BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
AB 2237 (Monning) - Contractors: definition.
Amended: April 9, 2012 Policy Vote: B,P&ED 8-0
Urgency: No Mandate: No
Hearing Date: July 2, 2012 Consultant: Bob Franzoia
This bill does not meet the criteria for referral to the
Suspense File.
Bill Summary: AB 2237 would define the term consultant for
purposes of the definition of a contractor to include a person
who provides a bid, or who arranges for and sets up work
schedules and maintains oversight of a construction project,
with respect to a home improvement contract. Because
consultants who provide the above described services would be
required to pay license fees which are deposited into the
Contractors' License Fund, a continuously appropriated fund,
this bill would make an appropriation.
Fiscal Impact: Unknown, likely minor annual increase in penalty
revenue to the Contractors' License Fund.
Unknown, likely minor increased workload associated with
increased licensing and enforcement.
Background: The Contractors' State License Board (board)
protects consumers by licensing and regulating California's
construction industry. There are about 300,000 licensed
contractors in the state, in 43 different licensing
classifications. In addition to educating consumers about
contractors and construction law, board activities include
administering examinations to test prospective licensees,
issuing licenses, investigating complaints against licensed and
unlicensed contractors, issuing citations, suspending or
revoking licenses, and seeking administrative, criminal, and
civil sanctions against violators.
As noted in the policy committee analysis, in 2008, the board
adopted Precedential Decision No. 1, establishing that someone
acting in the capacity of a swimming pool consultant is a
contractor. In 2009, the Appellate Court decision The Fifth Day
v. Bolotin found that someone acting in the capacity of a
AB 2237 (Monning)
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construction manager is not required to be licensed as a
contractor. The Fifth Day v. Bolotin decision undermined the
board's Precedential Decision, and the board thinks the law
should be amended to clarify that a person performing these
services is required to be licensed as a contractor and comply
with the law.
The board further indicates that recently, an unlicensed
contractor facing criminal prosecution for violating Business &
Professions Code 7028 (engaging in business of a contractor
without a license) claimed to have been a project coordinator
and asserted exemption from licensure, citing The Fifth Day v.
Bolotin decision. Although the unlicensed contractor was not
overseeing a contract between the project owner and a general
contractor as in the Fifth Day v. Bolotin case, the defense
strategy was nonetheless of concern to the prosecutor and
ultimately resulted in a plea bargain dismissing the charge,
according to the board.
Proposed Law: This bill would define consultant for the purposes
of the definition of a contractor to include a person who meets
either of the following criteria as it relates to work performed
pursuant to a home improvement contract:
(1) Provides or oversees a bid for a construction project.
(2) Arranges for and sets up work schedules for contractors and
subcontractors and maintains oversight of a construction
project.