BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 865|
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THIRD READING
Bill No: SB 865
Author: Negrete McLeod (D)
Amended: As introduced
Vote: 21
SENATE BUSINESS, PROF. & ECON. DEV. COMMITTEE : 7-0, 4/4/11
AYES: Price, Emmerson, Correa, Hernandez, Vargas, Walters,
Wyland
NO VOTE RECORDED: Corbett, Negrete McLeod
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Contractors: expertise: legal representation
SOURCE : Contractors State License Board
DIGEST : This bill requires the Contractors State License
Board (CSLB) to provide legal representation to any person
hired to provide expertise in a licensing or disciplinary
matter when, as a result of providing that expertise, that
person is named as a defendant in a civil action, and
requires the CSLB to indemnify the expert for any judgment
rendered against him/her.
ANALYSIS :
Existing law:
1. Requires a board under the Business and Professions
Code, to provide legal representation to any person
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hired or under contract who provides expertise to the
board in the evaluation of an applicant or the conduct
of a licensee when that person is named as a defendant
in a civil action arising out of the evaluation or any
opinions rendered, statements made, or testimony given
to the board.
A. Provides that the board is not liable for any
judgment rendered against that person.
B. Requires the Attorney General to be utilized in
the action and his/her services charged to the board.
2. Licenses and regulates more than 300,000 contractors
under the Contractors State License Law (Contractors
Law) by the CSLB within the Department of Consumer
Affairs.
3. Under the Contractors Law, authorizes CSLB to contract
with professionals whose skills or expertise are
required to aid in the investigation or prosecution of a
licensee, registrant, applicant for a license or
registration, or those subject to licensure or
registration by CSLB.
4. Provides for the indemnification of a public employee or
former employee of a public entity against any claim or
action for an injury arising out of an act or omission
occurring within the scope of that public employment, as
specified, and provides that the public entity shall pay
any judgment based thereon or any compromise or
settlement of the claim or action to which the public
entity has agreed.
This bill:
1. Requires the CSLB to provide legal representation to any
person hired to provide expertise to the CSLB in the
evaluation of the conduct of a licensee, registrant, or
applicant when, as a result of providing that expertise,
that person is named as a defendant in a civil action.
2. Requires the Attorney General to be utilized in the
defense of the expert and his/her services charged to
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the CSLB.
3. Requires the CSLB to indemnify the expert for any
judgment rendered against him/her.
4. Provides that the right of defense and indemnification
shall be the same as, and no greater than, the right
provided to a public employee as specified within the
Government Code.
Background
The CSLB states that when investigating consumer
complaints, the Board may ask a member of its Industry
Expert Program to inspect a project and render opinions on
specific items of complaint. Such persons provide expert
opinion and testimony about specific complaint items and
accepted trade standards. Industry experts participate in
complaint investigations, mandatory arbitration, voluntary
arbitration, on-site negotiation, administrative hearings
and license examination development.
CSLB's Industry Expert Program involves a statewide pool of
licensed tradespeople which provides a variety of essential
services. In investigating consumer complaints, the CSLB's
enforcement personnel sometimes uses trained members of its
Industry Expert Program to inspect projects and render
opinions on specific items involved in the complaint.
These industry experts are either appropriately licensed or
registered professionals such as contractors, engineers,
architects, landscape architects, geologists, and
accountants, or manufacturer representatives with skills
and expertise essential to specific investigations or
criminal prosecutions.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 5/2/11)
Contractors State License Board (source)
California Chapter of the American Fence Association
California Fence Contractors Association
California Professional Association of Specialty
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Contractors
Engineering Contractors Association
Flasher Barricade Association
Marin Builders Association
OPPOSITION : (Verified 5/2/11)
Department of Finance
ARGUMENTS IN SUPPORT : The CSLB argues that the bill is
needed so that industry experts are not burdened with legal
costs in the event that an enforcement case they
participate in is the subject of a lawsuit.
The California Chapter of the American Fence Association,
California Fence Contractors Association, Engineering
Contractors Association, Flasher Barricade Association, and
Marin Builders Association state that many of their members
provide services to the CSLB as industry experts, and that
potential exposure under the status quo is so great that
few if any contractors will ever want to serve as industry
experts in the future without receiving indemnification.
ARGUMENTS IN OPPOSITION : The Department of Finance is
opposed on the provisions of this bill for the following
reasons:
1. The requirement to provide indemnification without a
statutory limit is unconstitutional.
2. This bill could result in potentially significant
unfunded costs to the CSLB for the Attorney General's
representation and the cost of any judgment against an
industry
CTW:mw 5/2/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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