BILL ANALYSIS
AB 1074
Page 1
Date of Hearing: April 14, 2009
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Mary Hayashi, Chair
AB 1074 (Conway) - As Introduced: February 27, 2009
SUBJECT : Contractors: fraudulent license numbers.
SUMMARY : Provides that it is a crime if a person willfully and
intentionally uses, with the intent to defraud, any number that
does not correspond to the number on a currently valid
contractor's license held by that person.
EXISTING LAW :
1)Provides that it is a crime if a person willfully and
intentionally uses, with the intent to defraud, a contractor's
license number that does not correspond to the number on a
currently valid contractor's license held by that person.
2)Deems that a violation is punishable by a fine not exceeding
ten thousand ($10,000), or by imprisonment in state prison, or
in county jail for not more than one year, or by both that
fine and imprisonment.
3)Finds that if, upon investigation, the registrar has probable
cause to believe that an unlicensed individual is in violation
of this section, the registrar of the Contractor's State
License Board (CSLB) may issue a citation.
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of the bill . According to the author's office, "Some
contractors who do not have a license continue to do business
under another contractor's number or a completely made-up
number." The author's office further maintains that under
current law, "It is illegal to falsely use an existing
contractor's license number when it legally belongs to another.
However, the issue of a contractor making-up a number is not
mentioned. Home and business owners are being taken advantage
of through this loophole. This would make it clear that any
person who claims to have a contractor's license number and does
not have one issued to them by the state would be in violation
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of the law."
According to the sponsor, the CSLB, "Contractor fraud, most of
which involves unlicensed contractors, consistently ranks in the
top ten lists of consumer complaints both nationally and
statewide. According to the U.S. Office of Consumer Affairs,
unscrupulous contractors defraud consumers of more than $100
billion annually."
Background . The CSLB issues licenses to contractors who meet
safety and experience requirements within their field. There
are more than 316,000 licensed contractors in the state, in 43
different licensing classifications. In addition to educating
consumers about contractors and construction law, the CSLB
administers examinations to test prospective licensees, issues
licenses, investigates complaints against licensed and
unlicensed contractors, issues citations, suspends or revokes
licenses, and seeks administrative, criminal, and civil
sanctions against violators. All projects that exceed five
hundred dollars ($500) and are not performed by a homeowner for
his or her self, are required to be performed by a state
licensed contractor.
Support . According to the sponsor, "As currently written,
Business and Professions (B&P) Code Section 7027.3 provides that
it is a felony to use a contractor's license number of another
person if the perpetrator's intent in using the number is to
defraud. However, the CSLB regularly investigates cases wherein
individuals use a number of any unspecified origin, such as a
business license number, as a means to take advantage of
consumers who unwittingly believe that the number represents a
contractor's license (number). The application of the felony
penalty under B&P Code Section 7027.3 should not be restricted
to those instances where an actual contractor's license number
was used. Rather, the provisions of the section should be
expanded to include those instances where a non-licensee
defrauds a consumer by using an arbitrary number to represent a
contractor's license (number)."
According to the California Landscape Contractors Association,
"AB 1074 gives the CSLB an additional tool to fight unlicensed
contracting activity. It addresses an increasingly common
problem where persons engaged in unlicensed contracting activity
use a random six-digit number or a local business license number
in advertisements, business cards, or on their vehicles in order
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to trick consumers into believing that the number represents a
valid contractor's license number?
REGISTERED SUPPORT / OPPOSITION :
Support
Contractor's State License Board (CSLB) (sponsor)
California Chapter of the American Fence Contractors'
Association
California Fence Contractors' Association
California Landscape Contractors Association
Engineering Contractors' Association
Flasher/Barricade Association
Golden State Builders Exchange
Law Offices of Adbulaziz, Grossbart, & Rudman
Marin Builders' Association
Opposition
None on file.
Analysis Prepared by : Joanna Gin / B. & P. / (916) 319-3301