Amended in Assembly January 21, 2014

Amended in Assembly June 5, 2013

Amended in Senate April 22, 2013

Amended in Senate April 1, 2013

Senate Bill No. 263

Introduced by Senator Monning

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(Principal coauthor: Assembly Member Achadjian)

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February 13, 2013

An act to amend begin delete Section 7028 of the Business and Professions Code, relating to contractors end delete begin insert Section 1071 of the Labor Code, relating to employment end insert .

LEGISLATIVE COUNSEL’S DIGEST

SB 263, as amended, Monning. begin delete Contractors: unlicensed activity. end delete begin insert Private employment: public transit employees. end insert

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Existing law requires a local government agency to give a 10% preference to any bidder on a service contract to provide public transit services who agrees to retain employees of the prior contractor or subcontractor for a period of not less than 90 days, as specified.

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This bill would expand these provisions to require a state agency to also give a 10% preference to any bidder under these provisions.

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The Contractors’ State License Law provides for the licensure and regulation of contractors by the Contractors’ State License Board within the Department of Consumer Affairs.

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The Contractors’ State License Law makes it a misdemeanor for a person to engage in the business or act in the capacity of a contractor without having a license, unless the person is particularly exempted.

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This bill, instead, would provide that, unless exempted, it is a misdemeanor for a person to engage in the business or act in the capacity of a contractor if the person either has never been licensed pursuant to the Contractors’ State License Law, or the person was a licensee, but performed acts covered by the law under a license that was under suspension for failure to pay a civil penalty or comply with an order of correction, or failure to resolve all outstanding final liabilities, as specified.

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Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

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begin insert Section 1071 of the end insert begin insert Labor Code end insert begin insert is amended to
read: end insert

1071.  

The following definitions apply throughout this chapter:

(a) “Awarding authority” means any begin insert state or end insert local government
agency, including begin insert , but not limited to, end insert any city, county, special
district, transit district, joint powers authority, or nonprofit
corporation that awards or otherwise enters into contracts for public
transit services performed within the begin delete State of California end delete begin insert state end insert .

(b) “Bidder” means any person who submits a bid to an
awarding agency for a public transit service contract or subcontract.

(c) “Contractor” means any person who enters into a public
transit service contract with an awarding authority.

(d) “Employee” means any person who works for a contractor
or subcontractor under a contract. “Employee” does not include
an executive, administrative, or professional employee exempt
from the payment of overtime compensation within the meaning
of subdivision (a) of Section 515 or any person who is not an
“employee” as defined under Section 2(3) of the National Labor
Relations Act (29 U.S.C. Sec. 152(3)).

(e) “Person” means any individual, proprietorship, partnership,
joint venture, corporation, limited liability company, trust,
association, or other entity that may employ individuals or enter
into contracts.

(f) “Public transit services” means the provision of passenger
transportation services to the general public, including paratransit
service.

(g) “Service contract” means any contract the principal purpose
of which is to provide public transit services through the use of
service employees.

(h) “Subcontractor” means any person who is not an employee
who enters into a contract with a contractor to assist the contractor
in performing a service contract.

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SECTION 1.  

Section 7028 of the Business and Professions
Code is amended to read:

7028.  

(a) Unless exempted from this chapter, it is a
misdemeanor for a person to engage in the business or act in the
capacity of a contractor within this state under either of the
following conditions:

(1) The person has never been licensed in accordance with this
chapter.

(2) The person was a licensee, as defined in Section 7096, but
performed acts covered by this chapter under a license that was
under suspension for failure to pay a civil penalty or comply with
an order of correction, pursuant to Section 7090.1, or failure to
resolve all outstanding final liabilities, pursuant to Section 7145.5.

(b) A first conviction for the offense described in this section
is punishable by a fine not exceeding five thousand dollars ($5,000)
or by imprisonment in a county jail not exceeding six months, or
by both that fine and imprisonment.

(c) If a person has been previously convicted of the offense
described in this section, unless the provisions of subdivision (d)
are applicable, the court shall impose a fine of 20 percent of the
contract price, or 20 percent of the aggregate payments made to,
or at the direction of, the unlicensed person, or five thousand
dollars ($5,000), whichever is greater, and, unless the sentence
prescribed in subdivision (d) is imposed, the person shall be
confined in a county jail for not less than 90 days, except in an
unusual case where the interests of justice would be served by
imposition of a lesser sentence or a fine. If the court imposes only
a fine or a jail sentence of less than 90 days for second or
subsequent convictions under this section, the court shall state the
reasons for its sentencing choice on the record.

(d) A third or subsequent conviction for the offense described
in this section is punishable by a fine of not less than five thousand
dollars ($5,000) nor more than the greater amount of ten thousand
dollars ($10,000) or 20 percent of the contract price, or 20 percent
of the aggregate payments made to, or at the direction of, the
unlicensed person, and by imprisonment in a county jail for not
more than one year or less than 90 days. The penalty provided by
this subdivision is cumulative to the penalties available under all
other laws of this state.

(e) A person who violates this section is subject to the penalties
prescribed in subdivision (d) if the person was named on a license
that was previously revoked and, either in fact or under law, was
held responsible for any act or omission resulting in the revocation.

(f) If the unlicensed person engaging in the business of or acting
in the capacity of a contractor has agreed to furnish materials and
labor on an hourly basis, “the contract price” for the purposes of
this section means the aggregate sum of the cost of materials and
labor furnished and the cost of completing the work to be
performed.

(g) Notwithstanding any other law, an indictment for any
violation of this section by an unlicensed person shall be found,
or an information or complaint filed, within four years from the
date of the contract proposal, contract, completion, or abandonment
of the work, whichever occurs last.

(h) For any conviction under this section, a person who utilized
the services of the unlicensed person is a victim of crime and is
eligible, pursuant to subdivision (f) of Section 1202.4 of the Penal
Code, for restitution for economic losses, regardless of whether
he or she had knowledge that the person was unlicensed.

(i) The changes made to this section by the act adding this
subdivision are declaratory of existing law.

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