BILL ANALYSIS �
AB 2219
Page 1
ASSEMBLY THIRD READING
AB 2219 (Knight)
As Amended March 27, 2012
Majority vote
BUSINESS & PROFESSIONS 9-0 INSURANCE
13-0
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|Ayes:|Hayashi, Bill Berryhill, |Ayes:|Solorio, Hagman, |
| |Allen, Butler, Eng, | |Bradford, |
| |Hagman, Hill, Ma, Smyth | |Charles Calderon, Carter, |
| | | |Feuer, |
| | | |Beth Gaines, Hayashi, |
| | | |Miller, Olsen, Skinner, |
| | | |Torres, Wieckowski |
|-----+--------------------------+-----+--------------------------|
| | | | |
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APPROPRIATIONS 17-0
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|Ayes:|Fuentes, Harkey, | | |
| |Blumenfield, Bradford, | | |
| |Charles Calderon, Campos, | | |
| |Davis, Donnelly, Gatto, | | |
| |Ammiano, Hill, Lara, | | |
| |Mitchell, Nielsen, Norby, | | |
| |Solorio, Wagner | | |
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SUMMARY : Eliminates the sunset date on existing law requiring
roofing contractors who hold a C-39 classification to maintain
workers' compensation insurance, whether or not they have
employees, and makes additional changes to law regarding C-39
contractors. Specifically, this bill :
1)Requires the Contractors' State License Board's (CSLB)
Registrar of Contractors (Registrar) to remove the C-39
classification from any contractor's license that, on January
1, 2013, is active and includes a C-39 classification in
addition to any other classification, unless a valid
certification of workers' compensation insurance or
certification of self-insurance is received by the Registrar.
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2)Requires automatic suspension of a license for any CSLB
licensee whose license, after January 1, 2013, is active and
has had the C-39 classification removed and who is found to
have employees and to lack required workers' compensation
coverage.
3)Requires annual payroll audits for C-39 roofing contractors,
which are performed by their insurers, to include an in-person
visit to the place of business of the contractor to verify
whether the number of employees reported by the contractor is
accurate.
4)Requires statistical data on contractors holding C-39
licenses, which is compiled by the Insurance Commissioner
(Commissioner), to include the number of employers, total
payroll, total losses, and the losses per $100 of payroll by
the employers' annual payroll at certain intervals, as
specified.
5)Deletes the sunset date of January 1, 2013, on current
provisions of law amended by 1) through 4), above.
6)Makes conforming changes and deletes obsolete provisions.
EXISTING LAW :
1)Licenses and regulates contractors, including C-39 roofing
classification contractors, under the Contractors' State
License Law (CSLL) by the CSLB within the Department of
Consumer Affairs (DCA). The Registrar is the CSLB's executive
officer.
2)Requires, under the CSLL, every licensed contractor to have on
file at all times with the CSLB a current and valid
certificate of workers' compensation insurance or
certification of self-insurance, as specified. This
requirement does not apply to a licensee who does not hold a
C-39 license and who files a statement certifying that he or
she has no employees and is not required to provide for
workers' compensation insurance coverage.
3)Requires the Registrar to remove the C-39 classification from
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any license that, on January 1, 2011, is active and includes a
C-39 classification in addition to any other classification
unless a valid certification of workers' compensation
insurance or certification of self-insurance is received by
the registrar. Requires automatic suspension of a license for
any licensee whose license, after January 1, 2011, is active
and has had the C-39 classification removed and who is found
to have employees and to lack required workers' compensation
coverage. These provisions sunset January 1, 2013.
4)Requires a workers' compensation insurer who issues a policy
to a contractor with a C-39 classification to perform an
annual payroll audit for the contractor, and allows the
insurer to place a surcharge on the policy holder to recoup
reasonable costs of the audit. This provision sunsets January
1, 2013.
5)Requires the Commissioner, through the Workers' Compensation
Insurance Rating Bureau (WCIRB), to annually compile
statistical data on contractors holding C-39 licenses, as
specified. This provision sunsets January 1, 2013.
FISCAL EFFECT : According to Assembly Appropriations Committee:
1)A significant portion of the 4,800 active licensed roofing
contractors are insured by the State Compensation Insurance
Fund (SCIF). Requiring SCIF auditors to conduct annual
in-person audits on all of these contractors would likely cost
in excess of $500,000 per year. The bill provides the
insurers, including SCIF, with the authority to charge fees to
recoup their costs.
2)Minor and absorbable costs for the Contractors' State License
Board (CSLB), Department of Industrial Relations and CDI.
COMMENTS : According to the author, "This measure removes the
sunset date?on a program that requires all Roofing (C-39)
contractors, regardless of whether or not they have employees,
maintain current workers compensation. It also specifies that
the mandatory annual review of C-39 contractor's books will
include an in-person visit to the place of business of the
roofing contractor.
"Eliminating the sunset on this program will ensure a
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comprehensive approach to eliminating fraud in the roofing
industry, which increases system efficiency, protects property
owners and roofing employees, while also bringing down costs for
California's honest roofing contractors. Furthermore, annually
verifying reported payroll numbers through in-person visits (as
opposed to simply a phone call) by the insurer during the audit
period will further deter fraudulent claims, and will provide
insurers with a more accurate picture of the size of roofing
operations which they are insuring."
Analysis Prepared by : Angela Mapp / B.,P. & C.P. / (916)
319-3301
FN: 0003890