BILL ANALYSIS �
AB 2237
Page 1
Date of Hearing: May 16, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 2237 (Monning) - As Amended: April 9, 2012
Policy Committee: Business and
Professions Vote: 8 - 1
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill broadens the definition of consultant for purposes of
the definition of a licensed contractor to include a person who,
with respect to a home improvement contract, provides a bid,
arranges for and sets up work schedules, and maintains oversight
of a construction project.
FISCAL EFFECT
Minor increase in revenue for the Contractors State License
Board (CSLB) due to requiring additional persons to obtain
licenses. This revenue would offset the minor and absorbable
workload associated with increased licensing and enforcement.
COMMENTS
1)Purpose . This bill is in response to a 2009 court case, The
Fifth Day v. Bolotin , where the appellate court found that
someone acting in the capacity of a construction manager is
not required to be licensed as a contractor. This bill would
clearly state that someone acting as a construction manager
for home improvement projects is indeed a contractor and would
need to be licensed as such.
2)Background . The CSLB licenses and regulates California's
construction industry. Anyone performing construction work in
California that totals $500 dollars or more in labor and
materials must be licensed by CSLB. There are about 300,000
licensed contractors in the state, in 43 different licensing
classifications.
AB 2237
Page 2
According to CSLB, the sponsors of the bill, unlicensed
contracting is part of California's estimated annual $60 to
$140 billion dollar underground economy. It is illegal for an
unlicensed person to perform contracting work on any project
valued at $500 or more in labor and materials. Besides being
illegal, unlicensed contractors lack accountability and have a
high rate of involvement in construction scams. They also are
unfair competition for licensed contractors who operate with
bonds, insurance and other responsible business practices.
Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081