recognized and defined, such as
manufactured housing, but the PPH process is not included in
the definition because it does not include a permanent chassis
or air conditioning, heating, or plumbing that is installed
prior to delivery. Because there is no codified definition,
the author contends that purchasers of such housing are
vulnerable to abuse by unscrupulous businesses who take
advantage of the loophole. This bill is intended to clarify
what constitutes a PPH, as well as stating conditions under
which a seller of a PPH is not required to have a contractor's
license; namely, that the company possess a retail
manufactured housing license as well as an assurance that the
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final assembly be performed by a licensed contractor.
2)Background . There is no clear entity that regulates the sale
of PPHs. The Department of Housing and Community Development
(HCD) regulates manufactured homes and mobilehomes, which are
different because they are pre-constructed, inspected, and
delivered intact to the home site. In addition, manufactured
homes and mobilehomes also include fire safety, plumbing,
heat, air conditioning components that are installed prior to
sale and delivery. Current law requires a licensed contractor
to install a manufactured home and mobilehome, but not a PPH.
PPHs are commonly sold throughout the country.
Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081