BILL ANALYSIS �
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|Hearing Date:June 11, 2012 |Bill No:AB |
| |2554 |
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SENATE COMMITTEE ON BUSINESS, PROFESSIONS
AND ECONOMIC DEVELOPMENT
Senator Curren D. Price, Jr., Chair
Bill No: AB 2554Author:Bill Berryhill
As Amended:March 27, 2012 Fiscal: No
SUBJECT: Contractors.
SUMMARY: Provides that the revocation of a license shall not deprive
the Contractors State License Board jurisdiction to proceed with
disciplinary proceedings against a licensee; makes technical updating
and conforming changes.
Existing law:
1)Licenses and regulates contractors by the Contractors State License
Board (CSLB) within the Department of Consumer Affairs (DCA) under
the Contractors State License Law. The registrar of contractors
(Registrar) is the executive officer of the CSLB.
2)Establishes a separate enforcement unit in the CSLB and requires the
unit to rigorously enforce the Contractors State License Law
prohibiting all forms of unlicensed activity. (Business and
Professions Code (BPC) � 7011.4 (a))
3)Provides that persons employed as enforcement representatives in the
enforcement unit and designated by the Director of DCA are not peace
officers, are not entitled to safety member retirement benefits, and
do not have the power of arrest. However, they may issue a written
notice to appear in court for misdemeanor violations of the
Contractors State License Law. (BPC � 7011.4 (b))
4)Specifies that the expiration, cancellation, forfeiture, or
suspension of a license by operation of law or by order or decision
of the Registrar or a court of law, or the voluntary surrender of a
license by a licensee, shall not deprive the Registrar of
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jurisdiction to proceed with any investigation of or action or
disciplinary proceeding against the license, or to render a decision
suspending or revoking the license. (BPC � 7106.5)
This bill:
1)Renames the CSLB's enforcement unit as a division, and makes
conforming changes.
2)In addition to expiration, cancellation, forfeiture, or suspension of
a license, as described above, further provides that the revocation
of a license shall not deprive the Registrar of jurisdiction to
proceed with an investigation, action or disciplinary proceeding
against the license, or to render a decision suspending or revoking
the license.
FISCAL EFFECT: None. This bill has not been keyed "fiscal" by
Legislative Counsel.
COMMENTS:
1.Purpose. This bill is sponsored by the Contractors State Licensing
Board (CSLB). According to the Author, this bill ensures that the
CSLB has authority to pursue an accusation when a license has been
revoked by operation of law.
The bill further changes the name of the CSLB's enforcement unit to
enforcement division.
The Author states "By not having the clear authority to file an
accusation when the license is revoked by operation of law, an
individual could evade/avoid discipline because the facts of the
grounds for the accusation were never established."
AB 2554 also includes an additional provision to amend Business and
Professions Code Section 7011.4, to provide all CSLB enforcement
representatives with the authority to issue a notice to appear for
misdemeanor violations of the Contractors State License Law.
2.Background. The CSLB is responsible for implementation and
enforcement of the Contractors State License Law; the laws and
regulations related to the licensure, practice and discipline of the
construction industry in California. All businesses and individuals
who construct or alter, or offer to construct or alter, any
building, highway, road, parking facility, railroad, excavation, or
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other structure in California must be licensed by the Board if the
total cost (labor and materials) of one or more contracts on the
project is $500 or more. The CSLB licenses approximately 310,000
contractors in 43 license classifications.
The current law authorizes the CSLB to proceed with an investigation of
a complaint even though the license has been expired, cancelled,
forfeited, or suspended by operation of law, or voluntarily
surrendered. However, the statute does not provide for pursuing an
accusation to revoke the license when the license has already been
revoked by operation of law.
Revoking a license by operation of law occurs when a licensee fails to
comply with a citation or arbitration award. The license is revoked
for a minimum of one year, to a maximum of five years. To reinstate
the license, the licensee must make restitution or comply with the
order of correction, pay civil penalties, and post a minimum
disciplinary bond in the amount of $15,000. Often, the amount of
restitution is minimal and the civil penalties cannot exceed $5,000.
An accusation is not a bare complaint. An accusation is a formal
allegation of wrongdoing that a regulatory agency files against a
licensee only after the case has been investigated by enforcement
staff. The accusation is a public written statement of charges CSLB
has filed with the Office of the Attorney General that specifies
statutes and rules a contractor or home improvement salesperson is
alleged to have violated; it is filed after an investigation by
enforcement staff of one or more complaints of egregious actions in
violation of the Contractors State License Law filed against a
licensee. It may result in a hearing to determine whether a
licensee has violated the law and whether the license should be
revoked, suspended, and/or placed under some type of restriction by
CSLB.
3.Changing Enforcement Unit to Enforcement Division. This bill would
change the name of the CSLB's enforcement unit to instead refer to
the enforcement division. According to the Sponsor, this
effectively allows all CSLB enforcement representatives (ERs), not
just those with a particular unit, the authority to issue a notice
to appear (NTA).
According to the CSLB, "Allowing all ERs to issue a NTA will enhance
CSLB's enforcement efforts, particularly in the area of workers'
compensation, by allowing additional investigators to partner with
the California Department of Insurance and the Premium Insurance
Fraud Task Force to combat unlicensed and uninsured practice. ERs
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will only receive this authority upon completion of appropriate
training."
4.Prior Legislation. SB 1694 (Wright, Chapter 413, Statutes of 1994)
removed the limitation that the CSLB enforcement unit operate as a
demonstration project only in Southern California.
AB 2279 (Eastin, Chapter 1363, Statutes of 1989) established the CSLB
enforcement unit as a demonstration project only in Southern
California.
5.Arguments in Support. The California Spa & Pool Industry Education
Council (SPEC) supports the bill arguing that a license revocation
by operation of law should not deprive the Registrar of the
jurisdiction to proceed with disciplinary proceedings against CSLB
licensees. SPEC further indicates that under current law, when a
license is revoked by operation of law, an individual could evade or
avoid discipline because the facts of the grounds for the accusation
were never formally established.
SUPPORT AND OPPOSITION:
Support:
Contractors State Licensing Board
California Spa & Pool Industry Education Council
Opposition:
None received as of June 6, 2012.
Consultant:G. V. Ayers